Springfield Utility Board attempts hostile takeover of EPUD territory, again

February 24 - The Springfield Utility Board (SUB) is once again trying to seize service territory from Emerald People’s Utility District in the SE Springfield area.

In the early 2000’s, the City of Springfield expanded their Urban Growth Boundary into Emerald’s service area and offered to buy that portion of Emerald’s system. Emerald refused the offer, explaining that we built the infrastructure in that area (an area of farms and fields in 1983) and have faithfully served those customers/owners for nearly 40 years.

Subsequently, in 2005 SUB filed a lawsuit to Exclude and Eject Emerald from the exclusive service territory assigned by the Oregon PUC when Emerald was founded in 1983. The lawsuit made its way through Lane County Circuit Court, the State Court of Appeals and the Oregon Supreme Court which ultimately denied SUB’s action and confirmed Emerald’s exclusive rights.

The litigation costs in the mid-2000s were extensive, costing Emerald and SUB ratepayers money that should have been allocated to improving and updating our infrastructure.

Last year SUB once again filed a lawsuit attempting to seize the territory, this time around by trying to condemn our facilities via eminent domain. In late January, Lane County Circuit Court Judge Erin Fennerty denied the petition requesting that the court validate SUB’s condemnation authority. This is the third consecutive court decision to deny SUB’s attempts to take Emerald service territory, dating back to the State Appellate Court and Oregon State Supreme Court in the mid-2000s.

Also, on January 26, 2022 SUB officials met with City of Springfield officials, informing them that they planned to initiate this action and requested that the City endorse or sanction it. The City declined to support the action, telling Emerald officials recently that they thought “it was a bad idea”.

As of today, the City of Springfield’s position is that the matter does not involve them and they have no position on it. However, it is notable that SUB voters and Springfield city voters are exactly the same people.

Oregon has a dozen or so municipal public utilities that are surrounded in one fashion or another by 6 PUDs and 18 Electric Cooperatives.

Generally speaking, the Co-ops came first in the 1920s and 30s to provide electric power in rural areas where none had previously existed. PUDs (public or people’s utilities) came on the heels of the co-ops to provide power to underserved areas; that is, areas that were unprofitable for the investor-owned utilities (usually PGE or PacificCorp) and where the service was often atrocious as a result. Enabling statutes for PUDs in Oregon are enshrined in the state constitution.

Emerald was voted into existence in 1978, had it’s exclusive service territory designated by the Oregon PUC and began operating in 1983 after a protracted court battle to wrestle control from PacificCorp (then PP&L). The result of that process was that Emerald took a large area of unprofitable territory from PacificCorp, service territory they were likely glad to be rid of and paid them $40 million for it. Emerald PUD is one of the youngest of Oregon’s PUDs, turning 40 this year.

The growth of cities naturally results in Urban Growth Boundaries being pushed out into previously rural areas and is guided by Oregon land use planning. We at Emerald think this is a natural, organic process and we have no particular reason to oppose it. However, Oregon law makes no provision for one public electric utility to seize territory from another public electric utility. If that were the case, the implications for PUDs and Co-ops all over the state would be enormous.

As the cities expand into PUD/Co-op exclusive service areas and attempt hostile takeovers, they would undermine the rural utilities entire business model. Costs for Cottage Grove families and all EPUD customers/owners would rise as municipal utilities carve away our territory.

Courts in Oregon, including the Supreme Court, have said no to this action.

SUB seems to be undeterred, forcing Emerald and themselves to continue to spend ratepayer funds on legal fees, nearly a half million in the last year and millions more if SUB persists; money that would be better allocated to improving the lives of our customers/owners.

Charles Kimball, Board President
Ron Davis, Vice President, serving the Cottage Grove area

Emerald People’s Utility District