Clearing an important milestone in its plans to acquire Westcoast Energy, Duke Energy announced it had received approval from the British Columbia Utilities Commission (BCUC) to acquire indirect control of the public utilities owned wholly or in part by Westcoast and regulated by the BCUC.

The Westcoast Energy utilities subject to the BCUC approval order dated Nov. 14 include Pacific Northern Gas Ltd. (PNG), Pacific Northern Gas (N.E.) Ltd. (PNGNE), Centra Gas British Columbia Inc. (Centra BC) and Centra Gas Whistler Inc. (Centra Whistler).

Vancouver-based Westcoast Energy currently owns approximately 41% of the outstanding non-voting Class A common shares of PNG and all of the outstanding voting Class B common shares of PNG. PNGNE is a direct wholly owned subsidiary of PNG. Centra BC and Centra Whistler are indirect wholly owned subsidiaries of Westcoast Energy.

The order is not expected to impact the previously announced separate agreements that Westcoast Energy has reached with other parties to sell all of the common shares of Centra BC and Centra Whistler for approximately C$208 million. In preparation for the merger, Westcoast announced two divestitures in October, including selling its Centra Gas units to BC Gas Inc. and another deal worth C$176.7 million, which sends its Ontario-based Union Energy and Westcoast Capital Energy Services companies to the City of Edmonton’s Epcor Utilities Inc. (see Daily GPI, Oct. 23).

Duke Energy and Westcoast Energy also announced they have received a routine request for additional information and documentary material from the Federal Trade Commission following from the FTC’s Hart-Scott-Rodino Act review of the proposed acquisition. The companies intend to provide the additional information and documentary material promptly and do not expect the request to have a material impact on the timing of the consummation of the proposed acquisition.

If the acquisition arrangement is approved by Westcoast Energy’s common shareholders and optionholders, and subject to the arrangement being approved by the British Columbia Supreme Court and the other conditions of closing being satisfied or waived, Duke Energy and Westcoast Energy expect the acquisition will be completed during the first quarter 2002. The acquisition, valued at US$8.5 billion, including $4 billion in debt assumption, was announced Sept. 20 (see Daily GPI, Sept.21).

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