Progress, Duke extend merger 'termination date'

Posted January 9, 2012
Updated January 10, 2012

— In documents filed Monday with the Securities and Exchange Commission, Progress Energy extended the timeline of a planned merger with Duke Energy until July. The merger of the utilities was to be completed this week, but has hit regulatory hurdles in recent weeks.

The Federal Energy Regulatory Commission ruled in December that the $35 billion deal, which would create the nation's largest electric utility, would have "harmful effects on competition."

Any deal must also be approved by the North Carolina Utilities Commission. That approval would come after the feds give the OK. 

"The filings we made today with the Securities & Exchange Commission were to extend what's called the 'initial termination date' of the merger agreement by six months, or to July 8, 2012," said Progress spokesman Mike Hughes.

"The date was part of the original merger agreement issued early last year. Since January 8, 2012, was the one-year anniversary of the merger agreement's being signed, we needed to extend the termination date to accommodate the regulatory reviews under way. The six-month extension to July 8 was stipulated in the merger agreement (filed last April).

"It is not an estimate of when we expect to complete the merger. We have not provided an update on that schedule because we do not yet have our plan completed."

Once the deal goes through, the combined company would be headquartered in Charlotte, and as many as 1,000 jobs could be lost in Raleigh. Customers have raised concerns that the merger would yield a near-monopoly for the utility, and rate increases would follow.

Last week, Progress Chairman and Chief Executive Bill Johnson said both companies remained committed to the multi-billion dollar deal. 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 savings for the company.

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

Meanwhile, North Carolina Attorney General Roy Cooper has come out against Duke's proposal to raise electricity rates by a combined $646 million, which would amount to about $7 per month for the average residential customer.

Cooper asked the state Utilities Commission to "heed the economic damage to North Carolina consumers before signing off on Duke Energy's rate increase."


This story is closed for comments.

Oldest First
View all
  • dmpaltman2 Jan 10, 2012 have a choice. Don't want Duke or PGN, then move into one of the EMC territory. Move into a city owned utility. The Duke/Progress Energy merger will not affect your choice.

  • balog Jan 10, 2012

    " Let the companies finally merge. It's been a rumor for years that Duke would purchase CP&L/Progress Energy.
    January 10, 2012 9:56 a.m."

    So much for consumer choice.

  • dmpaltman2 Jan 10, 2012

    This is turning into another NLRB versus Boeing situation. Let the companies finally merge. It's been a rumor for years that Duke would purchase CP&L/Progress Energy.

  • balog Jan 10, 2012

    So according to your logic, gas stations should be allowed to jack up their proces during a fuel shortage and major weather event - after all, its capitalism....

  • notodukpgnmerger Jan 9, 2012

    balog - you crack me up - Yes our great system of capitalism would let me choose my supplier, it would not guarantee a profit, it would not control who could offer me service, it would let the free market work.

    sorry...I sound like New Bern and Rocky Mount!

    Yes capitalism says the government should guarantee me a profit, it should let me get bigger and further control my market, it should let me determine my own cost and get a profit beyond this cost without ever allowing any other competitor in. That is capitalism Johnson/Roger style!!

  • notodukpgnmerger Jan 9, 2012

    Johnson is using the usual utility spin - "make us bigger and we will be able to spend and upgrade the facilities and be more efficient too!". If that is the case commit to lower rates immediately along with a rate freeze. Also, with natural gas prices at a near all time low and an abundant supply the need to invest in the $8,000,000,000 (yes that is billion!) per reactor Harris #2, #3 is not needed. PGN and Duke will only need to invest in Gas generation for the next 20 years so the requirement to merge to allow access to capital is a fallacy.

    There is no benefit for anyone other than Johnson and Rogers - the 2 who least need it. 1000's laid off all to line the pockets of 2 executives.

    Hopefully the Utility Commission and its utility puppet staff just say no - it is time to support the customers and citizens of this state. JUST SAY NO TO THE UNITED STATES LARGEST ELECTRIC UTILITY MONOPOLY!

  • balog Jan 9, 2012

    But this is capitalism at its very raw best people! Remember? We don't WANT big bad regulations on things like this because it hinders job creation. We don't want government stepping in the way of this "free market" merger because someday we all might own a big company and want to merge with another big company. Blocking this merger is equal to a socialist-communist act and is anti-american!

  • Rebelyell55 Jan 9, 2012

    Merging Duke and Progress would eliminate this competition and all the customers of Electrical Cooperatives across North Carolina would be paying higher rates.
    January 9, 2012 5:09 p.m.
    This so true and why this would be very bad for NC. Just hope the pocket of our elected leaders don't itch too bad.

  • notodukpgnmerger Jan 9, 2012

    Check the facts
    ...according Charlotte Business Journal Jim Rogers said PGN shareholders were due a 20% premium w/out PGN's Johnson becoming CEO. Johnson accepted a 5% PGN premium to allow himself a handsome raise all at the loss of 1,000+ jobs in Raleigh.
    ...The market power option "virtual divestiture" is a ruse. What makes anyone think the new Duke is interested in protecting or advancing wholesale competition. As I recall Duke along with Enron manipulated prices in California so what a great idea for NC.
    ...The $130M "savings" proposed annually is not a reduction in rates but rather a reduction from future rate increases. Put it in writing Bill - are you proposing a rate reduction of $130M along with a freeze - no chance.
    ...The cuts in jobs exceeds $200M per year - more than the proposed customer savings. Sounds like a big setback for NC employment and downtown Raleigh.

    This deal is should be rejected by both FERC and the NCUC. JUST SAY NO!!!

  • Walkin Man Jan 9, 2012

    "new technologies and, at the same time, produce savings for the company." Translated means higher utility bills to pay higher dividends to their stockholders, pay their execs bigger salaries and generally put an additional burden on the rest of us. Nice! Let's hope the plan NEVER goes through.