The company that owns ENSTAR Natural Gas, an Anchorage gas utility, has sold the company to a Canadian company — TriSummit Utilities Inc. — for $1.025 billion.
The sale includes ENSTAR Natural Gas, a gas distribution company in Alaska with about 150,000 customers; the Alaska Pipeline Co., which operates transmission and distribution pipelines for ENSTAR; the company’s 65 per cent indirect interest in Cook Inlet Natural Gas Storage Alaska; and other ancillary operations, according to the seller, AltaGas.
TriSummit is an Alberta, Canada-based company that is in the natural gas business.
“The dedication and culture of ENSTAR, which is very similar to TriSummit’s, has provided them with a solid track record and makes this an excellent fit for our company,” said Jared Green, president and CEO of TriSummit. “Our top priority is to ensure a very smooth transition, maintaining the strong relationships ENSTAR has in its communities, and to fully support ENSTAR as they continue to provide customers with safe, reliable and affordable service. I look forward to working with the ENSTAR team to serve Alaska.”
“We are pleased to announce this transaction with TriSummit,” said Randy Crawford, president and CEO of AltaGas. “The Alaskan Utilities have a long history of delivering safe, reliable and affordable energy to its customers, operating with an industry-leading safety record, and driving positive outcomes for all of its stakeholders. We believe that TriSummit will be an excellent steward to the Alaskan Utilities stakeholders in the next chapter of its corporate life, along with the continued direction from the highly capable Alaskan senior leadership team and the dedicated employees that will be joining TriSummit post-closing.”
The transaction is seen as a strategic fit, enhancing TriSummit’s position as a growing North American utility and renewable energy company. It already operates in Alberta and British Columbia.
ENSTAR is the largest gas utility in the state of Alaska, servicing approximately 60 percent of the State’s population, with 3,626 miles of transmission and distribution pipeline. CINGSA, located in Kenai, is the only commercial, fully contracted, state regulated gas storage facility in Alaska.
Combined, ENSTAR and its 65 percent interest in CINGSA had 2021 average rate base of approximately $350 million.
The transaction is expected to significantly increase TriSummit’s scale, growing its consolidated rate base by approximately 40 percent to $1.5 billion Canadian dollars, and more than doubling its customer base. TriSummit will operate in four distinct regulatory jurisdictions, three in Canada and one in the United States.
“We are excited about the future of having ENSTAR join the TriSummit family. I would like to welcome ENSTAR’s employees and customers. We respect and value our employees and our customers and endeavour to provide the best customer experience and help build strong, vibrant communities. We look forward to the opportunity to do this,” said Green.
The sale was approved by the boards of directors of both TSU and AltaGas and is not subject to any financing contingency; financing from TSU’s indirect shareholders for all funds necessary is already in place. TriSummit expects the permanent financing of the transaction to be approximately 50 – 55 percent common equity with the remaining financing to be in the form of long-term debt. TriSummit anticipates having access to the U.S. private placement market as part of the permanent financing plan.
ENSTAR will maintain its existing headquarters in Anchorage and will continue to operate as a standalone utility in Alaska. Its current management team and employees will remain in place.
The sale is expected to close no later than the first quarter of 2023, subject to certain customary closing conditions, including including approval by the Regulatory Commission of Alaska and compliance with applicable requirements under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the satisfaction of customary closing conditions.