The Oregonian

Clackamas County mails ballots with PUD question

Voters will have a chance to decide on a people's utility district that would eventually take over assets from PGE

Friday, April 30, 2004

SARAH HUNSBERGER

Clackamas County voters are getting their turn to decide whether to form a people's utility district, the first step toward public ownership of the county's electricity system.

Ballots are being mailed beginning today and will be counted May 18. As in recent proposals in Yamhill and Multnomah counties, Clackamas County voters have several decisions to make. Questions include whether to approve the PUD and who should be its first elected leaders.

The Clackamas County PUD would exclude customers of the Canby Utility Board, a municipal public utility.

The proposal could lead to a takeover of electrical service from Portland General Electric. It's virtually identical to the recent measures in Yamhill and Multnomah counties that were soundly defeated after big-money opposition campaigns financed by Enron-owned PGE. The company serves about 157,000 electricity customers in Clackamas County.

Clackamas County PUD supporters face a similar uphill battle, with PGE pouring more than $300,000 into an opposition campaign, according to campaign finance reports filed earlier this month.

Several groups supporting the PUD raised about $20,000 altogether.

PGE is offering most of the same arguments against formation of a PUD: There is no guarantee rates would go down; there are many unknowns; and a PUD led by a fledgling board would be too risky.

But what's different about this election is that for the first time, PUD supporters are offering hard numbers they say show a PUD would save ratepayers money.

A preliminary study completed this week by Washington-based consultant D Hittle & Associates estimates that ratepayers would save $860 million in the first 10 years.

Brian Gard, an advertising executive leading the campaign against the measures, brushed off the study's findings, saying it's not surprising that the study represented supporters' point of view.

PUD supporters say the study was completed independently.

While the numbers in the study are estimates, PUD supporters say they provide enough positive news to warrant more detailed study.

And further study, supporters say, is what residents really are being asked to approve.

"The PUD formation is a multistep process," said Tom Civiletti, coordinator for Clackamas Public Power, the group leading the pro-PUD campaign.

A second election would be required before the PUD could issue the voter-approved bonds it would need to pay for buying PGE's infrastructure.

Two sets of votes

The main proposal on the ballot, Measure 3-122, asks voters to create the nonprofit people's utility district. If approved, it would be Oregon's seventh PUD.

Voters also are asked to elect a five-member board of directors.

The board members would oversee general policy but would hire a professional manager to handle day-to-day operations.

The new PUD board's first task would be to oversee an engineering report that would analyze the cost and feasibility of providing electrical service, including whether rates would drop.

If the engineering report showed rates would not go down, the district could re-examine a takeover later. The Columbia River People's Utility District in Columbia County began in 1947 but didn't begin providing electricity until decades later, said general manager Kevin Owens.

To pay for the initial engineering study, voters also are asked to approve Measure 3-123, which would create a one-time property tax levy of $.003 per $1,000 of assessed value. The levy would total 45 cents for a $150,000 house.

"It's kind of like buying some cheap insurance," said Lloyd Marbet, a PUD supporter.

Gard argued that the amount of money collected -- an estimated $73,000 -- wouldn't be enough to do a complete study.

The district would not be able to get more money without voter approval.

The feasibility study released this month found that customers would save on their utility bills even after the PUD spent the money to buy PGE's power lines and other facilities. The money to buy PGE's facilities would come from bonds and be paid back with rate collections.

It remains unclear how much it would cost for a PUD to obtain the infrastructure. If the two sides cannot agree on a price, a judge would decide.

Gard said PGE is likely to fight a takeover in court. He also said this week's preliminary study assumed an unreasonably low price for buying PGE's infrastructure. PGE estimates are twice as much.

In Columbia County, voters in several communities voted to join the Columbia River PUD in 1999. The residents had been served by PGE but saw their rates drop by 20 percent when the PUD bought and took over PGE's lines, Owens said. The rates went down even after the PUD bought the needed power lines and other facilities, Owens said.

The rate savings in Clackamas County theoretically would come from several sources, including the fact that PUDs earn no profits because they provide electricity at cost.

But supporters say one of the biggest reasons to form a PUD is local control.

PUD supporters are concerned about what will happen if Texas-based Texas Pacific Group's buys PGE from Enron. While state regulators must still approve the deal, PUD supporters worry that Texas Pacific may not have the county's best interests in mind and could re-sell quickly. Texas Pacific executives have said they hold their investments an average of five to seven years.

Marbet would rather see the power in residents' hands.

"When you know that you as a voter have the power to reject anything," he said, "what do you have to lose?"

Sarah Hunsberger: 503-294-5922 shunsberger@news.oregonian.com