Utah’s largest supplier of natural gas is heading to new ownership after Alberta, Canada-based Enbridge announced this week that it is buying Dominion Energy’s Utah operations.
If the sale is approved by federal and state regulators, Dominion’s Utah customers — about 90% of the state — will get their natural gas from a foreign company that is a major player in the pipeline business, both natural gas and petroleum. The deal also includes Dominion’s Wyoming and Idaho operations.
“We move about 30% of the crude oil produced in North America, we transport nearly 20% of the natural gas consumed in the U.S., and we operate North America’s third-largest natural gas utility by consumer count,” Calgary-based Enbridge states on its “about us” page.
The sale will include Dominion’s Utah exploration and development arm, Wexpro, which supplies much of the gas Utahns burn. Including Wexpro, Dominion employs about 1,000 people in the state.
“As one of the largest and most experienced operators of energy infrastructure assets in North America, Enbridge will be an outstanding steward of these businesses to the benefit of employees, customers, and communities alike,” said Robert M. Blue, Dominion Energy chair, president, and chief executive officer, in a statement. “Specifically, as part of the agreements, Enbridge has agreed to provide significant protections for existing employees, honor existing union commitments, and maintain local operating leadership.”
The $14 billion deal also includes East Ohio Gas and Public Service Co. of North Carolina. Enbridge is paying $9.4 billion in cash and assuming $4.6 billion of Dominion’s debt. Dominion’s Utah operations constitute $4.3 billion of the price, including $3 million in cash and $1.3 billion in debt.
That large assumption of debt evidently spooked investors after the Tuesday announcement. Enbridge’s stock price dropped 5.8% on Wednesday but stayed steady at $33.21 Canadian per share on Thursday.
Dominion’s announcement said the deal requires clearance under the Hart-Scott-Rodino Act, approval from the Federal Communications Commission and the Committee on Foreign Investment in the United States, as well as review or approval from Idaho Public Utilities Commission, North Carolina Utilities Commission, Public Utilities Commission of Ohio, Utah Public Service Commission and Wyoming Public Service Commission.
“Closing of each transaction is expected to occur following receipt of each respective state regulatory approval(s), as required, and are not cross-conditioned upon each other,” the company said.
“It will receive a full regulatory review,” said Michele Beck, director of the Utah Office of Consumer Services, which represents Utah consumers in matters before the Utah Public Service Commission.
Beck noted that Dominion acquired its predecessor, Questar Gas, in 2016 in a $4.4 billion acquisition, so the process for such a transfer is not new for regulators. “We’ll be using that experience.”
