8-KOther Events

Duke Energy CORP 8-K Report, Corporate Update (Jun 10, 2016)

Filed June 10, 2016For Securities:DUKDUKBDUK-PA

Summary

Duke Energy Corporation (DUK) has filed an 8-K report detailing a significant development in its proposed acquisition of Piedmont Natural Gas Company. The company, along with Piedmont and the Public Staff of the North Carolina Utilities Commission (NCUC), has reached an Agreement and Stipulation of Settlement. This settlement, filed with the NCUC, indicates that the Public Staff agrees the acquisition will not adversely impact customer bills or service, and is justified for approval. Key terms of the settlement include a $10 million reduction in Piedmont's customer bills in North Carolina over the first two years post-acquisition, designed to pass on cost savings. Additionally, Duke Energy entities commit to substantial charitable contributions and funding for low-income energy assistance and job training programs in North Carolina. The settlement also clarifies that certain acquisition-related expenses will not be passed on to customers, and a code of conduct will be implemented to ensure continued competitive natural gas pricing.

Key Highlights

  • 1Duke Energy and Piedmont Natural Gas reached a settlement with the North Carolina Utilities Commission (NCUC) Public Staff regarding Duke's proposed acquisition of Piedmont.
  • 2The settlement states the acquisition will have no adverse impact on customer bills or service, and is justified for NCUC approval.
  • 3Piedmont's North Carolina customers will see a collective bill reduction of $10 million over the first two years following the acquisition's close.
  • 4Duke Energy entities commit to a minimum of $17.5 million in annual charitable contributions in North Carolina for four years post-acquisition.
  • 5The companies will commit $7.5 million for low-income energy assistance and community job training in the first year after closing.
  • 6Specific acquisition-related expenses, such as severance and professional fees, will be excluded from customer rates.
  • 7The acquisition has received shareholder approval from Piedmont and early termination from the Hart-Scott-Rodino Act review, with prior approval from Tennessee, pending NCUC approval.

Frequently Asked Questions

This 8-K filing announces a significant development in Duke Energy's proposed acquisition of Piedmont Natural Gas. Specifically, it reports on the Agreement and Stipulation of Settlement reached with the Public Staff of the North Carolina Utilities Commission (NCUC) regarding the acquisition.

Piedmont's customers in North Carolina will benefit from a collective reduction of $10 million in their bills over the first two years after the acquisition closes. This is intended to reflect cost savings generated by the acquisition.

Duke Energy and Piedmont are seeking to close the acquisition by the end of 2016, subject to approval from the North Carolina Utilities Commission (NCUC). Hearings for the NCUC review are scheduled for July 18, 2016.

No, while Piedmont's shareholders have approved the acquisition and early termination has been granted under the Hart-Scott-Rodino Act, and the Tennessee Regulatory Authority has given contingent approval, the acquisition is still pending approval from the North Carolina Utilities Commission (NCUC). Duke Energy has also formally notified the Public Service Commission of South Carolina and is providing updates.