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Gas merger on judge's desk

Joe Napsha
| Saturday, Nov. 18, 2006

Natural gas customers should know by February whether an administrative law judge favors Equitable Resources Inc.'s proposed purchase of Dominion Peoples Gas, but they won't know how the merger would affect their gas bill.

John Corbett, an administrative law judge for the state Public Utility Commission, said Friday he will begin to write a recommendation to the PUC on the proposed merger on Jan. 12. He must wait for the companies, government, industry and consumer groups to file opinions on the proposed $970 million acquisition.

Speaking at the conclusion of a four-day hearing on the deal at the State Office Building, Downtown, Corbett said his recommendation to the five-member PUC board is subject to responses by the interested parties, and then a vote by the board.

Pittsburgh-based Equitable remains hopeful the state regulators will approve the deal so that it can complete the purchase in the first quarter, said spokeswoman Pat Kornick. The company plans to use a combination of debt financing and borrowing to finance the purchase of Dominion Peoples Natural Gas and its sister company in West Virginia, Dominion Hope Gas Co.

If the transaction is approved by the state, Equitable will file rate adjustments. When that will occur, and the impact on rates, has yet to be determined, Kornick said.

Yesterday, Equitable avoided testimony opposing the deal by reaching tentative settlements with four entities: state Rep. Jake Wheatley Jr., the Mon Valley Unemployed Committee, the Office of Consumer Advocate and the PUC's Trial Staff. What Equitable did to resolve those objections will not be known until Dec. 1, when the documents become part of the public record, Corbett said.

Wheatley expressed concern in his written testimony about the impact of the merger on low-income customers and business opportunities for minority vendors and supplies. "At the end of the day, you will see some very good consumer protections ... and historic precedents for African-American businesses" that supply products and services to the gas company, Wheatley said.

The PUC should reject the merger if the gas companies do not ensure adequate protection and programs to help low-income customers, Harry S. Geller, an energy consultant for the Mon Valley Unemployed Committee, said in written testimony submitted yesterday.

The proposed merger would not help the 122,000 low-income customers within the service areas of Equitable and Dominion Peoples, unless those companies change their programs, said Geller, executive director of the Pennsylvania Utility Law Project of Harrisburg.

The companies did not present a clear plan for customer service after the merger, while the plans for serving the needs of low-income customers appear to be in conflict, Geller said.

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