Progress Energy and Duke Energy have set July 8 as a new date to complete their corporate merger, seven months past their original self-imposed deadline.
The two electric utilities set their new date in filing this week at the Securities Exchange Commission as they work toward completing their $26 billion deal. It means either company can abandon the merger after the set date expires, but they both have the option of adding more extensions.
Progress spokesman Mike Hughes said the new date is a formality, replacing the previous termination date that expired Monday because the merger is still being worked out.
"Having an initial termination date is fairly standard in agreements of this sort (which require lengthy approvals)," Hughes said by email. "It’s the date on which either company can walk away from the deal without paying a penalty."
The date set in the SEC filing differs from earlier statements to investors and employees that had indicated the merger could take just three extra months to complete, with a completion as early as March, as the power companies address monopoly concerns raised by federal regulators.
The Federal Energy Regulatory Commission has rejected the merger twice, saying the deal as proposed raises anti-competitive issues. Technically, the FERC conditionally approved the merger, but the deal can't move ahead until the companies address concerns that they would become so dominant they could manipulate the market price of wholesale electricity.
Duke and Progress are looking at selling off several hundred megawatts of electricity in a way that would preserve the merger's financial benefits to customers in the Carolinas and other states.
The companies will need to select a suffiicent block of power and price it competitvely to convince the FERC that they do not have an unhealthy amount of control of wholesale power markets.
They expect to file their revisions this month, Progress CEO Bill Johnson said recently. Johnson will be the CEO of the combined company, Duke Energy.
The merger, announced a year ago, would create the nation's largest electric utility, with 7.1 million customers in six states. Company executives initially expressed confidence the deal would be quickly approved by federal and state regulators and completed by the end of 2011.
When the companies merger, they will be headquartered in Charlotte. Raleigh-based Progress will empty out one of its two downtown office towers and sublease it to software developer Red Hat, raising another deadline issue: Under lease terms with Red Hat, Progress will have to make the building available by Jan. 1, 2013.