Avangrid Inc. on Dec. 27 said it has decided to pursue the sale of its gas storage and trading businesses, following the conclusion of its strategic review.
The company oversees its natural gas business operations through its Enstor Gas LLC subsidiary. In turn, Enstor Gas manages the gas trading business through Enstor Energy Services LLC and the gas storage business through Enstor Inc.
Through Enstor Energy Services, Avangrid owns approximately 67.5 Bcf of net working gas storage capacity and operates 50.3 Bcf of contracted or managed natural gas storage capacity in North America as of Sept. 30.
For the nine-months ended Sept. 30, Avangrid's noncore gas storage segment reported GAAP net loss of $35 million, or a loss of 11 cents per share, compared with a net loss of $46 million, or a loss of 15 cents share per share, recorded in the same period of 2016.
The resolution of the status of the Enstor Gas storage business is expected to result to accounting adjustments, which will offset the one-time gain Avangrid will recognize associated with the enactment of the tax reform legislation, according to a Dec. 27 news release.
The one-time gain is tied to the remeasurement of deferred taxes primarily in the renewables business. But the full financial impacts and any necessary accounting adjustments are still under review and will be communicated with the release of Avangrid's fourth-quarter results in February 2018, the company said.
Going forward, Avangrid anticipates that the enacted tax reform legislation will bring a modest financial benefit under U.S. GAAP due to a combination of factors. The company noted that the lower federal corporate tax rate of 21% will generally benefit its nonregulated businesses.