On October 10, 2015, Duke Energy, the holding company for electric utilities with more than 7 million customers, announced it was acquiring Piedmont Energy, the holding company for a predominantly gas utility with 1 million customers. Piedmont’s natural gas service territory and Duke’s electric service territory overlap in parts of the Carolinas, and Piedmont’s gas pipelines supply some of Duke’s natural-gas-fired power plants. Moreover, Duke and Piedmont recently announced the joint development of the Atlantic Coast Pipeline, which will transmit natural gas from the Marcellus shale to the southeastern United States. Duke’s chief executive officer, Lynn Good, described the deal as “establish[ing] a valuable natural gas infrastructure platform, which will provide strong growth opportunities for years to come.”
Duke’s move is the most recent example of a predominantly electric company expanding with a natural gas utility acquisition. In June 2015, Southern Company, an electric utility with 8 million customers in the Southeast, announced it was acquiring AGL Resources, a gas utility with territories in the Southeast and Midwest. Just prior to that, Black Hills Corporation, an electric utility in North Dakota and Colorado, announced it was expanding its customer count by nearly 50 percent by acquiring SourceGas, a 450,000-customer gas utility with operations from Colorado to Arkansas. Finally, in October 2014, Iberdrola US, which owns Central Maine Power, New York State Electric & Gas, and Rochester Gas & Electric, announced it was acquiring the predominantly gas UIL Holdings. As the maps below illustrate, these transactions offer the acquirer a natural gas service territory that overlaps or is directly adjacent to its own electric service territories. In most cases, the transaction also offers expansion into a new state.