The Oregonian

Questions, answers about PUD ballot

10/31/03

Here are some common questions about the measures on the Multnomah County ballot in Tuesday's election.

What is a people's utility district?

A people's utility district is a government-owned corporation. It will be formed in Multnomah County if Measure 26-51 is approved on the Nov. 4 ballot. Unlike investor-owned utilities, PUDs don't seek to generate profits. Among other powers, they have the authority to condemn the property of investor-owned utilities and issue voter-approved revenue bonds to fund acquisitions. There are six electricity PUDs in Oregon, 23 in Washington (where they are called public utility districts) and none in Idaho or Montana.

Who would govern the PUD?

The PUD would be governed by a five-member board elected by voters who live within its service territory. Twelve candidates for the board are also on the ballot.

Would it raise taxes?

A separate measure on the Nov. 4 ballot, Measure 26-52, would authorize the PUD, if formed, to impose a one-time levy to raise $127,000 for an engineering study on acquiring utility assets. The property tax charge would be 0.3 cents for every $1,000 of assessed value, or 0.0003 percent -- about 45 cents on a house with an assessed value of $150,000. To pass, it needs an overall yes vote plus voter turnout of at least 50 percent.

Would it acquire the investor-owned utilities that serve Portland?

PUD backers say they would seek to acquire poles, lines and other assets of Enron-owned Portland General Electric, which has 230,000 customers in Multnomah County. A PUD is authorized to condemn the assets of investor-owned utilities in its service area. Under Oregon law, it then must pay "just compensation" for the property. If the parties cannot agree on the amount, it will be set by a court.

Backers of the PUD campaign say they are not interested in PacifiCorp, which does business as Pacific Power and has 68,000 customers in Multnomah County. The ballot language, though, does not exclude PacifiCorp, and it would be possible for the PUD board to decide to condemn PacifiCorp's assets.

Where would it get the power to serve customers?

From the Bonneville Power Administration, from the wholesale electricity market, and from any generating facilities that it is able to acquire through condemnation or by building generating facilities. BPA officials say a new Multnomah County PUD would have access to the electricity the agency now supplies PGE for its residential customers. That electricity would not be enough to supply Multnomah County, but PUD advocates say they would be able to condemn and acquire PGE generating plants, even those outside the county. PGE representatives say they would legally contest such an effort.

How would it raise money for acquisition or construction?

It would raise money by issuing revenue bonds, which must be approved by voters and would be paid with money from electric rates.

Would it lower rates?

PUD proponents say a publicly owned utility district almost certainly would charge lower rates than PGE, noting that all six Oregon PUDs currently do. The PUD wouldn't pay high executive salaries, they say, wouldn't funnel income tax estimates to a corporate parent, could issue some tax exempt bonds and would have access to lower-cost BPA power. It still would pay property taxes, payroll taxes and franchise fees.

PGE's mailings to its customers this month say rates probably would go up under a PUD. The PUD would have to assume debt to pay $1 billion or more for PGE's assets, opponents say, buy power in a volatile wholesale market, and set up a separate control center and billing system for a jigsaw-shaped service area. With PGE and PacifiCorp vowing to fight the PUD, they also would have to shell out millions for legal expenses, opponents say. The lower BPA rates aren't guaranteed. And the PUD wouldn't be overseen by the Oregon Public Utility Commission.

PUD opponents made similar arguments in 1999 when voters approved the Columbia River PUD's annexation of PGE service territory in Scappoose, St. Helens and Columbia City. Rates dropped immediately after the annexation, and the rate differential has increased since then. PUD opponents say the Multnomah County PUD would be larger and more costly to administer.

PGE says its rates are high compared with other Northwest utilities largely because of contracts the utility signed during the 2000-01 energy crisis that eventually will expire.

Would it be required to raise money for "public purposes," such as low-income assistance programs or weatherization?

PUDs are not required to impose a 3 percent "public purpose" surcharge on electric bills. PUD supporters, though, say a PUD would raise more public purpose money than the more than $15 million a year collected by PGE. PUDs are statutorily required to have a low-income energy assistance program, but how it is designed or administered is up to the individual PUD.

If this measure is approved, could the city of Portland still buy PGE?

Portland has been negotiating with Enron, so far unsuccessfully, to buy PGE and has the authority to condemn some PGE property because it is privately owned. If the PUD condemned and acquired PGE before the city did, the city could not condemn the publicly owned utility. However, the city could act more quickly than a PUD.

Whom would the new PUD serve?

A surprisingly tough question. For one, people who live in the east county areas covered by the Rockwood water PUD (13,000 households) and the Interlachen water PUD (150 households) would not be part of the new district because state law bars PUDs from overlapping. Those residents will not vote on the PUD measures and would not have to pay any new property taxes authorized for a PUD.

Residents in the eastern portion of the county who get electricity from the city of Cascade Locks also would not be in the new district.

Another wrinkle: If Measure 26-51 authorizing the PUD passes overall, state law requires elections officials to tabulate the vote in each incorporated city and in the unincorporated areas of the county. If any of those jurisdictions -- namely, Fairview, Gresham, a portion of Lake Oswego, Maywood Park, Portland, Troutdale, Wood Village and the county's unincorporated area taken as one jurisdiction -- votes no, it will not be included in the PUD, and its residents will not have to pay PUD property taxes.

It's unclear whether votes for board candidates from areas that drop out would be counted, Multnomah County election officials say.

What if voters approve the PUD but reject the property tax measure, or it lacks the turnout to pass?

The PUD still would take effect, and the board still would form. PUD supporters say they probably would ask for the money again at another election.

What if voters reject the formation of the PUD but approve the property tax measure?

The tax measure would not take effect, and the PUD board would not be formed.

Wouldn't the PUD break apart PGE's system?

Yes, and this is a major argument of PUD opponents. PUD supporters say the Multnomah County election is only the first of six that they hope to trigger through petition drives. Members of the public power coalition are seeking to put similar measures on the ballots of Clackamas, Marion, Polk, Washington and Yamhill counties, and will announce today that they have necessary signatures in Clackamas and Washington counties. They also say areas not served by the PUD could opt to join later. And they note that the county's electric service already is divided between two providers.

Do I have to vote for everything on the ballot?

No, you can choose to vote for all of the ballot items or just some of them, and your vote still will be counted. You also can choose to vote for five board candidates or fewer. All voters who submit ballots will be counted in the turnout calculation required for Measure 26-52, even if they do not vote on the property tax measure.

-- Jonathan Brinckman and Scott Learn