Concessions not enough to seal PSE deal

MERCHANT bankers from Australia have offered a small box of concessions to win friends for their planned capture of Puget Sound Energy. Their little box has mollified a lot of folks, but it is not enough.

State utility commissioners Mark Sidran, Patrick Oshie and Philip Jones, who have full authority to put a stake through this takeover, should do so, in the name of the public interest.

The main issue is debt, which ultimately will be paid by Puget's gas and electric customers. In the original deal, Puget would become an Australian-Canadian subsidiary with $2.6 billion of old debt and $1.4 billion of takeover debt. Another $1 billion would be available for a total possible debt of $5 billion.

The acquirer, Australia's Maquarie Group and its Canadian investors, now make their concession: they will put up $0.2 billion more in cash. In relation to total possible debt, this is 4 cents on the dollar.

The acquirer also offers $0.1 billion in rate-increase credits, to be spread over 10 years, meaning a few quarters, dimes and nickels per customer per month; to increase the subsidies for low-income customers by about half that amount over the same period, and to drop a $0.005 billion contribution into a community fund.

Puget also agrees to a list of obligations regarding charitable giving, greenhouse gases, renewable energy, low-income programs, wage contracts and pension plans — most of which it would have had to follow anyway.

All this is nice. But it does not offset the potential for large rate increases on the utility's captive customers.

The box of concessions failed completely with only one official objector, Simon ffitch of Attorney General Rob McKenna's Office of Public Counsel. ffitch's job is to represent the public interest, and he is standing alone.

We hope Commissioners Sidran, Oshie and Jones, who are also supposed to represent the public interest, will take the same stand he has.