State lawyers say PSE should not be sold
June 25, 2008 · Updated 9:26 AM
State lawyers hired to represent the public interest have asked the Washington Utilities and Transportation Commission to reject the proposed sale of Puget Sound Energy to a foreign-based consortium.
The Bellevue-based utility provides electricity to Whidbey Island and more than a million customers in Western Washington.
A PSE spokeswoman could not immediately comment on the case Wednesday afternoon.
PSE asked the commission to approve the sale in December 2007.
Macquarie Group, an Australian-based international banking and investment firm, is leading the group of investors that are trying to buy PSE.
The Public Counsel Unit of the Attorney Generals Office, the group of lawyers who represent residential and small business customers in utility rate cases, submitted expert witness testimony today and asked utility commissioners to reject the sale.
Based upon our review, this sale, as proposed, simply exposes PSEs customers to an undue level of financial risk by undertaking too much debt, said Public Counsel chief Simon Fitch.
At the same time, customers have no assurance that capital for infrastructure will be any more available or affordable than without the merger. Consumers appear to get little or nothing in return for the increased financial risk, Fitch said.
State lawyers said the sale should be rejected because the transaction needs substantial amounts of debt financing, including $1.6 billion of new bank debt that would be added to PSEs $2.6 billion of existing debt.
Those attorneys also said the sale does not balance the interests of ratepayers and shareholders, and said ratepayers will get no direct benefit from the sale but would shoulder the additional financial risk associated with the transaction.
Further, they warned the sale would make PSE a privately-held company, and detailed quarterly and annual financial information will no longer be publicly available.
Hearings that will include the cross-examinantion of expert witnesses will begin in late July.
The commission is expected to issue a decision by September 2008.