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Locals are in revolt against Puget Sound Energy

With Washington's biggest utility about to be bought by foreigners, public power advocates in four counties are hoping to switch their portions of the grid to local control. Voters will decide in November.

"I'm not afraid of foreigners," a Skagit County resident told Public Utility District commissioners in Mount Vernon, Wash., last Tuesday, July 29. "Some of my best friends are foreigners. It's just this particular foreigner I'm afraid of."

The "particular foreigner" is the Macquarie Group of Australia, which wants to buy out Puget Sound Energy, Washington's oldest and biggest utility. The proposed takeover, which PSE consistently describes as a merger, has given new life to latent authority and ambition within public utility districts (PUDs) north and west of Seattle. The PUDs are positioning themselves for an attempted takeover of PSE assets in Skagit, Jefferson, and Whatcom counties and on Whidbey Island in Island County. Both sides in the coming public power fights turned up the rhetorical energy last week.

"The devil is in the details," warned Gretchen Aliabadi, a spokesperson for PSE, "and there are lots of layers to this onion."

Aliabadi made it clear that her company will do whatever it can to defeat any proposed PUD move on its service area. "We're trying to protect our customers from making a bad decision without knowing all the facts," she said, referring to public questions on the ballot in November.

Dean Boyer, a spokesperson for the Washington Public Utility Districts Association, puts it this way: "Who do you want controlling your electricity, the local commissioners you elect, who live in your neighborhood, or the officers of a private company controlled by a bank on the other side of the world?"

At last week's meeting, all three commissioners of the Skagit County Public Utility District voted to ask the county's electorate in November if they want their water-serving PUD to go into the electric power business. D. Hittle & Associates, an energy consultant hired by the district, concluded earlier this year that the move makes sense for Skagit PUD and its potential 59,500 power consumers.

Jefferson County voters will decide in November whether to have their PUD go after PSE's assets and electrical customers in Port Townsend and other portions of the county. And a grassroots organization on Whidbey Island has gathered enough signatures to ask the Island's voters to form a PUD for the express purpose of taking over PSE's Whidbey operations.

Just to the north, commissioners of the Whatcom County Public Utility District are pondering a move to take over much of PSE's service in that county. Since they're already in the business (they have one electricity customer, the Conoco-Phillips refinery at Cherry point north of Bellingham), Whatcom faces a less complicated process than the other three. No public vote is required — the Whatcom PUD commissioners will decide whether to go after PSE's operations in Bellingham and elsewhere in the county.

Although the PUDs have the authority to buy or condemn the assets of privately owned utilities, it hasn't happened in decades. Assuming the voters approve the venture in Skagit or Jefferson counties, or formation of the new PUD on Whidbey Island, their commissioners and those of the Whatcom PUD may still conclude that this windmill is too big to tilt.

Talking with reporters, PSE's Gretchen Aliabadi stresses the company's size and clout. "We're not huge in comparison to Consolidated Edison and some of the other national giants, but we're big enough to bring such things as green power and conservation to the area. Those are expensive, but with our buying power we can do it. How's a little PUD with 19,000 subscribers [meaning Jefferson County] going to spend hundreds of millions on a wind farm?"

The obvious answer is that they can't. The not-so-obvious answer is that they don't have to. Jefferson PUD counts on hooking up to the Bonneville Power Administration for a segment of BPA's limited power supply that's set aside for new, small PUDs. Whidbey Island would be similarly entitled. Skagit would try to condemn PSE's power dams on the Baker River. The PUDs will, however, need to meet the state requirement that 15 percent of their power come from renewable sources, not counting hydroelectric power, and that could prove challenging in the start-up years.


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Comments:

Posted Mon, Aug 4, 3:08 p.m. Inappropriate

Local utility history: Didn't Puget Power still operate in parts of Seattle until 1951, when City Light consolidated ownership? I wonder why it's taken so long for other localities to follow suit.

Thanks for a fascinating article. If the PUDs succeed, there won't be much left of PSE for Macquarie to leverage!

Posted Tue, Aug 5, 1:48 p.m. Inappropriate

RE: Local utility history: Speaking of municipal takeovers, I found this great Puget Power billboard in the Seattle Municipal Archives' photo database (#16205, for if they ever change their URL structure, or TinyURL kicks the bucket). Dating from 1941, it shows a hooded executioner (presumably the government) dragging Reddy Kilowatt to the "chopping block for private enterprise."

"If we can just get 'Reddy,'" he says, "the others will come easier!"

Puget Power's prediction of mass nationalization didn't come true (though they did end up losing this particular fight), but it will be interesting to see what their campaigns look like, 67 years on.

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