Peoples natural gas customers getting bill credit after utility's $4.3B acquisition

Most residential customers of Peoples Gas in Pennsylvania saw a discount on their recent bills as a result of the natural gas company being acquired in a $4.3 billion deal earlier this year.

Essential Utilities announced in mid-March that it had completed its acquisition of Peoples. That followed the state Public Utility Commission approving the transaction in January.

Peoples, which has about 740,000 customers in Western Pennsylvania, West Virginia and Kentucky, became a subsidiary of Essential. It remains headquartered in Pittsburgh, while Essential is based in Bryn Mawr.

The bill credit to customers was negotiated at the time of the transaction between the two companies with the PUC, Peoples spokesman Barry Kukovich said.

“This rate credit is part of the acquisition agreement,” he said. “It was agreed upon by the Public Utility Commission as a public benefit of the transaction.”

The one-time credit is a set dollar amount.

Most of Peoples’ 690,000 residential customers in Pennsylvania are getting $20.22 taken off their bill, Kukovich said.

The credit is slightly higher for about 60,000 Peoples customers, primarily in Butler County, who are former customers of T.W. Phillips Gas and Oil. Their credit is $29.27, Kukovich said.

The total value of the credit is $18.9 million, Kukovich said.

Service, rates remain the same

Customers will not be seeing any other changes to their service, bills, rates or payment plans, Kukovich said.

“This is a one-time benefit,” he said.

Essential changed its name from Aqua America in February. Under the Aqua and Peoples brands, Essential — a publicly traded water, wastewater and natural gas provider — serves about 5 million people across 10 states.

With Aqua Pennsylvania customers also receiving a credit, Essential committed to $23 million in rate credits for customers in 2020.

“Beyond this positive impact, there will be no other impact to customer bills at either utility as a result of the transaction,” Essential said in a news release.

Essential said no jobs will be lost as a result of the combination, and it plans to add employees internally and through contractors as it accelerates replacing gas mains in the Pittsburgh region.

The company said it plans to replace nearly 3,000 miles of old mains over about 15 years.

“The accelerated gas main replacement program will also improve the environment as we reduce methane emissions from old pipes that may be leaking,” Essential Chairman and CEO Christopher Franklin said. “Our increased need for employees and contractors to complete this work will bring even more jobs to the region.”