Charlotte-based Duke Energy on Thursday said it has received the final approval it needs from the North Carolina Utilities Commission to complete its $4.9 billion purchase of Piedmont Natural Gas.
The two Charlotte companies view the transaction as an opportunity to expand their investments in natural gas infrastructure, especially in pipelines and storage. The deal, which includes the assumption of $1.8 billion in Piedmont debt, is expected to close Monday.
The acquisition, first announced nearly a year ago, adds Piedmont’s 1 million natural gas customers in North Carolina, South Carolina and Tennessee to Duke Energy’s customer base of 525,000 natural gas customers and 7.4 million electric customers. Piedmont gives Duke new access to customers in Tennessee.
“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,” Duke CEO Lynn Good said in a statement.
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The two companies have been working to win regulatory approval of the deal for months.
Advocacy groups opposed the merger because natural gas is a fossil fuel tied to climate change and the greenhouse gas methane is released in drilling shale formations for it. But executives at the company said gas is likely to increasingly be a power plant fuel of choice because of its cheaper cost and cleaner environmental profile.
Duke said Piedmont will retain its name, operating as a Duke business unit, and keep a “significant presence” in Charlotte. Piedmont CEO Thomas Skains is retiring, but a Piedmont executive, Frank Yoho, will lead Duke Energy’s natural gas operations after the two companies combine.
As part of the deal, Duke said Piedmont’s North Carolina natural gas customers will see their bills decrease collectively by $10 million as of Dec. 31, reflecting cost savings in the merger. The reduction for Piedmont’s South Carolina natural gas customer will be about $1.1 million collectively.
The combined company has also made commitments for charitable giving and low-income household energy assistance.
In a Bloomberg News interview this week, CEO Good said Duke’s purchase of Piedmont will accelerate the utility owner’s shift away from coal.
By 2030, under the government’s Clean Power Plan, coal-based electricity generation will fall by 28 percent and renewables will surpass it in the country’s power mix, according to the U.S. Energy Information Administration.
“I think we’ll still be operating coal in 2030,” Good said. “Whether we will be in 2040 I think is a question, or in 2050.”
Bloomberg News contributed