Proposed Progress Energy merger creates questions for Raleigh
Posted January 12, 2011 6:17 p.m. EST
Updated January 12, 2011 6:43 p.m. EST
Raleigh, N.C. — Uncertainty hangs over Raleigh as the city stands to lose its only Fortune 500 headquarters when Progress Energy is acquired by Charlotte-based Duke Energy.
Regulators must still approve the $26 billion deal. If approved, the merger would result in the largest utility in the U.S., with about 7 million customers from Florida to Indiana.
Officials said that size would benefit customers since the combined firm would be able to operate more efficiently and spread its costs across a larger base of customers.
Company representatives said they would stress attrition and retirements to reduce payroll, but the overall job impact wouldn't be known for at least another year.
Greater Raleigh Chamber of Commerce President and Chief Executive Harvey Schmitt said it's too early to tell how much the city might lose in the deal. He said he remains hopeful since company leaders promised to keep a strong presence in Raleigh while moving the utility's headquarters to Charlotte.
"This is a very dynamic market. We're going to have some ups and some downs, but our ups are much higher than our downs," Schmitt said.
Raleigh Mayor Charles Meeker put a positive spin on the potential for vacant office space downtown.
"We don't have any major space downtown, and if they do have 30,000 to 50,000 square feet that becomes available in the next couple of years, that actually could become an asset in terms of new businesses coming in," Meeker said.
Both Progress Energy and Duke Energy are big corporate givers in their communities, combining for about $25 million in donations to nonprofit groups each year. The Progress Energy Center for the Performing Arts in downtown Raleigh is a symbol of the firm's largesse.
"There's always a concern when companies merge. Nonprofits are concerned about whether that will mean fewer contributions," said Todd Cohen, editor of The Philanthropy Journal in Raleigh.
In federal filings, company executives promise to maintain their level of giving for at least two years.
"Being a good corporate citizen is good for the bottom line," Cohen said.