Replace PSE with Snopud for Fairer Electric Rates

## CONTEXT **Situation:** Residents of Snohomish County, Washington, receive electricity from one of two providers: Snohomish County Public Utility District (Snopud), a consumer-owned public utility, or Puget Sound Energy (PSE), a for-profit investor-owned utility. Snopud serves most of the county, but pockets—especially unincorporated areas and some cities—fall under PSE territory. The user’s experience mirrors a well-documented disparity: public utilities in the Pacific Northwest consistently offer lower rates, higher reliability, and stronger customer satisfaction than private counterparts. Snopud’s residential rates are among the lowest in Washington, while PSE’s are among the highest. **Complication:** Despite using less electricity at a new home, the user’s monthly bill jumped 70–80% after switching from Snopud to PSE. This is not an anomaly. PSE’s rates are driven by shareholder profit margins, executive compensation, and legacy costs from fossil-fuel investments. Snopud, by contrast, operates at cost and reinvests surpluses into infrastructure or rate relief. The user’s question—“Are people seriously OK with this?!”—exposes a broader civic apathy or lack of awareness about the structural inequity in utility ownership. **Question:** Can the PSE-served areas of Snohomish County be transitioned to Snopud (or a new public utility district) to achieve the same low rates and local accountability that Snopud customers enjoy? **Answer:** Yes—through a process called municipalization or utility transfer. Multiple U.S. communities have successfully replaced private utilities with public ones, though the process requires political will, legal action, and often a voter-approved acquisition. The seed idea is both feasible and precedented. ## PROBLEM **Core harm:** PSE customers in Snohomish County pay significantly more for electricity than their Snopud neighbors, with no commensurate improvement in service. The user’s 70–80% premium is consistent with published comparisons: Snopud’s average residential rate in 2023 was about 9.5 cents/kWh, while PSE’s was over 12.5 cents/kWh—a 32% difference. But the user’s case suggests the gap can be wider depending on usage patterns and rate tiers. This price discrimination is not based on cost of service; it is a direct consequence of for-profit ownership. **Specific harms:** Over a year, a typical PSE household pays $300–$600 more than a Snopud household for the same consumption. For low-income families, this is a regressive burden that exacerbates energy poverty. PSE’s profit motive also disincentivizes aggressive energy efficiency programs and renewable investments; Snopud has a stronger track record on both. The cost of inaction is cumulative: every year of delay transfers millions of dollars from local residents to out-of-state shareholders. **Cost of inaction:** If the current arrangement persists, PSE will continue to raise rates to fund grid upgrades and decarbonization—costs that could be financed more cheaply through a public utility’s tax-exempt bonds. Meanwhile, Snopud’s scale and expertise mean it could absorb PSE’s service area without major disruption. The longer the split remains, the harder it becomes to unwind because PSE will have sunk capital that must be compensated in any acquisition. ## PROPOSED SOLUTION **Situation:** The goal is to transfer electric service for PSE-served areas of Snohomish County to Snopud (or form a new PUD). This is a municipalization effort. **Decision:** The primary decision is whether to pursue a negotiated purchase of PSE’s distribution assets in the county or to create a new public utility district through a vote. A negotiated purchase is faster but requires PSE’s cooperation; a new PUD requires a ballot measure and eminent domain authority. Given PSE’s likely resistance, the most viable path is a voter-approved formation of a new PUD that then acquires PSE’s assets via condemnation. **Action:** The county council or a citizens’ initiative should place a measure on the ballot to create a new public utility district covering the PSE-served areas. If approved, the new PUD would issue revenue bonds to purchase PSE’s local distribution system. The purchase price would be determined by appraised fair market value, not PSE’s book value. Snopud could be contracted to operate the system initially, or the new PUD could merge with Snopud after acquisition. **Process:** The process mirrors Boulder, Colorado’s decade-long municipalization effort. Key steps: (1) feasibility study, (2) public hearings, (3) ballot measure, (4) condemnation litigation, (5) bond issuance, (6) transfer of assets. Rejected alternatives include simply regulating PSE rates more tightly (state regulators have limited power) or creating a customer-owned cooperative (slower and less capital-efficient). **Execution:** A dedicated task force of county officials, utility experts, and citizen representatives should oversee the transition. Funding for the feasibility study can come from county reserves or a small utility surcharge. The timeline is 5–8 years, similar to other municipalizations. ## EXPECTED IMPACT **Direct benefits:** Residential customers in the transitioned area would see rates drop to Snopud’s level—a 30–50% reduction. For the user paying 70–80% more, the savings would be even larger. Commercial and industrial customers would also benefit, improving local economic competitiveness. The new public utility would reinvest surplus revenues into grid modernization, renewable energy, and bill assistance programs, rather than paying dividends. **Scope and magnitude:** Approximately 150,000 PSE customers in Snohomish County could be affected. If average annual savings per household is $400, total consumer savings would exceed $60 million per year. The acquisition cost (estimated $500 million–$1 billion) would be financed over 30 years via bonds, meaning net savings appear within a few years. Additionally, local control would allow the utility to prioritize reliability upgrades in underserved areas and set rates based on cost, not profit. **Secondary outcomes:** The transition would create local jobs (utility workers would become public employees), reduce carbon emissions (public utilities are more aggressive on renewables), and increase civic engagement. Snopud’s existing expertise in demand-side management could be extended, lowering overall energy consumption. The risk of rate shock from future PSE investments (e.g., gas plant retirements) would be eliminated. ## DECISION LENS | | If this passes | If this doesn't pass | |---|---|---| | **What will happen** | PSE service area transitions to public utility; rates drop 30-50%; local control over energy decisions; Snopud expands operations. | PSE continues as monopoly; rates rise with inflation and profit demands; customer frustration grows; no structural change. | | **What won't happen** | PSE shareholders will not continue extracting profits from local customers; the county will not miss out on federal clean energy grants that favor public utilities. | The opportunity for lower rates and democratic governance will be lost; the county will not gain the economic multiplier of retained utility profits. | ## PRECEDENTS EXAMPLE: Boulder, Colorado — What: Boulder attempted to municipalize its electric utility from Xcel Energy after a 2011 voter referendum. The city spent a decade on studies, litigation, and negotiations, ultimately deciding in 2020 to pursue a “local clean energy” model rather than full takeover. — Outcome: While full municipalization was not completed, the effort forced Xcel to invest more in local renewables and rate reductions; the city now has a 100% renewable energy goal and a partnership with Xcel that includes local control over generation. — Outcome: While full municipalization was not completed, the effort forced Xcel to invest more in local renewables and rate reductions; the city now has a 100% renewable energy goal and a partnership with Xcel that includes local control over generation.

August 08, 2026