The City Council heard the first reading of an ordinance March 15 that would allow Tacoma Power to raise power rates. If approved, the ordinance would increase power rates beginning April 4, 2005. Tacoma Power is attempting to use $26.3 million from the rate increase to cover a portion of a projected revenue shortfall in excess of $45 million during the 24-month rate period from April 4, 2005 through March 31, 2007. The utility also plans to allocate $19 million from its cash reserves to help cover the shortfall. The main causes of the shortfall are implementation of a new license for the Cowlitz Hydroelectric Project, revenue financing of 50 percent of renewal and replacement capital, and power and transmission costs from the Bonneville Power Administration. Tacoma Power’s rate case assumes an average of a 5.2 percent system-wide electricity rate increase. The council will schedule a vote on this ordinance at a future date.