On Feb. 6, the ownership of Puget Sound Energy (PSE) was formally transferred to Puget Holdings, LLC, a group of long-term infrastructure investors including the Macquarie Group based in Australia.

New ownership of PSE, including foreign utility investors, was one of the issues raised by proponents of a public takeover of the power system in East Jefferson County. Proponents of public power, including the Public Utility District, claimed foreign ownership would further remove local control and impose higher rates. PSE’s supporters, however, said the utility would continue to be regulated by state officials and the merger would provide essential investment dollars in future infrastructure.

Called a merger, the transfer of the private utility company cost $7.4 billion, which PSE officials say provides the cash needed for upgrades in the Northwest-based power and gas network, along with additional generating facilities needed to supply demand for the future.

“Our merger with Puget Holdings is already providing benefits to our one million electric and nearly 750,000 natural gas customers in Western Washington,” said Stephen P. Reynolds, president and CEO of Puget Energy and PSE, in a statement.

All PSE stock shares were acquired for $30 per share in the transaction, which was announced in 2008 and has now made its way over regulatory and financial hurdles. With the transaction, PSE’s stock is no longer traded on the public exchanges.

On Jan. 16, after both Puget Holdings and PSE accepted the Washington Utilities and Transportation Commission merger approval order, Standard & Poor’s increased PSE’s corporate credit rating to BBB from BBB- and its secured bond rating to A- from BBB+. The ratings upgrade is expected to result in meaningful savings for PSE customers for years to come due to reduced borrowing costs, according to PSE.

Reynolds said PSE gains access to long-term, stable capital – $1 billion a year for the next five years – provided by the new owners.

PSE also gains new leadership. Effective with the transaction, William "Bill" S. Ayer, chairman and chief executive of Alaska Air Group, became the chairman of the board of directors for Puget Energy and PSE. Reynolds relinquished his three-year title as chairman, but remains as PSE president and chief executive officer. The PSE board also includes Herbert B. Simon, a member of Simon Johnson LLC, a real estate and venture capital investment company in Tacoma. Other board members are from the investor entities.

The merger transaction was announced Oct. 26, 2007, approved by shareholders and the Federal Energy Regulatory Commission in April 2008, and the UTC on Dec. 30, 2008.