Major U.S. Utilities Consider Selling Natural Gas Distribution Networks

By Charles Kennedy - Apr 06, 2023

As Democratic lawmakers and governors ramp up efforts to ban gas hookups in new buildings, two large U.S. utilities are considering selling part of their gas pipeline networks, The Wall Street Journal reported on Thursday, quoting sources with knowledge of the plans.

Dominion Energy and National Grid plc are deliberating potential divestments of part of their gas transmission systems as the “gas stove wars” have intensified and towns and cities across the U.S. are considering banning gas hookups for home appliances in new buildings.   

The bans, and the potential bans, would refer to new homes only, and will not remove existing gas appliances, yet the debate has become fierce among politicians and lawmakers.

To minimize possible losses from such bans, Dominion Energy and National Grid are exploring potential sales of gas pipeline networks.

Dominion Energy is considering divesting its gas distribution units in North Carolina, Ohio, and parts of the Western United States, with a total value of those assets at as much as $13 billion, some of the Journal’s sources said.

It is unlikely, though, that all the assets will be sold as a whole package, the WSJ notes. 

National Grid, for its part, is deliberating a possible sale of part of its gas distribution network in the Northeast, with one option being divesting a minority stake, the Journal’s sources said.

The quest of many U.S. towns and cities to ensure that all newly built homes will be all-electric has resulted in a fierce battle in dozens of states, many of which have moved to preemptively prohibit their towns from banning natural gas in new homes.         

In California, the city of Berkeley became the first to enact a ban on new natural gas hookups in new buildings back in 2019. Two years later, Seattle passed an ordinance to ban natural gas for space heating in new construction of new commercial and apartment buildings taller than three stories, or for use in replacement heating systems in older buildings.

By Charles Kennedy for Oilprice.com