[...] Old School Value presented Update: Puget Energy (PSD) Arbitrage [...]

PSE’s campaign for a “no” vote consists of scare tactics to sow fear, uncertainty and doubt, not the facts. Their “local” committee consists of employees of a political campaign firm in Seattle, whose address is the UPS mailbox store in Burlington. As of October 13, 2008 PSE has contributed over $ 420,334.65 of funds paid by customers to their committee in order to defeat PUD Proposition 1.

For more information there are two more websites:

http://www.sceanow.org/

http://www.savepse.org/

[...] that I wrote about how the final reply briefs had to be submitted by October 23,2008. Well, there were plenty of submissions and responses. [...]

[...] gone through three arbitrage opportunities in this blog. Aquila, Jazz Technologies and currently Puget Energy. I eeked out a tiny profit with Aquila and documented a vital mistake with this transaction, [...]

[...] Over at Seeking Alpha where my post was published, people have been commenting on the local counties wanting to start up their own Public Utility District (PUD) which would provide service at a lower rate than to Puget Sound Energy. I replied to a comment regarding this on the previous post. [...]

I’m fully vested in PSD at the moment, but if nothing comes up, I’ll either add a little more or wait it out. On the other hand, if news is bad, I’ve got to be ready to cut losses and work on the next opportunity.

I know some readers have bought PSD and are either scared or want to get in but feel uneasy. If this is the case, you would be best served to stay away and go long on great companies such as KO that offer stability and reliability. It’s much better to sleep comfortably at night.

Thanks for the link. I read something similar but of less detail this morning from this article.

After reading this article, my views on how this will affect the merger doesn’t change. Here are my thoughts.

The opposing counties are Skagit, Island and Jefferson. If you are not a resident of Washington state, these are the rural counties. This means less and lower paid jobs and a much smaller population.

If this proposition was to go forward, I’m uncertain as to how they will come up with $1 billion just to acquire the infrastructure alone. I don’t even know how much more it would cost to get it running. For all this to happen it’s probably going to come down to higher taxes from these people and increasing taxes is the last thing anyone wants in this economy.

Also, the worst case scenario of the PUD taking over would mean that PSE sell the infrastructure and lose customers in those counties. I don’t believe it would derail the deal, but it is a possibility. And if the proposition is passed, that would mean the rates would be regulated just like PSE. Washington state is a highly regulated state so nothing gets passed easily, but so far PSE has agreed to continue offering the same level of service even under new control. The UTC has also acknowledged that PSE meets the “no harm” requirement.

As a previous customer of PSE, I must admit that the rates were higher than what I wanted to pay, but the service is excellent. You just can’t beat them here. And a lot of people know this.

Lastly, looking at who paid the campaign bills for the Skagit PUD, it seems like of the $15,267.75 raised, only $1,450 was from cash donations. If this was such a big issue as the article implies, I would think more people would have donated. Even if each person donated $10, that’s only 140 people actively opposing it. Not enough to be a deal breaker.

Thanks a lot for helping with the additional research.