Progress Energy issued lackluster first-quarter earnings this morning in what Progress officials hope is the company’s last quarterly earnings release as a stand-alone company.

Duke Energy and Progress Energy have responded to federal regulators request for more information on their latest merger plan.

In a statement, the companies said they don't expect the Federal Energy Regulatory Commission's request to affect efforts to complete the merger by July 1.

They said the FERC's requests were common and "were technical and focused on the transmission-related models that Duke and Progress submitted as an exhibit to the March 26 revised mitigation plan. Many of our responses involved re-formatting data previously submitted to FERC as part of that filing."

In a letter Tuesday, the FERC gave the companies seven days to respond.

Under the plan submitted in March, the companies would spend about $110 million on seven transmission projects intended to bring competitors' power into the Carolinas, increasing market competition.

Duke and Progress have also signed power purchase deals with three wholesale electricity marketing companies that would be in effect until the transmission projects are finished.

FERC raised about a dozen issues in Tuesday's filing. Among them were questions about the companies' analytical models supporting the transmission projects.

FERC cited problems with models addressing competition concerns in Progress' Carolinas territory.

Two months after Duke Energy won a 7 percent rate increase from the N.C. Utilities Commisison, the state's Attorney General said he would appeal the ruling.

AG Roy Cooper opposed the rate increase when it was before the utilities commission. Charlotte-based Duke, under pressure to scale back its request, agreed to cut back the rate hike from the 15 percent the company originally requested.

Cooper will fight the increase at the N.C. Court of Appeals, according to our sister publication, The Charlotte Observer. He contends Duke's profit should be curtailed during tough economic times for its customers.

Duke has about 180,000 customers in Durham, Chapel Hill and the western Triangle, representing about 10 percent of its North Carolina customers.

Duke Energy is proposing a half dozen new energy-efficiency measures and cash incentives to encourage customers to invest in household upgrades. The incentives range from $30 to $400 and can be used in tandem with state and federal incentives, where applicable.

The Charlotte-based electric utility filed the request today with the N.C. Utilities Commission, the regulatory agency that must approve the measures as sound and worthwhile before customers can take advantage of them. Approval is likely since the measures are comparable to those already offered by Raleigh-based Progress Energy. 

Approval would also allow Duke to recover its program costs -- incentives, administrative and other expenses -- from all customers through their monthly bills. The rationale for spreading the costs is that all customers benefit from cleaner air and system-wide energy reductions that reduce the need for building costly new power plants. Energy-efficiency programs are considered the most cost-effective way to manage power demand.

Duke has about 180,000 customers in Chapel Hill, Durham and other parts of the Triangle, amounting to about 10 percent of the company's customer base in North Carolina.

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.

Progress Energy reported weakening electricity sales for what was to be the Raleigh-based power company's last year of independent operation before a planned merger with Duke Energy in Charlotte.

The revenues and earnings released this morning are a prelude to conference calls with Wall Street analysts and investors who will undoubtedly seek updates on the status of the delayed $26 billion merger. Duke's conference call is scheduled at 10 a.m. today and Progress will update Wall Street at 2 p.m.

Duke's CEO Jim Rogers told our sister paper, The Charlotte Obsever, that the companies expect to file their revisions within a week. The two North Carolina electric utilities were expected to file their merger revisions as early as last month and warned then that the deal could be delayed by six months as the revisions make their way through complex regulatory reviews.

The N.C. Utilities Commission this afternoon approved an overall 7 percent rate increase for Duke Energy's 1.8 million customers in the state, effective next month.

The commission largely adopted an earlier settlement between Charlotte-based Duke and the Public Staff, the state agency that represents consumers in utility rate cases.

Monthly bills for typical residential customers will go up about $7, as reported by our sister newspaper, The Charlotte Observer.

Duke has about 180,000 customers in Chapel Hill, Durham and other parts of the Triangle.

Duke Energy and Progress Energy have delayed the closing date of their corporate merger as the two North Carolina electric companies face tough regulatory scrutiny of their proposed $26 billion deal.

In a memo to employees issued today, the companies said the earliest their merger could now close is May or June. Just last month, Charlotte-based Duke and Raleigh-based Progress predicted they could finish their merger as soon as March.

The update is the latest in a series of developments that indicate the merger is turning out to be far more complicated than company executives had expected.

"Based on the time needed for our analysis and the estimated time for regulatory reviews and approvals, we believe the earliest the merger could close is May or June," Progress Senior Vice President Paul Sims wrote to employees.

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 N.C. Utilities Commission this afternoon resolved a long-simmering dispute over an electric utiltiy's plans to build a substation and transmission lines near a Cherokee holy site in Western North Carolina.

The commission closed the matter and reaffirmed Duke Energy's plans to build the substation and power lines. The matter became moot last year after Charlotte-based Duke found an alternate site, out of view from the sacred valley the Cherokees refer to as Kituwah.

However, the Utilities Commission was left with a challenge filed in 2010 by the Swain County Commission and by an ad-hoc group calling itself Citizens to Protect Kituwah Valley. The Commission said today the issue is resolved, but if those groups have still have concerns, "they will need to pursue that remedy in the appropriate court."