The U.S. power-generating giant Duke Energy Corp. (DUK) will add about 1 million gas customers to the 7.3 million it already serves once it closes an all-cash deal to buy its neighbor in Charlotte, N.C., Piedmont Natural Gas Co. (PNY), for $4.9 billion.

Duke said Oct. 26 that it will pay $60 per share to Piedmont stockholders, 40 percent more than a share was worth at the close of trading on Oct. 23. It also will take over Piedmont’s debt, which now runs to about $1.8 billion. To finance the transaction, Duke will tap its existing cash resources and run up debt of its own by issuing bonds worth a total of between $500 million and $750 million.

“This combination provides us with a growing natural gas platform, benefiting our customers, communities and investors,” Duke CEO Lynn Good said in a statement announcing the deal. More specifically, the statement said, the sale “enhances” the company’s expected earnings per share, boosting its growth rate from 4 percent to 6 percent.

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U.S. shale has been producing generous amounts of gas and thus kept prices stable for distributors of the fuel, including Piedmont. As a result, several power companies have enlarged their gas producing operations and reduced their reliance on power generation at a time when improved energy efficiency has depressed the demand for electricity.

One example is the Southern Co., the electric utility holding company, which announced in August that it plans to buy AGL Resources Inc., for about $8 billion in cash. Both companies are based in Atlanta.

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As for the Duke-Piedmont deal, the two companies are already among several partners in the 550-mile-long Atlantic Coast pipeline, which carries gas south from the Marcellus shale basin in Pennsylvania. Duke’s stake in the project will rise to 50 percent once the deal is closed.

Duke’s current customers are in the Carolinas, Florida, Indiana, Kentucky and Ohio, where the rates they charge are decided by state regulators. Duke also has 500,000 additional customers in Kentucky and Ohio for its natural gas services. Piedmont has about 1 million customers in the Carolinas and Tennessee.

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The sale has already been approved by the management of both companies and is expected to close by the end of 2016. Still needed is the approval of Piedmont’s shareholders and the North Carolina Utilities Commission. Duke and Piedmont must also give details of the deal to the Public Service Commission of South Carolina and the Tennessee Regulatory Authority.

It’s not clear whether all the regulators will perceive the transaction as beneficial to customers as Duke and Piedmont do. Christopher Ayers, the executive director of the North Carolina Utilities Commission’s Public Staff, told the Charlotte Observer: “Our standard is that the benefits to consumers have to outweigh the costs and risks. Once the filings are made, we will do a deep dive on all their numbers to make sure consumers are not harmed in this process.”

If the deal goes through, Piedmont would keep a measure of autonomy. Duke will also appoint a member of Piedmont’s board to its own board, and a Piedmont manager will run Duke’s gas operations in the Carolinas, Kentucky, Ohio and Tennessee.

By Andy Tully of Oilprice.com

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