Puget Sound Energy’s (PSE) $7.4 billion sale to a consortium of private investment groups led by Macquarie Infrastructure Partners should close Feb. 6, the investors and PSE’s parent, Puget Energy, said last Friday. They said the companies have accepted the conditioned approval late in December by the Washington Utilities and Transportation Commission (WUTC), the deal’s final regulatory approval.
The WUTC on a split 2-1 vote gave a heavily conditioned approval to the deal Dec. 30, affirming a multi-party settlement from last summer that included its own staff (see Daily GPI, Jan. 2; July 23, 2008).
Commissioner Philip Jones opposed approval of the sale and filed a separate dissent, contending that “the settlement agreement in its current form creates too much risk and potential harm for ratepayers and stakeholders.” (When asked by NGI at an energy conference in Seattle last Thursday whether the global financial crisis influenced his dissent, Jones declined to elaborate, saying he did not want to go beyond his written opposition statement.)
Puget Holdings LLC, the acquiring company made up of the Macquarie-led investment groups and Bellevue, WA-based Puget Energy, has committed to support the PSE utility’s $5 billion capital program during the next five years as it attempts to narrow a gap between growing demand and its resource base in western Washington state, where it serves more than 1 million electric and about 750,000 natural gas customers.
As part of the settlement to which the WUTC added conditions, Puget Holdings also committed to providing $100 million in rate credits and other savings to PSE utility customers. “Customers could begin seeing these rate credits on their bills as early as March this year and continuing for the next 10 years,” a PSE spokesperson said.
PSE’s headquarters and existing management will remain in place with three current board members continuing and William Ayer, Alaska Air Group CEO, becoming chairman of the boards for both Puget Holdings and PSE. Stephen Reynolds continues as president/CEO of PSE and also will be on the two companies’ boards as a director.
The utility will continue to operate with the same local employees, and will be regulated by the WUTC, the Federal Energy Regulatory Commission and other federal, state and local agencies, the PSE spokesperson said. Puget Energy stock will continue to be listed on the New York Stock Exchange until the sale closing, at which time privately held Puget Holdings will acquire all of the outstanding shares at $30/share in cash.
In reiterating that the purchasers accept the WUTC’s approval and conditions, Christopher Leslie, the Macquarie Infrastructure CEO, said the buyers are “committed to using our combined access to capital to support the plans of PSE’s local management to meet the utility’s steady increase in demand for energy.”
Reynolds said he was confident that with “the committed access to capital,” PSE will have the resources to “build the infrastructure and secure the clean energy supplies needed to serve the growing region.”
Puget Holdings is comprised of a New York City-based unit of the Australian investment firm Macquarie Infrastructure Partners, and includes Macquarie Capital Group, the Canada Pension Plan Investment Board, British Columbia Investment Management Corp., Alberta Investment Management Corp. and Macquarie-FSS Infrastructure Trust.
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