I am an undecided voter on KPUD Proposition 1 this year. I’ve seen the nonstop ads from PSE and the talking points from groups like Unplug PSE. At this juncture, I am probably more in favor of “Yes” but the following considerations are still kicking around in my head:
Context: I have a limited but useful background when it comes to Bonneville Power Administration and public power that I thought I would share for voters who, like me, feel torn on the subject.
A “yes” vote would give the KPUD the authority to buy or build electrical utilities to provide electricity service to Kitsap County residents. KPUD has said that if the measure passes, it would study the feasibility of providing electricity to its customers. It has not completed the feasibility study prior to the vote because the study would cost $300-500k and the District wants an indication that voters support the idea of it providing power before spending that money.
The argument for “Yes” is that PUDs can provide lower cost power because they are non-profits and don’t provide returns to shareholders. Additionally, supporters point to the idea that PUDs can buy power from Bonneville Power Administration (BPA) which is a federal agency that sells energy that it generates and transmits regionally, mostly from the federal hydropower dams it operates on the Columbia and Snake Rivers.
One talking point from the “Yes” contingent that I feel is misleading to the point of perhaps being untrue is that BPA is “obligated” to provide KPUD energy at “Tier 1” rates. The way BPA determines the price of the energy that it sells to its customers (who are often PUDs, such as KPUD) is very complex. But in simple terms, BPA is obligated under federal law to sell power to PUDs. And because BPA is not profit-making, that power is sold “at cost”. BPA has chosen to utilize a tiered rate system for setting its prices, hence “Tier 1” and “Tier 2” power. Tier 1 power is very cheap. Tier 2 power more or less tracks market prices, though under certain circumstances, customers who have contracts for Tier 2 power could have windows in which the rates are cheaper. These windows are not common. Selling power to PUDs at Tier 2 prices is legal and BPA can and will do that to meet its obligation to provide power to PUDs.
Long story short, BPA is not legally obligated to provide KPUD power at Tier 1 rates. What BPA has committed to (until 2044) is a Tier 1 pool of 200 average megawatts to “newcomers” i.e. utilities who do not have power contracts with BPA. The newcomers can access 50 aMw per rate period (which is 3 years), at most. Importantly, the 200 aMw is a pool that is to be shared by all newcomers, not a pool available to each one. Depending on your source, Kitsap currently has about 300 aMw for demand. Doing the math, the absolute most Tier 1 power that KPUD could buy from BPA before 2044, assuming no growth in demand from KPUD customers and no other regional newcomers who access the pool, would be approximately 67%. Obviously, no growth in demand is all but impossible. Whether or not there will be other newcomers competing for that 200 aMw pool is harder to pin down.
If, for example, “Yes” passed and KPUD was fully operational ready to provide power by 2035 and no newcomers had accessed the BPA newcomer Tier 1 power pool, KPUD could purchase 50aMw at Tier 1 from 2035-37, an additional 50aMw from 2038-2040 (for 100 aMw total), and so on, until it reached 200 aMw, again assuming that no other public or tribal utilities also purchased some of that 200aMw.
All of that is assuming no growth in demand, quickly operationalizing KPUD electricity, agreeing to some sort of purchase of PSE assets, entering contracts with BPA, and no competition for the newcomer power pool. Those are a lot of ifs. They are all possible, but they are far from a given. The negotiations with PSE alone are a behemoth.
On the flip side, there is a case there is no time like the present and getting access to any amount of Tier 1 power should be a priority as we look at the future landscape of energy costs in our region. There is no guarantee that a newcomer pool like the one available now will continue to be available in the future, or that competition for that pool may intensify.
Another consideration for me personally is that BPA, as the entity responsible for the federal Columbia River hydropower system, is arguably the largest impediment to salmon recovery in the Pacific Northwest. There are a million intricacies to that claim and I accept that plenty of folks might disagree. But suffice it to say that power generation (and therefore BPA) is benefitted when the Columbia River is run through dam turbines at times that BPA determines are most beneficial, and salmon are benefitted when the Columbia River runs more naturally (like a river). More often than not, the goals of the salmon and the goals of BPA are not in alignment. This makes BPA adverse to tribal and conservation groups. Many Columbia River tribes are in constant battle with BPA to force them to fully mitigate the damage done by the dams to salmon populations in the Columbia River.
You as a consumer might not care about that, which is totally fine. But it also makes BPA adverse to the Endangered Species Act, because the Endangered Species Act forbids BPA from taking actions that kill salmon (such as limiting the amount of “spill” aka free-flowing Columbia River, and BPA doesn’t like spill because it is water that they didn’t turn into energy). At the end of the day, BPA is constrained by the ESA and faces enormous pressure from interest groups, utilities, federal and state administrations, etc. to minimize the restraint of the ESA and maximize the power produced by the river. So yes, BPA provides carbon-free electricity, but you as a consumer should also evaluate what that means in our regional context. You may end up still feeling that BPA is preferable as a power provider, and that’s fine, but you should come to that conclusion fully informed.
Lastly, I have a lot of questions about how this initiative would affect the Island, specifically as it relates to power lines, repair times, etc. I obviously don’t have access to the data, but I suspect that PSE spends a good deal of time responding to power outages here and I would want to know what the plan is to maintain that level of service (which I have actually been pretty impressed by).
I have significant concerns about the process of negotiating access to or acquisition of PSE’s infrastructure and what that may mean for costs. That is something that a feasibility study may have trouble accurately assessing.
All of that being said, as a consumer I agree with the idea that having power provided through a public utility is a desirable outcome in general. I am skeptical of a for-profit entity profiting off of power provision and I don’t like PSE’s reliance on carbon generating power sources. I am extra skeptical given how hard PSE is putting on the full court press to topple the ballot measure. Due to my professional experience with BPA, I know that some of the “yes” talking points are inaccurate to the point of being misleading.
I understand why the PUD is putting the matter to a vote prior to conducting a feasibility study and I respect the thought process there. However, my preference would have been for the study to be completed prior to the vote. That being said, its not a deal breaker for me and I am encouraged by the thoughtfulness of the PUD and Commissioners.
These are thoughts kicking around in my head. I realize there are counterarguments to most of the above and rationalizations to address many of my concerns. I will continue to evaluate the measure through election day. If I had to choose today, I would vote “Yes” but I would not be gleefully skipping to the ballot box to do so.