* UPDATED *

Puget Sound Energy announced Monday that a tentative multi-party agreement has been reached that could ease the way for a merger with an Australia-based investment group.

The company said that the staff of the Washington Utilities and Transportation Commission has approved the settlement along with several other interested parties.

Groups in Skagit and Island counties have begun to organize in opposition to the $7.4 million merger between Bellevue-based PSE and Macquarie Consortium, the investment group formed to acquire the investor-owned utility.

But PSE says the parties that had filed petitions with the WUTC challenging the proposed merger have now agreed to a settlement of all issues.

In addition to the WUTC staff, those parties included the Industrial Customers of Northwest Utilities, Northwest Industrial Gas Users, the Energy Project, the Northwest Energy Coalition and The Kroger Co. The Cogeneration Coalition has indicated it will not oppose the settlement.

No other details were available Monday evening. WUTC officials were unavailable for comment.

The PSE announcement said that the parties have notified the administrative law judge in the WUTC case that they will file a settlement stipulation Tuesday or Wednesday.

The WUTC commissioners must sign off on the proposed settlement and sift other information before deciding whether to approve the merger. The commission’s staff had earlier recommended against the deal.