Charlotte, NC-based Piedmont Natural Gas, expanding its service into neighboring territory, has completed its purchase of North Carolina Natural Gas (NCNG) and a 50% interest in the EasternNC project from Progress Energy

Plans for the purchase, for $425 million in cash plus $32.4 million for estimated working capital, were first announced a year ago (see Daily GPI, Oct. 18, 2002). NCNG serves approximately 180,000 residential, commercial and industrial natural gas customers, including 56,000 served by four municipal wholesale customers, in eastern and southern North Carolina.

EasternNC is a joint venture with the Albemarle Pamlico Economic Development Corp. to bring natural gas service to 14 counties in eastern North Carolina.

“This is an exciting time in the history of natural gas service in North Carolina, with one company serving the vast majority of our growing state — from the mountains to the sea,” commented Piedmont’s President and CEO Thomas E. Skains. “Combined with our other service areas in the upstate region of South Carolina and the greater Nashville, TN, metropolitan area, our company now serves over 920,000 natural gas customers in the Southeast. In addition, we look forward to becoming an integral part of the new communities we now serve in the eastern and southern parts of North Carolina.”

Piedmont expects the purchase to be accretive to earnings in its 2004 fiscal year beginning Nov. 1, 2003. Piedmont utilized a new short-term commercial paper program to finance the transaction, and intends to issue long-term securities, both debt and equity, in the near future to realign its long-term debt and equity capitalization to traditional ratios.

The company has been gradually adding to its customer base over the last few years. In 2002 Piedmont purchased North Carolina Gas Service (NCGS), a gas distribution division of NUI Corp. (see Daily GPI, Oct. 2, 2002), which serves customers in Rockingham and Stokes counties, contiguous to Piedmont’s service territory. In 2001, Piedmont purchased the gas distribution system serving customers in the Gaffney area of Cherokee County, SC, from Atmos Energy Corp.

Piedmont is also invested in a number of non-utility, energy-related businesses including companies involved in unregulated retail natural gas and propane marketing, and interstate and intrastate natural gas storage and transportation.

Progress Energy said it was divesting its gas distribution business to focus on its core electric distribution service.

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