Duke Energy & Progress Energy Revise Merger Plan
February 17, 2012
Duke Energy of Charlotte has submitted another merger plan to the Federal Energy Regulatory Commission (FERC) for their twice rejected proposal to acquire Raleigh based Progress Energy in a $13.7 billion all-stock deal that would create the nation’s largest utility.
The companies need the approval of the Federal Energy Regulatory Commission and regulators in North Carolina and South Carolina.
In December, the FERC rejected the companies’ second proposal to give up control of some of their electricity pricing as a way to ensure that the combined company wouldn’t exercise undue influence over the power markets in the Carolinas.
Duke and Progress will offer transmission system upgrades and wholesale power sales in a revised merger plan to be filed with state regulators next week.
The plan is intended to satisfy the Federal Energy Regulatory Commission’s objections to the merger’s effect on competition for wholesale power in the utilities’ Carolinas territory. But it also must balance state regulators’ concern for the impact on retail customers.
“We’ve been rejected twice (by FERC), and we’re trying to find the place between federal requirements and state regulations – there’s a thread-the-needle aspect of that,” Duke CEO Jim Rogers said. “We did a lot of complex analysis. We want to be third time’s the charm and not three strikes and you’re out.”
Rogers discussed the merger Thursday as Duke reported its fourth-quarter and 2011 earnings. Quarterly earnings fell 33 percent as mild weather softened electricity sales, but the company’s full-year results beat its expectations and 2010 earnings.
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