Electrical power is distributed to consumers in the United States by two types of utilities:
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1) Investor-owned utilities like Pacific Power &
2) publicly owned utilities like the City of Ashland
About 25 percent of the nation's electric consumers are served by publicly owned utilities.
Public power serves small towns like Ashland but also large cities like Los Angeles and Seattle. Public power systems belong to the people they serve, while private utilities are owned by stockholders who expect to earn dividends from company profits.
There are other benefits to municipal ownership. Ashland's utility is run by a city council elected from among the utility's own customers. They are closest to the people they serve and can be more responsive to local needs. Local ownership also protects against monopolization of a vital public service by a few large private companies. The quality and level of service is locally controlled. And the utility employs local people who have great pride in delivering service to their friends and neighbors.
Public power was introduced into the Pacific Northwest by the city of McMinnville in 1889, the same year Ashland Power and Light began service. It wasn't until the 1930's that public power became available on a mass scale. The Depression had hit the Midwest particularly hard. Thousands of people pulled up stakes and moved -- many to California -- but thousands to the Pacific Northwest which had 13 percent of the U.S. landmass but only 3 percent of its population.
Many of these newcomers were farmers who settled in the rural areas of Washington, Idaho and Oregon. Others settled into city life in Seattle and Portland. Life was difficult and jobs were few. But, President Franklin Roosevelt's New Deal changed all that. Massive public works projects were started on the mighty Columbia River in an attempt to tame and utilize the river for flood control, transportation, recreation and irrigation for thousands of acres of farmland, to provide jobs for thousands of unemployed workers, and most of all provide electrical energy to farmers in rural areas that had no electrical power.
The concept was to provide all Americans with what was called "postage-stamp" electricity rates. That was similar to the U.S. Postal Service, where all Americans paid the same rate to mail a letter no matter where they lived.
Bonneville Dam, located east of Portland, was the first major New Deal project in the Northwest built by the U.S. Army Corps of Engineers. It was the first flood-control hydroelectric dam built across the Columbia River. It forever changed the river's flow. Its massive turbines have supplied millions of kilowatt-hours of low-cost electricity every year since 1938.
Upstream, the U.S. Bureau of Reclamation had begun an even bigger project, building the largest dam in the world -- Grand Coulee. It impounds the Columbia River for 160 miles, provides irrigation water for thousands of acres of farmland and produces massive amounts of hydroelectricity.
By the time the first generators began to turn, Congress had created the Bonneville Power Administration in 1937, to market this new source of electrical power. It was a Northwest copy of the famed Tennessee Valley Authority which had built 21 dams in the Tennessee Valley, more than doubling energy consumption in that region which attracted new industry and that meant jobs for citizens.
The BPA would not build dams, operate them or get involved in land planning like TVA, but Bonneville would market for the federal government the new power, rather than leave it to private industry to distribute.
Bonneville and Grand Coulee dams were finished in a coincidence of time, just as the Japanese surprise attack at Pearl Harbor brought the U.S. into World War II. Electrical energy supplied by federal dams ignited the aluminum and aerospace industry by turning out more than 10-thousand bomber aircraft. By 1943, 96 percent of Columbia River electricity was used for war manufacturing.
Today, nearly half of all U.S. aluminum manufacturing remains in the Northwest. Portland and Vancouver shipyards produced 755 ships used in the war effort, nearly a quarter of all war tonnage. About 55-thousand kilowatts mysteriously disappeared to a place, later identified as the Hanford Nuclear Reservation, the birthplace of America's nuclear arsenal.
During the war the Northwest's population grew by 44 percent and BPA public affairs officer Stephen B. Kahn wrote, "On this democratic altar we have worked and scores have died. So the power of the river may turn the battle tide. As our armies fight in battle, so we back them with the might of the nation's greatest river, working day and night."
The war also led to the creation of the Northwest Power Pool, a cooperative effort by public and private utilities to increase interconnections and exchanges of electric power. With one half of all BPA electricity reserved for public power uses, Oregon and Washington lawmakers approved legislation allowing residents in rural areas and cities to form public utility districts or
PUDs and electric cooperatives. All would buy cheap hydropower from BPA and distribute it to customers throughout the Northwest ensuring local ownership, control and lower electric rates for consumers. BPA, the marketer for this federal electricity is headquartered in Portland.
Under its first administrator, BPA, began an aggressive transmission line construction program that enabled, BPA, to deliver electrical power from Columbia River dams easily. These tall pillars represented the beginning of an electric grid system that's still in use today. Today, one half of all Columbia River power is reserved for publicly owned utilities, the other half for industry.
The BPA markets all Columbia River electricity after it leaves the powerhouses of the great dams. There have been drawbacks. As dams named McNary, Rock Island, Ice Harbor and John Day and 24 others were added to the Columbia and Snake Rivers, salmon runs slowly began to dwindle and some species are now endangered.
Many feel the dams are largely responsible. BPA under court mandate is using profits from electricity sales and working with irrigators, industry, wildlife officials and others in an attempt to restore the Columbia and Snake River salmon runs. No federal agency, state government or Native American tribe has wanted to surrender authority over Columbia River water. As a result, a Chinook salmon returning to spawning grounds in Idaho must swim through 23 difference agency jurisdictions including tribal lands, a dozen power agencies, industry, farming and environmental groups, not to mention struggling through huge dams along they Journey.
In February 1982, the City of Ashland changed its wholesale electric power supplier. They ended a decades-old relationship with Pacific Power and Light Company and began purchasing power directly from the Bonneville Power Administration. BPA offered the City of Ashland, not only a stable long-term supply of low-cost power, but an array of conservation programs and technical assistance and thereby became the 124th city to purchase power from BPA.
Ashland's contract to purchase wholesale electricity from BPA is in effect until the year 2001. Power purchased from BPA is delivered to Ashland over PP&L transmission lines, where it is distributed from three substations to consumers. Ashland's municipal utility serves about nine thousand customers with residential consumers making up about 85 percent of the total. Revenues totaled $8.2 million in 1995. Electrical rates within the City of Ashland are nearly the same as those paid by Pacific Power and Light customers.
Because Ashland is a publicly owned utility, it long ago decided to return 28 cents of every dollar earned by the utility, instead of raising taxes, to support city services to local citizens. Private utilities also return approximately the same 28 cents of every dollar to their stockholders, but many of these owners and investors live in other parts of the country. When Ashland signed a 20-year power supply agreement with BPA, not only were energy prices kept low, but the contract opened up new opportunities to participate in conservation programs benefiting Ashland residents.