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December 2, 2005
Public Power: An Alaskan Tradition
by Brian Yanity, insurgent49

     Alaska is a public power state. More than 90% of the electricity generated and distributed in the Great Land is from publicly owned utilities (cooperatives and public utility districts). Public power is defined as municipal-ownership of electric utilities, often called Public Utility Districts (PUDs) (aka “publicly-owned”) or cooperative utilities, owned by the electric consumers. Non-public producers and distributors of electricity are known as Investor-owned utilities (IOUs) are for-profit corporations, like Enron or WorldCom.

     Alaska electricity consumption statistics for the year 2002:

-66% by cooperatives, average retail price: 10.4 cents/kWh
-25% by PUDs, average retail price: 9.8 cents/kWh
-8% by IOUs, average retail price: 12.9 cents/kWh

Source: website of the U.S. Department of Energy’s Energy Information Administration (www.eia.doe.gov/cneaf/electricity/st_profiles/alaska.pdf)

     In the U.S., 14% of electric consumers are served by 2,010 Public Utility Districts, 12% are served by 885 rural electric cooperatives, with the remaining 74% served by for-profit IOUs and private power marketers. Nationwide, customers of IOUs paid electric rates averaging 13% above those served by public power according to the U.S. DOE, and this has generally be true for the past fifty years.

     Publicly owned utilities don’t have to pay taxes or dividends to shareholders, and have access to tax-exempt financing for capital projects. With local control, and greater public accountability, the focus is on reliably serving customers and not on quick profits. Hence the popular slogan of public power advocates: “public power is hometown power”.

     The state of Alaska owns some generation and transmission infrastructure, such as the Bradley Lake hydroelectric plant near Homer, and the Alaska Intertie transmission line connecting Anchorage and Fairbanks. The Railbelt region, stretching from the Kenai Peninsula to the Fairbanks area, is connected electrically via the state-owned Alaska Intertie. The listing of utilities below connected via this intertie shows that the Railbelt is entirely public power:

     - Golden Valley Electric Association, serving the Fairbanks area
     - Matanuska Electric Association, serving the Mat-Su Borough and northern part of the Municipality of Anchorage
     - Municipal Light and Power, part of the Municipality of Anchorage
     - Chugach Electric Association, serving most of the Municipality of Anchorage and part of the Kenai Peninsula
     - Homer Electric Association, serving most of the Kenai Peninsula
     - City of Whittier
     - City of Seward

     If these Railbelt electric utilities were private companies, electric bills would be much higher for consumers. One must also remember that cooperatives can be reactionary forces if their customers choose to elect conservative board members. The most reactionary utility in the state is the Matanuska Electric Association, which has withdrawn from the Alaska Power Association, and wants to build a polluting coal power plant in the Matanuska-Susitna Valley.

     The members of Chugach Electric Association recently elected a majority-conservative board which is trying to blame higher natural gas prices (and thus CEA electric rates) on the unions representing CEA workers. However, the policies of an electric cooperative’s board are ultimately the responsibility of voting co-op members.

     Alaska’s two largest IOUs are the Alaska Electric Light and Power Company (AELP) and Alaska Power and Telephone (AP&T). AELP was founded in 1893 with Alaska’s first hydroelectric plant, and is the sixth largest electric utility in the state. AELP has grown to serve over 14,500 customers in the Juneau area. AELP operate the Snettisham hydroelectric facility, which is owned by the State of Alaska.

     AP&T is also based in Juneau, but has a scattered base of customers in different parts of Alaska. AP&T currently provides service to communities located above the Arctic Circle, deep in the Wrangell Mountains, and throughout the islands of Southeast Alaska.

     The electric utility history of my home city of Portland, Oregon illuminates the need for public power. Portland Electric Power Company (PEPCO), started in 1889 with a hydroelectric plant at Willamette Falls, was controlled by a New York holding trust. In the 1920s, 75% of the U.S. electric utility industry was controlled by just ten holding companies.

     In Portland, revelations of watered-down stock, higher electric rates for PGE customers led to a grassroots fight for public power in the 1930s. Oregon, and the city of Portland, was a very conservative, pro-business society back then. Private electric companies refused to serve rural areas that didn’t have enough profit potential.

     With the support of farmers groups such as the National Grange, Congress passed the Rural Electrification Act in 1936, creating the Rural Electrification Administration, which still exists today as the Rural Utilities Service (www.usda.gov/rus). This legislation directly led to the establishment of more than 740 rural electric coops, and at least 60 PUDs. By 1944, almost half of the farms in the U.S. had electric power, and by the early 1960s, over 90% of U.S. farms were electrified.

     Other New Deal projects, such as the nearby Bonneville Dam on the Columbia River were part of a new push for great public works. Policies encouraging public power were gaining headway with the creation of such federal agencies as the Tennessee Valley Authority and the Bonneville Power Administration.

     By 1932, City of Portland had a chance to buy all of the PEPCO and Northwestern Electric Co. facilities within the city limits, and to build a new hydroelectric power plant for only $50 million. However, a 1937 municipal ballot measure to this end was defeated. Up until the 1960s, the city of Portland had suffered from corruption and a lack of strong civic leadership.

     The state of Washington, however, had stronger labor and Grange (farmer) movements than Oregon in the 1930s, though Seattle has had a city-owned electric utility since 1908.  Seattle and Tacoma both have municipally-owned electric systems, and have long boasted some of the least expensive power in the U.S. Today, the cheapest electric rates in the country are found in the public utility districts of Washington’s Chelan and Grant counties.

     Now called Portland General Electric, Portland’s IOU never gave up on its robber-baron roots. In 1996, PGE was purchased by a Houston-based energy firm by the name of Enron. In the build-up to the big sale, which was approved by the meek Oregon Public Utilities Commission, I clearly remember slick TV ads from Enron promising “greater efficiency” and “lower prices”.

     When Enron collapsed at the end of 2001, PGE workers and Portland consumers paid the heavy financial price as the Houston executives secretly stashed their money away in offshore accounts. Since then, a new grassroots public-power movement has taken charge in Portland. History has repeated itself seventy years later, but this time the people are likely to be successful. post-Enron, electricity consumers in Portland pay PGE least 8 cents/kWh, while consumers in Tacoma and Seattle pay rates of 4 to 6 cents/kWh. In March of 2005, the city government of Portland announced an intent to buy PGE from the remnants of Enron.

     Here in Alaska however, Enron never bought any of our electric utilities, so we were saved much expense. Public power is the best way for Alaskans to get electricity, and will continue to be.

For more information:

www.alaskapower.org

www.appanet.org

www.nreca.org



Brian Yanity is a student activist and freelance journalist who resides in an undisclosed location in Southcentral Alaska. He can be reached at byanity@insurgent49.com.
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