On October 3, 2017, the CEOs of AltaGas Ltd. and WGL Holdings, Inc., David Harris and Terry McCallister, testified before the Maryland Public Service Commission on the benefits to combining the two companies.
The Commission held two-and-a-half weeks of evidentiary hearings as part of the ongoing regulatory review process of the proposed combination of the two leading energy companies. The companies demonstrated over the course of the hearings that AltaGas brings an excellent track record of strong financial and operational performance to Maryland, that together the companies will be even better positioned to deliver more diverse energy solutions to customers, and finally, that customers and communities will benefit from an array of new investments and commitments.
AltaGas is a financially strong, well-managed company with a solid existing base business and a successful track record of growth over the last 23 years. The company’s highly contracted, low-risk business model continues to deliver strong, stable returns to investors and exceptional service to its customers. AltaGas, through its wholly owned subsidiaries, provides utility service to 575,000 customers in the U.S. and Canada, including 450,000 in the U.S.
AltaGas and WGL Holdings are confident of the benefits of this proposed combination, as they are built upon the strong foundation of providing value for Washington Gas customers in Maryland. The combined company will be in an even stronger position to deliver exceptional service at affordable rates, more investment in the community and workforce training programs, as well as good secure jobs. The combination will better position Washington Gas to deliver more clean energy options to customers and the community in the future. Following regulatory approval, there will be no rate increase as a result of the combination.
Here are just some of the ways MD consumers will benefit from the merger:
- No layoffs are planned as a part of this combination.
- AltaGas intends to retain existing Washington Gas executives to assist in managing AltaGas’ U.S. regulated utility business.
- AltaGas will fund $30.5 million for one-time bill credits to be distributed among all Maryland customer classes.
- AltaGas will provide $4.0 million to develop and fund an Affordable Housing Multifamily Natural Gas Initiative for Maryland.
- The combined company will enhance our local presence post-Merger with the relocation of the head office of the AltaGas U.S. power business to the Greater Washington, D.C. metropolitan area.
- AltaGas will protect Washington Gas employees’ pay, benefits, job security, retirement, and pensions.
- Washington Gas will have the same complement of dedicated employees to deliver safe and reliable service.
- Customers will experience a seamless transition, with continued, safe and reliable service.
- Washington Gas will significantly increase the Washington Area Fuel Fund over the next 5 years, providing emergency utility bill assistance to qualifying low and moderate income customers.
- Washington Gas will continue offering assistance to low income customers including weatherization and installation of energy efficient technology.
- Following regulatory approval, the combined company will significantly increase charitable contributions, invest even more in workforce training programs, and help make clean energy more affordable for our customers.
The companies have filed extensive testimony with the Commission to demonstrate the benefits of combining the two companies.
Below are two excerpts from the testimony of Mr. Harris and Mr. McCallister filed with the Maryland Public Service Commission on April 24, 2017.
From David Harris:
“AltaGas and WGL are committed to the communities where Washington Gas provides service. The combined company intends to enhance our local presence post-Merger with the relocation of the head office of the AltaGas U.S. power business to the Greater Washington, D.C. metropolitan area. The Merger will enhance the combined company’s commitments to the existing community in which Washington Gas operates, and Washington Gas will continue its relationships with its local communities.
“I am confident that the Merger will strengthen Washington Gas and its continued ability to provide safe and reliable service to its customers. The Merger maintains the value propositions espoused by Washington Gas, its service commitments to customers, and the continued commitment to the communities in which it serves. Washington Gas will continue to provide safe and reliable service to its customers at affordable rates. And AltaGas will ensure that Washington Gas continues to have access to the capital resources needed to invest in the safety and reliability of its system.”
From Terry McCallister:
“For WGL and for the Washington, D.C. region, this Merger brings a new business to the area while retaining existing businesses. The Merger keeps the Washington, D.C. region at the center of WGL’s existing businesses, and retains and supports WGL’s own growth plans.
“WGL’s charitable, community, and local supplier presence will continue in the Washington, D.C. area. AltaGas is committed to continuing and increasing charitable giving in the region. It is dedicated to building on the strong community commitment and presence of WGL, Washington Gas and its employees. It will also continue Washington Gas’ commitment to leadership in growth of supplier diversity efforts.”
Additional Background Information:
Both AltaGas and WGL have a tradition of investing in the communities they serve, and are committed to continuing investments in Maryland. Both companies look forward to working with community groups, local leaders and regulators to make sure the combined company remains committed to offering reliable service at affordable rates. WGL’s customer bills will not go up as a result of the combination.
Status of Regulatory Review Process
All required federal approvals are complete, including:
- Approval from the Federal Energy Regulatory Commission (FERC), on July 6, 2017, an independent agency that regulates the interstate transmission of natural gas, electricity and oil;
- Expiration of the waiting period as of July 17, 2017, pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), when the combination was deemed approved by the Federal Trade Commission and the Department of Justice and;
- Approval from the Committee on Foreign Investment in the United States (CFIUS) on July 28, 2017.
- The staff to the Virginia State Corporation Commission filed a productive report on the proposed combination in August. That report and responses to the report are under consideration by the Virginia Commission, with a decision expected in late October 2017.
- Following the evidentiary hearings, the companies and other parties in the case will file briefs with the Commission. The Commission is expected to issue its decision in early December 2017.
District of Columbia:
- The intervenors in the case have filed their initial testimony. AltaGas and WGL will file responses in late October. Hearings in front of the District of Columbia Public Service Commission will occur in December 2017 with a decision expected in the first half of 2018.
AltaGas and WGL will continue to work constructively with the regulatory commissions in all three jurisdictions within WGL’s service territory to make sure all consumers benefit, existing jobs are protected, new jobs are added, and clean energy is moved forward.
To learn more about the combination, please visit www.WGLdeliveringmore.com
AltaGas (TSX:ALA) is an energy infrastructure company with a focus on natural gas, power and regulated utilities. AltaGas creates value by acquiring, growing and optimizing its energy infrastructure, including a focus on clean energy sources. For more information visit: www.altagas.ca
About Washington Gas
Washington Gas Light Company is a regulated natural gas utility providing safe, reliable natural gas service to more than 1.1 million customers in the District of Columbia, Maryland and Virginia. A subsidiary of WGL Holdings, Inc., the company has been providing energy to residential, commercial and industrial customers for 169 years.
WGL (NYSE: WGL), headquartered in Washington, D.C., is a leading source for clean, efficient and diverse energy solutions. With activities and assets across the U.S., WGL consists of Washington Gas, WGL Energy, WGL Midstream and Hampshire Gas. WGL provides options for natural gas, electricity, green power and energy services, including generation, storage, transportation, distribution, supply and efficiency. Our calling as a company is to make energy surprisingly easy for our employees, our community and all our customers. Whether you are a homeowner or renter, small business or multinational corporation, state and local or federal agency, WGL is here to provide Energy Answers. Ask Us. For more information, visit us at www.wgl.com.