Canadian utility owner AltaGas Ltd. expects regulators to issue some of the final decisions on its US$6.63 billion purchase of WGL Holdings Inc. within months, CEO David Harris said on a conference call.
The impact of U.S. tax reductions, which has roiled the financial statements of other Canadian owners of U.S. utilities, is likely to be less acute for Calgary, Alberta-based AltaGas because of its geographic diversity, Harris said in the March 1 call. The company recently completed regulatory hearings with stakeholders in Maryland and Washington, D.C., on the WGL deal, which is expected to close by the end of June.
"In early December we announced a positive settlement agreement with many of the key stakeholders in Maryland," Harris said. "We also completed settlement hearings in mid-February and the commission is set to issue its decision on or before April 4. In Washington, DC we concluded hearings in December and we expect DC to issue their decision within the first half of this year. This is on track with what we have always stated and we remain comfortable with this time frame."
AltaGas is also on track to shed noncore assets to help finance the transaction. "We have identified over [C]$4 billion of assets from our gas, power and utility business segments which we are currently evaluating and we expect to realize over [C]$2 billion from this asset sale process in 2018," Harris said.
In Canada, the company is moving closer to completion of its Ridley Island propane export terminal, which is expected to increase price realizations for producers of the liquid in the Montney and Duvernay shales that straddle the northern border of Alberta and British Columbia. The terminal on British Columbia's northern coast is expected to be in service next year.
"In just over a year's time we will be able to offer access to Asian markets for propane through our Ridley Island export terminal," Harris said. "Once on line in [first quarter] 2019 we will be able to take full advantage of far-east Asian pricing for propane and offer premium netbacks to producers."
Harris said the company's indirect ownership interest in a similar terminal in Ferndale, Wash., gives it a leg up in dealing in Asian markets. The company also owns power plants in California and British Columbia.
Separately on March 1, AltaGas reported fourth-quarter 2017 normalized EBITDA of C$213 million, an increase from C$194 million in the same quarter of 2016. The S&P Capital IQ consensus estimate for fourth-quarter 2017 normalized EBITDA was C$214.4 million.
