Puget Sound Energy has agreed to be acquired by a consortium of Australian and Canadian investment funds for $30 a share, a 25-percent premium over Thursday’s closing stock price of $23.95. PSE is Washington state’s largest private utility, serving over 1 million electric and 718,000 natural gas customers throughout the region.
After years of record trade deficits, isn’t it comforting to know that at least one segment of US exports is still going strong?
What will this mean for customers? Well, the deal still needs to be approved by shareholders as well as regulators at both WUTC and FERC. And of course, rate hikes will remain subject to regulation. But by taking the company private and delisting its stock, the new owners won’t need to provide the same sort of detailed financial reporting the SEC requires of public corporations.
Filling in late nights at 710-KIRO during last year’s extended, post-windstorm blackouts, I fielded dozens of angry calls from PSE customers complaining that the infrastructure had not been adequately maintained, and that the company was slow to bring in outside crews to get ex-urban neighborhoods back on the grid quickly. Will the new, privately held PSE really invest in improving service? Or will they just suck profits out of their captive customers? While I had my own complaints about Seattle City Light’s performance, I’m personally much more comfortable relying on a public utility for such a vital service, than a foreign-owned, private monopoly… especially in our increasingly volatile and expensive energy market.
Well, the reason that we have Seattle City Light is that the City Fathers of old got tired of being screwed by utility-supplier Stone & Webster of Boston. IIRC, S&W’s other holdings eventually became Puget Power.
This sounds like an extraordinarily bad deal.
this is another rotten example of the US inferstructure(sp?) being sold to foriegn interests….how can this be good??
only in america….and they call Don King crazy
Hey why not CHINA owns the rest of the USA.
I’d say there’s going to be bipartisan agreement that this sucks for the ratepayers except for the those devout corporatists who’ll keep mouthing “Private ownership leads to competition!” and “Enron who?????”.
I’ve got a pretty good hunch what Dino Rossi’s opinion is likely to be about this. Let’s see if is smart enough to keep his mouth shut.
I think I’m also glad we didn’t convert to gas a couple years back.
Ha ha, all I can say is “PGE and Enron”. Do you remember the infamous words of those greedy hill-billy six-toed traders (traitors) at Enron: “Burn Baby Burn”.
Better learn to recognize those words in Mandarin Chinese.
Irving Stelzer of Kroll Marsh (AIG Greenberg) Oliver Wyman and the American ENTERPRISE Institute strikes again. Those SPV’s and SIV’s disappeared into the Far East. Have you any idea of what I am talking about? Probably not.
There’s that troublesome word again, ENTERPRISE…
SoCal gets burned out again, this time curiously, during a Vigilant Guard exercise, and this time biggest one of all… billions, hmmm, Bush Boy is there too, with Enron’s Ahhnold, do you think it was a “Burn Baby Burn” reunion?
The problem with red blooded Americans who want a place to pick a fight, is they already have a doozey of one, and they need to act fast while they can boot up their brains in time. Washington State has always been a gateway state. Make it count.
The investors behind leveraged buyouts have only one objective: To flip the company for a quick profit. Nearly all LBOs “go public” again with a few years. Sometimes, though, private buyers strip a company of its most valuable assets and leave it for dead. Regardless of the precise technique(s) used to milk the cow, the outcome is never good for either employees or customers.
I’m so glad that I’m not one of their customers. I get my electricity from an itty-bitty co-op. I like it that way.
Now we come to the “blame Bush” part. Yes, it’s Bush’s fault. This is not just some liberal propagandist with pink ears talking; I won’t ask you to take MY word on an issue this contentious. I don’t have to, because even the conservative, business-oriented, investor media thinks so:
“Is Bush giving the country away … ?
“Posted Oct 26th 2007 12:45PM by Sheldon Liber
” … Either many people are ignoring or do not understand how a devalued dollar facilitates our giving away the country wholesale ….
“This concept does not seem to have resonated in Washington and … our president is either ignorant or avoiding the issue altogether because he does not want to discuss the remedy: everyone tightening their belt financially and taking some economic pain.
“Warren Buffett has sounded the alarm many times about this subject, and I will, too. When the dollar falls in value, … that gives foreign investors … more buying power here. Yes, it is true they buy more when our goods and services are ‘on sale’ (and we buy less of theirs). However, what if instead of buying perishables, they buy income-producing property and companies. …
“A simple example: They buy a company that makes widgets in the United States. They are able to sell (export) more widgets along with their American counterparts because of the devalued dollar. Who makes a higher return on invested capital? The foreign investor, of course, because they paid … less for the widget company!
“It gets worse from there. Where do the profits go? … The U.S.-owned company distributes profits here. The foreign-owned company takes its profits home. This means that our devalued dollar allows the Asian investor (holder of stronger currency) to make money on both sides of the Pacific, and this movement of profits and investment capital is snowballing. The largest investor in Citigroup, the largest U.S. bank, is not American. …
“The more the dollar drops in value, the more we are discounting the sale of our country, and as it escalates, we become even more dependent on that foreign influx of capital until eventually we are working for foreigners on our own soil. This is something many third-world nations experience, and unless this trend changes we could become one of them.
Washington, Wall Street and [investors] keep talking up … more interest rate cuts to stave off a recession. I do not have the same fear of recession as I do the consequences of long-term economic mismanagement. I … caution … that they may cut rates and get the recession anyway, and cause inflation – while giving away the country. I do not want to see people whose income has stagnated for years also lose any interest income they get due to lower bank interest rates, and then get slammed by inflation to boot.
“No matter who is in power, the government is getting increasingly better at lying. Remember, they do not count the Iraq war in the budget deficit, they do not count food and energy (way up) in the inflation figures, the Social Security (current surplus) has been borrowed so much that lock-box has an ‘IOU’ in it, we have heard the purpose of the mission in Iraq change continually (‘mission creep’) for four years (get your story straight, Dubya), and Bush thinks a recent 5% improvement in the trade imbalance makes up for 30% to 40% devalued dollars … and lastly, I am tired of people telling a guy (‘my pal Warren’) that made over $50 billion as perhaps the best allocator of resources the world has ever known that he does not know what he is talking about!”
Quoted under fair use, but if use is not fair, then quoted under the Emergency Clause, because this is an emergency folks!!! To read the whole article and/or see whose copyright I trampled on, see http://www.bloggingstocks.com/.....nowing-it/
Roger Rabbit Commentary: I’ve always maintained the Bush Economy is a house of cards built on a foundation of sand, and there will be hell to pay when the house comes tumbling down, as it inevitably will. Republican professionals, who have already written off the ’08 elections and are focusing on ’12, hope it happens after President Hillary and an even bluer Congress is sworn in. Bush, and they, won’t be that lucky. See that dark cloud on the horizon? That’s a huge flock of chickens coming home to roost, and they’ll be arriving at Gate 1 shortly.
Nearly all the jobs “created” on Bush’s watch came about as a result of the now-defunct housing boom, which we now know was a house of cards built on a foundation of … well, you know the rest. Unregulated mortgage brokers; no-down, no-credit-check mortgages; collateralized debt oblibations which is a fancy word for Wall Street shrink-wrapping worthless mortgages and selling them to unsuspecting pension funds, college endowment funds, and other big investors (they would have sold them to the Social Security Trust Fund, too, if Democrats hadn’t slammed the brakes on Bush’s privatizing scheme, which of course, was designed to be the biggest theft in the history of the universe).
And then there’s the credit-card war and the unsecured billionaire tax cuts, all of which are CDOs of multi-trillion-dollar magnitude in their own right.
Where does all this bullshitting and finger-dipping lead? Simple:
1. Foreigners buy American companies, and fire American workers.
2. More and more of the stuff we buy is made by foreign-owned companies employing foreign workers, and more and more of it is shitty and even dangerous quality. Including the “food” and “medicines” you put in your body. Soon, even our drinking water won’t be safe. Wait — it already isn’t safe, that’s why everyone is buying bottled water. But wait — the bottled water isn’t safe, because it’s just tap water …
3. High inflation and high unemployment; in Gerald Ford’s time, we called it “stagflation,” and of course the Republicans who created it blamed it on Jimmy Carter and used it as leverage to put another credit-card-junkie in the White House, Raygun Ronnie.
4. Bottom line: You end up poorer. A HELL OF A LOT POORER. And the bastards who did it to you laugh all the way to the bank.
Getting back to the specific top at hand, namely, Puget Sound Energy, YOU are going to PAY for the private buyout of this company, if you are a PSE customer or employee. You see, the furriners who bought PSE don’t see “investing” as a way of spending money (a hobby as it were), like competing in the America’s Cup or privately-financed space flight; nope, they’re doing this to make money. And since they don’t intend to make it off themselves, they obviously intend to make it off you.
How? Simple. The only way they can. The way capitalists have made money since time immemorial. Buy cheap, sell dear. Charge you more for less. Back you into a corner and wring money from your pocket, turn you upside down and shake dollar bills from your pants, grab your arm and twist until you agree to pay them a LOT of money in return for — letting go of your arm. No value added, merely extortion and robbery. Public utilities work great for this kind of thing, because they have monopolies on essential services and you have absolutely no choice about giving them whatever they feel like taking from you, which is everything you own. That’s why the world’s richest and greediest guys — e.g., Carlos Sim and Warren Buffet — own utilities. Tons of ’em. (For example, Warren Buffet bought Pacific Power in 2006.) And that’s why the Aussie-Canadian interests bought PSE.
It would be interesting to see some names and faces attached to those news reports referring to “Australian and Canadian investors.” You’re not talking about ma and pa kettle here. These “investors” undoubtedly are the richest people in their respective countries, people whose names you would recognize, world-class economic buccaneers. And they’re not doing this as a favor for PSE’s shareholders or employees. They’re doing it as a favor to themselves.
Pull your pants down, bend over, and, in the immortal words of all rapists, “it’s gonna happen so you might as well try to enjoy it.”
8 Roger, it’s getting worse and worse. There’s a very large corporation that owns four major hotel chains, that was featured this week in an article in the PI. They’re building a “condo-hotel” here where the rooms and suites are for sale for anywhere from $400K to a mil and a half. We were in Hawaii last month and got a pitch from the same company for timeshares over there. One of the properties being offered had just broken ground. We were supposed to put our credit on the line and take out a loan (and start making payments) then wait until 2009 for the first use of “our week”. I’m not saying that this company’s credit is no good, but now it doesn’t matter. They’re making their customers borrow the money for them.
The single solitary advantage to privatizing anything is the positive impact that competition can have. Everything else is a loss. The profit-taking and cost-cutting and lack of transparency and control by the public are all huge negatives. But if there is competition to encourage quality of service and keep prices down, it can be worth it to privatize. Where, exactly, will competition come into play under this scheme?
Brenda Helverson @1 says:
Well, the reason that we have Seattle City Light is that the City Fathers of old got tired of being screwed by utility-supplier Stone & Webster of Boston. IIRC, S&W’s other holdings eventually became Puget Power.
If I’m not mistaken, all of the Seattle City Light vehicles say “Your Seattle City Light” on the side. That’s not the kind of attitude we’re going to get from a foreign owned consortium.
This sounds like an extraordinarily bad deal.
That’s because it is. It’s probably scarcely better than Enron buying Portland General Electric. It’s a sucky deal that we have to rely on for-profit companies beholden to Wall Street for something as basic as electricity. Hey, it’s worked great for medicine, hasn’t it?
Yep, take your choice: Foreign-investor-owned utility, or SOCIALIZED ELECTRICITY … now, who would you rather be a customer of, PSE or City Light? I’m just askin’, that’s all …