Watchdog asks NC to reconsider Duke-Progress merger approval

Posted July 26, 2012

— A group that monitors area utilities filed a request with the North Carolina Utilities Commission on Thursday to reconsider its recent approval of the merger between Duke Energy Corp. and Progress Energy Inc.

The North Carolina Waste Awareness & Reduction Network alleges that Duke failed to disclose plans to spend $2.5 billion on upgrades to Progress nuclear plants over the next two years, which the group says dwarfs the $650 million in customer savings the two companies promised in order to win regulatory approval.

“Billions in undisclosed rate hikes turns the merger into a net public soaking instead of the net public savings legally required of such a corporate merger,” NC WARN executive director Jim Warren said in a statement.

The watchdog group also contends that Duke and Progress failed to update the commission on the prospects for costly and complicated repairs to Progress' Crystal River nuclear plant in Florida, which has been offline since 2009. The repairs could impact North Carolina customers by raising Duke’s borrowing costs and by forcing more of the parent company’s dividends to be borne by North Carolinians, the group says.

Duke spokesman Tom Williams has said the nuclear plant upgrades are part of normal business operations.

Warren predicted that the nuclear expenses would lead to a 12 to 15 percent rate increase for Duke and Progress customers.

"We urge the commission to help restore public confidence by ensuring that all cost and rate information finally be placed on the table for a rigorous and transparent review by all intervening parties,” he said.

The commission has been examining whether to amend of rescind its June 29 approval of the merger following the sudden ouster of Progress Chief Executive Bill Johnson as the president and CEO of the combined company.

Duke board members told the panel last week that they had doubts about Johnson's ability for months before the merger closed and he was asked to resign. Jim Rogers, who had been Duke's president and CEO and was expected to become chairman after the merger, was named to replace Johnson.

Commissioners have said they feel Duke executives misled them, noting they were repeatedly told Johnson would be in charge as they considered whether to approve the deal.


This story is closed for comments.

Oldest First
View all
  • ckblackm Jul 26, 2012

    Amend the merger so no rate increases for several years.

  • Comfortably Numb Jul 26, 2012

    About as transparent as Obama. Rescind.

  • Gork Jul 26, 2012

    Rescind the approval and make them do it right - transparently, or not at all. Isn't that the way it's supposed to be?

  • epee131 Jul 26, 2012

    Someone needs to tell the commission that I think they might be...buying pens for writing. Normally an operating expense, clearly buying so many pens for so many workers will cause a rate increase. They failed to disclose that they would buy those pens and they should stop the merger. And don't even get me started about the toilet paper....

  • robertmm1948 Jul 26, 2012

    The media is missing a very important story regarding the merger. To make the Federal Energy Regulatory Commission (FERC) happy, Duke signed on to pay (not sell) third parties to take power during the summer (during AC months) just to make FERC happy. This was one of the most major promises made to FERC to get the merger approved. FERC wisely assigned a monitor to check up on Duke to see if they are doing what they said they would do. Well, it turns out that Duke has *failed* almost every day since the merger to dump the power (equal to a large power plant) they said they would. Go to the FERC website,, and search on Docket EC11-60-004, and see for yourself. Look for the Potomac Economics reports.