With a decision from the feds possible in the coming weeks on the $26 billion merger between Duke Energy and Progress Energy, participants are jockeying for last-minute advantage in the proceedings.
The towns of New Bern and Rocky Mounty are making a final push to persuade the Federal Energy Regulatory Commission that the merger will give the two utilities too much power to manipulate electricity prices.
The FERC, which is largely concerned with monopolies and price manipulation, is one of two major hurdles the merger must clear. The N.C. Utilities Commission is evaluating the merger's costs and benefits to the state, but is not likely to rule until the FERC makes its decision.
Duke and Progress, which announced their merger nearly a year ago, have asked the FERC to rule by Dec. 15 so they can complete their merger this year, forming the nation's largest electric utility. They have plans in place to cut 2,000 positions when they integrate the two companies and establish headquarters in Charlotte.
In a Monday filing, however, the two towns are urging the federal commission to force Charlotte-based Duke and Raleigh-based Progress to make a divestiture -- the regulatory term for selling off key assets, like power plants or transmission lines -- as a condition of approving the merger.
The two companies had earlier suggested selling off blocks of wholesale power at a fixed profit of 10 percent, but the towns say that's an accounting trick that accomplishes nothing. New Bern, with less than 30,000 residents, and Rocky Mount, with a population under 60,000, have been the merger's most vocal opponents, urging FERC to force the two electric utilities to sell their "crown jewels" to competitors as a condition of getting the merger approved.
"What they cannot do is what they have tried to do here -- cobble up some zero-cost window dressing, call it 'divestiture' and invite the Commission to join them in pretending that it accomplishes any effective mitigation of their merger-induced market power," the towns' latest filing says. "The Applicants' proposal relinquishes control of precisely nothing of any value to any actual or potential competitor."
In their filings, Progress and Duke counter that the "crown jewels" argument is self-defeating. Selling off power plants, they argue, would drive up electricity costs for everyone by forcing the companies to build new power plants.