AltaGas, a Canadian company, wants to merge with Washington Gas at the purchase price of $4.5 billion. Washington Gas is the primary producer and supplier of natural gas in the Washington, D.C. region.
AltaGas has already gotten approval from national government agencies such as Federal Energy Regulatory Commission, the Federal Trade Commission, the U.S. Department of Justice and the Committee on Foreign Investment in the United States.
Sandra Mattavous-Frey, the People’s Counsel of the District of Columbia, is skeptical about the proposed merger. (Courtesy photo)
For the merger to go forward, AltaGas must be approved by Public Service Commission of the District of Columbia as well as its counterparts in Maryland and Virginia. The merger, as proposed, has made many Ward 8 residents anxious.
The Ward 8 Democrats hosted a symposium: “Washington Gas Buyout: Discussing the Impact on Consumer Energy Bills and Community Benefits Agreement” on Jan. 20 at the R.I.S.E. Demonstration Center. A robust discussion took place with 50 attending.
The panelists were John O’Brien, president of AltaGas U.S. operations, Sandra Mattavous-Frye of the District of Columbia’s Office of the People’s Counsel, and Nina Dodge of the DC Climate Action.
Mattavous-Frye isn’t a proponent of the merger and explained why. “AltaGas is a Canadian company and therefore a foreign company,” she said. “AltaGas has a low credit rating and its planned merger with Washington Gas doesn’t have any cost-savings for District consumers. When we look at a merger in the District of Columbia, it has to be determined if it is in the public interest of the city.”
Mattavous-Frye said the District is undergoing massive demographic and economic seismic change and any merger must be good for all residents “in all eight wards.”
Dodge said her organization “isn’t an intervening party” in the AltaGas-Washington Gas application but has taken a position against it. “Washington Gas has a stronger commitment to the D.C. market and it is a more diversified company,” said Dodge. She said AltaGas won’t match the commitment to the city and if the merger goes through it would negatively impact consumers in terms of rising rates and perhaps result in uneven service.
Mattavous-Frye said Washington Gas has an “A” credit rating while O’Brien confirmed that AltaGas has a Triple BBB standing.
Dodge also said that the merger may not be necessary because a growing number of District residents are using solar power instead of gas. “There are solar houses in Deanwood,” Dodge said, speaking of the fast-gentrifying community in Northeast Washington. “Even though installing solar panels on the houses are expensive at first, they recoup those losses by the savings they incur over time. Besides, all over D.C. many buildings codes don’t need gas or any of the fossil fuels for energy.”
John O’Brien, a former Massachusetts state senator, told the audience the merger would be good for District residents, especially Ward 8 residents. “District consumers would be in a stronger position with this merger than Washington Gas alone,” O’Brien said. “We are investing in the new energies such as wind and we have a battery storage project. We are involved in the leading technologies.”
O’Brien said AltaGas’ credit rating is the same as Exelon, the energy giant, and his company will not initially raise rates if the merger goes through.
Mattavous-Frye disagreed with O’Brien in terms of his company’s sensitivity toward Ward 8 residents. “They tend to think that one cookie fits all, and that is simply not true,” she said. “You have to look at the demographics.”
Mattavous-Frye said Ward 3, the wealthiest ward in the city, and its disconnection rate in terms of services is very small whereas in Ward 8, the poorest ward, it is much more significant.
Mary Cuthbert, a Ward 8 advisory neighborhood commissioner, raised many concerns to O’Brien and eventually to Marcellous P. Frye Jr., a vice president at Washington Gas. Both conceded that more community outreach is needed and they intend to have a strong Washington presence, including embracing a proposal to have the president of Washington Gas on the AltaGas board.
Several members of the LiUNA labor union were present at the symposium and endorsed the merger. One member said the merger would mean higher wages and better benefits for workers.
O’Brien noted that the $17.15 million community benefits package would include a one-time credit on District consumers’ gas bill and grants and support for gas-related projects in the city. Mattavous-Frye said AltaGas’ community benefits agreement may not be all that it seems to be.
“We should be focusing on long-term benefits,” she said. “The benefits they are offering are . . . temporary.”
A final decision by the District’s public service commission on the merger is expected this April.