Regulators with the North Carolina Utilities Commission (NCUC) have approved Duke Energy Corp.'s acquisition of Piedmont Natural Gas Inc. The merger is expected to close Monday.
"This combination provides clear benefits to our customers and the environment as we continue to expand our use of low-cost and clean natural gas and invest in pipelines," Duke CEO Lynn Good said Thursday. "We have enjoyed an excellent relationship with Piedmont's team for years, and we are eager to welcome them to Duke Energy in the coming days."
Last October, Duke announced plans to pay $4.9 billion in cash to acquire Piedmont and assume $1.8 billion in the latter's debt, for a deal valued at approximately $6.7 billion in total (see Daily GPI, Oct. 26, 2015). The acquisition will give Piedmont "a growing natural gas platform." Under the deal, Piedmont will retain its name but become a wholly-owned subsidiary of Duke.
Piedmont's shareholders have already approved the merger, as have regulators with the Tennessee Regulatory Authority and the U.S. Federal Trade Commission.
According to the NCUC, the acquisition will add Piedmont's one million natural gas customers in North Carolina, South Carolina and Tennessee to Duke Energy's existing customer base of 525,000 natural gas customers and 7.4 million electric customers. Piedmont's Tennessee service territory represents a new addition to Duke Energy's footprint and includes the growing Metropolitan Nashville area and seven middle-Tennessee counties.
Good has pointed to the growing role of gas in the power stack as a benefit of acquiring Piedmont, though analysts have had their doubts about the synergy of the utilities' respective operations (see Daily GPI, March 22).
Duke and Piedmont are both joint venture partners in the Atlantic Coast Pipeline LLC, a proposed Appalachian Basin-to-Southeast takeaway project headed by Dominion Resources Inc. (see Daily GPI, Nov. 3, 2015).
The Southeast has been a hotbed for incremental natural gas demand growth, driven by coal-to-gas switching among electric generators, a trend examined in detail in NGI’s special report "Southern Exposure: Gas-Fired Generators Rising in the Southeast; But Will Northeast Gas Show Up?"