ONEOK pressing on with Southwest Gas merger intention

Thursday, Jan. 6, 2000 | 11:47 a.m.

The Oklahoma company trying to acquire Las Vegas-based Southwest Gas Corp. vowed to move forward with merger plans, despite increasing regulatory resistance in Arizona.

On Tuesday, the staff of the Arizona Corporation Commission recommended that the merger between ONEOK Inc. and Southwest Gas should not be approved at this time. The staff cited concerns about ONEOK's safety and customer service records, and questioned ONEOK's behavior within the regulatory process. The staff suggested that ONEOK should voluntarily withdraw its application.

On Wednesday, ONEOK vowed it would fight on.

"We recognize that the ACC staff has some concerns, but we are confident in our ability to resolve those concerns, especially since many of them appear to be based on false and misleading statements made by people who had their merger proposals rejected," said ONEOK President David Kyle in a statement. "We know that ONEOK is an excellent company with an excellent record for integrity and safety, and we know that the allegations are false. ONEOK has done nothing wrong and we will prove that."

The staff's recommendation is not binding on the ACC, which will begin hearings on the merger Feb. 11. The ACC's approval is necessary to consummate the $1.8 billion merger. Despite the staff's negative recommendation, the Arizona Residential Utility Consumer Office said Tuesday that it would continue to support the merger.

"We know this is a good proposal, others have recognized it as such, and we are confident that when the ACC has all the facts before them, they will make the right decision for Arizona ratepayers," Kyle said.

Southwest spokesman Lew Phelps said the company had no comment beyond ONEOK's statements.

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