BY Fraser Tennant
In a deal that will create the largest natural gas utility franchise in North America, Canadian pipeline operator Enbridge Inc. is to acquire three utilities from American power and energy company Dominion Energy, Inc. for $14bn.
Th three utilities are: (i) The East Ohio Gas Company, also known as Dominion East Ohio, which serves more than 1.2 million customers across more than 400 communities and 27 counties in Ohio; (ii) Questar Gas, which serves about 1.2 million customers across Utah; and (iii) the Public Service Company of North Carolina, also known as PSNC Energy, which serves more than 600,000 customers across 28 counties in North Carolina.
The deals for the three will consist of $9.4bn in cash and $4.6bn of assumed debt.
With the addition of these gas utility operations, Enbridge now has a significant presence in the US utility sector. Upon closing, Enbridge’s gas utility business will be the largest by volume in North America.
The acquisition of each gas utility is expected to close in 2024.
“Adding natural gas utilities of this scale and quality, at a historically attractive multiple, is a once-in-a-generation opportunity,” said Greg Ebel, president and chief executive of Enbridge. “The transaction also reinforces our position as the first-choice energy delivery company in North America.
“The assets we are acquiring have long, useful lives – and natural gas utilities are ‘must-have’ infrastructure for providing safe, reliable and affordable energy,” he continued. “The entire Enbridge team is looking forward to serving our customers with dedication, and to providing them with safe, reliable and affordable energy service for years to come.”
Enbridge’s primary gas utility, Enbridge Gas Inc., has a storied 175-year history, and serves about 75 percent of residents in the Canadian province of Ontario. Enbridge Gas and its affiliate, Gazifère, presently provide safe, reliable service through 3.9 million residential, commercial, institutional and industrial meter connections in Ontario and Quebec.
Mr Ebel concluded: “These gas utilities have each committed to achieving net-zero greenhouse gas emissions by 2050, and are expected to play a critical role in enabling a sustainable energy transition.”
News: Enbridge bets big on US gas with $14 billion bid for Dominion utilities