Maryland Public Service Commission Approves $4.5 Billion Merger of WGL Holdings, Inc. and AltaGas Ltd.
04 Abril 2018 - 7:16PM
Business Wire
Maryland joins Virginia, the Federal Energy Regulatory
Commission, the Federal Trade Commission, the Department of
Justice, and the Committee on Foreign Investment in approving the
combination
The District of Columbia Public Service Commission’s review is
continuing
AltaGas and WGL are reviewing the Commission’s changes in the
order and expect to respond soon
The Maryland Public Service Commission announced its approval
Wednesday of the combination of WGL Holdings, Inc. (NYSE:WGL) with
AltaGas Ltd. (TSX:ALA). The $4.5 billion merger brings together two
complementary energy companies committed to delivering more value
for customers in Maryland and promises more investment in energy
infrastructure and clean energy across the state.
“We are confident that our combination with AltaGas will benefit
residents, businesses and the economy of Maryland. We appreciate
the Commission’s careful consideration of the many positive
benefits this merger brings to the state as they thoroughly
evaluated our application. We are reviewing the Commission’s final
order and will provide our joint response as soon as possible,”
said Terry D. McCallister, Chairman and CEO of WGL Holdings, Inc.,
the parent company of Washington Gas. “Washington Gas will be an
even stronger company as part of the AltaGas family and the new
resources available as part of this combination will provide
benefits for the state for years to come.”
“We are pleased that the Maryland Public Service Commission has
approved our acquisition of WGL,” said David Harris, President and
Chief Executive Officer of AltaGas. “This marks another major
milestone in bringing together AltaGas and WGL to deliver long-term
value to customers and shareholders alike as we build a stronger
future together.”
The Commission voted 4 to 1 in favor of the merger. According to
the final order issued by the Commission, AltaGas and WGL will
provide benefits that include:
- $30.5 million for a one-time $50 rate
credit for Maryland residential heating customers and a rate credit
for non-residential customers. In addition, the companies committed
that operational savings resulting from the merger will be passed
through to customers.
- $22.8 million to Montgomery and Prince
George’s counties for customer, educational, workforce development
and energy efficiency programs, with at least 20% of such funds
directed to benefit low- and moderate-income residents in both
single- and multifamily communities.
- $100 million to expand natural gas
infrastructure in the state of Maryland:
- $70 million over 10 years in the
Washington Gas service area (which will be included in the
Washington Gas’ rate base, subject to Commission approval).
- $30.32 million to promote economic
development, job creation and the expansion of natural gas
infrastructure to underserved parts of Maryland, with a majority of
this funding dedicated to the Washington Gas’ service
territory.
- New Renewable Energy Resources
developed in Montgomery and Prince George’s counties.
- AltaGas' U.S. power business head
office will be relocated to Prince George’s County.
- $4 million to further enhance
safety.
- Washington Gas will be required to
strengthen its already robust efforts to increase supplier
diversity through a variety of new strategies.
The companies have also made commitments to support all
Washington Gas’ service territories in Maryland, Virginia and the
District of Columbia, including:
- $12 million in charitable contributions
and local community support in the Washington, D.C., metropolitan
area over the next 10 years, with at least $475,000 in
contributions annually to organizations serving Maryland
residents.
- $1.5 million over five years to help
pay gas bills for Washington Gas low- and moderate-income
customers, with at least $595,000 dedicated solely to Maryland
residents, administered through the Washington Area Fuel Fund.
- $2.4 million over five years to add an
additional Pipeline Damage Prevention Trainer/Educator in each
jurisdiction.
- $350,000 in incremental funding for
pipeline damage prevention awareness and education across all three
Washington Gas jurisdictions.
- $450,000 for a renewable bio natural
gas study.
The Commission is giving the companies until April 16, 2018, to
indicate whether they will accept the new conditions that it is
imposing as part of its approval.
McCallister said Wednesday that while WGL and AltaGas leadership
begin the detailed review of the 100-page order to fully understand
all of the Commission’s requirements, customers will ultimately
benefit from the combination of the companies. In addition, he said
customers will continue to enjoy the high quality service they have
come to expect from the 170-year-old company that has called the
District of Columbia home since its founding.
“Our customers will experience a seamless transition and
continue to receive safe, reliable, service provided by the same
complement of dedicated Washington Gas employees just as they
always have,” McCallister said. “We will keep all of our current
facilities including our walk-in offices.”
With the favorable decision in Maryland on Wednesday, the
companies now have one remaining regulatory review to complete in
the District of Columbia. AltaGas and WGL are continuing to work
with the District of Columbia Public Service Commission (DC PSC)
and other parties involved in the regulatory proceedings to achieve
a favorable decision that benefits all customers, protects existing
jobs and adds new ones, and supports clean energy solutions for the
future. A final decision from the DC PSC is expected in
mid-2018.
As of April 4, 2018, the combination has received the following
approvals:
Shareholders
- Approval from WGL Holdings, Inc.
shareholders on May 10, 2017
Federal
- Approval from the Federal Energy
Regulatory Commission (FERC), an independent agency that regulates
the interstate transmission of natural gas, electricity and oil, on
July 6, 2017
- Expiration of the waiting period as of
July 17, 2017, pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (HSR Act), when the merger was deemed
approved by the Federal Trade Commission and the Department of
Justice
- Approval from the Committee on Foreign
Investment in the United States (CFIUS) on July 28, 2017
State
- Approval from the Virginia State
Corporation Commission on October 20, 2017
- Approval from the Maryland Public
Service Commission on April 4, 2018
About WGL
WGL (NYSE: WGL), headquartered in Washington, D.C., is a leading
source for clean, efficient and diverse energy solutions. With
activities and assets across the U.S., WGL consists of Washington
Gas, WGL Energy, WGL Midstream and Hampshire Gas. WGL provides
natural gas, electricity, green power and energy services,
including generation, storage, transportation, distribution, supply
and efficiency. Our calling as a company is to make energy
surprisingly easy for our employees, our community and all our
customers. Whether you are a homeowner or renter, small business or
multinational corporation, state and local or federal agency, WGL
is here to provide Energy Answers. Ask Us. For more information,
visit us at www.wgl.com.
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WGL Holdings, Inc.News Media:Brian Edwards,
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202-624-6129
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