CenterPoint Energy sold its Arkansas and Oklahoma natural gas local distribution company, or LDC, assets to Summit Utilities for $2.1 billion in cash.
The assets include approximately 17,000 miles of main pipeline in Arkansas, Oklahoma, and Texarkana serving more than half a million customers.
Including the recovery of approximately $425 million for unrecovered storm costs, CenterPoint will make $1.7 billion in cash on the deal. The transaction is anticipated to close by the end of 2021, subject to various regulatory approvals.
“I could not be more excited to share this announcement today. Summit Utilities is a seasoned operator of utility assets in the region and the ideal company to acquire these assets. We are excited that Summit has existing businesses in Arkansas and Oklahoma, which will facilitate the transition process for our employees and customers. Summit has an industry track record of being a high-quality operator, and we are confident they will continue to provide safe, reliable, and low-cost natural gas service to our customers in Arkansas and Oklahoma,” CenterPoint President and CEO Dave Lesar said.
Lesar said this deal will have no impact on the company’s targeted 6 percent to 8 percent annualized earnings per share growth rate.
“Further, we will also be eliminating the Oklahoma and Arkansas storm-related incremental natural gas cost from our balance sheet,” Lesar added.
J.P. Morgan Securities and RBC Capital Markets served as CenterPoint Energy’s financial advisors.
CenterPoint Energy serves more than 7 million metered customers in Arkansas, Indiana, Louisiana, Minnesota, Mississippi, Ohio, Oklahoma, and Texas.