PORT HADLOCK — The three Jefferson County Public Utility District commissioners agreed Wednesday to begin talks with Bonneville Power Administration about the possibility of the utility providing electrical service to east county customers now served by Puget Sound Energy.

“I think they are anxious to meet with us,” said Jim Parker, PUD general manager, as about 20 people crowded into the small PUD conference room to hear the utility commissioners’ first official discussion on actions needed to take over electrical service for most of East Jefferson County.

Parker said he intends to send a letter to BPA officials, telling them that the PUD wants to talk about BPA providing wholesale power to it — a process that could take three years — and plans to meet with a BPA account executive on Friday.

In November, voters granted the utility — which now provides only water and sewer service — the authority to provide electrical power to East Jefferson County.

The PUD has taken no formal vote, saying it would use the authority granted it by voters.

Talks with BPA are an early step in an extensive process.

Wednesday’s meeting was the first for PUD Commissioner Ken McMillen, who was elected Nov. 4.

Fast track urged

A PUD-contracted consultant, D. Hittle and Associates, has strongly urged PUD to fast-track obtaining wholesale power from BPA while considering acquisition of PSE’s facilities.

The PUD must prove that it owns the needed power transmission system and can pay for the power BPA delivers.

Parker recommended that PUD hire a project manager and an attorney.

“You need to get a good bond counsel right away,” Parker said, referring to the need to finance acquisition of PSE’s facilities, if the commissioners choose to go that route.

Hittle estimates the cost of PSE’s facilities ranging from $35 million to $70 million, while PSE representatives have quoted a figure as high as $100 million or more.

The purchase price could be negotiated between PUD and PSE or established through court condemnation proceedings, or PUD could choose to build its own facilities.

“You need to set a budget that you can live within,” Parker told the PUD commissioners.

He said an appraiser team would be needed to determine the cost of the system, and an engineer would have to sign off on it.

“We need to figure out what we want to do and to follow the proper procedures,” Parker said, adding that public relations would be important.

PUD Commissioner Wayne King said PUD would need “a shark hunter attorney to do the due diligence on this.”

McMillen agreed, saying, “A lot of it is going to depend on what we get out of discussions with BPA.”

PUD Commissioner Dana Roberts said he believes that a project manager should be hired “sooner rather than later.”

Also suggested at the meeting was that the PUD should offer a series of workshops about what power authority can bring to PUD customers, including energy conservation improvements and alternative energy sources.

Hydropower on the Quilcene River was one option discussed, which PUD commissioners chose not to pursue in the 1980s.

Steve Hamm, co-facilitator of Citizens for Local Power, the group that successfully sold PUD power authority to voters, urged the commissioners to consider power co-generation through biomass, wood slash left after timber harvests.

Build new system

Hamm suggested that the PUD commissioners examine what it would cost to build a new system, instead of buying PSE facilities.

Bill Wise, also a Citizens for Local Power co-facilitator, congratulated PUD for moving forward on power authority.

He urged PUD to narrow its scope and try to identify the process, saying he saw that as the commissioners’ two biggest tasks.

Phil Otness, of Port Ludlow, said that, once PUD moves ahead with BPA, it can look into power conservation alternatives.

Parker informed the PUD commissioners that the city of Port Townsend is considering providing power separately from Jefferson PUD but that neighboring PUDs, such as Grays Harbor, would help Jefferson PUD.

An ad hoc citizens committee should be formed to advise PUD, Parker recommended.

Jefferson County PUD is the second smallest PUD in the state, behind Thurston, Parker said.

PUD workshops with consultant D. Hittle and Associates will be conducted next Wednesday, finishing up the feasibility study, then later in the day Hittle will meet with city of Port Townsend representatives.

The PUD commissioners next meet on the matter on Jan. 21.

Benefits

Over the first 10 years of PUD operation, the benefit is $22 million for Jefferson County businesses and residents, PUD consultants have said.

PUD hired consultants D. Hittle and Associates of Lynnwood three months before county voters on Nov. 4 approved granting the utility the authority to provide electric service to about 18,200 customers, 84 percent of which would be residential.

The consultant concluded it was feasible for PUD to provide power.

Voters approved the measure by 10,027 votes, or 53.27 percent, approving it to 8,797 votes, or 46.73 percent, against it.

Under state law, the PUD has 10 years to exercise its authority or go to another vote.

PSE, which falls under the jurisdiction of Washington Utility and Transportation Commission, does not qualify for BPA rates as a private corporation.

PUD would work as a nonprofit government power provider.

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Port Townsend-Jefferson County Editor Jeff Chew can be reached at 360-385-2335 or at jeff.chew@peninsuladailynews.com.