Manager’s Message February-March 2014

Public Preference = Low Cost Electricity

At the start of the New Year I read an article citing Washington State to have the lowest electricity rates of all 50 states in 2013.  In fact Washington is the only state with average 2013 residential rates remaining below $0.09/kWh – an impressive status.  In a society so dependent on electricity, low rates translate to a higher standard of living.  What earns Washington this high status?  Public preference and the Federal Columbia River Hydropower System (FCRPS)!

Public preference means that in the allocation of benefits from public resources, the public interest must be served before private interests.  Specific to Northwest electric utilities, preference is the first right of the public to purchase electricity generated from the FCRPS through their non-profit public power utility.  Public preference has its roots in federal legislation passed during the first half of the 20^th century.  For the northwest, the Bonneville Power Act of 1937 created the Bonneville Power Administration (BPA) and gave preference to municipalities, cooperatives and public utility districts within its service area.  BPA’s preference customers have first right to FCRPS generated electricity.  Once preference customer needs are met, surplus power is sold to investor owned utilities (IOU’s) and direct service industries (DSI’s, ie. large industrial plants like aluminum smelters).  Skamania PUD is a full-service customer of BPA and as such we are a direct recipient of the preference benefit of low cost FCRPS electricity.

Preserving our preference requires constant vigilance for the same reason shopping is madness on Black Friday – everyone wants in on the best deal.  Because preference plays a vital role in our low cost electricity, public utilities band together in organizations like the American Public Power Association, the Public Power Council, the Washington PUD Association and the Western Public Agencies Group to preserve our preference benefits.  These groups are staffed by lawyers, lobbyists and industry experts who have the knowledge and skills to fight the legal and legislative battles in defense of our preference status.  These groups are a little like the rodeo horse trainer making sure the horse (BPA) is working hard for the rider (municipalities, PUDs and co-ops).

Living in the state at the top of the list for low cost electricity is a good place to be!  Skamania PUD is working hard to keep us there.

Brent Bischoff
General Manager