Freedom from Burning Coal and Natural Gas?

During the last year, with help from two very active campaigns—Vashon Climate Action and Carbon Free Vashon—our island has been educated on some startling facts:  our electric utility company, Puget Sound Energy, that generally provides good service and touts often its “green” ambitions, has concealed a very dirty secret, namely, that 59% of its electricity comes from the burning of coal and natural gas.

On top of that climate changing fact, we’ve also learned that this century-old, northwest company was purchased in 2009 by a group of Australian and Canadian investors, and is now run strictly for the profit of a foreign-held private equity company.  They are constrained somewhat by our state’s Utility and Transportation Commission however this UTC granted PSE the highest rates charged in our state and entitled them to a 9.8% return on the company’s equity which is purchased primarily with the income from those rates.
And then in February, after over 40 people from Vashon carpooled to Renton and spent the whole day demonstrating and testifying with several hundred others in front of the UTC Commissioners, expressing our concerns about the carbon-tainted electricity, we were left only with the very real question, is there hope for any change in the status quo?  The only answer was maybe.

I’ve participated in those campaigns; I was in Renton and watched people pleading—begging even—the 3 UTC Commissioners to urge PSE towards the use of renewable resources.  The effort was uplifting but, I felt, somewhat misdirected; especially when compared to the very real alternative offered Vashon, and currently embraced by the 62 publicly owned, non-profit utilities that serve the rest of our state with electricity that is over 90% free of carbon and delivered in a more democratic manner today—a business model known as a Public Utility District.

Here are my observations concerning our electric industry, its economics and state-level politics:
1.) It is very unlikely, in the near term, that Vashon will reach any significant carbon-free goals by pleading our case with PSE or by making our wishes known to the UTC and other state-level politicians.
2.) Rather, the economy itself—with the rapid decline in the cost of wind and solar power—will most probably push PSE “beyond coal” and they will then most likely switch to the less expensive, carbon-based natural gas as their preferred alternative for power generation.
3.) In clear contrast, the most viable path towards Vashon’s carbon freedom is through a PUD, whereby local voters—not state regulators or foreign executives—control the strategies and policies needed to get to the 100% renewable energy future that we desire.

So, what makes a Vashon PUD viable?

There are thousands of community-owned public utilities in the United States, including 24 PUDs in Washington.  These utilities have been operating since the 1930s and get their carbon-free power from the federal Bonneville Power Administration and offer their customers rates that are, on average, 25% less than PSE’s.  PUDs are common in Washington, well-established by state and federal laws and BPA provides them hydro or nuclear power—97% carbon-free today!

The newest PUD, in Jefferson County, took over PSE’s franchise in 2013, and immediately reduced that county’s carbon footprint by two-thirds.  Once their voters approved their PUD, a group of dedicated supporters was formed to negotiate and structure its future.  This publicly owned, non-profit electricity utility now serves their rate-payers directly—outside the influence of foreign investors or state-level bureaucrats and with all profits retained in the county, the liberty to train and employ local people, and with the freedom to manage their business following strategies designed to benefit their community alone.

This last point offers the most important advantage of any PUD.  Once formed (and after the infrastructure of PSE has been purchased—perhaps the biggest hurdle in such a formation), a PUD in Washington purchases BPA electricity at their “Tier One” price—generally the lowest electricity rate available in the state.  That, of course, offers an immediate financial benefit for any community, one denied the PSE customers, and one that should be exploited.  However in the future, because of the rapid decrease in the cost of solar energy, this renewable source of electricity may be available at an even lower rate.  If so, the independent PUDs will be poised to exploit that opportunity as well.
And so it is in this regard—the likely future for renewable resources—that the major benefit of a locally owned PUD becomes clear.  As renewable systems develop—as the power generating industry is predicting today—utilities will purchase them using their rate-payer income.  If those rates are paid to PSE, the resources will be purchased by PSE and belong to their investors.  If the rates are rather paid to a locally owned Vashon PUD, it will purchase the facilities, taking ownership of the asset and benefiting our community directly!

So, as I see it, we can continue with PSE and the begging for our carbon-free future, or, we can form a PUD on Vashon, become 97% carbon-free right away and likely reduce our electrical rates to boot.  If you’re interested in this prospect, give us your email address and we’ll keep you informed of any progress.

Ward Carson,

If PSE continues with coal and natural gas, we’ll go local and carbon-free!