Puget Sound Energy forges settlement with some sale opponents

By Julie A. Miller

Washington, July 22 - Puget Sound Energy said it has reached a settlement with many of the parties that had opposed the sale of the utility company to a group of investors led by Macquarie Infrastructure Partners.

The Bellevue, Wash.-based electricity and natural gas utility said it had reached an agreement with staff of the Utilities and Transportation Commission, the Industrial Customers of Northwest Utilities, Northwest Industrial Gas Users, the Energy Project, the Northwest Energy Coalition and Kroger Co. The announcement said the Cogeneration Coalition, another party to an administrative law action aiming to stop the sale, won't oppose the settlement.

The Washington state Attorney General's office of public counsel isn't agreeing with the settlement, whose terms were not disclosed.

The office of public counsel and staff of the Utilities and Transportation Commission, which must approve the merger, have opposed it on the grounds that it would saddle the utility with too much debt and consumers would not benefit enough from the capital investment the potential buyers are promising. Rate increase requests for gas and electricity customers are also pending before the UTC.

Puget announced the proposed buyout in October by an investment consortium led by Macquarie, an investment concern that focuses on infrastructure assets in the U.S. and Canada. It is a subsidiary of Macquarie Group, an Australian banking firm. The consortium also includes three Canadian pension plans. It offered to buy Puget at $30 a share for its common stock. Puget closed in trading Monday at $24.71 a share. Puget says it needs capital to finance maintenance and new infrastructure needed to meet increased customer demand.

The utilities commission has the authority to approve the settlement, even if there are objections to it, approve the buyout with its own conditions or reject it. The parties have notified the administrative law judge in the UTC case that they will file documents by Wednesday outlining the settlement agreement and requesting that the UTC speed up the procedural calendar for its decision.

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