Duke EnergyCorp. cleared the final regulatory hurdle in its of Piedmont Natural Gas Co. Inc., and the deal will closeOct. 3.
The North Carolina Utilities Commission issued an orderSept. 29 approving the merger. (Docket Nos. E-2, SUB 1095; E-7,SUB 1000; G-9 SUB 682)
"This combination provides clear benefits to ourcustomers and the environment as we continue to expand our use of low-cost andclean natural gas and invest in pipelines," Duke Energy Chairman,President and CEO Lynn Good said in a news release. "We have enjoyed an excellentrelationship with Piedmont's team for years, and we are eager to welcome themto Duke Energy in the coming days."
Piedmont will retain its name and operate as a business unitof Duke Energy, Duke said. Piedmont serves about 1 million natural gascustomers in North Carolina, South Carolina and Tennessee and, like Duke, isheadquartered in Charlotte, N.C.
A settlementagreement between the companies and public staff of the NorthCarolina commission includes a one-time, $10 million bill credit for Piedmontcustomers and at least $17.5 million in annual charitable contributions forfour years after the merger. The stipulations in the agreement also include a"code of conduct" specific to the acquisition that would ensure competitivenatural gas prices.
The deal previously received approvals from the TennesseeRegulatory Authority and Piedmontshareholders, as well as the Federal Trade Commission.
The combined company's South Carolina customers also areexpected to receive merger-related savings. Customers in the Palmetto State canexpect a $6.7 million share of the $35 million in fuel and fuel-related savingsbased on a settlement the companies reached with the Carolina Utility CustomersAssociation, which represents industrial customers.
The combined company also committed to a one-time, $1.6million contribution to workforce development and low-income assistance inSouth Carolina, based on a $7.5 million commitment in North Carolina.
North Carolina regulators rejected motions from publicinterest groups, such as the North Carolina Waste Awareness and ReductionNetwork, charging that the deal increases risks for Duke Energy and itsratepayers due to an overreliance on natural gas.
"[T]here is no evidence in this proceeding that DukeEnergy's purchase of Piedmont, in and of itself, will result in an increaseduse of natural gas by [DukeEnergy Carolinas LLC], [Duke Energy Progress LLC], or Piedmont," thecommission wrote in its order. "Thus, the risks of increased methaneemissions, potential natural gas supply shortages and possible cost increasesare not relevant to the question of whether the merger should be approved bythe Commission. As a result, the Commission finds and concludes that NC WARNhas failed to establish a nexus between the proposed merger and its concernsregarding methane emissions, potential natural gas supply shortages, andpossible gas cost increases."