Progress to raise rates after merger with Duke
Posted June 11, 2012 8:10 a.m. EDT
Updated June 11, 2012 4:59 p.m. EDT
Raleigh, N.C. — Progress Energy said Monday that electric rates will go up after it completes its merger with Duke Energy but noted that the combined company will help keep the increase down.
The proposed $35 billion deal would create the nation’s largest utility, with more than 7 million customers in six states. The Federal Energy Regulatory Commission gave conditional approval Friday to the utilities' plan, which would cost jobs, but save consumers money.
"Progress Energy Carolinas anticipates going this fall in front of the (North Carolina) Utilities Commission and requesting the first general base rate increase we've had in more than two decades," said Scott Sutton, a spokesman for the Raleigh-based company. "So, bills will be increasing in the near future. The advantage of the merged company, though, is to help mitigate or reduce the amount of money needed to run this system today."
The rate increase would help cover infrastructure improvements made over the last five years, Sutton said, adding that the increase would be even higher were it not for the $650 million in savings from the merger.
FERC's approval is good news for the companies, executives said in statements issued early Monday. They still aim to complete the merger by July 1.
“We are pleased that the FERC has conditionally approved the merger, our Joint Dispatch Agreement and Joint Open Access Transmission Tariff,” said Jim Rogers, chairman and chief executive of Duke Energy. “We will quickly complete the evaluation of the conditions in the orders while working to obtain the remaining regulatory approvals to close the merger on July 1.”
“Receiving the FERC’s conditional orders last Friday is a major milestone for this transaction,” said Bill Johnson, chairman and CEO of Progress Energy. “Both companies have accelerated the integration planning efforts necessary to complete this transaction by July 1 and begin to deliver the substantial benefits of the merger as soon as possible.”
The two firms "have substantially completed their evaluation of the orders’ conditions and expect to make a compliance filing with the FERC within 15 days, as requested by the FERC," Duke and Progress announced.
The utilities also are still awaiting approval from he North Carolina Utilities Commission and Public Service Commission of South Carolina.
The companies noted they have already secured approval for the merger or met the requirements of the U.S. Department of Justice under the Hart-Scott-Rodino Act, U.S. Nuclear Regulatory Commission, Kentucky Public Service Commission, Federal Communications Commission, and the shareholders of both companies.