PORT HADLOCK – Clearing another tall hurdle in its long-distance run to provide East Jefferson with public power, Jefferson County Public Utility District commissioners signed an agreement Wednesday with Bonneville Power Administration.
The pact with the federal power management agency secures low-cost electricity to more than 18,000 customers now served by the private Puget Sound Energy.
The PUD commissioners conducted a special meeting Wednesday afternoon at their Port Hadlock offices to sign the agreement with BPA account executive Shannon Greene, delivering documents from the agency that provides power to surrounding PUDs in Clallam, Mason and Grays Harbor counties.
Most of BPA’s power comes from 31 dams in the Columbia River basin and its tributaries.
The PUD is wending its way through myriad steps to become Washington’s first public utility to buy out a private utility’s franchise since 1949.
With the BPA deal signed, the PUD can now seek low-interest financing — estimated at between 4 and 4.5 percent — through the U.S. Department of Agriculture Rural Utility Service for about 70 percent of the purchase price of $103 million for PSE’s East Jefferson County electrical service facilities.
The PUD will have to come up with the balance of the financing, possibly through a bond issue.
It is estimated that the purchase would produce about $33 million in additional revenue to the PUD.
PSE executives agreed to willingly sell to the PUD, saying they respected the will of the voters who resoundingly granted the PUD the authority to get into the energy-providing business.
The PUD commissioners must also work with an advisory committee to decide power service policies, staffing and management, and equipment and facilities needed, a process that should coincide with securing financing over the next two years.
“We appreciate BPA’s assistance in bringing low-cost, carbon-free hydroelectric power to Jefferson County,” PUD president Ken McMillen said in a statement.
“Now, that we have our purchase agreement with Puget Sound Energy and an executed binding obligation for power with BPA, we can move forward on obtaining the financing and begin planning operations for our community-based electric utility.”
PUD now provides water and sewer service to about 3,200 East Jefferson County customers outside south of Port Townsend to Mount Walker.
Brinnon is and will remain served by Mason County PUD.
PUD officials said entering into a binding obligation with BPA would mean that the PUD qualifies for the federal agency’s lowest power rates, known as Tier 1, beginning in three years, or about June 30, 2013.
Mark Gendron, BPA Power Services vice president, said the public comment period on the proposed agreement would begin next week and last several weeks.
“Once we’ve reviewed the comments, we’ll either make modifications to the contract as necessary or move forward with implementing it as it is,” Gendron said.
“Either way, BPA intends to sign the contract and provide service to the newly formed electric utility.”
The news comes just weeks after the PUD filed a request for BPA power and executed a definitive agreement with Puget Sound Energy.
It will take up to 36 months for the transition from Puget Sound Energy to PUD, officials said.
A copy of the PUD’s utility development plan, BPA application and other information on the transaction are available at the PUD website, www.jeffpud.org.
After the contract was ceremoniously signed Wednesday, Wayne King, who led the PUD commissioners’ negotiations with PSE executives said: “We’re not there yet, but this is another step.”
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Port Townsend-Jefferson County Editor Jeff Chew can be reached at 360-385-2335 or at jeff.chew@peninsuladailynews.com.