Public Power Proposals
Posted on April 17, 2005 by oregoncub
Tags, Utility Regulation
Two viable options are now on the table that would create such a public utility: SB 1008 (introduced by Senator Ryan Deckert, Senator David Nelson, and Senator Vicki Berger) would create a state power authority called Oregon Community Power. OCP has the advantage of a broad geographical and political base, and a host of financial and practical advantages. This proposal is being crafted by customer groups along with others in a workgroup created by the Senate Business & Economic Development Committee.
The same financial and practical advantages also apply to a proposal that the City of Portland, led by City Commissioner Erik Sten and endorsed by Mayor Tom Potter, purchase PGE. The City has an additional advantage in that it can move forward quickly, an important fact in light of the announcement that Enron would like potential buyers to make offers within one year.
Lower Rates
The rates that would be charged by Oregon Community Power can be expected to be lower than rates otherwise would be, because a publicly-owned version of PGE will have lower costs. For example, a public utility would have access to tax-exempt financing, which is only available to government institutions. This means that all new power plants, transmission lines, and distribution facilities could be built at a significantly lower cost than any non-governmental alternative. In addition, a public utility would not be subject to state and federal income taxes. While we know that PGE has not paid taxes in recent years, customers have been charged hundreds of millions of dollars in taxes. With a public utility, customers would no longer be charged for income taxes. (Note: OCP would pay property taxes and franchise fees to local governments.) Finally, a public utility would not have shareholder equity as part of the financing. Therefore, a public utility would not have to pay higher cost interest on equity, but would rely on lower cost debt.
Stability
In the last 8 years, there have been 4 attempts to purchase PGE (Enron, Sierra Pacific, NW Natural and Texas Pacific). During this time, PGE’s rates have become among some of the highest in the Pacific Northwest. A public utility would be focused on providing reliable service at the lowest cost, not helping sell itself to the highest bidder.
Resource Planning/Economic Development
Oregon’s economy has been harmed by having electricity rates soar in recent years. Electric utilities need to plan years ahead in order to ensure the lowest cost and least risk power supply. A utility cannot adequately plan for the next 20 years when it does not know who will own it next year or what their business model will be. Because a public utility would have no other business interests and would not be up for sale, its only business model would be to provide electric power to its customers. This means that it could focus on fueling Oregon’s economy by providing low rates.
Oregon Energy Policy
Oregon has one of the most innovative energy policies in the country. PGE is the nation’s leader in green power options. Oregon allows industrial customers direct access to the wholesale market. Oregon has a non-profit organization, the Energy Trust, that invests in energy efficiency and renewable programs integrating the programs that were once offered independently by PGE, Pacific Power and NW Natural. A public utility would continue these programs.
Workforce Interests
Everyone understands that, not only does our economy depend on the power that PGE supplies to homes and businesses, but that the thousands of people that PGE employs—comprised of linemen, customer service people, and management—are also crucial to making a good future for the economy and the community that is Oregon. A public utility would value the people who work for the utility and the important economic role those jobs play in the larger economy.
The Community’s Interest Is the Utility’s Interest
Enron’s attempt to manipulate the power market did not reflect Oregon’s interests or values. Neither did Texas Pacific’s attempt to make a quick billion dollar profit on PGE. A public utility would be an Oregon-run, Oregon-headquartered utility that does operate in our interest and reflect our values. By statute and by inclination, the Board of a public utility would make decisions in the best interest of the customers and community served by the utility.
High Quality Board through Gubernatorial Appointment
A public utility would be led by a Board selected by the Governor based on their credibility, their experience, their creativity and their ability to make decisions in the interests of the customer and the community. This Board would be able to represent the diverse viewpoints of the utility’s extended service territory.
To keep up with CUB, like us on Facebook and follow us on Twitter!
03/10/17 | 0 Comments | Public Power Proposals