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.

In a letter sent Monday to Vulcan Materials shareholders, Martin Marietta Materials CEO Ward Nye says Vulcan's preliminary proxy statement makes unfounded assertions and misleading statements about Martin Marietta's merger proposal.

Nye says the four nominees Martin Marietta has put forward for Vulcan's board are being attacked unfairly by Vulcan officials, who have questioned their independence.

"Martin Marietta believes that all Vulcan shareholders should know that Vulcan appears to attempting to impugn and to improperly disqualify independent director candidates proposed by Martin Marietta for election to Vulcan's Board," Nye wrote in his letter.

Raleigh-based Martin Marietta is attempting to gather support for its nominees ahead of Vulcan's annual shareholders' meeting, which is set for June 1.

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.

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."
 

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.

Bill Johnson had expected to be heading the nation's largest electric company next week when addressing his executive peers at the Economic Forecast Forum, the annual gathering of who's whos among the state's business elite.

Johnson, currently CEO of Progress Energy in Raleigh, is slated to become CEO of Duke Energy in Charlotte when the two power companies complete their corporate merger. The $26 billion deal is temporarily on ice, however, as the two utilities regroup to work out a merger proposal that's acceptable to federal regulators.

The feds have rejected the previous two merger proposals from Duke and Progress, expressing concern that the merger as proposed would create a company with an unhealthy concentration of market power that could manipulate the wholesale price of electricity. Duke and Progress had expected to complete their merger this year, but now Wall Street analysts say the merger could take three to six more months to get done.

Johnson is slated to discuss the role of energy in North Carolina's economy at the annual economic forum that's sponsored by two of the state's most influential business lobbying groups: N.C. Bankers Association and the N.C. Chamber. He is likely to extol the merger's benefits for customers and shareholders, but he may also face questions from the audience about the economic consequences to this state of eliminating 1,860 jobs over three years.
 

Vulcan Materials, which just a week ago was targeted with a hostile takeover by Raleigh-based Martin Marietta Materials, announced today that it is restructuring its business operations in an effort to reduce costs and operate more efficiently.

The company estimates its restructuring, which will consolidate its eight operating divisions into four, will save $30 million annually.

Martin Marietta has said its proposed merger with Vulcan would result in between $200 and $250 million in savings.

The initiative announced today was approved by Vulcan's Board of Directors on Dec. 9, before Martin Marietta submitted its takeover bid to Vulcan shareholders.
 

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."