Critics of the planned merger between Duke Energy and Progress Energy spent the last day of public hearings Thursday urging state officials to require the two companies to make amends for the expected loss of 2,000 jobs when the utilities streamline operations and dismantle a Fortune 500 corporate headquarters in downtown Raleigh.
The N.C. Utilities Commission is widely expected to approve the $26 billion deal before the end of the year, but has no deadline. The agency has broad authority to impose conditions and provisions on the merger to make sure its promised benefits outweigh the costs and risks to this state and its residents.
"We have to resolve all the issues laid out before us," said Utilities Commission Chairman Edward Finley Jr. "Underlying all these issues is a cost-benefit analysis."
Charlotte-based Duke and Raleigh-based Progress announced in January that they would combine into a multistate energy conglomerate with business interests in the Midwest, Southeast and Latin America. Company officials have hinted at further acquisitions down the road that would solidify Charlotte-based Duke's position as a political juggernaut and a leading operator of nuclear power plants, coal-burning plants and hydroelectric dams.
Lawyers for the merger's opponents, fearing costs that have not been disclosed, spent three days this week trying to pry clues from Progress and Duke executives.
Company executives stuck to their storyline: A bigger corporation will be more cost-efficient, and help hold down the future rate increases that are inevitable as the companies embark on a capital-intensive phase of power plant construction, environmental compliance and other multibillion-dollar upgrades.
Opponents charge the merger would shift benefits to Wall Street at the expense of the state's environment and the poor. The Sierra Club, Environmental Defense Fund and Southern Alliance for Clean Energy and other groups want the commission to require the combined Duke to spend more on clean energy technology, home weatherization and other programs that would create jobs and redistribute some of the merger's economic benefits.
"The merger should be expressly conditioned to avoid creating winners and losers," said Richard Hahn, an economist hired by the environmental groups. "It's not clear that North Carolina will enjoy benefits commensurate with the expected costs. North Carolina would be particularly hard hit by merger-related job losses."
The utilities' lawyer, Len Anthony, countered Thursday that the organizations are guilty of a double standard in their newfound concern for jobs and the economy.
"Would it surprise you to know that Progress Energy is going through a coal-to-gas conversion and the natural gas power plants will require fewer employees to run?" Anthony asked. "The environmental community didn't object when we were reducing jobs to reduce emissions."
Progress will eliminate about 200 positions as it shuts down 11 older, coal-burning units in this state and builds three plants - including one that was completed this year - that burn natural gas. Natural gas is the cleanest-burning fossil fuel, reducing greenhouse gas emissions by half and virtually eliminating mercury, a potent neurotoxin.
One of the sore points of the merger is not likely to be decided by the commission this year: Who will pay the severance costs for utility employees who are laid off or take buyouts? The costs come to several hundred million dollars. Duke plans to ask the utilities commission at a later date for permission to pass those costs on to customers.
The utilities earlier this year signed agreements with municipal power agencies and rural electric cooperatives, guaranteeing that those organizations will not have to pay merger-related costs for two years.
