Puget Energy and the buyer group led by Australian investment bank Macquarie said that the Attorney General's Public Counsel office was undervaluing the recent modifications made by the buyers to the original proposal and overstating the risks associated with the transaction. The state's public counsel is the sole remaining major party opposed to the $7.8...

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Puget Sound Energy and the international consortium that has proposed to take over the utility said Tuesday the state consumer advocate’s opposition to the deal is based on flawed arguments.

In a filing with the Washington Utilities and Transportation Commission (UTC), executives for utility holding company Puget Energy and the buyer group led by Australian investment bank Macquarie said the Attorney General’s Public Counsel office was undervaluing the buyers’ recent modifications to the original proposal and overstating the deal’s risks.

The state’s public counsel is the sole major party still opposed to the $7.8 billion deal. The consortium reached a settlement with other critics, including the UTC’s staff.

Public counsel said the deal, which includes a $300 million investment the potential buyers made in December, could undermine the credit profile of Washington’s largest utility by saddling it with additional debt.

In their testimony Tuesday, Puget Energy and the takeover group said the transaction would actually reduce the utility’s debt ratio to 49.6 percent from 60.4 percent last September, before the offer was announced.

The holding company’s consolidated debt ratio at the closing of the transaction would be 55.7 percent, according to the filing.

The state agency also said Washington customers were better off with Puget Energy’s status as a publicly traded company than as a privately owned utility borrowing from rocky capital markets to fund its growth.

The buyers’ rebuttal said the public counsel did not take into account Macquarie’s ability to raise huge sums of cash — $71 billion since July 2007.

All the money the potential buyers are borrowing to acquire Puget Energy “was committed after the onset of the current credit crisis,” the filing said.

Puget Energy’s financial health “will be better than recent historical levels” after it is acquired, the filing said.

The deal, which represents a 25 percent premium on the price of Puget Energy shares, was overwhelmingly approved by shareholders.

Federal regulators have also given their blessing but the UTC has the last word. First, however, it must determine that Washington consumers will suffer no harm.

The UTC has scheduled hearings on the transaction at its Olympia headquarters from Aug. 25 to 27, including a public-comment hearing Aug. 26. Final briefs are due Sept. 19.

Puget Sound Energy shares closed down 20 cents at $27.20 Tuesday.

The Macquarie-led consortium offers to buy the company for $30 a share.

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