BOSTON, Mass. and HARTFORD, Conn. – Eversource Energy (NYSE: ES) today announced that it has reached an agreement to purchase the Massachusetts natural gas assets of Columbia Gas for $1.1 billion from NiSource. The acquisition will bring Columbia Gas operations in Massachusetts under local ownership by the largest energy company in New England.
Columbia Gas currently serves 330,000 natural gas customers in more than 60 communities in Massachusetts. Eversource has 300,000 natural gas customers and 1.5 million electric customers in 51 communities across the commonwealth. Many communities that Columbia Gas serves with natural gas already receive electric service from Eversource.
“Eversource is uniquely positioned to leverage the strengths of our current and future workforce, facilities, gas supply resources and business processes to achieve greater operational efficiency, while continuing to deliver on our unwavering commitment to safety and superior service for our customers,” said Eversource Chairman, President and CEO Jim Judge. “As the #1 rated energy company in the U.S. by Newsweek and the #1 ranked utility according to Forbes and JUST Capital for corporate social responsibility, we are focused on providing safe and reliable service to our customers while at the same time nurturing a diverse and engaged workplace for employees and working to protect the environment. We look forward to bringing that commitment to all of our new customers and employees.”
Under the asset purchase agreement, liabilities related to the September 2018 gas distribution incidents in the Merrimack Valley will remain the responsibility of Columbia Gas’ current parent company, NiSource.
Eversource recently announced an industry-leading strategy to achieve carbon neutrality in its operations by 2030. The energy company will extend the same carbon reduction initiatives in the extended service territory of Columbia Gas in order to achieve that aggressive goal.
Columbia Gas customers will have the opportunity to realize numerous benefits from the transaction including:
• Ownership by a larger, locally focused company with expertise and resources to excel at delivering safe and reliable energy for customers
• Improved safety and reliability through additional investments in infrastructure upgrades
• The advantage of locally based gas dispatch and emergency response in Massachusetts
• Expanded opportunities to benefit from Eversource’s #1 in the nation energy efficiency programs
• Improved potential to participate in demand response and other clean energy initiatives that Eversource is undertaking
• Potential for reduced gas supply costs and increased reliability through portfolio optimization and management
• A commitment to maintain appropriate staffing levels that enable safe and reliable operations
• Strong financial profile with access to Eversource’s top tier credit ratings that helps to lower financing costs for customers
“We have a strong track record of investing in infrastructure to significantly improve the reliability and safety of our systems,” said Eversource Gas President Bill Akley. “Our commitment to operational excellence and superior customer service will create value for customers, employees, shareholders, and the communities we serve.”
The transaction is expected to be accretive to Eversource’s earnings per share in the first 12 months after closing. The company plans to finance the transaction with a balance of new equity and debt that maintains its strong credit profile.
“We look forward to working with Columbia Gas to achieve the transaction and ensure a safe and smooth transition of services for customers in Massachusetts,” Judge added.
The transaction will require approval from the Massachusetts Department of Public Utilities and the U.S. Justice Department under the Hart-Scott-Rodino Act. Eversource and Columbia Gas intend to engage with key regulatory stakeholders and consumer advocates over the next 30 days to review the investments needed to operate the system, to minimize rate impacts and review key benefits for customers.
The parties expect to close the transaction by the end of the third quarter 2020.
Goldman Sachs & Co. LLC is serving as the exclusive financial advisor and Ropes & Gray LLP is acting as legal advisor to Eversource Energy on this transaction.