Portland General Electric has agreed to buy most of PacifiCorp’s Washington utility operations for $1.9 billion, PGE said Feb. 17.

Under the terms of the deal between the two Portland, Ore.-based utilities, PGE will acquire three generation facilities, 4,500 miles of transmission and distribution lines, and a 2,700-square-mile service territory containing about 140,000 electricity customers concentrated in Yakima, Walla Walla and nearby communities.

The generating facilities include the 477-MW gas-fired Chehalis Power Plant, as well as the Goodnoe Hills and Marengo wind farms, rated at 94 MW and 234 MW, respectively.

PGE plans to manage the Washington operation through a newly formed subsidiary regulated by the Washington Utilities and Transportation Commission. The utility is partnering on the acquisition with Manulife Investment Management, which will own 49% of the new company.

“We are excited for the opportunity to continue to grow, expanding into Washington and building upon PGE’s foundation of operational excellence and customer service,” PGE CEO Maria Pope said in a statement. “We look forward to our partnership with Manulife Investment Management, who bring a track record of investment success across the utility sector and Pacific Northwest agriculture and timberland industries.”

“We are pleased to partner with PGE to support this investment in reliable generation, transmission and distribution for Washington communities,” said Recep Kendircioglu, global head of infrastructure at Manulife Investment Management. “This partnership represents an opportunity that fits well within our infrastructure strategy and leverages our experience in utility investments.”

In a separate statement, PacifiCorp said “diverging policies” among the six states the utility serves “have created extraordinary pressure” that has affected its ability to reliably serve its customers at the lowest cost.

“These challenges have impacted the company’s financial stability, liquidity and credit ratings. The sale will be a critical step in strengthening PacifiCorp’s financial position and simplifying operations across its service area,” the company said.

“This is a targeted step toward ensuring the continued delivery of safe, reliable power to our nearly 2 million customers in the West and Intermountain West,” PacifiCorp CEO Darin Carroll said. “This will improve the company’s financial stability while simplifying our operations to support our long-term commitment to customers in each of our remaining states.”

The two utilities said the deal, which is subject to state and federal regulatory approval, should close in about 12 months.