The proposed merger between Richmond, VA-based Dominion Resources Inc. and Salt Lake City, UT-based Questar Corp. came one step closer to completion Tuesday when Utah’s Public Service Commission signed off on the deal, the companies announced.
The final regulatory approval needed to finalize the transaction is now pending before the Wyoming Public Service Commission, the companies said. Questar’s shareholders approved the deal in May.
The combined company would boast one of the largest natural gas storage systems in the country and operate over 15,500 miles of transmission and gathering pipelines.
When Dominion, which owns roughly 25,700 MW of electric generation capacity, announced its plans earlier this year to pay $4.4 billion to acquire Questar, it came after a string of other mergers involving electric utilities looking to buy up natural gas distribution and transmission assets (see Daily GPI, Feb. 1).
But unlike similar mergers between Duke Energy Corp. and Piedmont Natural Gas Company Inc. (see Daily GPI, Oct. 26, 2015) and between Southern Company and AGL Resources Inc. (see Daily GPI, Aug. 24, 2015), the Dominion-Questar tie-up brings together utilities from completely separate operating areas.
Dominion’s assets and service territories are focused in the Mid-Atlantic, in states including Virginia, North Carolina, West Virginia, Ohio, Pennsylvania and Maryland. Meanwhile, Questar operates a retail gas distribution subsidiary serving Utah, Wyoming and Idaho, along with production, storage and transmission assets.
In March, Moody’s Investors Service concluded that the recent trend of power buys gas mergers was not motivated by “synergistic benefit” so much as a desire to diversify in a climate of slow electric demand growth (see Daily GPI, March 22).
The Dominion-Questar merger is expected to close this year after securing final regulatory approval.