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Questar Corp., which provides natural-gas service to more than a million homes and businesses in Utah, Wyoming and Idaho, has been sold to Virginia-based Dominion Resources Inc. for $4.4 billion.
What that means for Utah consumers and the gas company's 1,700 employees was unclear Monday.
"These mergers or acquisitions can go any number of ways," said Michele Beck, director of the Utah Office of Consumer Services, which represents residents and small businesses in matters before the Utah Public Service Commission, which regulates Questar.
"They tell me we are unlikely to see any noticeable difference in how [Dominion] operates here in Utah. I guess time will tell."
Beck said her agency will "be watching and hoping."
"We've had a very good relationship with Questar, in recent years, that we feel has been beneficial to customers," she added. "We hope Dominion's purchase of Questar will not change that relationship."
Ron Jibson, Questar's chairman, president and CEO, said the change of ownership should not bring major changes for utility customers or employees.
"Our customers will continue to enjoy the same safe, reliable and low-cost services provided by the same high-performing Questar people who make our company great," he said in a new release announcing the purchase.
The release also said Questar employees will be given "due and fair consideration for continued employment and promotion opportunities within the new organization." Jibson contended the two companies have "similar cultures and commitment to customers, employees, communities and shareholders."
Questar shareholders will receive $25 per share, a 23 percent premium over Friday's closing price ($20.39).
That offer was mirrored closely by Questar Corp.'s performance Monday on the New York Stock Exchange, where the stock rose $4.60 to $24.90.
Dominion's stock slid 2.76 percent, falling from $72.17 at the end of Friday's trading on the New York exchange to $70.18 at Monday's close.
The deal will result in Salt Lake City becoming the Western hub for Dominion, which provides electrical and natural-gas service throughout the mid-Atlantic region, making it one of the country's largest energy companies.
Carl Tobias, a professor at the University of Richmond School of Law, said Dominion is "a huge player in Virginia government … [that's] used to having their own way."
"They're always in the paper because they're always running a pipeline somewhere in a way that's going to be an issue for someone," he said. "They're more than willing to litigate issues if they have to — and usually do pretty well."
The combined company would serve about 4.8 million electric and gas customer accounts in seven states, running 15,500 miles of pipelines for natural-gas transmission, gathering and storage.
Jibson will remain the Utah gas company's top executive until the transaction closes. Questar spokesman Darren Shepherd said the company expects standard regulatory approvals, antitrust clearance and approval by Questar's shareholders to be wrapped up by year's end.
Those approvals would include acceptance by the Utah and Wyoming public service commissions and the Idaho Public Utility Commission.
Besides heating homes and businesses, Questar produces, develops and stores natural gas along with operating more than 3,400 miles of transmission pipelines.
When the acquisition is completed, the company's name will change to Dominion Questar Gas. A current Questar board member will serve on Dominion's board, while another Questar trustee will join the board of an affiliated company, Dominion Midstream Partners.
"Dominion is very pleased to combine with Questar to establish a national footprint," Thomas Farrell II, Dominion's chairman, president and chief executive, said in the release.
"Like Dominion, Questar has a history of safe and reliable operations, integrity and a firm commitment to its employees and the communities it serves," he added. "Questar's customers can count on a continuation of the high-quality service they have enjoyed for years."
Farrell said Questar fit nicely into Dominion's corporate emphasis on "core regulated energy infrastructure operations. Questar boasts best-in-sector customer growth in states with strong pro-business credentials and constructive regulatory environments."
He added that "these high-performing regulated assets will improve Dominion's balance between electric and gas operations and provide enhanced scale and diversification into Questar's regulatory jurisdictions."
Dominion will take over Questar's outstanding debt and pledged to increase the gas company's level of community giving and to establish an advisory board of community and business leaders to "provide feedback on community issues."
While based in Virginia, Dominion is a familiar figure in Utah's energy sector.
The company is investing about $1 billion in solar-generating facilities in Beaver, Iron and Millard counties. All three, the company noted, are backed by long-term purchase agreements with local electric utilities.
Questar Corp.
Subsidiaries of the company, established in 1928 after natural gas was discovered in southwestern Wyoming, are:
Questar Gas • Home and business supplier.
Questar Fueling • Natural-gas fueling stations.
Questar Pipeline • Transportation and underground storage services.
Wexpro • Exploration and production.