Duke Energy, Progress Energy Make Regulatory Filings for Merger Approval
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CHARLOTTE, N.C., and RALEIGH, N.C., April 4, 2011 /PRNewswire/ -- Duke Energy Corp. and Progress Energy, Inc. today filed applications seeking regulatory approval of the merger the companies announced Jan. 10.
An application to the N.C. Utilities Commission (NCUC) filed today outlines numerous customer benefits that will occur as a result of the merger. They include:
o Estimated savings of approximately $700 million in the Carolinas over
the first five years after the merger closes through reduced fuel costs
and efficiencies gained by jointly operating and managing the Progress
Energy Carolinas and Duke Energy Carolinas utility power plant systems.
Those savings flow directly to customers through the annual adjustment
in the fuel component of retail rates.
o Efficiencies in siting and building power plants. By combining the
generating fleets, planning for future capital expenditures and
operating the fleets as a single system, the companies expect to realize
efficiencies in location, timing and other factors associated with
making large capital investments in new resources.
o Additional savings will occur over time as a result of the combination
and integration of the companies' information technology systems,
supply-chain functions, generation operations, corporate and
administrative programs and inventories.
The savings from operating as a combined utility will help offset the impact of expected rate increases in the next few years. The entire U.S. electric system faces rising costs as aging infrastructure is replaced and as new federal and state regulations become applicable. The merger will enable the Duke and Progress utilities in the Carolinas to make these significant investments with lower overall impact to customers.
As previously announced, the companies are targeting to close the merger by late this year.
Today's filing with the NCUC seeks approval of the proposed holding-company combination. If approved, Progress Energy Inc. will become a wholly owned subsidiary of Duke Energy Corp. The utilities - including Progress Energy Carolinas and Duke Energy Carolinas - will continue to operate as separate entities. It is anticipated that Duke Energy Carolinas and Progress Energy Carolinas will be combined into a single legal entity at some point in the future. Before any combination of the utilities would occur, software, computer systems, business practices, procedures and equipment must be standardized and other issues resolved. Each company will continue to have separate rate schedules for the foreseeable future.
Regarding other merger-related filings:
o Duke filed a preliminary joint proxy statement/prospectus with the
Securities and Exchange Commission (SEC) March 17. After the SEC reviews
the joint proxy statement/prospectus, Duke Energy and Progress Energy
will mail it to their respective shareholders before special shareholder
meetings to approve the merger.
o The companies also filed an application to approve the merger with the
Kentucky Public Service Commission today.
o The companies made joint filings today with the Federal Energy
Regulatory Commission (which assesses market power-related issues).
o Last week the companies made filings with the Nuclear Regulatory
Commission related to nuclear plant license transfers.
o The companies have also submitted their Hart-Scott Rodino filing with
the U.S. Department of Justice and Federal Trade Commission (for review
under U.S. antitrust laws).
o This month, both companies will make merger-related filings with the
S.C. Public Service Commission.
o In the coming months, the companies also will file an application to the
Federal Communications Commission for certain license transfers.
o Although there are no merger-specific regulatory approvals required in
Indiana, Ohio or Florida, the companies will continue to update the
public service commissions in those states on the merger, as requested.
The merger requires modifications to several existing affiliate
agreements; we will file those with our various state commissions for
approval, as applicable.
Upon closing, the merger will create the nation's largest electric utility, as measured by enterprise value, market capitalization, generation assets, customers and numerous other criteria. The combined company will have more than 7.1 million electric customers in six states (North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky) and the largest regulated nuclear fleet in the country.
About Duke Energy
Duke Energy (NYSE: DUK) is one of the largest electric power holding companies in the United States. Its regulated utility operations serve approximately 4 million customers located in five states in the Southeast and Midwest, representing a population of approximately 12 million people. Its commercial power and international business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: www.duke-energy.com.
About Progress Energy
Progress Energy (NYSE: PGN), headquartered in Raleigh, N.C., is a Fortune 500 energy company with more than 22,000 megawatts of generation capacity and approximately $10 billion in annual revenues. Progress Energy includes two major electric utilities that serve about 3.1 million customers in the Carolinas and Florida. The company has earned the Edison Electric Institute's Edison Award, the industry's highest honor, in recognition of its operational excellence, and was the first utility to receive the prestigious J.D. Power and Associates Founder's Award for customer service. The company is pursuing a balanced strategy for a secure energy future, which includes aggressive energy-efficiency programs, investments in renewable energy technologies and a state-of-the-art electricity system. Progress Energy celebrated a century of service in 2008. Visit the company's website at www.progress-energy.com.
MEDIA CONTACTS:
Duke Energy
Tom Williams 704-382-8333
ANALYSTS:
Duke Energy
Bill Currens 704-382-1603
Stephen De May 704-382-2620
Progress Energy
Bob Drennan 919-546-7474
Bryan Kimzey 919-546-6931
