“People For Yes on Whidbey PUD” released its preliminary cost study of what it would cost to form a island-wide public utility district during Tuesday’s Exchange forum in Clinton.
The long-awaited cost estimate was much lower than expected.
“People For Yes” campaign chairman Dave Metheny said it would cost $57.5 million to take over Puget Sound Energy’s assets on the island and start up a island-owned utility. He also said the property tax burden would be between $2.57 and $5.78 per year for a $300,000 home. The initial property tax increase would pay for a professional feasibility study and initial legal cost. The system would be acquired with bonds that would be paid for with revenue from electrical rates.
The numbers are radically different from what PSE’s consultant UtiliPoint found; between $130 million and $200 million, or an average cost share of roughly $4,000 per resident overtime.
Bob Bellemare, the author of the UtiliPoint study called the numbers unrealistic.
“The $57 million is laughable,” Bellemare said.
He said that substations and transmission lines alone will cost more than that. And he added that his evaluation is based on comparable cases that have been settled in Washington.
“You’re not going to get the system cheap or for free. This is not scare tactics. This is reality,” he said.
Metheny also said that rates would be initially higher than PSE’s rates, but would then go down overtime, resulting in savings for islander of $7.5 million in the first five years to $119 million at the end of 10 years.
“Our rates are based on cost. PSE’s rates are based on cost plus profit,” Metheny said.
In contrast, PSE may have to borrow $5 billion for infrastructure over the next five years that will be reflected in electric rates, Metheny said. The utility has also a pending rate increase request before the Washington Transportation and Utilities Commission, which, if approved, would make PSE rates the highest in the state.
Whidbey residents had long pressed the PUD supporters to release firm dollar figures, but were told time and time again that the group needed more time to complete its study that was conducted by volunteers.
Once the numbers were out in the open, the audience attention turned on the buyout of PSE by the Australian-based investment group Macquari. While PUD supporters stressed that it is the company’s goal to maximize its profits and PSE couldn’t care less about lower rates and reliability on Whidbey, PSE officials said they would continue to be locally controlled and the sale was simply to gain the investment money needed to upgrade its system.
The forum was sponsored by The South Whidbey Record and the Clinton Community Club.
