Duke CEO: Piedmont deal heralds new focus on natural gas industry

Despite the weather and decrease in natural gas prices, Gardner still recommends consumers taking steps to reduce consumption.

By federal law, natural gas prices are not regulated at the wholesale level and fluctuate with supply and demand. Duke Energy Corp. will also assume approximately $1.8 billion in Piedmont debt. Atlanta-based Southern Co. said in August it will buy AGL Resources Inc., the nation's largest natural gas distribution-only company, giving the company access to 80,000 miles of natural gas pipelines.

However, natural gas prices settled ~0.75% lower at $2.39 per MMBtu (million British thermal units) on October 22 compared to the previous day's close. "Not only would the pipeline worsen the impacts of fracking in those communities, it would lock us into decades of dependence on dirty energy and divert investment away from cleaner, more sustainable energy sources".

Lower natural gas prices may also negatively affect MLPs such as Oneok Partners (OKS) and dissuade producers from producing more natural gas, which would result in lower volumes for the MLPs to transport.

"It's getting very warm everywhere and with so much gas in storage, it's like: 'What are you going to do with it?"' Trevor Sikorski, head of natural gas, coal and carbon research at Energy Aspects Ltd.in London, said Tuesday by telephone.

The 550-mile long Atlantic Coast Pipeline will be the first major natural gas pipeline to serve Eastern North Carolina.

According to USA Today the deal will give $60 in cash to Piedmont shareholders for each share they own. Both the companies went to a unanimous agreement with the deal. Approvals are needed from the North Carolina Utilities Commission and Piedmont shareholders.

Piedmont started its operations in 1951 in Charlotte.

Duke announced this week it would purchase Piedmont for nearly $5 billion, adding roughly 1 million new gas customers to Duke's service territory.

Piedmont will keep its name and maintain its headquarters in Charlotte, North Carolina, and one of its directors will join Duke's board.

About 44 percent of Kentucky residents heat their homes with natural gas.

According to Lynn Good, president and CEO of Duke Energy, "We look forward to welcoming Piedmont's employees and one million customers in the Carolinas and Tennessee to Duke Energy".