Rhode Island’s Providence Energy Corp.’s shareholders votedoverwhelmingly to approve a proposed merger with Austin’s SouthernUnion Co. this week. At the special shareholders’ meeting inProvidence on Monday, nearly 95% of those voting were in favor ofthe move.

ProvEnergy’s Chairman James H. Dodge said that the merger willbring change, but “we expect to preserve the essence of the company— our core businesses, our customers, our employees and even ourname.”

First announced last November, the proposed merger is on trackfor regulatory approval by late this summer. ProvEnergyshareholders would be paid $42.50 per share with the merger.

“I think it’s safe to say that one of the key factors in thismerger is that (ProvEnergy chairman) Jim Dodge was looking for apartner who shared his vision,” said James Grasso, vice presidentof ProvEnergy’s public and government affairs. “He wanted tomaintain the Rhode Island hub, which Southern Union wanted to do aswell, and we saw this as a good fit.”

“This move also has given us a strategic partner in such thingsas technology,” Grasso said, and he indicated that the merger willhelp with future plans in e-commerce ventures.

Grasso said the merger would not affect personnel in RhodeIsland at the present time. Southern Union runs a “lean” company,he said, but it also needs the expertise that ProvEnergy canprovide in the Northeast, a relatively new territory for thegrowing Texas utility.

Just last week, Southern Union received approval from Pennsylvaniaregulators concerning its pending mergers with ProvEnergy and twoother Northeast utilities, Massachusetts’ Fall River Gas and RhodeIsland’s Valley Resources (see Daily GPI, May16). Other governmental reviews are pending

Once completed, the growing utility would serve nearly 1.6million gas and electric customers in six states. Currently, itserves 1.2 million customers in Texas, Missouri, Pennsylvania,Florida and Mexico.

Providence Energy, which distributes and markets natural gas,heating oil, and petroleum products, electricity, and energyservices, serves 181,000 customers in Rhode Island andMassachusetts. It announced a merger agreement six weeks after theFall River agreement, on Nov. 15 (see Daily GPI, Nov. 16, 1999).

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