Duke Energy Files Power Competition Plan in North Carolina
Duke Energy Corp. (DUK) proposed to upgrade its transmission system to import more power from out- of-state generators to ease competition concerns from its $16.1 billion takeover of Progress Energy Inc. (PGN)
Duke Energy and Progress Energy are amending their proposal to North Carolina regulators after the U.S. Federal Energy Regulatory Commission rejected an original plan in December. The North Carolina Public Utilities Commission has as long as 30 days to review the filing before it is submitted with FERC, according to a statement today from both companies.
Duke Energy, based in Charlotte, said its proposed transmission projects will expand the ability to import wholesale power into North Carolina and South Carolina and would cost between $75 million to $150 million.
“They are increasing the potential for competition by allowing more power to be imported into their service territories,” said Paul Patterson, a New York-based utility analyst for Glenrock Associates LLC.
The utility owners will also sell 800 megawatts during summer off-peak hours, 475 megawatts during summer peak hours, 225 megawatts during winter off-peak and 25 megawatts during winter peak hours.
“We believe this is a solid plan that addresses the FERC’s concerns about market power while providing benefits to our customers and shareholders,” said Progress Energy Chief Executive Officer Bill Johnson in the statement. Johnson will become the chief executive of the combined companies.
The deadline for the transaction was extended to July 8 after FERC rejected Duke’s plan to limit the combined company’s ability to manipulate power prices. North Carolina and South Carolina regulators must approve the latest proposal as well as FERC, the companies said. Progress Energy is based in Raleigh, North Carolina.
To contact the reporter on this story: Mark Chediak in San Francisco at mchediak@bloomberg.net.
To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net.
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