RALEIGH, N.C. (AP) -- Duke Energy and Progress Energy are taking a third stab at a deal that would create the largest U.S. electric utility, offering to spend up to $150 million to reduce competition concerns.
The companies are trying to complete a merger that was in progress for more than a year when it was sidetracked by the Federal Energy Regulatory Commission saying details of the deal didn't do enough to protect competition in their North Carolina and South Carolina home markets.
The utilities now propose building more transmission lines to bring more wholesale electricity into the Carolinas and signing advance contracts selling a defined amount of power at set prices to other electric utilities and cooperatives.
The plan submitted to the North Carolina Utilities Commission could require the state regulator to reopen their review to decide whether electricity customers or company shareholders will pay.
"The intent of this merger is to strike the right balance between the customer and shareholder benefits, and that continues to be our goal," Duke Energy chairman and CEO Jim Rogers said. "We must also balance the expectations of our state commissions to keep electricity costs low, and the Federal Energy Regulatory Commission's concerns about market power in the Carolinas. We believe we have done that with this plan."
A lawyer representing the towns of Rocky Mount and New Bern and their concerns about the monopoly power of the merged company said Thursday the proposal doesn't go far enough. The towns last year urged federal regulators to force Progress and Duke to sell off power plants as a condition of approving their merger.
The Duke-Progress proposal still wouldn't force the merged company to relinquish control over their own electricity output, doing too little to lessen their market concentration, Washington, D.C.-based attorney John Coyle said.
"What they're selling now, although it's a firm product, is not linked to any of their resources. That means they could be injecting additional supply from the area that they're buying from somewhere else," Coyle said. "It may not have much impact."
The state utilities commission has up to 30 days to review the plan before it is submitted to the federal agency.
Progress Energy and Duke Energy have agreed that July will be the new deadline for completing their merger to create a combined company that would serve 7.1 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky. Shareholders of both companies approved the merger in August.
Emery Dalesio can be reached at http://twitter.com/emerydalesio