Kinder Morgan deal wins approval
PUC approves $22 billion plan to take pipeline company private
Pipeline company Kinder Morgan, owner of the petroleum line that
exploded near downtown Walnut Creek in late 2004, killing five workers,
won approval from state utility regulators Thursday for a $22 billion
financing plan to take the company private.
Financiers in the deal include Goldman Sachs and the Carlyle Group.
The Public Utilities Commission approved the deal 5-0.
"That was the final regulatory approval," said Larry Pierce, a spokesman for Kinder Morgan.
The company previously stated that it expects to close the deal in the second quarter.
The commission action came four days after Kinder Morgan agreed
to pay California more than $4.1 million for major spills in Suisun
Marsh in late 2004 and the Oakland Estuary in 2005.
The company paid $640,000 in state fines for the fatal 2004 explosion
and has paid an additional tens of millions of dollars to victims’
families and four workers badly burned in the accident.
A web of lawsuits stemming from the explosion is continuing. So
is a criminal investigation by the Contra Costa County District
Attorney’s Office.
State investigators pinned the explosion on Kinder Morgan’s failure to
properly mark its petroleum line. A backhoe driver working on a nearby
water main project ruptured it when he followed inaccurate ground
markings.
Prior to Thursday’s vote, the Consumer Federation of
California had pushed the PUC to place strict safety and maintenance
requirements on the company’s new owners, said the group’s executive
director, Richard Holober. Commissioners will need to keep a close eye
on the company, he said.
"This is a company that has not maintained its pipelines in a safe
manner," he said. "In recent years, (the PUC has) not been much of a
watchdog."
Kinder Morgan CEO Richard Kinder, a former president of Enron, founded
the company in 1996. He will remain in charge. Kinder Morgan operates
43,000 miles of pipeline nationally.
The sale won U.S. antitrust clearance in January on the
condition that two of the buyers become passive investors in rival
pipeline operator Magellan Midstream Partners LP. The two private funds
in the investor group, Carlyle and Riverstone, agreed to end their
management control of Magellan in favor of that company’s other major
investor, Madison Dearborn Partners.