Drawing a close to an earlier chapter in the utility holding company's almost decade-long history, San Diego-based Sempra Energy Monday confirmed it has found a buyer, Great Falls, MT-based Energy West Inc., for its two small, start-up natural gas distribution utilities in the East -- in Bangor, Maine, and North Carolina. Collectively, the two utilities have slightly more than 1,000 customers.
The two companies jointly announced the deal as an execution of two stock purchase agreements between them, involving Penobscot Natural Gas Co. and Frontier Utilities. The total price to be paid by Energy West for the two utilities collectively is $5 million, subject to adjustments for changes in working capital items, the two companies said.
The sale could take up to four months to a year to obtain regulatory approvals, the companies said. Besides the regulatory commission approvals in the respective states, both deals are conditioned upon "the receipt of certain other approvals by third parties," the companies said.
Energy West is a natural gas, propane and energy marketing company serving the Rocky Mountain states. The two distribution utilities Sempra is selling are Frontier Energy LLC, a gas distribution utility that Sempra began from scratch, moving into six counties with a total population of 262,000 collectively; and Penobscot Natural Gas Co., Inc., the parent of Bangor Gas Co. LLC, a 10-year-old utility serving 12 communities in and around Bangor.
Energy West CEO Dave Cerotzke said the Sempra utilities are a good fit for his firm. "Our focus is serving smaller and emerging utility markets," Cerotzke said. "We are very excited with this opportunity to grow our business by moving into two areas that fit so well within our core strength."
In contrast, Sempra's President/COO Neal Schmale said the small utilities were not core to Sempra's growth strategically going forward. That focus for Sempra is "on natural gas supply, transmission and storage infrastructure, and our two California utilities," Schmale said.
This transaction ends Sempra's dabbling with utilities outside of its two main California companies --San Diego Gas and Electric Co. and Southern California Gas Co. However, through its Global group of companies, Sempra owns interests in other gas and electric distribution utilities in Argentina, Chile, Mexico and Peru, and Sempra officials have said that the Southern American interests will be sold as attractive buyers emerge.
Sempra announced in December it has decided to sell its interests in two Argentine natural gas distribution companies. The company is looking for buyers for its 37% interest in Camuzzi Gas Pampeana SA and its 39% interest in Camuzzi del Sur SA, both based in Buenos Aires, where Sempra has been in continuing disputes with the Argentine government. The company said it would record a non-cash impairment to 4Q earnings of $200 million connected with the properties.
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