Southern Company Gas announced that Pivotal Utility Holdings, Inc., a subsidiary of Southern Company Gas, has entered into agreements to sell the assets of its utility operating divisions Elizabethtown Gas and Elkton Gas to South Jersey Industries in an all-cash transaction valued at $1.7 billion. Southern Company Gas is a subsidiary of electric utility giant, Southern Company.
The bulk of the purchase prices covers Elizabethtown Gas, a supplier, which has more than 280,000 customers in New Jersey. Elkton Gas has about 6,000 customers. The Elkton utility, under various owners, seemed content to service the county seat of Cecil County.
In the past couple of years, Dover-based Chesapeake Utilities has moved into areas of Cecil County outside of Elkton. The lack of natural gas service outside Elkton has long been a drawback in economic development efforts. Chesapeake has grown rapidly in recent years, as cheaper natural gas supplies came online from Marcellus deposits in Pennsylvania.
“This transaction, which we anticipate completing by third quarter 2018, will strengthen the balance sheets of Southern Company Gas and Southern Company by reducing existing financing requirements,” said Thomas A. Fanning, CEO of Southern Company. “In addition to maximizing value for Southern Company shareholders, the transaction is beneficial to our company and aligns with our overall business strategy to drive growth and prosperity.”
Elizabethtown Gas and Elkton Gas customers will continue to provide service at New Jersey Board of Public Utilities (NJBPU) and Maryland Public Service Commission (MPSC) approved tariff rates. South Jersey Industries also will maintain commitments to Elizabethtown Gas and Elkton Gas employees, including honoring all collective bargaining agreements in place at the time of close and pension benefits.
The transaction will involve regulatory approval in Maryland and New Jersey and antitrust regulators.
South Jersey Industries is an energy services holding company comprised of a natural gas utility, South Jersey Gas, which serves approximately 381,000 residential, commercial and industrial customers in the seven southernmost counties of New Jersey. South Jersey Industries also operates several non-regulated enterprises.
