Work continues on transmission expansion projects following FERC’s conditional approval of Duke, Progress merger

In conditionally approving the merger of Duke Energy (NYSE:DUK) and Progress Energy (NYSE:PGN), FERC accepted the companies’ revised mitigation proposal, which involves seven transmission expansion projects.

“As part of our mitigation proposal to the Federal Energy Regulatory Commission, [in relation to the proposed merger], we proposed building additional transmission lines that previously were not a part of any plans,” a Progress Energy spokesperson told TransmissionHub June 11. “We basically have two types of transmission projects now: we’ve got the transmission mitigation projects, which are directly related to the merger, and then there are the existing transmission plans, which are not at all related to the merger.”

He added: “The transmission mitigation projects that are being completed as a result of the merger will be done in parallel with the other planned transmission projects required for system reliability and the transmission mitigation projects will not be prioritized over our existing plans. Our transmission construction activity will be augmented to accommodate the increased work load.”

According to one of FERC’s orders on the merger issued June 8, the revised mitigation proposal, which FERC accepted, subject to certain revisions and conditions, “provides for permanent structural mitigation in the form of seven transmission expansion projects that fully address the concerns raised by the commission.”

Those projects include replacing two existing transformers with larger capacity transformers at the Antioch 500/230-kV substation and building a new third line in relation to the Lilesville-Rockingham 230-kV line.

According to the companies, the seven proposed transmission expansion projects will increase transmission import capability into the Duke Energy Carolinas and Progress Energy Carolinas-East Balancing Authority Areas (BAAs).

FERC also said that the companies claim that the projects will increase the simultaneous transmission import limit (SIL) for the Duke Energy Carolinas BAA by 2,440 MW in the summer and 1,930 MW in the winter, and for the Progress Energy Carolinas-East BAA by 2,225 MW in the summer and 1,225 MW in the winter.

The projects’ total cost is projected to be about $110m.

According to the companies, it will take up to three years to complete the transmission expansion projects. FERC also said that in order to track the progress, it will require an independent monitor to provide periodic reports on the projects’ status every three months.

In addition to those projects, the companies are accelerating the in-service date of Progress Energy Carolinas’ planned Greenville-Kinston Dupont 230-kV line from 2017 to 2015, FERC said.

FERC also conditionally approved the companies’ joint dispatch agreement and joint open access transmission tariff, Duke Energy Chairman, President and CEO Jim Rogers said in the companies’ June 11 statements. “We will quickly complete the evaluation of the conditions in the orders while working to obtain the remaining regulatory approvals to close the merger on July 1,” he said.

Progress Energy Chairman, President and CEO Bill Johnson said in the statements that receiving FERC’s conditional orders “is a major milestone for this transaction.”

The companies said they expect to make a compliance filing with FERC within 15 days following the commission’s conditional approval of their merger.

They also said they have received merger-related approvals from, or met the requirements of, their shareholders, the U.S. Department of Justice, U.S. Nuclear Regulatory Commission, Kentucky Public Service Commission and Federal Communications Commission.

The North Carolina Utilities Commission (NCUC) is required to approve the merger and the joint dispatch agreement, the companies said, adding that the Public Service Commission of South Carolina must also approve the joint dispatch agreement.

According to the NCUC’s June 11 order establishing a procedural schedule, the companies and public staff may file comments or testimony by June 13. By June 18, interveners may file comments or testimony and by June 19, the companies and public staff may file reply comments or rebuttal testimony in response to the interveners’ filings.

The timing of the closing date depends on receiving the remaining state regulatory approvals and submitting additional compliance filings with FERC. The companies also said that consummation of the merger is contingent on satisfying all the conditions to the merger according to the merger agreement’s terms.

Article amended at 11:30 a.m., EST, June 12, to add information about the NCUC’s order.

About Corina Rivera-Linares 3286 Articles
Corina Rivera-Linares was TransmissionHub’s chief editor until August 2021, as well as part of the team that established TransmissionHub in 2011. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial from 2005 to 2011. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines.