UGI Corp., an operator of natural gas and electric utilities in Pennsylvania, recently agreed to purchase Mountaintop Energy Holdings for $540 million, including the assumption of approximately $140 million of debt.
Mountaintop Energy Holdings owns Mountaineer Gas Co., the largest gas local distribution company in West Virginia.
The purchase is part of UGI’s goal of increasing adjusted earnings per share by 6 percent to 10 percent and dividends by 4 percent. The purchase also increases UGI’s regulated utility rate base by nearly 14 percent, and the number of customers served by 30 percent.
Mountaineer serves nearly 215,000 customers, and its system includes nearly 6,000 miles of distribution, transmission, and gathering pipelines.
“We see significant investment opportunities to continue, if not accelerate, the replacement of over 1,500 miles of bare steel pipelines and expand the reach of natural gas in West Virginia to both unserved and underserved areas,” John L. Walsh, UGI president and CEO, said.
“These investments will improve the safety and reliability of the distribution system and align with our environmental efforts to lower methane and other GHG emissions. We expect Mountaineer’s rate base to grow by a compound annual growth rate of approximately 10 percent- 12 percent over the long term.”
The deal will close during the second half of 2021, pending customary regulatory and closing conditions.