Home / Business / TECO buys New Mexico Gas Company for $950 million

TECO buys New Mexico Gas Company for $950 million

Erny Zah | The Daily Times (Farmington, N.M.)

FARMINGTON — A Florida-based utility company is looking to finalize a deal to purchase the state’s primary natural gas supplier.

TECO Energy announced plans to buy New Mexico Gas Company for $950 million, according to a release. The deal still must be approved by state regulators.

“We think the company is a position to grow,” said Charles Hinson, TECO vice president of state and community relations.

Hinson and Randy Fitzpatrick, New Mexico Gas Company Northwest operations manager, visited The Daily Times on June 11.

Hinson said TECO has been looking for an opportunity to expand it’s company portfolio and once New Mexico Gas Company became available for sale, TECO moved into position to buy the company.

He said one of the conditions of the purchase is to keep rates unchanged through 2017.

Hinson said TECO plans to keep managerial operations in Albuquerque, the current headquarters for New Mexico Gas Company. He said service to customers will be unchanged.

“We don’t think there are going to be any changes in operations,” Hinson said.

However, he noted that as many as 99 positions would be cut in the next three years in order to cut costs. He added that more than one-third of those positions are now vacant.

The New Mexico Public Regulations Commission has to approve the purchase and Hinson expects the commission to make a decision by the fall.

Fitzpatrick said he and other employees are happy that a utility company is the prospective new owner of the gas company. In addition, he said TECO isn’t a mega corporation that might undervalue New Mexico Gas Company.

“They’re small enough for us to be a valued part of their company,” Fitzgerald said.

Hinson said TECO believes there is a future for natural gas — with plentiful supply and relatively low cost — and hopes to grow the company with new customers. He added that the company will look at the possibility of selling natural gas to power plants.

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“Coal units are going to a be real challenge for America,” he said about pending federal policies that demand cleaner emissions from existing power plants. In addition, other clean power generation like wind and solar are yet to be reliable and nuclear power plants are too expensive to build, he said.

“Those power plants are so expensive, nobody can built them except the federal government,” Hinson said.

Public Service Company, primary owners of San Juan Generating Station, announced earlier this year they plan to build a natural gas powered generator to be used during peak times.

One local business owner hopes that he can move forward with selling natural gas for vehicle use.

Jason Sandel, owner of RoadRunner Fuels and Convenience Store, said he has been working for more than two years to sell natural gas for vehicle use.

Sandel said he has been frustrated so far with trying to find a gas company who would help him sell natural gas.

“At every turn, not only am I going to have to make the investment in the station, I’m going to have to extend their lines for them,” he said.

He has settled to sell propane, but hopes that TECO will be open to helping him sell natural gas once the company gains full ownership.

“The San Juan Basin has been a natural gas producer,” Sandel said. “We believe that it is critical for the future of our area to promote the use of natural gas.”