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

URS shareholders vote on merger with AECOM

URS Corp. (NYSE: URS) said the company’s shareholders have weighed in on a possible merger with AECOM Technology Corp. (NYSE: ACM).

SNC-Lavalin completes sale of interest in NY natural gas-fired power plant

SNC-Lavalin Inc. (TSX: SNC) reached financial close on the sale of its minority interest in Astoria Project Partners LLC (Astoria I) to EIF Astoria LLC and East River FundCo LLC.

Follow Power Engineering on Twitter

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.

Latest News

Shutterstock coal production trucks

Weekly Coal Production

The Weekly Coal Production shows how much coal is being produced across the U.S.

Federal Reserve Bank of Dallas Weekly Economic Indicators financial business

The Federal Reserve Bank of Dallas' Economic Indicators

The Federal Reserve Bank of Dallas offers a glimpse into how the markets are doing domestical...

Kvaerner awarded contract for gas-fired power plant in Delaware

Kvaerner North American Construction Inc. and its joint venture partner, Parsons Brinckerhoff...

Canadian Solar purchases two solar projects

Canadian Solar Inc. has acquired a majority interest in two utility-scale solar power project...

Operators Restart Unit 2 at PPL Susquehanna

Unit 2 at the PPL Susquehanna nuclear power plant near Berwick, Pa. resumed generating electr...

Settlement agreement limits cost recovery at Edwardsport

The Indiana Utility Regulatory Commission (IURC) on Dec. 27 modified and approved a settlemen...

Toshiba in talks to sell portion of Westinghouse nuclear unit

Toshiba Corp is in talks  to sell up to 16% of its stake in the Westinghouse Electric Co...

Utah nixes nuclear waste storage facility

Plans to park radioactive waste at a storage facility in Utah have been officially called off.

Archived Articles

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

Buyers Guide Categories

Power Engineering Current Issue

03/01/2014
Volume 118, Issue 3
1403PE-cover

Buyers Guide Company Listings

CAS DataLoggers

Manufacturer of data acquisition and control systems including high performance real-time systems. For use in data acquisition, test and control applications featuring microsecond precision.

Krishnan & Associates

Krishnan & Associates is a specialized consulting firm that provides marketing, market analysis, executive recruitment, and merger and acquisition services to the power, infrastructure, and coal mining industries.

North American Dismantling Corp

Established in 1984, North American Dismantling Corp is a demolition/dismantling contractor specializing in heavy industrial demolition, selective demolition, remediation, plant stripouts, plant decommissioning, emergency response, and turnkey acquisitions.

Contec Systems

Contec Systems develops continuous emission monitoring (CEMS), user-configurable, Windows-based data acquisition software systems (DAHS) offered to CEMS integrators, OEMs, and end users.

Power Industry Wire News

BASF Brings Hands-On Science to More Than 2,000 Schoolchildren During National Chemistry Week

BASF Brings Hands-On Science to More Than 2,000 Schoolchildren During National Chemistr...

SCS-Certified Products Among Top 10 Products Honored by BuildingGreen at Greenbuild 2014

SCS-Certified Products Among Top 10 Products Honored by BuildingGreen at Greenbuild 2014

Arabella Exploration Backs Into Additional Acreage

Arabella Exploration Backs Into Additional Acreage

FLIR Systems Announces Third Quarter 2014 Financial Results

FLIR Systems Announces Third Quarter 2014 Financial Results

Despite Declining Demand, BASF Increases Sales and Earnings in the Third Quarter of 2014

Despite Declining Demand, BASF Increases Sales and Earnings in the Third Quarter of 2014

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 >>


Power Engineering Newscasts

EPA chief: carbon caps will boost economy
Australia, Russia enter nuclear power agreement with Argentina
Largest battery energy storage in North America now operational
EPA chief: carbon caps will boost economy Largest battery energy storage in North America now operational Australia, Russia enter nuclear power agreement with Argentina Texas’ Panda Temple combined cycle plant up and running
Siemens agrees to acquire Dresser-Rand
Safety concrete poured at UAE nuclear reactor power project
Foster Wheeler to upgrade natural gas-fired power plant’s emission controls
GE, TransCanada partner on natural gas turbine design
Energy storage global market to grow to $15.6B by 2024; DOE awards $2M to support taller wind turbine towers; Hinkley Point C nuclear project have financial incentives approved; N.J. company building waste-to-energy project in Ireland