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
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