Enstar Changes Hands to a Different Canadian Company
MAXXYUSTAS | ENVATO
One Alberta-based company is taking over the natural gas supplier for Southcentral Alaska from another Calgary company that has owned the utility since 2012.
Meet the New Boss
TriSummit Utilities reached an agreement with a subsidiary of AltaGas for a subsidiary of TriSummit to acquire 100 percent of Enstar Natural Gas Company and the Alaska Pipeline Company, the Norstar Pipeline Company, and a 65 percent indirect interest in Cook Inlet Natural Gas Storage Alaska (CINGSA) in an all-cash transaction valued at approximately C$1 billion (US$800 million), subject to closing adjustments.
AltaGas had paid more than US$1 billion to acquire Enstar’s previous holding company, Michigan-based Semco, in a deal that also included a Michigan gas utility.
“The dedication and culture of Enstar, which is very similar to TriSummit’s, has provided them with a solid track record and makes this an excellent fit for our company,” says Jared Green, president and CEO of TriSummit. “Our top priority is to ensure a very smooth transition, maintaining the strong relationships Enstar has in its communities, and to fully support Enstar as they continue to provide customers with safe, reliable, and affordable service. I look forward to working with the Enstar team to serve Alaska.”
Enstar is the largest gas utility in Alaska, and largest utility of any kind by customer base, serving approximately 60 percent of the state’s population with 3,626 miles of transmission and distribution pipeline from Homer to Houston. CINGSA, located in Kenai, is the only commercial, fully contracted, state regulated gas storage facility in Alaska. Combined, Enstar and its 65 percent interest in CINGSA had an average rate base in 2021 of approximately US$350 million.
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“We are pleased to announce this transaction with TriSummit,” says Randy Crawford, president and CEO of Enstar’s parent company, AltaGas.
The transaction is expected to significantly increase TriSummit’s consolidated rate base by approximately 40 percent to C$1.5 billion, more than doubling its customer base. TriSummit provides approximately 133,000 customers across Canada with natural gas and renewable power generation assets. After the close of the transaction, TriSummit will operate in four distinct regulatory jurisdictions, three in Canada and one in the United States.
“We are excited about the future of having Enstar join the TriSummit family. I would like to welcome ENSTAR’s employees and customers. We respect and value our employees and our customers and endeavor to provide the best customer experience and help build strong, vibrant communities. We look forward to the opportunity to do this,” Green says.
TriSummit expects the permanent financing of the transaction to be approximately 50 to 55 percent common equity, with the remaining financing to be in the form of long-term debt. TriSummit anticipates having access to the US private placement market as part of the permanent financing plan.
Following the close of the transaction, Enstar will maintain its existing headquarters in Anchorage and will continue to operate as a standalone utility in Alaska. Its current management team and employees will remain in place.
The acquisition is expected to close no later than the first quarter of 2023, subject to regulatory and government approvals and clearances, including approval by the Regulatory Commission of Alaska and compliance with applicable requirements under the US Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the satisfaction of customary closing conditions.
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