Two publicly traded natural gas companies that serve a large portion of Nebraska outside of Omaha have announced plans to merge.
Black Hills Energy and NorthWestern Energy announced Tuesday that their boards have approved plans for the companies to combine operations.
Black Hills, based in Rapid City, South Dakota, serves more than 300,000 customers across the state, including Lincoln, Columbus, Norfolk and Scottsbluff. Northwestern serves more than 40,000 customers, mostly in Grand Island, Kearney and North Platte.
The new company will be headquartered in Rapid City, but it will be led by the current CEO of NorthWestern, Brian Bird, who said in a news release that the merger will produce, “a premier regional regulated utility company.”
Combined, the companies will have roughly 1.4 million natural gas customers and 700,000 electric customers, a rate base of $11.4 billion and a market value of about $7.8 billion based on current stock prices.
“Together, we will be better positioned to meet rising demand, accelerate investment in energy and grid infrastructure, and support customers and communities through a rapidly evolving energy landscape,” Bird said. “NorthWestern and Black Hills are best-in-class operators, and we are confident that our closely aligned cultures and skilled workforces will enable us to successfully bring the companies together.”
Both companies have instituted recent rate increases in Nebraska. NorthWestern was approved for a 4% increase that went into effect July 1. Black Hills raised rates a total of nearly $35 million annually beginning Aug. 1, but the increase still has to be reviewed by the Nebraska Public Service Commission, which could approve a lower increase.
The companies said the merger is likely to take 12-15 months to complete and will be subject to approval from the Federal Energy Regulatory Commission as well as regulators in the states in which they operate.