Critics of the proposed merger between Progress Energy and Duke Energy urged state regulators Monday to hold another round of public hearings to explore alleged secrets and rumors about the utility merger that could sap the public benefits of the $26 billion deal.
N.C. Waste Awareness and Reduction Network, an advocacy group, cited a litany of concerns that the group contends demand a public airing before the merger can be approved. The Durham-based organization was joined by the N.C. Justice Center, N.C. Housing Coalition, N.C. League of Conservation Voters and others in its bid to delay or derail the pending merger.
Among the rumors N.C. WARN cites is that Duke’s board of directors allegedly is reviewing a confidential study this week of the costs and feasibility of repairing Progress’ Crystal River nuclear plant in Florida, which has been down since 2009.
Duke spokesman Tom Williams said Duke continues to follow the Crystal River nuclear plant’s status while Progress evaluates its technical options. He said the companies hope to close the merger soon.
Raleigh-based Progress and Charlotte-based Duke have asked the N.C. Utilities Commission to approve the merger by July 8, the date when their termination agreement expires and each could walk away from the deal without paying hundreds of millions of dollars in penalties.
Hewing to that deadline would almost certainly preclude holding public hearings. The state commission held hearings in September, but the two power companies have since revised their merger proposal to address monopoly concerns raised by the Federal Energy Regulatory Commission in Washington.
The merger would create the nation’s largest electric utility, to be based in Charlotte, with $95 billion in consolidated assets and operations in a dozen states as well as Latin America.
Moody’s, the credit rating firm, said Monday in its weekly credit outlook that the merger would be positive for the credit of both companies, which potentially could lower interest rates on money borrowed by the combined company. One financial benefit of the merger to shareholders will be the elimination of 1,860 positions over three years, reducing operating expenses by millions of dollars a year.
But skeptics remain. In a separate filing Monday to the N.C. Utilities Commission, another North Carolina organization wary of the merger’s consequences asked regulators to impose additional conditions on the merger to protect solar developers and other green industries.
The N.C. Sustainable Energy Association, a renewable industry membership group in Raleigh, said the merger would reduce potential bidders on green energy projects. The group asks the utilities commission to create programs to boost prospects for solar power and other green technologies.
The merger has already won the backing of key organizations that represent virtually every electricity customer in North Carolina: industrial users, rural electric cooperatives, municipal power agencies and the Public Staff, the agency that represents North Carolina electricity consumers in utility matters before the utilities commission.
The Public Staff signed a deal with the companies to pass on more than $1 billion to customers in the first years of the merger. Most of those savings would have happened anyway, but the Public Staff got a written guarantee.
“We have protected the rate payers from any liability,” said Public Staff lawyer Gisele Rankin.
Rankin said the rumor about Duke’s board reviewing nuclear repair costs is an internal matter of due diligence that has no bearing on the regulatory review of the merger.
But N.C. WARN says the corporate review may contain crucial information unknown to regulators and that the utilities commission should not acquiesce to the Progress and Duke timeline.
The group says its concerns include the more than 15 private, confidential settlements Progress and Duke have reached to guarantee merger-related benefits to the industrials, rural co-ops and municipal power agencies.
The terms of those private deals can be reviewed by the utilities commission, the Public Staff and any party to the proceeding who signs a non-disclosure agreement, but the information is not accessible to the public because it contains potentially competitive data, Rankin said.
The parties to these confidential settlements with Progress and Duke are the state’s co-ops, municipal agencies and industrial users, which buy power from the two electric companies.
“Our point is that all that stuff needs to be out in the open,” said N.C. WARN director Jim Warren. “They’re cutting deals on rates and that has impact for all the other ratepayers.”