The Jefferson County Public Utility District will celebrate its 10th year of providing electrical power to its home county this week. Jefferson PUD threw the switch that marked its control of the …
The Jefferson County Public Utility District will celebrate its 10th year of providing electrical power to its home county this week. Jefferson PUD threw the switch that marked its control of the power utility in April 2013.
But the critical year for that historic expansion was 2008.
That’s when a unique combination of grass-roots politics and global financial shifts led little Jefferson County to become the only county in Washington state to make the leap from a private power utility to a public one in a half-century.
In fact, that same year three Western Washington counties put the question of shifting from private to public power before their voters. Jefferson County was the only one that said yes.
The county’s private power utility started supplying power to Jefferson County in 1889, the same year as Washington’s statehood. It was then called Puget Sound Power & Light.
In 2008, now called Puget Sound Energy (PSE), the private utility supplied electricity to more than 17,000 customers in Jefferson County. It operated eight substations, 40 miles of high-voltage transmission lines and 570 miles of distribution lines in this county. Jefferson County was a small part of PSE’s holdings, which today provides power to 1.1 million customers in Western Washington, including King, Pierce and Kitsap counties.
PSE was generally well-regarded. But corporate changes came to light in 2007 that caused alarm in some quarters.
Cost-cutting decisions through that decade reduced the Jefferson County-based PSE staff from 20 to two, as offices were closed and maintenance of utility lines shifted to contractors like Potelco, whose crews were based as far away as Sumner.
Also, in 2007 PSE put itself up for sale. It entered into a $7.4 billion purchase agreement with an Australian-based hedge fund called the Macquarie Group. PSE’s shareholders, who would be paid $30 per share, had already approved the deal.
But the state Utilities and Transportation Commission (UTC), which regulates private utilities, had yet to act.
(The UTC later approved the sale, which occurred in 2009. In 2019, Macquarie sold PSE to a coalition of Canadian firms that manage the pension funds for public employees in the provinces of British Columbia and Alberta. A Dutch company has a minority interest.)
Concern about offshore ownership of the Northwest’s largest private power utility prompted people in three PSE counties to consider a shift to public power to keep control of the power system in local hands. Those three counties were Skagit, Island (Whidbey and Camano islands) and Jefferson.
The separate moves in each of those counties set up the climactic election of 2008.
In Jefferson County, Bill Wise, a retired electrical engineer with ties to the software industry, was among the first to raise concerns. Together with Steve Hamm, he formed Citizens for Local Power and advocated a look at public power.
Public power utilities had substantial history in Washington state. Led by farmers, granges, and rural communities ignored by private utilities, a public power movement in the 1920s led several rural counties to establish PUDs in 1930. Among them were Clallam County to the west and Mason County to the south. Of Washington’s 39 counties, 22 are public power counties.
While Jefferson County instead went with PSE, it already had a PUD focused on water and sewer. The Jefferson County PUD acquired the Gardiner water system in 1981, and by 2008 operated other water systems and community sewage systems that served 3,200 rural households.
Led by Port Townsend native and engineer Jim Parker, the PUD had nine employees.
In the spring of 2007 Wise and Hamm approached Parker and the three elected members of the PUD Commission to advocate a look at public power.
The commission was cautious. It eventually told Wise and Hamm if they could generate enough signatures from local voters to put an advisory vote on the November 2008 ballot, they would consider it. In fact, the PUD was neutral throughout the campaign that followed.
“We don’t care who wins,” said Parker shortly before the vote. “If it happens, it happens. If it doesn’t, it doesn’t.”
Wise, Hamm, and two dozen volunteers who were part of the grassroots Local 2020 group became fixtures at farmers’ markets and any other significant gatherings to collect signatures. In the end they got 2,100, more than enough for a ballot measure. As Wise later said, that “means we probably had at least 4,000 conversations with people. That’s a lot of conversations.”
In effect, the campaign for what became called Proposition 1, set for the Nov. 4, 2008 ballot, had already started, and the grassroots effort by Citizens for Local Power was already out of the gate.
PSE was not going to stand by while three of its lucrative, longtime Western Washington counties dropped away.
PSE countered that it had been a reliable utility for over a century, that it was regulated by the state, that its rates were reasonable, its service good and that launching a new PUD would be expensive and risky.
It also said that a PUD purchase of all PSE infrastructure in Jefferson County would be enormously expensive – up to $100 million. The funds would, over time, come from ratepayers.
PSE, based in Bellevue, hired the state’s most sophisticated political and public relations firm, Strategies 360, to conduct its campaign against Proposition 1 in Jefferson County and the parallel propositions in the other two counties. Strategies 360 had a long record of success, mostly on Democratic campaigns, such as Sen. Maria Cantwell and Gov. Booth Gardner. (It has grown to 22 Western states and a major presence in Washington, D.C.)
Strategies 360 launched a campaign unlike any other ever seen in Jefferson County.
It did extensive and frequent polling of voters, including some push-polling. It introduced billboards on trucks. It did robo-calls. It authored a blizzard of home mailings and newspaper advertisements. It brought all of PSE’s top corporate officials to local political forums or other gatherings.
It hired a popular local man, until then the Chamber of Commerce director, and set up a visible downtown Port Townsend office.
It also set up what’s called an “astro-turf” organization (in contrast to grassroots) which it claimed represented local people in support of keeping PSE. All of the initial officers were employees of Strategies 360. Its address was a Mail Plus postal box. It did the same in the other two counties.
By the time the vote took place on Nov. 4, 2008, PSE had spent almost $1 million in all three counties, of which $250,000 was spent in Jefferson County. (That would be $30 for every voter who, in the end, supported PSE’s position.)
Citizens for Local Power, in contrast, remained small scale. It spent $24,000, most of it donated by locals. The largest single contributor was a trade association representing PUDs.
When the ballots were tallied, Prop. 1 passed in Jefferson County with 54 percent of the vote. The Port Townsend precincts had been strongly in favor; the rural county precincts were slightly opposed.
In the other two counties – Skagit and Island – public power lost.
A post-election interview with Ron Dotzauer, the chief executive officer of Strategies 360, gave insight into why Jefferson County was unique. The situations in the other counties were quite different.
Island County had no existing PUD. So the vote there was not just about public power, but setting up a new government agency and electing its first commissioners. The public power proposition lost there by a two-to-one margin.
In Skagit County, a PUD existed already but the push for public power came directly from the PUD commission, not a voter petition. The PSE central message about “Say no to a government takeover” had resonance there. It was also a much larger and more expensive power system that included a dam.
Public power in Skagit County lost by 6 percent.
In Dotzauer’s post-mortem, he said he knew from the get-go that Jefferson County was most likely to vote for the switch. The county was more rural, more cohesive, less susceptible to outside campaign tactics, and at least in the Port Townsend area, more politically progressive. Some 75 percent of voters in the Port Townsend precincts had cast ballots for Barack Obama.
His regular polling told him, he said, the measure was likely to pass in Jefferson County.
While Prop. 1 was advisory to the PUD Commission, that body soon took the steps to make the transition to public power a reality.
In 2009, negotiations began with PSE over a purchase price for PSE’s assets. In 2010 the PUD signed a contract with a three-year window to acquire cheap hydroelectric power from the Bonneville Power Administration (BPA). BPA power was restricted to public, as opposed to private, utilities.
Later that year, PSE and the PUD agreed to an asset sale price of $103 million.
New staff with electrical power expertise were added to the PUD, beginning with Kevin Streett, who is now the PUD’s general manager.
On April 1, 2013, the PUD took over the power utility. A switch was flipped, and to the relief of many, it worked.
Today the PUD has grown from the pre-vote nine employees to over 60. The tens of millions of dollars locals spend on power stays, for the most part, in Jefferson County.
And the lights stay on.