Peoples Gas acquires its second Kentucky utility
WINCHESTER—Officials with Peoples Gas, a utility based in Pittsburgh, found Kentucky to be progressive in its stance toward utilities. That is one reason Peoples decided to buy its second Kentucky utility, Delta Natural Gas, for $270 million.
Peoples serves 700,000 customers in Pennsylvania, West Virginia and Kentucky, and is now adding Delta’s 36,000 customers. The company is open to further acquisitions if the opportunity arises, Barry Kukovich, director of community relations for Peoples, told American Gas. The utility acquired Kentucky’s Equitable Gas in 2013.
Based in Winchester, Kentucky, Delta operates 2,600 miles of pipelines in 23 counties. Peoples plans to increase Delta’s investment in infrastructure improvements and grow the business over time. It has already committed to replacing 186 miles of aging pipelines in the area. “A great many people there use primarily electric heat, so we see an opportunity to grow,” Kukovich said.
Kukovich said Delta customers will not see any increase in their rates, and all 148 employees will keep their jobs.
Under the terms of the transaction, Delta shareholders will receive $30.50 per share, according to a news release from Delta. Delta will be a wholly owned subsidiary of PNG Cos. LLC, the parent of Peoples, and will continue to be regulated by the Kentucky Public Service Commission.
Morgan O’Brien, president and CEO of Peoples, said in a news release that the company plans to modernize infrastructure in Kentucky, implement Peoples’ state-of-the-art technology solutions for Delta’s customers and “support community-based organizations and initiatives throughout central and eastern Kentucky.”
“One of Peoples’ key values is tied directly to the success of the communities it serves,” he said. “Our goals with these investments are driven by Peoples’ mission to make our customers’ lives better.”
Glenn Jennings, president and CEO of Delta Natural Gas, said Peoples, like Delta, is a highly regarded natural gas distribution company. “It shares Delta’s values, particularly our commitment to customer service and creating a great place for our employees to work. That is why I am pleased to announce this merger agreement, which is beneficial to all parties involved,” he said. “Our board of directors has considered the opportunity carefully and believes merging with Peoples is in the best interests of Delta’s shareholders, customers, employees and the communities we serve.”