Duke Energy's $30 Billion Capital Spending Plan May Rise with Piedmont Acquisition

---

Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina), one of the nation's largest utilities, plans to invest about $25 billion in its regulated electric utility business over the 2016-2020 period, plus up to another $5 billion in its "commercial" business, which includes renewable energy, gas pipelines and electric transmission projects.

That $30 billion sum does not include potential capital projects it may inherit from its acquisition of Piedmont Natural Gas Company (NYSE:PNY) (Charlotte, North Carolina), a gas utility serving one million customers in the Carolinas and Tennessee. That transaction, announced last October, is being reviewed by the North Carolina Utilities Commission (NCUC) (Raleigh, North Carolina) in hearings that began July 18. That is the last regulatory approval required before the transaction can close.

Duke already has reached a settlement agreement on the Piedmont acquisition with the staff of the NCUC, which may expedite approval by the commission. The Federal Trade Commission (FTC) (Washington, D.C.) has given anti-trust clearance to the deal and the Tennessee Regulatory Authority (Nashville, Tennessee) also has green-lighted the transaction contingent on its approval by the North Carolina regulators. Duke is providing updates on the merger to the South Carolina Public Service Commission (Columbia, South Carolina). Piedmont's shareholders voted to support the acquisition, which Duke hopes to complete by yearend 2016.

Duke and Piedmont are equity owners of the Atlantic Coast Pipeline, a 600-mile interstate gas pipeline that will bring natural gas from the Marcellus and Utica shale formations to North Carolina and Virginia. The total investment value of that project is between $4.5 billion and $5 billion. That project, being managed by a unit of Dominion Resources Incorporated (NYSE:D) (Richmond, Virginia), is scheduled to begin construction in mid-2017 and be operating by late 2018, Piedmont executives told a conference held last month by the American Gas Association (AGA) (Washington, D.C.).

Piedmont has about $2 billion in planned capital spending for the 2016-2018 period, company officials told the AGA conference. A Duke spokesman told Industrial Info it was too early to say how Piedmont's planned capital spending will fare.

Duke's largest capital projects include:

• Crystal River Natural Gas Brownfield combined-cycle power plant, a 1,640-megawatt (MW) gas-fired project valued at about $750 million. A unit of Fluor Corporation (NYSE:FLR) (Irving, Texas) is providing turnkey services to that project, which is scheduled to come online in mid-2018.
• William S. Lee Combined Cycle Unit Addition, a $750 million, 750-MW, gas-fired unit addition to the W.S. Lee Power Station in in South Carolina. Construction of that project is scheduled to be complete by late 2017. Fluor is providing engineering, procurement and construction (EPC) services to that project.
• Rio Bravo Windfarm, a 200-MW merchant wind project being built in south Texas. Construction of this $740 million project is scheduled to be completed early next year.
• Panoche Valley Solar Power Station, a $650 million, 247-MW photovoltaic power project scheduled to be built in Hollister, California. Duke is developing that project in conjunction with PV2 Energy (Menlo Park, California). Construction kicked off last September and construction should be complete by next September.
• Ashville Combined Cycle Plant Addition, a project to add 560 MW of new gas-fired, combined cycle generation at Duke's Ashville Power Station in Arden, North Carolina. That $600 million project is scheduled to kick off in September 2017, and be operating by mid-2020.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.