UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
______________________________
SCHEDULE
14A
(Rule
14a-101)
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PUGET
ENERGY, INC.
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(Name
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ABOUT
PUGET
SOUND
ENERGY
Washington’s
oldest and largest energy utility
COMPANY
OVERVIEW
Puget
Sound Energy (PSE) is Washington State’s
oldest and largest energy utility, serving more than 1 million electric
customers and 721,000 natural gas customers, primarily in the vibrant Puget
Sound area.
The
region has experienced dramatic change during PSE’s century plus history, but
one thing has remained constant: PSE’s focus on safe, reliable, low-cost energy
service. The company’s commitment to serving communities, to helping make them
better places to live and work, is as steadfast as ever.
PSE’s
service area is home to some of America’s most recognized and respected
businesses, including Boeing, Microsoft, Amazon.com, Weyerhaeuser, Starbucks,
Costco, and Nordstrom, to name a few.
The
utility employs a well-defined strategy for meeting customer energy needs
in a
reliable, low-cost way by staying focused on the traditional, regulated,
vertically integrated-utility business model.
With
plans to invest $5 billion over the next five years to add and upgrade
infrastructure, PSE’s parent, Puget Energy signed a merger agreement in October
2007 with a consortium of long-term infrastructure investors to obtain committed
capital to continue to provide the high levels of service customers have
come to
expect as well as build the sustainable energy system necessary to serve
the
growing customer and environmental needs of Washington state.
PSE
SERVICE AREA
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HEADQUARTERS
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EMPLOYEES
(2007)
|
|
§ Bellevue,
Washington
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§ 2,400
|
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INCORPORATION
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CUSTOMERS
(2007)
|
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§ 1997,
merger of Puget Sound Power
& Light
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§ 1.04
million electric
|
|
Company and Washington Energy Company
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§ 721,000
natural gas
|
|
|
|
|
SERVICE
AREA
|
|
|
REVENUES
(2006)
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§ 6,000
+ square miles, primarily in Puget Sound
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§ $2.9
billion
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region of Western Washington
|
|
ASSETS
(2006)
|
SERVICE
AREA POPULATION (2006)
|
|
§ $7.1
billion
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§ Approximately
4 million
|
PSE NATURAL GAS SUPPLY SOURCES
PSE
purchases 100 percent of the natural-gas supplies
needed to serve its customers
PSE
ELECTRIC POWER SUPPLY FUEL MIX
PSE
delivers electricity to customers using
several resources
ADDITIONAL
INFORMATION AND WHERE TO FIND IT
In
connection with the proposed transaction, Puget Energy will file a proxy
statement with the Securities and Exchange Commission (SEC). Before making
any
voting or investment decision, investors and security holders of Puget
Energy
are urged to carefully read the entire proxy statement and any other relevant
documents filed with the SEC, as well as any amendments or supplements
to those
documents, because they will contain important information about the proposed
transaction. A definitive proxy statement will be sent to the shareholders
of
Puget Energy in connection with the proposed transaction. Investors and
security
holders may obtain a free copy of the proxy statement (when available)
and other
documents filed by Puget Energy at the SEC’s website at www.sec.gov. The proxy
statement and such other documents may also be obtained at no cost from
Puget
Energy by directing the request to Puget Energy, 10885 NE 4th Street, PSE-08,
Bellevue, WA 98004, Attention: Sue Gladfelter.
PARTICIPANTS
IN THE SOLICITATION
Puget
Energy, its directors, executive officers and other members of its management,
employees, and certain other persons may be deemed to be participants in
the
solicitation of proxies from Puget Energy shareholders in connection with
the
proposed transaction. Information about the interests of Puget Energy‘s
participants in the solicitation is set forth in Puget Energy’s proxy statements
and Annual Reports on Form 10-K, previously filed with the SEC, and in
the proxy
statement relating to the transaction when it becomes available.
Washington
state’s oldest and largest energy utility, with a 6,000-square-mile service
territory stretching across 11 counties, Puget Sound Energy (PSE) serves
more
than 1 million electric customers and 721,000 natural gas customers primarily
in
the Puget Sound region of Western Washington. PSE, a subsidiary of Puget
Energy
(NYSE:PSD), meets the energy needs of its growing customer base through
incremental, cost-effective energy conservation, low-cost procurement of
sustainable energy resources, and far-sighted investment in the energy-delivery
infrastructure. For more information, visit PSE.com. October
2007
GOOD
FOR
WASHINGTON
Good
for PSE customers
MERGER
OVERVIEW
The
Puget
Sound region faces a constant challenge in balancing economic growth with
the
reality of strained roads and services, impacting our quality of life.
Sound
solutions require rethinking old ways and applying fresh perspective to
new
models. For Puget Sound Energy (PSE) the stakes have never been greater.
The
utility needs to invest nearly $5 billion over the next five years to add
and
upgrade infrastructure to meet growing customer needs and continue to provide
safe and reliable electric and natural gas service.
To
accomplish this, PSE plans to change ownership to gain access to needed
capital
to continue to strengthen and grow the company in the years ahead. Puget
Energy,
PSE’s parent, has signed a merger agreement with the Macquarie Consortium,
a
North American long-term infrastructure partnership led by Macquarie
Infrastructure Partners, the Canada Pension Plan Investment Board and the
British Columbia Investment Management Corporation. The group also includes
Alberta Investment Management, Macquarie-FSS Infrastructure Trust and Macquarie
Bank Limited. The consortium will acquire all of Puget Energy’s outstanding
stock in exchange for access to much-needed investments to expand and improve
infrastructure, including increased energy efficiency and renewable energy
generation.
This
merger means business as usual, only better. Focus on customer service
and
commitment to the local community will remain unchanged. On a day-to-day
basis,
customers will continue receiving the same safe, reliable service they
have come
to know. For the future, however, PSE will be able to meet the constantly
expanding regional need for energy and do it in a way that will preserve
a
commitment to local communities and the environment. The new ownership
is good
for PSE’s business and it’s good for the state of Washington. Here are a few of
the highlights to this new chapter for PSE.
THE
ENERGY GAP
PSE’s
Integrated Resource Plan (IRP) predicts that rising customer demand for
electricity and expiring power contracts will create a need for PSE to
replace,
renew and acquire nearly 700 average Megawatts (aMW) of electric resources
by
2011, more than 1,600 aMW by 2015, and 2,570 aMW by 2025. This is equivalent
to
adding enough electricity to power two cities the size of Seattle.
According
to the IRP, the 20-year incremental cost of meeting PSE customers’ power needs
has more than tripled over the past four years – rising from a $4.4 billion
estimate in 2003 to $14.4 billion today.
PSE
2007 Integrated Resource Plan
CUSTOMER
BENEFITS
To
meet
these growing needs and to provide the high level of service that our customers
have come to expect, significant investment is needed to upgrade systems
as well
as increase capacity, energy efficiency and renewable resources.
Recent
storms continue to underscore the importance of ongoing infrastructure
investment for customer reliability. The strengthened infrastructure and
steady
investment in increased energy efficiency and renewable generation means
a more
secure and reliable energy supply for our customers. The consortium and
PSE are
dedicated to continually improving the quality of service to PSE’s residential
and business customers.
ENVIRONMENTAL
COMMITMENTS
PSE
has
long been a leader in energy efficiency in the Northwest. We are dedicated
to
advancing the development of clean, renewable energy sources. For years,
we have
enjoyed access to affordable energy through vast supplies of hydro-electric
power and natural gas. However, our population is expected to grow 28 percent,
or about 1 million people, over the next 20 years in PSE’s service area of
Western Washington.
Meeting
the demands of this growing population, while ensuring minimal impact on
the
environment, requires steady access to capital that will allow us to support
industry-leading environmental technologies that are at the forefront of
energy
efficient and renewable-energy development. The consortium and PSE are
dedicated
to upholding PSE’s commitment to the environment.
COMMUNITY
BENEFITS
PSE
understands that success is closely linked to the vitality of the communities
the utility serves. That’s why PSE will continue to invest corporate resources
and employee volunteer hours to help strengthen local communities. These
contributions have and will continue to help hundreds of non-profit
organizations in PSE’s service area.
The
Puget
Sound Energy Foundation was formed last year to further expand PSE’s legacy of
leadership and support of worthy, community-based programs. The foundation
makes
charitable contributions to qualifying nonprofit organizations to help
support a
broad range of community programs, with a special focus on initiatives
that
promote economic and environmental sustainability within PSE’s service territory
and in communities where the utility produces or purchases energy.
The
consortium understands the important role PSE plays in its communities
and has
committed to further strengthen the work of the Puget Sound Energy Foundation.
It has pledged $5 million at transaction closing to further develop the
charitable programs and contributions of the foundation.
ECONOMIC
BENEFITS
Delaying
investment in infrastructure and growth exposes greater risk to the economic
vitality of the state. Waiting until these short-comings are
noticeable is a surefire path to destabilize economic growth – shaking the
confidence of new business and further economic investment.
The
consortium’s commitment to investing approximately nearly $5 billion over the
next five years, is good for the local economy by sustaining and enhancing
employment, providing a sound energy resource base needed for business
growth
and creating a quality of life needed to attract and retain workers. However,
one of the greatest benefits to this investment is tied more to what it
may help
avoid. Properly planning for and managing growth means the future needs
of
Northwest businesses are protected. This will increase the overall confidence
in
investing in Washington at a time of tremendous global and national
uncertainty. Anything that adds to the economic viability of the
Puget Sound is a good thing for future economic health and
investment.
This
consortium is good for business, customers, and the community by allowing
PSE to
meet the expanding regional need for energy while preserving the company’s
on-going commitment to the environment.
EMPLOYEE
BENEFITS
As
a
result, employees can expect business as usual, only better. PSE’s management
team will now be focused on the business of developing a state-of-the-art
energy
company rather than focusing on the search to acquire cash for capital
investments and maintenance.
Employees
will have the added benefit of working on leading-edge projects in the
area of
renewable resources and new generation facilities.
ADDITIONAL
INFORMATION AND WHERE TO FIND IT
In
connection with the proposed transaction, Puget Energy will file a proxy
statement with the Securities and Exchange Commission (SEC). Before making
any
voting or investment decision, investors and security holders of Puget Energy
are urged to carefully read the entire proxy statement and any other relevant
documents filed with the SEC, as well as any amendments or supplements to
those
documents, because they will contain important information about the proposed
transaction. A definitive proxy statement will be sent to the shareholders
of
Puget Energy in connection with the proposed transaction. Investors and security
holders may obtain a free copy of the proxy statement (when available) and
other
documents filed by Puget Energy at the SEC’s website at www.sec.gov. The proxy
statement and such other documents may also be obtained at no cost from Puget
Energy by directing the request to Puget Energy, 10885 NE 4th Street, PSE-08,
Bellevue, WA 98004, Attention: Sue Gladfelter.
PARTICIPANTS
IN THE SOLICITATION
Puget
Energy, its directors, executive officers and other members of its management,
employees, and certain other persons may be deemed to be participants in
the
solicitation of proxies from Puget Energy shareholders in connection with
the
proposed transaction. Information about the interests of Puget Energy‘s
participants in the solicitation is set forth in Puget Energy’s proxy statements
and Annual Reports on Form 10-K, previously filed with the SEC, and in the
proxy
statement relating to the transaction when it becomes available.
Washington
state’s oldest and largest energy utility, with a 6,000-square-mile service
territory stretching across 11 counties, Puget Sound Energy (PSE) serves
more
than 1 million electric customers and 721,000 natural gas customers primarily
in
the Puget Sound region of Western Washington. PSE, a subsidiary of Puget
Energy
(NYSE:PSD), meets the energy needs of its growing customer base through
incremental, cost-effective energy conservation, low-cost procurement of
sustainable energy resources, and far-sighted investment in the energy-delivery
infrastructure. For more information, visit PSE.com. October
2007
HISTORY
Washington’s
oldest and largest energy utility
Through
mergers and acquisitions, dozens of small utility companies gradually evolved
into today’s Puget Sound Energy (PSE). The oldest of these – the Seattle Gas
Light Company – introduced Washington Territory to manufactured-gas lighting on
New Year’s Eve, 1873. A dozen years later, another PSE ancestor – the Seattle
Electric Light Company – gave the region its first electric service from a
central power plant. Yet another of PSE’s predecessor companies built the
region’s first large hydroelectric plant, at Snoqualmie Falls, in
1898.
|
Carved
into bedrock 270 feet beneath the surface, the Snoqualmie Falls
hydroelectric project was the world’s first hydropower facility housed
entirely underground.
|
Almost
overnight, homes, offices, and factories from Centralia to Everett
took
advantage of natural gas, a fuel far more efficient, clean, and
inexpensive than manufactured gas.
|
Ground-breaking
innovation continued to be a company hallmark as the 20th century unfolded.
Together with various partners, company forebears built the Columbia River’s
first massive hydropower plant, the Rock Island Dam, in 1932. Then, in 1956,
another company predecessor, Washington Natural Gas Company, gave the Puget
Sound region its first natural gas service.
A
half-century later, the company once again led the way, becoming the Pacific
Northwest’s largest producer of renewable energy. PSE is the first utility – and
so far the only one in the region to build and operate, two large wind-powered
generating facilities.
PSE
adopted its name and current structure in 1997 when two of its largest ancestral
companies – Puget Sound Power & Light Company and Washington Energy Company
– merged.
In
October 2007, PSE started a new chapter and signed a merger agreement with
a
group of long-term infrastructure investors to obtain committed capital to
serve
the growing energy needs of Washington state.
 PSE
generates 5 percent of its electricity supply from two company owned
and
operated wind facilities at Hopkins Ridge in Eastern Washington and
Wild
Horse in Central Washington.
|
ADDITIONAL
INFORMATION AND WHERE TO FIND IT
In
connection with the proposed transaction, Puget Energy will file a proxy
statement with the Securities and Exchange Commission (SEC). Before making
any
voting or investment decision, investors and security holders of Puget Energy
are urged to carefully read the entire proxy statement and any other relevant
documents filed with the SEC, as well as any amendments or supplements to those
documents, because they will contain important information about the proposed
transaction. A definitive proxy statement will be sent to the shareholders
of
Puget Energy in connection with the proposed transaction. Investors and security
holders may obtain a free copy of the proxy statement (when available) and
other
documents filed by Puget Energy at the SEC’s website at www.sec.gov. The proxy
statement and such other documents may also be obtained at no cost from Puget
Energy by directing the request to Puget Energy, 10885 NE 4th Street, PSE-08,
Bellevue, WA 98004, Attention: Sue Gladfelter.
PARTICIPANTS
IN THE SOLICITATION
Puget
Energy, its directors, executive officers and other members of its management,
employees, and certain other persons may be deemed to be participants in the
solicitation of proxies from Puget Energy shareholders in connection with the
proposed transaction. Information about the interests of Puget Energy‘s
participants in the solicitation is set forth in Puget Energy’s proxy statements
and Annual Reports on Form 10-K, previously filed with the SEC, and in the
proxy
statement relating to the transaction when it becomes available.
Washington
state’s oldest and largest energy utility, with a 6,000-square-mile service
territory stretching across 11 counties, Puget Sound Energy (PSE) serves more
than 1 million electric customers and 721,000 natural gas customers primarily
in
the Puget Sound region of Western Washington. PSE, a subsidiary of Puget Energy
(NYSE:PSD), meets the energy needs of its growing customer base through
incremental, cost-effective energy conservation, low-cost procurement of
sustainable energy resources, and far-sighted investment in the energy-delivery
infrastructure. For more information, visit PSE.com. October
2007
ABOUT
THE CONSORTIUM
Long-Term
infrasturcture investors
|
MACQUARIE
CONSORTIUM
|
A
consortium of experienced long-term infrastructure investors led
by
Macquarie Infrastructure Partners (MIP), Canada Pension Plan Investment
Board (CPPIB) and British Columbia Investment Management Corporation
(bcIMC) and includes Alberta Investment Management (AIM), Macquarie-FSS
Infrastructure Trust (MFIT) and Macquarie Bank Limited.
The
consortium members have previously partnered together on a number
of
infrastructure and utility investments in the US, Canada and
Europe.
|
|
INVESTMENT
PHILOSOPHY
|
The
infrastructure investment philosophy of the Macquarie Consortium
is to
invest in high-quality infrastructure and other essential assets
over the
long-term. The members of the Consortium take a partnership approach
to
their infrastructure investments, working with existing management
to help
support the overall performance and growth of the business.
As
one of the world’s leading and most experienced investors and managers of
infrastructure assets globally, Macquarie has a strong track record
of
responsible management of essential community assets. It does
this through working collaboratively with all stakeholders, including
employees, customers, Government and the wider community, to ensure
sustainable growth.
|
|
UTILITY
EXPERIENCE
|
Macquarie
also has experience managing investments in a number of North American
utilities including:
§ Duquesne
Light – Regulated Pittsburgh electric utility
§ AltaLink
– Electricity transmission company in Alberta
§ Cardinal
Power – Cogeneration power facility in Ontario
§ Aquarion
Company – Regulated New England water utility
§ The
Gas Company – Hawaiian full-service gas utility
§ Thermal
Chicago – District Energy assets located in Chicago and Las
Vegas
|
|
INFRASTRUCTURE
EXPERIENCE
|
The
members of the Macquarie Consortium have significant experience
managing
infrastructure investments in North America and around the world
including
in investments in toll roads, airports and airport-related assets,
telecommunications, rail, ports as well as social
infrastructure.
|
MACQUARIE
INFRASTRUCTURE PARTNERS (MIP)
|
§
|
A
diversified unlisted fund focusing on infrastructure investments
in the
United States and Canada
|
|
§
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Headquartered
in New York
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§
|
Majority
of investors are US and Canadian institutions such as public pension
funds, corporate pension funds, endowments & foundations and
Taft-Hartley (Union) funds
|
|
§
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Managed
by a member of the Macquarie Group
|
|
§
|
MIP
has ten investments which include a stake in Aquarion Company,
a regulated
New England water utility, a stake in Duquesne Light, a regulated
electric
utility in Pittsburgh, a stake in a US wireless tower operator,
two
Canadian port terminals and interests in four toll roads in the
United
States and one in Canada.
|
“PSE
is a best-in-breed energy company with well-respected and experienced senior
management and employees. We are delighted to partner again with our
long-term co-investors to help enable PSE meet its long-term energy and
infrastructure needs,”
Christopher
Leslie, Chief Executive Officer, Macquarie Infrastructure
Partners
CANADA
PENSION PLAN INVESTMENT BOARD (CPPIB)
|
§
|
A
professional investment management organization focused on investing
the
assets of the Canada Pension Plan to maximize returns without undue
risk
of loss to help ensure the CPP benefits of 16 million
Canadians
|
|
§
|
Headquartered
in Toronto, Canada
|
|
§
|
The
CPP fund totals C$120.5 billion (approx. US$124.7 billion) making
it one
of the largest single-purpose pools of assets in the
world
|
|
§
|
CPPIB
is a long-term investor focused on broadly diversifying the portfolio
to
enhance long-term returns by investing in public and private equities,
real estate, fixed income, and inflation-sensitive assets such
as
infrastructure
|
|
§
|
CPPIB’s
$2.2 billion infrastructure portfolio includes major direct investments
in
Wales & West Utilities, a natural gas distribution network that serves
Wales and southwest England; Transelec S.A., the largest electricity
transmission company in Chile; and AWG Plc., parent company of
Anglian
Water, a U.K.-based water and sewage
company.
|
“As
long-term investors, we look for solid infrastructure assets like PSE. PSE
is
particularly attractive because it demonstrates strong operational performance
and is committed to delivering the best quality of service to its customers.
We
are pleased to partner with like-minded investors on this transaction as
we
continue to strengthen and grow our portfolio of infrastructure
assets,”
Mark
Wiseman, Senior Vice-President – Private Investments, CPP Investment
Board.
BRITISH
COLUMBIA INVESTMENT MANAGEMENT CORPORATION (bcIMC)
|
§
|
An
investment management corporation with over $83 billion in assets
under
management invested in all major asset
classes
|
|
§
|
Based
in Victoria, British Columbia
|
|
§
|
Clients
include public sector pension plans, the Province of British Columbia,
provincial government bodies and publicly administered trust
funds
|
|
§
|
bcIMC’s
Strategic Investment and Infrastructure Program, valued at over
$2.3
billion at March 31, 2007, seeks long-term interest in tangible
infrastructure assets with the potential to generate strong returns
and
cash yields for our clients. The program has holdings in North
America,
Latin America, and Europe – including direct investments in water
utilities (Corix, Thames Water, and Aquarion Company) and energy
and power
consumption companies (Transelec S.A. and InterGen
NV)
|
"bcIMC
is delighted to invest in Puget Sound Energy - a strong and respected firm
headquartered and employing people in our Pacific Northwest
region. We strongly support PSE’s commitment to the environment and
provision of green power to residents of Washington State. Our
investment in Puget complements our existing infrastructure portfolio and
is
considered a long term investment for bcIMC and our clients,"
Doug
Pearce, Chief Executive Officer & Chief Investment Officer,
bcIMC.
ALBERTA
INVESTMENT MANAGEMENT (AIM)
|
§
|
One
of the largest institutional investors in Canada, with US$75 billion
in
assets under management as of September 30,
2007
|
|
§
|
Based
in Edmonton, Alberta
|
|
§
|
Significant
investment program in alternative investments, including private
equity,
real estate, timberland, and infrastructure. AIM has been active
in the
infrastructure asset class for more than four years, with investments
and
investment commitments of US$1.5
billion
|
|
§
|
Infrastructure
investment focus on long-life, regulated assets used to provide
essential
services
|
"Puget
Sound Energy is a great fit within the investment programs of our pension
plan
and endowment fund clients. We are excited by the strong economic fundamentals
of western Washington, PSE’s history of success, and its impressive
team.”
Bill
McKenzie, Head of Infrastructure Investments, Alberta Investment
Management
Macquarie-FSS
Infrastructure Trust (MFIT)
|
§
|
Unlisted
Australian infrastructure trust
|
|
§
|
Headquartered
in Australia
|
|
§
|
Managed
by Macquarie Specialised Asset Management
Limited
|
|
§
|
MFIT
currently holds interests in four assets across four sectors including
communications infrastructure, vehicle inspection, electricity
and water
infrastructure in three countries: the USA, Spain, and the
UK
|
Macquarie
Bank Limited
|
§
|
A
diversified global financial services
organization
|
|
§
|
Headquartered
in Sydney, Australia
|
|
§
|
The
Macquarie Group (Macquarie) comprises Macquarie Bank Limited, the
leading
Australian investment bank, and its worldwide affiliated
entities.
|
|
§
|
Members
of the Macquarie Group manage more than US$50 billion in equity
invested
in infrastructure and essential service assets around the world
through a
range of listed and unlisted
vehicles
|
|
§
|
Infrastructure
investments managed by Macquarie include investments in the energy,
water,
telecommunications and transportation sectors in the US, Canada,
UK,
Germany, Portugal, Italy, France, Sweden, Denmark, the Netherlands,
Belgium, Australia, Korea, Japan and South
Africa
|
|
§
|
Macquarie
aims to manage investments in infrastructure assets profitably
and
responsibly
|
ADDITIONAL
INFORMATION AND WHERE TO FIND IT
In
connection with the proposed transaction, Puget Energy will file a proxy
statement with the Securities and Exchange Commission (SEC). Before making
any
voting or investment decision, investors and security holders of Puget Energy
are urged to carefully read the entire proxy statement and any other relevant
documents filed with the SEC, as well as any amendments or supplements to
those
documents, because they will contain important information about the proposed
transaction. A definitive proxy statement will be sent to the shareholders
of
Puget Energy in connection with the proposed transaction. Investors and security
holders may obtain a free copy of the proxy statement (when available) and
other
documents filed by Puget Energy at the SEC’s website at www.sec.gov. The proxy
statement and such other documents may also be obtained at no cost from Puget
Energy by directing the request to Puget Energy, 10885 NE 4th Street, PSE-08,
Bellevue, WA 98004, Attention: Sue Gladfelter.
PARTICIPANTS
IN THE SOLICITATION
Puget
Energy, its directors, executive officers and other members of its management,
employees, and certain other persons may be deemed to be participants in
the
solicitation of proxies from Puget Energy shareholders in connection with
the
proposed transaction. Information about the interests of Puget Energy‘s
participants in the solicitation is set forth in Puget Energy’s proxy statements
and Annual Reports on Form 10-K, previously filed with the SEC, and in the
proxy
statement relating to the transaction when it becomes available.
Washington
state’s oldest and largest energy utility, with a 6,000-square-mile service
territory stretching across 11 counties, Puget Sound Energy (PSE) serves
more
than 1 million electric customers and 721,000 natural gas customers primarily
in
the Puget Sound region of Western Washington. PSE, a subsidiary of Puget
Energy
(NYSE:PSD), meets the energy needs of its growing customer base through
incremental, cost-effective energy conservation, low-cost procurement of
sustainable energy resources, and far-sighted investment in the energy-delivery
infrastructure. For more information, visit PSE.com. October
2007
October
26, 2007
To
Puget
Sound Energy Employees,
Today
we
announced that we have signed a merger agreement with long-term investors
to
obtain the capital and flexibility we need to continue to strengthen and
grow
the company in the years ahead. This will help us concentrate on our core
business of providing safe and reliable service to our customers and will
provide us with the $5 billion we need over the next five years to upgrade
our
aging infrastructure and introduce expanded energy efficiency programs and
more
renewable energy resources to fulfill the booming energy needs of our
region.
We
signed
the agreement with a North American infrastructure fund consortium led by
Macquarie Infrastructure Partners (MIP), the Canada Pension Plan Investment
Board (CPPIB) and the British Columbia Investment Management Corporation
(bcIMC). The investor group also includes Alberta Investment Management (AIM),
Macquarie-FSS Infrastructure Trust (MFIT) and Macquarie Bank Limited. The
consortium has significant experience in managing infrastructure and utility
investments in the U.S. and around the world and has proven track records
of
partnering with existing management to support the performance, stewardship
and
growth of those businesses.
This
merger will enable us to move more assuredly to make the infrastructure
investments and commitments to energy efficiency and renewable energy needed
to
keep Puget Sound Energy at the cutting edge of our industry. It will be business
as usual, only better.
This
is
not a merger like the one between Washington Natural Gas and Puget Power
a
decade ago. It is not a consolidation move. Job reductions and cost
cutting are not involved. Our new investment partners value the
company and its employees and will continue current operations, management
and
union contracts. The consortium will honor the current collective bargaining
agreements with the International Brotherhood of Electric Workers, Local
77, and
the United Association of Journeymen and Apprentices of the Plumbing and
Pipefitting Industry of the United States and Canada, Local 26 and Local
32, in
place for PSE’s represented employees, as well as existing wage and primary
benefits for all employees. Your job will not change and the high level of
service, for which our company and employees are known, will
remain.
We
will
hold an employee meeting at 9 a.m. today, October 26, in the auditorium that
will be video conferenced to Bothell, Tacoma and Mt. Vernon. In
addition, members of the leadership team will work to meet with you at various
locations to discuss this at greater length and to answer any questions you
might have. Please read the press release and fact sheets to learn
more.
We
will
provide you with regular updates as the transaction unfolds and encourage
you to
check back with your manager, director, officer or me if you have any questions
or concerns.
Sincerely,
Stephen
P. Reynolds
Chairman,
President and CEO
ADDITIONAL
INFORMATION AND WHERE TO FIND IT
In
connection with the proposed transaction, Puget Energy will file a proxy
statement with the Securities and Exchange Commission (SEC). Before
making any voting or investment decision, investors and security holders
of
Puget Energy are urged to carefully read the entire proxy statement and any
other relevant documents filed with the SEC, as well as any amendments or
supplements to those document, because they will contain important information
about the proposed transaction. A definitive proxy statement will be
sent to the shareholders of Puget Energy in connection with the proposed
transaction. Investors and security holders may obtain a free copy of
the proxy statement (when available) and other documents filed by Puget Energy
at the SEC’s website at www.sec.gov. The proxy statement and
such other documents may also be obtained at no cost from Puget Energy by
directing the request to Puget Energy, 10885 NE 4th Street,
PSE-08,
Bellevue, WA 98004, Attention: Sue Gladfelter.
PARTICIPANTS
IN THE SOLICITATION
Puget
Energy, its directors, executive officers and other members of its management,
employees, and certain other persons may be deemed to be participants in
the
solicitation of proxies from Puget Energy shareholders in connection with
the
proposed transaction. Information about the interests of Puget
Energy’s participants in the solicitation is set forth in Puget Energy’s proxy
statements and Annual Reports on Form 10-K, previously filed with the SEC,
and
in the proxy statement relating to the transaction when it becomes
available.
October
26, 2007
BUSINESS
AS USUAL, ONLY BETTER
A
letter
to our community
Living
in
Puget Sound, we are all continually challenged to find balance between the
security of a thriving economy and the reality of congested roads, challenged
services and quality of life. Maintaining balance requires rethinking
old ways and finding new opportunities.
Puget
Sound Energy (and its predecessor companies) has lived this challenge for
more
than a century. Today, the stakes have never been
greater. We need to invest nearly $5 billion over the next five years
to update our aging power generating and delivery infrastructure and to increase
our focus on energy efficiency and renewable energy.
We
believe we have the solution. As you may have heard, we have
announced merger plans with infrastructure fund partners who are focused
on the
long term. This merger will provide access to the capital we need to
continue providing safe and reliable service and to meet the growing energy
needs of our region.
What
does
this mean for you? It means business as usual, only
better. Our employees’ focus on customer service and commitment to
the local community will remain unchanged on a day-to-day basis. In
the future, we will be able to meet the constantly expanding regional need
for
energy and do so in a way that will preserve our commitment to customers,
communities and the environment. We can move faster and with greater confidence
for your benefit.
Over
the
coming months you can expect to hear more about this. Please take a
look at the news release and fact sheets. Be assured that the same
people you’ve come to know and trust will be here to serve you in the
future.
Sincerely,
Stephen
P. Reynolds
Chairman,
President and CEO
Puget
Sound Energy
ADDITIONAL
INFORMATION AND WHERE TO FIND IT
In
connection with the proposed transaction, Puget Energy will file a proxy
statement with the Securities and Exchange Commission (SEC). Before
making any voting or investment decision, investors and security holders
of
Puget Energy are urged to carefully read the entire proxy statement and any
other relevant documents filed with the SEC, as well as any amendments or
supplements to those document, because they will contain important information
about the proposed transaction. A definitive proxy statement will be
sent to the shareholders of Puget Energy in connection with the proposed
transaction. Investors and security holders may obtain a free copy of
the proxy statement (when available) and other documents filed by Puget Energy
at the SEC’s website at www.sec.gov. The proxy statement and
such other documents may also be obtained at no cost from Puget Energy by
directing the request to Puget Energy, 10885 NE 4th Street,
PSE-08,
Bellevue, WA 98004, Attention: Sue Gladfelter.
PARTICIPANTS
IN THE SOLICITATION
Puget
Energy, its directors, executive officers and other members of its management,
employees, and certain other persons may be deemed to be participants in
the
solicitation of proxies from Puget Energy shareholders in connection with
the
proposed transaction. Information about the interests of Puget
Energy’s participants in the solicitation is set forth in Puget Energy’s proxy
statements and Annual Reports on Form 10-K, previously filed with the SEC,
and
in the proxy statement relating to the transaction when it becomes
available.
EMPLOYEE
Q&A
Oct.
26, 2007
EMPLOYEE
Q&A
|
1.
|
How
will Macquarie Consortium ownership impact
employees?
|
|
|
It
will be business as usual following the merger. The retention
of management and its employees is key in the success of the
partnership. The consortium is committed to Puget Sound
Energy’s business plan and workforce. The consortium is
committed to supporting business growth and places a high priority
on
recruiting, retaining and rewarding quality
people.
|
|
2.
|
Are
there planned layoffs as a result of the
merger?
|
|
|
There
are no layoffs planned.
|
|
3.
|
Will
my employment terms remain the
same?
|
|
|
Your
existing terms will be unchanged.
|
|
4.
|
What
is the impact on my
salary?
|
|
|
Your
salary will be unaffected by the
transaction.
|
|
5.
|
What
will happen to my
benefits?
|
All
benefits, with the exception of the ESPP, will be unaffected by the
merger. Further discussions on the ESPP will occur prior to the
transaction closing.
|
6.
|
Will
my bonus arrangements
change?
|
|
|
You
will retain your current bonus eligibility and
target.
|
|
7.
|
How
will my compensation arrangements be determined in the
future?
|
|
|
Your
compensation arrangements will be managed in the same way as they
are
today. The company will continue to conduct the annual compensation
and
performance review processes and roles will be benchmarked in the
same way
they are today to ensure that Puget Sound Energy continues to provide
a
market competitive compensation offering to non-represented
employees. Union employees will continue to be paid as per the
applicable Collective Bargaining
Agreement.
|
|
8.
|
What
will happen to my Union
representation?
|
|
|
Employees
currently represented by a Union will continue to be represented.
Management will continue to maintain an open and constructive relationship
with the Unions and honor all current collective bargaining
agreements.
|
|
9.
|
Will
my manager or reporting line
change?
|
|
|
No,
there is no planned reorganization of roles and responsibilities.
Puget
Sound Energy will continue with the same organization structure
and
management it has today.
|
|
10.
|
Will
the way you manage the workforce
change?
|
|
|
No.
Management will continue to operate the company as it does today.
Current
practices in areas including recruitment, annual reviews, training
and
development and succession planning will
continue.
|
ADDITIONAL
INFORMATION AND WHERE TO FIND IT
In
connection with the proposed transaction, Puget Energy will file a proxy
statement with the Securities and Exchange Commission (SEC). Before
making any voting or investment decision, investors and security holders
of
Puget Energy are urged to carefully read the entire proxy statement and any
other relevant documents filed with the SEC, as well as any amendments or
supplements to those document, because they will contain important information
about the proposed transaction. A definitive proxy statement will be
sent to the shareholders of Puget Energy in connection with the proposed
transaction. Investors and security holders may obtain a free copy of
the proxy statement (when available) and other documents filed by Puget Energy
at the SEC’s website at www.sec.gov. The proxy statement and
such other documents may also be obtained at no cost from Puget Energy by
directing the request to Puget Energy, 10885 NE 4th Street,
PSE-08 ,
Bellevue, WA 98004, Attention: Sue Gladfelter.
PARTICIPANTS
IN THE SOLICITATION
Puget
Energy, its directors, executive officers and other members of its management,
employees, and certain other persons may be deemed to be participants in
the
solicitation of proxies from Puget Energy shareholders in connection with
the
proposed transaction. Information about the interests of Puget
Energy’s participants in the solicitation is set forth in Puget Energy’s proxy
statements and Annual Reports on Form 10-K, previously filed with the SEC,
and
in the proxy statement relating to the transaction when it becomes
available.