Press Release

PUC Approves Agreement for Equitable Resources to Purchase Dominion Peoples

Published on 4/13/2007

Filed under: Gas

HARRISBURG, Pa. – The Pennsylvania Public Utility Commission (PUC) today approved the settlement agreement for Equitable Resources Inc. to purchase Dominion Peoples.

“The approval of this merger goes toward creating a stronger company and ensuring the reliability of service for consumers,” said Commission Chairman Wendell F. Holland. “The company will maintain its headquarters here in Pennsylvaniaand has provided assurances of stability for jobs. But with that said, be assured that this Commission will be closely monitoring the status of competition in that market.”

“I reluctantly support our staff’s recommendation to approve this transfer of ownership," said Commission Vice Chairman James Cawley. " Even though this is a stock acquisition and not a merger, the public interest standard...applies, and therefore we must find affirmatively that public benefit will result from the change of ownership and that the change of control will affirmatively promote the service, accommodation, convenience, or safety of the public in some substantial way. The vital issue always is the same: How much public benefit is "substantial"? Although I believe the standard has been met here (although barely), nothing prevents us from improving upon settlement provisions—especially where there exist serious objections from responsible parties—to ensure that the standard has been met.”  (Vice Chairman Cawley's full statement.)

The Commission voted 4-0 to approve the acquisition, finding that the partial settlement reached in the case was in the public interest by affirmatively promoting the service, accommodation, convenience or safety of the public in some substantial way.  Terrance Fitzpatrick also issued a statement.

The settlement provides for the:

• Creation of a Service Quality Index for residential and small business customers that will establish performance standards to ensure the service quality will not decline as a result of the merger;
• Formation of a Universal Service Collaborative Group that will work with the company in shaping its future plans for low-income and energy conservation programs;
• Continuation of current funding levels for community organizations and the Hardship Fund for at least three years; and
• Commitment to reduce barriers for consumers to enroll in Customer Assistance Programs.

The company also will:

• Not request a base rate increase before Jan. 1, 2009, and not include the costs associated with the acquisition in any rate filing;
• Reduce Purchased Gas Cost rates by about $10 million;
• Increase use of native Pennsylvania natural gas with the goal of stimulating other areas of the local economy;
• Take several steps to increase the safety of its natural gas distribution system;
• Develop a program to increase the hiring of minority and low-income applicants; and
• Make improvements in operational practices the will positively impact the competitive retail gas market;

The partial settlement was filed by the companies and several parties in the case including: the state’s Office of Consumer Advocate; the PUC’s Office of Trial Staff, state Rep. Jake Wheatley; Mon Valley Unemployed Committee; Independent Oil and Gas Association of PA; and Amerada Hess Corp./Constellation NewEnergy-Gas Division.

On March 31, 2006, Equitable and Dominion Peoples filed a joint application with the PUC for the sale of Dominion Peoples’ natural gas distribution utilities in Pennsylvania to Equitable. Dominion Peoples serves about 357,000 homes in central and southwestern Pennsylvania. Equitable serves about 270,000 homes in southwestern Pennsylvania and West Virginia. Dominion’s parent company also is seeking to sell its West Virginia operations to Equitable.

The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as stewards of competition. For recent news releases, or more information about the PUC, visit our website at www.puc.state.pa.us.

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Docket No. A-122250F5000

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