Everett, Wash.
Published: Thursday, July 24, 2008

Whidbey pushes for its own public utility district

Proponents say a public utility district can provide better electricity rates and service.

By Gale Fiege
Herald Writer

 OAK HARBOR -- Angry about proposed electricity rate hikes, what they say is poor service and the prospect of Puget Sound Energy winding up controlled by foreign investors, some people on Whidbey Island are pushing for a public utility district.

Ed Jenkins, spokesman for People for Yes on Whidbey PUD, said his group collected more than enough signatures to put the issue on the November ballot.

If it passes, it would be the first public utility district formed in the state in nearly 25 years.

"The people on Whidbey Island have had it hard, and (Puget Sound Energy) hasn't always taken care of things out here," Jenkins said. "Two years ago, when we had that winter and went without power for so long, we were at the end of their chain."

Rate increases and talk that the private utility may be taken over by Canadian and Australian investors prompted Whidbey residents to look for an alternative, Jenkins said.

"When we found out we could form a public utility district, we did not even have to work to get the signatures to get the matter on the ballot," Jenkins said. "We have people living on Top Ramen so they can pay their electric bill and buy gas to get to work."

To fund the purchase of the current electrical system on the island, the proposed utility district would sell bonds paid back by the sale of electricity to its customers, Jenkins said.

Puget Sound Energy is urging its nearly 35,000 customers on Whidbey Island to hear its side of the argument and has posted numerous links to information on its Web site.

"We're really encouraging people to look at the facts," spokeswoman Davina Gruenstein said.

The private utility maintains it has a good record of making repairs during power outages on the island, Gruenstein said. Puget Sound Energy is proposing rate increases because costs are going up, she said.

As for concern about foreign investors, the company essentially is trading one set of global investors for another and won't be passing on costs of the merger to ratepayers, she said.

Puget Sound Energy wants to make sure its Whidbey customers understand that it won't be easy to switch to a public utility, Gruenstein said.

"Many PUD proponents will tell you that getting access to power is easy, but it's a complicated process," Gruenstein said. "Why would you want to pay extra for something that's already working?"

The Washington Public Utility Districts Association maintains people on Whidbey can do better.

"Puget Sound Energy has the highest rates in the state, with the possible exception of Orcas Island," said association spokesman Dean Boyer. "Generally, public utility districts provide better service and lower rates than investor-owned utilities."

The focus with a nonprofit public utility is on service because it is not driven to return a profit to investors, Boyer said.

The last time a public utility district was formed was 1984 in Asotin County in Eastern Washington, Boyer said. The PUD association represents 27 public utility districts in the state, 23 of which offer electricity, he said.

Snohomish County PUD is the largest public utility in the nation, formed by buying property owned by what is now Puget Sound Energy, Boyer said.

"So, can a group of locally elected commissioners provide guidance to a local electrical utility? Yes," Boyer said.

Although in Island County, Camano Island is within Snohomish County PUD's boundaries. It serves nearly 15,000 people on Camano, but has no interest in expanding to Whidbey Island, said spokesman Neil Neroutsos.

Island County Commissioner John Dean of Camano Island said he believes the election in November will be one of perception among Whidbey Island residents.

"It's much too hard for me to call at this point, but it will be about whether you want government or a corporation to provide your electricity," Dean said.

The Bonneville Power Administration, which provides electricity to Puget Sound Energy, doesn't care who owns the utility on Whidbey Island.

"We are completely agnostic when it comes to whether a utility is publicly owned or investor-owned, said BPA spokesman Scott Simms. "We don't weigh in what is right for a community."

However, the BPA has standards for service providers, and a new PUD would have to go through a certification process to determine whether it has the infrastructure and staff to maintain the utility, Simms said. BPA also would have to be certain that any legal questions about the transfer of assets have been put to rest and then the fledgling PUD would be subject to a three-year grace period before its customers could expect to receive BPA's lowest rates.

Not all the people on Whidbey Island are sold on the idea of a public utility that provides power.

Kim Drury, an energy-efficiency consultant who lives on the south end of the island, has served as a water commissioner and thinks there are advantages to the local control a nonprofit public utility district would provide.

As a somebody who pays power bills, she has plenty of unanswered questions.

"I am looking for the economic and environmental benefits and not seeing them in the proposal," Drury said. "The utility business is very complicated and risky. How can they get a better rate?"

Whidbey PUD proponent Jenkins said he is optimistic.

"We know the measure will pass," Jenkins said. "And then the formation of PUD No. 1 of Island County will not be that difficult. This sort of thing has been done many times before. Washington is a public power state."

Reporter Gale Fiege: 425-339-3427 or gfiege@heraldnet.com.



To learn more

For more information about a proposed public utility district to provide electricity on Whidbey Island, visit the proponents' Web site, www.whidbeypud.org, or Puget Sound Energy's site, www.pse.com. A public hearing to consider the boundaries of the proposed district is 10:15 a.m. Aug. 4 in the Island County Commissioners hearing room, Island County Annex Building, 1 NE Sixth St., Coupeville.
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