Duke Energy, Progress Energy file new merger plan

Duke Energy (NYSE: DUK) and Progress Energy (NYSE: PGN) on Feb. 22 filed a second wholesale market power mitigation plan with the North Carolina Utilities Commission (NCUC) as part of their proposed merger.

"The intent of this merger is to strike the right balance between the customer and shareholder benefits, and that continues to be our goal,” said Jim Rogers, chairman, president and CEO of Duke Energy. “We must also balance the expectations of our state commissions to keep electricity costs low, and the Federal Energy Regulatory Commission’s (FERC) concerns about market power in the Carolinas. We believe we have done that with this plan.”

The NCUC has up to 30 days to review the mitigation plan before it is filed with the FERC, which required mitigation measures to offset market power concerns in the Carolinas resulting from the proposed merger.

The revised mitigation plan provides for permanent transmission upgrades and interim power sales:

• The permanent solution consists of constructing up to eight transmission projects in the Duke Energy and Progress Energy service territories.

These projects will expand the capability to import wholesale power into the Carolinas. The construction would begin after the merger closes and take approximately three years to complete. The preliminary cost estimate range of these projects is approximately $75 million to $150 million.

• While these projects are being built, the companies propose a three-year plan to sell capacity and firm energy during the summer (June – August) and winter (December – February) to new market participants.

Together, the companies would sell 800 MW during summer off-peak hours, 475 MW during summer peak hours, 225 MW during winter off-peak hours, and 25 Mw during winter peak hours. The companies expect to secure contracts with potential buyers prior to filing the mitigation plan with FERC.

The companies said they will be working closely with the North Carolina Public Staff and Office of Regulatory Staff in South Carolina over the next few months on appropriate state ratemaking treatment associated with measures in the revised mitigation plan and other merger-related issues.

Final agreement to the proposed mitigation efforts will be subject to resolution of the state ratemaking issues.

Later in the first quarter of 2012, the companies expect to file the mitigation plan with the FERC.

In addition to the market power mitigation plan, FERC must also approve the merger’s Open Access Transmission Tariff and Joint Dispatch Agreement in the Carolinas. The NCUC must also approve the merger and the Joint Dispatch Agreement. The Public Service Commission of South Carolina must approve the Joint Dispatch Agreement in the Carolinas.

To date, the companies have received merger-related approvals from, or met the requirements of: the U.S. Nuclear Regulatory Commission; Kentucky Public Service Commission; and the shareholders of both companies.

The companies have also met their obligations with the U.S. Department of Justice under the Hart-Scott-Rodino Act (HSR), but will need to make a new HSR filing prior to the April 26, 2012, expiration date of the initial HSR filing.

Read more mergers and acquisitions news

Sponsored by FLSmidth

Related Articles

Milwaukee medical center plans to buy power plant, convert to natural gas

Milwaukee County Regional Medical Center is negotiating to buy a coal-burning power plant currently owned by We Energies in Wauwatosa, and plans to convert it to natural gas before the 2015 heating season, reports the Milwaukee, Wisconsin Journal Sentinel.

Exelon Pepco Holdings Maryland Prince George's County Montgomery County merger settlement agreement

Exelon, Pepco settle with Md. counties over proposed merger

Exelon Corp. and Pepco Holdings have reached a settlement agreement with two Maryland counties over the companies’ proposed merger.

Follow Power Engineering on Twitter
Latest News

Dominion Virginia Power shelves plans for offshore wind project

Dominion Virginia Power, a subsidiary of Dominion (NYSE: D), put plans to build an offshore w...

Coal ash recycling company successfully repurposes pond ash

The SEFA Group Inc. recently opened a stand-alone Staged Turbulent Air Reactor (STAR) facilit...

Hawaii energy park, Sandia National Laboratories to test energy storage

The Natural Energy Laboratory of Hawaii Authority (NELHA) has secured a deal with New Mexico-...

E.ON, GE wind farm reaches operation in Texas

E.ON and GE's (NYSE: GE) Energy Financial Services celebrated the opening of the Grandview Wi...

Feds move to speed approval for Great Plains wind projects

Federal officials are moving to speed up their review of wind power projects across the Upper...

Sempra U.S. Gas & Power acquires Minnesota wind project

Sempra U.S. Gas & Power has acquired the 78-MW Black Oak Getty wind project — in Stearns ...

Mississippi Power to build largest utility-scale solar projects in the state

Mississippi Power, a subsidiary of Southern Company (NYSE: SO), is partnering with two solar ...

Another measure to block advance of NC renewables law falls

North Carolina electric companies must keep planning to generate more power through alternati...

Power Engineering Current Issue

02/01/2015
Volume 119, Issue 2
1502PE-cover
Products Showcase
Dynamic Fluoride Ion cleaning DFIC of industrial natural gas turbines Hi-Tech Furnace Systems

Dynamic Fluoride Ion Cleaning of IGT Parts

The Dynamic Fluoride Ion Cleaning (DFIC) Process from Hi-Tech Furnace Systems is able to clean deep, narrow cracks of oxides by cycling between negative, atmospheric, and positive pressure.

Archived Articles

2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015

Buyers Guide Categories

Power Industry Wire News

Rockdale Resources Enters Into Letter of Intent to Acquire Working Interest in a Historical Oklahoma Oil Field

Rockdale Resources Enters Into Letter of Intent to Acquire Working Interest in a Histor...

Scorpio Tankers Inc. Announces Newbuilding Vessel Deliveries and Reminder for Upcoming Conference Call

Scorpio Tankers Inc. Announces Newbuilding Vessel Deliveries and Reminder for Upcoming ...

Falcon Crest Energy Searching for Opportunities Outside Oil and Gas Sector

Falcon Crest Energy Searching for Opportunities Outside Oil and Gas Sector

West Texas Resources, Inc. Announces Appointment of Paul Brogan to Board of Directors

West Texas Resources, Inc. Announces Appointment of Paul Brogan to Board of Directors

Younicos Commends U.S. Department of Energy Call for Energy Storage to Be Part of National Electricity Grid Infrastructure Improvements

Younicos Commends U.S. Department of Energy Call for Energy Storage to Be Part of Natio...

Power Engineering

Article Archives for Power Engineering Magazine

Continuing Education

Professional Development Hours

To access a course listing associated to a specific topic listed below, click on the topic of choice from the list below.

Latest Energy Jobs

View more Job Listings >>