By Scott Rhees
Public power was founded on a bold and innovative idea by a populist agricultural organization, which collected more than 60,000 signatures, twice the number necessary to send Initiative No. 1 to the Legislature, allowing rural communities to form their own publicly owned utilities.
Another bold innovative idea that took place between the late 1800s and 1950s was the construction of the federal hydro system. The building of dams enabled communities to thrive by providing low-cost, reliable electrical power, abundant irrigation for crops, and a cost-effective way to deliver products to market.
Without low-cost energy, irrigation pumping systems and a cost-effective product delivery system the Pacific Northwest would look vastly different than it does today. Bold innovative solutions that provide benefits to society take time and effort and a commitment to make life better. When we minimize or discount the efforts of innovation everyone loses.
Seldom do real solutions come from moving backward, they come from further innovation. Public power continues to have to be innovative and creative to ensure that we have the ability to provide low cost, reliable energy to the citizens of Washington. This is becoming more difficult with the increasing mandates being placed on public utilities, the rising costs of power supply and the impacts of inflation.
Federal and state mandates that are being placed on the electrical industry from individuals who seem to believe the industry is simplistic are destined to create catastrophic events.
A current proposal in the Snake River dam lawsuit has the potential to crush economic vitality in the Pacific Northwest, impacting system reliability, along with placing economic burden on those who are most vulnerable within our communities.
We believe innovative solutions are needed now more than ever and the best way to find them would be to involve industry experts that actually understand the potential impacts on the electric system and consumers.
Instead, public power along with other stakeholders have been shut out of the process. Simply put, those that make up the public power industry and understand the consequences of inferior solutions should have a right to participate in the process and find solutions that move us forward.
The proposed settlement from the Snake River dam lawsuit would expose customers of the Federal Columbia River Power System (FCRPS) to at least $100 million in long-term additional Fish and Wildlife expenses, and $200 million in capital investments.
All this comes at a time when utilities with preference rights to purchase wholesale power and transmission service from the Bonneville Power Administration (BPA), such as Franklin PUD, are working in good faith to develop long-term post-2028 power supply contracts.
The massive uncertainty regarding the FCRPS makes it difficult to commit to a long-term take or pay contract at this time and ultimately leaves the customers that rely on the service we provide vulnerable. We continue to fight the mentality to move backward, such as the idea of breaching the dams.
We believe that there are solutions out there, solutions that aren’t destructive, but rather innovative. We will continue to oppose solutions that undo the innovation that was put in place by dreamers and leaders that came before us.
In addition to mitigating the settlement negotiated in the back channels of government, Franklin PUD is currently dealing with increasing costs due to inflation in all aspects of the power industry.
Specifically, materials and equipment are needed to maintain the electric system at the reliability level that our customers deserve.
We continue to experience dramatic increases in material costs and extended delivery times. For example, in 2020 pre-pandemic pricing for a single-phase pad mount transformer, which can energize four to six residential services, was about $1,400 with a general delivery time of 12 weeks. Today, delivery of these transformers can be up to 100 weeks with costs 350% more than pre-pandemic prices. We have seen delivery and cost increases across the board.
In an effort to deal with these and other issues, we have had to be innovative and think outside the box. We seek efficiency and innovation in system design and system planning. These efforts are done with the focus on the ability to continue providing high reliability that supports the continued growth taking place in our service territory.
We have been proactive with our purchases, repurposing our materials and ensuring everything is being utilized to its fullest potential. We are being as prudent as possible without compromising our system’s reliability. Franklin PUD seeks efficiency in all aspects of what we do and realizes that every dollar saved impacts our bottom line. Our employees work hard to streamline processes and cut costs where possible to optimize the rate dollars our customers have entrusted to us.
As a public power utility, Franklin PUD strives to be highly responsive to our customers’ needs and provide reliable service to the customers in our communities. We focus on having a highly reliable system; being able to restore power quickly and safely after an outage; and providing excellent customer service.
We will continue to recognize and respect those who paved the way with bold innovative ideas. If we are to move forward successfully, innovation has to be part of the process.
As we move into 2024, our mission remains the same: to provide our customers with the reliable service at the lowest cost possible. We recognize who the complexity of the electric industry will continue to change, and we will navigate the changes by being innovative and bold.
Scott Rhees is Franklin PUD’s general manager and chief executive officer.
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