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FTC Challenges Equitable, Dominion Deal

Reuters
Thursday, 15 Mar 2007 | 3:05 PM ET

Equitable Resources said it would fight to defend its planned aquisition of a subsidiary of Dominion Resources.

Equitable issued a statement saying it would contest the U.S. Federal Trade Commission's decision to challenge the company's proposed purchase of Peoples Natural Gas, also known as Dominion Peoples.

Earlier, the FTC voted four to one to file an administrative complaint and seek a preliminary injunction that would block the $970 million deal.

Equitable and Peoples are the only competitors in the distribution of natural gas to nonresidential customers in some parts of Allegheny County, Penn., the FTC said.

"By removing Dominion Peoples as a competitor through this transaction, Equitable obtains a monopoly in the distribution of natural gas to many nonresidential customers in the Pittsburgh area," said FTC competition bureau chief Jeffrey Schmidt.

Equitable's proposed acquisition of Dominion Peoples must also be approved by Pennsylvania's public utilities commission, which is expected to announce its decision later this month or in early April, the FTC said.

The FTC has not yet filed for a preliminary injunction in federal court, because the companies can not consummate the deal until after the utilities commission issues its decision, the FTC said.

The FTC said the deal also includes Equitable's purchase of Hope Gas, another subsidiary of Dominion, which it is not challenging.

Equitable would acquire Dominion Peoples' natural gas distribution system, which covers 9,400 square miles in southwest Pennsylvania and serves more than 350,000 customers, and its midstream natural gas system and storage facilities, the FTC said.

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