Piedmont Customers to See Millions of Dollars in Benefits from Merger with Duke
The North Carolina Utilities Commission (NCUC) approved (Docket Nos.E-2, SUB 1095, E-7, SUB 1100, and G-9, SUB 682) Duke Energy’s acquisition of Piedmont Natural Gas on September 29 – providing the final regulatory authorization needed to close the transaction on October 3.
For Piedmont customers, the merger will mean millions in benefits: Piedmont’s North Carolina natural gas ratepayers collectively will see their bills decrease by about $10 million by year-end 2016. Piedmont’s South Carolina natural gas customer collectively will see a decrease of about $1.1 million
The Tennessee Regulatory Authority and Piedmont’s shareholders previously approved the merger, and the U.S. Federal Trade Commission already has granted early termination of the waiting period under the federal Hart-Scott-Rodino Antitrust Improvements Act.
Duke Energy will acquire Piedmont – an energy services company primarily engaged in regulated natural gas distribution – for approximately $4.9 billion in cash and assumption of approximately $1.8 billion in Piedmont existing net debt, representing total enterprise value of approximately $6.7 billion.
The acquisition will add Piedmont’s 1 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.
Piedmont will retain its name, operate as a business unit of Duke Energy, and maintain its significant presence in Charlotte.
Among the benefits of the acquisition for North Carolina and South Carolina are:
- To ensure Piedmont’s North Carolina natural gas customers receive a benefit from the projected transaction-related cost savings, their bills collectively will decrease by approximately $10 million by December 31. Piedmont’s South Carolina natural gas customer bills collectively will decrease by approximately$1.1 million.
- The combined company has committed to provide$7.5 million to low-income household energy assistance and community workforce development programs in North Carolina, and $1.6 million in South Carolina, during the first year after the acquisition.
- North Carolina and South Carolina retail and wholesale customers are expected to receive a proportional share of the anticipated $35 million in fuel-related savings (approximately $22.8 million for North Carolina customers, $6.7 million for South Carolina customers, and $5.5 million for wholesale customers). This is in addition to the $687 million in savings already guaranteed in connection with Duke Energy’s 2012 merger with Progress Energy.
“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,” said Lynn Good, CEO of Duke Energy. “We have enjoyed an excellent relationship with Piedmont’s team for years, and we are eager to welcome them to Duke Energy.”
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