PSE-financed Jefferson PUD power opposition surfaces
Photo by Jeff Chew/Peninsula Daily News
By Jeff Chew, Peninsula Daily News
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Strategies 360, a Seattle political consulting firm, has formed Citizens Against Proposition 1.
Karen Waters, senior vice president of communications with Strategies 360, said that PSE, which now provides power service to most of East Jefferson County, is the sole contributor behind Citizens Against Proposition 1.
Proposition 1 will be on the Nov. 4 general election ballot.
If passed, it will give Jefferson County PUD — which now provides water and sewer service in East Jefferson County — the authority to also provide electrical service.
State Public Disclosure Commission documents show that PSE has contributed $40,000 to Jefferson County Citizens Against Proposition 1
"I wanted to stress it's not ratepayers money," Waters said.
Waters said that Jefferson County Citizens Against Proposition 1 was created to show the cost of PUD power service.
"If you approve it, you are giving Jefferson PUD a lot of power," she said.
It has the potential of putting county voters "in a heck of a lot of debt," she added.
'Smoke and mirrors'
Steve Hamm, co-chairman with the group that successfully petitioned voters for the Proposition 1 election, Citizens for Local Power, called the PSE effort a case of "smoke and mirrors" that ignores the advantages of PUD power service, such as that in adjacent Clallam and Mason counties.
Although Proposition 1 would give the PUD the authority to provide electrical service, it wouldn't mandate that the PUD decide to do so.
The PUD commissioners have said they could decide to move ahead — or not — depending on the figures given to them in a feasibility study now being conducted by a consulting firm they have hired.
PSE has also contributed to anti-PUD power takeover measures in Skagit County and on Whidbey Island.
The energy company has contributed $60,000 to Skagit Committee for Reliable and Affordable Energy and $50,000 to Whidbey Consumers for Affordable Energy, state Public Disclosure Commission documents show.
Citizens Against Proposition 1 is recruiting supporters and distributing political signs around Jefferson County, Waters said.
The signs state: "Vote no on Prop 1. Stop a government takeover of Jefferson County's power system."
"We're actually just starting to get the message across the county," Waters said.
"We really wanted the people to have as much information as possible.
"Our primary goal is, when people show up at the polls on Nov. 4, that they know what they are voting on, and know the impact on their pocketbooks."
The potential buyout of PSE by a consortium of international investors has PUDs in Jefferson, Skagit and Whatcom County positioning themselves to take over PSE's assets in those counties.
Assuming the voters approve the venture in Skagit or Jefferson counties, or formation of a new PUD on Whidbey Island, their commissioners and those of the Whatcom PUD still could conclude that that replacing PSE would be too large a job.
PSE officials have made it clear that the company will do whatever it can to defeat any proposed PUD move on its service area.
PSE concerns
Waters said PSE has "strong concerns about the impact of municipalization on its business but, just as importantly, on the consumers and taxpayers of Jefferson County."
She cites the following issues:
The PUD would be able to issue bonded indebtedness, placing the residents of Jefferson County into hundreds of millions of dollars of debt without another vote of the people, Waters said.
PSE rate increases are set by the Washington Utility and Transportation Commission.
"All of that regulation, which exists to protect consumers, is eliminated if a utility takes over the electric system. PUDs are not regulated by the UTC," Waters said.
"Infrastructure is expensive, and that doesn't include the cost of maintenance or the development of future power generation," Waters said.
"Power rates would rise 19 percent to pay for the bonds needed to purchase the infrastructure that already provides our service."
The consumers would lose access to that power, and the PUD would have to go onto the open market to purchase renewable energy, she added.
Local power
Hamm argued that most of those served by 20 other PUDs in the state are happy with the power service they get.
Brinnon, he said, is "perfectly happy with Mason County PUD, which serves the Hood Canal community up to Mount Walker.
"We want what they have, and that's local power provided by a PUD," Hamm said.
He said it was true that the PUD would be given the authority to condemn and acquire PSE's system without another vote.
But he added that the three PUD commissioners would ensure that the process would be thoroughly vetted with the public before they made any decision to move forward.
"This issue could lie dormant for 10 years," he said, should the PUD commissioners choose not to move forward on providing power.
"As a publicly vetted process, we are going to have a chance to go to meetings, talk to commissioners and tell them what we want," Hamm said, adding that that process would take up to five years, not up to eight years as PSE contends.
PUD commissioners can be replaced by voters, unlike PSE board members, Hamm said.
Hamm also raised concerns about PSE being taken over by a consortium of foreign investors, and whether UTC would retain adequate oversight of PSE.
Fewer rate increases
Because the PUD would not be profit-driven, Hamm said that rate increase proposals would not come nearly as often as they do from PSE.
"Clallam County is asking for its first one in six years," he said.
PSE, he said, "Not only raises rates, they can raise their return on investment."
"PSE has raised rates seven times in six years."
"They've not always got what wanted, but every time they got a rate increase."
PSE has asked the state Utilities and Transportation Commission for an electric revenue increase of $130 million, or 7 percent, with the basic charge going up 98 cents to $7 for electrical service.
The new rate schedule, if approved by the UTC, would raise a typical monthly residential electrical bill in Jefferson County by $7.65, or 8.25 percent, to about $100.
The UTC was to evaluate the proposal in hearings beginning this month.
Hamm said that the PUD conducts meetings open to the public, while PSE is a private company that provides information to the utilities commission that is not always accessible to the public.
He also shot down the argument that PUDs cannot provide green energy options to ratepayers.
"The PUDs in the state have far more options available to ratepayers on buying green power," he said.
"I am not going to say PSE does have some offerings, but there's a greater range for PUDs to create opportunities for homeowners."
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Jefferson County Editor Jeff Chew can be reached at 360-385-2335 or jeff.chew@peninsuladailynews.com.
Last modified: September 05. 2008 9:00PM