The Avista Corporation has signed an agreement giving it possession of the Alaska Energy and Resources Company (AERC) for US$170 million.
AERC, which is the parent company of the Alaska Electric Light and Power Company (AEL&P), will now be a wholly-owned subsidiary of Avista via its power and gas arm, Avista Utilities, which is headquartered in Spokane, Wash.
AERC’s board of directors said in a statement that it sought a new owner primarily due to continuity of ownership issues, the desire to provide AERC shareholders liquidity, and the need for sources of new capital necessary to meet the long term and growing electric requirements of Juneau.
“AERC’s Board of Directors wanted to find a qualified utility buyer that would focus on providing reliable and competitively priced electric service, be a contributing member of the Juneau community and provide an environment for AEL&P employees to continue to realize job satisfaction and accomplishment,” the company said. “Avista, whose corporate culture is remarkably similar to that of AEL&P, satisfies these needs very well.”
The deal will be funded through the issuance of Avista common stock to the shareholders of AERC. The transaction is expected to close by July 2014 after the parties complete regulatory and other closing terms.
AEL&P will maintain its current corporate structure, the company said, with current management and employees remaining in place.
The utility’s hydroelectric fleet includes four plants that have a cumulative output capacity of around 80 MW. The company’s newest hydropower project, the 14.3-MW Lake Dorothy, went on line in 2009.
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