Blashfield • Components: Michael Moran, Jack Sanders
Peter Sellers, September 8, 7924 —July 24, 7 980 ‘‘I want to die like a champion. as Quilty in Lolita etilLES E ^BGIPCEB When money talks, we listen. 2 1 O Q N . W . G L iS A N ST . PH O N E ( 5 0 3 ) 2 4 8 - 9 1 4 2 R O N H IN C K L E Y M A T T L A B A D IE i s j? I G hO dE x OFF 225-9^26 U583.W. iEffensoN ™ WE SELL SERVICE! ★ WE ARE PORTLAND’S ONLY STEREO REPAIR SPECLALLST! * WE SERVICE AND REPAIR ALL BRANDS AND TYPES OF STEREO EQUIPMENT! ★ WE ARE NO T SALESMEN. WE ONLY SERVICE WHAT YOU OWN. STEREO REPAIR JAY MOSKOVITZ Certified Electronic Technician SOUND 2314 S.E. Division Portland, OR 97202 Phone 238-1955 rMediteiTanean an unusual place featuring Greek Wines Greek Olives Souvlaki Vegetarian Souvlaki Dolmades Spanakopita Octopus Open for Lunch at 11:00 a.m. Wed. night is poetry night—host Walt Curtis 1650 W. Burnside 222-1507 Illustration by Steve Blackburn
CLINTON ST. QUARTERLY THE CLINTON ST. QUARTERLY vol. 2, no. 3 firm, but just fall 1980 A Sellers Tribute, Steve Blackburn . . . . 2 Ed ito ria l................................................ 3 Traveling Light, Ed Blatter................... 5 Pulling the Switch on the Private Utilities Rick Mitchell..................................... 8 Nuke Waste, Rory Tyler..................... 14 Grapes, Peter T ro tte r......................... 18 The Capitalist Conspiracy David Horowitz........................... 21 Naughty Boys Acting Up Jim Blashfie ld................................... 24 Praise the Lord and Pass the Politicians Steve Myers. . . . . . . . . . . . . . . . . . . . . 26 The Demos, M.G. H orow itz .............. 30 Candidate Commoner David Milholland............................. 31 The Book Review, Steve IVallin.......... 34 Cowboys and Indians, Walt Curtis . . . 35 Ashes in the Beerdrops Musicmaster..................................... 39 Musical Newts Pt. II, Talk About Heavenly Bodies Michael Adelsheim ......................... 42 Feetsball Lenny (Who Else) D e e ........ 44 The Education of Mrs. R Katherine D u n n............................... 45 The Clinton St. Quarterly is published free to the public by Clinton St. Center for the Arts, Inc., 2522 S.E. Clinton St., Portland, OR. © Clinton St. Quarterly 1980 BEST Editors Emeritus: Eric Edwards Joe Uris Bev Walton TALES OF THE TRICKEY Co-Editors: Lenny Dee Peggy Lindquist David Milholland Joel Weinstein Design and Production: Eric Edwards Peggy Lindquist Joel Weinstein Proof Readers: Walt Curtis Steve Cackley Ad Sales Lenny Dee Kathy Livingston David Milholland Randy Shutt Contributing Artists: Steve Blackburn Jim Blashfield Alan Brewster Tom Kramer Jerry Kruger Tad Leflar Henk Pander Frank Poliat Phil Post Bob Rini David Sondin Isaac Shamsud-Din Robyn Tarbet Gus Van Sant It began back before Tammany Hall and grew to be ponderous like the girth of Richard Daley. It has achieved the consistency of jellied napalm and smells, some say, like a field of rotting broccoli. Every time you think it’s reached its nadir, another election year rolls around to convince you it can sink a lot lower. It’s that grand old flim-flam, American politics. Who are the flimmers? How are they flamming you, and why? From everyday intimidations of hapless individuals by faceless bureaucrats to corporate blows against the public interest, the powerful are out to put your ass in a sling. Sure, you expect them to lie blatantly, cheat remorselessly and pull every dirty trick in their treacherous hearts. But did you know they are robbing you blind? (Look inside and learn what is really behind the utilities’ desperate fight against Public Utility Districts.) Or that they are threatening your life? (Don’t believe it? Read how government inertia abets the nuclear industry in its failure to deal with the deadly problem of radioactive wastes.) Or that their ambitions are global? (Our political affairs expert David Horowitz reveals the extremity of Wall Street’s desires in a scenario right out of the ravings of the lunatic fringe.) Or that they have joined forces with America’s other great huckster class, the evangelists, to fleece the public? (Although the trend has been trumpeted ad nauseam by the national media for months, Steve Myers takes a first-hand look at the phenomenon as it festers right here in River City.) Or that they may be in big trouble? (Intrepid David Milholland talks to Presidential candidate Barry Commoner, and the corporations had better take heed.) In the spirit of American shuck and jive, The Clinton St. Quarterly dedicates this issue to several political worthies. First, plaudits go to Mayor-elect Frank Ivancie for his enthusiastic support of $9.5 million worth of improvements to Civic Stadium. For this modest sum, a perfectly functional scoreboard can be replaced, the pressbox for our long-suffering press corps can be enlarged, and the roofline can be extended beyond the 15,000 seats already protected. In this sports-blase town, the stadium rarely holds more than two thousand hardcore fans, and only the most befuddled of these would come to the stadium during a rainstorm, perhaps to watch the synthetic turf grow. So what if four local high schools face closure in the coming year due to budget restrictions. This is the stuff of long-denied dreams of power, and Frank’s political vision ranks right along with Mr. Magoo’s. The CSQ also congratulates the Portland shakers and movers whose recent attempt to recall four School Board members fizzled ignominiously. We might have applauded the Black United Front for its gumption and tenacity or the people of Portland for their good sense, but probably the biggest factor in the recall’s failure to even make the ballot was the abject simplemindedness of the sponsors. Here were some of the most wealthy and powerful interests in the city falling on their great, pink rumps with a resounding plop, and it made you wonder who gets them up in the morning. Their statements were shrill and filled with nonsequiturs and quotes taken outrageously out of context. Time after time — almost exclusively, in fact — they targeted the Board’s only black member for their harshest criticism, leading observers to conclude their motivation was simply racist. It’s hard to know why the city’s power elite would fall all over themselves looking so foolish, but the CSQ is grateful for such a delicious, revealing glimpse of how they operate. It was good for a laugh, and they give us so few. J.W. Editorial cartoon by Jerry Kruger 3
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ST. QUARTERLY By Ed Blatter Have you ever walked Portland’s waterfront, gazed into the Willam e tte’s pleasure-craft-infested channel, and wondered why you see no ferryboats there? Dreamed of the halcyon days when steamboats drifted into shore at the wave of a hand to pick up passengers from Astoria to The Dalles? Puzzled, in fact, over the obvious boon that the river offers to the city’s transportation woes? Portland’s transit planners obviously haven’t. A regional transportation plan that is now taking shape under the auspices of the Metropolitan Service District (Metro) dwells on land-bound alternatives: carpooling, buses and a light rail line. No mention is made of the possibility of using what one local observer calls the “ 900- to 1,000-foot highway running down the middle of Portland.” To native Portlander Ken Rose, the thought of a mass transit river system is not just an idea, it’s an obsession. “One day I was driving my car during rush hour from Vancouver to Portland,” says Rose in the musty downtown office he shares with a portrait photographer. “ Sitting there parked on the freeway, I got to wondering why people couldn’t ride boats up and down the river. I wondered why no one was operating a ferry service. Why wasn’t the river being used to bail us out of some of our transportation problems?” When Rose got out of the traffic jam, he went to the library and began reading about waterborne transportation. Although there was nothing written about modern-day river mass transit, there were histories about the old Portland and Sauvie Island ferries, and about the sidewheelers which steamed up and down the Columbia and Willamette rivers before the turn of the century. “ I admit I became obsessed,” he says. “ Here was a city with a unique and beautiful waterway running right down the middle of the town, and it wasn’t being used for anything but freight and pleasure boats. A river transit system could alleviate pollution and congestion on the 1-5 corridor and be an aesthetic addition to the mass transit network in Portland. It just seemed stupid not to be using the river.” Rose was obsessed enough to go past merely studying the concept. In October 1978, he quit his job working a dredge for the U.S. Army Corps of Engineers, and with a bank officer and a business advisor, formed the Rose City River Transit Company, a non-profit corporation. The heart of Rose’s transit dream is the surface effect ship, a vessel that can reach speeds of 50 miles per hour riding on an aproned cushion of air. Such a vessel has several advantages over conventional ships. It has a minimal wake, high maneuverability, low noise and the ability to stop from full speed in less than three times its length. Because it runs on a cushion of air and only a small portion of the hull rides through the water, damage from floating debris in the river is less likely than with conventional hull-type craft. A 100-passenger version of a surface effect ship costs about $500,000 per vessel. Yet, while this is relatively cheap by industry standards, Rose City Transit has been barely able to scrape together enough money to pay rent for its half of the office. Rose and his associates therefore do the only thing they can — wage an educational campaign aimed at local governments and community organizations. Money, they hope, will someday come from public funds, given the proper climate. They have written letters to politicians, addressed neighborhood associations, and canvassed the city with flyers about their cause. They have talked to anyone who would listen. The idea of river transit seems to spark the imagination of all who are told about the idea. Letters of support have come from a broad crosssection of politicians, including Governor Vic Atiyeh, Congressman Robert Duncan, Senator Mark Hatfield, Multnomah County Executive Donald Clark, and Portland Mayor Connie McCready. Letters of encouragement have also come from William M. Fast, branch agent for the Marine Engineers Beneficial Association and the Marine Cooks and Stewards unions, and from Donald E. Liddle, vice president of the Inlandboatmen’s Union of the Pacific. It has been an auspicious beginning for Rose City River Transit, and Ken Rose has only been encouraged. “ I figure we can start on a gradual scale,” Rose says. “ We can start with a small shuttle service between St. Johns and Downtown, or Swan Island and Downtown — our main function at first would be to serve the industrial community. “ With Wacker Siltronics in Willbridge, the St. Johns Riverfront Development in the offing, and the Rivergate Industrial District under development, the community of St. Johns might as well move. The streets up there will become freeways.” In the first half of 1979, the City of Portland Bureau of Planning received a $150,000 grant from the U.S. Department of Commerce’s Economic Development Administration to explore innovative transit alternatives to serve major municipal industrial districts. At the prompting of North and Southeast Po rtland community groups, who had heard and liked Rose’s proposal, river transit was included as one of four elements of the study; the others were a traffic behavior survey, a vanpool program and an Eastside transit station. Of the $150,000, river transit was given $5,000. On June 28, 1979, the city made an agreement with the newly forned Metropolitan Service District to to- operate in the study. They retained the consulting firm of George M Baldwin and Associates, Inc., oi Portland to study the feasibility of river transit in Portland. Metro’s obligation was to draw from the Baldwin report what it would need to determine the costeffectiveness of the river mass transit. River Transit Feasible The Baldwin report was completed in March. It was heralded by Portland Mayor Connie McCready, a self-described “ river person,” as an exciting possibility. “ It has been a long time since the people of Portland thought of the river as a transit corridor,” said Mayor McCready. “ Given the problems we face today, the river may once again become an integral part of Portland’s daily life.” But while there was optimism in her announcement, the mayor cautioned that to earn implementation, any new transportation mode would have to be cost effective as well as have a potential for high ridership. The Baldwin report concluded that while “ transporting people between residential areas and employment centers in the Portland metropolitan area by water” was feasible from an operational standpoint, there were some difficulties. Low clearance under the Burlington Northern Railroad Bridge across the Columbia River, low clearance under the railroad deck of the Steel Bridge across the Willamette River, and shallow water in the confluence of the Clackamas and Willamette rivers were identified as the major obstacles to overcome if a full-scale service was to begin. On the other hand, such anticipated problems as interference with commercial and pleasure boating, noise, dangers caused by floating debris and inclement weather were found to present no particular drawbacks to commuter travel on the river. Then it was Metro’s turn, and Metro’s transportation staff went to work calculating the costs of operating such a system based on potential ridership. Their findings were not favorable. The staff concluded that further investigation into river transit in Portland not proceed and recommended this to the district’s Joint Policies Advisory Committee (J-PAC) — made up from representatives of city, county, port, and Washington and Oregon state transportation departments. J-PAC agreed with that recommendation, as did the entire Metro Council. “ If you look at living patterns — where people live to where they want to go, there’s nothing cost effective or fuel conserving about fiver transit,” says Mike Burton, Metro councilor from District 12 (North Portland), who sits on the J-PXC committee. “ River transit just didn’t prove all that attractive.” Metro investigated three major factors involved in the cost effectiveness of operating a river transit system: travel time, operating cost, and riderIllustration by David Sondin 5
CLINTON ST. QUARTERLY Using a hypothetical 100-passenger surface effect ship, travel times for five routes were estimated, and those estimates were then compared with travel times for buses. For example, a one-way trip from Vancouver to Portland on the bus required 61 minutes. The same trip by boat would require 72 minutes, or 12 minutes longer, according to Metro’s study. A ride from Rivergate Industrial Dictrict in North Portland to Milwaukie took 39 minutes by bus, 41 minutes by boat. Out of the five routes, only one was found to take longer by bus than by boat — the ride from Swan Island to Portland took 34 minutes by river and 47 minutes by road. Likewise, a ride on the same route from St. Johns to Portland required 41 minutes by boat and 43 by bus. Strike one. Next, the Metro study compared the operation costs of a river transit system, again using buses partson. The annual price for three surface effect ships, for comoperating including labor, fuel, maintenance and administration, was $1,864,000. An equivalent number of buses, six, would cost only half as much, $715,000. The major difference was in fuel. Surface effect ships drank up diesel fuel four times faster than buses. Another element of cost was the fare. It would cost, said Metro, $2 per ride to pay for the more expensive river system, compared to $1.25 for a bus. Assuming fares for both bus and boat were set at 75 cents, government subsidies would have to pick up one- third of the cost for bus transit, while subsidies would have to pick up two- thirds of the cost of river transit. Strike two. As far as ridership, Metro concluded that since the cost of river transit was more expensive and travel time generally longer, fewer people would utilize the river system. Strike three. As far as Metro was concerned, river transit was out. Those who support river transit are wary of Metro’s conclusions. They contend that Metro’s analysis was hardly even handed in its approach to "Here is a city with a unique and beautiful waterway running right down the middle o f town, and it isn't being used fo r anything but freight and pleasure boats. " the subject. “Metro’s study was a disaster,” says Rose. “ Their study compared the cost of buses to the cost of boats. What Metro can’t understand is that we wouldn’t be competing with buses, we’d be competing with automobiles. The idea is not to compete with the bus system, but to tie in with it, to enhance it.” Furthermore, Rose says, the Metro staff ignored the most valuable aspects of river transportation. There was no mention of the value of creating a system which does not disrupt land as do new or expanded roadways and light rail systems, nor could Metro attach a value to the aesthetics of waterborne transportation, the character it would give to the development of the city, the value to education, or tourism. Rose, as well as other critics, contend the engineers judged the mode of transportation more as a challenge to their nearly completed regional transportation plan than as a potentially advantageous addition. The transportation plan, which Metro has made one of its principal goals, is essentially an agreement among local governments that the transportation problems in Portland and from Portland to Vancouver can be solved by emphasizing the use of buses and carpooling with a little light rail thrown in for advancement’s sake. Currently, the plan is in its second draft and Metro is hopeful a final version will be adopted by the Metro Council by December. River transit is nowhere mentioned in the regional transportation plan. “ If there’s a cost-effective way to utilize waterborne transportation in Portland, if it is cheaper, easier and less fuel consuming than it is to use buss or light rail,” says Burton, “ I’d be ill for it. But it’ll have to come fron the private sector. All we’re say- inj is we don’t want to spend any more money on investigating it.” No One is Interested To the last one — city, county, port and transit company — transportation planners have stood behind Metro’s decision not to pursue river transit in Portland. “Generally speaking,” says Steve Matoff, director of service planning for Tri-Met, “ we’re going to have to put our money in proven, practical modes rather than something already found to be not very cost effective. There are so many needs all over the region.” Doug Wentworth, systems planning director for Tri-Met, echoes that feeling. “What scares us are the hidden costs, the start-up costs of a new mode, the cost of interfacing with the other modes,” he says. “ We’d need park-and-ride centers, ways to get from the bus to the boat and from the car to the boat. Riverfront property is not cheap.” Congressman Robert Duncan (D-Portland), an ardent supporter of river transit, is chairman of the transportation subcommittee of the House Appropriations Committee. So convinced was he that river transit would be successful in Portland, he secured the Surface Transportation Act of 1980, $10 million for a waterborne transportation demonstration project in Portland. “We have a 900- to 1,000-foot highway running down the middle of Portland,” says Duncan. “ There are no neighborhoods to displace, no easements to obtain, and we have vessels that ride on a cushion of air to transport people along it.” Duncan laments that he cbuld not convince local governments to explore river transit in greater detail, even with the $10 million just ready for the picking. He blames what he calls “ mass transit idealists” who worship a particular mode of transportation and are not tolerant of any other form. “ They see any other form as a challenge to their own,” Duncan says. “We’ve spent $20 billion on mass transit since the early ’60s and we haven’t been successful yet. I think it’s because we’re trying to squeeze people back into systems that have already reached their peak. The horse was replaced with the bus, and now the bus has been replaced with the automobile. Now we have to replace the automobile. We have to keep experimenting.” Rose would like to get his hands on that demonstration money, but this is not destined to b.e. A local jurisdiction must create an agency or department on river transit before the federal funds can be dispersed, and no one is offering to do so. Private corporations may not apply. “We’ve done the whole song and dance,” says Sam Anderson, Duncan’s assistant. “Metro didn’t want it, the Port of Portland didn’t want it, Tri-Met didn’t care; the only person interested in it was a mayor who won’t be mayor much longer. “All the city would have to do is set up a water transit office. It could hire a contractor to run the system. It could hire Rose. But no one has shown any real interest in it. They have so many other things going on. It’s too bad, because the project is going to be done someplace — on the Ohio or the Missouri or the Mississippi.” Exactly what Rose plans to do now is uncertain. There is some talk of attracting a private financier to the cause, but these days money is difficult to come by. And since there hasn’t been a form of mass transit developed to date that doesn’t require a government subsidy to operate, the success of a privately owned system would be doubtful. With a $10 million plum just out of reach, with everyone except a lameduck mayor and congressmen against even exploring the subject further, Ken Rose is undaunted and optimistic. “ We are being beaten down by the system,” he says. “We have been beaten down before and probably will be beaten down again. But river transit is a community cause. I go to neighborhood groups and they support me. This time the community will win. How can residents of Portland, the most livable city in the country, soar like eagles when they are dealing with a bunch of turkeys?” Ed Blatter is the editor o f the St. Johns Review. YOUR SEWING CIRCLE Homeof the DOLLARTIE andother GREAT DEALS! THE SEWING CIRCLE 1034 SW 3RD 227-7985 HERBS-SPICES—FRUIT Open 10 a.m. to 6 p.m. Wholesale Monday - Saturday Retail 1026 S.W. Stark — Portland — 224-6797 6
CLINTON ST. QUARTERLY 7
CLINTON ST, QUARTERLY Illustration In Isaac Shamsud-Din
CLINTQN ST. QUARTERIY PULLING THE PLUG ON THE PRIVATES Rick Mitchell Prologue here as been a war going on in Oregon off and on for over 50 years. On one side have stood two large private utility companies; Pacific Power and Light (PP&L) and ^Portland General Electric (PGE), ^w ith their allies in the State legislature ■land regulatory process. Opposing these powerful interests has been a ^considerably less well-financed, r often-disorganized alliance of public power advocates including the Grange, a few labor unions, the left wing of the Democratic party, and, in recent years, anti-nuclear activists. The history of the war begins back around the turn of the century. In 1892, Portland General Electric was formed with the financial backing of a Boston bank and the infant General Electric Company. The following year, PGE purchased the city of Portland’s first and only municipally- owned electric utility, the East Portland Municipal Light Works. By 1907, PGE had merged with Portland Railway Light and Power, a holding company owned by Eastern investors that controlled nineteen companies, six power plants, and nearly fifty city franchises across the country. In 1909, Portland Mayor Harry Lane called the utility “ an arrogant monopoly” and suggested a municipal plant to meet the city’s needs. It seemed like a reasonable proposal on the face of it, yet public power proponents have been struggling to implement similar plans ever since. In 1910, Portland welcomed a second electric utility, the Pacific Power and Light Company. PP&L was the creation of another holding company, American Power and Light, which was in turn a subsidiary of the grandaddy of giant utility holding companies, the Electric Bond and Share Company of New York. AP&L also owned other Northwest utilities systems including those in Astoria, Yakima-Pasco, Walla Walla, Pendleton and The Dalles. In 1927, all of AP&L’s holdings in Oregon were reorganized under the administration of Pacific Power and Light, although publicly they continued to operate as independent companies. Following standard holding company practices, millions of dollars worth of new securities were issued each time the companies were reorganized or reincorporated, thus inflating their assets beyond any measure of their true value. The decade of the 1920s saw the increasing monopolization of the electric power industry, and it soon became a national controversy. By 1928, 80% of U.S. electric energy was controlled by sixteen giant holding companies. The financial precariousness of these empires was a major reason for the collapse of the stock market that led into the Depression. An investigation by the Federal Trade Commission in 1928 uncovered a wide variety of illegalities and abuses, such as “ padding operating expenses, entering into questionable transactions with subsidiaries, manipulation of security markets and milking of operating companies through excessive service charges.” In addition, the Federal probers uncovered “ an extensive public relations network sponsored by the pcwer companies that exerted an extraordinary influence over newspapers, political assemblies, school teachers and religious bodies.” Needless to say, until the Depression bankrupted many of them, the directors of the holding companies reaped huge profits. By the end of the ’20s, the controversy over holding companies and public power had spread to Oregon. In the 1930 election, the public development of hydroelectric energy became the major issue. A pro-public power Independent candidate, Julius Meier, easily defeated the Democratic and Republican candidates who were supported by the utilities. A statewide initiative providing a mechanism for the creation of People’s Utility Districts — publicly owned, locally- controlled utility systems — passed by a wide margin. Washington voters also approved a PUD law that year, but with a critical difference; Washington’s law was a single-stage — once voters approved a PUD’s formation, revenue bonds could be issued to finance it without a subsequent vote of approval. The Oregon law required a separate vote for bond issues. This gave the private utilities two chances to defeat every attempt at a PUD formation. The result is that 50 years later, over 75% of Oregon’s power is sold by private utilities, while in Washington, over 75% is provided by public utilities. Still, it’s a wonder PP&L and PGE survived the ’30s. As a result of the Federal Trade Commission’s investigation — which revealed $926 million in watered stock in Electric Bond and Share — thousands holders were wiped PP&L’s president PP&L’s subsidiary, of local stockout, including Guy Talbot. Northwestern Electric, alone had issued over $10 million in watered stock. In 1933, Charles M. Thomas, the state’s first Public Utilities Commissioner, gave a major speech at the Portland Civic Auditorium in which he laid out the complicated transactions the utilities were using to benefit large New York banks at the expense of local ratepayers. Thomas concluded his speech by calling for public ownership. Meanwhile, PGE (at that time known as the Portland Electric Power Company — PEPCO) had been sold to a different holding company. There followed a series of manipulative financial transactions involving the Chase Bank in New York and the Harris Trust in Chicago that resulted in their milking local investors, eventually forcing PEPCO into bankruptcy proceedings in 1934. In September, 1933, President Roosevelt dramatically and permanently altered the energy picture in the Northwest by approving the construction of a dam at Bonneville. Natunl- ly, the Bonneville project loomed large in Oregon politics. The promise of cheap Federal hydroelectric pcwer stimulated more attempts toward public power in the area. In 1934, the Oregon Grange sponsored ar initiative to create an elective state commission to transmit and distribute electric power. In what was to become a familiar pattern, the utilities waged an expensive campaign and defeated the measure. Between 1934 and 1940, 84 elections were held in Oregon and Washington on the question of establishing PUDs. As previously noted, most of those in Washington passed. Most in Oregon did not. Roosevelt was generally sympathetic to the idea of public power, and his appointment of J.D. Ross, former administrator of Seattle’s municipal power system, as the first BPA Administrator was a severe setback for the private companies. Ross promptly lowered wholesale electric rates between 2% and 37%. Bonneville’s 20-year maximum contracts required BPA approval of resale rates, and its public preference clause gave publicly-owned systems priority in access to BPA power. (The preference clause became crucial in 1967, when Bonneville first notified PGE and PP&L of its insufficient ability to continue to provide them with a total allotment of low cost hydro power, motivating the utilities to turn to more expensive coal and nuclear operations and creating the disparity in which Washington’s public power consumers now enjoy rates half that paid by Oregon customers. In May 1940, the Portland City Council placed a PUD measure on the ballot with the active support of the BPA staff. The private utilities were forced to fight harder than ever. PEPCO-PGE president Franklin T. Griffith argued in nearly 50 speeches prior to the election that a PUD formation would result in the loss of city tax revenues if the private utilities ceased business (an argument not heard mucti anymore in these days of tax write-offs — PGE paid $10.00 in state income tax in 1979.) PP&L president Paul McKee argued against the PUD as an erosion of the private enterprise system (an argument still very much in use — see the accompanying interview with PP&L vice president Glen Spicer.) A week before th e ^ election, the Oregon Journal and th e* Oregonian ran full page ads signed by “ prominent citizens” opposing the^ PUD. As a result of this massive c am - \ paign (the Federal Power Commission later charged the companies with excessive spending and accused them of transferring operating funds into political activities), the PUD proposal was voted down. It was to be the last serious challenge to the power of the private utilities in Oregon for nearly 40 years. Though PGE was forced into bankruptcy again in 1939, the company was able to turn the short-term power it bought from Bonneville into profits as World War II brought new industry and an expanded population to Portland. By the end of the war, both PGE and PP&L were rolling along quite profitably on Bonneville’s cheap hydro power. Their rates, while never as low as the public systems in Washington, were low enough to keep fied. cates can” most of their customers satis- Persistent public power advo- could be branded “unAmeri- and “ anti-free enterprise,” a dangerous charge in the post-war climate of McCarthyism. It was not until the early 1970s, when rising rates and nuclear power politicized the energy issue again, that public sentiment would begin to turn back toward the formation of PUDs. The 1980 Election With measures to form Public Utility Districts on the November ballot in 12 Oregon counties, the opposing forces are again joined on the electoral battlefield in mortal combat. Although the statewide Public Power Coalition is much broader and stronger this year than in previous elections, with increased labor support joining long-time public power advocates in the Grange (a rural organization with mass support from farmers), the Democratic Party, and a core group of youthful activists working ’round the clock with the media and door-to-door canvassing, PGE and PP&L will again outspend their opponents by an astronomical amount. And if their 50-year record in such situations is any indication, they will attempt to confuse the issue with misleading slogans and charges calculated to scare voters into acceptIllustrations by Phil Post 9
gUNTQN ST-QUARTERLY ing the status-quo. Actually, unler Oregon’s two-step Private utilities label PUDs inefficient govern ment bureaucracies despite the documented fact that public utility systems nationwide havemuch lower management costs thanprivate monopolies. yprroceadure, tihnius fniirsit C elK eM ctW ioH n wvouilud f merely commission, at a cost to the taxpayers of approximately 2$ per $1,000 assessed property value, feasibility studies in the 12counties to report on the potential advantages and disadvantages of public power. The PUDs could not float bond issues to finance a takeover without another election. However, the utilities are treating the upcoming vote as a matter of life and death. Apparently they’re worried the feasibility studie; would reveal the cost benefits ol public power, so that the voters would approve bond financing in the \ n e x t election. This would spell disaster for PGE in Multnomah County, " t h e heart of its operation where 80% of its customers live. And if the /^measures passed in the other 11 counties (Clackamas, Clatsop, Coos, Hood River, Jackson, Lincoln, Linn, M a r io n , P o lk , W a sh in g to n , Yamhill), it could cut into PP&L’s six-state operation by almost 40%. Brieflv, the argument for PUDs is that they provide customers with cheaper service and democratic control over energy decisions affecting their lives. As it is now, rates are determined by the Public Utilities Commissioner appointed by the governor. Under this structure, the utility monopolies are guaranteed a set rate o f return for their investors, which must be comparable to what stocks and bonds are selling for on the open market. Although the Commissioner has occasionally criticized the utilities for bad management (such is PGE’s decision to build an expensive downtown office complex, which they have since sold), for the most pan, utility requests for higher rates are routinely approved. The most recert was PGE’s 19% increase to cover the cost of its new Boardman coal-fired generating plant. Since 1973 when PGE and PP&L were cut off Lorn their previous full allottment of tow cost hydro power from BonneviEe, their rates have been rising constantly so that Portland residents now pay twice as much as PUD customers in Washington’s Clark County. The reason is that Clark County is still receiving its full energy requirement from Bonneville. BPA’s preference clause dictates that publicly-owned energy systems in the region have first rights to the energy produced since the BPA system was constructed by the federal government with taxpayer’s money. However, this is soon to change; the BPA has notified its public power customers that as of 1983, it will no longer be able to guarantee their total energy supply. Hence, the Washington Public Power Supply System’s decision to build plants — all of behind schedule dollars over their cost. five new nuclear them now years and billions of original estimated Nevertheless, advocates of new PUDs still believe they can offer cheaper rates, because as public 10 bodies they can borrow money with less interest to finance growth, and because they don’t have to include profits for stockholders in their rate base. Oregon PUD supporters point out that even in the days of plenty in the ’50s and ’60s, Oregon’s private customers paid more than Washington’s public customers. Many PUD proponents also criticize the utilities decision to concentrate on coal and nuclear plants as the most profitable way to meet the region’s increased energy demands. They feel that a PUD, with an elected Board of Directors responsible to local concerns, would be more likely to promote conservation and alternative energy projects such as co-generation, windmills, midro-hydro (small-scale dams on mountain creeks) and solar heating. WPPSS’ embarassing experience with nuclear power reveals that public systems are subject to the same manipulation and mistakes as the privates, but the Eugene Water and Electric Board’s decision not to parti- cpate in any new nuclear plants is a positive example of a public agency’s ability to respond to changes in popular opinion. The private utilities counter these arguments by labeling PUDs as inefficient government bureaucracies, despite the documented fact that public utility systems nationwide have much lower management costs than private monopolies. When their first bluff is called, the utilities claim there is no power available for new PUDs, and toss out inflated billion dollar figures as the cost of taking over their facilities. Of course, the utilities also contend they will not sell their power to new PUDs without a court fight, nor will they give up their property short of condemnation proceedings. Although the utilities try to portray themselves as fair-minded public servants, they have been known to play dirty when they feel their backs are to the wall. For example, in their 1978 election campaign against Ballot Measure #4, the utilities coined the slogan “ It puts you in debt without your consent.” After being sued for false advertising by the Public Power Action Group — since #4 would only have changed the election procedure, without forming any new PUDs or putting anyone in debt — the utilities settled out of court for $4,000 damages in a tacit admission of guilt. Hanging over the battle like a cloud is the stalled Pacific Northwest Electric Power Planning and Conservation Act, usually called the Northwest regional power bill. The bill’s passage will be decided by the lame duck session of Congress following the election, and it’s destiny will determine who will have first access to Bonneville’s hydro-electric power, who will pay for WPPSS’s ill-fated nuke plants and who will direct local planning for conservation programs and alternative energy development. Put together by a shaky coalition of existing PUDs in Washington, private utilities in Oregon, and energy- intensive aluminum companies receiving direct service from Bonneville, and introduced in Congress by Washington Senator Henry “ Scoop” Jackson, the bill is a compromise be-, tween these special interests. If passed, the Bonneville Power Administration would become a power broker for the entire region. Utilities could sell their costly energy from coal and nuclear plants to Bonneville, which would pool it with its cheaper hydro resources and sell it back at an equalized wholesale cost to public and private utilities. WPPSS would thereby be able to spread the debt for its nuke plants — originally priced at $4 billion, now at $16 billion, with final estimates ranging as high as $46 billion — throughout the region. (This might create a constitutional conflict, as it circumvents the intent of Ballot Measure #9, passed in 1978, which prevents Oregonians from being charged for power plants still under construction.) The aluminum companies would have their soon-to- expire direct-service contracts — which swallow up nearly 25% of the total electricity in the region — renewed, though at a higher price. And PGE and PP&L eould offer rate relief to their hard-pressed and increasingly angry residential customers, thus decreasing the likely- hood of a PUD formation. Opponents of the bill, including Oregon congressman Jim Weaver, claim it sets up BPA Administrator and long-time Jackson aide Sterling Munroe as the “ energy czar” of the Northwest. The bill is written they say, so that the administrator can override regional authorities to finance new nuclear plants, should he deem that action necessary. Also, while the bill mandates conservation incentives, it camouflages the cost of new thermal plants by averaging all costs together. BPA guarantees the purchase of output or capacity from new power plants, so unexpected cost overruns and operating problems — including the risk of a so’called “ dry hole” — fall directly to the ratepayers. Public power advocates also object to the bill’s modification of the preference clause as a disincentive to the formation of PUDs, although new PUDs are guaranteed quirements contracts under and there is a provision private utilities’ contracts full re- the bill, whereby can be cancelled if there is not enough power to supply preference customers. The utilities were expecting to have the bill passed prior to the election so that they could promise rate relief to voters. Weaver’s determined opposition, which put off the vote until the lame duck session in November, was a blow to their hopes. Weaver now has more time to consolidate his position, improving the chances that the bill can be stopped. Meanwhile, the intense campaigns for and against PUD proposals continue. The utilities have their usual media blitz under way, and they have also formed “ citizens committees” in the counties affected by the vote to give the appearance of grassroots support for their position. The Public Power Coalition has closed ranks after a split over the advisability of backing a billion-dollar renewable\ energy initiative in this election. (The measure did not acquire enough signatures to make the ballot.) The Grange, which has directed the previous campaigns for public power in this decade, is keeping a lower profile this time, as dedicated young activists directed by State representative Rick Bauman handle most of the Multnomah County operation. The PUD proponents believe they are riding a trend. In 1974, a public power measure received 24% of the vote in Portland. In 1976, it received 36%. In 1978, Ballot Measure # 4 ^ drew 46% of the vote statewide. “ I’m * optimistic the mood of the people is more in favor of public power than ak anytime since I’ve been working for \ it,” comments Grange leader W.C. Harris. “ I think people are beginning to see through the private utilities’ tactics,” adds Rhys Scholes of the Public Power Information Center. “Our job is to inform the voters. Their job is to confuse people. I believe we’re gonna win.” An Interview With PP&L On September 23rd, we interviewed Glen Spicer, PP&L’s Assistant Vice- president for Consumer Affairs and a coordinator for the company’s election strategy, in his office at PP&L’s corporate headquarters in downtown Portland. Mr. Spicer was very generous with his time, and willingly explained PP&L‘S positions regarding our questions. We then showed Mr. Spicer’s answers to a panel of public power experts. As you will see, many of his statements are open to serious contention. CSQ: I ’ve run into a lot o f simple- minded propaganda about this issue. I ’m going to try and ask some hard questions, some o f the same hard questions that I asked the public power proponents. Spicer: Sure. CSQ: First, to put the issue in perspective, what would you say is the basic philosophical argument fo r Oregonians to continue with investor- owned utilities when much o f the world now considers energy service to belong in the public domain? For example, Nebraska has been 100% public power fo r quite awhile. Spicer: In the case of Nebraska, the state went into the public power business a good many years ago with promises of cheaper rates and ample power supply and all the things you normally hear from people who have a desire to nationalize the industry. Right now, the state of Nebraska’s rates are almost double what you pay as a Pacific customer here in the Northwest. Their power supply is very critical. As a matter of fact, they’re almost on the basis of curtailing industry in that area. Those facts you can check for yourself. Our basic assumption is that
CLINTON ST. QUARTERLY forts last year? They must have thought they were buying something for their money._________________ It is no more ridiculous for the public to own its own energy system than it is for it to own its own schools, sewer systems, police and fire protection or any other necessarypublic service. investor-owned utilities can do a better job. I’ll give you a good example. In the case of the Trojan nuclear /p lan t, built by Portland General Electric, the total investment per customer is about $1,000. In the case of the nuclear plants built by the publics in the state of Washington, their share on a per customer basis exceeds $30,000. They’re inefficient. They’re managed by a board that doesn’t have the knowledge of the business. The basic philosophy of energy being managed by non-professionals is ridiculous. The issue is: do you want your energy problems managed by business enterprise, or do you want it managed by government enterprise? Comment: We took Mr. Spicer’s ■advice and did check the facts and we have to conclude that his answer con- tains several misleading & inaccurate statements. Ffrst, forming a PUD has nothing to do with nationalizing the industry. It is the establishment of Nebra ates to Oregon’s rates is like comparing apples to donuts. Orepower from the Bonneville system which the private utilities have shared in. A more valid comparison would be between Nebraska’s Public Power District rates and neighboring Iowa's private rates. The fact is that Nebraska’s are almost 50% cheaper. (Nationwide public systems are 43% cheaper than private systems.) Nebraska’s Public Power District currently has a surplus, not a shortage, of energy. They are not curtailing industry . Third, we’re not sure how Spicer arrived at his population figures, but his cost per customer comparison between Trojan and the Washington Public Power Supply System (WPPSS) plants is irrelevant. PGE’s contracts for the construction o f Trojan were written before increasing inflation and more stringent Atomic Energy Commission requirements drove the price tot all nuJcai conmore ridiculous for the public to own energy ■y ■m ’ to own its own schools, sewer systems, police and fire protection, or any other necessary public service. CSQ: PP&L outspent its opposition and handily defeated three previous initiatives in the last decade to have the city o f Portland take over its facilities. This year, PUD proponents have told me they fee l they have the best chance they’ve ever had to win. The utilities have been reported as organizing ‘‘citizen’s committees” in the counties affected by the election. You’re onfile as estimating $840,000, or “whatever it takes, ” as what you plan to spend. My question is — what specifically is the company’s relationship in terms o f bankrolling these committees? Spicer: Oh, we’ve helped bankroll them, obviously, but they’re also being bankrolled by thousands of other people, independent citizens throughout the state. It’s pure and simple — the PUD proponents have nothing to lose. Our stockholders have a lot to lose. And it should be made clear that that (money) is not being supported by the ratepayers. Its being supported by the stockholders. That’s the law. Comment: Simple, perhaps, not the Oregonians te Government Takeover books showed less lunds came from Diego tai ot $400,000) came directly from PGE and PP&L. The rest was pm up by ■• s e p a r a t io n o f ra te p a y e r and stockholder costs is basically a false issue. Ratepayer expetses pay for the company’s operating costs. as well as providing a return on investments to stockholders (called dividends, or profits). If that money is used fur political purposes, (he stockholders receive less in dividends. Then the company comes in for a rate increase, claiming (hey need a higher “ rale of return” to insure investor confidence. Guess who picks up the lab. Incidentally. PP&L stockholders with “ a lot to lose.” are, for the most part, large Eastern financial institutions like Merrill Lynch and Dean Witter. CSQ: How much influence would you say that PP&L has on the politics o f this state? I ’ve heard it said that the first group that Governor A tiyeh met with after his election was representatives o f the utilities . . . Spicer: If I had to put it on a scale of 1 to 10 how effective we are in controlling the politics in the state of Oregon, I ’d give it about a 2. Or 1. None of those people (the legislators) are utility-oriented. None of ’em are big business-oriented. Most of their philosophy is totally against that. I don’t think we have any influence at all with Atiyeh, Lobdell (Oregon’s Public Utilities Commissioner) or anybody else in the regulatory process. If it was true, you wouldn’t see the state siting council raising such a fuss on what we would like to do. This whole thing you hear about the utilities having the regulatory process and the politicians in their pocket is a bunch of crap. It just isn’t so. Comment: Crap? As the head of the Oregon State Department of Transportation under both Republican and Democratic administrations, the late Glenn Jackson was widely regarded as the most powerful man in the state. In addition to serving on the boards of many other Northwest corporation',. Jackson was President and then Chairman of the Board of PP&L. Jackson reportedly used to call on then-Governor Bob Straub twice a day. It's true that Governor Atiyeh's first appointee to the Public Utilities Commission was so industry- biased the State Senate refused to approve him. But it PP&L really - V trolling legislative politics, why did they spend $393,000 on lobbying efCSQ: In the long run, since PUDs can borrow money at lower interest rates, without having to pay a rate o f return to stockholders, how do you see that your rates will ever be as cheap as theirs? Spicer: Our embedded cost of capital at Pacific Power and Light is about 714% (interest), because you take all the old debt, which we got at three and four percent, and the new debt, which is going almost as low as the publics. That embedded cost of capital will continue on for many years, whereas if the publics go into the market today for money, they’re going to pay 10% (interest) — no question about it. Now publics have to make a profit too. They just call it a different thing. You look at any public agency in the Northwest tha t’s successful and you’ll see a hell of a bunch of money on the books that’s been retained from the ratepayers. If they were truly non-profit, they’d either reduce that rate, or they’d give it back at the end of the year. Comment: Mr. Spicer is being^ghb when he compares PP&L’s embedded raise* capital in three ways; selling bonds, selling preferred stock and is rmmon stock. of the three, and PP&L’s average interest on these bonds . 7 ’4% However, the company’s average overall cost of capital as determined by the Public Utility Commissioner is over 10%, and it’s going up, since their most recent bond sale was reported in the Oregon Journal on October 8 at fourteen percent. There is no doubt that a feasibility study would show that a new PUD can raise funds cheaper than PP&L and PGE. As for a PUD’s so-called profit — in a public utility, the retained earnings are re-invested in improving the system, just as in any business. The difference is who owns the system. In a publicly-owned system, the consumer owns the equity. Clark County bought its system in the late 1940s for $5.3 million. Today it’s worth over $80 million on the books. In real terms, that amounts to about $1,000 per person in value. < . . . CSQ: I have a poll here you conducted indicating that the key words fo r voters in the 1978 election campaign on Ballot Measure H4 were taxes and increased bureaucracy. I want to ask you a couple o f questions about this. Spicer: Sure. CSQ: ILTiy do you call revenue bond financing a lien against people’s property? Spicer: Revenue bond financing is a lien against the rates. The bonding companies who buy the bonds from a public agency are no different than ours. They must get a return on their investment. The state of Oregon has a restriction of 8% on whata PUD can sell a bond for. People ignore that fact. There’s no bonding company i n \ the United States today tha'. will handle a bond for a public ajency for 8%. So they’re dreaming to think they could ever go into business without a change in the law. We have never said revenue bonds are a lien on property. However, in the lav itself, it does state that if revenues are not sufficient to meet the requirements of the bonds in the district, people can te taxed. No PUD has ever done it. Bat it is in the law. Comment: As Mr. Spicer says, no PUD has ever taxed its constituents.^ Oregon's four operating have* sold millions of d , of bondsand they have never increased^ provisioi in bonds is tikts agree to a ise the rates if necessary to meet bonl requirements, not keep the rates down by taxing instead. Talk of taxes seem* to be a scare tactic. He is right about the 8% restriction. However, there is a statute allowing “ special districts” to sell at up to 10%, which might supersede the PUD law. I f not, the law will have to be changed, which shouldn’t be impossible. CSQ: Why do you call PUDs a new and costly bureaucracy when we already have a bureaucracy o f state regulators — the Public Utilitie; Commission. It seems to me that the PUDs in some ways constitute lets bureaucracy between the people aid the decision-making process thin what we have now. Spicer: That’s exactly what it is.Its a new and costly bureaucracy. V/hy buy a power system when you already own it? And that’s basically vhat you’re doing. If you look at the total need for funds through condemnation to take all of the investor-owned utility property out of the state of Oregon, it’s almost 4 billion dollars. Almost 4 billion dollars. Comment: “ Why buy a power system when ah it?” That’s easy for him to say! PP&L ai(d PGE ratepayers own nothing and have virtually no control over man- O m - s, not owners. By the way, I think he avoided the CSQ: How do you arrive at that figure o f 4 billion dollars? Spicer: It’s simply based on the historical buy-out cost all over the Northwest for the last 25 years. Comment: The industry yardstick for buy-out costs over the last 25 to 30 years has been annual revenue times the figure 5.5. This may have been an accurate formula in the past, but ii has little application now tor the following reason: The formula takes into account the costs of everything PGE and PP&L own, including coal and nuclear plants, because these 11
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