Alliant Energy Corporation announced agreements Sept. 3 to sell its Minnesota electric and natural gas distribution businesses. The electric distribution business in the state will be sold to Southern Minnesota Energy Cooperative (SMEC), a combined group of 12 neighboring electric cooperatives. Alliant Energy’s Minnesota natural gas business will be sold to Minnesota Energy Resources Corporation, a subsidiary of Integrys Energy Group, Inc.

SMEC and Minnesota Energy Resources currently serve customers adjacent to Alliant Energy’s utility operations in the state. SMEC-member utilities currently serve nearly 135,000 electric customers and Minnesota Energy Resources provides natural gas service to approximately 214,000 customers in Minnesota.  Alliant Energy serves 43,000 electric customers and 10,600 natural gas customers spread over a significant footprint of nearly 15,000 square miles in southern Minnesota. Alliant Energy’s Minnesota operations represent less than four percent of the company’s overall customer base.

“Our Minnesota customers will be part of utilities with a significant, long-standing presence in the state,” said Tom Aller, President of Alliant Energy’s Minnesota and Iowa utility. “We would expect long-term customer benefits from the efficiencies achieved by combining our customer base with those of the purchasing utilities.” 

The combined sales price of the electric and natural gas assets is approximately $128 million, subject to customary closing adjustments. The electric sales agreement also includes a ten-year purchased power agreement (PPA) between SMEC and Alliant Energy’s Iowa electric utility.

With the PPA agreement, Alliant Energy’s current Minnesota electric customers will continue to receive energy from a diverse portfolio of generation resources while future electric generation needs and plans for Alliant Energy’s Iowa utility are unchanged. Alliant Energy will continue to operate its electric generation facilities in Minnesota. 

Along with customer value, Alliant Energy also focused on its employees when negotiating the sales proposals with the purchasing utilities. “The sale agreements will assure that our impacted Minnesota employees receive offers for continued employment after the sale,” added Aller.

The sales of the company assets require state and federal approvals, which are expected to occur in six to twelve months. Wells Fargo Securities, LLC served as Alliant Energy’s exclusive financial advisor on the electric transaction.