Lower electric rates
Public utilities are able to buy power directly from Bonneville power (BPA) at rates lower than what Puget Sound Energy (PSE) pays wholesale. PSE marks up their wholesale price and retails the power to their customers. Public power residential customers pay about 10% less for their power. Commercial customers pay about 20% less for their power under public power ownership.
Local ownership and control
Local ownership secures long term control over price spikes and inflation. It is more reliable, also, because employees can live nearby. Line crews are more familiar with the infrastructure and are often quicker to get on the job and get the power back on in natural disasters and emergencies. Currently in these situations PSE pulls in crews from other, distant private utilities, many out of state. This slows down response times even further while waiting for these crews to arrive and begin repair work. Typically PUDs sustain far less damage and down time in storms than PSE because they take better care of their equipment and have more rigorous line maintenance schedules.
Benefits are dependable
Employees of publicly owned utilities can can access the Peers 2 and 3 retirement plans and insurance benefits that other state, municipal and school employees are entitled to.
Mutual aid agreements
Utility line and maintenance crews of a publicly owned utility can quickly assist others when they are hit hard during times of ice and wind storms. Fortunately the city of Olympia is virtually surrounded with other public utilities like Mason county PUD 1 and 3, Grays Harbor PUD, Lewis county PUD, Centralia Power, Tacoma Power and Light. Even the towns of Lakewood and Steilacoom have public power utilities. PSE has never taken advantage of the opportunity to sign onto Mutual Aid Agreements with local PUDs and thus PSE customers end up paying more in ‘Act of God’ charges and in longer wait times while they haul in other private utility line crews to fix their storm-damaged lines.
Low income assistance
A publicly owned utility can implement programs assist low income customers. Seattle City Light offers a 60% discount to low income customers.
Reduction in fossil fuel use
Bonneville is currently powered 90% by hydroelectric generation, so eliminating PSE as Olympia’s power provider will get us off the 59% fossils by PSE virtually overnight (37% coal, 22% natural gas). A 2014 study found PSE produces over 11 million tons of CO2 annually, more than any other utility in Washington state.
Paying to transition away from PSE can be accomplished by selling municipal bonds. A process identical to how the city raises funds for parks, schools and other improvements. The city with its very good credit rating would have the advantage of being funded at lower interest rates than PSE ever could hope for.
After the transition is completed the city could then issue tax exempt bonds to pay to update PSE’s old worn out and obsolete equipment.
Transitioning to a city owned public power provider would save our; school district, City government, state offices, The Port of Olympia and residential and businesses large amounts of money over the years to come.
Other municipalities with city utilities
Are there examples of how city utilities work we can examine? Richland Washington’s City utility with 22,000 ratepayers (customers) is the same as Olympia’s—22,000 ratepayers. Closer to home we find Seattle Power and Light, Tacoma Power, Centralia City Light, as well as the county-run PUDs mentioned earlier.
The city of Ellensburg, with 7,400 customers, runs its own utility, which provides both electric power and natural gas to their customers similar to PSE in Olympia. City utilities work with large cities like Tacoma (97% fossil free) and Seattle as well as small ones like Centralia (98.6% fossil free), along with Steilacoom (98.5% fossil free) with their 2,756 customers.
Puget Sound Energy will go to great lengths and spend vast sums of their customers’ money to retain their UTC-guaranteed 9% rate of return. Who wouldn’t? Just remember this next time a glossy mailer arrives or you receive an offer for a free refrigerator upgrade from PSE: it’s your money as a ratepayer that they are spending.
Mike Pelly’s interests include busting up oil companies and transitioning from fossil fuels to 100% clean renewable energy as soon as possible. Currently a high school paraeducator, Pelly supports providing the public with education about the benefits of a completely plant-based diet. He is a frequent contributor to Works in Progress.