Puget Energy's proposed acquisition by a group of Australian and Canadian investors was cleared by the Federal Energy Regulatory Commission, but other regulatory hurdles remain.

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The Federal Energy Regulatory Commission approved Thursday the proposed takeover of Puget Energy by a group of Australian and Canadian investors, one day after the company’s shareholders gave their blessing to the $7.4 billion deal.

“We find the transaction will not harm competition or rate, and will not adversely affect regulation,” said FERC Chairman Joseph Kelliher in a statement.

Puget Energy is the parent company of Puget Sound Energy, the state’s largest electric and gas utility.

The agency also found that the merger would not result in Puget Sound Energy improperly providing subsidies to other parts of the company. This phenomenon, called ‘cross-subsidizing,’ is frowned upon by regulators.

FERC’s nod marks a significant milestone, but doesn’t seal the deal.

The Washington State Utilities and Transportation Commission, which has scheduled public hearings on the matter starting next month, has the final word.

The proposal must also clear the Committee on Foreign Investment in the U.S., and inter-agency group leb by the U.S. Treasury; the Department of Justice; and the Federal Communications Commission.

The FERC announcement doesn’t change the company’s estimate for the closing of the transaction, set for the second half of 2008.

In a statement, Chief Executive Stephen Reynolds called the approval “another step toward achieving a successful transaction that will enable PSE to build on our 135-year-old legacy as a leading, locally-managed utility and help secure the future energy supply and delivery infrastructure to meet the needs of our customers and communities in this growing region.”

Ángel González: 206-515-5644 or agonzalez@seattletimes.com