The merger hearings for Duke Energy and Progress Energy before the North Carolina Utilities Commission were supposed to be the last major hurdle for the deal to be approved, but now the concerns of a small coastal city and a federal government regulatory agency have cast last-minute doubts. It turns out the demands by environmental groups for Duke to pay more money into weatherization boondoggles were minor irritants compared to the threat posed by the Federal Energy Regulatory Commission.
As The News & Observer of Raleigh reported last week, FERC informed the North Carolina-based utilities that in order to win its approval, extensive changes need to be made to the deal, since the proposed plan would “have an adverse effect on competition” in the Southeast, with the agency characterizing the deal’s problems as “systematic” and “severe.”
Duke and Progress officials made the FERC decision sound like it was no biggy, but others viewed that as spin. Potential solutions that could alleviate the feds’ concerns could include the sale of power plants, additional transmission lines, or having Duke give up control of existing transmission lines. FERC gave approval to the deal, but only conditional upon Duke and Progress addressing its concerns satisfactorily within 60 days.
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