Politics & Government

LNG plant faces heated criticism at hearing over PSE financial agreement

A view of a portion of Puget Sound Energy's proposed 30-acre liquid natural gas plant site on the Tacoma Tideflats. The $275 million plant would be situated along Alexander Avenue and East 11th Street between the Blair (in background) and Hylebos Waterways. Photo taken Wednesday, Sept. 28.
A view of a portion of Puget Sound Energy's proposed 30-acre liquid natural gas plant site on the Tacoma Tideflats. The $275 million plant would be situated along Alexander Avenue and East 11th Street between the Blair (in background) and Hylebos Waterways. Photo taken Wednesday, Sept. 28. dperine@thenewstribune.com

More than a dozen opponents of a proposed liquefied natural gas plant in Tacoma vehemently testified against a financial agreement between Puget Sound Energy and regulators during a hearing Wednesday in Olympia, saying the deal would not protect Tacoma residents from paying for what they believe could be negative effects of the plant.

The agreement was reached this month after more than a year of negotiations over the business structure for the LNG plant.

Under the arrangement, the Macquarie Group — the multinational consortium which owns PSE — will create a new subsidiary called Puget LNG to handle the new plant’s commercial LNG business. PSE and Puget LNG will jointly own and operate the Tideflats plant, with PSE contributing $133.7 million of the $310.7 million construction cost.

Both state Utilities and Transportation Commission staff and PSE contend the deal will shield ratepayers from doling out more if Puget LNG loses money — one intent of the agreement.

That deal is still subject to UTC approval because it modifies terms of the 2008 sale of PSE to Macquarie, including a promise that there would not be a new subsidiary business.

Many who spoke against the agreement claimed it wouldn’t protect them from paying more on their gas bill. But they mostly testified the plant would cost people money in other ways, such as reducing local property values and contributing to climate change that would be expensive to reverse.

They also attacked the plant proposal in general.

“I know I’m supposed to speak about financial issues,” said Marilyn Kimmerling, a North Tacoma resident, later adding: “The problem is things cannot always be separated out in that way, things are connected.”

Said Tacoma resident Roxy Murray: “We really need to stop making long-term capital investments on new fossil fuel projects that lock in dangerous emission levels for decades.”

Most opponents of the agreement at the hearing appeared affiliated with the group RedLine Tacoma, which has offered fierce opposition to the LNG plant. The group is against fossil fuel-based industries in Tacoma and also protested a plan for a methanol plant in the city that was withdrawn earlier this year.

RedLine has aired safety concerns that the LNG plant is too dangerous to be within a half-mile of city homes and businesses. Those worries were frequently echoed at the hearing by many who said a dangerous accident would cost taxpayers significant money.

Safety studies of possible spills, fires or leaks at the plant commissioned by PSE seem to say those hazards wouldn’t reach across the site’s property lines. Some industry experts have told The News Tribune the safety reviews were a thorough look at common risks of the plant but didn’t spend much time examining effects of an unlikely catastrophic failure there.

Representatives from businesses organizations and longshoremen unions also testified at the hearing, saying they thought the agreement wouldn’t hurt ratepayers. They also talked about what they said will be positives of the plant.

Dean McGrath, president of the local International Longshore and Warehouse Union Local 23, said the plant would create jobs and emphasized that LNG burns cleaner than dirtier diesel-based fuel, according to PSE.

The Tideflats plant is expected to provide LNG for Totem Ocean Shipping Express (TOTE) for two Alaska-to-Tacoma ships.

“In securing this project, TOTE will then make a long-term commitment to stay in Tacoma,” McGrath said.

Javier Figueroa, University Place mayor, was the only elected official to testify at the event. He said he thought the agreement will hold ratepayers “harmless from the liabilities and financial losses” sustained by Puget LNG.

Puget Sound Energy supplies gas and electric service to hundreds of thousands of homes and businesses in Western Washington and has leased a 30-acre site from the Port of Tacoma in hopes of building the plant.

The group has already obtained some permits for the plant, which PSE hopes to open in 2019.

Reporter Derrick Nunnally contributed to this report

Walker Orenstein: 360-786-1826, @walkerorenstein

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