Duke-Piedmont deal wins North Carolina utility regulatory staff support

Dive Brief:

North Carolina Public Staff of the Utilities Commission have recommended approval of Duke Energy's $4.9 billion acquisition of Piedmont Natural Gas, finding the deal "will have no adverse impact" on customers and including stipulations to save them millions of dollars on bills, the Associated Press reports.
In the first two years after the acquisition, Piedmont customers in North Carolina would save $10 million, a stipulation to ensure Piedmont customers benefit from cost savings generated by the deal.
Next month, the North Carolina Utilities Commission consider of the deal, with a final decision meaning the transaction could close by the end of the year. The Tennessee Regulatory Authority has already given its stamp of approval.

Dive Insight:

Duke Energy continues to win support for its proposed acquisition, and North Carolina Public Staff has filed testimony finding that with added stipulations, the deal "is justified…and meets the standard for approval."

Duke Energy Chairman, President and CEO Lynn Good said the recommendation is "another positive step" toward completing the deal.

"The combined company will build on Duke Energy's and Piedmont's strong tradition of customer service and community support, with an ongoing commitment to affordable energy, economic development and environmental stewardship," Good said in a statement. "We look forward to discussing the benefits of the acquisition at the NCUC hearing in July."

In addition to customer bill savings, Duke agreed that the combined company will make annual charitable contributions totaling at least $17.5 million in North Carolina during each of the four years after the acquisition. And, the combined company would commit $7.5 million for low-income household energy assistance and community job training programs during the first year after the acquisition.

Duke also agreed to exclude certain expenses related to the acquisition, including severance costs and investment banker and legal fees.

Piedmont shareholders signed off on the deal in January; Tennessee Regulatory Authority has approved it as well, contingent on NCUC approval. The companies have also been providing updates to the Public Service Commission of South Carolina, and the Federal Trade Commission has already given its approval.

If approved, the merger would add about 1 million new gas customers to Duke's service territory, returning the company to the gas business for the first time since 2007.

The hearing is slated for July 18.