Duke Energy and Progress Energy cleared another hurdle in their $26 billion corporate merger this morning with the announcement that the two companies reached a settlement with South Carolina's consumer advocate.

The agreement with the S.C. Office of Regulatory Staff, which is very similar to terms signed in North Carolina last week with the Office of the Public Staff, means that the consumer advocate agencies in both states will not oppose the merger when it comes up for review before the utilities commissions in each state.

The consumer advocates say the settlements will help keep down future rate increases, which are inevitable as both companies enter a phase of mutli-billion dollar power plant construction and transmission upgrades.

Progress Energy and Duke Energy have reached a deal that secures key backing in this state for the companies' planned corporate merger.

The agreement disclosed this afternoon with the state's consumer advocate will require Progress and Duke to pass on millions of dollars in savings to the public in exchange for support from the consumer agency, known as the Public Staff.

A blessing from the Public Staff removes a significant obstacle to getting the merger approved by the N.C. Utilities Commission. The Public Staff has been reviewing the merger for months at a cost of $330,000 to an outside utility analyst.

However, the deal conspicuously omits terms that have been imposed on utility mergers in other states in past years -- such as rate cuts, rate freezes and guarantees to retain employees. Regulators in Kentucky, for example, are requiring a 2-year rate freeze as a condition of approval for the Duke-Progress merger.
 

Progress Energy could eliminate as much as half its downtown Raleigh workforce as part of the company's merger with Duke Energy.

The Raleigh-based electric utility today updated workers to expect its downtown staff to end up between 1,000 and 1,300 employees, down from about 2,000 today. The job cuts will come through voluntary buyouts, attrition, retirements and layoffs over several years, as well as from Raleigh employees relocating to Charlotte.

The corporate merger, announced in January, will create the country's biggest electric utility with 7.1 million customers in six states. The combined company will be headquartered in Charlotte. 

Under the merger terms, Progress promised to keep a "substantial presence" in Raleigh. The company will keep a number of key positions here, including N.C. utility president, two senior executives over regulated utilities and customer operations and functions that could include transmission, nuclear engineering, fossil fuel engineering, human resources, communications and IT support.
 

Progress Energy shareholders overwhelmingly approved the power company's $26 billion merger with Duke Energy this morning in Raleigh, just an hour after Duke shareholders gave their assent in Charlotte.

Shareholder approval, which was widely expected, would create the nation's largest electric utility with 7.1 million customers in six states. Progress shareholders voted 95.9 percent in favor of the vote, while Duke shareholders also voted overwhelmingly to approve the deal.

Executives at both electric utilities have promoted the deal for months as the best way to create the financial heft required to build new nuclear plants, upgrade transmission systems and comply with stricter environmental regulations.

"It means shareholders really like the deal," Progress CEO Bill Johnson said after the vote tally was announced this morning at the Progress Energy Center for the Performing Arts in Raleigh.

Progress Energy and Duke Energy have agreed to settle lawsuits filed by shareholders who allege the planned merger between the two companies shortchanges investors.

The settlement would end nine lawsuits filed in Wake County Superior Court and subsequently consolidated in the N.C. Business Court in Raleigh. The settlement requires approval from the business court.

As part of the settlement, two power companies would pay up to $550,000 to lawyers who represent the shareholders, with the final amount to be determined by the business court.

Raleigh-based Progress and Charlotte-based Duke also agreed to make additional public disclosures to provide shareholders more information about the proposed merger. The corporate union, announced in January, would create the nation's biggest electric utility with 7.1 million customers in six states.

Progress Energy and Duke Energy moved a step closer to cutting staff by notifying workers this afternoon that both companies will offer a voluntary buyout program later this year.

The two electric utilities, which announced a corporate merger in January, expect to shed employees through buyouts and layoffs as they integrate business divisions and cut costs. Raleigh-based Progress and Charlotte-based Duke expect to complete the merger this year, after receiving regulatory approval from state and federal agencies.

Progress sent an e-mail notice this afternoon to all 11,000 workers in the Carolinas and Florida. The eligibility requirements for the voluntary buyout will be announced this fall, but they will target employees in endangered jobs.

Duke Energy and Progress Energy said today they have agreed to a 2-year rate freeze and $825,000 in contributions to social programs in Kentucky in exchange for getting their corporate merger approved in that state.

The agreement hints at the kinds of concessions the two North Carolina electric utilities might consider in this state to win approval from the N.C. Utilities Commission.

Charlotte-based Duke and Raleigh-based Progress announced the agreement with Kentucky's Attorney General this morning. The two companies announced their proposed merger in January, which would form the nation's largest electric utility with 7.1 million customers in six states.
 

Duke Energy and Progress Energy have filed their merger application in South Carolina, the last of slew of filings made to state and federal agencies.

As in prior regulatory filings, the two North Carolina electric utilities stressed the benefits of the merger to their customers, a claim that regulators will subject to intense scrutiny and complex audits. The application, filed Monday, also promises that the two utilities will try to reduce staff through retirements and attrition before resorting to forced layoffs.

While the power companies aren't promising rate cuts for customers, they say that combining operations and forming the nation's largest electric utility will reduce future rate increases.

Duke and Progress expect to complete their merger toward the end of this year, after receiving regulatory approvals in North Carolina, South Carolina and Kentucky, as well as several federal agencies.

The combined company will be called Duke Energy and headquartered in Charlotte. Raleigh-based Progress will become a Duke subsidiary, retaining its name and separate rates into the indefinite future.

Progress Energy CEO Bill Johnson received $6.2 million in total compensation last year, a 3.5 percent decline from the previous year.

Citing the challenging economic environment, the Raleigh-based utility gave Johnson and most other Progress executives no salary increases and reduced their annual stock grants by 20 percent.

Johnson, 57, remains one of the highest paid executives in the Triangle.

His pay is likely to face increased scrutiny in light of the job cuts that are expected with the proposed merger between Progress and Duke Energy. Johnson is to become CEO of the combined company, which will be based in Charlotte.

Total compensation for Johnson and other Progress executives was outlined in a proxy statement filed Thursday with the Securities and Exchange Commission.

Five of the top executives at Progress Energy will not be unfurling their golden parachutes in the wake of their company's merger with Duke Energy.

The five execs who will continue in plum jobs at the post-merger Duke Energy were in line to reap nearly $50 million in payouts from Progress under a so-called Change In Control provision.

But since the Progress quintet will have jobs at Duke Energy, all five agreed to forego the money included in their Progress contracts in the event of a takeover that cost them their jobs.

"Executive officers will not receive additional compensation or benefits under their employment agreements or the Progress Energy CIC Plan solely on account of the completion of the merger," Charlotte-based Duke and Raleigh-based Progressstated in a regulatory filing Thursday.