PSE releases electric utility feasibility study

5/17/2017

PSE, which has remained clear the electric system is not for sale, commissioned a preliminary feasibility study to give Bainbridge Island residents a detailed assessment of the costs and risks of a City-owned electric utility. According to the study’s authors, Concentric Energy Advisors, a management consulting and financial advisory firm focused on the North American energy industry, a City-owned electric utility would cost Bainbridge Island taxpayers $146.8 million upfront and millions more to operate.

The upfront costs for the City of Bainbridge Island to take over and set up a City-run electric utility would be broken into three main parts:

  • Acquisition costs of PSE’s assets are $109.1 million, which cover purchasing electric infrastructure items such as substations, transmission lines, distribution lines, easements and property. 
  • Transaction costs are $8.7 million, which cover costs such as legal, consulting and financing costs to pursue the condemnation and close the transaction.
  • Start-up costs are $29 million. These include the cost of new systems, resources, inventory, machinery and services that will be necessary to operate and maintain the utility; to manage customer relationships, data and billing; and to provide sufficient financial reserves.

The $146.8 million is the initial cost to form a utility; there are also annual operations costs. Concentric Energy Advisors estimates ongoing operations costs for the citizens of Bainbridge Island will be greater with a City-run utility than with PSE. These costs include:

  • The City-run electric utility would need approximately $30 million to operate the utility in the first year (2021), and by 2034, would require roughly $42 million annually.
  • Over a 10-year period customers on Bainbridge Island would spend $36.6 million more than if they stayed with PSE.

“PSE has the expertise and programs today to partner with the City to meet the community’s goals, whether it is improved reliability or reduced carbon footprint,” said PSE Vice President of Customer Operations and Communications Andy Wappler. “Spending time and resources on a City-run electric utility does not bring the community closer to improved reliability or a lower carbon footprint; we are ready to partner with the City and avoid the risky, expensive endeavor of creating a City-run electric utility.”

If you are interested in hearing more from the City on their electric utility plans, or would like to express your opinion on their efforts, you can always attend a council meeting (external link) to speak during the public comment period. 

Also stay tuned for a PSE-hosted town hall on the topic in the near future.

In the meantime, please contact us at info@psebainbridge.com or 1-888-878-8632 with any questions or comments.