News Summary
Duke Energy has finalized a $2.48 billion sale of Piedmont Natural Gas’s Tennessee operations to Spire Inc. The move is part of Duke Energy’s strategy to modernize its services and focus on growth. With this acquisition, Spire enhances its market presence, expanding its reach to nearly two million customers while Duke Energy intends to use proceeds for debt reduction and modernization. The deal is significant within the natural gas sector and is expected to reshape distribution in Tennessee amid growing energy demands.
North Carolina – Duke Energy has announced the sale of its Piedmont Natural Gas Tennessee local distribution company to Spire Inc. for $2.48 billion in cash. This transaction marks one of the largest acquisitions in the United States involving publicly traded natural gas companies. The decision is part of Duke Energy’s strategy to focus on energy modernization and capitalize on growing investment opportunities.
The financial details reveal that the $2.48 billion sale price equates to a 1.8 times multiple of Duke Energy’s projected year-end rate base for 2024 and a 24 times multiple of the company’s expected earnings for the same year. A significant portion of the proceeds, approximately $800 million, will be allocated to reducing debt at Piedmont Natural Gas, aimed at maintaining its capital structure.
Moreover, Duke Energy intends to leverage existing tax credits to mitigate most of the cash taxes incurred from this transaction. The remaining $1.5 billion will assist in funding Duke Energy’s ambitious $83 billion five-year capital plan, which is centered on modernizing energy infrastructure across the region. The president and CEO of Duke Energy emphasized that the sale would facilitate investments driven by an increase in customer demand and economic growth.
Piedmont Natural Gas, operating in Tennessee for over 40 years, is a well-established energy provider in the Nashville area, serving approximately 205,000 customers. The sale agreement encompasses nearly 3,800 miles of distribution and transmission pipelines along with a liquefied natural gas facility. There are assurances that the operations will mainly continue in the Greater Nashville area, with employees transitioning from Duke Energy to Spire to ensure sustained business continuity.
Spire Inc., which also operates gas utilities in Alabama, Mississippi, and Missouri, stands to expand its customer base to nearly two million households and businesses as a result of this deal. The CEO of Spire has expressed enthusiasm over the acquisition, seeing it as a strategic enhancement of their core utility business.
There are specific conditions that must be met before the transaction can be finalized. These include regulatory approval from the Tennessee Public Utility Commission and compliance with the Hart-Scott-Rodino Act. It is anticipated that the sale will be completed by the first quarter of 2026.
Duke Energy has engaged JP Morgan Securities LLC and RBC Capital Markets LLC as financial advisors for this transaction. Legal counsel is being provided by Skadden, Arps, Slate, Meagher & Flom LLP, with additional support from McGuireWoods and Holland & Knight.
This strategic sale reflects the ongoing changes and transformations within the energy sector, as companies like Duke Energy pivot towards investments in cleaner energy sources, encompassing natural gas, nuclear power, renewable energy, and energy storage. Overall, Piedmont Natural Gas provides vital services to over 1.2 million customers across North Carolina, South Carolina, and Tennessee, where it has consistently earned high ratings for customer satisfaction among large utilities in the southern United States.
In summary, this significant transaction between Duke Energy and Spire Inc. is poised to reshape the landscape of natural gas distribution in Tennessee while enabling both companies to focus on growth and infrastructure modernization in a rapidly evolving energy market.
Deeper Dive: News & Info About This Topic
- PR Newswire
- Wikipedia: Natural Gas
- Investing.com
- Google Search: Duke Energy Tennessee
- Business North Carolina
- Google Scholar: Duke Energy Piedmont Natural Gas
- Nashville Post
- Encyclopedia Britannica: Natural Gas Industry
- Duke Energy Newsroom
- Google News: Duke Energy Spire
Author: HERE Nashville
The NASHVILLE STAFF WRITER represents the experienced team at HERENashville.com, your go-to source for actionable local news and information in Nashville, Davidson County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as CMA Fest, Bonnaroo Music & Arts Festival, and Nashville Pride Festival. Our coverage extends to key organizations like the Nashville Area Chamber of Commerce and Nashville Health Care Council, plus leading businesses in healthcare, automotive, and technology that power the local economy such as HCA Healthcare, Bridgestone Americas, and Asurion. As part of the broader HERE network, including HEREBristol.com, HEREChattanooga.com, HEREKnoxville.com, and HEREMemphis.com, we provide comprehensive, credible insights into Tennessee's dynamic landscape.
