Monthly Archives: March 2017

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.

Sincerely,
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.

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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!