According to the Peninsula Daily News, Jefferson County Public Utility (PUD) Commissioners have reached a deal, at least in principle, to purchase Puget Sound Energy’s (PSE) electrical service system in East Jefferson County.

In 2008, voters approved a ballot measure, giving authority to the PUD to pursue the take-over of electrical services from PSE, a private-owned company, to the control of a public agency.  At the time proponents argued that a publicly-controlled agency could offer lower utility rates and better customer service.

Whether or not the proponent’s claims are true is yet to be determined, but the announcement of the nonbinding agreement between the PUD and PSE should serve as a reminder that the transfer of service from a private utility to a public one will not come without some costs to taxpayers.

For instance, during the campaign, proponents claimed that it would only cost taxpayers about $47 million to purchase PSE’s electrical services.  However, the tentative agreement reached between the PUD and PSE commits taxpayers to $103 million, more than double the cost claimed during the campaign.

There is, as PUD Commissioners move forward in their pursuit to become the provider of electrical services, no guarantees that rates will be lower or service improved.  As we highlighted in our Policy Note, “Moving to Government-Owned Power,” taxpayers in East Jefferson County should consider the following:

· New PUDs do not have guaranteed access to the best power rates, leaving them vulnerable to volatile price swings in the market,

· Ratepayers will lose access to PSE, which has a consistent record or providing reliable power, and

· Ratepayers, under a PUD, are exposed to more political risk and financial burden than ratepayers of a private utility.

In the end, our analysis shows that it is unlikely that shifting to a government-owned utility in Jefferson County would result in improved service or reduce costs for residents and business owners.  In fact, if the nonbinding agreement between the PUD and PSE is any indication, ratepayers in East Jefferson could be on the hook for more than they bargained for.