CHARLOTTE, N.C. - Duke Energy, the nation’s largest electric utility, today said it has bought a 7.5-percent ownership stake in the proposed and previously announced $3-billion Sabal Trail natural gas pipeline that will traverse Alabama, Georgia and Florida to meet the growing need for natural gas in those states.
Duke Energy’s commercial power business unit will invest approximately $225 million in the approximately 500-mile underground pipeline – from Tallapoosa County, Ala., to Osceola County, Fla. – during the next seven years. The company expects to invest more than 90 percent of those funds in the next three years.
The pipeline, scheduled to begin service in 2017, requires federal and other regulatory approvals.
Sabal Trail Transmission, a joint venture of the pipeline’s owners – Spectra Energy, NextEra Energy, Inc., and now Duke Energy – seeks to secure those approvals by early 2016 and begin pipeline construction later that year.
Duke Energy acquired its ownership share from Spectra Energy, resulting in a pipeline ownership structure of Duke Energy (7.5 percent), NextEra Energy (33 percent) and Spectra Energy (59.5 percent).
Customer, economic, environmental benefits
“The Sabal Trail pipeline will benefit Duke Energy’s Florida customers by supplying a stable, reliable supply of low-cost natural gas to generate electricity,” said Phil Grigsby, Duke Energy’s vice president of commercial transmission.
“Today, only two major natural gas pipelines supply the entire state of Florida. A third pipeline, Sabal Trail, is essential to meet the increasing energy needs of Florida’s growing population and economy,” Grigsby said.
“Duke Energy’s investment in the pipeline further expands the company’s commitment to build critical natural gas pipeline infrastructure in the Southeast U.S., where natural gas has become an important fuel that provides significant environmental benefits,” he added.
Natural gas plants release significantly smaller amounts of greenhouse gases and other emissions than do coal and oil plants.
Florida uses natural gas to generate 62 percent of its electricity, according to the latest data from the U.S. Energy Information Administration.
That percentage is expected to increase in the coming years as Florida’s population continues to grow and electric utilities continue to replace coal and oil power plants with cleaner-burning natural gas plants.
The pipeline will have the capacity to deliver approximately 1.1 billion cubic feet of natural gas per day to the Southeast U.S. market, supplying natural gas-fired power plants, natural gas distribution companies, manufacturing plants and other industrial users.
The pipeline’s largest customers will be two Florida electric utilities – Duke Energy Florida and Florida Power & Light Company – which have contracted to buy pipeline capacity for 25-year initial terms.
Duke Energy Florida will use natural gas from the pipeline to fuel its new $1.5-billion power plant in Citrus County, Fla., scheduled to open in 2018.
Duke Energy’s partial ownership of the pipeline will not affect electricity rates paid by Duke Energy Florida customers or Duke Energy customers in other states.
The Sabal Trail pipeline (www.sabaltrailtransmission.com) is Duke Energy’s second interstate natural gas pipeline investment announced in the past eight months.
The company in September 2014 became a 40-percent owner of the proposed 550-mile Atlantic Coast Pipeline from West Virginia, through Virginia to North Carolina. That project has an estimated cost of $4.5 billion to $5 billion, and a target in-service date of late 2018.
Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at: www.duke-energy.com.
Contact: Dave Scanzoni 24-Hour: 800.559.3853