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State lawyers ask utilities commission to reject settlement on PSE sale

Lawyers with the state Attorney General's Office are asking the state to reject a proposed settlement that would clear the way for a foreign buyout of Puget Sound Energy.

PSE is the state’s largest electric and natural gas utility and currently serves Whidbey Island and more than 1 million electric customers in 11 counties. The Macquarie Group, an Australian-Canadian investment consortium, has been pursuing a $7.4 billion takeover of the Bellevue-based utility.

The proposed sale is under review by the state Utilities and Transportation Commission, and PSE, the utility commission staff, the Macquarie-led investment consortium and others in the case reached a settlement on July 23.

But earlier this week, the Public Counsel Section of the Washington State Attorney General’s Office said the commission should reject the settlement, which includes $100 million in rate credits to the PSE’s customers over 10 years, dividend restrictions, the reduction of $200 million in debt from the proposed deal, and other provisions.

Simon ffitch, the attorney who leads the Public Counsel Section that represents residential and small business customers in utility rate cases, said expert testimony shows the settlement doesn't do enough to resolve the public's concerns with the sale.

“Puget customers and Washington’s economy are better off with what they have now – a publicly-traded, investment-grade utility with improving financial health and low business risk,” ffitch said.

“Puget Sound Energy has not shown that it makes sense to burden this company with a dramatic increase in debt and financial risk, especially at a time when national and international economic conditions are so shaky," he said.

“Simply put, the acquisition of Puget as detailed in the settlement is an inferior choice,” ffitch said.

PSE spokeswoman Martha Monfried said the company would offer rebuttal testimony on Aug. 12.

"We will continue to work to address public counsel's concerns and demonstrate the importance of the merger, which will enable a well-capitalized utility that is able to invest in needed infrastructure and resources to serve our customers," she said.

"And throughout this almost year-long review process we have consistently tried to address public counsel's concerns, which primarily focus on debt," Monfried added.

The commission will hold hearings Aug. 25 through Aug. 27 in Olympia to hear expert witnesses for and against the settlement.

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