FREQUENTLY ASKED QUESTIONS ABOUT FORMING A WHIDBEY PUD, ITS OPERATIONS,
AND COSTS
Why a PUD?
Lower electrical rates, better electrical service, and economic
development of Whidbey Island.
What is A PUD?
- Public Utility Districts are community-owned, locally regulated
utilities
- PUDs are formed by a vote of the people
- Authorized by state law to conserve the water and power resources
of the State of Washington for the benefit of the people thereof,
and to supply public utility service, including water and electricity
for all uses.- [RCW 54]
What's So Special about PUDs?
- Formed by public vote
- Community owned
- Governed by locally elected commissioners
- Non-profit/Cost-based rates
- Accountable to customers, not shareholders
- Jobs, revenues, resources stay in community
What rates will we be paying?
Because a PUD has access to relatively inexpensive money as opposed
to the sub prime rates PSE must pay, our capital costs will always
be cheaper. As you will read below a PUD purchases it's electricity
at wholesale from Bonneville Power, not retail like PSE. Energy
costs will always be going up but we will always be at the lowest
rates possible.
What will having our own Public Utility District mean to us?
In our opinion the big advantage is securing our electrical future
and insuring the lowest rates possible. Businesses can count on
continued reasonable power to grow, all rate payers can have a say
in how our PUD is run and retired and limited income residents will
not be priced off the island, by power at least.
What about personnel costs? Will we be paying huge salaries to
a few executives?
The PUD will generate good paying jobs in the local community, many
positions are IBEW union jobs. The PUD commissioners salaries are
set by the Washington Legislature - around a maximum of $25,000.
The Washington PUD law.
-The purpose of this act is to authorize the establishment
of public utility districts to conserve the water and power resources
of the State of Washington for the benefit of the people thereof,
and to supply public utility service, including water and electricity
for all uses.-
How will this PUD will be paid for?
Issuing long-term revenue bonds will pay the formation expenses
and acquisition costs of purchasing the electrical infrastructure
on Whidbey Island from PSE. The PUD has the statutory authority
to sell tax-exempt bonds for any new capital funding needs that
may arise.
PUD Principles
- Local control - Communities have the right to own and operate
their own power and water utilities
- Local control also implies an obligation to provide efficient,
reliable, cost-based service
- As community-owned utilities, PUDs have added obligation
to advance community values, including conservation, care for the
environment, community service
PUDs versus private power
- PUDs are non-profit entities operated for the benefit of
their customers
- Private utilities are for-profit entities operated for the
financial benefit of large institutions and other stockholders
- PUDs are governed by locally elected boards that meet and
make decisions in open sessions; they are accountable to their customers
- Private utilities are governed by boards that most often
meet in closed sessions and are accountable to their shareholders
- PUDs rates are based on the actual cost of providing service
- Private utilities rates are based on the cost of service
plus a margin for profit (return on equity) that is paid to stockholders
- PUDs accumulate equity in their distribute systems on behalf
of their customers, leading to lower rates
- Equity in private utilities accrues to stockholders, who
look for dividends and increases in the value of their stock
- On average, customers of investor-owned utilities pay electric
rates that are 10% higher than public power customers [American
public Power Association]
Forming a PUD
Twenty of the 23 electric PUDs operating today acquired distribution
facilities of existing investor-owned utilities through condemnation
or negotiated purchase
PUDs and Preference
Bonneville Power Act (1937) gave Northwest public utilities first
right - -preference- - to purchase power at cost from
federal Columbia River Basin hydroelectric dams Public utilities
purchase power through Bonneville Power Administration. Collectively,
Washington PUDs are BPA's largest purchasers of wholesale electricity
PUD's are Powered by water and wind
Washington PUDs provide an average of 81.8 percent of their power
from clean, renewable hydroelectricity. Eight PUDs (Chelan, Cowlitz,
Douglas, Grant, Klickitat, Lewis, Pend Oreille, and Snohomish, and
joint operating agency Energy Northwest) own their own hydroelectric
facilities. PUDs also are building and investing in wind energy
projects such as the White Creek project near Goldendale, Wash.,
and the Nine Canyon project near Kennewick, Wash. (above), currently
the nation's largest publicly owned wind facility.
PUD's are Community owned
The communities they serve own PUDs. Elected commissioners set policy
for each PUD, and customers are always welcome to observe and participate
in their PUD's meetings.
Who will operate the Whidbey PUD?
The delineation of authority between the PUD Commission and the
PUD Manager(s) is more like the corporate model's delineation of
authority between the Board of Directors and the Executive Management
Team.One thing we are absolutely sure of is that a campaign team
member will not be the person running the daily operations of the
PUD.
None of us are an experienced utility manager, so we would be in
violation of Washington State law if we attempted to function as
the PUD's operating manager. We would need to hire a seasoned electric
PUD manager and local staff.
Our Whidbey PUD, Local People Promoting Hometown Power
People For Yes On Whidbey PUD started out as unconnected individuals
who felt that Whidbey Island's energy future was not looking too
bright. By circumstances and chance we found each other and formed
a political group that is dedicated to the concept that basic public
services should be established for the enhancement of the local
island community, rather than the enrichment of off island private
interests. We believe that basic utility services are the core infrastructure
of public goods, and that these goods and services are the things
that help our island and our communities move forward on a daily
basis.
What about putting the power lines underground?
That is something our local PUD could explore and the actual costs
and benefits presented to the owners - you. The solution might be
all underground, partly underground, better maintenance or a combination
of all three. The big thing is YOU will directly have a say.
What about promoting conservation and sustainability?
As owners of our Whidbey PUD we can vote to be as green as we feel
we can afford to be. We will of course be subject to State environmental
laws as will every power company and PUD. The difference is we decide
not some corporation. Whidbey will have the opportunity to vote
to fund new green energy sources, we can participate in tidal power,
the possibilities are endless and we make the choices locally.
How will a local PUD affect power outages?
There are many factors affecting power outages here on Whidbey.
First are the transmission lines on the island and second is the
transmission line on the mainland. In a major storm, ice or wind
trees disrupting the lines is the major problem. Our own PUD on
Whidbey would directly control the tree maintenance program here.
The other part of the equation is the maintenance on the mainland;
we would have little or no control about that. Bottom line is that
the possibility for problems would still exist but be out of our
reach to fix. It is important to remember that unless we clear-cut
all trees that could possibly fall on a power line there will occasionally
be problems. The big advantage is that our PUD will have LOCAL crews
here on the island and would have personnel on stand by when a storm
is predicted. We would not have to wait in line for outside contractors
to respond as before. Short answer, outages should be less often
and fixed much faster…about as good as can be expected in the
evergreen (read lots of trees) state.
What putting a Whidbey Island PUD (Public Utility District)
on the November Ballot will do and how it will affect you and your
family.
The November ballot will have a measure authorizing the formation
of Public Utility District No 1 of Island County that will replace
Puget Sound Energy as our electrical power provider for Whidbey
Island. This will effect Whidbey Island only, as Camano Island gets
its power from Snohomish PUD.
Why do we need to do this?
Even without the foreign corporate takeover and its related costs,
PSE has put itself in a financial corner by boosting share prices
instead of it's credit rating. Their costs will go up and up with
no say so from the ratepayers. PUD's around the state enjoy the
lowest electrical rates in Washington, while PSE will continue to
charge higher and higher rates. The only way we can control our
economic future regarding electrical rates is to form our own PUD.
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