State regulators hear arguments in energy merger
Posted June 25, 2012
RALEIGH, N.C. — 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.
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.
Allen Reed can be reached on Twitter at http://twitter.com/Allen_Reed