Plan would boot PSE in favor of Thurston public utility district

A nonprofit group formed last month in support of public power in Thurston County will kick off an initiative drive this weekend to place a measure on the November ballot asking voters to electrify the Thurston County Public Utility District.

The group, which calls itself the Thurston Public Power Initiative, needs 10,733 signatures of county residents who are registered voters to qualify for the ballot, group spokesman John Pearce said.

Meanwhile, two of the three PUD commissioners have voiced support for a $50,000 feasibility study to look into the pros and cons of the public utility taking over electrical service in Thurston County from Puget Sound Energy, the private utility that serves the county.

The two separate-but-related activities are likely to spark community discussion and debate over public versus private power to a degree not seen in Thurston County in decades.

“We want voters of Thurston County to have a choice,” said Pearce, a self-employed business consultant and Oyster Bay-area resident. “Our motto is: Neighbors bringing neighbors reliable electric power at a fair rate.”

Advocates of public power say the PUD could deliver electricity with more local control and at a lower cost to ratepayers than Puget Sound Energy, the state’s oldest and largest investor-owned utility, which was purchased by an Australian and Canadian consortium in 2009.

Puget Sound Energy has no desire to relinquish its Thurston County service territory, PSE director of communications Grant Ringel said. The company serves more than 1 million electric customers and 750,000 natural-gas customers in 11 counties.

In 2008, Jefferson County voters approved a public utility takeover of Puget Sound Energy infrastructure at a cost of at least $103 million. The Port Townsend-based utility expects lower electric rates when it assumes operations in 2013.

A similar measure in Skagit County was rejected in 2008, and voters on Whidbey Island, which is part of Puget Sound Energy’s service territory, nixed a plan to form a public utility there in 2008.

Meanwhile, the Thurston County PUD commissioners, which oversee water utilities serving some 4,000 customers, could vote this month to embark on the electrical service feasibility study. The commission meets Jan. 10 and Jan. 24 at 5 p.m. at utility headquarters, 921 Lakeridge Way. S.W., Olympia.

The study has the strong support of Commissioner Chris Stearns, who made it a pledge during his 2008 election campaign. Commissioner Paul Pickett has also voiced support for the study as a way to answer some basic questions about rates, finance costs to purchase PSE infrastructure and PUD power supplies.

“I’m not ready to embrace or dismiss public power by the PUD,” Pickett said.

PUD Commissioner Alan Corwin said he can’t support a feasibility study at this time, noting that the PUD should avoid any appearance that it is trying to aid the Thurston Public Power Initiative.

He said utility officials should do some of their own homework first on how such a purchase could be financed.

“It’s reasonable to estimate it would cost Thurston PUD several hundred million dollars to acquire PSE infrastructure,” he said in a Dec. 29 position paper. “How/where would Thurston PUD get the money?”

Olympia energy economist Jim Lazar said factors that help a public utility deliver power cheaper to its customers than a private utility include:

n Public utilities don’t earn a profit, while private utilities regulated by the state Utilities and Transportation Commission are allowed a return on investment of roughly 10 percent.

n Public utilities can issue tax-free municipal bonds, which lower interest rates.

n Public utilities have access to cheap hydroelectric power produced by the Bonneville Power Administration.

Just how much cheap hydro-power could be available to Thurston PUD in the years ahead is not clear.

Bonneville has set aside 250 megawatts – enough power for 250,000 homes – to serve new public utilities that form or go into electric service in Washington, Oregon, Idaho and Montana in the next 20 years.

It can take several years from the time voters approve an electrified PUD until the utility flips the switch on the public system.

And not all of a new public utility’s needs may be met with the so-called preference power, or it could be phased-in over time.

“In the long run, we’d save money,” Lazar summarized.

The business establishment has resisted public power in Thurston County in the past and appears poised to do so again.

“This is the exact wrong time to be creating more government and eliminating a private utility in our community with a long history of dependable service,” said David Schaffert, president of the Thurston County Chamber. “And I just can’t imagine the feasibility study would be of any value.”

Ringel said Puget Sound Energy has made capital improvements in Thurston County totaling $50 million since 2007 and has $100 million in projects planned over the next five years.

“There’s a lot of attention being paid to Thurston County by PSE,” Ringel said.

And if the pro-public-power movement in Thurston County gains traction in the months ahead, look for that PSE attention to include a vigorous counter-campaign.

John Dodge: 360-754-5444

jdodge@theolympian.com