Two of the country’s largest utility companies are weighing potential sales of parts of their natural-gas pipeline networks as efforts to phase out in-home gas use accelerate.
Dominion Energy Inc.
is considering selling its gas-distribution companies serving North Carolina, Ohio and parts of the Western U.S., according to people familiar with the matter. Combined, the assets could be worth as much as $13 billion, some of the people said, though they are unlikely to be sold all together.
Meanwhile,
PLC is exploring a possible sale of part of its pipeline network serving the Northeast as lawmakers there look to curtail fossil-fuel use, according to people familiar with the matter. One option under discussion at the British utility company is to sell a minority interest in the network, some of the people said.
The potential sales come as lawmakers and regulators across the U.S. debate the future of natural gas for home heating and cooking as more towns and cities look to phase it out. Utilities are working to determine how to modify or repurpose their natural-gas delivery networks in response.
The electrification of homes and businesses is a key part of the Biden administration’s climate agenda. The Inflation Reduction Act passed last year includes tax credits to motivate the purchase of heat pumps and other electric appliances and fixtures, as well as the adoption of electric vehicles. Those shifts are expected to boost demand for electricity, which for years plateaued in the U.S. as a result of energy-efficiency improvements.
As a result, utilities are beginning to grapple with the likelihood that parts of their gas systems risk becoming stranded assets, or facilities that retire before they pay for themselves, as fewer homes and businesses rely on the networks of pipelines built to serve them.
Brattle Group, a…
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