Private-Power Victory

In the Pacific Northwest, where public power has taken over 65% of the market in the past 20 years, private power seemed finished President Frank McLaughlin of Puget Sound Power & Light Co. Washington's biggest private utility, finally threw in the towel last year after fighting a long, rearguard action against the Public Utility Districts. "Fighting them," said he, "is like trying to live in a house while the workmen are tearing it down."

But President Kinsey Robinson of Washington Water Power, Washington's second-biggest private utility, refused to give in. First he turned to American Power & Light, which owned Washington Water Power and which, under the holding companies' "death sentence," had to get rid of its subsidiary. A P & L had made a tentative deal to sell Washington Water Power to the P.U.D.s. But Robinson, who started as a lineman and spent 14 years building his company, fought his bosses' plan. He won the backing of A.P. & L. s biggest stockholders, who persuaded the company to turn down the P.U.D.s, distribute Washington Water Power stock to the parent company's shareholders. Thus, the utility was put on its own (TIME, March 31, 1952). Then Private Enterpriser Robinson set out to save Puget Sound from public ownership.

New Giant. It looked like a lost cause, since McLaughlin had already made a deal to sell Puget Sound to the P.U.D.s for $96 million. With the deal tied up by a stockholders' suit, Robinson went to work to persuade McLaughlin to sell out to Washington Water Power. Robinson promised him a better offer than the P.U.D.s had made. Furthermore, said he by merging Puget Sound with Washington Water Power, they would have a new giant big enough to fight off the public-power men. Last week, after turning down two offers, Mclaughlin agreed to sell.

The deal would make the new company a statewide operation, doubling its customers (to about a million) and its revenues (to some $38 million). For every share of Puget Sound common, stockholders would get half a share of Washington Water Power common, plus half a share of new convertible preferred. Those who want cash would get $27 for each Puget Sound share (v. $22 offered by the P.U.D.s). The agreement must still be approved before July 30 by directors and stockholders of both companies, and also the Washington, Idaho and federal power commissions. Washington Water Power must also raise $95 million, and the deal is off if holders of more than 50% of Puget Sound's stock want cash. But Robinson is confident. Says he: "Washington Water Power will have all the authority and money on the line before 5:30 on the evening of July 30th."

Turning Tide. The P.U.D.'s are bound to fight. But Robinson, with two victories under his belt, thinks that at long last the tide is turning in favor of private powor in the Northwest. Recently, the Washington legislature passed a bill allowing public and private utilities to buy jointly or build dams to generate power. One such deal already in the making: to build a dam at Priest Rapids on the Columbia River. With power still short in the Northwest, it looks as if there is still plenty of room for private enterprise, thanks to tough-minded Kinsey Robinson.

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