Puget Sound Energy managed to work out a deal last week to avoida municipal takeover of its service to 8,800 businesses andresidents in Lakewood, WA. Instead, the Lakewood City Council,which had considered a costly condemnation and purchase of PSE’spower distribution system last spring, voted unanimously to workcollaboratively with the utility to improve service for electricitycustomers.

When they first considered the takeover, city officials had putthe cost between $4 million and $8 million. In reality, thecondemnation and purchase of PSE’s power distribution system inLakewood would have cost the city somewhere between $42 million and$60 million, according to a recent analysis by Reddy Corp.International, an engineering consulting firm in Albuquerque, NM.Following the Reddy report, representatives from the city and PSEsat down and agreed that working together to improve utilityservice was in the best interests of the homes and businessesserved by the Washington utility.

“We both want customers to have the absolute best electric andnatural gas service,” said Tim Hogan, PSE’s vice president ofexternal affairs. “This agreement gives us the framework toaccomplish that goal. It’s clear that a costly condemnation ofPSE’s facilities is not the answer for addressing service concernsor obtaining lower energy costs.”

Under the agreement reached last week, a citizens advisorycommittee appointed by the city council will identify utilityservice issues and potential solutions. The ad hoc committee’sproposals will provide items for consideration in a separate,binding Memorandum of Agreement between PSE and the city.

The agreement also calls for a cooperative effort, including acoalition with neighboring cities, to seek more of low-cost federalhydropower benefits for PSE customers. Currently, customers servedby investor-owned utilities like PSE receive less than 25% of thebenefits of low cost federal hydropower from the Bonneville PowerAdministration. About 60% of the Northwest’s population are servedby investor-owned utilities, with PSE being the largest.

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