An investor group led by Macquarie Bank of Australia agreed October 26 to buy U.S. hydropower utility Puget Energy Inc. in a deal worth $3.51 billion.
In the Australian bank’s latest foray into the North American energy sector, the group plans to pay $30 per share of the fast-growing Puget, more than a 25 percent premium to its October 25 close, and promised to provide $5 billion for the company’s power generation and infrastructure needs. The deal must be approved by Washington state regulators.
The deal, which also calls for $1.6 billion of newly issued debt in addition to $2.6 billion of existing debt, is being led by Macquarie Infrastructure Partners, the New York-based subsidiary of Macquarie Bank that purchased Pittsburgh utility Duquesne Light Holdings Inc. for $1.59 billion earlier this year.
Puget Energy is the parent of Puget Sound Energy, which has 1 million electricity customers and 720,000 natural gas customers in the Seattle area, said current Chief Executive Steve Reynolds.
Reynolds said his management team would stay in place.
The company generates 45 percent of its power from hydro sources, 17 percent from natural gas, 34 percent from coal, and 2 percent from wind. Puget Sound Energy has about 2,400 MW of generation capacity and purchases about two-thirds of the power needed to serve its customers. It expects its service area’s population to grow by 28 percent, or 1 million people, over the next two decades.
Puget’s wholly owned hydro projects are 170.03-MW Baker River in northwest Washington (HNN 7/19/07), 44-MW Snoqualmie Falls east of Seattle, and 26-MW Electron southeast of Tacoma. It also buys power from the hydro projects of Chelan County Public Utility District. (HNN 4/26/06)
In addition to Macquarie Infrastructure Partners, the consortium buying Puget includes the Canada Pension Plan Investment Board and British Columbia Investment Management Corp, the company said.