The Empire District Gas Co., a new subsidiary of The Empire District Electric Co., is seeking approval from the Missouri Public Service Commission (MPSC) for the purchase of the Missouri gas distribution operations of Aquila. The $84 million transaction was first announced in September (see Daily GPI, Sept. 22).
Empire is also seeking approval from the MPSC to adopt the existing commission-approved Aquila gas tariffs, including the base rates and purchased gas adjustment. In addition, the company is asking that new certificates of convenience and necessity be issued authorizing the provision of natural gas service in the involved service areas.
The Missouri gas properties consist of 48,500 customers, which includes about 42,650 residential, 5,600 commercial and industrial, and 250 transportation customers. These customers are in 44 Missouri communities in northwest, north central, and west central Missouri and are served with 1,274 miles of transmission and distribution mains.
The sale by Aquila is part of its utility divestment program. In September, the company reported definitive agreements to sell four utility businesses in Michigan, Minnesota, Missouri and Kansas for a total of $896.7 million, or about $20 million more than estimated in March when it announced its intention to divest the utility assets.
Based in Joplin, MO, The Empire District Electric Co. is an investor-owned utility providing electric service to approximately 157,000 customers in southwest Missouri, southeast Kansas, northeast Oklahoma, and northwest Arkansas. The company also provides fiber optic and Internet services, customer information software services, and has an investment in close-tolerance, custom manufacturing. In addition, Empire provides water service in three incorporated communities in Missouri.
The Empire District Electric Co. also announced Wednesday that it will make a non-cash adjustment to its previously reported third quarter earnings. Subsequent to the third quarter earnings release, the company said it has determined that approximately $1.3 million of pre-tax unrealized losses, as of Sept. 30, 2005, related to its gas hedging program should be reclassified from Other Comprehensive Income to Fuel Expense.
This reclassification decreased third quarter net income from $20.4 million to $19.6 million. Earnings per share decreased from $0.78 to $0.75 (fully diluted) and from $0.79 to $0.75 (basic).
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