RICHMOND, Va., Sept. 16, 2016 /PRNewswire/ -- Dominion
Resources, Inc. (NYSE: D), and Questar Corporation announced today
that they have completed their proposed merger, forming one of the
nation's largest combined electric and natural gas energy
companies.
Thomas F. Farrell II, chairman,
president and chief executive officer, said:
"We are pleased to complete our strategic combination with
Questar, and to continue serving our Questar customers in the West
with the same commitment and dedication to safety and excellence to
which they – and our customers along the Eastern Seaboard and
Midwest – are accustomed. Questar's high-performing regulated
businesses also improve our geographic diversity and enhance our
balance between electric and gas operations."
Questar's "hub of the Rockies" system is a principal gateway for
gas supply to Western states. Dominion expects that demand on
Questar's pipeline system will rise as Western states rely
increasingly on low-carbon, natural gas-fired generation to comply
with potentially stringent federal clean air requirements and to
support state-mandated renewable standards. Questar's gas
distribution operations benefit from being located in one of the
country's fastest growing regions.
"Questar's businesses are ideally located to take advantage of
the growth opportunities due to the changing energy landscape,
benefiting the economies of the states in which they operate,"
Farrell said.
The combined company includes:
- 2.5 million electric utility customer accounts in Virginia and North
Carolina;
- 2.3 million natural gas utility customer accounts in
Idaho, Ohio, Utah,
West Virginia and Wyoming;
- 1.3 million retail energy and related services customer
accounts in 13 states;
- 14,400 miles of natural gas gathering, storage and transmission
pipeline and nearly 51,000 miles of gas distribution pipeline;
- 6,500 miles of electric transmission lines and 57,300 miles of
electric distribution lines;
- 25,700 megawatts of electric production in 11 states; and
- More than a trillion cubic feet of natural gas storage.
Ronald W. Jibson, chairman,
president and chief executive officer of Questar, said:
"From our initial meetings with Dominion leaders it was evident
from our similar strategies, cultures, values, and employee and
safety focus that Dominion was an excellent company to combine with
to move us into the future. After working through a very smooth
merger, I'm more confident than ever that this opportunity to
combine with one of the nation's best energy companies will benefit
Questar customers, employees, shareholders and the communities we
serve."
Benefit to customers, communities
Questar – now
Dominion Questar – will operate as a first-tier, wholly owned
subsidiary of Dominion. Questar's principal operating companies –
Questar Gas, Questar Pipeline and Wexpro – have retained their
names as of closing.
Dominion Questar will maintain its significant local presence
with a local management structure drawn from existing Questar
employees. Questar Gas' headquarters also will remain in
Salt Lake City, along with a new
Western Regional operating headquarters there.
Effective today, Questar CEO Jibson has retired and has been
elected to Dominion's board of directors. Craig C. Wagstaff has been named president of
Dominion Questar. He will lead Dominion's Western natural gas
operations and be responsible for all current Questar operating
companies.
Other benefits of the Dominion-Questar combination include:
- A $75 million contribution to
Questar employee retirement plans, at Dominion shareholder
expense;
- Withdrawal of a $22 million rate
increase request in Utah, thereby
stabilizing base rates until 2020;
- An agreement in Wyoming to
freeze base rates at current levels until at least Jan. 1, 2020;
- A commitment to maintain Questar Gas' excellent customer
service levels, with frequent reporting to state public service
commissions;
- A $1 million per year increase in
charitable giving in Dominion Questar's service area for at least
the next five years, at Dominion shareholder expense;
- Establishment of a new Western region operating headquarters in
Salt Lake City; and
- Maintaining environmental monitoring and maintenance programs
at Questar Gas at or above current levels.
Jibson elected to Dominion's board of
directors
Dominion's board of directors has elected Jibson
as director, effective today. The election brings the size of the
Dominion board to 11.
"Ron Jibson will bring to
Dominion's board more than three decades of expertise in the energy
infrastructure field, with a strong reputation for providing
excellent customer service, protecting the environment and
operating safely and efficiently," Farrell said. "We look forward
to adding Ron's outstanding capabilities, intellect and insights to
our board."
Until his retirement today, Jibson, 63, served as chairman,
president and chief executive officer of Questar Corporation since
2012. Jibson joined Questar in 1980 and has held various operations
and engineering positions within the company and its gas
transmission and distribution subsidiaries. He has served or is
serving on a number of industry, corporate and community boards,
including the board of directors of the American Gas Association
(past chairman); Western Energy Institute (past chairman); Gas
Technology Institute; IDACORP, Inc.; his alma mater Utah State University's board of trustees
(chairman); the Salt Lake Chamber Board of Governors (chairman);
and the Utah Symphony/Utah Opera
board, among others. Jibson received a bachelor's degree in civil
engineering from Utah State and an MBA
from Westminster College.
Dominion Midstream
Dominion Midstream Partners, LP
(NYSE: DM), of which Dominion is the general partner and the
majority holder of limited partner units, is also expected to
benefit from the addition of Questar Corporation. "We expect
Dominion Questar to contribute more than $425 million of EBITDA to Dominion's inventory of
top-quality, low-risk MLP-eligible assets, supporting Dominion
Midstream's targeted annual cash distribution growth rate of 22
percent," Farrell said.
Dominion has agreed to take all necessary action to appoint a
current member of the Questar board as a director to serve on the
board of directors of the general partner of Dominion Midstream as
soon as practicable after such time as all or part of Questar
Pipeline is contributed to Dominion Midstream.
Terms of transaction
Under the terms of the merger
agreement, as of market close on Sept. 16,
2016, each Questar share has been canceled and shareholders
are to receive $25.00 per share of
common stock – or about $4.4 billion.
Dominion has also assumed approximately $1.5
billion of Questar's outstanding debt. Questar shareholders
of record as of the close of business Sept.
16, 2016, will also receive a pro-rated dividend of
$0.07018 per share of common stock,
payable Sept. 19, 2016.
Questar Corporation common stock will cease trading on the New
York Stock Exchange prior to market open on Sept. 19, 2016. Additional information for
Questar shareholders may be found at
https://www.dom.com/corporate/investors/shareholder-services/merger-information.
About Dominion
Dominion is one of the nation's largest
producers and transporters of energy, with a portfolio of
approximately 25,700 megawatts of generation, 14,400 miles of
natural gas transmission, gathering and storage pipeline, and 6,500
miles of electric transmission lines. Dominion operates one of the
nation's largest natural gas storage systems with 1 trillion
cubic feet of storage capacity and serves more than 6 million
utility and retail energy customers. For more information about
Dominion, visit the company's website at www.dom.com.
This release contains certain forward-looking statements that
are subject to various risks and uncertainties. Factors that could
cause actual results to differ from those in the forward-looking
statements may accompany the statements themselves. In addition,
our business is influenced by many factors that are difficult to
predict, involve uncertainties that may materially affect actual
results and are often beyond our ability to control. These factors
include, but are not limited to, financial market conditions
and/or the anticipated benefits from the merger
that may take longer to realize than expected. We
have identified and will in the future identify a number of
additional generally applicable factors in our reports on Forms
10-K, 10-Q and 8-K filed with the U.S. Securities and Exchange
Commission. We refer you to those discussions for further
information.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dominion-resources-combines-with-questar-corporation-300329643.html
SOURCE Dominion