PORT TOWNSEND — Switching East Jefferson County electrical service from Puget Sound Energy to Jefferson County Public Utility District would cost too much, say Port Townsend residents who oppose Proposition 1.

“It will not be cheaper for us,” said Rita Beebe, a Port Townsend School Board member, expressing her skepticism that the PUD could offer lower rates than the private utility that now counts about 18,000 East Jefferson County customers among the more than 1 million it serves.

If rates go up, “it would be a major body blow to small business,” said Ryan Anderson, general manager of American Marine Bank in Port Townsend and Port Townsend Chamber of Commerce president-elect.

Liz Coker, head of the United Good Neighbors of Jefferson County fundraising effort to help the needy, worries that under the PUD, rates could increase to the point that those on fixed income could not afford electrical power service.

“If you’re 65, their income is fixed and right now they’re losing money, as is everybody,” Coker said.

“I have some pretty mixed views on it. To be honest, I side with no change right now.”

A measure on the Nov. 4 general election ballot will ask voters to give the authority to provide electrical service in East Jefferson County to the PUD, which now provides water and sewer service only.

The PUD would then make the decision about taking over service, and would have to purchase PSE facilities.

Ballots will mailed to registered voters on Wednesday.

PSE has contributed more than $140,000 to Jefferson County Citizens Against Proposition 1. The money pays Seattle political consultants Strategies 360 to campaign against the proposal.

Karen Waters, Strategies 360 senior vice president, arranged interviews with residents who oppose the ballot measure at the Peninsula Daily News’ request.

A PUD-contracted study by D.H. Hittle & Associates said that, if the PUD took power electrical service, its new rates would come to about 1 cent per kilowatt hour for the first three years of service and then low-cost Bonneville Power Administration “tier 1” rates would kick in for the next 10 years at a “net present value savings” of $31.1 million to Jefferson County power ratepayers.

A Washington Policy Center review of power service takeover proposals in Jefferson, Island and Skagit counties said that staying with the private utility company “would likely result in a continuation of current levels of power service at roughly the same rates.

Washington Policy Center provides research for policy makers, the media and the general public as an independent, nonpartisan research and education organization located in Seattle.

Court battle

Anderson is adamantly opposed to Jefferson PUD taking over PSE’s power service, especially when a court battle is expected.

“It’s very expensive to buy an unwilling seller,” Anderson said.

PSE executives have warned PUD commissioners that a protracted legal battle could be expected if PUD moves forward on acquiring the company’s system under condemnation proceedings.

Anderson also questions the figures cited by the PUD and Hittle to acquire the PSE system in East Jefferson County, which range from $33 million to more than $100 million.

“For the simple nuts-and-bolts, it simply does not pencil out,” he said.

Steve Hamm, co-facilitator with Citizens for Local Power, has said that a PUD takeover of power service would create new jobs and provide local accountability between nonprofit PUD elected officials and voters without foreign ownership of the for-profit PSE.

“They say it’s a local issue,” Beebe said.

But she disputes that idea.

Australia-based Macquarie Corp. and Canadian investors in the process of merging with Puget Sound Energy. Approval of the merger rests with Washington Transportation and Utilities Commission.

But, said Beebe, the bonds PUD would use to finance acquisition of PSE facilities “will be bought up by Canadian and Australian investors anyway.”

New jobs

She also contradicted the argument that Jefferson County jobs would be created by PUD power service.

The Hittle study estimates that about 67 jobs would be created by a switch to the local utility.

“We would be a small entity going out to bid for contractors,” Beebe said. “Puget Sound Energy has more than a million customers and has some leverage for bidding.”

With PUD power service, she said, “Contractors would have us over a barrel.

“I have difficulty seeing how those local jobs would be created. For the majority, we would probably be hiring outside the area.”

She said she believes PSE has done “an outstanding job” with few power outages during bad weather.

“I’m a firm believe of, if it’s not broken, don’t fix it.”

Coker said she doesn’t think the PUD concept has been fleshed out enough.

“Money very specifically needs to be spelled out,” she said.

“Maybe in two years, sure. Maybe when everything stables out, and the market improves.

“It’s a lot to ask people to swallow without being very definitive about what you’re going to do or spend on it.”

Lynne Sterling, a retired banker in Port Townsend, said she was “confused” about how exactly PUD’s acquisition of PSE’s power system would work.

“As a retired banker, I do know the amount of money is going to be huge,” Sterling said.

With Bonneville Power Administration offering cheaper rates to PUD after three years, Sterling said she was still concerned about PUD being able to pay off its debt under the power system acquisition without raising rates.

“I don’t see how that could happen,” she said. “I have big doubts because I don’t know where the PUD is going to get the money.

“The money, it’s on everybody’s mind.”

________

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