PORT HADLOCK — Jefferson County Public Utility District and Puget Sound Energy are poised to begin formal discussions about the public utility taking on PSE’s facilities to provide community-owned electric service to county customers.
Officials with both entities, looking ahead to the June 29 meeting that will start the discussion, hope for a smooth transition from PSE to PUD electric service in Jefferson County, although PUD representatives have a different view of what that means.
In a letter to Jefferson County residents expected to be released this week, the PUD commissioners — who on June 3 directed PUD General Manager Jim Parker to undertake a detailed examination of the cost and benefits of a community-owned electric utility — say:
“We are pleased to report that the PSE representatives who have been attending our PUD board meetings for some time and are informally discussing electrical matters with us, have stated that we can expect a ‘smooth transition’ form PSE to PUD. We look forward to PSE’s valued assistance.”
PSE spokeswoman Davina Gruenstein on Friday said the “smooth transition” quote was “taken out of context a bit, but that’s OK.”
Don’t want to sell
“Our position remains the same — we plan to continue to work with the PUD on their power authority pursuit, but we don’t want to sell our system,” Gruenstein said.
“In the event PUD is successful with a potential condemnation of PSE’s system, we are still dedicated to our customers.
“We would want to make sure the PUD has a good grasp of our system for our customers’ benefit. In that case, we would work toward a smooth transition for their benefit, as we don’t want customers left hanging without power.”
Gruenstein said PSE “will continue to listen and respond” during the June 29 meeting with PUD’s Parker, PUD Commissioners Chairman Wayne King and Kirk Gibson, PUD’s newly contracted attorney specifically hired to shepherd PUD through the legal process.
Gibson’s law firm, with offices in Seattle and Portland, has handled other successful PUD power authority efforts involving PSE, including the Columbia River People’s Utility District. That PUD is in Columbia County and northern Multnomah County, Ore.
Jefferson PUD commissioners recently visited Columbia PUD’s facilities, which employs 54 and serves an area about the same size as East Jefferson County, PUD officials said.
The PUD letter also states that the commissioners will know more in the next 60 days and plan to continue to keep prospective PUD power customers informed.
After an extensive feasibility study following voter approval granting PUD power authority in November, PUD commissioners concluded that the benefits of public power can pay off in Jefferson County.
The commissioners have assembled a team of experienced advisors to move forward to evaluate the many elements involved in developing a community-owned electric utility.
“At least it’s moving down the road,” Parker said Friday. “The more I look at it, the more it’s doable.”
PUD now serves more than 4,000 water and septic community septic system customers.
“I think we’re moving here,” said King, who is looking forward to meeting with PSE Chief Executive Officer Steve Reynolds about the proposed transition from PSE to Jefferson County PUD.
PSE has served Jefferson County for more than 100 years and its executives campaigned hard against Proposition 1 that voters handily approved in last November’s general election.
PSE now serves about 17,900 customers in East Jefferson County.
“I am very pleased that everything is going well,” said attorney Gibson on Friday. “We are in the preliminary stages and have some meetings set up with Puget Sound Energy.
“Until those come we won’t have a good barometer on how things are going to progress.”
Gibson said PSE has to “understand that we have the will and the capability, which we do.”
Once the utility understands that, he said, “Then it becomes an economic issue for PSE.”
“We hope that PSE will cooperate and want to let them know there is a mutual benefit to both of us,” he said.
“It’s a very sensitive thing at this point, but I believe that the PUD can come away with a win-win kind of thing.”
“PUD is really focused on getting jobs back in Jefferson County and lowering [power] costs to the minimal amount it has to be.
“Now we’re at the point where have to come up with what is a reasonable price.”
Utilities consultants D. Hittle and Associates has strongly urged PUD to fast-track obtaining wholesale power from Bonneville Power Administration.
Acquiring BPA discount power would take up to three years. The PUD must prove that it owns the needed power transmission system and can pay for the power BPA delivers.
Under state law, the PUD has 10 years to exercise its authority or go back to the voters.
PSE, which falls under the jurisdiction of Washington Utility and Transportation Commission, does not qualify for Bonneville Power Administration discount rates as a private corporation.
PUD would work as a nonprofit government power provider, such as Clallam County, Mason County and Grays Harbor County PUDs.
The purchase price could be negotiated between PUD and PSE, established through court condemnation proceedings, or PUD could choose to build its own facilities.
An appraiser team would be needed to determine the cost of the system and an engineer would have to sign off on the system.
Acquiring BPA wholesale power would take up to three years and the PUD must prove that it owns the needed power transmission system and can pay for the power BPA delivers.
Over the first 10 years of PUD operation the benefit of PUD operation is $22 million for Jefferson County businesses and residents, the PUD consultants have reported.
A PSE consultant has estimated it would cost PUD at least $100 million to acquire PSE’s power delivery system in the county.
PUD’s consultant Bob Schneider came up with a lower price range of between $30 million and $69 million for PSE infrastructure.
Like other PUDs, the system would be acquired and maintained through revenue bonds that PUD ratepayers would pay off.
PUD has already secured a bond attorney and will later secure an appraiser to put a value on Puget Sound Energy’s facilities in Jefferson County.
PUD has budgeted $200,000 this year to pursue power authority.
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Port Townsend-Jefferson County Editor Jeff Chew can be reached at 360-385-2335 or at jeff.chew@peninsuladailynews.com
