The
Sale of Puget Sound Energy
Puget Sound Energy announced in October 2007 that its board has accepted
a buyout offer ($7.4 billion) by Macquarie Consortium, pending regulatory
approval.
Seattle
Times Report
|Fortune
Magazine On Macquarie Bank
The Washington
State Office of the Attorney General writes:
Don’t
Throw Away That Puget Sound Energy Bill Notice
The Attorney General’s
Public Counsel Section, which represents the public in utility rate
cases, says Puget Sound Energy customers need to keep an eye out for
a special notice in their April/May bills.
Bellevue-based PSE,
Washington’s oldest and largest energy utility, wants to raise
rates for its more than 1 million electric customers and 725,000 gas
customers in Western Washington. In addition, PSE’s parent company
is proposing a sale of the company to an international consortium of
investors from Australia, Canada, and the U.S. in a deal valued at more
than $7 billion. If the acquisition moves forward, PSE will no longer
be a publicly traded company.
Monthly bills, now
arriving in the mail, will include a notice
with details of the proposed rate increase and the sale transaction,
as well as a detachable comment card for customers to tell state regulators
what they think about the company’s proposals. Customers also
have an opportunity to speak out during three public hearings scheduled
this spring in Bellevue, Bellingham and Olympia.
“The new comment
cards are a great way for customers to voice their opinions to the state
Utilities and Transportation Commission, which has the final say on
whether to approve Puget Sound Energy’s proposals,” said
Public Counsel Chief Simon ffitch.
PSE filed a request
with the UTC in December 2007 to take in an additional $174.5 million
in revenues from electric customers and $56.7 million from gas customers.
In addition, PSE has requested to raise the monthly base charge, which
all customers pay regardless of usage, by nearly $3 for electric customers
and $10 for gas customers.
If the commission
approves PSE's request, residential customers will see their monthly
electric bills increase by nearly 12 percent, on average, while gas
bills would rise by nearly 6 percent, on average.
“We’re
concerned with the data we have seen so far from PSE and believe the
requested increases are excessive,” ffitch said. He said the Public
Counsel Section plans to file formal testimony with the UTC on May 23
with recommendations regarding the rate request.
“Public Counsel
also is taking a close look at the company’s proposed sale,”
ffitch continued. “We’re specifically reviewing the potential
impact the sale may have on PSE’s financial and operational soundness,
service quality and customer rates.”
The UTC will make
the final decision on both the proposed rate increases and the merger.
For the UTC to approve the merger, it must find that the sale is in
the public interest and will not cause harm to PSE’s customers.
The commission has
scheduled three public hearings to consider customer comments. Public
Counsel will be present:
BELLEVUE: 6:30
p.m. Thursday, May 15, Bellevue Community College, Room 130 B, 3000
Landerholm Circle S.E.
BELLINGHAM: 6:30
p.m. Tuesday, May 20, Bellingham Senior Activity Center, 315 Halleck
St.
OLYMPIA: 6:30
p.m. Wednesday, June 4, Utilities and Transportation Commission Office,
1300 S. Evergreen Park Dr. S.W.
In addition to the
public hearings and comment cards, customers can also submit comments
via e-mail at comments@wutc.wa.gov, online at www.wutc.wa.gov/comment
or call the UTC toll-free 1-800-562-6150.
Details about the
company’s proposals are included in the bill notice and online
at www.wutc.wa.gov, enter 072300 (electric), 072301 (natural gas) or
072375 (merger) in the docket lookup field.
The Skagit Public
Utilities District is exploring
the idea of providing electricity.
Diane Freethy, President
of Skagit Citizens Alliance for Rural Preservation, is concerned:
Washington State Attorney
General Rob McKenna says the takeover by foreign investors may not be
in the public's best interests so he's asking approximately 1.5 million
Puget Sound Energy customers to tell him what they think about the proposed
PSE/Macquarie "merger."According to the notice enclosed in recent
PSE power bills,your comments about the takeover and proposed rate increases,
should be directed to:
Public Counsel email:
utility@atg.wa.gov
Assistant Attorney General
800 Fifth Avenue, Suite 2000
Seattle WA 98104-3188
PSE's CEO
Tells His Side of the Story
Nancy Johnson and
I met with PSE Chief Executive Officer Steve Reynolds on March 28th
at the new corporate facility in Burlington. During the two-hour conversation
we heard all the reasons why PSE thinks the Macquarie Consortium's acquisition
would be beneficial for its customers. We remain unconvinced. In fact,
we learned that this is not a "merger." It's an outright takeover
of what appears to be a utility in serious financial trouble and unable
to say "no" to ruthless, predatory corporate raiders ... even
after the initial buy-out offer was reduced by 10%.
Reynolds admitted
that Puget Energy's bond rating is a dismal "triple-B-minus,"
meaning that attracting reliable investors is virtually impossible under
current market conditions. Reynolds also defended a pair of recent "Macquisitions"
-- two east cost utilities that haven't been under the Macquarie wing
long enough to show signs of ownership change. Yet Reynolds seemed oblivious
to several Macquarie infrastructure buy-outs that have left other utilities
in shambles. And, he apparently had not heard reports from Australia's
National Electricity Code Administrator that Macquarie is guilty of
maximizing profits by reducing power supplies to customers in the Sydney
area.
What
Do You Think About This Idea?
One alternative
to the Macquarie buy-out is a takeover of PSE by Public Utility District
#1 of Skagit County. As I understand it, if enough county residents
petition PUD to put the issue on the November 2008 ballot, they will
do it. But they must have the public's support. PUD is currently taking
a telephone survey to determine how much local support there is. However,
individual letters to General Manager David Johnson would help convince
the PUD Commissioners that Skagit County voters should be allowed to
make the decision themselves.
Send your comments
to:
David Johnson
PUD #1 of Skagit
County
1415 Freeway Drive
Mount Vernon WA
98273
Shareholders
To Vote April 16th
Incidentally, PSE
shareholders could stop the sale in short order. If you are a PSE shareholder,
or you know a shareholder, be aware that proxy votes solicited by PSE
could result in approval of the sell-out to Macquarie. According to
a letter from Reynolds, proxy statement forms were sent to shareholders
on February 20th.
Your Comments
Are Crucial
Write to:
Mark Sidran
Chairman of the Washington Utilities & Transportation Commission
PO Box 47250
Olympia WA 98504-7250
Reliable, efficient
and affordable power and gas service in much of western Washington apparently
rests on the outcome of the PSE/Macquarie transaction. The questions
is: Which entity is best equipped to provide that service. Speak up
NOW... before it's too late!
Thanks for making a difference!
Diane
Freethy, President
Skagit Citizens Alliance for Rural Preservation
PSE's
announcement
KOMO
consumer reporter Connie Thompson
Skagit
Valley Herald: Public or Private?
Seattle
Post-Intelligencer: Debate on PSE deal goes beyond foreign buyer
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