PRESQUE ISLE, Maine — The parent company of Bangor Hydro-Electric Co. intends to buy the company that owns Presque Isle-based Maine Public Service Co., a move officials say will improve chances of building a power transmission line linking northern and southern Maine and bolster economic development in Aroostook County.
In a deal valued at approximately $108 million, BHE Holdings Inc., the parent company of Bangor Hydro-Electric Co., plans to buy Maine & Maritimes Corp., or MAM, which owns Maine Public Service Co.
Maine Public Service Co. serves approximately 36,000 electricity customer accounts in northern Maine.
BHE Holdings, a subsidiary of Emera Inc. of Halifax, Nova Scotia, agreed to purchase MAM for $45 a share in cash, which is a 40 percent premium over the stock’s closing price Thursday.
Brent Boyles, president and chief executive officer of MAM, said Friday that the transaction has been approved by the MAM board of directors. The deal is expected to close later this year, subject to approval by MAM’s shareholders and regulatory agencies such as the Maine Public Utilities Commission and the Federal Energy Regulatory Commission, along with other customary closing conditions.
The approval process could take six to eight months. As part of the proposal, BHE would assume $31 million in debt now owed by MAM, Boyles said.
“We are very excited about this opportunity,” said Boyles. “Our employees also are excited.”
Gerry Chasse, the president and CEO of Bangor Hydro, said the deal would benefit northern Maine customers. Bangor Hydro has about 115,000 customers in eastern and central Maine.
“We see this as an opportunity to make new innovations in this area,” said Chasse. “Bangor Hydro employees welcome this new partnership.”
Chasse said that both Bangor Hydro and Maine Public Service Co. would continue to operate separately and serve their customers in their respective service territories.
Both Boyles and Chasse said that Maine Public Service Co. customers would see few changes as a result of the merger over the next eight months.
“Everything will continue to operate just as it is today,” said Boyles. “The billing will remain the same, people will still see the Maine Public Service Company trucks around and they will receive the same level of customer service.
“There will be no increase in rates initially, and rates may even go down,” Boyles continued. “This is going to be a completely transparent process for our customers and the public.”
Both officials also said there are no immediate plans to reduce staffing levels, and Boyles was optimistic that the merger would boost economic development in the region. It could even lead to the hiring of more employees, he indicated.
Chasse agreed, noting that 45 employees have been added to Bangor Hydro’s employment roster since 2001.
“The company has grown and we have stabilized rate increases for our customers in the last eight years or so,” Chasse added.
Chris Huskilson, president and CEO of Emera Inc., also was excited about the merger.
“We look forward to serving the customers of northern Maine and building on the strong community reputation established by Maine Public Service Company,” he said. “Maine plays an important role in the Maritime and New England energy market. This merger is an important next step in Emera’s strategy of growth and integration within the northeast market, by geographically expanding our service territory in Maine to the New Brunswick market.”
Boyles said he believes the merger will be approved by all parties as it goes forward.
Right now, there is no power transmission line linking northern and southern Maine. Boyles said the merger could provide the “financial wherewithal” needed to move forward with such a line in the near future. Such a line would provide a conduit for energy produced by wind farms in northern Maine to reach customers elsewhere in New England.
He added that he had spoken to state and local legislators about the proposed merger.
U.S. Sen. Olympia Snowe, R-Maine, said in a press release Friday that she knew of the proceedings and would review the details of the merger.
“With any major energy merger it is critical that we assess the bottom-line to consumers, especially in Aroostook County, which is dealing with 9.8 percent unemployment,” said Snowe. “I am encouraged that Bangor Hydro is committed to retaining all employees and I look forward to reviewing the specific merger and its effects on building Maine’s clean energy future and making our electricity prices more competitive for our residential consumers as well as our employers.”
U.S. Sen. Susan Collins, R-Maine, said in a press release that she had been assured the merger would lead to work toward connecting Aroostook County to Maine’s electric grid.
Northern Maine at present has no electrical connection with the remainder of Maine and is not part of the larger New England power grid. Instead, northern Maine is part of the Maritimes control area and is directly connected to the electrical grid operated by New Brunswick Power.
“I have long been concerned that electricity generated in northern Maine often travels first through Canada because there is no transmission line connecting northern and southern Maine,” Collins said in the release. “I spoke with officials from both Bangor Hydro and [Maine] Public Service Company, and they reassured me that, if this merger is approved, they will work to connect Aroostook County to Maine’s electric grid. It is also encouraging news that the companies intend to at least maintain current employment levels.”
Maine Public Service and CMP partnered two years ago on a proposal to build a 150-mile transmission line at a cost of more than $600 million that would link northern Maine to the New England regional grid.
Regulators last year dismissed the proposal, but CMP and Maine Public Service have been in discussions about building a shorter, less-costly transmission line that would be paid for by wind power companies that would use the lines, Boyles said.
There are no plans for Maine Public Service Co. to join the regional New England power grid, The Associated Press reported.
State officials were unavailable for comment Friday during the state shutdown day.
The Associated Press contributed to this report.