Maine agrees to Unitil’s $72 million acquisition of Bangor Natural Gas

Maine regulators on Tuesday approved Unitil Corp.’s $71.9 million acquisition of Bangor Natural Gas Co., the state’s largest gas utility. Under the agreement, Unitil must measure, report and take action to reduce the amount of greenhouse gases released into the air through accidental leaks and intentional pipeline vents.

The Public Utilities Commission voted 3-0 to support the sale announced in July. The acquisition expands Unitil’s 618 miles of distribution network in Maine by more than 50% and adds Bangor Natural Gas’s 351 miles of pipelines. The move will also bring together Unitil’s 8,500 Bangor natural gas customers with Unitil’s 33,000 Maine customers. Unitil, known as Northern Utilities, is based in New Hampshire and also serves customers there and in Massachusetts.

Bangor Gas was acquired by PHC Utilities Inc., a subsidiary of Hope Utilities Inc. of Morgantown, West Virginia. A deadline has not yet been set as Unitil awaits the formal order from the PUC, said Unitil spokesman Alec O’Meara. Hope Utilities did not respond to a telephone message Thursday seeking information about the deal.

Public Advocate William Harwood said the move could save ratepayers money by consolidating the state’s relatively small natural gas industry, with three natural gas companies operating in Maine.

The acquisition agreement approved by the PUC stipulates that Bangor Gas will not seek a rate increase before January 1, 2027 and will not charge customers for certain costs associated with the transaction.

PUC Chairman Philip L. Bartlett II said the provisions barring a rate increase for two years and limiting the impact of corporate restructuring costs on ratepayers protect consumers. And the provisions for measuring and mitigating natural gas emissions are “beneficial and in the public interest,” he said.

Unitil reported that 20,424 tons of carbon dioxide equivalent, or the amount of gas that would have the equivalent impact on global warming, were released in 2023. That’s a decrease of about 18% since 2019. Construction and reported leaks are the main causes of gas releases, O’Meara said.

Unitil said it uses gas capture technology as part of regular maintenance to prevent the release of gas through blowdowns, which are the release of pressurized natural gas during maintenance, inspection or emergency response, and other construction activities.

Harwood, Unitil and the Conservation Law Foundation, an environmental group, negotiated an agreement that requires Bangor Gas and Unitil to review emissions-reduction practices, including leaks and intentional venting, and consider “economically reasonable options” to improve those practices.

O’Meara said the procedures are in place in its Portland-area gas pipeline network and will be applied to its new Bangor Gas property, which serves customers in Hancock, Penobscot and Waldo counties. Unitil’s service area extends from the Maine-New Hampshire line to Lewiston.

The agreement will not be interpreted to justify Bangor Gas replacing pipelines to comply with the agreement. At the same time, the agreement will not be interpreted as limiting the “operational discretion” of the gas business.

Unsuccessful legislation this year attempted to limit natural gas connections by changing how connections are financed. The measure would have meant that potential companies and private customers and not ratepayers would have to pay for the natural gas expansion. Supporters said the legislation would limit greenhouse gas emissions and slow the expansion of natural gas pipelines as policymakers push for greater electrification of buildings’ heating and cooling systems.

Natural gas is typically used for heating water and buildings, as well as cooking and drying clothes.

Maine’s natural gas utilities, which include Summit Natural Gas of Maine and Maine Natural Gas, serve 50,000 customers, which is a relatively small number, he said. The 8,500 Bangor natural gas customers are “really small,” he said.

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