Comment at June 13 Council meeting

6/9/2017

A great blue heron flies by Bainbridge Island

The Bainbridge Island City Council is taking public comment on the possibility of a City-run electric utility at their June 13 business meeting. You can share your feedback with City Council in two ways:

  • In-person on Tuesday, June 13 at Bainbridge City Hall, starting at 7 p.m.
  • Email your input to council@bainbridgewa.gov

At their study session on June 6, the Bainbridge Island City Council listened to three presentations, one from D. Hittle & Associates, author of the May 2017 revised feasibility study regarding a possible City takeover of PSE’s electric assets on Bainbridge Island, the second from Island Power, the citizen’s activist group supportive of public power on Bainbridge Island and, third, a presentation from PSE's Andy Wappler. 

Andy Wappler, VP, Customer Operations & Communications, began his presentation indicating PSE would prefer a conversation with the City about what PSE and the City can do together. He then critiqued the Hittle study, pointing out four “red flags”:

  • Rising costs - From the draft study in January to the May study, acquisition costs increased from $57.7 million to $62.4 million, while the expected 10-year savings decreased from $13.1 million to $3.6 million. Risks are growing and benefits are shrinking right from the start.
  • Unrealistic assumptions - Many of the assumptions the Hittle study made are either not correct or are overly optimistic. Examples: Hittle’s study quoted interest for taxable municipal bonds at 5% while research shows the average interest rate is 6%. Hittle’s study uses Rural Utility Service (RUS) funding, while RUS rules prohibit providing funding to an incorporated city with a population of over 20,000 people.
  • Critical questions - Hittle's study raised critical questions it didn’t answer such as giving no specifics on how the City might pay for a variety of issues including building a new transmission line and substation, increasing undergrounding or developing a more aggressive tree-trimming schedule.
  • Biased, not objective - In the six business cases the Hittle study provides, four rely on 5% bonds and two rely on RUS funding, stacking the deck toward municipalization.

For his presentation, Mr. John Heberling of D. Hittle & Associates walked through their report highlighting issues including, standards of service required by the Bonneville Power Administration (BPA), how the City of Bainbridge Island might get power from BPA, their assessment of the City’s acquisition costs for PSE’s assets on the island, and a variety of financing options and potential costs to the City calculated out to year 2040.

Bob Snyder of D. Hittle & Associates spoke more directly to the benefits the City and its residents might glean from municipalization over continuing to be served by PSE. He also touched on some of the risks the City might face creating and operating a small public power company.

Steve Johnson and Randall Samstag of Island Power compared some aspects of the Hittle study to the study authored by Concentric Energy Advisors, which was commissioned by PSE. Barney Burke, former Jefferson County PUD commissioner, spoke about public power.

After all the presentations, the City Council had many questions for the authors of the Hittle Study. 

Public comment will be entertained by the Council at their business meeting on June 13 at 7 p.m. If you want to have your voice heard, please attend the June 13 Council meeting to provide comments. If you cannot attend, the Council is accepting written comments at council@bainbridgewa.gov.