Colorado-based Summit Utilities, the parent company of Fort Smith-based Arkansas Oklahoma Gas Corp., announced Thursday (April 29) it has signed a definitive agreement to acquire the Arkansas and Oklahoma gas distribution assets of CenterPoint Energy for $2.15 billion.
The deal includes $425 million in cash of unrecovered storm-related incremental natural gas costs incurred in February 2021.
The deal will significantly boost Summit’s customer base, which is about 100,000 customers in five states. CenterPoint’s Arkansas and Oklahoma gas distribution systems serve approximately 525,000 customers and include 17,000 miles of gas main pipeline across Arkansas, Oklahoma and Texarkana, Texas. Of the CenterPoint customers, there were 381,961 residential customers and 47,931 industrial customers in Arkansas as of Dec. 31, 2020.
“In 2017, Summit expanded its footprint to Arkansas and Oklahoma with our acquisition of Arkansas Oklahoma Gas Corporation. Today, we couldn’t be more excited to announce our plans to serve more communities in these two great states with the acquisition of CenterPoint’s Arkansas and Oklahoma gas distribution systems,” said Summit Utilities President and CEO Kurt Adams. “CenterPoint has built a strong reputation for quality customer service and we are eager to carry on that tradition, and continue to help families, businesses and industries throughout Arkansas and Oklahoma meet their energy needs through the delivery of safe, reliable and affordable natural gas services.”
The transaction is anticipated to close by the end of 2021, subject to customary closing conditions. The sale must be approved by the Arkansas Public Service Commission and the Oklahoma Corporation Commission.
CenterPoint first announced in December 2020 it sought to sell the Arkansas and Oklahoma business to help finance a $16 billion capital investment plan. CenterPoint CEO Dave Lesar predicted at the time the operations in Arkansas and Oklahoma would attract numerous potential buyers.
“This is a good set of assets. And I believe that there’s going to be tremendous amount of demand for them in the marketplace. One thing I learned a long time ago in business, you never put a business up for sale that you’re not very confident you’re going to move. And we’re very confident that there’s going to be value there for these businesses,” Lesar said during a Dec. 7, 2020 Investor Day conference.
Summit Utilities owns natural gas distribution and transmission subsidiaries that operate in Arkansas, Colorado, Maine, Missouri, and Oklahoma, including Fort Smith-based Arkansas Oklahoma Gas Corp.
Houston-based CenterPoint Energy, Inc. (NYSE: CNP) provides electric transmission and distribution, power generation and natural gas distribution operations that serve more than 7 million metered customers in Arkansas, Indiana, Louisiana, Minnesota, Mississippi, Ohio, Oklahoma and Texas. As of Dec. 31, 2020, the company owned approximately $33 billion in assets and also owned 53.7 percent of the common units representing limited partner interests in Enable Midstream Partners.