Portland, 29 May (Argus) — MidAmerican Energy Holdings has signed an agreement to purchase NV Energy in a deal valued at about $10bn.
NV Energy is a Las Vegas-based energy holding company serving 1.3mn electricity and natural gas customers in Nevada. The company's chief subsidiaries are Nevada Power and Sierra Pacific Power, which together serve the vast majority of Nevada's power customers and control most of the state's transmission infrastructure.
“By joining forces with MidAmerican, we will gain access to additional operational and financial resources as we continue to position NV Energy to support the evolving energy needs of our state and work with public policy leaders and regulators to reshape Nevada's energy future,” NV Energy chief executive Michael Yackira said.
NV Energy will retain its name and operate as a separate subsidiary of MidAmerican, with its headquarters remaining in Las Vegas.
Completion of the transaction will leave MidAmerican with $66bn in regulated electric and gas utility assets and 8.4mn customers. It will also translate into an even larger western market footprint for the Berkshire Hathaway subsidiary, which is itself the parent of Pacific Power, Rocky Mountain Power and PacifiCorp Energy.
“The benefits we bring to NV Energy are the resources and strength of a global energy partner that lends stability, expertise, and access to competitively prices capital to support NV Energy's strategic focus,” MidAmerican chief executive Greg Abel said.
But NV Energy also brings MidAmerican a singular and potentially lucrative benefit – namely increased transmission access into California's massive electricity market. In short, the acquisition provides the missing puzzle piece for the energy imbalance market announced earlier this year by PacifiCorp and the California Independent System Operator. That effort has been criticized in part for the lack of transmission links between the two entities' service territories.
The two companies expect to close the transaction in the first quarter of 2014. The deal is still subject to approval by shareholders, as well as state and federal regulators.
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