Piedmont subsidiaries are invested in joint ventures (JV) such as unregulated retail natural gas marketing, regulated interstate natural gas transportation and storage, and regulated intrastate natural gas transportation businesses.
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If weather fails to support demand, Natural gas price is likely to deteriorate to as low as $1.5-1.4/mmbtu.
Duke Energy will add one member of Piedmont’s board of directors to its board after the transaction is closed. An existing member of Piedmont’s management team will lead Duke Energy’s natural gas operations in the Carolinas, Tennessee, Ohio and Kentucky. Shares of Piedmont Natural Gas Co. jumped almost 40 percent before the opening bell and appear to be heading for an all-time high.
Three years after Duke Energy bought Progress Energy for $32 billion and became the nation’s largest electric utility, it again wants to combine forces with a North Carolina-based energy company, announcing plans this week to purchase natural gas distributor Piedmont Natural Gas for $4.9 billion in cash.
“We’re pretty sure it’s going to have a few impact on our clients, with billing rates, but we don’t have an idea of how much yet”, Bannister said.
Alongside Duke’s move to develop the Atlantic Coast Pipeline with Dominion, the investments help paint a picture of growing interest in gas infrastructure across many sectors of the electric industry, the Charlotte Business Journal reports.
“Today’s low natural gas costs offer an opportunity to invest in permanent improvements, such as weatherization, that will insulate homeowners against higher energy costs in the future”, Gardner said. Buying a company like Piedmont could put Duke on a track to obtain customer growth of between 1.5 and 2 percent, analysts say.
The Duke-Piedmont merger must still get approval from state regulators and Piedmont stockholders and undergo an anti-trust review by the Federal Trade Commission and Justice Department.
Atmos Energy has about 25,000 customers in Paducah, West Paducah, Reidland, Grand Rivers and Calvert City. Duke will also assume about $1.8 billion of Piedmont’s net debt, giving the deal an enterprise value of $6.7 billion.
About 44 percent of Kentucky residents heat their homes with natural gas.
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Duke Energy President and CEO Lynn Good said they are looking forward to welcoming the employees of Piedmont, as well as the one million customers that mostly comes from Carolina and Tennessee.
