No guarantee on power rates

October 14, 2012 

Proponents of Proposition 1 say public utility districts can provide electricity less expensively than a private corporation, such as Puget Sound Energy.

It is true that public utility districts in Washington charge rates equal to or less than PSE. But the proposition’s promoters leave out important facts.

All of the state’s electric PUDs were formed 60 to 80 years ago and no longer have debt associated with their formation.

The most relevant comparison is with Jefferson County, which passed a similar proposition several years ago. The Jefferson PUD may start providing power next year and says it just hopes to match PSE rates.

While the Jefferson PUD hopes to end its reliance on property taxes some day, it has had to increase tax collections to get into the power business.

Any significant savings to PUD electric customers is not guaranteed and is unlikely to materialize until decades down the road.

Proposition supporters base their claims for lower PUD electric rates on receiving less expensive Tier 1 power from the Bonneville Power Authority. But there are questions about whether Thurston PUD could get Tier 1 rates for anything beyond its initial service area.

If it has to purchase Tier 2, or market-rate power, as PSE does, for future added service areas, the rates would presumably be blended and everyone would pay more.

Regular rate increases are common, even to public utilities. Thurston PUD for example, has raised its rates to water customers by 37 percent since 2005 and is budgeting about a 5 percent increase for next year.

Voters have been given too little information to know whether they’ll pay less or more for electricity.

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