Northern States Picking up 20,000 Natrogas Customers
Minneapolis-based Northern States Power Co. will add about 5,000
natural gas and 15,000 propane customers in four states through the
acquisition of Natrogas Inc., also of Minneapolis. The deal
requires regulatory approval.
Natrogas subsidiary Western Gas Utilities Inc. serves 5,000 gas
customers in Minnesota. NSP and Western will merge, and the gas
customers will become part of the regulated NSP gas utility's
operation and be served from NSP's St. Cloud, MN, regional office.
"Merging Western into NSP Gas will give us access to a growing
area west of Minneapolis. The addition of the Natrogas propane
business moves NSP closer to becoming the single provider of our
customers' energy needs," said Cyndi Lesher, NSP Gas president. She
said NSP provides electricity to most of the natural gas
communities served by Western and also has electric operations in
many of the propane communities.
Natrogas of Minneapolis provides retail and wholesale liquefied
propane service to 15,000 customers in 20 locations throughout
Minnesota, Wisconsin, North Dakota and South Dakota. Propane
operations will become a subsidiary of NSP through a
stock-for-stock deal. Steve Neidermire, manager of new business
development for NSP Gas, will become general manager and chief
operating officer of the propane operations when the merger is
completed. Also part of the deal is Natrogas' wholesale propane
business, North American Energy Inc., in Hankinson, ND.
"Historically, we've worked with the company and kind of always
been interested in their natural gas piece, as well as other LDCs
in the area," Neidermire said. "I think it's really the combination
and the size of the company that attracted us. It's local.
Certainly the natural gas customers fit very well with our existing
service territory, and it's a growth area." There are no plans to
expand the LDC assets to be acquired, Neidermire said, other than
to accommodate growth. He said the company will benefit from
combining gas supply and transportation contracts with its existing
Other NSP gas acquisitions in the last few years are Natural Gas
Inc. of Richmond, WI, and Black Mountain Gas Co. of Cave Creek, AZ,
Natrogas revenues exceed $20 million annually from gas sales of
700 MMcf and propane sales of 25 million gallons. NSP distributes
gas to more than 475,000 customers in Minnesota, Wisconsin, North
and South Dakota, Michigan and Arizona, in addition to providing
electricity to about 1.5 million customers in the upper Midwest.
The stock-for-stock exchange will be accounted for as a pooling
of interests and requires approvals from the Minnesota Public
Utilities Commission and the North Dakota Public Service
Commission. It is not expected to affect NSP's proposed merger with
New Century Energies of Denver.
Joe Fisher, Houston