July 30, 2025 [Reuters]- Duke Energy said on Tuesday it would sell its Tennessee natural gas distribution business to Spire for $2.48 billion in cash, as the utility aims to streamline operations and unlock capital to invest in electric grid upgrades.

About $800 million of the proceeds will be used to pay down debt at Piedmont Natural Gas, while the remaining $1.5 billion will support Duke’s $83 billion five-year capital plan focused on grid modernization and energy transition, the company said.

“This capital-recycling strategy becomes increasingly valuable as Duke Energy faces significantly higher electricity demand growth from data centers and industrial expansion across its service territories,” said Jefferies analyst Julien Dumoulin-Smith.

This simplification should improve operational efficiency and reduce regulatory risk as Duke Energy navigates its energy transition strategy, Dumoulin-Smith said.

Duke’s electric utilities serve about 7.4 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky. Its shares rose 1.4% to $119.26.

The sale agreement for the Piedmont Natural Gas Tennessee business includes nearly 3,800 miles of distribution and transmission pipelines and a liquefied natural gas facility serving about 205,000 customers.

Piedmont’s primary operations will remain in the Greater Nashville area after the transaction closes, which is expected in the first quarter of 2026.

Natural gas company Spire said it has secured a bridge facility with BMO Capital Markets for the entire purchase price and is pursuing a permanent financing plan, including a balanced mix of debt, equity and hybrid securities.

It is also evaluating the sale of non-utility assets such as natural gas storage facilities as a potential source of funds.

Spire CEO Scott Doyle said on a conference call the company expects to file for regulatory approval with the Tennessee Public Utility Commission within 45 days.

The integration of the Tennessee business is expected to expand Spire’s utility footprint, adding to its existing operations in Missouri, Alabama and Mississippi.