Alaska Electric Light and Power Company announced Monday that it intends to merge with Spokane-based energy provider Avista Utilities.
Avista is acquiring Juneau’s primary energy provider’s parent company, the Alaska Energy and Resources Company, for $170 million, minus regular transaction-closing fees. The deal is expected to close by July 1 of next year.
The leadership team at AERC decided it was “in the best interest of Juneau ratepayers, the community and shareholders that maybe now is the right time to sell the company,” owner Bill Corbus said.
The decision to look into selling was made several years ago for primarily three reasons — concern over ownership continuity after Corbus, 76; a desire to give AERC shareholders the ability to sell their stock; and a need for new capital for the company to grow with Juneau, Corbus said.
“Something had to change sooner or later,” said Tim McLeod, the president and general manager of AEL&P.
AEL&P has provided electric to Juneau since 1894, and it is joining forces with an even older company, which was chosen primarily due to the pair’s similarity in values and corporate culture, McLeod said.
“It just seems like a very good natural fit,” said Dennis Vermillion, the president of Avista Utilities.
Avista has about 375,000 electric customers and a slightly smaller pool of natural gas customers. The company provides energy to parts of Idaho, Montana, Oregon and Washington, and employs about 1,600 people. AEL&P serves just under 16,000 customers in Juneau.
It will be business as usual for AEL&P until the transaction closes, and not much is planned to change once it does.
AEL&P will not be closing any offices or changing its name, and part of the transaction includes a commitment from Avista that there will be no employment change at AEL&P for at least two years. McLeod will report directly to Vermillion, and his leadership team will continue running the business, Vermillion said.
“We have no plans to change anything,” Vermillion said. “This is a great business and great company with great employees that do a fabulous job. We want that to continue.”
There is a possibility that AEL&P’s operations in the region will increase in the future, as Avista has begun exploring the possibility of natural gas development in Juneau and the rest of Southeast Alaska.
AEL&P is planning to file for a rate increase next year to account for a greater need of investment into the company and rising costs, but that increase is not a result of the merger, McLeod said.
The transaction is pending approval from various regulatory bodies and the AERC shareholders — neither side expects any issues in getting everything approved. AERC shareholders will be given Avista stock when the deal is finalized.
Corbus has special plans for his shares. When the deal is finalized, the owner plans to sign over 90 percent of his shares — expected to be worth more than $40 million — to the Juneau Community Foundation to be given to non-profits in the capital city.