Shawn Rocco - srocco@newsobserver.com
Progress Energy is merging with Charlotte-based Duke Energy as Red Hat needs a new headquarters.
Federal regulators could rule as soon as Thursday on the merger between Duke Energy and Progress Energy, a decision that would clear a major hurdle for the $26 billion deal nearly a year after the merger was announced.
The Federal Energy Regulatory Commission has placed the matter on its monthly meeting calendar for Dec. 15, the date the two companies requested for a decision so they can finalize the merger this year. The federal commission set its calendar late Thursday, raising anticipation within the executive suites of both utilities that the key decision they've been awaiting is finally at hand.
Charlotte-based Duke and Raleigh-based Progress are proceeding as if the merger could be approved at any time, with corporate integration and staff reduction plans well under way. On Friday, the companies said 1,153 of their workers have signed up to leave in a voluntary buyout program that's part of a broader strategy to eliminate 1,860 positions over three years.
"We're still working toward a year-end close or around the first of the year," said Progress spokesman Mike Hughes. "In large part that day is going to be dictated by regulatory approval schedules."
A federal commission ruling would clear the way for state approvals in North Carolina and also in South Carolina, where public hearings are scheduled for Monday. The N.C. Utilities Commission has said it would wait to issue its ruling until after the federal decision comes out.
The issue before the federal commission is whether a Duke-Progress combination, which would create the nation's largest electric utility, would manipulate electricity prices.
In September, the federal commission said the merger, as originally proposed, raised serious monopoly concerns and would need to be modified. In response, Duke and Progress have proposed selling off blocks of wholesale power at a fixed 10 percent profit.
Merger critics have said the modifications are insufficient to protect the public, but the merger has won support from this state's consumer protection agency, known as the Public Staff.
If the four federal commissioners side with the critics and require further modifications, the merger could be delayed for months as the companies are forced to go through more rounds of costly changes. Each time Duke and Progress make concessions, they chip away at the financial value of the merger for their shareholders and investors.
Meanwhile, both companies say they are set to begin operating as a combined company on Jan. 1 were the merger to be speedily approved.
They offered early buyouts to nearly 8,200 employees several weeks ago, and 14 percent accepted.
The greatest number of those who came forward work in North Carolina.
Progress accounted for 666 volunteers, a total that includes 508 workers in North Carolina, mostly in Raleigh where Progress plans to eliminate its corporate headquarters. Progress has said it plans to eliminate 700 to 1,000 jobs in Raleigh as part of discontinuing its headquarters here, so the voluntary buyouts won't be sufficient to meet that goal.
Duke accounted for 487 workers, including 307 from North Carolina, mostly in Charlotte.
Duke and Progress will have to eliminate several hundred more jobs through a combination of layoffs, retirements and resignations.
Several hundred workers already have left the two companies in the past 11 months, mostly before the buyout program was offered. The more workers leave on their own, the fewer people the companies will have to lay off, but some layoffs are seen as inevitable.
