The merger between Progress Energy and Duke Energy has one final hurdle to clear: The N.C. Utilities Commission.
The state commission is a wild card in the pending merger that has dragged out for 18 months of filings, protests and reviews. The N.C. commissioners would issue a ruling on the $26 billion utility merger within weeks if they play by rules requested by the merger participants.
N.C. Utilities Commission Chairman Edward Finley Jr. said such an accelerated schedule is possible but not guaranteed.
Its been lingering for many months, and there are a lot of people on the edge whether theyll be working, or who theyd be working for, of if they have a job, Finley said Saturday. So its to the advantage of all concerned to bring it to a conclusion as quickly as possible.
Raleigh-based Progress and Charlotte-based Duke have reached agreements with environmental groups, industrial power users, rural electric cooperatives, municipal power agencies and the Public Staff, as the states consumer protection bureau in utility rate cases is called. All those groups, representing virtually every electricity customer in North Carolina, negotiated promises and sweeteners in exchange for a guarantee that they will not oppose the deal.
None of those private settlements, however, was binding on the Federal Energy Regulatory Commission, the Washington panel that late Friday approved the third iteration of the merger. The commission added more than a dozen conditions, which the utilities are reviewing and will likely accept.
The two companies hope to get the deal done by July 1 but have said they need to close it by July 8. Thats the date their legal agreement expires and they can walk away from the deal without paying hundreds of millions of dollars in penalties.
Dealing with states
Like the federal commission, the N.C. Utilities Commission is an independent body not beholden to other regulators or to the state interests that have blessed the deal. In other states, mergers that got a pass at the federal level have been tripped up by state commissions demanding rate cuts for customers, employee protections against layoffs, and other social safeguards.
In this state, elected officials have remained conspicuously silent on the merger, creating virtually no political pressure on a deal that will result in the elimination of 1,860 jobs over three years and the dismantling of Progress Energys corporate headquarters in downtown Raleigh.
The deal also requires approval from South Carolina regulators, who are reviewing one aspect of the merger called the joint dispatch agreement.
Weve been pursuing parallel tracks with the state commissions because we know there would be a compressed review schedule, Progress spokesman Mike Hughes said.
James McLawhorn, director of the Public Staffs Electric Division, said everything is ready for the N.C. commission to make a decision.
We set everything up so that if the FERC did rule by Friday, the Commission could have a hearing or whatever other proceeding were going to have in North Carolina, McLawhorn said. I dont see anything that would throw a major monkey wrench in those plans.
Delay still possible
If the N.C. commission imposed additional conditions that changed the economics of the merger, the Progress-Duke merger could be in for more delays, and ruling promptly would likely preclude imposing significant conditions.
The companies had expected to close the deal last December and are now six months behind the original schedule. They have already revised the date of their termination agreement after it expired in January, and if four more weeks pass they would have to revise the date again.
The merger conditions imposed by the federal regulators largely cover reporting and timing issues related to steps Progress and Duke have agreed to take to address monopoly concerns.
Hughes said the companies are reviewing the conditions to ensure that were capable of moving forward with them and that they dont have implications for what weve promised on the state level.
Robert Gruber, director of the Public Staff, said the companies have made a strong case for the mergers benefits, guaranteeing to pass on to customers $650 million in fuel savings and spare customers from paying up to $450 million in merger-related costs.
The last round of filings was made May 8, and the utilities commission has all the information needed to decide, Gruber said.
Well take the time that is necessary, said Finley, the commission chairman. Theres plenty to do.
Charlotte Observer staff writer April Bethea contributed