Tuesday, November 1, 2011

Duke-Progress merger off schedule?

With two months left in 2011, it's looking less likely Duke Energy and Progress Energy can meet their goal of merging by year's end.

"Given the amount of approvals needed, you could certainly look at it that way," said Duke spokesman Tom Williams.

On Monday the companies fired off a request that the Federal Energy Regulatory Commission reconsider the conditions it attached to its Sept. 30 approval of the merger. The filing accused the commission, in evaluating the impacts to wholesale-power markets, of holding the companies to a higher bar than it had previous mergers.

Duke and Progress still hope FERC will approve their offer to sell off excess power, addressing the competition concerns, by Dec. 15. Even if it does, much work remains.

The N.C. Utilities Commission, which has not yet ruled on the merger, will have to review the power-sale proposal if FERC approves it. South Carolina's utility commission has to rule on the companies' plan to jointly operate their power plant fleets in the Carolinas. FERC has not yet addressed the joint-operating proposal or a power transmission agreement among Duke and Progress subsidiaries.

Duke's last merger, with Cincinnati-based Cinergy, took 11 months to complete in 2006. Williams said Duke and Progress are eager to close this deal, which was announced in early January, to reduce the "internal churn" of assigning roles for their combined 29,000 employees. The companies expect to cut about 2,000 positions through voluntary departures and, if needed, layoffs.