State regulators have denied an emergency appeal filed by a Durham-based nuclear watchdog group seeking to allow greater scrutiny of the proposed merger between Duke Energy and Progress Energy during Monday's scheduled public hearing.

The N.C. Utilities Commission ruled late Friday that N.C. Waste Awareness and Reduction Network has not shown a good reason as to why the hearing should consider a broader range of issues, including more than dozen private settlements that Duke and Progress reached with large customers in exchange for those customers not opposing the merger.

The $26 billion merger, originially proposed in January 2011, was approved two weeks ago by federal regulators in Washington. The last major hurdle is the N.C. Utilities Commission, which has scheduled a hearing Monday afternoon in Raleigh.

The 2 p.m. hearing is strictly limited: N.C. WARN will be able to ask questions about three filings made in May and June.

Raleigh-based Progress and Charlotte-based Duke are proposing to form the nation's largest electric utility with operations in a dozen states and in South America. The merger would result in the elimination of 1,860 positions over three years at both companies and the elimination of Progress Energy's corporate headquarters in downtown Raleigh.

In exchange for promises not to oppose the merger, the two electric companies have cut deals with organization representing virtually every customer in North Carolina, promising to deliver the merger's financial benefits to those groups. They are rural electric cooperatives, municipal power agencies, industrial power users and the Public Staff, the state's consumer protection bureau in utility matters before the N.C. Utilities Commission.

The N.C. commission is widely expected to rule on the merger promptly to acquiesce to the utilities self-imposed deadline to complete the deal by July 8, the date the termination agreement runs out and the companies can walk away from the deal without paying hundreds of millions of dollars in penalties.

Progress Energy and Duke Energy this morning urged state regulators to strictly limit the scope of Monday's scheduled hearing on their pending utility merger.

The two power companies asked the N.C. Utilities Commission to reject the emergency appeal, filed Thursday by a Durham-based nuclear watchdog group, to open up the merger review to a broad range of issues.  

The $26 billion merger, originally proposed in January 2011, was approved two weeks ago by federal regulators in Washington. The last major hurdle is the N.C. Utilities Commission, which has scheduled a hearing Monday afternoon.

The hearing is strictly limited. N.C. Waste Awareness and Reduction Network will be able to ask questions about three filings made in May and June. The N.C. commission said that most of the issues were reviewed during three days of public hearings last September and don't need to be revisited.

Some of the region's most influential environmental organizations are asking N.C. regulators to impose additional conditions on the proposed merger between Progress Energy and Duke Energy before the two power companies are allowed to combine into the nation's largest electric utility.

The groups filed their request with the N.C. Utilities Commission on Monday, the deadline for participants in the merger proceedings to sway the state regulators in their merger review. The filing by the Environmental Defense Fund, Sierra Club, Southern Alliance for Clean Energy and the S.C. Coastal Conservation League was posted on the commission's web site this morning.

"The commission's decision in this proceeding will shape the energy future not only of North Carolina, but of the Southeast and the entire nation as well," the groups wrote. "Environmental Intervenors remain concerned that the proposed merger does not provide sufficient protections for North Carolina ratepayers or the environment."

The $26 billion merger could be just weeks away from final approval by the N.C. Utilities Commission after being approved recently by the Federal Energy Regulatory Commission in Washington. The issue before the N.C. commission now is whether to hold another round of public hearings or to rule based on hearings held last year and submitted legal briefs.
 

The state's consumer advocate says there's no need to hold another round of public hearings on the proposed merger between Progress Energy and Duke Energy.

The Public Staff, as the state's consumer protection agency is called, told the N.C. Utilities Commission late Wednesday that the merger proposal is ready for a ruling.

The Public Staff is arguably the most influential independent participant in the merger proceedings and the bureau's position points to a likely imminent ruling from the N.C. commission.

The N.C. commission is the last major hurdle for the $26 billion utility deal, which was announced 18 months ago and finally approved Friday by the Federal Energy Regulatory Commission on Friday.

North Carolina's power suppliers, awash in solar energy and other clean resources, said today they will not be able to meet a state mandate this year for generating electricity from two of the state's most abundant renewable resources: swine waste and poultry waste. 

The organizations, including Progress Energy and Duke Energy, said they have fallen behind in efforts to sign contracts to buy power output from independent generators that burn or extract flammable gas from those agricultural animal wastes.

The power suppliers collectively asked the N.C. Utilities Commission for a delay to meet those green energy goals, saying the technologies are immature, the markets are not developed, and potential suppliers are inexperienced.

The filing was made by Raleigh-based Progress, Charlotte-based Duke, Richmond-based Dominion N.C. Power, GreenCo Solutions, Public Works Commission of Fayetteville, Tennessee Valley Authority as well as a number of rural electric cooperatives and municipal power agencies.

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.