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Mountaineer Buys Washington Gas's WV Assets

November 9, 1998
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Mountaineer Buys Washington Gas's WV Assets

Shenandoah Gas Co., a subsidiary of Washington Gas Light (WGL), agreed last week to sell its natural gas utility assets in West Virginia to Mountaineer Gas Co. for an undisclosed sum. To ensure continued gas service in the area, Shenandoah Gas will provide transportation services through its Virginia pipeline to Mountaineer Gas' newly acquired pipe in West Virginia for seven years.

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

According to Don Supcoe, Mountaineer Gas vice president, the company gains an area it feels will blossom economically in the near future. He also indicated that there may be more acquisitions to 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 in Virginia," said WGL spokeswoman Laurie Dunlap, "This deal provided them with that chance." The WGL subsidiary still serves 10,000 customers in the northern Shenandoah valley of Virginia, including the counties of Clarke, Fredrick, Shenandoah, and Warren, as well as the city of Winchester. Its dealings represent less than 2% of WGL's total natural gas deliveries.

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

The sale still must be approved by the West Virginia Public Service Commission, and FERC. A representative from Mountaineer Gas believes that these approvals will come within the next three to six months.

John Norris

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