Duke Energy, Piedmont Natural Gas CEOs to testify on acquisition

The chief executives of Duke Energy and Piedmont Natural Gas will testify as the N.C. Utilities Commission opens a hearing Monday on Duke’s $4.9 billion acquisition of its Charlotte neighbor.

Attorneys for environmental advocates will be allowed to cross-examine Duke CEO Lynn Good and Piedmont’s Thomas Skains.

Advocates say Duke relies too heavily on fossil fuels, including natural gas, and is too close to regulators in the administration of Gov. Pat McCrory, a former Duke employee. Duke and the governor’s office deny any favoritism.

Hundreds of form letters organized by Greenpeace and submitted to the commission ask it to reject a deal that is “bad for business, bad for the future of North Carolina, and bad for our democracy.”

Duke and Piedmont will present their merger as good for customers.

The acquisition won’t increase electric or gas rates, the companies say, and will allow them to build construction projects under better financial terms.

Under an agreement with the state’s independent Public Staff, which represents consumers, Piedmont will cut $10 million from customer bills in North Carolina this year. The combined companies will also make $70 million in charitable donations over four years and offer $7.5 million in aid to low-income customers.

Piedmont shareholders will make out well. Duke agreed to pay $60 for each of their shares, a 42 percent premium over the trading price before the deal was announced. Duke will assume $1.8 billion of Piedmont’s debt.

Duke and Piedmont reached terms with another advocacy group, the Environmental Defense Fund. In a separate settlement with a trade group representing industries, the utilities agreed to pass $35 million in fuel cost savings to retail customers.

But other environmental advocates insist that the negotiations that lead to such agreements cheat the public by limiting the scrutiny given to cases before the commission.

A utility’s agreement with the influential Public Staff usually leads to shorter hearings and commission approval, although some details may be changed. The commission often invites comment from all parties before making significant rulings.

The Durham advocacy group NC WARN filed a petition last week asking the commission to halt “backroom deals.” WARN wants the commission to require that settlement negotiations be open to all parties to a case, and to stop agreements from being reached until a public hearing has been held.

Neither Duke nor a commission spokesman would comment on the petition Friday.

Duke and Piedmont expect to close their deal by the end of this year. Skains will retire but join Duke’s board of directors. Piedmont’s chief commercial officer, Frank Yoho, will lead Duke’s natural gas operations.

Duke has 4 million customers in the Carolinas and Piedmont 1 million in the Carolinas and Tennessee. Duke operates six power plants that Piedmont supplies with natural gas.

This story was originally published July 18, 2016 at 6:00 AM with the headline "Duke Energy, Piedmont Natural Gas CEOs to testify on acquisition."