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Progress CEO: Merger with Duke will boost NC

Posted January 3, 2012

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— North Carolina has the potential to become an “energy hub” for the nation, but approval of the delayed merger between Progress Energy and Duke Energy is essential for that to happen, Progress Chairman and Chief Executive Bill Johnson said Tuesday.

Speaking at a forum about energy ahead of the North Carolina Chamber's and North Carolina Bankers Association's 10th annual Economic Forecast Forum, Johnson reiterated the commitment of both companies to the multi-billion dollar deal that would form one of the nation’s largest utilities.

Announced nearly a year ago, the deal was expected to close before the end of 2011. Federal regulators delayed approval last month, forcing Progress and Duke to revise plans.

Johnson said he remains hopeful a deal will be closed in the next three months or so, describing the delay as a “setback.”

Progress Energy CEO Bill Johnson Web only: Progress chief touts benefits of Duke merger

The deal would put Johnson in charge of the combined company, and the corporate headquarters would be located in Charlotte. Hundreds of jobs in Raleigh will be phased out.

Johnson defended the merger, saying a combined company would have the capital and resources necessary to upgrade facilities, embrace new technologies and, at the same time, produce “more than $650 million in savings over the first five years.”

Concern about electricity prices has been a factor cited by opponents of the merger.

A combined company also would help Duke Energy “attract jobs to the state” that would be linked to “our nation’s energy transformation.”

Johnson did express concerns about environmental regulations that he said drive up energy costs. While he acknowledged global warming and a need to lower carbon emissions in his remarks, Johnson called for a prioritization of concerns.

“When you get to the end of the string, customers have to pay the bill,” he said.

Looming regulations will be among the costliest on record even in the view of the U.S. Environmental Protection Agency, he said.

The impact of energy costs on customers “is something I think about every day,” he added.

Johnson pointed out that one-third of the utility’s customers have a household income of less than $30,000 a year.

Tom Skains, chairman, president and chief executive of Piedmont Natural Gas, discussed the role of natural gas in the country's future during the preliminary session of the economic forum.

Other speakers scheduled for the event include Gov. Beverly Perdue and Kevin Kabat, president and chief executive of Fifth Third Bancorp.

48 Comments

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  • simplelogic Jan 4, 2012

    What difference does it make? Can we choose our electric company? Where does competition fit into this picture??

  • barbstillkickin Jan 4, 2012

    Sure it will boost NC well at least the pockets of the people who already have pockets of gold. Taxes going up, food going up, clothing going up, pay going DOWN. If the merge then we will have no protection or control but then again do we now on anything.

  • DottieDot Jan 4, 2012

    YourConscience - spot on! The regulator make me nervous too! I don't trust them either!

  • vcrandall Jan 4, 2012

    The proposed merger would bring no long-term benefits to the State or customers of either company, is not motivated by potential fuel savings or operational efficiency. The merger is a strategic play that increases financial risk, reduces exposure to unregulated markets, enhances financial standing to invest in capital intensive nuclear power and morphs two utilities into a single statewide energy monopoly.

    When it comes to solar energy, utilities typically use the same solar panels as homeowners. Discounted volume purchases for solar panels is about the only cost advantage electric utilities could have. But any cost advantage is canceled out by operational overhead and having to pay additional expense to property owners for suitable places to position their panels.

    The point is this: homeowners will discover that onsite panels will generate electricity for equal or less cost than buying power from the utilities.

  • retiredinflorida48 Jan 4, 2012

    Two questions for you folks up in NC:
    1) I am no accountant, but why is no one questioning the economic logic of spending $20 BILLION+ to "save $650 million over 5 years"? Is this the way most companies (or people) invest their money (or in this case, the home owner's money)? Would you spend over $2,000 to save just $65 over 5 years time?
    2) The big story here in Tampa FL is the Crystal River plant, and how the power company's own employees messed up the walls of the building that holds the reactor. Google it or go to http://www.myfoxtampabay.com/dpp/news/local/nature_coast/crystal-river-nuclear-plant-may-close-06142011. Looks like they are going to have to tear down the building and replace it for $2 or $3 billion (small potatoes compared to the cost of the merger) or close the place down. Really suprised that it has not been in the news up there, maybe the reporters in NC are busy with other stories. I guess out of sight, out of mind. Hope they don't try the same fix with the Duke

  • YourConscience Jan 3, 2012

    They keep dangling carrots in front of NC decision makers. DONT BE FOOLED!!! You see the trap right in front of you. DONT LOOK AT THE CARROT. A merger will create a monster that cost NC consumers, city budgets, and little old ladies MILLIONS in increased fees that will all go to Dukes bottom line and pad the execs pockets. Energy is and should be regulated because it is a necessity of life, not something to jack around to make a few people rich. Regulators PLEASEEE do your job and protect he consumers!!!!

  • timtooltime777 Jan 3, 2012

    No ! This CEO has to Go ! You are not welcome in N.C. ! You are up to no good !

  • boneymaroney13 Jan 3, 2012

    PLEASE MERGE!!!!!! And then take over these "rip-off" co ops. The co ops are not regulated and charge us customers way more that regulated power customers.

  • westernwake1 Jan 3, 2012

    "You didn't answer his question... try again" - timbo10.0

    Progress Energy is unable to answer these questions for the Federal regulators who rejected the merger proposal as anti-competitive and not good for consumers. I have very little hope that this Progress Energy insider will be able to provide any realistic answers.

  • westernwake1 Jan 3, 2012

    "if PGN only made 10x its lowest paid employee, he'd make less than some guys in the field" - dmpaltman2

    You mean those linemen that Progress Energy has been laying off for the last 10 years to reduce expenses. Now the company has reached the point where they are unable to maintain the outside plant much less deal with even minor weather events.

    Well the good news is that the executive bonuses went up for cutting all these expenses.

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