#California regulators approve $12B merger of #Southern_Co ., #AGL_Resources RSS Feed

California regulators approve $12B merger of Southern Co., AGL Resources

California regulators have signed off on the Southern-AGL deal, and the companies say they expect to close the merger in the second half of this year.

AGL Resources is the parent company of Central Valley Gas Storage, a natural gas storage facility located in the Sacramento River valley, triggering the need for West Coast review. Commissioners voted unanimously to approve the deal, the companies said.

Once completed, the utility will control nearly 200,000 miles of electric transmission and distribution lines and more than 80,000 miles of gas pipelines. The combined utility’s 80,000 miles of gas pipeline could help to reduce supply constraints for gas plants across Southern’s service territories.

AGL Resources’ distribution operations include Nicor Gas in Illinois, Atlanta Gas Light in Georgia, Virginia Natural Gas in Virginia, Elizabethtown Gas in New Jersey, Florida City Gas in Florida, Chatanooga Gas in Tennessee and Elkton Gas in Maryland. AGL shareholders voted to approve the deal last year.
The deal represents a growing consolidation trend in the utility industry, pressed by stagnant load growths and declining power prices. Another factor is the Obama adminstration’s Clean Power Plan, which quickly propelled utilities to look for cleaner sources of fuel to cut 32% of carbon emissions by 2030 from the power sector. Despite the stay, utilities have indicated they will continue investing in natural gas and other clean energy technologies, citing expectations of more regulations down the road.

Many utilities have sought to acquire gas infrastructure – either distribution utilities or transmission or production facilities, to take advantage of the stable returns and to lock in lower commodity prices. AGL is a distributor, so Southern’s purchase will not yield a direct stake in gas production, but will give it a new foothold in the natural gas market.

Read full article at Utility Dive