...Organic Growth Opportunities for LDCs: Natural gas local distribution companies (LDCs) have become the strong and steady growth vehicle in the broader utilities sector. The need to replace aging pipe and a heightened concern for safety following several high-profile pipeline accidents in recent years have created a large backlog of organic growth opportunities for LDCs. Capex has increased significantly over the past five years, and Fitch Ratings expects capex growth to continue over the long term as LDCs accelerate their replacement of aging pipe. Acquisitions of LDCs: Several other companies in the broader utilities sector announced acquisitions of LDCs in 2015. The Southern Company (Southern, Issuer Default Rating [IDR] A/Watch Negative) and Duke Energy Corporation (Duke, BBB+/Watch Negative) are two large electric utility companies that could benefit from the business mix diversification of their targets' natural gas utility operations and the organic growth opportunities those LDC...
