Jefferson County Public Utility District 1 commissioners could announce as early as Feb. 24 whether the utility might buy Puget Sound Energy holdings in East Jefferson County – or walk away.
Until a decision is made, commissioners told leaders of Citizens For Local Power (CFLP) – the group that sponsored Proposition 1 in 2008 and put the issue on the PUD’s plate for a decision – that they all signed an agreement with PSE to keep the private company’s information confidential and must abide by that legal document in order to continue negotiating.
That means commissioners can’t tell the public what they’ve learned from PSE in closed-door meetings – nor will they be able to tell what they learned after making a decision.
Bill Wise, a CFLP leader, asked commissioners at their meeting Feb. 3 whether they had thought about a public process for engaging people before action is taken.
“We have a confidential agreement with PSE which makes it pretty doggone difficult to comment,” responded Ken McMillen, commission president. McMillen said commissioners all have thoughts and hopes about providing local jobs, for example. “We’ll spend every cent locally we can,” he said.
As for questions CFLP raised about how the PUD would manage public power if it acquired PSE – whether it would reduce electric rates or subsidize solar power, for example – McMillen said those kinds of questions can’t be answered until a decision is made on whether to acquire PSE.
Commissioner Wayne King agreed.
“The confidential agreement is pretty tight if we should step out of line,” said King, adding that even Barney Burke, newly appointed commissioner and a former Leader reporter accustomed to asking tough questions of government officials, had signed the agreement.
“We’re a ways away from hiring people,” King added. “There’s a million things I’d love to tell you, but I can’t.”
Burke said after the meeting that commissioners are getting a good look at the numbers needed to make a decision, and that wouldn’t happen if the board hadn’t agreed to keep the private utility’s information confidential.
“The more you know about their business model, the better position you are in to make an offer to buy it or to consider an offer from PSE or whether it makes sense to condemn should you not come to an agreement,” Burke said of the three options available to the board.
The options would be to buy PSE's holdings in East Jefferson County, walk away or condemn the holdings, which would entail legal action.
Condemnation, however, would be expensive. If the PUD did opt to condemn PSE, it would go to a jury to decide the true value of the utility. And should a jury conclude the utility was worth 10 percent more than the PUD offered, the PUD would not only have to pay the additional 10 percent – or more – but also it would have to pay PSE attorney fees, PUD commissioners note.
PSE Director of Regulatory Relations Karl R. Karzmar said state and federal rules apply in the negotiations because PSE is operating “under threat of litigation.
“We’ve entered into compromise talks to see if we can work this out without going through a litigated court proceeding,” Karzmar said.
Concerns voiced
Several people voiced concerns Feb. 3 about the public utility operating behind closed doors with the private utility.
Steve Hamm, who, like Wise, was active in the successful November 2008 Proposition 1 campaign that put the power question in the PUD’s lap, persisted and asked whether the agreement commissioners signed with PSE also was covered by the no-comment agreement. Hamm was told it was.
Hamm suggested that having access to the agreement would help those who fought for public power to understand the framework under which the board was operating.
Tom Thiersch, who attends County Commission meetings regularly and asks pointed questions about county public records, said he was disturbed by the process.
“We’ll never have any information about what information was used to make the decision,” Thiersch said. “That’s not in the public interest, in my opinion.”
