American Gas - May 2014 - (Page 20)

state watch connecticut Such a Deal will become more comfortable with the sale as they get to know UIL better as a company. -Jennifer Pilla Taylor UIL agrees to buy nation's largest municipal utility NEW HaVEN, CT -Connecticut-based UIL Philadelphia's City Council and the Pennsylvania PUC still need to approve the sale. 20 AmericAn GAs may 2014 maine $1.5 Billion Question Holdings Corp. has agreed to buy Philadelphia Gas Works for $1.86 billion. The deal comes two years after Philadelphia Mayor Michael Nutter announced the city would explore the sale of PGW, the largest municipally owned natural gas utility in the United States. UIL, the parent company of United Illuminating, Southern Connecticut Gas, Connecticut Natural Gas, and Berkshire Gas, submitted the highest of several bids for PGW, according to a city press release. More than 30 entities formally expressed interest in buying PGW last fall. The sale still requires the approval of the Philadelphia City Council and the Pennsylvania Public Utilities Commission. Under the terms of the deal, UIL can withdraw its offer if it does not close by July 2015. "Energy is our core business, and UIL is well suited to operate the natural gas utility business in Philadelphia and make substantive investments in its infrastructure," UIL CEO James P. Torgerson said in a statement. "UIL has substantial experience running an urban natural gas utility and being an engaged civic partner in the communities we serve." With 500,000 customers, 6,000 miles of distribution line, 1,600 employees, and annual revenues of more than $600 million, PGW would become UIL's largest subsidiary. UIL currently serves about 700,000 electric and gas customers in Connecticut and Massachusetts. Under the terms, UIL has agreed to freeze rates through 2017 and honor PGW's collective bargaining agreement. It will also maintain dual headquarters in New Haven and Philadelphia. The total workforce may not dip below 1,350 for the next three years. The city expects to have between $424 million and $631 million remaining from the sale after paying off PGW's liabilities. Union officials as well as some consumers groups and city council members have expressed opposition to a sale. UIL spokesman Michael West told American Gas he believes Philadelphians Northeast could save big on electricity with infrastructure build-out aUGUSTa, mE -New England electricity customers could save more than $1.5 billion a year if natural gas prices in the region could be brought closer in line with what other parts of the Northeast pay, a new study by the Maine Public Utilities Commission has found. The study, "A Review of Natural Gas Capacity Options," was commissioned as part of sweeping energy bill approved last year that directed the MPUC to evaluate the costs and benefits of bringing additional natural gas pipeline capacity into New England. In the report, consultant Sussex Economic Advisers describes the dramatic impact that New England's inadequate pipeline capacity has on electricity prices, and concludes that adding "incremental natural gas pipeline capacity into the New England region would place downward pressure on the regional natural gas price indices and, therefore, benefit customers who use those price signals in transactions," such as electricity generators. The study shows that a reduction of the "basis differential"-the difference between the wholesale price of gas produced near the Marcellus Shale deposits in Pennsylvania and the gas delivered by pipeline to New England- by 75 percent would save Maine electricity customers alone more than $120 million a year. The study adds that in areas where new pipeline has been built or proposed to relieve congestion, the basis differential has fallen substantially. "This report highlights the imperative to move forward with basic infrastructure to access the domestic and world-class natural gas supplies in our backyard," said Patrick Woodcock, director of the Governor's Energy Office, in a news release. "It is critical that we cost-effectively manage New England's reliance on natural

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American Gas - May 2014