Senior Debt: A Growing Issue

It wasn't so long ago that retirement for most people was an opportunity to do some travel, maybe get more involved in personal interests and hobbies that have nothing to do with collecting a paycheck. You might have envisioned a time when you wouldn't have to answer to anyone and life would become simple.  The reality is that as you grow older life becomes more complicated, not less.

I don't know of too many seniors that don't spend a considerable amount of time in worry.  Dealing with health issues, the cost of prescriptions, trying to jump through all the hurtles over Medicare, Medicaid, prescription coverage, gap coverage, rising property taxes, rising grocery costs..etc

Then the economy tanked at a time when the millions born during the post war baby boom are just entering retirement age.  The money they had been putting away in IRA's and 401K plans just melted away.  Many had to find work if they are still able.  Many can't because the opportunities to work just aren't there.  Those circumstances have led seniors to chose between paying the grocery bill or buying medicine.  Those who have the option to use up available credit have amassed large debt that they simply can't repay.

Then the phone calls and letters start.  The same institutions that participated in the destruction of pensions and the obliteration of  retirement income now want their money.  They are relentless.  They hire agencies that  will say anything to a senior to get that money.  They threaten jail. They threaten to call friends and relatives to embarrass the senior into paying what they can't pay.  The collectors threaten to take away Social Security money.  The fact is they can't do any of those things because seniors and the disabled are protected.  There are no work houses or debtor prisons in this country.  That doesn't stop the lies those bill collectors tell.

There is a way to put a stop to it.  If you are a protected senior or disabled person all you need is a lawyer.  Once you have legal representation those phone calls and letters stop coming to you and go to your lawyer.

Of course, since most seniors believe in paying their obligations, if you have the money to retain a lawyer that means you probably have the money to pay your bills.  If only that were true.

Enter Portland bankruptcy attorney Eric Olsen who says seniors often end up filing bankruptcy when it really doesn't make sense to do that.  Olsen thinks seniors should be protected from the collection agencies and the blatant lies they tell.  He has formed a non-profit organization called HELPS that, for a very small fee, and a very small monthly service charge will make the letters and phone calls stop.  He says there are millions of Americans facing this issue.

Monday February 6th Olsen will be my guest on KAST 1370 at 8:30am and will explain how this works. In the meantime there is a web site where you can get more information http://helpsishere.org/

As Promised

As promised, here is the response from Pacific Power to my previous post on PUD formation in Clatsop County.

Watching with great interest as this issue is discussed. As an employee and spokesman for Pacific Power, though, I do need to correct a few points thrown around in your recent blog post.

One, Pacific Power is not an “off-shore company.” Scottish Power hasn’t been in the picture since March 2006, when MidAmerican Energy Holdings Company purchased PacifiCorp, and therefore Pacific Power. MidAmerican Energy is based in Des Moines, Iowa and PacifiCorp’s corporate headquarters is in Portland.    Pacific Power’s home office is in Portland and serves Oregon, Washington and Northern California.  We also have a presence in Utah, Wyoming and Idaho, serving those communities as Rocky Mountain Power, and our sister utility in Iowa, MidAmerican Energy Company.  It is from these affiliated businesses that we have brought in crews to assist in restoration during and after the 2007 storm.  Today we are most assuredly not a Scottish-owned company and haven’t been for a long time.  

Two, our energy portfolio is not as described. Non-hydro renewable (mostly wind) make up 10 %, Hydro 10%, natural-gas-fired 20%, coal fired 52%. (The rest is bought off the market.) We eliminated new coal plants from our plans years ago and we are investing in making the ones we do own cleaner. We have increased our commitment to wind power by 3,000 percent since 2005, making us the second largest utility owner of wind power in the nation, second only to our sister utility in Iowa. We are well on our way to meeting the state’s “25% by 2025” Renewable Portfolio Standards, a standard that smaller PUDS are not obligated to meet. Our company is among the most aggressive renewable energy companies in the U.S.; MidAmerican just acquired more than 800 megawatts of solar projects in late 2011, on top of our wind, geothermal and biomass projects.

Three, our community donations, which have been ongoing for more than a century now, are not funded by the 3 % surcharge on your bill. That surcharge is a state-mandated charge that goes specifically to the Energy Trust of Oregon for energy efficiency and small renewable energy project funding.  It also goes toward home weatherization assistance and to energy efficiency programs for schools. 

Pacific Power’s community impact and giving is not part of our rates, but comes directly from our shareholders and employees.  We give through our foundation and through direct company philanthropy.  For instance we donated over $510,000 in contributions from our employees and owners just in 2011 for low-income energy assistance, and give about $50,000 in direct grants and sponsorships in Clatsop County each year.

Four, the “comparative rates” are not accurate. And the biggest inaccuracy would be the impression that any existing PUD rates would be approximate to what would be paid by a new PUD. Unless and until accurate research and analysis are done to estimate the true cost to taxpayers and ratepayers from a government condemnation to take over and set up a new utility, there is really no accurate way to compare rates that don’t really exist yet.

There are plenty of conclusions in your blog that we also take issue with, but first we thought it might help to clear up a few of the basics on which you are basing your argument. As you said in your opening, “a little research.” A little more research was needed. Call me any time if you have a question.

Tom Gauntt

Spokesman, Pacific Power

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As Planning Commission Chair Bruce Francis told Pacific Power's Pat Eagan, This is really going to come down to three things. Rate, reliability and, the value of local control.

Sure. What we pay for power plays into this but before putting a price tag on this proposal we need to have a discussion about what the expectations would be for an operational philosophy if a PUD were to be formed here.

It is important going in to be clear about why we would spend the next two or three years setting all this up.  For example, I would hate to see a PUD board that has a philosophy akin to manifest destiny where it never stops growing until you end up with a wonderful facility and huge staff instead of the kind of operation where the focus is on long term reliable service at a reasonable rate for the customers. How often can a PUD raise rates I wonder? 

One area where it could all fall to pieces rapidly comes with the election of the board that will guide the new organization.  This can't be a typical popularity contest with a disconnected, ill-informed electorate. The first incarnation of the PUD board must be comprised of people who understand what leadership, management and strategic planning are all about.  This can't be the kind of board that doesn't have time to pay attention, allows itself to be badly informed, and leaves leadership of the organization strictly to it's managers.  This is a critical service organization that needs full time attention. Being well-meaning won't be enough. Since local politics might make the creation of such a board nearly impossible perhaps it would be possible to have an active advisory group composed of individuals with the level of experience necessary to guide the process. That might be the first action taken by a new PUD board.

What if the County decides to drop this idea as Pacific Power has demanded? It's entirely possible that during the 

discussion that will take place at the County Board level that this idea might attract little public interest, or be given a very low, or perhaps no priority at all.  The cities might decide they'd rather not go this direction either. What happens if a city opts out? If an election is held and the majority of citizens in one city want the PUD but the majority in a smaller city don't want a PUD, what happens then?  Lots of questions.  Few answers yet. 

It will be interesting to watch what happens over the next couple of months.

PUD Politics

The discussion regarding a People's Utility District for Clatsop County is bound to be contentious.  Over the years PUD's have slowly developed even though they offer big advantages over paying an investor owned utility company.  Once you do a little research you quickly begin to ask your self why there are only six PUD's in the state.  It doesn't make any sense at all.

Most people say they are satisfied with what they have until they learn that PUD customers on average pay upwards to 30% less every month.  That's when the the two major private power providers march out the arguments about how expensive it will be to pay them for everything they have built and how unreliable public power supplies and services tend to be.  The problem with these arguments are that it's pure hog wash at best.

Pacific Power can't argue about rates. Right now it costs about $97 for every 1000 kWh you use.  Tillamook PUD customers pay around  $79 per thousand.  Clatskanie PUD customers pay around $40.  They benefit from power sales to the Wanna Mill and the development of their own power sources.  PUD's have access to hydro power supplied by the federal Bonneville Power Administration which is the cheapest power source around year in and year out.  They also have gas-fired power at a smaller percentage.  Compare that to Pacific Power which  relies primarily on coal to the tune of about 72% of it's power source. 

There are community ties with Pacific Power, of course, that would seem to make the utility a good "community partner"  I understand just as the story about a possible PUD surfaced a local museum suddenly got a check for $10,000.  The fact is PGE and Pacific Power are required by law to contribute 3% of what they make to charitable, or not for profit community organizations.  You still pay for that. Check your Pacific Power bill. it's a separate line item.

The fact is every PUD in Oregon is a community partner in the same way.  That's not because the Oregon legislature mandated it.  It's because the people that run the PUD live and work in the community and participate in community support year round.

If the county commission proceeds with this idea it won't change anything for people currently covered by a PUD or Electric Coop.  The boundaries of a new PUD can't interfere with those. 

A major player in this discussion is Pacific Power's Sheila Holden.  She is well known locally and that is her job. She is the face of the power giant here.  Holden is a regional manager for Pacific Power and has earned her position and reputation as a change agent, mixing business with personal passion, cheerleading for businesses, pushing for social services for low-income people and creating economic opportunities for women and minorities in Northeast Portland, and here acting on behalf of her company in the 2007 storm to provide supplies to feed those stuck in shelters unable to return to damaged homes and workplaces.  

She is very highly though of and rightly so. 

 In this debate however she will be pushing the company line. We know this because of her reaction at a recent Astoria city council meeting and a discussion of the possible PUD which she said she had only heard about incidentally.  She seemed puzzled that the county had not approached Pacific Power.  She stated that any PUD would have to buy Pacific Power's system here and it would be very expensive.  She didn't quote a figure. When asked about what her company might do to help the area in an emergency she said if it's not in the company service area she suspected there would be great resistance to lending aid. Too bad since she makes much of the strong ties the company has to it's roots in Astoria.  I guess that only applies if we pay our bill including the line item that allows her to have fountains rebuilt and give grants to museums.

I agree that Pacific Power investors should get fair market value for what the company has built here. The county has the figure already because the county assessor keeps track of those filings with the state revenue department. All private utilities are required to file a report on the market value of their holdings.  The number doesn't seem to bother anyone at the county, nor has it made the proposal economically unfeasible thus far.

The company won't have a choice to sell everything to the PUD because of eminent domain rights which includes paying fair market value, not what Pacific Power wants to charge. A PUD has that right but not the right to exercise eminent domain on any other industry or individual..An important point to remember as the campaign starts to get nasty.  And it will.

Here's an example from a 2003 Oregonian article that was written as PGE was battling a proposed PUD in Portland that shows exactly how the company will use Holden here:

In a fight to keep its customer base, Pacific Power has joined PGE in distributing and financing anti-PUD information. But Holden -- and her long-established community credibility -- may be the secret weapon in this dogfight.

For the last two years, Holden has run the North-Northeast Economic Development Alliance. The group will soon release its first State of the Community report, which monitors all of the area's investments.

Last year, Holden was a chairwoman of the citizens committee for the Interstate Corridor urban renewal area. Her group helped identify projects that later got cut out of the funding loop of the Portland Development Commission.

What's more, in 1988, Holden helped create a business incubator called the Cascade Business Center. Pacific Power provided the financing and North Vancouver Avenue building, which now houses the Oregon Association of Minority Entrepreneurs, or OAME.

"If it wasn't for Pacific Power paying my salary," Holden says, "I wouldn't have the freedom and time to do that work."

Now, it's payback time. Holden plans to use those contacts she's made helping people to build community angst over the public-utility initiative.

"We see this right now as a grand opportunity," Holden says, "to tell them what's real and what's Memorex."

She's good.

At the end of the day the decision to form a Clatsop PUD will come from voters who will have to decide three ballot issues. 1) To form the district, 2) To elect a local board to run it and, 3) To vote on a levy to pay for the legal work and any engineering studies and provide other start up costs that will need to paid back to the county.  The power may or may not come from the Clatskanie PUD depending on decisions made by the board of the Clatsop PUD

That's the basics. The fine points are still in development.

PUD Or PP&L?

We interrupt our discussion on the Legion Block to bring you and new topic.

Last week KAST reported that Clatsop County was holding a number of quiet discussions with various parties about the possibility of dumping Pacific Corp and going with the Clatskanie PUD.

This came up at the Astoria City Council meeting when the Pacific Power Regional Community Manager asked if anyone on the council had heard this as a rumor.  She said she was trying to track it down and that her company had heard nothing from the county.  It was surprising to discover that most of the council had heard about it. In fact Peter Roscoe said while he didn't know much about it yet he had been asked by one of the commissioners to sit on a citizens committee to explore the idea. Then City Manager Paul Benoit said that County Manager Duane Cole had recently paid him a visit to chat about the proposal.  Benoit said that the county had approached some key power users for letters of support.

Today I discovered that Cole is moving even faster to secure the support of school districts who think it will save them money even though it doesn't look like there is much more than speculation involved with that conclusion.

Cole is saying that since Clatskanie PUD gets it's power from the Bonneville Power Administration it is coming from clean hydro power and not the coal burning plant Pacific Power uses.  So it's greener and it's cheaper.

I'm all for paying less on fixed expenses like energy bills. I'm just a little concerned about whether there will be any actual savings involved.  Pacific Power has made it clear that buying their infrastructure will be at current market rate because much of the system has been replaced since the 2007 storm.  That's going to be a big number.  I'm also concerned about how the Clatskanie PUD spends money after seeing the incredible headquarters building they just finished.

Then there is the question about reliability. What happens if we get slugged with a big storm or series of storms? Will the Clatskanie PUD be able to get to us? How long will it take to make repairs? In 2007 Pacific Power brought in teams of engineers and linemen from throughout the western states. Can the PUD do that?

I await the outcome of this rush to change something that isn't broken.