Regulator, Senator Smile on Southwest-Oneok
Southwest Gas of Las Vegas and Oneok Inc. of Tulsa, OK, received the
blessing of Nevada's Consumer Advocate and a Nevada state legislator for
their proposed merger.
Fred Schmidt, the state consumer advocate in the Nevada Attorney General's
Office, said his office performed a preliminary evaluation of a competing
offer for Southwest Gas by Southern Union, and concluded that, "we
did not think they had the financial capability to pull off the offer that
they put forward without substantially jeopardizing the current rate levels
that customers pay in Nevada."
Comments favoring the merger came during one of two consumer sessions
conducted by the Public Utilities Commission of Nevada May 26 and 27. The
sessions are part of the Commission approval process of the Southwest Gas-Oneok
combination. Evidentiary hearings on the case are scheduled to start June
State Sen. Randolph Townsend (R-Washoe), chair of the State Senate Committee
on Commerce and Labor, which oversees all utility matters and the Public
Utilities Commission, also addressed the hearing. "This merger will
provide significant benefits to consumers as well as shareholders."
Southern Union gained permission early last month to join an existing
lawsuit against Southwest Gas in a last-ditch attempt to overtake Oneok
as the winner in the race to merge with Southwest. The lawsuit accuses
Southwest Gas' board of directors of refusing to negotiate with Southern
Union in good faith. None of the parties involved would comment further
on the situation as of press time.
The original lawsuit was filed by Southwest shareholders in San Diego
County's Superior Court. Southern Union said the original lawsuit accuses
the Southwest board of seeking only to protect itself during the past merger
Southern Union is asking the court for permission to directly solicit
Southwest's shareholders to oppose the Southwest-Oneok agreement and to
support Southern Union's efforts to merge.
The combination of Oneok and Southwest gas, which was announced in December,
would create the largest stand-alone gas distributor in the United States,
followed by Columbia Energy (see NGI Dec. 21,
1998). Oneok-Southwest would be the fourth largest gas and electric
Joe Fisher, Houston
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