Peoples Natural Gas Announces Agreement to Buy Equitable Gas Company
Western Pennsylvania energy companies focus their strengths in response to
changes in the natural gas industry
PITTSBURGH, Dec. 20, 2012
PITTSBURGH, Dec. 20, 2012 /PRNewswire/ --Peoples Natural Gas today announced
an agreement with EQT Corporation that will enhance each company's core
business and build the best future for the Pittsburgh-based companies'
customers. Under the agreement, Peoples Natural Gas will expand its core
business of local gas distribution by acquiring Equitable Gas Company, EQT's
distribution business in Pennsylvania, West Virginia and Kentucky. As part of
the transaction, EQT will receive cash proceeds of $720 million and select
midstream assets and commercial arrangements that will strengthen EQT's
"This agreement involves two longstanding Western Pennsylvania energy
companies working together to embrace our strengths and build the best future
we can for our customers, our region and our nation," said Morgan O'Brien,
President and CEO of Peoples Natural Gas. "At Peoples, our focus is on being
the best local distribution utility company, meeting the energy needs of our
customers and supporting the communities we serve."
The addition of Equitable Gas Company to the Peoples Natural Gas local
distribution system will greatly benefit the Western Pennsylvania community,
and beyond, by creating significant operational efficiencies and by enhancing
the safety and reliability of the system. Peoples Natural Gas is committed to
increased capital spending on the pipeline systems – as already demonstrated
at Peoples Natural Gas and its sister company, Peoples TWP in Butler,
Combining Equitable and Peoples will result in a more streamlined and
efficient operating system for customers, allowing the companies to avoid a
substantial amount of upcoming replacement costs where the systems overlap.
The expected savings of combining the two systems and their operations will be
passed on to all customers as those efficiencies are realized.
The new combined company will be committed to all customers of both utilities
in keeping Peoples Natural Gas one of the lowest utility bills in
Pennsylvania. And for those limited customers who today can choose between the
two separate systems for delivery service, they will be protected with
guaranteed extended rate protections.
Peoples expects the transaction to promote greater competition in gas supply,
since the combined systems are expected to attract more marketers and permit
them to operate more efficiently. In addition, Peoples will continue its
support of local gas producers.
"The natural gas industry is quickly evolving into the cleanest and most
economical solution for meeting this country's future energy needs," O'Brien
said, "and Western Pennsylvania is at the heart of this economic boom."
Chris Kinney, CEO of SteelRiver Infrastructure Fund North America, said, "In
2010, SteelRiver acquired Peoples, returned its headquarters to Pittsburgh,
and increased capital investments in the region. In the past two years,
Peoples has created more than 300 new jobs in Western Pennsylvania by shifting
work that had been previously performed elsewhere. We expanded our commitment
to Western Pennsylvania with the acquisition of Peoples TWP in 2011, with the
goal, once again, of strengthening the company through investments and
improved customer service. The acquisition of Equitable attests to our desire
for continued investment and long-term presence in the region, and allows
Peoples to pursue its objectives of growing and supporting the local economy."
EQT also has operations in Kentucky and West Virginia and, in purchasing
Equitable Gas Company, Peoples will expand its operations into those states.
The deal is subject to approval by various regulatory bodies, including the
Pennsylvania Public Utility Commission, West Virginia Public Service
Commission and Kentucky Public Service Commission, as well as the Federal
Energy Regulatory Commission and federal antitrust authorities. The
transaction is expected to close in the second half of 2013.
Peoples Natural Gas and its sister company, Peoples TWP, currently provide
safe and reliable service to approximately 420,000 homes and businesses in 18
western Pennsylvania counties.
SteelRiver Infrastructure Partners is an independent investment management
firm that invests in core infrastructure in North America for the long term,
seeking out assets and businesses that provide essential services with stable
cash flows and often regulated characteristics.
Media Contact: Barry Kukovich
SOURCE Peoples Natural Gas
Press spacebar to pause and continue. Press esc to stop.