Three projects developed and operated by subsidiary Peoples Natural Gas will be sold for $165 million to energy solutions leader with established local presence
PITTSBURGH–(BUSINESS WIRE)–Essential Utilities, Inc. (NYSE: WTRG) today announced a binding agreement to sell its three non-utility microgrid and district energy properties in Allegheny County to Cordia, a sustainability-driven energy solutions provider. The agreement is valued at $165 million.
The agreement covers innovative microgrids and district energy systems developed by Peoples, Essential’s gas operations subsidiary based in Pittsburgh, where the assets are located.
“I thank our Peoples and Essential teams for their work in creating a clean, safe, reliable future through developing these innovative energy systems,” said Essential Utilities CEO Chris Franklin. “Selling these unregulated assets to a skilled and experienced operator in Cordia allows us to focus more fully on our core business as a regulated utility, while continuing to support projects that create a more resilient, sustainable energy grid.”
Essential selected Cordia as the buyer for the three systems in part because of their expertise in microgrids and district energy systems, along with their established footprint in Pittsburgh. Cordia currently operates energy systems in Pittsburgh’s Uptown and North Shore neighborhoods, as well as the on-campus energy system for Duquesne University. The company’s presence in the region dates back to the 1960s.
“We are honored to have the opportunity to acquire the cutting-edge microgrid and district energy systems from Essential Utilities,” said Cordia CEO Earl Collins. “Our decades of experience owning, managing, and operating energy systems will allow our new customers to focus on their core businesses. Cordia’s comprehensive expertise in district energy and microgrids aligns this acquisition with our commitment to safety, service, and innovation. We will ensure the seamless continuation of service while building on our strong ties with the Pittsburgh community and supporting our new customers.”
The sale of these unregulated assets, along with the recently closed West Virginia traction, demonstrate Essential’s efforts to strategically focus on its core businesses. The company will continue to prioritize investments in infrastructure to improve safety and reliability, and to reduce emissions.
“Ensuring our customers remained in good hands has been a top priority throughout this process,” said Peoples President Mike Huwar. “We are confident Cordia will provide that for each of these crucial assets, and look forward to working together by providing clean, safe, reliable and affordable natural gas service to all three projects for years to come.”
TD Securities (USA) LLC acted as financial advisor to Essential, while Gibson, Dunn & Crutcher LLP acted as legal advisor.
The transaction is subject to various closing conditions and regulatory approvals, and is expected to close in late 2023 or early 2024.
Use of Proceeds
Essential will use the $165 million in transaction proceeds to finance its capital expenditures and water and wastewater acquisitions, in place of external funding from equity and debt issuances.
Essential Utilities, Inc. (NYSE:WTRG) delivers safe, clean, reliable services that improve quality of life for individuals, families, and entire communities. With a focus on water, wastewater and natural gas, Essential is committed to sustainable growth, operational excellence, a superior customer experience, and premier employer status. We are advocates for the communities we serve and are dedicated stewards of natural lands, protecting more than 7,600 acres of forests and other habitats throughout our footprint.
Operating as the Aqua and Peoples brands, Essential serves approximately 5.5 million people across 9 states. Essential is one of the most significant publicly traded water, wastewater service and natural gas providers in the U.S. Learn more at www.essential.co.
Peoples provides clean, safe, affordable and reliable natural gas service to approximately 740,000 homes and businesses in Western Pennsylvania and Kentucky. Peoples is committed to its customers, its employees, the environment, and to the regions it serves.
Cordia is a leading provider of safe, reliable, and sustainable energy solutions. Headquartered in Phoenix, AZ, Cordia serves over 700 customers with heating, cooling, and electricity throughout the U.S. Cordia is committed to driving change toward a more resilient, sustainable energy future and empowering people and communities to reach their full potential. Learn more at www.cordiaenergy.com.
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others: the company’s ability to successfully close the transaction. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: the receipt of governmental approvals and other closing conditions; the successful closing of the acquisition; and other factors discussed in our Annual Report on Form 10-K, which is on file with the Securities and Exchange Commission. For more information regarding risks and uncertainties associated with Essential Utilities business, please refer to Essential Utilities annual, quarterly and other SEC filings. Essential Utilities is not under any obligation — and expressly disclaims any such obligation — to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
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