Obstacles could be insurmountable to electrified PUD

October 3, 2012 

With fewer than three weeks before Thurston County voters can begin casting their ballots, there are still many unanswered questions about the Thurston Public Power Initiative.

In at least two key areas, the Public Utility District’s initial study into entering the business of providing electric power failed to adequately inform voters. Last week’s public debate on the initiative might have tackled these harder questions, but proponents and opponents chose to focus on other issues.

The initiative’s promoters originally suggested the PUD would acquire all of Puget Sound Energy’s assets. But when cost estimates started ranging from $500 million to $1 billion that idea was abandoned in favor of acquiring some of the least troublesome portions of PSE’s Thurston County service area.

The PUD commissioned a preliminary feasibility study by D. Hittle and Associates that narrowed in on three options ranging from serving only Yelm to taking in the larger area of Tumwater to the Port of Olympia.

But the concept of incremental growth raises tough questions that could embroil a small PUD without huge cash reserves in expensive, perhaps crushing, legal challenges.

The Thurston Public Utility District was formed in 2005 as a countywide PUD. That means it must get approval from the entire county electorate to construct or acquire electric facilities.

If a majority of Thurston voters say yes to the initiative, the PUD would have the authority to serve everyone in the county. That would likely expose the PUD to a legal challenge from any voter who doesn’t get electric service.

Courts have ruled that utilities, both public and private, are obligated to provide non-discriminatory service to everyone within their service area. A new PUD formed in Yelm, for example, wouldn’t face that problem. But that is not the case with Thurston PUD. It serves the entire county.

Even more problematic might be the state law prohibiting the duplication of utility infrastructure. The Legislature declared a clear interest in preventing two sets of power poles and transmissions lines visually polluting a single street.

The state law says this “is uneconomical, may create unnecessary hazards to the public safety, discourages investment in permanent underground facilities, and is unattractive, and thus is contrary to the public interest.”

Two of the three options in the Hittle study anticipate constructing new facilities. The Tumwater-to-port option would require it, and the Capitol Campus-to-port option would require it only if PSE was unwilling to sell. PSE is not likely a willing seller.

A duplication of services might even be inconsistent with Thurston County’s comprehensive plan. Further, the PUD study did not address the environmental impacts of building duplicative facilities, which it presumably would have to do to comply with the state Environmental Policy Act.

The PUD has not yet said how it would avoid these legal buzz saws.

Even by the friendly Hittle study, acquiring all of PSE’s assets in Thurston County is cost prohibitive, let alone the expense of building new service and maintenance operations.

But given the options proposed in the initial study, it is difficult to see how the PUD could meet state law and avoid litigation arising from a failure to satisfy its countywide obligation.

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