The front page story about Puget Sound Energy’s proposed

staffing shifts should be viewed as another indication that big changes in the

utility industry are coming down the road. PSE’s current staffing convolutions

are primarily being caused by changes in the way electricity is generated,

transmitted and distributed to end users.

Basically, the generation, transmission and distribution of

electricity are being “unbundled” as part of

the nationwide effort to deregulate the utility industry. This means one

company will generate power, another (Bonneville Power Administration

in our case) will transmit the bulk power from the generating sites to the

distribution utility’s local grid, and the local utility will deliver power on

demand to the points of use. Puget Sound Energy is evolving into one of the

local “distribution” utilities because

they have already divested much of their generating resources and BPA is

the recognized transmission agency in the Pacific Northwest.

Is this bad? No, not really. But, it does mean that PSE soon must

make all their profits off only part of their historical piece of the pie. Now

they have no guaranteed rate of return on generation, transmission and

distribution combined. While it is true they still have their legal monopoly on

distribution rights in their service territory, even this is not guaranteed

because big chunks of their distribution business can go elsewhere. This is

evidenced by up to six municipalities currently thinking about jumping

the PSE ship and forming their own public utilities. In other words, PSE

must become competitive in ways they didn’t dream of even five or ten

years ago. This means controlling the costs of operating and maintaining the

local grid _ a tough job in an area that is growing as fast as the tri-county

area of the central Puget Sound Basin.

The employees of PSE should stay light on their feet because all

these changes will inevitably affect them _ sometimes adversely. I think they

are about to join the ranks of displaced loggers, fishermen and middle

bank managers. Users of electricity (this means everyone) should stay light

on their feet because the key question in all of this is “reliability.” Will it

get better, or suffer? Will the cost of “reliable” electricity increase, stay

the same or go down?

The utility industry is currently spending millions on development

of fuel cells and microturbines that generate power at the point of use.

These technologies don’t require an electricity grid. In the near future

individual residences and businesses may be able to choose to generate their own

power on site instead of buying off the grid. The days when good ol’ Puget

Power took care of everyone by building an affordable “electricity birthright”

are beginning to erode and even the senior managers upstairs in Bellevue

are operating with a somewhat cloudy crystal ball.

William L. Petitjean

Fall City