4 April 2006 – The merger between US utilities Duke Energy and Cinergy was completed 4 April following the granting of regulatory approvals from the North Carolina Utilities Commission (NCUC). The combined group will have more than 50,700 MW of installed capacity across the US and Latin America.
An Order issued Friday, March 24, the NCUC substantially accepted, and modified in part, an agreement previously reached between Duke Energy and the N.C. Public Staff to resolve all relevant issues related to the Commission’s merger review.
“With the merger action in North Carolina, we have cleared the last hurdle in the regulatory approval process,” said Paul M. Anderson, chairman of the board and chief executive officer of Duke Energy. “With all requisite approvals in hand, we intend to close on April 1, less than 11 months from our merger announcement.”
“The Commission’s Order strikes an appropriate balance to ensure that both Duke Energy shareholders and Duke Power customers will benefit from the merger’s efficiencies and cost savings,” added Ellen Ruff, group vice president of planning and external relations at Duke Power. “By combining with Cinergy, we are building a stronger company with the size and strength to continue delivering reliable electric service to our customers at a cost well below the national average.”
The NCUC agreement required among other things that the $117.5 million in merger savings to be shared with Duke Power customers in North Carolina. These savings will be shared through a reduction of retail base rates to all of Duke Power’s North Carolina customers.
Overall, the merger is expected to save $400m by 2009, mostly from the elimination of duplicate spending and overlapping functions, improved sourcing strategies, avoidance of planned expenditures and the consolidation of non-regulated business unit operations.
The Duke Energy/Cinergy merger, announced May 9, 2005, was approved by both companies’ shareholders March 10, 2006, and has been approved by state regulators in Ohio, Kentucky, South Carolina and Indiana, as well as North Carolina; by the Federal Energy Regulatory Commission; and the Nuclear Regulatory Commission. The companies also have satisfied Federal Trade Commission and U.S. Department of Justice review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.