July 6, 2020 Read More →

Southeast utilities cancel Atlantic Coast Pipeline, Dominion also selling gas business


One of the largest utilities in America is starting to turn its back on natural gas.

Dominion Energy said Sunday that it’s selling substantially all of its natural gas pipeline and storage assets to Berkshire Hathaway Inc. for $4 billion, along with Berkshire’s assumption of $5.7 billion in debt. In a separate statement, the Richmond, Virginia-based company said it also decided with partner Duke Energy Corp. to kill the controversial Atlantic Coast gas pipeline along the U.S. East Coast, citing ongoing delays and “increasing cost uncertainty.”

“We offer an industry-leading clean-energy profile,” Dominion Energy Chief Executive Officer Thomas F. Farrell said in a statement, citing the company’s goal of reaching net-zero emissions by 2050 and carbon-free electricity generation.

Atlantic Coast is the latest gas pipeline to be scrapped by developers after years of delays and mounting costs. Williams Cos. earlier this year pulled the plug on the Constitution natural gas pipeline that would run from Appalachia to New York. Gas projects across America are facing intensifying opposition as local governments and environmentalists push for a transition away from fossil fuels.

Berkshire is amassing more than 7,700 miles (12,400 kilometers) of natural gas storage and transmission pipelines and about 900 billion cubic feet of gas storage in the deal with Dominion. Warren Buffett’s conglomerate will also acquire 25% of Cove Point.

Dominion said it will use $3 billion of the proceeds to buy back shares. The company cut its projected 2021 dividend payment to around $2.50 a share, reflecting the assets being divested and a new payout ratio that aligns it better with industry peers.

[Rachel Adams-Heard and Katherine Chiglinsky]

More: U.S. utility giant kills pipeline, ditches gas in Berkshire deal

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