Warren Buffet-led conglomerate company Berkshire Hathaway is acquiring all of Dominion Energy Inc.’s gas pipeline and storage assets for $4 billion. Dominion is the second-biggest US power company by market value which recently announced the cancellation of the 966-km Atlantic Coast natural gas pipeline.
Judges have halted the construction after ruling that the approval for the project was granted without conducting adequate environmental studies. The US Supreme court last month upheld a crucial permit, but it remains facing strong opposition. Dominion and its partner, Duke Energy Corp abandoned the $8-billion project citing years of delays and swelling costs.
Despite the sale, Dominion is not walking away from fossil fuels. It will still sell heating and cooking gas and also retains an interest in its Cove Point LNG terminal in Maryland. Gas, coal, and oil contributed to 40% of the electricity that the company generates. However, Dominion is facing pressure from environmentalists, governments, and investors to quit fossil fuels. Virginia approved a regulation in April requiring Dominion’s utility in the state to be carbon-free by 2045.
Dominion’s deal with Berkshire is expected to ease its debt loads. The company also plans to reduce its projected 2021 dividend payment to around $2.50/share. Its shares fell 11% on Monday, marking the steepest decline in more than three months.
