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."
 

Red Hat, the Triangle software company, has been promised several years in free rent and huge discounts in other years as part of a sweet deal from Progress Energy to sublease its office building in downtown Raleigh.

Red Hat reported this week in a federal regulatory filing that it expects to receive at least $28 million from Progress toward its real estate rent. That represents a 32 percent discount over the life of the $87 million lease.

The terms of the real estate lease effectively mean that Red Hat will be paid by Progress, a Fortune 500 electric utility, to occupy the 19-story building for a chunk of the long-term lease through 2035..

Officials at Progress and Red Hat could not be reached for comment to elaborate on their real estate contract. However, Progress has been under pressure to find a tenant to occupy the headquarters it plans to dismantle as part of its corporate merger with Charlotte-based Duke Energy.

Progress Energy and Duke Energy this afternoon vowed to press ahead with their corporate merger, despite two previous rejections from federal regulators.

The two North Carolina electric utilities plan to file a revised proposal to address federal monopoly concerns, adding that the earliest possible date the $26 billion deal could be completed would be in March. Some Wall Street analysts are projecting the merger will take six more months to complete.

Charlotte-based Duke and Raleigh-based Progress announced 11 months ago they plan to form the nation's largest electric utility, with 7.1 million customers in six states. The Federal Energy Regulatory Commission said twice, most recently yesterday, that the merger would allow the two companies to manipulate market prices of electricity in North Carolina.

The federal commission wants the companies to give up control of power plants or transmission lines, either by selling or leasing those assets.

In a joint statement issued this afternoon, the companies said they will file a revised merger plan as soon as they review the federal commission's most recent order.

"The FERC ruling does not call into question the benefits of the merger," the joint statement said. "The combination of Duke Energy and Progress Energy will provide clear benefits for our customers, including overall lower corporate costs and $650 million in guaranteed benefits to customers in the Carolinas from the joint dispatch of the utilities' generation fleets and from power plant fuel savings."

Federal regulators have again rejected the proposed merger between Duke Energy and Progress Energy, assuring the $26 billion deal won't get done this year, and raising questions whether it can get done at all.

The Federal Energy Regulatory Commission said this evening the merger raises serious concerns about giving the companies too much monopoly power in North Carolina. Announced in January, the merger would create the nation's largest electric utility to be based in Charlotte. It would also result in the elimination of 1,860 positions, mostly in North Carolina.

The federal commission issued its ruling the day before the agency was expected to consider the matter at a public hearing in Washington on Thursday morning. The ruling blindsided executives at both companies, who had hoped for an approval of the deal they have been working on for the past 11 months.

"It's certainly a surprise," said Progress spokesman Mike Hughes. "We are reviewing the ruling as to what our options are."

Environmental advocacy organizations that were among the staunchest critics of the corporate merger between Duke Energy and Progress Energy have agreed not to fight the $26 billion deal in exchange for sweeteners that could be worth millions in electricity savings.

The agreement will require greater commitments to energy efficiency, pushing North Carolina's conservation goals to higher levels. The state's current green energy mandate -- which requires that of 12.5 percent electricity sales be met through a combination of renewables and efficiency programs by 2021 -- would likely be exceeded under today's agreement.

The last-minute agreement was announced this afternoon, the same day public hearings on the merger got under way before the S.C. Public Service Commission.

Over 1,100 employees at Progress Energy and Duke Energy have volunteered for an early out program as the companies look to cut nearly 1,900 positions in anticipation of their planned merger.

The greatest number of those who came forward work in North Carolina, where Progress plans to eliminate its corporate headquarters when it consolidates operation with Duke in Charlotte.

That means Duke and Progress will still have to eliminate several hundred more jobs through a combination of layoffs, retirements and resignations. The staff cuts will take place over the next three years as the company seeks to eliminate a total of 1,860 positions during that time.

Most of the staff cuts will come through the voluntary buyout program offered several weeks ago at the two North Carolina electric companies. They said today that 1,153 workers have signed up to leave as part of a voluntary buyout program. They will be paid a severance based on the length of their tenure with the companies.