Dominion, Equitable Extend Sale to Sept. 1

By The Associated Press

RICHMOND, Va. – Integrated gas and electric company Dominion Resources Inc. said Thursday its agreement to sell its Pennsylvania and West Virginia natural gas utilities to Equitable Resources Inc. has been extended at least until Sept. 1 as the companies await regulatory approval.

Before the extension, both companies had the option to end the agreement after June 30.

Dominion also said the agreement would be extended until Nov. 1 if the companies agree to close the sale of Dominion Peoples Gas earlier than the sale of Dominion Hope.

In March 2006, Pittsburgh-based Equitable Resources said it would buy the two natural gas utilities for $970 million.

The West Virginia Public Service Commission has delayed approving the deal as it investigates whether Dominion’s West Virginia utility manipulated natural gas supplies and prices.

“We don’t have approval yet,” Dominion spokesman Dan Donovan said.

The commission ordered further investigation after discovering transcripts that indicated Dominion Hope may have been manipulating natural gas supplies and prices while operating under a price cap that ended Jan. 1, 2004, said Billy Jack Gregg, director of the commission’s Consumer Advocate Division. “The prospect is that we actually were paying more than we should have” after the cap was lifted.

Gregg’s division also has an appeal of natural gas prices that Dominion Hope passed on to consumers in 2005. “If we’re successful on that appeal, that will lower rates,” he said.

Both situations weigh on the pending sale, Gregg said. “The question is: one, what if any repricing will be required for Hope’s supplies for their West Virginia rate payers, and two, will that affect the purchase price that Equitable is willing to pay?”

Dominion Peoples serves 357,000 customers in western Pennsylvania from its headquarters in Pittsburgh while Dominion Hope serves 116,500 customers in West Virginia from its headquarters in Clarksburg.

The Pennsylvania Public Utility Commission already has approved the Dominion Peoples Gas sale. The 3rd U.S. Circuit Court of Appeals is expected in September to render a decision on an appeal by the Federal Trade Commission seeking a delay of the sale until further FTC review. A U.S. District Court judge previously turned down that request, Dominion said.

AP-ES-07-05-07 1438EDT

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