Former PSE VP Blows Whistle on Energize Eastside, Calling It a “Scam”

Richard Lauckhart, who for 22 years was a Vice President for Power Planning at PSE, has decided to blow the whistle on PSE’s Energize Eastside project, claiming PSE has been using specious facts and false assumptions to justify it. Last week he wrote these words to the city council members of the affected cities who have yet to receive permit applications from PSE for Energize Eastside:

City Council Members and staff –

Over the past two years, I have spent considerable time and energy investigating PSE’s proposed Energize Eastside project.  I am an energy consultant who worked for Puget for 22 years, most notably as vice president of power planning.  I keep abreast of all new projects in the Pacific Northwest, and two years ago I learned that PSE wishes to build 18 miles of new, high voltage transmission lines through the Eastside.  I assumed when I read through the documentation surrounding this project that everything would check out.  Instead, I came to quite the opposite conclusion.

I have investigated this project on a deeply technical level, for no compensation whatsoever, because I am compelled by my conscience.  I am shocked and dismayed that the company  where I spent the bulk of my career would try to put forth a project that at its best is baseless, and at its worst, a deceptive attempt by PSE to get a deeply flawed, yet highly profitable project into their rate base.

I’m reaching out to you today because I recognize that PSE is putting you in a difficult position.  As much as I respect the important role you play in your community, you are not experienced transmission planners.  Yet due to the way transmission projects are permitted in the state of Washington, you are being expected to fully vet a highly complex transmission project that, if permitted, will have a devastating impact on your community.  I know that PSE’s motto is “just trust us, it’s too complicated for you.”  However, your constituents are counting on you to represent their concerns and to force PSE to be transparent about things that up until now have been opaque.  PSE is counting on the fact that you will not do a deep dive into this project. It is a sad truth that a project of this cost and magnitude could be built through your communities with no vetting by anyone highly experienced in Pacific Northwest transmission planning other than PSE, which stands to gain financially from this project.

Based on my thorough investigation, I must conclude that PSE’s main goal in building this line is to reap the generous 9.8% rate of return allowed on projects like this.  This will yield PSE over a billion dollars over the next 40-50 years.  The project will not measurably improve reliability on the Eastside and may in fact significantly increase other risks, like those of a catastrophic pipeline fire.  However disappointing this is, it is not unusual in our country.  The media is full of reports on the “death spiral” of old fashioned utilities, and despite its seemingly progressive nature, Washington is not one of the states that has made significant overhauls to its incentive programs for utilities to invest in smart, clean tech.

In order to “blow the whistle” on this project, I have written two detailed papers.  I have also prepared a slideshow that provides an overview of what is in the two papers and enhances the message with graphics.  I have attached all three to this message.

I would be happy to talk to you individually or in a work session if you are interested.  I’m also happy to answer any questions you have about my documents.  You can reach me by responding to this email.

Richard Lauckhart
Energy Consultant
Davis, California

Links to the three documents he references are here: 1) summary overview slides; 2) PSE’s motive for Energize Eastside; 3) Setting the technical facts straight.

We salute Mr. Lauckhart for taking this courageous stand against this boondoggle project and hope our elected city representatives will do likewise.

PSE’s Energize Eastside Project Counts on the Impotence of the Washington Utilities and Transportation Commission

Appearing in this month’s King County Bar Association’s Bar Bulletin is an article, “The Toothless Washington Utilities and Transportation Commission,” written by CSEE’s attorney, Larry Johnson. He reveals the real reason why PSE is pushing so incredibly hard to sell “Energize Eastside” with an all-out aggressive PR campaign and fraudulent ads: PSE’s Australian investor owners need the guaranteed 9.8% return on any new infrastructure, thanks to the WUTC and Washington law; PSE’s foreign owners could care less whether the project is needed (which it is not, as we have repeatedly shown here).

A guaranteed return of 9.8% for several years on a $300 million project in today’s markets? Where else can you get a fantastic return like that?

Johnson points out that the WUTC has no power to approve a project like “Energize Eastside” before it is built, only after it is built. By then, of course, all the damage will have been done, so the WUTC’s denying a utility a rate increase to pay for what turns out to be an unneeded project is a meaningless remedy. Not surprisingly, the WUTC has never disapproved any infrastructure project built by PSE.

We need to have a law like other states have, where the WUTC can hold a “public use and necessity” hearing so grotesque boondoggles like “Energize Eastside” don’t get built. Meanwhile, as the article points out, “…something can be done right away under existing law. The WUTC could issue periodic non-binding advisory opinions about any proposed new project before it is built and allow public input before issuing such opinions. There is nothing in existing law to prohibit that. And even with such thin gruel, both the public and the utility proposing the project would get helpful ideas in advance about what the chances are of a project’s approval, thereby hopefully deterring the bad ones.” (emphasis added)

You want to do something to make Washington the “progressive” state you think it is when it comes to energy? Write the WUTC, write the governor, write your elected representatives in the House and Senate in Olympia, and demand they make these changes in the law now!

PSE’s Calling Energize Eastside a “System Upgrade” is Another Big Lie

PSE likes to play a semantic shell game of conflating “reliability” — coping with very rare peak usage in extreme events, such as early morning on an extremely cold day, where outages might last for just a few hours, occurring about every 5 to 10 years or never — with “updating the grid” to meet “increased demand,” even though overall electricity usage on the Eastside has gone down in the last 8 years. Here is a typical misleading ad from PSE, published in Eastside newspapers:

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The text in the yellow rectangle may appear fuzzy, so here it is: “New, independent research confirms the need to upgrade our electric grid now to meet growing demand. Without the Energize Eastside project, we risk longer and more severe outages. Learn more about how PSE is working with your community on a safe and reliable solution.”

That part about a “safe” solution is truly risible. Read this Planning Commision submittal from CSEE regarding PSE’s horrible gas pipeline safety record and the greed that drives the company to lie to the public in order to secure huge profits for its Australian and Canadian owners, without regard to the health and safety of its customers.

Energize Eastside is one big con job that must be stopped now!

PSE’s Fraudulent Energize Eastside Project Would Gut Newcastle, Bellevue

True to form, PSE for the past three years has never revealed that its proposed “Energize Eastside” project would require its buying and destroying whole swaths of homes in Newcastle and Bellevue. But finally, hidden in the hundreds of pages of the murky and deeply flawed Draft Environmental Impact Statement (which sidesteps all the safety issues!), we find these entries:

EIS chapter 10, page 20: For the first time the EIS makes it clear that PSE will need to purchase many houses adjacent to the existing right-of-way. Not only might some home owners need to vacate their homes and see them destroyed, but the neighbors who remain would be looking at a no-man’s wasteland like the one the Berlin Wall ran through:


Chapter 11 page 29: The EIS admits that there will be up to 20% home value depreciation for Newcastle. If you think you won’t be affected just because you don’t live along the path of these gigantic new steel towers built next to jet fuel under pressure that can flow downhill to the tune of thousands of gallons per minute, think again. Check out the devastation caused by the pipeline explosion in San Bruno, California, in 2010: Here is a photo of a home downhill of the massive fire that ensued that killed eight people:

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Here is a graphic of what we can expect if our city councils are crazy enough to permit this project:

Easement expansion online

Easement expansion online2

According to electrical engineer Brian Elworth who prepared this document, “it is based on PSE widening the corridor 75 feet on each side to provide bare minimum separation between the tower base and adjacent pipes (including the hazardous liquid pipeline). It only includes Olympus but much more of Newcastle would be impacted. PSE may elect to only widen one side but it would have to be very wide.”

The greedy Australians who own PSE don’t care, of course, about what may befall us (including 130′ steel towers that could fall on our houses and crush us, such as in an earthquake along the Seattle Fault line that insanely enough is right where these towers would be placed), because they don’t live here.

This project should be called “Pulverize Eastside“!

PSE Suffers Major Defeat in Appeal of Lake Hills-Phantom Lake Project Denial

“Energize Eastside” is not the only big-ticket boondoggle Puget Sound Energy has been pushing on the Eastside in pursuit of its Australian owners’ insatiable greed. For the past 10 years, this investor-owned and investment-driven “utility” has sought to add a “redundant” line along Southeast 16th Street, 148th Avenue Northeast and Northeast Eighth Street in Bellevue. This project with more overhead lines and wires would have required the removal of 300 trees older than Bellevue itself, further undermining Bellevue’s claim to be “a City in a Park.” (Energize Eastside, by contrast, would require the removal of 8,000 trees — a kind of “Agent Orange” result for the Eastside!).

Of course, ruining our environment is of no concern to PSE: for its foreign owners it is all about the bottom line. They don’t have to live here with the consequences.

When the East Bellevue Community Council (EBCC) decided unanimously in June of this year to deny PSE this ill-conceived and unnecessary Lake Hills-Phantom Lake Project by rejecting PSE’s conditional use and shoreline permit applications, PSE chose to ignore the will of the people and appealed EBCC’s decision to the King County Superior Court. On Friday, December 18, 2015, the judge dismissed PSE’s appeal on all counts, noting it was completely within the purview of EBCC’s power to reject the project as inconsistent with the city’s “Comprehensive Plan, its compatibility with the immediate vicinity and whether the proposed electrical utility facility would succeed in providing needed reliability.”

Kudos to EBCC for standing up to PSE and for the public good. PSE is so used to having sway over any regulatory body that is supposed to keep it in check that this court decision must have come as quite a shock. Let’s now see more of the same grit from our five city councils in denying the totally unjustifiable and fraudulently marketed Energize Eastside!

Inside Look into How PSE Fudged Technical Studies to Make Energize Eastside Look Necessary

Here is how we imagine the PSE board meeting went when they realized simulations of 2018 Eastside electricity reliability requirements revealed no need for the boondoggle Energize Eastside project that would earn their Austrialian owners a Washington State-guaranteed return of a half billion dollars:

Created by CSEE as satire, this cartoon nevertheless conjures a scenario that was no doubt not far from reality. PSE did in fact add irrelevant, invented power flow to Canada (1500 MW) and turned off a dozen peaker plants in Western Washington in its simulated “flow studies” to create phony, skewed results to justify the $200 million Energize Eastside project. It could become the biggest fraud ever perpetrated by a public utility on its ratepayers and on the public in general.