Bloomberg News

Duke Takeover of Progress Appealed by Conservation Group

January 09, 2013

A North Carolina conservation group will appeal the approval by state regulators of Duke Energy Corp. (DUK:US)’s $17.8 billion purchase of Progress Energy Inc.

The North Carolina Waste Awareness & Reduction Network, in a notice of appeal filed today with the state utilities commission, said regulators made “numerous errors” in the approval process.

“In ignoring key merger costs, the North Carolina Utilities Commission helped lock in Duke’s business plan for serial rate hikes to build dirty and dangerous power plants North Carolina does not even need,” Jim Warren, the group’s executive director, said in a statement.

Duke, based in Charlotte, North Carolina, said in a statement that the appeal lacks merit.

In November, the commission closed an investigation into Duke’s takeover of Progress Energy after the company agreed to replace Chief Executive Officer Jim Rogers and guaranteed $25 million in additional fuel-related cost savings to customers in the state.

The commission erred in approving the settlement and denying the conservation group’s request to intervene in the case, the group said in its filing with the commission giving its notice of appeal. The group, known as NC Warn, said it filed a notice with the appellate court earlier today, which couldn’t be immediately confirmed in court records.

‘Statutory Authority’

The commission’s order approving the settlement was beyond its “statutory authority and jurisdiction,” NC Warn said in the notice of appeal it gave the commission. The decision violates constitutional provisions, is legally flawed and isn’t in the public interest, the group said. The commission also failed to address new and relevant information regarding significant costs to ratepayers, according to the filing.

“Seventeen confidential settlements with Duke’s big customers bought support for the merger and could cost small North Carolina customers billions of dollars over time,” NC Warn said in its statement.

The six-month-old merger makes “good sense” for Duke’s customers, Dave Scanzoni, a spokesman for Duke, said in an e- mailed statement.

Lower Costs

“Since the merger was consummated in July 2012, Duke Energy’s North Carolina and South Carolina customers have been benefiting from lower plant fuel costs and a larger, combined fleet of power plants that ensure operational efficiency,” Scanzoni said.

The takeover by Duke was announced in January 2011 and created the largest owner of U.S. electric utilities. The deal closed in July after receiving approval from North Carolina and South Carolina regulators.

The utilities commission case is In the Matter of Investigation Regarding the Approval and Closing of the Business Combination of Duke Energy Corporation and Progress Energy Inc., E-7, SUB 1017, State of North Carolina Utilities Commission (Raleigh).

To contact the reporter on this story: Sophia Pearson in Philadelphia at spearson3@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net Susan Warren at susanwarren@bloomberg.net.


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Companies Mentioned

  • DUK
    (Duke Energy Corp)
    • $74.38 USD
    • 0.90
    • 1.21%
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