FERC has asked Duke Energy (NYSE:DUK) and Progress Energy (NYSE:PGN) again to provide more information about their proposed merger.
In a letter to the companies on April 10, FERC highlighted some discrepancies between the companies’ original merger application and the revised market power mitigation compliance proposal they submitted March 26.
According to FERC, the seasonal benchmark models the companies included in their original merger application for the 2011/2012 seasons for the balancing authority areas (BAA) of Carolina Power & Light-East, Carolina Power & Light-West (CPLW), and Duke Energy (Duke), which were used to conduct energy transfer analyses for determining Duke Energy Carolinas’ (DEC) and Progress Energy Carolinas’ (PEC) import capabilities, differed from the transmission models they submitted in their March 26 compliance filing, FERC said.
“Although applicants are proposing to mitigate the competitive harms identified in the merger order through the seven proposed transmission expansion projects, applicants do not provide seasonal benchmark models that include the seven proposed transmission expansion projects and the Greenville-Kinston Dupont 230 kV Line,” FERC said in the letter.
The plan they filed March 26 proposes permanent mitigation with seven transmission projects, estimated to cost approximately $110m, as well as a two-to-three-year interim mitigation plan with must-deliver, must-take power purchase agreements that will be in place from the date the merger closes until the transmission projects are operational. The Greenville-Kinston Dupont line would be the only newly constructed line in the companies’ proposed transmission package.
Duke Energy and Progress Energy also provided different types of supporting analyses for DEC and PEC, which do not appear to examine all seven of the proposed transmission expansion projects and the Greenville-Kinston Dupont line, FERC said.
FERC asked the companies to modify the three seasonal benchmark models used in their application by including the seven proposed expansion projects and the Greenville-Kinston Dupont line. The commission also asked that the companies provide the three solved, modified seasonal benchmark models and asked that if doing so leads to any changes to the seasonal benchmark models in the application other than the seven proposed transmission projects and the Greenville-Kinston Dupont line, that they provide a detailed narrative description of the changes.