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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
December 10, 1997 December 10, 1997
___________________________________________________
(Date of earliest
event reported)
PUGET SOUND ENERGY, INC
(Exact name of registrant as specified in its charter)
Washington 1-4393 91-0374630
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation) Number)
411 108th Avenue N.E., Bellevue, Washington 98004-5515
(Address of principal executive offices, zip code)
Registrant's telephone number, including area code:
425/454-6363
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ITEM 5. Other Events
On December 10, 1997, the Company made the following press release:
TENASKA AND PSE AGREE TO NEW SUPPLY ARRANGEMENTS
Bellevue, Wash. and Omaha, Nebr., - Tenaska Washington Partners, L. P.
(Tenaska) of Omaha, Nebr. and Puget Sound Energy (NYSE:PSD) of Bellevue,
Wash. have reached a preliminary agreement that is expected to lower the
price the utility pays for power from Tenaska's cogeneration facility located
at Ferndale, Wash. The Washington Utilities and Transportation Commission
(WUTC), which regulates the utility, today approved the utility's filed
accounting method for the revised power sales agreement.
Key to the revised arrangement, Puget Sound Energy will buy out the
final 14 years of Tenaska's underlying fixed-price gas supply. Puget Sound
Energy will become the principal natural gas supplier to the Ferndale
facility and will supply Tenaska with market-priced natural gas. The market-
priced gas supplies are expected to reduce Puget Sound Energy's power supply
costs between 15 and 20 percent from this facility over the remaining life of
the agreement. The original power agreement between Puget Sound Energy and
Tenaska resulted from negotiations between the companies in 1991. Puget Sound
Energy purchases the available power from Tenaska's 245 megawatt
facility. The cogeneration facility, which also provides steam to the
adjacent Tosco oil refinery, began operation in 1994 and is considered a
Qualifying Facility (QF) under the federal government's Public Utility
Regulatory Policies Act (PURPA).
"This mutually-beneficial solution to the issue of above-market power
supply contracts -- an increasingly important issue in light of increased
competition in our industry -- shows what two companies can do when they work
together as negotiating partners, rather than through adversarial processes,"
said Puget Sound Energy Chairman and CEO Richard R. Sonstelie. "At the same
time, for Puget Sound Energy in particular, this agreement represents major
progress along the strategic course we are pursuing as we drive our costs of
energy supply toward market value. Shareholders and customers all can win
with this agreement."
"Independent power plants like ours exist today because we have provided a
lower cost alternative to meet utility energy needs," according to Howard L.
Hawks, Chief Executive Officer of Tenaska Washington I L.P., managing
general partner of the Tenaska facility. "Tenaska clearly understands the
importance of working with our customers and keeping them competitive when
the customer is similarly motivated. During the last several months, we have
worked together to find innovative, cost-effective solutions to meet Puget
Sound Energy's needs primarily by taking advantage of current gas prices,
which are substantially lower than when our power contract was signed.
Together, we have taken a significant step to help Puget Sound Energy become
more competitive in the marketplace."
The restructured power supply arrangement is subject to the approval of
definitive agreements by both companies. The companies expect to close the
transaction by January 2, 1998.
Tenaska Washington Partners L.P. is a partnership consisting of the
affiliates of: Tenaska Inc.; Continental Energy Services, a subsidiary of
Montana Power Company; Illinova Generating Company, a subsidiary of Illinova
Corporation; and KU Capital Corporation, a subsidiary of KU Energy
Corporation.
Puget Sound Energy provides electric and natural gas service to more
than 1.1 million customers, primarily in Washington state's Puget Sound
region.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PUGET SOUND ENERGY, INC
Date: December 10, 1997
James W. Eldredge
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James W. Eldredge
Corporate Secretary and
Controller