Utility CenterPoint unloads LDCs and pipelines for cash
Investor-owned utility CenterPoint Energy said April 29 it received $2.2bn in cash for the sale of its local distribution companies (LDC) in Arkansas and Oklahoma.
CenterPoint sold its natural gas LDC assets to Summit Utilities, which counts approximately 100,000 customers and 5,400 miles of pipeline in Arkansas, Colorado, Maine, Missouri and Oklahoma in its portfolio.
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Apart from the gas distribution companies, CenterPoint handed over 17,000 miles of pipeline in Arkansas, Oklahoma and Texas serving more than 500,000 customers to Summit as part of the transaction.
“We are excited that Summit has existing businesses in Arkansas and Oklahoma, which will facilitate the transition process for our employees and customers,” CenterPoint CEO Dave Lesar said.
CenterPoint in February told the Minnesota Public Utilities Commission it racked up a $500mn gas bill over a 10-day period in February. Arctic weather across much of the United States that month idled large parts of the nation’s energy sector and led to a sharp spike in demand for heating fuels, putting a notable premium behind the price for natural gas.
Lessar said the sale demonstrates how the company has been able to “recycle” its capital while at the same time honoring its commitment to shareholders. That commitment includes an annualised utility earnings/share growth of 6%-8%, he said.