by Dan Peterson, PUD Commissioner
Pend Oreille PUD has been involved in proposed state legislation to give PUD’s authority to provide retail telecommunication services. Currently PUD’s have authority to provide only wholesale telecom services.
The core business of Pend Oreille PUD is generating and distributing electricity to our customers at the lowest possible cost with the highest possible reliability. I believe my job as a Commissioner is to make certain that always remains the first priority.
For years utilities have used their own fiber optic systems to make electricity more reliable. It is a business we know and do well. For more than a decade, our PUD’s excess capacity and wholesale authority have provided greater bandwidth at lower cost to local government, schools, libraries, hospitals, doctors, businesses and cell towers.
In 2010 we chose to accept a large federal grant to extend fiber optic cable everywhere our electric lines go in the southern part of Pend Oreille County. Just like electricity a century ago, broadband access is now becoming an essential service people do not want to live without. It increases educational opportunities, economic vitality, property values, and jobs. Our rural county will leap forward in this information age with state-of-the-art infrastructure. Without this gift, such progress is otherwise impossible.
This project is a huge undertaking for a small utility and there is substantial risk. The PUD is totally dependent upon retail and internet service providers to offer services people need at markups they can afford. Some RSPs are enthusiastically marketing what is coming, while others are not. We believe having retail authority would help us protect the enormous investment being made.
Having the authority does not necessarily mean using that authority. We want local providers to be successful. We do not want to put anyone out of business. We will not compete unfairly. But we must ensure that this new PUD system pays its own way and does not raise electric rates. Having retail authority would give us an option if other providers fail, and help us bring service to the northern part of the county sooner, if others do not.
The state PUD Association was not seeking retail telecom authority in the 2011 state legislative session. PUDs around the state have mixed opinions about the issue, just as they have varied business models for their wholesale telecom systems. Representative John McCoy of Tulalip, however, believes PUDs are part of the solution to providing broadband access to unserved and underserved areas around the state where private companies seem to have little interest.
McCoy chairs the State House Technology, Energy and Telecommunications committee, where many issues affecting PUDs are decided. In January 2011 he asked us to testify about his proposed legislation. PUD Finance Director John Jordan explained how we might use retail authority to better serve our citizens. He was also candid with the committee about conditions in the bill we will not accept, such as unneeded regulation by the Washington Utilities and Transportation Commission.
Legislation is sometimes described as “sausage making.” This bill is a great example of the wildly divergent pros and cons that get thrown around in the process. Ultimately, McCoy’s bill did not make it out of committee this session.
We knew it would be difficult to get a bill we could fully support through the 2011 legislative session. Legislators involved in this process, however, now have a better idea what public utility district customers need, and we will continue to work the issue. Meanwhile, we hope to build win-win relationships with all of our retail service providers, to make retail authority unnecessary for Pend Oreille PUD.
(Dan Peterson is President of the Pend Oreille PUD Commission and chairs the Washington PUD Association’s Government Relations Committee. He can be reached at dpeterson@popud.org.)
