Progress, Duke extend merger 'termination date'
Posted January 9, 2012
Updated January 10, 2012
Raleigh, N.C. — 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."