By: Gary Ivory- Douglas PUD General Manager
March 31, 2021
Years ago, private companies were unwilling to provide electric service to the rural areas of Douglas County. Residents decided to form a Public Utility District (PUD). The PUD is run by local Douglas County citizens who set rates and policy for the utility. Forward thinking local commissioners took significant risk developing the Wells Hydroelectric Project in the late 1960's. These insightful commissioners also invested in power lines, substations and fiber optic systems that provide the reliable, sustainable and affordable utility services our local owners benefit from today.
Since Douglas PUD was formed in 1935 private companies have come and gone, but the PUD has remained. While some community leaders are looking at the shiny penny in front of them, the PUD is looking far beyond the arrival of bitcoin mining and data centers to determine how it will be able to provide utility services for generations to come. It is almost inconceivable right now, but the shiny penny data industry will change as new technology is developed. These companies may eventually leave because of economic forces beyond their control, but the risk and cost of maintaining the utility will remain.
Data center development has been beneficial to Douglas County's major population center, East Wenatchee. However, the rural and most vulnerable areas of Douglas County do not receive that same property tax benefit as East Wenatchee because of how property taxes are distributed. We have all seen the benefits in Quincy, but the other cities in Grant County like Warden and Soap Lake don't get the same benefit. The PUD is owned by all of the customers in Douglas County, not just one taxing District within the county. The PUD is responsible to all of its customers, whether they are data centers or farmers.
Large data center developments will use the limited power line capacity that Douglas County PUD customers have invested in for generations. If capacity on these power lines gets used up it may stifle or slow new business development. It will certainly require the PUD to heavily invest in more power lines to serve future development in Douglas County. All resources have limits and it seems short-sighted to use up this power line capacity to serve a few customers.
The total power costs for these new large power users will be fair and reasonable compared to other PUD's in the region. They may not be the lowest in the country, but the rates are very competitive. Since there is not enough power available from Wells Dam, new companies will need to purchase their power on the wholesale market. Being right here on the Mid-Columbia allows them access to very affordable energy on a wholesale level.
I recognize all of our local leaders love Douglas County and are trying to create the best outcomes for its residents. However, the PUD customer-owners should not bear the entire risk of bringing large data centers to Douglas County. If local leaders need the property tax benefits and determine data centers are important to the future of Douglas County, then PUD power rates are not the only economic tool that could be used by them to make this deal attractive to data centers. I'm sure data centers would love more tax breaks or incentives to improve the overall deal made by the community. Douglas PUD does not support more incentives because we believe the rates are fair and reasonable and they will eventually attract the right community partners.
Since January 2020, the PUD has worked with rate specialists, customers and leaders on the rates developed. Leaders in Douglas County have asked for a continued dialog with Douglas PUD commissioners before the rates are adopted. We will be holding special meetings on April 6th and 7th.
Douglas PUD's mission is to provide the best possible utility services at the lowest possible cost consistent with sound business principles. This is the guiding principal in all we do. By focusing on our mission, we can reliably serve our community for generations to come.