PUD Issues and Information 

Our policy approach:

Created and owned by their communities and operated under the direction of locally-elected boards, PUDs provide safe, reliable and affordable service at cost to more than one-million residential, business and industrial customers in 27 counties in Washington State. The Washington Public Utility Districts Association (WPUDA) represents 27 operating PUDs and one joint-operating agency, Energy Northwest. WPUDA works cooperatively with other public power and water utilities and their affiliated organizations to support our shared mission of serving the needs of Washington citizens.

The Washington PUD Association supports a policy approach that ensures locally-elected PUD Boards maintain the ability to effectively and efficiently manage the systems, resources, and services that support their local economies and quality of life.

Our 2019 positions

WPUDA resolution on Clean Energy - The Washington PUD Association Board of Directors passed a resolution in January 2018 in support of least-cost policies by the State to reduce carbon emissions while maintaining electric system reliability and affordability and improving the environment.  Members of the Washington PUD Association are already doing effective work to keep carbon emissions from the electric sector minimal and are well positioned to contribute to development of carbon reduction policies.  The resolution passed by the Board demonstrate our commitment to use our clean energy expertise to contribute in the development of sensible carbon reduction policies that effectively reduce carbon while ensuring the ability of PUDs to continue to serve customers with clean, reliable and affordable electricity.  The intent is to help shape carbon reduction policy by adding our experience and knowledge to the discussion. 

State issues
Energy
Water
Telecom

Federal issues 
Clean energy standard
Columbia River Treaty
Federal infrastructure funding
Pole attachment rates
Preserving the value of federal hydropower
Bonneville Power Administration 

WPUDA supports a least-cost path toward carbon reduction and clean energy programs: 
Washington’s public utility districts are already clean energy providers with almost 90% of the resources used to serve customers carbon-free. To ensure a federal policy applied broadly does not undermine the positive attributes of PUD clean energy resources, it is important for any policy approaches to promote carbon reduction and/or clean energy achieve the following: 

• Provide a least-cost path toward carbon reduction and clean energy programs. There may be a variety of approaches which should be evaluated in terms of the cost-effectiveness to minimize the impacts on Washington’s citizens and economy while achieving carbon reduction goals.
• Ensure that reliability of the electrical grid is not compromised. Policies should be based on existing technology and the capabilities of the grid.
• Provide a technology-neutral approach ensuring that carbon-free resources regardless of the technology can contribute to policy goals.
• Recognition of hydropower and nuclear power as carbon-free generation. These resources are important to Washington’s clean energy portfolio and should receive equal treatment under any carbon reduction and/or clean energy standard.
• Continued federal support for licensing and development of small modular reactor nuclear technologies. This existing technology allows for scalable, baseload generation important to meeting loads with a carbon-free resource and incorporating intermittent clean energy resources into the grid.
• Programs should be complementary to state or regional policies already in place. Pancaking of policies can result in conflicting policies or redundant policies. It is important that policies are aligned to promote efficient and effective outcomes.
• Consumer protection and affordability should be key drivers in policy.
• Ensure program flexibility and evaluation criteria are in place to adapt policies to new technology.

WPUDA supports completion of the Columbia River Treaty negotiations by the end of 2019:
Modernizing the Treaty is important to Washington’s clean, reliable, affordable energy future. WPUDA is part of the regional Power Group that supports a rebalancing of the Canadian Entitlement under the Columbia River Treaty. Now that the negotiations are underway, we believe they should be completed by the end of 2019. To encourage a meaningful discussion of revising the Canadian entitlement portion of the treaty by the end of 2019 we are encouraging the State Department to issue notice of termination for the commercial and power provisions of the treaty. We want to see meaningful engagement and leadership of regional experts such as the Power Group as part of the negotiation progresses. We believe that this engagement will lead to a successful and timely completion of the treaty negotiations.

The Columbia River Treaty between Canada and the United States provides for the cooperative development and operation of Columbia River Basin water resources to reduce the effect of flooding and increase the dependable and usable amounts of hydropower generation. The costs and benefits are borne by Pacific Northwest utility customers, and therefore, the Treaty has a direct impact on WPUDA members and the more than 600,000 customers they serve across the State of Washington.

The current Treaty puts a greater financial burden than necessary on Northwest ratepayers: Of primary concern to Northwest utilities is the current, inequitable distribution of power benefits between the U.S. and Canada. Under the Treaty, the U.S. paid $64.4 million for sixty years of flood control benefits and Canada constructed three dams in British Columbia, providing additional storage to reduce the potential for flooding as well as increased hydroelectric power generation. Under the Treaty the U.S. also delivers to Canada one-half of the downstream power benefits resulting from the improved stream flow in the U.S. on an on-going basis. This is called the “Canadian Entitlement.” The Canadian Entitlement is being delivered in the form of hydroelectric capacity and energy.
According to extensive analysis by the Bonneville Power Administration (BPA), the computed downstream power benefits that determine the Canadian Entitlement far exceed the actual benefits, and are estimated to be about 10 times more than what they would be based on the actual operation of the river. That means Pacific Northwest ratepayers are paying more than they might otherwise pay if the benefits were based on actual power benefits reflective of how the river is operated today. The U.S. currently overpays Canada about 70 - 90 percent for downstream power benefits from Canadian storage. This overpayment translates into approximately 3 billion kilowatt hours per year, and over the last decade has resulted in a Northwest electric ratepayer overpayment of approximately $1.25 billion.

WPUDA supports federal funding mechanisms to facilitate PUD infrastructure investments:
WPUDA supports efforts to recapture the savings that advanced refunding of municipal bonds offers. Public Utility Districts issue bonds to cost-effectively invest in infrastructure necessary to provide safe, reliable and affordable services. The ability of PUDs to “refund” existing tax-exempt municipal bonds by issuing new bonds and paying off the existing ones allows PUDs to ensure infrastructure investments are made using least-cost financing tools.

The 2017 Tax Reconciliation Act prohibited the issuance of tax-exempt “Advance Refunding Bonds” after December
2017, eliminating an important tool to manage critical infrastructure investments. Loss of this option means PUD ratepayers may have to pay more than they would otherwise for infrastructure funded by the issuance of bonds and PUDs would have less flexibility in managing system needs.

WPUDA supports restoration of funding cut due to sequestration for CREBs and BABs. Clean Renewable Energy Bonds (CREBs) and Build America Bonds (BABs) provide state and local governments with direct federal interest payments for a portion of their borrowing costs on taxable bonds. The promised portion of the interest payments paid by the federal government has not been fulfilled as these funds were cut by sequestration, costing PUD ratepayers over $1 million per year.

WPUDA supports preserving PUD utility pole attachment rates that are just, resonable, non-discriminatory and sufficient to recover PUD costs
Rates utilities charge telecommunications companies to attach equipment to power poles have emerged as part of the topic of promoting broadband deployment and WPUDA is highly concerned about recent action by the FCC that undermines the ability of PUDs to charge sufficient rates to recover costs, forcing ratepayers to subsidize private companies.

Federal Law (section 224 of the Communications Act) explicitly exempts public power utilities from FCC pole
attachment regulations because Congress has consistently determined that “pole attachment rates charged by
municipally-owned and cooperative utilities are already subject to a decision-making process based upon constituent needs and interests.” Section 224 of the Act also allows states to “reverse preempt” if the state decides to regulate pole attachments.

In Washington State, PUDs’ pole attachment rates are based on a formula specified in state law. The law was passed in 2008 with the legislative intent to encourage joint use of utility poles by providing a consistent, cost-based formula for calculating rates that ensure PUD customers do not subsidize licensees.

In September of 2018, the FCC issued a report and order asserting its authority to preempt state and local laws and
agreements, including those related to pole attachments. WPUDA opposes this action as well as any legislative
proposals that would shift regulation of community-owned utility poles to the FCC, especially in light of the work
Washington State has done to ensure rates are just, reasonable and non-discriminatory. We support legislation, H.R. 530, which will protect the federal exemption and existing Washington State law. 

WPUDA support preserving the value of federal hydropower

Work is underway in preparation for an Environmental Impact Statement on the Federal Columbia River Power System and, while WPUDA supports a fair and comprehensive review of all factors that impact the operation of the system, we oppose any action that would undermine the cornerstone of Washington’s clean energy economy and quality of life; federal hydropower.
Hydroelectric dams provide more than 60-percent of the Northwest’s energy. The Federal dams, including the Snake River Dams, are a vital part of our clean, renewable energy portfolio and a critical component of the Northwest’s economic prosperity.

Northwest ratepayers fund through power rates more than 500 million dollars annually (over $700 million in 2014
and over $750 million in 2015 alone and almost $16 billion since 1980) in habitat and wildlife programs to ensure
the clean, renewable energy delivered to the region is done so in an environmentally sensitive manner.

The Snake River dams provide 1,700 to 2,000 megawatts of sustained peaking capabilities in addition to 1,000
average megawatts of clean, renewable baseload resource to the region. The hydropower not only powers
communities but has provided a low-cost, baseload resource which has allowed integration and balancing of
intermittent renewable resources such as wind and solar.

Federal and state policy is leading to the electrification of the transportation sector in order to reduce carbon
emissions. This approach will lead to additional electric sector loads best served through conservation and existing
carbon-free resources where possible. Our federal hydropower resources are integral to this effort.

WPUDA supports the continued independence of the Bonneville Power Administration to market the energy and capacity of the Federal system to preference customers

Many PUDs rely on the Bonneville Power Administration for the resources needed to power their communities. Bonneville Power Administration Resources play an important role in the ability of PUDs to serve customers with clean, reliable, affordable electricity. BPA contracts expire in 2028 and WPUDA strongly supports the efforts by BPA to examine their competitive status in the energy marketplace, assessing ways to decrease costs and improve revenues. As BPA has many responsibilities for managing this important federal resource, we are committed to working with them to help them regain their competitive position so that the value of the system can continue to be realized by Washington consumers.

Recently, there was a proposal included in the President’s budget to sell the transmission assets of BPA. WPUDA opposes any effort to privatize the Bonneville Power Administration or change the status of BPA. This is especially important at this time when the state is actively engaged in developing carbon reduction and clean energy strategies. Hydropower is important to implementation of many of these strategies and the federal system is an integral part of meeting our carbon reduction goals in Washington State.

In addition, it is important to note that the Federal Columbia River Power System is funded by power customers in the Northwest, not taxpayers. If the federal government sells Bonneville Power Administration assets, they are selling assets paid for by power customers with no guarantee the value of the assets will be returned to the region. The sale of assets also brings into question the continuation of funding for important programs such as fish and wildlife and energy conservation.  We support safeguarding BPA from any federal actions that could undermine the ability of the agency to effectively serve Washington customers. 

State Priority issues for 2019

Created and owned by communities they serve and operated under the direction of locally-elected Boards of Commissioners, the members of the Washington PUD Association (WPUDA) including 27 public utility districts and a joint-operating agency (Energy Northwest), are committed to providing safe, reliable and affordable service. The Washington PUD Association supports public policy that ensures our members’ ability to effectively and efficiently manage the systems, resources and services that drive local economies and enhance the quality of life for residents in 28 counties across the State of Washington.

Energy 

Consistent and equitable treatment of incremental federal hydropower under the Energy Independence Act:  WPUDA supports modification to the Energy Independence Act (EIA) that would provide equal recognition for the value of zero carbon hydropower produced as a result of efficiency improvements to the federal hydropower system.  The current Energy Independence Act only counts incremental hydropower produced as a result of efficiency improvements at utility-owned projects as an eligible renewable resource for compliance.  Over 2.3 million Washington consumers pay millions of dollars for federal hydro efficiency improvements through rates but do not receive equal recognition for their investments in clean, renewable hydropower. WPUDA supports modifying the EIA to address this discrepancy by providing equal recognition for efficiency improvements at federal hydropower facilities that result in increased clean energy.

Providing a pathway for utilities to support low-income energy assistance programs through a B&O tax exemption on credits returned to utilities from the Bonneville Power Administration. WPUDA supports legislation that would reenact a Business & Occupation tax exemption that was in place from 2010-2015, which ensures that funds used by electric utilities for energy conservation expenses are not subject to state B&O tax and directs the B&O tax savings to low-income ratepayer assistance and weatherization programs. Currently PUDs are taxed on funds returned from the Bonneville Power Administration for achieved conservation. While this is not new revenue, simply money credited back to the utility, the Department of Revenue subjects it to the B&O tax. WPUDA supports enacting a B&O tax exemption on the funds returned to utilities from BPA for those utilities that use the tax savings amount for low-income ratepayer assistance and weatherization.    

Reducing carbon emissions in the transportation sector by authorizing PUDs to provide electric vehicle incentives:  Public utility districts serve communities with some of the cleanest energy in the country and can play an instrumental role in reducing carbon from the state’s highest carbon emitting sector, transportation, through electrification of vehicles.  PUDs are seeking the authority to provide incentives to customers for EV charging equipment. The incentives would support deployment of EVs in communities served by PUDs and maximize the value of PUD clean energy resources.

Updating outdated bid limits: The bid limits statutes for PUDs haven’t been updated since 2008, limiting the ability of PUDs to use PUD crews for project work, including projects that are critical for safety, system reliability and PUD employee training.  Since 2008, labor and materials costs have increased 20% to 100% and a higher proportion of electrical wire is now installed underground, which is typically more expensive than overhead poles and wires, yet the bid limits haven’t been updated to reflect the increases in labor and material costs. WPUDA supports changing the bid limits statutes to align with increases in costs and to clarify what qualifies as equipment under the bid limits statute.

Water

Low cost infrastructure funding:  Low-cost financing for infrastructure investments is important to providing reliable utility services while keeping rates affordable.  The Public Works Trust Fund has served as a vital resource for PUDs seeking low-cost loans to fund infrastructure.  Since 2013, however, the Legislature has taken nearly all tax revenue and loan-repayment proceeds from the Public Works Assistance Account (PWAA) to help fund basic K-12 education and balance the state budget. Loss of PWAA revenue, which comes from water and sewer utility taxes, the real estate excise tax and repayment of past loans, has resulted in severe cuts in the Public Works Trust Fund’s ability to provide low-interest loans for PUD water and wastewater projects and other basic infrastructure projects of cities, counties and water-sewer districts. WPUDA supports restoring the PWAA’s tax revenue and loan repayments so that the account can provide a low-cost, predictable, stable funding resource for PUD water and wastewater projects well into the future. 

Grant funding for PUD water system rehabilitation:  WPUDA supports inclusion of $10 million in the state budget for the Water System Acquisition and Rehabilitation Program.  The grant program is important to PUDs and other local-government water utilities to help cover the cost of rehabilitating water systems these utilities acquire.  Many water systems PUDs acquire are 50-plus years old and in need of major improvements.  The majority of these systems were originally community water systems that owners and customers were unable to maintain and turned over to PUDs. The grant program provides necessary funding to help PUDs rehabilitate newly acquired systems without unfairly burdening other PUD customers with these rehabilitation costs. The grant program received $5 million in the last biennial capital budget, which provided vital assistance to a number of high-priority water system repair and consolidation projects but was far less than the program needs that the state Department of Health’s Office of Drinking Water has documented.

Hirst/Foster implementation:  The State Supreme Court’s Hirst and Foster state Supreme Court decisions impacted rural and urban water access.  WPUDA supported the legislative fix passed in the 2018 session (S.B. 6091). The legislation included the creation of a Joint Legislative Task Force to review the issue of municipal water rights and use of mitigation plans to address impacts to instream flows and fish habitat which was raised by the Foster decision.  WPUDA supports timely resolution of the issue with implementation of a process that will ensure access to water in an environmentally responsible manner.

Telecom

Enhancing consumer access, affordability, and quality of broadband and advanced telecommunications services: WPUDA supports legislation which provides the framework necessary for efficient deployment of the new generation of wireless service while addressing the need for greater broadband access in unserved and underserved areas. This framework includes establishment of an “Office on Broadband Access” to coordinate public and private efforts to ensure greater access to broadband services across the state and funding resources to facilitate infrastructure development.