Washington law granting citizens the right to form Public Utility Districts was approved by the state’s voters in 1930. Since the first PUD started operations 73 years ago, those 23 agencies have consistently provided lower electric rates and better service and reliability to their customers than investor-owned utilities such as Puget Sound Energy (PSE). Today, Whidbey Islanders pay higher rates than any PUD customer. And while PSE’s credit rating is at BBB-, one step above junk status, all PUDs have ratings firmly in the A’s – with lower borrowing costs.
The Washington State Utilities and Transportation Commission (WUTC) just gave approval to PSE to collect an additional $179 million annually from ratepayers. Whidbey residents pay PSE 20 percent more than what Clallam County PUD charges. If Island residents paid rates comparable to Clallam PUD, we would save at least $100 million over the next 10 years. This $100 million in additional rate payments is our ten year PSE tax.
If authorized by voters and deemed feasible by elected commissioners, the PUD would buy its power from the Bonneville Power Administration (BPA). BPA serves all or part of eight western states, and has set aside 210 megawatts of low cost hydropower for new public utilities in that region. New public utilities are eligible for this mostly carbon-free power on a first-come, first-served basis. (PSE’s owned resources are 70 percent carbon-based (coal, natural gas, and oil), which would be subject to a carbon tax. Such a tax has the support of both presidential candidates.) Jefferson and Skagit PUDs are already in line for this power, and we can join them.
Although the WUTC hasn’t made its decision yet, PSE will probably be purchased by a division of Macquarie Bank of Australia for $7.4 billion. This will increase PSE’s debt to $4.2 billion. Debt management could affect rates. This is not a blank check, but already filled in; Whidbey Islanders can write their check to Macquarie Bank of Australia and PSE for their share of that debt: $138 million. The North American Free Trade Agreement could also affect PSE, should it be acquired by Macquarie and its Canadian partners.
If a PUD is authorized, a detailed feasibility study would be the PUD commissioners’ first task. All the commissioner candidates have pledged that if the benefits of conversion don’t outweigh the costs, they would not move forward. If they decide to move ahead, the PUD would issue long-term revenue bonds to fund the purchase of PSE’s assets. These bonds would be paid off with revenue from the sale of electricity, the same method every other PUD uses. Future system improvements would be financed by tax-exempt bonds, unavailable to PSE, at even lower interest rates.
PUD commissioners would be unpaid until electric revenues begin, then serve at a salary of under $30,000 per year. They will determine electric rates, rather than PSE directors and the political appointees of the WUTC. PUD commissioners will live here and be accountable to Whidbey voters, unlike PSE’s management.
There are legitimate national security concerns about selling our vital public infrastructure to a foreign entity. Lack of control over our energy system and supply are important issues, and we need to keep as much of our money on the island as possible.
As PUD customer-owners, Whidbey residents would cease paying dividends to investors around the world and begin to reinvest their electric payments in their own system. A Whidbey PUD would generate about 100 local, family-wage jobs on the Island. And once a PUD is formed, no company or investment group, foreign or domestic, will ever be able to take control of Whidbey’s electric system. The PUD initiative is a low risk proposition that has the potential for a long-term high level benefit to Whidbey Island.
In the end, the Whidbey PUD initiative is really about local self reliance; we must look after our own energy interests because PSE will not. Please vote YES to form Island County PUD No. 1.
Dave Matheny
People for Yes on Whidbey PUD
Clinton
