“The lady doth protest too much, methinks”

Hamlet Act 3, scene 2

Methinks Macquarie doth protest a bit too much!

I WAS ALWAYS CONCERNED JUST WHY MACQUARIE WANTED PSE

SO BADLY? NOW I’M REALLY CONCERNED!!!

Statements in the PSE/Macquarie “Sweetened Deal” press release:

Canada Pension Plan Investment Board “CPPIB believes that PSE is a great company that is well run and that has a strong future.
Alberta Investment Management Corporation (AIMCo). “Day-to-day management will remain under the capable guidance of the current management team of PSE,” said William R. McKenzie, Head, Infrastructure and Timber Investments for AIMCo.
Lincoln Webb, Vice President, Private Placements for British Columbia Investment Management Corporation, one of the three Canadian investor members, said, “We’re counting on the same local people to run the same local utility,”.

What? Who the heck are these people and what alternate universe do they live in? PSE has only been able to make a profit to put into stock dividends by not spending anything on infrastructure and this is with the highest rates and a GUARANTEED 10.4 % return on earnings!!! Why in the world would they want the same inept hacks running a broken utility? Why in the world isn’t anyone asking these questions?

Macquarie and its partners all are in business to make a profit are they not?
If PSE can’t make a profit and repair its infrastructure at the same time with the highest rates in Washington how will Macquarie et al be able to?
Macquarie funds most of its deals with debt. The last time I checked debt has to be paid back.
Macquaries Canadian and other neighborly investors must make a profit on their investments the last time I checked their web sites.
If Macquarie won’t raise rates, is going to invest one billion a year and PSE can’t make enough money now, where in the heck is Macquaries profit on investment going to come from???

Let’s look closely at some of these other magnanimous concessions Macquarie is making to “sweeten the deal”.
Rate credits, cost reductions and low-income support

Helps moderate customer rates by applying $88 million in rate credits on customer bills ($8.8 million in each of the next 10 years).
Reduces costs by $12 million over 10 years ($1.2 million per year) by eliminating the administrative costs of having publicly issued stock.
Commits to seek to increase PSE’s low-income fund to help even more customers pay their energy bills.

MY REPLY: Ok, it’s 88 million not 100 million but let’s see. 8.8 million a year with roughly one million electric customers is about 73 cents a month per customer! Yea, that’s going to go a long way to help stabilize rates while they loot, oops I mean invest in the company. I’m always happy to see help for low-income folks but what about us middle class folks ravaged by sky high gas and groceries while paying the highest electric rates in the State? I’m sure we will find many wonderful, creative ways to spend our 73 cents.
Service quality measures

Adds new service quality index (SQI) on accurate billing and increased penalties for noncompliance with all SQIs.
With customer input, commits to thoroughly examine all existing SQIs to identify and implement enhancements.

MY REPLY: Yada, yada, yada. Whoever makes up the new and improved SQI will probably be eating the same mushrooms.
Renewable energy

Sets aggressive targets for renewable supplies to PSE’s energy-resource portfolio.
Enhances incentives for PSE customers to acquire renewable energy for their homes and businesses.
Expands customer participation in the Green Power Program.

MY REPLY: I have some “aggressive targets” for cleaning my garage, guess what? My “aggressive targets” don’t cut it with PSE’s billing department if I’m late paying my bill. I want written commitments with target dates. I would be more impressed with them figuring out how to deal with the mercury in disposing all the compact fluorescent bulbs they give out under their “green power program”.
Energy efficiency

Launches study in collaboration with NW Energy Coalition to identify and enable PSE’s distribution, transmission and generation facilities to apply cost-effective, energy-efficiency measures.
Sets goal for PSE to be carbon neutral by 2050, making it the first such investor-owned utility in the region.

MY REPLY: Ok, so what? Where’s the meat, the road to perdition is paved with good intentioned studies. I think we can lump their “goals” to be carbon neutral by 2050 under my comments about my garage and good intentions.
Regulatory oversight

Assures Washington Utilities and Transportation Commission regulatory oversight and compliance.
Assures Federal Energy Regulatory Commission regulatory oversight and compliance.
Assures financial record filings on a continued basis with the Securities and Exchange Commission (SEC), in compliance with the New York Stock Exchange Reporting Standards.

MY REPLY: I assume this is the same WUTC that had no teeth to keep PSE from getting in the fix it’s in now? We are to be assured that the same WUTC that is still considering this sham after tens of thousands of rate-payers said NO! The same WUTC that is still considering this sale after the Attorney General and IT’S OWN STAFF said NO! Excuse me if I’m not reassured.
Equity structure

Commits capital from the new investors to meet PSE’s $5 billion ($1 billion annually over the next five years) in necessary infrastructure and energy supply requirements for the region.
Commits to restrict dividends paid by PSE and Puget Energy if specific interest coverage ratios are not achieved. Dividend restrictions assure that earnings will be retained in the businesses to fund capital programs and other costs, and that a strong capital structure will be maintained should financial performance deteriorate.
Provides $88 million in rate credits over 10 years (see above) representing a reduction in returns to investors for 10 years.

MY REPLY: “"If I had a world of my own, everything would be nonsense. Nothing would be what it is, because everything would be what it isn't. And contrary wise, what is, it wouldn't be. And what it wouldn't be, it would. You see?”

Alice in Wonderland

Yes Alice, I see and it all makes sense, no wait here we are falling down the rabbit hole again…helllllp me. 5 billion to fix things that should have been fixed over the years instead of putting every cent into dividends. Five billion plus acquisition costs that don’t have to be paid back or maybe they do – but how? Yes, it all makes such wonderful sense. Does Macquarie REALLY expect us to believe that it won’t expect any return on this huge investment or perhaps just a teeny little return now and then? It is borrowing most of the money, the Canadian folks expect a profit, what strange accounting has it invented that will keep rates the same, provide billions to bail out PSE and give a good rate of return to the investors – but stay rate neutral? This is double talk, smoke and mirrors and believe, me the 73 cents a month to the ratepayers will only distract us long enough to buy a pack of gum with our savings. Sorry, but you wipe off the mascara and lipstick, it’s still the same old ugly pig staring back…no wait, could that be the Cheshire Cat smiling at me? No, I think its Steve Reynolds counting his 20 million…good grief this is all too surreal for me.

Perhaps in this alternate universe that loves current PSE management they have found a way to make garbage into gold? I personally think they truly have fallen down the rabbit hole and have ALL eaten the mushrooms. But wait…maybe not! Could I and many others who don’t believe in alchemy have been right all along, that this has nothing to do with PSE at all? Macquarie and many other global conglomerates realized years ago that the essential elements of life, namely water and energy would someday be a very valuable commodity indeed. Macquarie has already applied to FERC (Federal Energy Regulatory Commission) to immediately sell 10% of PSE upon completion of the sale. What is that 10%? Could it be the Baker Dams, its water rights and PSE’s other electric generating facilities? Somehow they never mention this prospect do they? Splitting those assets off into a foreign held company could be very valuable indeed. Holding Washington State hostage to pay whatever Macquarie wants to buy power from facilities we paid for through our electric rates? But that would be too sinister wouldn’t it? No, I guess Macquarie has discovered alchemy after all and remember when you do your taxes, two and two really does equal five.

Ed Jenkins
Director of Communications
People For Yes on Whidbey PUD