Could we run this as a public utility?
Two-thirds of Washington’s electricity is already delivered by utilities the public owns: county PUDs, city utilities like Seattle and Tacoma, and co-ops. The law that lets a county take over a private utility has been on the books since 1930. It has been used against Puget Power before. Here is how it works, who has tried, what it cost, and what else can hold rates down.
Washington is a public power state. PSE country is the exception.
Twenty-eight PUDs, about 20 municipal utilities and 15 co-ops serve 63% of the state’s load. The three investor-owned utilities, PSE, Avista and PacifiCorp, serve 37%. Nearly 80% of PUD electricity is hydro, much of it bought from the Bonneville Power Administration at “preference” rates reserved by federal law for public utilities.
Who serves Washington’s electric load
Share of statewide load by utility type
How a county takes over a private utility, step by step
Title 54 RCW, from the 1930 Grange Power Bill.
A county-wide vote
Counties without a PUD form one by petition of 10% of voters and a majority vote (RCW 54.08.010). Counties that already have a water-only PUD (Thurston, Kitsap, Skagit, Whatcom) instead vote to grant it electric authority. Approval grants authority only, with a 10-year window to act. This is what Kitsap votes on Nov 3, 2026.
Feasibility, then an offer
The PUD commissions a valuation and a BPA power-supply plan ($300K–$600K in Kitsap’s case). It can negotiate a purchase or, under RCW 54.16.020, condemn the system through eminent domain “in the same manner as cities.” A purchase must go back to the district’s voters.
Just compensation, decided by a jury if needed
If PSE won’t sell, a superior-court jury sets the price; the court must show the jury the values the county assessor placed on the property. PSE also gets to keep part of any gain: in 2014 the UTC split PSE’s $109M Jefferson gain 54/46 with customers, a one-time $40 credit.
Revenue bonds and BPA power
Commissioners issue tax-exempt revenue bonds by resolution (RCW 54.24.020); no shareholders, no income tax. A newly formed public utility can request BPA Tier 1 preference power, the cheapest in the region. FERC approves any transmission transfer. The UTC does not have to approve the sale.
The catch that stopped Whatcom. BPA’s cheap Tier 1 power is allocated by each utility’s historic “high water mark.” A brand-new public utility can request it; an existing PUD that simply expands its load may have to pay the higher Tier 2 rate for the added demand. Whatcom PUD’s 2023 study found PSE’s county assets worth about $500 million, the system in “marginally adequate condition,” and the combination “too great of a financial burden” for now. New BPA “Provider of Choice” contracts start Oct 1, 2028 and run 19 years; that timing matters for any county considering a move.
Who has tried to leave PSE
The only completed PSE takeover
Voters approved Proposition 1 on Nov 4, 2008, 53.3% to 46.7%, despite PSE spending $249,565 against a $28,000 campaign. The campaign estimated $47 million; the negotiated price was $103 million (2010), about $6,000 per customer, financed with revenue bonds. Jefferson PUD took over April 1, 2013, the first private-to-public transfer in Washington in 50 years. Rates were held flat at PSE levels on day one. Early problems: billing and outage systems, and losing PSE’s ~$500,000/yr low-income subsidies. Today: 2025 tiers of 9.66¢ / 11.72¢ / 13.34¢ with a $21 base, rising ~7%/yr through 2028 to fund $68 million of deferred infrastructure. The Kitsap Sun reports Jefferson customers paid about $10/month less than PSE customers in 2025 for comparable use.
Money and the BPA ramp
Skagit PUD sought to condemn PSE’s 57,000-customer system; opponents cited $238 million in takeover and legal costs and a 7–10-year wait for BPA power. It lost by about 6 points; PSE spent $426,344. Island County’s vote to form a PUD lost 33.5% to 66.5%; PSE spent $286,778.
Outspent 19 to 1
Proposition 1 to give Thurston PUD electric authority lost roughly 60–40 in 2012. The PSE-funded Alliance to Protect Thurston Power spent over $656,000 ($9.36 per vote) against about $34,000 for supporters. Power to the PUBLIC! qualified a second measure for Nov 2020, which also failed (certified result not retrieved). After the 13% Jan 2026 increase, a new Change.org petition has revived the debate; no measure is scheduled.
Two studies, $90 million apart
Citizens gathered 1,200+ signatures; the city hired D. Hittle & Associates ($99,300), whose draft put acquisition at $27.6–48.7 million and all-in cost at $57.6 million. PSE’s consultant Concentric put it at $146.8 million and $251 million more over 20 years than staying. The council dropped it in June 2017 after contentious hearings.
“Mid- to long-term goal”
Whatcom PUD’s EES Consulting study valued PSE’s county assets near $500 million and shelved the idea, while saying it would revisit if PSE rates keep rising. Bellingham separately studied a city utility.
The live one
On July 28, 2026 Kitsap PUD commissioners voted to ask voters for electric authority covering 130,000+ PSE customers. A public meeting drew 260–300 people. Approval only authorizes a $300K–$600K feasibility study (already funded) within a 10-year window; any purchase would return to voters. PSE calls it “a blank check,” cites Jefferson’s $109 million price, says its power-supply costs have tripled to $2 billion a year since 2019, and notes 70 Kitsap-based employees. Kitsap PUD board president: Debra Lester.
Kitsap Daily News coverage ↗What other places learned
| Place | What happened | Result | Lesson |
|---|---|---|---|
| Winter Park, FL (2005) | 69% voted to buy Progress Energy’s local system; utility asked $106M+, paid $42.3M after arbitration | Rates 24–32% below Duke Energy 20 years on; outages under 30 minutes/yr vs 83; 80% of lines undergrounded | Small, dense systems with a clear price path work |
| Sacramento (SMUD) (1923–1946) | Voters approved a district in 1923; PG&E litigated for 23 years | Operating since 1946; policy of rates at least 18% below PG&E, recently 26–47% lower | Incumbents fight for decades; patience pays |
| Nebraska (1946) | Omaha Public Power bought the last private utility | Only all-public-power state; 121 municipals, 30 districts, 10 co-ops | Statewide public power is possible |
| Snohomish County, WA (1949) & Seattle (1951) | Bought Puget Power’s systems for $16M and $26.8M after long fights | Snohomish PUD and Seattle City Light bills today are 30–40% below PSE’s | PSE’s own history shows it can be done |
| Boulder, CO (2010–2020) | Ten-year municipalization effort vs. Xcel | Spent $28.7M, then voters accepted a new 20-year Xcel franchise with climate off-ramps | Litigation and valuation can outlast political will |
| Maine (2023) | Question 3, Pine Tree Power, to buy CMP and Versant | Failed ~70% no after opponents cited a $13.5B buyout | Statewide buyouts of large IOUs are a hard sell |
| San Francisco (2018– ) | Prop A authorized bonds; $2.5B offer for PG&E’s local grid rejected; $3.4B valuation filed | Still pending at the CPUC in 2026 | Big-city takeovers take a decade or more |
| Long Island (LIPA) (1998) | State authority bought LILCO after the Shoreham nuclear bailout | Debt now over $9B; rates among the nation’s highest | Borrowing to hide costs doesn’t work |
Residential rate increases, 2020 → 2024
Nationwide, APPA analysis of EIA data
Public power utilities also averaged 90 fewer outage minutes per customer per year. Public power posted the lowest residential rate in 35 of 45 states where both types operate.
What a Kitsap or Thurston takeover would plausibly cost
No public valuation of PSE’s whole electric system exists. Benchmarks: Jefferson paid $103M for ~17,400 customers (~$6,000 each); Whatcom’s study put PSE’s county assets near $500M for ~100,000 customers (~$5,000 each); Skagit opponents cited $238M for 57,000 customers (2008). At those ratios, Kitsap’s 130,000 customers would be in the $650M–$800M range before startup costs, and all eight electric counties would run into the many billions. PSE reported $3.2 billion of capital spending planned for 2027–2029 alone, and its 2025 rate base grows with every approved project, so the price rises every year a decision waits. These ranges are extrapolations.
Financing at tax-exempt municipal rates, no shareholder return (PSE’s 9.9% ROE and 12% of bill to investors), no federal income tax, and BPA preference power are the three structural savings. Set against them: acquisition debt service, buying or building power supply, and standing up billing, crews and outage response.
Seven ways to contain PSE’s costs now
1. Show up in the rate case
The UTC sets ROE and decides which costs customers pay. Public Counsel’s 2026 proposal (8.17% ROE, shareholders pay executive pay, investor relations and insurance) would save up to $695M in 2027. Public comment hearings are Sept 29 and Oct 7; written comments to [email protected] with docket UE-260005 count.
2. Performance-based regulation
Since 2021 (ESSB 5295) the UTC has been designing rules that reward utilities for reliability, affordability and clean energy instead of for capital spending. Comments on its June 2026 assessment are due Oct 9; workshop Dec 17; final policy Q1 2027.
3. Cap the profit
No Washington law caps IOU return on equity, executive pay or lobbying recovery. Maryland and Minnesota adopted executive-pay limits in 2026, and model ROE legislation exists. The 2027 session opens Jan 11; House Environment & Energy (Chair Beth Doglio) and Senate Environment, Energy & Technology (Chair Sharon Shewmake) are where such bills start.
4. Stop cost-shifting from data centers
HB 2515 would have required large loads over 20 MW to pay their own way. It passed the House 51–41 in Feb 2026 and died in the Senate. PSE’s load-growth forecast (winter peak up 40% by 2045) is a driver of its capital ask.
5. Enroll in what already exists
Bill Discount Rate (5–45% off, up to 80% of area median income), HELP grants up to $1,000, Budget Payment Plan, LIHEAP, and time-of-use rates. Details on the Save at home page. The 2024 Climate Commitment Act credits sent $200 to 690,000 households; a second round would need legislative action.
6. Community solar and efficiency
Washington’s $100M Community Solar Expansion Program lets income-eligible subscribers join free; PSE credits 6.7¢/kWh. PSE’s efficiency rebates are funded by a line on every bill, so not using them means paying for someone else’s heat pump.
7. Keep the public-power option credible
PSE spent $1.6 million defeating four county votes between 2008 and 2012. A credible threat of municipalization is itself leverage: Boulder extracted a climate-linked franchise from Xcel, and Whatcom PUD keeps its study on the shelf “if PSE rates keep rising.” Kitsap’s Nov 3 vote is the next test.