Duke, Progress agree to new July merger deadline

January 10, 2012 10:33:21 AM PST
Progress Energy and Duke Energy have agreed that July will be the new deadline for completing their merger to create the country's largest electric utility.

The companies said in a filing last week to the Securities and Exchange Commission that they agreed to forgo an initial termination date in the merger agreement until July. The deal was valued at $13.7 billion when it was announced one year ago.

"The merger agreement provided for 18 months total time period.  This filing indicated we have mutually agreed to extend that to the full 18 months," Duke Energy spokesman Tom Williams said Tuesday.  "We could go beyond 18 months if needed if the companies agree to an extension."

The companies had pressed all of last year to complete their deal by the end of 2011. That target was upset when the Federal Energy Regulatory Commission said the companies haven't done enough to protect competition in their North Carolina and South Carolina home markets.

Duke and Progress said last month that revising their deal to satisfy federal regulators would take until March at the earliest, but that both companies remained committed to completing the deal.

In August, shareholders of both companies approved the merger.

In September, the FERC questioned the deal's impact on customers in North and South Carolina. Regulators suggested that the companies consider a number of measures that would diminish their influence, such as selling power plants, building new transmission lines, or giving up control of their transmission system to a regional operator.

The companies responded with a plan to sell excess electricity at a fixed price to wholesale buyers in their Carolinas territories. Federal regulators said last month the proposal by Charlotte-based Duke and Raleigh-based Progress didn't go far enough.

If approved, the combined company would serve 7.1 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky.

The two companies have received approval from, or met the conditions of, several other government agencies, including the U.S. Justice Department, the Nuclear Regulatory Commission, the Federal Communications Commission and the Kentucky Public Service Commission.

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