Court upholds Duke-Progress merger approval

bhenderson@charlotteobserver.comMarch 4, 2014 

BIZ DUKEENERGY-JOHNSON 2 RA

In this September 20, 2011 file photograph, Duke CEO Jim Rogers, left, and Progress CEO Bill Johnson appear in the N.C. utility commission hearing. Pressure is building on Duke Energy to explain why it ousted Bill Johnson as CEO this week, as former Progress Energy board members break their silence and express outrage at what they term a calculated deception. (Takaaki Iwabu/Raleigh News & Observer/MCT)

TAKAAKI IWABU — tiwabu@newsobserver.com

The N.C. Court of Appeals has upheld state approval of Duke Energy’s 2012 merger with Progress Energy, which created the nation’s largest utility.

The court ruled Tuesday on challenges to the $32 billion deal that were filed by the city of Orangeburg, S.C., and the Durham advocacy group NC WARN. The groups appealed approval of the merger by the N.C. Utilities Commission.

NC WARN argued in its appeal that Duke and Progress didn’t set out the risks of the merger, which the group claimed would cost customers money. WARN said the commission was not justified in approving it.

The court ruled that the commission properly approved the merger.

“Duke Energy is pleased that the N.C. Court of Appeals has upheld the N.C. Utilities Commission’s ruling to approve the Duke Energy-Progress Energy merger,” Duke said in a statement. “The merger has yielded significant savings to customers since it closed in July 2012.”

CEO Lynn Good told financial analysts in February that Duke has saved $190 million, above previous estimates, since the merger in fuel and in joint operation of the companies’ power plant fleet. She said Duke is on pace to save about 9 percent in non-fuel operating savings, compared to the original target of 5 percent to 7 percent.

NC WARN said it would likely challenge the ruling to the N.C. Supreme Court.

“NC WARN believes the courts should force the Commission to reopen hearings and require analysis of the actual impacts the merger has on customers – not just Duke’s purported but unsupported claims that the merger would benefit customers,” executive director Jim Warren said in a statement.

Orangeburg is a wholesale buyer of electricity and a potential customer of Duke. It challenged commission rulings that the city said discriminate against buyers that are not historic customers of Duke, claiming the rulings hurt its ability to compete for low-cost power.

The appeals court dismissed Orangeburg’s appeal, noting that the city signed a 10-year power purchase agreement with S.C. Electric & Gas in 2011 and so isn’t affected by those rulings.

Henderson: 704-358-5051; Twitter: @bhender

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