The chief executives of Duke Energy and Piedmont Natural Gas defended their merger Monday under questioning by advocates who hope to derail it.
An attorney for NC WARN, a Durham nonprofit, and two other advocacy groups questioned the CEOs on risks to customers of the electric and gas utilities at a hearing before the N.C. Utilities Commission.
The groups oppose the $4.9 billion deal because natural gas is a fossil fuel tied to climate change and the greenhouse gas methane is released in drilling shale formations for it. They also say gas supplies, currently estimated to be large enough to supply the U.S. for a century, may be overstated.
Duke’s attorneys repeatedly objected, arguing those questions aren’t relevant to the Duke-Piedmont acquisition.
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Commission chairman Edward Finley allowed the questions to continue but noted: “Some of these risks are going to be there whether or not this merger occurs.”
Piedmont CEO Thomas Skains said gas supplies are plentiful.
“My view is that natural gas customers will benefit from these supplies in the future, as they have since the advent of shale gas development in about 2009,” he said.
WARN attorney John Runkle questioned Skains and Duke CEO Lynn Good about the potential effects of future gas price increases and new regulations. Runkle tried to establish that Duke, whose power plants Piedmont supplies, would use more natural gas because of the merger and so increase those risks.
In response, the utility executives said gas is likely to increasingly be a power plant fuel of choice because of its cheaper cost and cleaner environmental profile, whether or not Piedmont becomes a Duke subsidiary. Duke has already retired half its 14 coal-fired power plants in North Carolina as it shifts to gas.
The companies view the transaction as an opportunity to expand their investments in natural gas infrastructure, especially in pipelines and storage. Each already owns a piece of the proposed Atlantic Coast Pipeline from West Virginia to eastern North Carolina, among other investments.
“Through Duke Energy’s strong balance sheet and electric generation expertise, and Piedmont’s understanding of natural gas markets and proficient operations, the combined company will be well-positioned for a future that may require additional natural gas infrastructure and services to meet the needs of our customers,” Good said in an opening statement.
Before the hearing and in its early stages, protesters decried Duke Energy’s continued reliance on fossil fuels and its political influence. Several speakers at the hearing Monday said a bigger Duke Energy will only enlarge what they call an already outsized political influence.
“The bigger they get, the more overwhelming their power will be,” said Charlotte resident Beth Henry.
Henry asserted that Duke already uses its charitable donations to squelch critics. Duke would make $70 million in contributions over four years under terms of a settlement agreement with consumer advocates in the Piedmont case.
“That purported benefit just amounts to silencing the opposition as money is handed out,” Henry said.
Duke and Piedmont say their combination will benefit customers in ways beyond the charitable donations. Neither electric nor gas rates will go up as a result of the acquisition, they say, and Piedmont will slice $10 million from the bills of N.C. customers.
Another speaker at the hearing, Dr. Richard Fireman of Mars Hill, accused the independent Public Staff of failing the utility customers it advocates for by not examining the risks of burning fossil fuel on climate change. Fireman held/ copies of studies showing North Carolina’s coast at risk from rising sea levels.
The risk to future generations, he predicted, “will be Biblical in scope.”