The company will add more than half a million customers in Arkansas and Oklahoma through the deal
Summit Utilities to acquire the Arkansas and Oklahoma gas distribution assets of CenterPoint. (Credit: Anita starzycka from Pixabay)
Summit Utilities has agreed to acquire the Arkansas and Oklahoma gas distribution assets of CenterPoint Energy for $2.15bn in an all-cash deal.
The consideration includes unrecovered storm-related incremental natural gas costs of nearly $425m in cash incurred in February 2021, which is subject to true-up at the closing of the deal.
Through the acquisition, Summit Utilities will add nearly 525,000 customers served by CenterPoint’s Arkansas and Oklahoma gas distribution systems. The deal also includes 27,358km of gas main pipeline that runs across Arkansas, Oklahoma and Texarkana, and Texas.
Summit Utilities president and CEO Kurt Adams said: “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.”
By growing its service territories in Arkansas and Oklahoma, Summit Utilities expects to gain additional scale and capacity to push its objective of serving natural gas customers in the two states.
The company had expanded its presence in Arkansas and Oklahoma through the acquisition of Arkansas Oklahoma Gas in 2017. The acquisition had given the company approximately 60,000 natural gas utility customers in the two states.
CenterPoint Energy said that the proceeds from the deal will enable it to recycle capital to fund its 10% planned compound annual rate base growth.
CenterPoint Energy president and CEO Dave Lesar said: “We are excited that Summit has existing businesses in Arkansas and Oklahoma, which will facilitate the transition process for our employees and customers.
“Summit has an industry track record of being a high-quality operator and we are confident they will continue to provide safe, reliable, and low-cost natural gas service to our customers in Arkansas and Oklahoma.”
The deal, which is subject to regulatory approvals and other customary closing conditions, is expected to close by the end of this year.