Utility Duke Energy sells Tennessee Natural Gas Business for $2.48 Billion

Duke Energy announced on Tuesday that it will sell its Tennessee Natural Gas Distribution business to Spire, for $2.48 Billion in cash. The utility is looking to streamline operations while releasing capital to invest in upgrades to the electric grid.

The company stated that approximately $800 million will be used to reduce debt at Piedmont Natural Gas. The remaining $1.5 billion is expected to support Duke's five-year $83 billion capital plan focusing on grid modernization, energy transition and grid modernization.

The Jefferies analyst Julien Dumoulin Smith said, "This capital recycling strategy becomes more valuable as Duke Energy faces a significant increase in electricity demand from data centers and industry expansion across its service territory."

Dumoulin Smith said that this simplification would improve operational efficiency as Duke Energy navigates through its energy transition strategy.

Duke's electric utilities serves about 7,4 million customers across North Carolina, South Carolina Florida, Indiana, Ohio, and Kentucky. The company's shares increased 1.4% to $119.26.

The Piedmont Natural Gas Tennessee sale agreement includes approximately 3,800 miles in distribution and transmission pipelines, as well as a liquefied gas facility that serves about 205,000 customers.

After the transaction is completed, expected to be in the first quarter 2026, Piedmont will continue its primary operations in Greater Nashville.

Spire, a natural gas company, announced that it had secured a bridge loan with BMO Capital Markets to cover the full purchase price. The company is also pursuing a permanent funding plan which includes a mix of debt and equity securities.

The sale of nonutility assets, such as storage facilities for natural gas, is being considered as a possible source of funding.

Spire CEO Scott Doyle stated on a conference called that the company anticipates filing for regulatory approval at the Tennessee Public Utility Commission in 45 days.

Spire's utility footprint is expected to grow with the integration of Tennessee, which will add to its current operations in Missouri and Alabama.

(source: Reuters)