Note: A proposed acquisition of Puget Sound Energy by a group of investors from Australia, Canada and New York was announced last October. PSE is currently in the process of finalizing the sale.
And I thought the weather got people riled up. Going from meteorology to the energy industry put me in stormy seas.
Puget Sound Energy, my new employer, is merging with some Canadian pension funds and New York and Australian investors.
Until now, I would have thought “Canadian pension funds” were as alarming as Melba toast, and Crocodile Dundee seemed like a fun guy. New York is another story. But this merger is causing a ripple, mostly due to myths about what it means to you and me and everyone who pays a utility bill.
Myth #1: PSE won’t be regulated! False. State regulators will still have the last word on rate increases and service just like today. Federal regulators stay on the job, too.
Myth #2: PSE won’t fix things after a big storm! False, again. Keeping the lights on is how we stay in business. Plus, we live here, and want to be good neighbors.
Myth #3: PSE won’t care about the environment! False. PSE is committed to clean, renewable energy and it’s required by state law. Same with energy efficiency – it’s also the law. The only change you’ll see is more wind, more solar and more tools to help you save energy, all financed by the new investors. Zero-carbon hydropower stays in the mix as well.
Myth #4: PSE will have too much debt! Actually, the utility will have our best balance sheet in years, but there’s no getting around our need for dollars — billions of them — to make upgrades, meet customer growth, add renewable energy and keep up with inflation. Public or private, all utilities are facing financial crunch time.
Consider that your standard-issue, used-to-be-a-tree utility pole now costs about $3,300, up some 500 percent since the ‘70s. And those awesome wind turbines? With the U.S. dollar tanking, they’ve doubled in price since 2005.
This merger will fund the things you’ve told us are important: improving service and caring for the environment. Some critics say we should just stay a publicly-traded stock and raise money on Wall Street.
The trouble is, Wall Street wants the next sexy investment, and while we’re pretty attractive, it’s in more of a “great personality, loves to dance” way than drop-dead gorgeous. We’re a good buy, but only in the long run, and today’s Squawk Box watcher can’t see past the next quarterly report. The debt argument also ignores the fact that no matter who owns PSE, the need for huge investments – and huge borrowing – won’t go away.
Want more information? Go to PSE.com and click on the “merger news” section. You’ll see some video Q & A with Steve Reynolds, the boss. I did the interview myself, and he answered whatever I asked him. I’m confident the merger will build a better PSE for our customers and our community.
And next time I get a chance to talk to those scary Canadians, Australians and New Yorkers, I’ll report back on that, too.
~Andy Wappler is a senior public relations manager at Puget Sound Energy. He joined PSE in February 2008 after being chief meteorologist at KIRO-TV. He looks forward to hearing from you at AskAndy@PSE.com.