Oct. 24--The parent of Dominion Peoples Gas Co. is asking the state Public Utility Commission to decide, once and for all, whether the natural gas distribution company can be sold to a San Francisco-based investors group.

Dominion Resources Inc. of Richmond, Va., petitioned the regulatory agency this week seeking a quick resolution to its proposal to sell the Western Pennsylvania utility to SteelRiver Infrastructure Partners. The five-member commission must base its determination on whether the deal is viewed as a substantial benefit to customers and employees.

The petition sets in motion a 30-day timetable to make a decision, PUC spokeswoman Jennifer Kocher said Friday.

The latest move in the longstanding case follows a decision a week ago by Robert P. Meehan, an administrative law judge with the PUC, to reject a settlement reached with some opponents to the sale. Meehan's order, in effect, sent the proposed sale back into another round of hearings and litigation.

Dominion Peoples spokesman Dan Donovan pointed out that the deal is written so that either side can pull out of the transaction without monetary reprisal should no deal be done by Dec. 31.

The PUC's Office of Trial Staff wasn't pleased with the settlement's terms, citing concerns that SteelRiver never adequately responded to questions about its technical or financial abilities to operate Dominion Peoples, which serves 359,000 customers in the region.

The sale agreement has a 16-month history. SteelRiver is the successor company to Babcock & Brown Infrastructure Fund North America, which announced the original $910 million deal to buy Dominion Peoples and a sister company, Dominion Hope in West Virginia, in July 2008.

The SteelRiver deal was amenable to the state Office of Consumer Advocate and Office of Small Business Advocate.

"We don't approve mergers and acquisitions unless there is a benefit to consumers," Consumer Advocate Sonny Popowsky said. "We think that the terms agreed to in this deal were reasonable," including a $35 million rate credit for customers.

SteelRiver CEO Chris Kinney said the partnership remains convinced that "despite the judge's recommendation on the settlement, the PUC will find that our stated commitment to improve customer service, deliver additional help to low-income customers and bring jobs back to Pennsylvania will provide substantial benefits to the customers and employees of Peoples."

Dominion has been trying for nearly four years to sell the two utilities. Before a deal with Babcock & Brown/SteelRiver, the energy company, starting in March 2006, tried to sell the companies to Equitable Resources Inc., now EQT Corp. That deal was dropped in January 2008 after the Federal Trade Commission contended it was a potential monopoly in the Pittsburgh area.

Rick Stouffer can be reached via e-mail or at 412-320-7853.

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