Progress Energy and Duke Energy this afternoon made their third -- and most expensive -- merger proposal in a bid to win approval from regulators in Raleigh and in Washington.
The two power companies proposed building up to $150 million in transmission lines, including upgrades in the Triangle, in order to expand competition in the Carolinas between wholesale electricity producers. The proposal is intended to address concerns at the Federal Energy Regulatory Commission in Washington that the merged power company would manipulate market prices of wholesale electricity in the region. 
The cost and extent of the concessions will almost certainly require North Carolina regulators to reopen merger proceedings in this state and potentially hold another round of hearings. The extra proceedings will prolong regulatory merger reviews into the summer as regulators and company executives negotiate who will pay for the transmission upgrades.
Duke CEO Jim Rogers said in a statement that the transmission line proposal strikes a balance at preserving the merger's financial benefits for customers and shareholders.
N.C. regulators will insist that the cost of the transmission lines and related expenses be fully borne by shareholders.
Raleigh-based Progress and Charlotte-based Duke had hoped to have their $26 billion merger approved by last December and are well along in their strategy to eliminate 1,860 jobs as they move to consolidate their corporate headquarters in Charlotte. The companies are proposing to form into the nation's largest electric utility, with 7.1 million customers in six states.
Duke and Progress plan to put in 84 miles of new transmission line -- either additional cables or replacement cables. During the three years it takes to build the upgrade transmission lines, the companies would sell up to 800 megawatts of electricity to wholesale customers, such as other electric utilities, rural electric cooperatives or municipal power agencies.
John Murawski has been a full-time newspaper reporter since 1991, with stints at Legal Times and The Chronicle of Philanthropy (both in Washington, DC), The Philadelphia Inquirer and The Palm Beach Post (in South Florida) before arriving at the N&O in December 2004. At the N&O he covers energy (nuclear, coal, renewable, efficiency), hydralic fracturing (or "fracking"), public utilities (both electric and natural gas) and health care. His beat includes Progress Energy, PSNC Energy, Piedmont Natural Gas, PowerSecure International, GlaxoSmithKline, Merck, Novo Nordisk, Pfizer, Biogen Idec and others. You can reach him at 919-829-8932 or
Comments
What a joke
Wed, 02/22/2012 - 23:20 — JoeTarheelthe NC utilities commission has their answer. Deny the merger. You have an obligation to support a merger that is in the best interest of customers. You know the margins on this deal were sketchy from the beginning. You konw there was no way they could do this deal without jacking up rates so you have a fiduciary obligation to DENY this merger!!!!
percentage
Wed, 02/22/2012 - 22:51 — RoroCAAre you serious. .6 percent concession. Who hoooo...
That is like going to buy a car for 30,000 and the guy reducing the price by a whooping 180 dollars. Sign me up...
That is a joke...
$150M?
Wed, 02/22/2012 - 21:45 — JustAGuyInNCThis is a proposed $26BILLION merger and $150M is considered an "expensive" concession. That's little more than a rounding error.
Is this just high voltage long distance lines?
Wed, 02/22/2012 - 21:34 — baconmOr does this include lines between substations and transformers? Would any of this money be available for the long-awaited burying of the power lines in central Durham?