The glut prompted Goldman Sachs Group Inc. and Bank of America Corp.to cut short-term gas price forecasts last week.
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Natural gas costs this year are, on average, about 38 percent lower than a year ago. The lower cost of natural gas has more than offset increases in base rates over that time.
Duke spokesman Dave Scanzoni said Duke and Piedmont customers will still get separate bills for their gas and electric.
By federal law, natural gas prices are not regulated at the wholesale level and generally fluctuate with supply and demand. These companies combined make up ~2% of the Vanguard Energy ETF (VDE).
United States natural gas prices fell below $2 per million British thermal unit (MMBTU) during European trading on Tuesday, October 27.
According to Coomes, Atmos Energy uses 65 mcf as a more accurate average usage of its customer base. The 1.5 Bcf/d project is a JV led by Dominion (45%) and includes Duke (40%), Piedmont (10%) and AGL (5%). A 564-mile interstate pipeline, it would carry Appalachian Basin gas to power generation and other markets in Virginia and North Carolina (see Daily GPI, September 18).
This is particularly critical now as the nation continues to shift away from coal and toward natural gas.
Piedmont has ownership interests in Hardy Storage Co. LLC, a 104-mile intrastate pipeline in North Carolina; and SouthStar energy Services, a retail gas marketing company.
Piedmont started its operations in 1951 in Charlotte.
Atmos Energy has about 25,000 customers in Paducah, West Paducah, Reidland, Grand Rivers and Calvert City. Approvals are needed from the North Carolina Utilities Commission and Piedmont shareholders. Antitrust clearance is also necessary. Closing is targeted by the end of 2016.
According to USA Today the deal will give $60 in cash to Piedmont shareholders for each share they own. Duke will also assume about $1.8 billion of Piedmont’s net debt, giving the deal an enterprise value of $6.7 billion.
A fully underwritten bridge facility is in place with Barclays to complete the transaction. Meanwhile, one of its directors will be part of Duke’s board.
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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.
