Duke Energy's proposed acquisition of Piedmont Natural Gas gained important support as the North Carolina Public Staff reached agreement with Duke Energy and Piedmont on certain stipulations and conditions for approval of the transaction.
The Public Staff is the independent state agency charged with protecting the interests of utility customers.
The stipulations will ensure that the proposed acquisition "will have no adverse impact" on either Duke Energy or Piedmont customer bills or service, the Public Staff states in a filing to the North Carolina Utilities Commission (NCUC).
With the stipulations, the acquisition "is justified…and meets the standard for approval" by the NCUC, the filing says.
Duke Energy Chairman, President and CEO Lynn Good called the Public Staff's recommendation "another positive step" toward completion of the acquisition, which will provide wide-ranging benefits for customers and communities throughout North Carolina.
"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. "We look forward to discussing the benefits of the acquisition at the NCUC hearing in July."
Piedmont will retain its name and operate as a business unit of Duke Energy.
Among the stipulations contained in the Public Staff's agreement with Duke Energy:
- Piedmont's North Carolina customer bills collectively would decrease by $10 million, spread over the first two years after the acquisition, to ensure Piedmont customers benefit from Piedmont-related cost savings generated by the acquisition. In North Carolina, Piedmont has about 655,000 residential customers, 69,000 commercial business customers and 1,000 industrial and other customers.
- The combined company would make annual charitable contributions totaling at least $17.5 million in North Carolina during each of the four years after the acquisition.
- 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.
- Certain expenses related to the acquisition, including severance costs and investment banker and legal fees for transaction structuring, would be excluded from customer bills.
- Duke Energy and Piedmont would be subject to a "Code of Conduct," specific to the acquisition, ensuring, among other things, that their customers would continue to benefit from competitive natural gas prices.
The NCUC will hold a hearing on the proposed acquisition on July 18 in Raleigh.
Duke Energy and Piedmont seek to complete the transaction, subject to NCUC approval, by the end of 2016.
The proposed acquisition, first announced in October 2015, has been approved by the Tennessee Regulatory Authority, contingent on NCUC approval.
Duke Energy and Piedmont also have formally notified the Public Service Commission of South Carolina about the transaction. The two companies are providing updates to the South Carolina commission about the NCUC's review.
In addition, the Federal Trade Commission has conducted an anti-trust review and approved the transaction.
Piedmont's shareholders also have approved the acquisition.