A perspective from Oregon’s mid-Willamette Valley

Power grab: Crowd mostly skeptical

Written May 20th, 2014 by Hasso Hering
Part of the crowd at Tuesday's hearing on the proposed Millersburg electric power takeover.

Part of the crowd at Tuesday’s hearing on the proposed Millersburg electric power takeover.

If the Millersburg City Council goes ahead and expels Pacific Power in favor of its own municipal electric company, it will be over substantial opposition from the town’s residents. That was my impression after Tuesday night’s public hearing at the Linn County Fair & Expo Center.

About 150 people showed up, by my estimate, maybe more, and from the audience reaction to those who spoke up, the prevailing mood on the power takeover seemed to range from skepticism to hostility.

Council members Lisa Metz-Dittman, Jason Yutzie, Mayor Clayton Wood, Darrin Lane and Scott Cowan listen.

Council members Lisa Metz-Dittman, Jason Yutzie, Mayor Clayton Wood, Darrin Lane and Scott Cowan listen.

More than 30 people signed up to say something, and 20 actually stepped up to the podium to do so. Of the 17 who had no connection to the issue other than living in Millersburg, eight expressed their opposition to the power takeover and were mostly greeted with vigorous applause. Most of the others asked questions, and one was critical of Pacific Power for having said its Millersburg system was “not for sale.”

A couple of men asked about an election on the power issue or demanded to know why none was being held. City Councilman Darrin Lane said a decision on an election had not been made. Lane also said, answering other questions, that the idea of forming a municipal utility had been initiated by ATI Wah Chang but that taking that step was “not a done deal.”

The council heard again from consultant John Heberling of D. Hittle & Associates, whose feasibility study projected substantial savings for Millersburg power customers; and from Scott Bolton of Pacific Power, who said the study underestimated the takeover’s costs and thus overstated any savings to customers.

Jim Denham of Wah Chang also spoke. Among his points: Having a municipal utility would help economic development in Millersburg. And rates would be set by the city council rather than regulated by the Public Utility Commission, which he said is appointed and not accountable to the public.

Pacific has a new consultant’s report backing up its contention that the municipal takeover would be a bad deal for Millersburg. It estimates the acquisition and system-separations costs at more than $50 million rather than the $16.6 to $20.6 million estimated by Hittle.

Ninety percent of Millersburg power consumption is used by four industrial customers, and 70 percent by Wah Chang alone. The town’s fewer than 800 residential customers account for just 3 percent of power use. This proportion among customers would make Millersburg the most unusual public utility around, and if one of the industries left, residents would be left to pick up the cost of paying off the acquisition costs. A woman from the audience suggested making Wah Chang buy a bond guaranteeing the company would pay off its share of the cost if it closed.

Another public hearing is planned for June 19, also at the Expo Center in Albany. After Tuesday’s excellent turnout, it’s hard to believe another is necessary, but the council wants to give anyone unable to attend Tuesday another chance. (hh)









3 responses to “Power grab: Crowd mostly skeptical”

  1. Hasso Hering says:

    Steve Bryant made this comment on Facebook: “The suggestion that the local industries put up a bond to guarantee their part of the acquisition costs makes total sense. It’s done all the time for other types of public improvements. The property is used as collateral.”

    • Craig Ziegenhagel says:

      Steve, this was a great idea. I think the top 4 industries (using 90% of all power) that were mentioned should all put up such a bond, not just Wah Chang. If any of the industries left the City….it could negatively effect residential utility rates.

  2. Craig Ziegenhagel says:

    I hope I made one thing clear at last nights meeting. Currently Pacific Power’s rates to all customers is regulated by the Oregon Public Utility Commissioner. If Millersburg was to develop a Municipal Utility, rates and fees, fees of any and all types would be at the sole discretion of the City Council….no longer regulated by the PUC. The representative from ATI Wah Chang stated last night that the PUC did not give us local control, implying that rates controlled by the State PUC was a negative. Well I can see why ATI is negative towards the PUC because the PUC does not believe that ATI should receive cheaper rates. The Courts have decided that ATI should not receive cheaper rates. Citizens…the PUC is here to protect our utility rates and they have. Below is an excerpt from the 4-17-13 decision from the Oregon State Court of Appeals (where ATI Wah Chang was again suing for lower utility rates):

    “The PUC further observed that ratemaking is a zero sum game. That is, if Wah Chang’s rates were to be reduced, it would come out of the pocket’s of PacifiCorp’s shareholders or the utility’s remaining customers.”

    I repeat…”or the utility’s remaining customers.” It appears from everything that I have seen and read that the State PUC has our back ! Allow the Municipal Utility… allow an ever changing city council to make those decisions.

    Does it also not concern the Citizens that the Council will not comit to a vote on this issue by the public ?

    Thank you for all the resident’s/neighbors who came to the meeting last night and a thanks to Hasso for covering this important local story !


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