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PSE: Takeover could cost ‘hundreds of millions’
Puget Sound Energy’s assets won’t be a bargain if Whidbey Island wants a public utilities district, a company spokeswoman said Thursday.
“It would be in the tens of millions of dollars — maybe hundreds of millions — easily,” said Gretchen Aliabadi, a PSE spokeswoman.
Aliabadi said PSE employees are currently out in the community gathering information and taking inventory of PSE’s assets to come up with a closer estimate.
And those who favor a local takeover of the energy company shouldn’t expect to buy the Bellevue-based utility’s assets at bargain basement prices.
“If a government entity decided to condemn our property, they would look at the fair market value,” she said, adding that the review of the company’s infrastructure on Whidbey will take time.
“There are 34,000 customers in the area, 329 miles of overhead distribution lines, 342 miles of underground distribution lines, 10 substations, and poles,” she said. “It’s not like going out and appraising a home.”
As a reference point, Aliabadi pointed to Whidbey’s neighbors on the mainland. In Skagit County, work is also underway to create a local utility district, and Skagit PUD officials have estimated it will cost them $520 million to take over PSE’s assets in Skagit County. PSE has 57,000 customers in Skagit County.
“It would be less than Skagit County,” Aliabadi said. “But we’re not sure by how much.”
A report with a cost estimate will be ready in early August, she said.
PUD supporters have said the newly created utility district may raise property taxes to pay for the takeover. The most recent estimate is a property tax hike of 45 cents per $1,000 of assessed property value. Organizers of the takeover said the increase could be in effect for two or three years, but claim the tax increase would still be cheaper than future rate increases that PSE may make down the road.
“People For Yes on Whidbey PUD,” the group behind the effort to start a public utilities district on Whidbey Island to replace PSE, cleared one hurdle this week.
Only 27 hours after submitting a petition for a vote to form a public utilities district, the auditor’s office announced Thursday that “People For Yes on Whidbey PUD” had collected enough signatures to qualify the measure for the November ballot.
Auditor staff, led by Michele Reagan, started counting and validating signatures immediately after the petitions were turned in Wednesday morning. They notified “People For Yes on Whidbey PUD” that the group had collected the minimum number of valid signatures to put the measure on the November ballot.
Almost 800 extra
In the last two months, the group collected 3,225 signatures. That’s 761 signatures more than the 2,464 they needed to qualify for the ballot.
Bernice Kistler of Oak Harbor placed the last signature on a petition before the paperwork was passed over to Island County Auditor Sheilah Crider.
The county prosecutor’s office has since started writing the official language for the November ballot.
“It seems clear that Island County officials believe that this measure is something Whidbey Island deserves to vote on, and ‘People For Yes on Whidbey PUD’ thank them for their expedient work to get this moving,” said Ed Jenkins, a spokesman for “People For Yes on Whidbey PUD.”
“This is an historical first step in gaining local control over our energy future. But we know the battle is far from over,” he added.
Island voters will now get the chance to decide if they want to locally control their energy supply and maintenance, or if they want to continue to be served by PSE, the state’s largest electric and natural gas utility. PSE currently serves Whidbey and more than 1 million electric customers in 11 counties.
Ready to rumble
“People For Yes on Whidbey PUD” claims that a locally-held utility could offer lower rates and better service. They also said they expect opposition from PSE in the form of a media campaign and legal battle.
With the PUD measure moving forward, PSE also announced that the company will start a public outreach campaign in the weeks ahead.
“We’re going to be in the community,” Aliabadi said. “We need to provide them with as much information as possible to make an informed decision.”
The first Whidbey Island appearance that PSE officials will make will be at the Oak Harbor Rotary Club meeting on July 18.
PSE softens deal
Part of the press for forming a local utility came after PSE announced earlier this year a potential takeover of the company by an investor group based in Australia.
The transaction is valued at $7.4 billion, and PSE and its investors offered a package of sweeteners and incentives Wednesday — including rate credits for customers — in hopes of gaining state approval for the deal.
In testimony filed this week with the state Utilities and Transportation Commission, PSE and representatives of Macquarie, the Australian-Canadian investment consortium, said they would offer $100 million in rate credits to the utility’s customers over 10 years.
PSE also said it would agree to increased quality-of-service requirements and greater commitments to renewable energy, conservation and low-income assistance programs.
Officials from “People For Yes on Whidbey PUD” panned the proposal.
“On the surface the new deal might look better but once you wipe off the mascara and lipstick, it’s still the same old ugly pig staring back,” Jenkins said.
Michaela Marx Wheatley can be reached at 221-5300 or mmarxwheatley@south