Lineman with NorthWestern Energy restring a power line in York on April 1 as heavy snow downed lines, cutting off power to the town.
Lincoln's natural gas provider, Black Hills Corp., announced Tuesday it is planning to merge with another regional natural gas company.
The two companies, Black Hills and NorthWestern Energy, are combining into a single electric and natural gas utility company in an all-stock merger, according to a news release from the two companies. The combined company will operate under a new name to be announced later and will serve about 2.1 million customers.
However, its operating companies will keep their names, meaning Lincoln customers will likely still see the Black Hills Energy brand.
Black Hills is headquartered in Rapid City, South Dakota, and NorthWestern Energy is based in Montana.
The new company will have a combined market capitalization of about $7.8 billion and NorthWestern Energy stockholders will receive 0.98 shares of Black Hills stock at the close of the transaction. Black Hills stakeholders will have the majority share of the combined company with 56%, meanwhile NorthWestern Energy shareholders will have the remaining 44%.
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Linn Evans, the CEO of Black Hills Corp., will continue in his role through the close of the merger and will retire at the end of the transaction. The CEO and president of NorthWestern Energy, Brian Bird, will lead the new merged company, which will be based in Rapid City, South Dakota.
The transaction is expected to close in 12 to 15 months. Federal and state regulators will have to approve the merger, including the Nebraska Public Service Commission, Evans said.
Evans said the combination of the two companies will create more value for consumers.
"The combined company will have greater scale and financial strength to consistently deliver for customers across our service territories and invest at the pace and scale that today's energy transformation demands," Evans said.
Black Hills provides natural gas services in Wyoming, Colorado, Kansas, Iowa, Arkansas and Nebraska, including Lincoln. It also provides electric utilities in Wyoming, South Dakota, Montana and Colorado.
NorthWestern Energy operates in Montana, South Dakota, Wyoming and Nebraska. The company mainly operates in western Montana and eastern South Dakota, but lists services in Grand Island, North Platte and Kearney.
Bird said the new company will be larger and more resilient.
"Together, we will be better positioned to meet rising demand, accelerate investment in energy and grid infrastructure and support customers and communities through a rapidly evolving energy landscape," Bird said.
The merger comes as the company is seeking to adapt to industry changes. Black Hills is seeking a natural gas rate increase for its customers in Lincoln, which the company attributed to inflation and infrastructure costs.
The proposed increase is by an average of about $6.27 per month, or about $75.24 a year. That number could vary depending on usage and other factors. The average monthly bill for a residential customer before the change was about $66.38, but increased to $72.65, a 9.4% monthly change.
That increased rate is already in effect, but customers could be reimbursed if the Nebraska Public Service Commission decides on a lower rate. The commission is set to hold three town halls on the rate increase Tuesday and Wednesday.
Reach the writer at [email protected] or 402-473-7391.
On Twitter @NealHFranklin
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