N.C. regulators keep Duke-Progress merger on schedule; voluntary buyouts underway

North Carolina regulators have turned down a request by environmental advocacy groups to indefinitely suspend their review of the pending merger between Duke Energy and Progress Energy.

The decision by the N.C. Utilities Commission this week means that Duke and Progress could potentially get their $26 billion merger completed by this year or early next year. Just this week, the two utilities offered a voluntary bouyout program to several thousand eligible employees as part of the merger integration goal to eliminate 2,000 positions.

The merger, which would create the nation's biggest electric company, is simultaneously being reviewed by the Federal Energy Regulatory Commission in Washington.

Environmental groups had argued that if the federal commission imposes conditions on the merger, that would throw into disarray the North Carolina proceedings, which are contingent on reviewing the merger as proposed, not as it might be altered by federal regulators.

The groups -- including Sierra Club, Environmental Defense Fund and Southern Alliance for Clean Energy -- cited the FERC's Sept. 30 ruling, which said the merger raised significant monopoly concerns and would have to be revised. To appease the FERC's concerns, Duke and Progress suggested in October selling off blocks of wholesale power at a fixed profit margin of 10 percent.

The advocacy groups earlier this week asked the N.C. Utilities Commission to put North Carolina proceedings on hold until the feds issue their final decision, noting that the FERC might require stricter conditions than those the companies propsed. Had N.C. regulators agreed with the request, they would likely have delayed the merger by weeks, if not months.

Charlotte-based Duke and Raleigh-based Progress are eager to get their merger completed as soon as possible. The companies on Monday opened the enrollment window for volunatry buyouts to several thousand eligible employees. Those employees will have until Nov. 30 to decide, but could end up working for months, or even more than a year, until their position is phased out.

Also this week, Duke and Progress notified 300-some "tier three" managers that they will have jobs with the combined company.

This week Progress CEO Bill Johnson, who will be CEO of the combined company, said at an industry conference that the merger is likely to be completed soon and will position the expanded Duke Energy to make other acquisitions in a consolidating utility industry.

The N.C. Utilities Commission noted it can always reopen the proceedings or schedule more hearings if necessary. A second round of public hearings might be needed if the federal commission imposes stricter conditions that alter the merger's economic impact in North Carolina.

The N.C. Commission did make a small concession, however, postponing a document filing deadline by one week, from Nov. 17 to Nov. 23.

South Carolina, which is also reviewing the Duke-Progress merger, recently delayed a public hearing from Oct. 26 to Dec. 12.