Think back to being in school. The teacher explains you must pair up with someone to complete a project, but you only have two students to choose from. One kid has a penchant for randomly punching you in the side of the head, the other kid enjoys punching you in the stomach when nobody is looking.
That’s similar to our society; our democracy.
Does the option to choose between two painful options feel like freedom? Or is it merely a form of oppression staged to appear democratic?
This scenario is indicative of the dilemma facing Americans: so much is determined for us, the choices we ultimately influence are reduced to choices between worst-case scenarios. Every election seems to feel that way, politics dominated by two parties that never fully represent their constituents limiting our choices to the candidates we dislike the least. The debate over a Klamath electrical power utility has also been predicated on the choice between two lackluster options.
The Government Side
On one side we have various community leaders that participate in projects where the cost and access to electrical power is a clear impediment to recruiting businesses to the area. Without a strong business climate, the tax base and all services that boost quality of life erode. These insiders have interacted directly with job producing businesses decided not to invest in Klamath because Pacific Power either could not accommodate new power requirements on a timely basis, or flatly refused requests to do so. These insiders hear from farmers that are facing rate hikes of 20% on their electrical costs. They hear from government insiders in Salem that tell them that more rate increases will be passed on to Klamath Citizens as Pacific Power passes the cost of dam removal to the ratepayers and transitions to more expensive renewable energy resources. These leaders talked to other communities who operate community power systems (and many, many do). The fact that so many exist and are still operating suggests that a project in Klamath would be feasible, sustainable, and prevent Klamath from being held hostage by the whim of a private power monopoly that has sometimes killed economic development projects for lack of responsiveness.
The Private Utility Side
Think about the business model. Let’s say you have access to power that you can resell. A very long time ago, you installed power lines to do just that, and you have maintained them ever since. Every home and business needs power, so as long as you keep the lines strung, you are guaranteed income. With no competition, you are guaranteed even revenue. You don’t face new competition because the cost of installing new power lines is so much more than it was when your power lines were installed half a century ago, it would be cost prohibitive. Moreover, the urban landscape has been built around a narrow right of way you have control over, so shoehorning another power grid over the top of yours would be nearly impossible.
Regulators were aware of how scale and incumbency could relegate a community to eternal exploitation, so they created a work-around. A government entity could use powers of eminent domain (in the best public interest) to take over such infrastructure by paying fair market value.
Of course, as the owner of the monopoly, this doesn’t sit well. You’ll do anything you can to keep from losing the ability to take that power you have access to and sell it for more than you paid for it to all those customers you’ve always had exclusive access to. Who wouldn’t? In this case, Pacific Power likely spent a couple hundred thousand dollars on a propaganda campaign to thwart the project.
The Lunatic Fringe
There is one more side to the issue that Pacific Power successfully tapped into: the government haters. They aren’t difficult to find. The collective of all governments is a huge force in our lives and any action taken against us by one condemns them all. It feels unfair to receive a speeding ticket for going 65 on arrow-straight highway 97 when you can drive 70 on the same highway in California. Forced to pay taxes to support education in a system where 60% of every dollar never makes it to the classroom feels very unfair. The list is endless, but the City of Klamath Falls has implemented a system of government that feels substantially draconian to the Klamath citizens that have crossed it. These people received parking tickets when they were the only car on a block. They noticed the city arbitrarily tripled their sewer rates when the City was already earning a profit on the water and sewer utility system. They were marginalized and shunned as businesses for a multitude of infractions that never used to exist in Klamath, from the size and location of their signs, to requirements to over-landscape industrial properties that are by definition known to be aesthetically displeasing.
Tell anyone who is forced to maintain grass on city right-of-way, replace sidewalks the City mandates, or pays for sewer service that they don’t use because their geothermal well leaks the city water being heated….tell these or the other society members that feel government oppression they have a chance to sucker-punch the MAN…and they will come.
And so they did.
On January 21, 2014, several hundred irritated citizens crowded the Ross Ragland theater for a town hall meeting on the issue of whether or not the City of Klamath Falls should continue exploring the establishment of a municipal power utility.
The Council members issued opening statements, except for Trish Seiller, who cowardly waited to make a statement until the end when the disdain toward the council was clear.
The audience comments ranged from thoughtful weighing of the issues (a few) to blatant ignorance (the majority). Smirking among the masses were Pacific Power representatives who understood their direct mail and counter-propaganda campaign had successfully armed the simple-minded masses with enough paranoia to power their buggy whips. A number of people were shaking their heads out of shame not for the proceedings but for their association with the Klamath citizenry.
In a sick way, the three hours of testimony was, at times, entertaining.
One speaker opened…”Thank you to the police for keeping the peace here and protecting us from the City Council.”
One very angry speaker looked at the council with a menacing look on his face and violent tone, “If you do this you won’t be around for long. We will remove you from office.”
There was a chuckle from a few people who understood Klamath politics, as if to say…Really? The mob is going to take away the office from these council members who work for free? Ooooh. And you are going to recall them when you can’t even prevent members like the Kellstrom and Hart who are automatically re-elected for decades?
The predominance of audience input gravitated toward parroting three points Pacific Power made by direct mail, on their website and through media interviews:
- It is un-American for government to take over the distribution lines from a private company that the company is not interested in selling.
- Klamath Falls is too incompetent to maintain an electrical system.
- The government shouldn’t be in the energy business and there is no assurance the City would maintain low rates.
It was sad, but not shocking, to witness so many people who stood on a soapbox without doing any of their own research.
As we eluded to earlier, it makes complete sense that people would turn out for a chance to bash the City. The point of incompetence on the part of the City is well-taken. One example many people used is how the City has handled the water and sewer infrastructure. There weren’t any complaints about competency in operations, only in pricing, noting how the cost of water and sewer service has escalated as a profit center, rather than a public service.
As far as the backlash on taking over power lines, it should be noted that many communities have done this and most electrical distribution began in the west as a rural electrification initiative funded by the federal government and facilitated by local cooperatives.
In a response, Councilman Bill Adams made a strong point. “Unlike Pacificorp who’se management you will never be able to talk to, this utility concept would have the oversight of the Council and you can call on any of us any time.”
We have to agree with this in full. We attempted numerous times to make contact with Pacific Power’s CEO Patrick Reiten. He was the one who signed his name on the direct mail letter to Klamath residents, urging them to oppose the plan. No staff member would pass our contact information forward and Reiten nor his staff ever returned our phone or email messages.
The kicker was the statement from a Pacific Power executive that stated it would be bad for the economy if the City took over because no one would do a better job for Klamath than Pacific Power. This sentiment was also echoed by what seemed to be planted speakers. Here is the biggest irony related to this statement: Pacific Power’s website urged Klamath citizens to be more friendly to Pacific Power like Prineville was. Their reward was a huge Facebook data center that couldn’t have been implemented without Pacific Power’s cooperation. That part is true. What they failed to mention is that Facebook was considering Klamath Falls before Prineville. Aside from the City’s mismanagement of site optioins and telecommunications infrastructure, the other reason Facebook decided not to locate in Klamath was because Pacific Power’s management refused to commit to the power requirements in Klamath.
So it was actually Pacific Power’s lack of support for Klamath’s energy needs that contributed to Facebook locating in Prineville. That was part of the impetus for the City exploring the municipal electrical utility in the first place, but for some reason, nobody mentioned Pacific Power’s contradiction.
Near the end…
The City that came on so strong to push the project through, spending $150,000 or so on feasibility studies and its own marketing machine…the City that arrogantly stated they had the right to implement the project without a vote of the public…this City whimped out completely. They voted at the end of the meeting not to pursue the project and subsequently removed all mention of the project from their website. Participants left the hall feeling victorious. This is the sort of “mob rule” the Founding Fathers were concerned about when arguing for the Federalist agenda.
Ultimately the debate began with an arrogant City, an arrogant monopoly, an ignorant populace and nothing in that arrangement changed. Neither side was right. The community does need electrical distribution alternatives and it seems absurd that the community can’t utilize the power generated locally to support projects needed locally (it goes into a statewide regulated pool that is metered back out to us through complicated formulas). Connecting to BPA’s power grid would have provided access to wholesale power at a special municipal rate that is 20 percent less than any energy can be be obtained through Pacific Power. Must have seemed like a no-brainer at first for the City.
The City might have achieved public support if:
- They not become greedy with arbitrary water and sewer rate hikes (even if you don’t use it they charge you $24 per month).
- The City had not tripped over geothermal through arbitrary high pricing that makes it cost-prohibitive for buildings to connect to the hot water loop. They had the option to establish at-cost distribution cooperatives, but never did.
- They had not destroyed direct access to the regional fiberoptics that was proposed by not caring enough to understand it and failing to endorse millions in grant applications that could have leveraged local direct access.
- The City should have been cultivating direct use geothermal, power, and telecommunications distribution by colocating cheap conduits underground during so many miles of water, sewer, and road upgrades that have been implemented over the past decade.
The only relevant question remaining is: did the City learn anything useful from this experience? Evidence of this would be progress on any of the four points above. Alas, we have heard nothing.
End note: If anyone wants to see one of the best municipal utility examples, visit The CPUD in Vancouver, Washington. It proves all of Pacific Power’s assertions wrong. But that utility is separated from local government, which in hindsight would have been a more productive tack for Klamath Falls to explore: sponsoring an independent utility of the people, not a potential profit center for local government.
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