ENMAX Corporation on March 24 said that the transaction to purchase Emera Maine for about C$1.3bn ($959m USD) from Emera Inc., has successfully closed.
Including the assumed debt, aggregate enterprise value is $1.3bn USD on closing, ENMAX said, adding that with the acquisition, it has increased its regulated rate base by 50%, with 70% of ENMAX’s future cash flows being derived from regulated and non-commodity sources. ENMAX said that the acquisition will support its continued provision of stable and high-quality dividends to its shareholder, the City of Calgary.
Emera Maine will continue to operate as a stand-alone utility headquartered in Bangor, Maine, and will operate under a new name to be announced in the future, ENMAX said.
“In response to the COVID-19 global pandemic, both ENMAX and Emera Maine place priority on efforts to ensure the health and safety of employees and the continuity of safe, reliable service to customers,” ENMAX said. “Both companies have also taken steps to support customers and communities during this difficult time.”
In its own March 24 statement on the matter, Emera Maine said that its phone number, website, and billing address will remain unchanged.
“At this time, our focus remains squarely on the health and safety of our employees and the public,” the company said, adding that a media event to unveil its new brand identity will be announced at a future time.
Emera Inc., in a separate March 24 statement, noted that the sale of Emera Maine was originally announced in March 2019.
According to a March 19 order by the Maine Public Utilities Commission, Emera Maine, Maine Electric Power Company, Inc., and Chester SVC Partnership — referred to as the petitioners — in May 2019 filed a request for commission approval of a proposed reorganization that would allow ENMAX, acting through its wholly owned, indirect subsidiary, ENMAX US Holdings, to acquire all of the outstanding common stock of BHE Holdings Inc., which is the direct parent company of Emera Maine.
The commission noted that the order is the “Part I Order,” which describes the commission’s decision in the proceeding (Docket No. 2019-00097), and that a complete “Part II Order” that provides the background, analyses, and reasoning underlying the commission’s decision will be issued in the near future.
The commission also noted that during its 2019 session, the state Legislature enacted emergency legislation modifying the standard for approval of Section 708 reorganizations from a “no net harm” standard to a “net benefit” standard for reorganizations that would result in the transfer of ownership and control of a public utility or the parent company of a public utility. That standard applies in the current proceeding, the commission said.
The petitioners on March 11 filed a revised stipulation, which was signed by the Office of the Public Advocate, Eastern Maine Electric Cooperative, Houlton Water Company, ND Paper, A Climate to Thrive, and ENMAX.
Under statutory conditions, the revised stipulation noted that Emera Maine will not request an increase in its distribution rates that would become effective before Oct. 1, 2021, and that notwithstanding that prohibition, Emera Maine may file a petition formally beginning a distribution rate case after Dec. 31, 2020.
The revised stipulation also noted that ENMAX will provide shareholder-funded customer rate credits of $8.1m, with those rate credits to be implemented within a reasonable period of time following the closing date.
Another statutory condition calls for Emera Inc., to provide shareholder-funded low-income electric utility rate relief of $5m to be allocated to customers in Emera Maine’s service territory and the service territories of adjacent consumer-owned utilities that are eligible for assistance form the Low Income Home Energy Assistance Program in a manner determined in cooperation with the commission and the Office of Public Advocate.
Among other things, the revised stipulation also noted that as part of the transaction — or otherwise — ENMAX will not seek recovery from Emera Maine’s customers of any portion of the acquisition adjustment, including incremental goodwill, that may be created upon the consummation of the transaction; or any transaction fees or costs incurred in connection with the transaction.
The commission, in its March 19 order, said that it concludes that the required approval criteria — including whether the overall stipulated result is in the public interest — with respect to the revised stipulation have been met.
The commission said that the proposed reorganization in which ENMAX, acting through ENMAX US Holdings, is to acquire all of the outstanding common stock of BHE Holdings is approved.