Black Hills Energy, the natural gas provider for North Central Arkansas, announced Tuesday a $15.4 billion all-stock merger with NorthWestern Energy. The combined company will serve about 2.1 million customers across eight states, including Arkansas.
“These two companies have been around for a long time: 142 years for Black Hills Energy and over 100 years for NorthWestern Energy,” Black Hills CEO Linn Evans said in a media call. “We think now is the right time to do that.”
The new company, which has not yet been named, will be headquartered in Rapid City, South Dakota, pending federal approval expected to take 12 to 15 months. Until then, the utilities will operate separately.
Evans said the first question customers ask is how the merger will affect rates. “Rates will stay the same as they are today in terms of this transaction,” he said. “It’s going to take 12 to 15 months for us to have this transaction approved, and meanwhile we will operate just like we always have.”
“We won’t necessarily see rates go down,” Evans said. “But because of optimization of our processes, optimization of our business model, we believe customers can see lower rates than they otherwise would have as standalone organizations.”
NorthWestern CEO Brian Bird said the merger gives the utilities “the appropriate scale and diversity to compete with other utilities. Not from a service standpoint, but for resources, including people, capital and being able to look at things like data centers.”
Energy economist Rob Godby of the University of Wyoming called it a “mutually beneficial merger,” noting both companies’ stocks rose after the announcement. “It really does look like a merger that makes sense territory-wise, it makes sense network-wise and it’s clearly not a buyout,” he said.
“These are interesting times in the energy business as we see rising costs across the nation,” Evans said. “And it’s not lost on us that we want to be able to serve our customers as efficiently and cost-effectively as we possibly can.”
For more on this story visit original reporting from Cowboy State Daily.
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