A Durham advocacy group is making an 11th-hour appeal to North Carolina regulators to allow greater scrutiny of the proposed merger between Progress Energy and Duke Energy during Mondays scheduled public hearing.
N.C. Waste Awareness and Reduction Network contends in a filing made Thursday morning that the public has a right to know about the private deals Raleigh-based Progress and Charlotte-based Duke have struck with more than 15 large wholesale and industrial power customers.
The environmental organization says the power companies havent proven the private deals are trade secrets protected by state law and shielded from the public. N.C. WARN also argues that the side deals may be detrimental to other customers.
The question is how can a large wholesale customer ... be harmed if the new Duke Energy passes on fuel savings or if the customer is promised a discounted rate in the future in exchange for not challenging the merger, N.C. WARN wrote in its emergency appeal.
The N.C. Utilities Commission has scheduled a public hearing Monday on the pending merger, but the scope of the hearing is strictly limited to three documents filed in May and June. The N.C. commission said that N.C. WARN can ask only about those filings, but cant introduce new information or raise new issues.
N.C. WARN has attempted to raise a host of concerns including rumors that Duke Energys board is reviewing Progress Energys ballooning nuclear-repair costs, and speculation that Duke is in talks to buy a stake of another utilitys nuclear plant.
I think thats where the commission is coming from: Its nothing new, and where its new, its innuendo, said Gisele Rankin, a lawyer with the Public Staff, the states consumer protection agency in utility matters.
The Public Staff inked a deal with the power companies to guarantee more than $1 billion in savings to residential and business customers in the first years of the merger. Much of those savings would have taken place anyway, but the Public Staff got a written guarantee.
The revised terms of that settlement with the Public Staff are filed publicly and are open to questioning by N.C. WARN in Mondays hearing. The other deals with industrial trade organizations, rural electric cooperatives and municipal power agencies are filed under seal and are accessible only to regulatory staff and to parties in the merger proceedings who sign non-disclosure agreements.
Progress Energy declined to identify who has signed the non-disclosure agreements or how many have signed the legal form. N.C. WARN has elected not to sign non-disclosure agreements which would have allowed them to review the agreement out of concern that it could prevent WARN from publicly criticizing the deals.
The N.C. Utilities Commission held three days of hearings on the merger in September. Since then the companies have revised the proposal to address monopoly concerns raised by the Federal Energy Regulatory Commission, the Washington agency that approved the merger two weeks ago.
The $26 billion deal would create the nations largest electric utility with operations in a dozen states and in South America. The merger will generate savings by combining power plant operations, by eliminating Progress Energys corporate headquarters in downtown Raleigh, and through the elimination of 1,860 positions over three years.
Progress and Duke would like a ruling by July 1 but said they need a decision by July 8, the date their termination agreement expires and each company can walk away from the deal without paying hundreds of millions of dollars in penalties.
Many expect the N.C. Utilities Commission to acquiesce to the companies self-imposed deadline and rule on the merger next week. To stick to that accelerated timeline, the state utilities commission is likely to rule promptly on the N.C. WARN request to expand Mondays hearing.
Rankin noted that if there are disgruntled shareholders who want Dukes board to rethink the deal, as N.C. WARN alleges, that shouldnt be surprising, given the fact that Fortune 500 corporations have thousands of investors. She said it would be a reassuring sign if shareholders are getting squeamish.
Weve shifted the burden sufficiently, Rankin said of the merger-related costs that Progress and Duke must absorb instead of passing on to customers in North Carolina.
Were making shareholders bear a lot of the cost, she said. They should be rethinking whether the deal is in their best interest.