Duke Energy (NYSE: DUK) and Piedmont Natural Gas want state regulators to approve an extension of gas purchase agreements they made with the Atlantic Coast Pipeline that are set to expire June 30.
The agreements, signed in April 2014, can be terminated on that date because the Federal Energy Regulatory Commission has not yet issued a certificate of public convenience and necessity for the 600-mile pipeline.
The N.C. Utilities Commission approved those “precedent contracts” for gas purchases in November 2014. And they contained the June 30, 2017 termination deadline. Duke Energy Progress, Duke Energy Carolinas and Piedmont filed petitions with the commission Wednesday to allow for an amendment extending that deadline.
Pipeline owners
Parent company Duke, based in Charlotte, owns all three utilities. And it also owns a 47% share of the pipeline. Therefore, the state commission must approve all contracts between the utilities and the pipeline to ensure there is nothing improper in the agreements.
The three utilities filed essentially identical requests.
“Due in part to disputes that have arisen between ACP and various stakeholders in the pipeline routing and environmental review process, the certificate for ACP has not yet been issued but is expected to be issued in a number of months,” Piedmont says in its filing.
Duke spokeswoman Tammie McGee says the utilities expect FERC will issue the certificate this fall, but the date is not fixed. The pipeline expects FERC to approve the Environmental Impact Statement for the project next month.
Initial agreements
In its proposed order, Piedmont says, “in order to preserve the respective parties’ rights and avoid a termination event under the existing provisions …, Piedmont and ACP have negotiated an extension of the FERC certificate condition.”
The utilities want the state commission, which had to pass the initial agreements, to approve the extension. They say that nothing in the agreement has changed, except the termination date.
In those initial agreements, Duke Carolinas contracted with the pipeline to transport 452,750 dekatherms of natural gas daily for use in its natural gas plants, once the pipeline is in operation. Duke Progress contracted for 273,250 dekatherms to be transported daily, while Piedmont contracted for 160,000 dekatherms.
Confidential date
Together, the three Duke companies account for 725,000 dekatherms of daily transportation, or about 48% of the pipeline’s capacity.
The public versions of the filings do not disclose the length of the proposed extension. Piedmont spokeswoman Loree Elswick says the new date is confidential.
Charlotte Business News – John Downey – 06/21/2017
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