Independent study finds cost for Kitsap PUD takeover of PSE’s electric system would start at $1.2 billion to $1.5 billion

Analysis highlights the cost to acquire PSE’s electric system—poles, wires, substations— represents only one component of the full cost. PSE will host a telephone town hall on the study results on Tuesday, Oct. 13 at 6:00 p.m.

Bellevue, Washington (9/22/2026) Puget Sound Energy today released the results of an independent analysis of the financial value of the company's electric transmission and distribution assets in Kitsap County. Conducted by Concentric Energy Advisors, a management consulting and financial advisory firm, the study estimates that the electric assets that would need to be acquired as part of a takeover are worth approximately $1.2 billion to $1.5 billion at the time of a potential takeover.

One of the study’s key findings is that the $1.2 billion to $1.5 billion estimate represents only the value of the electric transmission and distribution system itself and does not represent the total cost of a takeover. The valuation focuses on electric delivery infrastructure such as poles, wires, substations and related electric assets. It does not include numerous additional costs that would need to be evaluated separately and could increase the amount that a municipal utility would need to finance.

The report identifies categories of costs that are not included in the $1.2 billion to $1.5 billion estimate, including:

• Land, land rights and easements
• Separation and reintegration costs needed to divide the acquired system from PSE's remaining electric network
• Stranded and severance costs
• Going-concern value associated with acquiring an operating utility business
• Transaction costs, including legal, engineering, consulting and financing expenses
• Startup costs associated with building and operating a new utility organization

"The starting price is $1.2 billion to $1.5 billion for poles and wires alone. It doesn't include the substantial costs of creating, financing or operating a new utility,” said Josh Nowak, vice president, Concentric Energy Advisors.

In Washington, a public utility district can assess the costs, risks and operational requirements of forming or acquiring an electric utility without a public vote, as other jurisdictions, including Jefferson County, have done.

PSE commissioned this independent evaluation because the PUD has not provided any public estimate on the cost to takeover PSE’s system. Since no second vote would be required, residents should have a clear understanding of the potential cost before they vote in November.

The study evaluated electric transmission and distribution assets serving approximately 130,000 customer accounts throughout Kitsap County. Concentric Energy Advisors used three commonly accepted valuation[1] approaches:

• Income Approach: approximately $1.2 billion
• Market Approach: approximately $1.4 billion
• Cost Approach: approximately $1.5 billion

The report further notes that acquiring utility assets is only the first step in establishing a municipal utility. Ongoing responsibilities would include power supply procurement, utility operations, system maintenance, reliability planning, capital investment, customer service, technology systems, workforce development and regulatory compliance.

The study also examined municipalization efforts across the United States and found that completed acquisitions are relatively rare. According to Concentric's review, more than 70% of communities that have explored municipalization since 2000 either rejected or abandoned the initiatives. Costs for simply exploring municipalization can run into the millions, according to Concentric’s study and a separate report by The Brattle Group.

In Jefferson County, proponents said that taking over PSE’s system would cost $47 million. The final cost was $109 million, more than double what voters were told. Jefferson County’s customer base is much smaller with about 18,000 customers. PSE also agreed to sell its infrastructure in Jefferson County, which will not likely be the case in Kitsap County.

Learn more:

• The complete study and supporting materials are available at pse.com/poweringkitsap
• Telephone town hall with Concentric Energy Advisors on Tuesday, Oct. 13 at 6:00 p.m. Participants can join at https://admin.teletownhall.us/event/watch/137121 The town hall will cover what the study includes and the additional costs and considerations that are outside of the asset valuation.

Footnote:
[1] Income approach measures value based on the earnings and cash flow the assets can support. Market approach measures value using observed pricing evidence from the utility sector. Cost approach measures the depreciated reproduction cost of the physical system.

 

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