Duke Energy News

Duke Energy and Progress Energy today announced a settlement with the N.C. Public Staff regarding the companies’ proposed merger.

The proposed settlement, if approved by the NCUC, would provide for the following:

• Guaranteed customer savings – the companies will guarantee North Carolina customers benefit from their allocable share of $650 million in savings over the first five years after the merger closes (2012-2016);
• Continued community support – the companies will continue their current level of community financial support of approximately $16.5 million annually for a minimum of four years after the merger closes (based on each company’s average level of community support over the last 5 years – which is approximately $9.2 million for Duke Energy and approximately $7.28 million annually for Progress Energy);
• Other community funding – the companies will provide $15 million for low-income household weatherization, community college programs that target technical and vocational training, or similar organizations and initiatives; and
• Costs to achieve merger – direct merger-related expenses will not be recovered from customers. Recovery of employee severance costs can be requested separately.

The settlement agreement was filed today by the N.C. Public Staff, which serves as the state’s chief consumer advocate on utility matters. Other parties will file testimony related to the merger application and the proposed settlement agreement by Sept. 7. Read more

Duke Energy shareholders today overwhelmingly approved the proposed merger with Progress Energy. More than 90 percent of the Duke Energy shares voted supported the proposal.

Duke Energy shareholders specifically approved a 1-for-3 reverse stock split as well as the issuance of Duke Energy common stock to Progress Energy shareholders upon closing of the merger transaction. The reverse stock split is designed to reduce the number of outstanding Duke Energy shares.

Progress Energy shareholders also approved the merger this morning during a separate meeting in Raleigh.

“Our shareholders have voiced their strong support for the merger between these two companies,” said Jim Rogers, chairman, president and chief executive officer of Duke Energy. “The merger will increase our ability to more economically modernize our generation fleet and grid while providing significant savings to customers through improved fuel purchasing power and greater plant dispatch efficiency.

“At its core,” Rogers continued, “the merger enhances both companies’ abilities to ensure strong shareholder value, provide exceptional customer service and deliver affordable and reliable electricity in the face of current high levels of economic, regulatory, and industry uncertainty.” Read more

The Kentucky Public Service Commission (KPSC) today approved the merger-related application filed in April by Duke Energy Corp. and Progress Energy, Inc. The application sought approval for the indirect transfer of Duke Energy Kentucky that would result from the merger of the companies.

The KPSC’s order, approving a settlement agreement negotiated by the stakeholders involved, marks the first state regulatory approval in the merger process. The KPSC requires Duke and Progress to accept all the commitments contained in the order within seven days.

The companies announced their agreement to merge Jan. 10 and have made all regulatory filings necessary to have the merger approved. The companies continue to target the merger closing by the end of the year. If the merger is completed, Progress Energy will become a wholly owned subsidiary of Duke Energy, and the former shareholders of Progress Energy will become shareholders of Duke Energy. Read more

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:

• 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.
• 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.
• 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. Read more

Photos: James E. Rogers, Duke Energy CEO, and William D. Johnson, Progress Energy CEO

• $26 Billion Transaction Will Create Nation’s Largest Utility with a Combined Enterprise Value of $65 Billion
• Diversified Generation Portfolio in Six Regulated Service Territories
• Transaction Expected to be Accretive to Adjusted Diluted Earnings in First Year

CHARLOTTE, N.C. and RALEIGH, N.C. – Duke Energy (NYSE: DUK) and Progress Energy, Inc. (NYSE: PGN) announced today that both companies’ boards of directors have unanimously approved a definitive merger agreement to combine the two companies in a stock-for-stock transaction. The combined company, to be called Duke Energy, will be the country’s largest utility, with:

• Approximately $65 billion in enterprise value and $37 billion in market capitalization
• The country’s largest regulated customer base, providing service to approximately 7.1 million electric customers in six regulated service territories

North Carolina, South Carolina, Florida, Indiana, Kentucky and Ohio
• Approximately 57 gigawatts of domestic generating capacity from a diversified mix of coal, nuclear, natural gas, oil and renewable resources
• The largest regulated nuclear fleet in the country.

“Our industry is entering a building phase where we must invest in an array of new technologies to reduce our environmental footprints and become more efficient,” said Jim Rogers, chairman, president and chief executive officer of Duke Energy. “By merging our companies, we can do that more economically for our customers, improve shareholder value and continue to grow.

“Combining Duke Energy and Progress Energy creates a utility with greater financial strength and enhanced ability to meet our challenges head-on,” Rogers continued. Read more

Learn more about the Duke Energy/Progress Energy merger