Colorado regulators have approved the sale and transfer of Aquila Inc.'s utility operations in Colorado to Black Hills Corp. That leaves outstanding only the approval of Missouri officials for the multi-billion dollar, three-way transaction that will spell the end of Aquila and its predecessors, which have served portions of mid America since 1908.
South Dakota-based Black Hills will acquire Aquila's electric and gas operations in Colorado, Kansas, Nebraska and Iowa for $940 million, with the company's remaining electric assets in Missouri to be acquired by Missouri-based Great Plains Energy for $1.7 billion in cash and stock plus assumption of $1 billion of Aquila debt. The linked transactions were first announced in early 2007 (see NGI, Feb. 12, 2007)
The transfer of the company's electric and natural gas utility operations in the state was recently approved by the Colorado Public Utilities Commission. Negotiations are ongoing with Missouri regulators. The deadline on the purchase and sale agreements has been extended from February until May 1.
The transaction will mark the end of Aquila, formerly UtiliCorp, and predecessor companies, which were managed by the Green family since Lemuel K. Green started the Concordia Electric Co. in Osbourne, KS, 100 years ago. Rick Green is currently Aquila CEO. Spokesman Al Butkus said that all but about 50 of the current personnel will go with the new owners. The company already has sold off a number of assets.
Aquila, which long had focused only on utility operations, ventured into the burgeoning merchant energy trading market in the late '90s and 2000, accumulating a staggering debt load when that market, led by Enron, imploded.
Almost all the leading players among the natural gas and power marketing and trading companies took serious hits in that downturn. Calpine recently emerged from Chapter 11 bankruptcy; NRG and Mirant also both survived the bankruptcy route. Many of the larger companies such as El Paso, Dynegy, Duke, TXU, Reliant and Williams, took their hits, sold out of trading operations and moved on. Some smaller companies simply disappeared, as did Enron.
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