Shenandoah Gas Co., a subsidiary of Washington Gas Light (WGL),agreed last week to sell its natural gas utility assets in WestVirginia to Mountaineer Gas Co. for an undisclosed sum. To ensurecontinued gas service in the area, Shenandoah Gas will providetransportation services through its Virginia pipeline toMountaineer Gas’ newly acquired pipe in West Virginia for sevenyears.

By entering into the contract, Mountaineer Gas, the largest gasprovider in West Virginia, stands to gain 3,600 customers inMartinsburg and surrounding areas in Berkeley County. A subsidiaryof the Energy Corp. of America, Mountaineer Gas will now be servingmore than 200,000 people in 47 of 55 counties in the state.

According to Don Supcoe, Mountaineer Gas vice president, thecompany gains an area it feels will blossom economically in thenear future. He also indicated that there may be more acquisitionsto come. “Our parent company likes to expand through acquisitions,”he said.

As for Shenandoah Gas, this move represents a refocusing effort.”I think Shenandoah wanted to focus its efforts on its base inVirginia,” said WGL spokeswoman Laurie Dunlap, “This deal providedthem with that chance.” The WGL subsidiary still serves 10,000customers in the northern Shenandoah valley of Virginia, includingthe counties of Clarke, Fredrick, Shenandoah, and Warren, as wellas the city of Winchester. Its dealings represent less than 2% ofWGL’s total natural gas deliveries.

Jim White, a WGL vice president, denied the move was acost-saving measure in light of the parent company’s announcementlast week that its FY98 (which ended Sept. 30) net income of $67.3million dollars was $13.4 million dollars less than FY97’s netincome. “We want to focus on productive assets. We feel that thelong-term earning capacity in that region would not be as high asother things we are invested in.”

The sale still must be approved by the West Virginia PublicService Commission, and FERC. A representative from Mountaineer Gasbelieves that these approvals will come within the next three tosix months.

John Norris

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