State regulators hear arguments in energy merger

Posted June 25, 2012

— North Carolina environmentalists have made a last-ditch effort to block what will become the nation's largest electric utility.

Duke Energy has been trying for a year and a half to merge with Progress Energy and has one final hurdle to clear before the coupling — the blessing of the North Carolina Utilities Commission. Six commissioners met with representatives from the energy companies and the environmental group Monday to review information on the impact of the merger. The conclusion of the meeting has kicked off a countdown to a decision.

The environmentalists and the energy giants differ on one key point — whether the merger will drive prices up or down for customers.

Environmental nonprofit NC Waste Awareness and Reduction Network representatives argue it will harm the poor and the elderly by driving up costs. The energy companies have estimated $650 million will be saved by combining forces, and that money will be passed along to customers.

However, the scope of Monday's hearing before the NCUC was much narrower. NC WARN was only allowed to cross examine two witnesses who previously filed written testimony on the impact of the merger. Attorney John Runkle with NC WARN questioned Sasha Weintraub, vice president of fuels and power optimization at Progress, and James Hoard, assistant director in the accounting division for the public staff.

Group makes last-ditch effort to block utility merger Group makes last-ditch effort to block utility merger

Runkle's hour-long cross examination of the men mainly pertained to how the merger has changed since the most recent hearings last fall, and how the proposed $650 million in savings will be allocated among customers. During the hearing, NC WARN was not allowed to introduce new evidence for consideration, and stuck to asking the witnesses about their previous statements to commissioners. Both witnesses said they stood behind their previous statements and said customers will save money.

"The commission needs to look at the costs and the benefits of the merger and our position remains that looking at the people who don't have full representation in these hearings, low and fixed income folks, this is a major economic impact on those people," Runkle said.

Lee Anthony, general counsel for Progress Energy, maintained customers will see their rates drop.

"We're exactly where we thought we would be, which is a place where the benefits exceed the costs," Anthony said.

Separate from Monday's hearing, NC WARN filed to make public 17 settlement agreements between the utilities and customer groups that the nonprofit argues are subject to open records laws. The energy companies filed countermotions requesting the commission keep the documents private under trade secret laws. Chairman Edward Finley said after the hearing that he doesn't know when the commission will rule on the request, leaving open the possibility that details of the agreements could be made public after the merger is approved.

A spokesman for the North Carolina Utilities Commission said the final verdict will not likely be handed down the day of the hearing, but could come this week.

Finley was less specific.

"We hope to rule as expeditiously as we can now that everything is in," Finley said. "We've been working on it for a number of months and sometimes justice delayed is justice denied and we hope to get it out as quickly as we can."

The merger agreement between the two utilities was started January 2011 and the companies have until July 8 to close their current deal. The $23.4 billion merger would span six states, employ nearly 30,000 workers and serve more than 7 million accounts. During the year and a half, the energy merger has been approved by various state and federal agencies. The most significant came on June 8, when the Federal Energy Regulatory Commission gave its blessing after twice rejecting the merger because of concerns it would reduce competition for wholesale electricity in the Carolinas.

The companies still hope to close the deal by July 1.


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  • SARCASTICLES Jun 26, 2012

    More lies from the "liberal left-wing media"......they claim that 2000 jobs will be lost if this merger goes through. "Frankly, we're offended"....if these two companies merge, that means the business will grow, and THAT means creatin'MORE JOBS JOBS JOBS!(tm). If they ain't allowed to merge, it'll be JOB KILLIN'(tm). (hee hee hee) ;)

  • dmpaltman2 Jun 26, 2012

    piene2....The soon to be approved merger/ acquisition between Duke and Progress Energy, will not have people from the utility commission, as executives. The structure of the new company has already been set and there are no commission people in it. Merger will be approved before the deadline and the sky will not fall.

  • LambeauSouth Jun 26, 2012

    I See a few comments from folks who typically side with big Biz when pertaining to Dems versus Reps, but now it affects them and their pocketbooks, Question is why the change?

  • westernwake1 Jun 26, 2012

    "This merger does not benefit customers, employees, or shareholders of either utility. The North Carolina Utilities Commission should reject this merger. westernwake1"

    'Considering that most of the commissioners will eventually end up as executives in the "New" Duke Energy, I find it highly unlikely that they will block the merger.' - piene2

    Which is the entire issue with these political commissions. There needs to be rules that disallow commissioners (or their family members) from taking jobs or consulting work from any business they regulate for 5 years after leaving the commission.

  • pbjbeach Jun 26, 2012

    there is no longer any formof real justice inm this state anylonger for any case that goes to court in any county in this state the outcome of which is already predetermined as to the out come before the lwayers in the cases have ever uttered one word in the case the politicans are controling the outcomes of case before they ever get into the courtrooms of this state. the lawyers an the politicans are working hand an in hand in this state to deney citizens of this state to fair legal respresention an access to the courts of the land all for the favor of the coporate instrest an to protect their bottom lines an the coporate instrest from any form of legal actions taken against them seeing as that the coporations have already bought an paid for both the lawyers an the politicans an the judges in this state. thank you

  • piene2 Jun 26, 2012

    "This merger does not benefit customers, employees, or shareholders of either utility. The North Carolina Utilities Commission should reject this merger.

    Considering that most of the commissioners will eventually end up as executives in the "New" Duke Energy, I find it highly unlikely that they will block the merger.

  • pbjbeach Jun 26, 2012

    too everyone out there remember now that coporations are people an that money is free speech bull s thank you

  • pbjbeach Jun 26, 2012

    just another coporate example of to big to fail an like the mitten coporate raider while at bain capitial the worker bees will lose once again an as long as the people of this state continue to vote for the coporate raiding coporate funded repbulicans this is the way things will continue to be. it just suprises me that they arent outsourcing/ offshoring this merger to india or china thank you

  • pbjbeach Jun 26, 2012

    I can almost garuntee that this merger will sail right on thru with out any form of real oppositions as that the utlities commission an it's commissioners an the states politicans are in all likelyhood already in the pockets of this utlity company just so as to asure them of the fact that their merger& accussation will fly right thu the utlity commission without one minutes problem the deal was already done way before it ever got to this point . this is now just political cobukia theather now for the deal is already done sad to say but this cake was already baked before it ever got to the point that it is today it is a cut an dried an done deal. you can bank on it thank you

  • Scubagirl Jun 25, 2012

    This is such a bad idea on EVERY level except the pocketbooks of the CEOs and their ilk. Rates WILL go up, that has been stated. NO ONE WANTS THIS MERGER EXCEPT THE BIG DOGS! Not the customers, shareholders----only those who will get rich and that is NOT the customer!