Duke Energy and Progress Energy on Monday asked federal regulators to conduct a fresh review of the companies' proposed merger, suggesting that regulators are applying standards so strict and unreasonable as to imperil utility mergers in general.
The two North Carolina power companies, which want to create the nation's largest electric utility, use such terms as "unrealistic" and "unprecedented" to characterize the Sept. 30 finding by the Federal Energy Regulatory Commission.
The commission ruled that the proposed Duke-Progress merger raises significant and severe monopoly concerns because the combined company could manipulate the market price of electricity. In response, Duke and Progress — which is the parent company of St. Petersburg-based Progress Energy Florida — have proposed selling off wholesale power at a fixed price to appease the commission's concerns.
But Monday's filing suggests that Duke and Progress are less confident in their ability to win approval for the $26 billion merger than they have previously acknowledged. The tone of their filing makes clear that Duke and Progress executives were blindsided by the FERC's ruling.
"The commission's unprecedented analysis, if left unchanged or unexplained, will have far-reaching and long-term impacts on potential mergers," Duke and Progress wrote.
The companies go on to say the federal commission's requirements are "incompatible with reality" and do "not represent reasoned decisionmaking," accusing the FERC of "fundamental errors" that vastly overstate the companies' monopoly influence.
It's not clear how the companies would proceed if the federal commission rejects their plea.
Meanwhile, Duke and Progress have continued to move forward aggressively with their merger plans, laying the groundwork for the elimination of 2,000 positions and the dismantling of Progress' corporate headquarters in Raleigh, N.C.
The companies plan to consolidate their corporate functions in Charlotte, N.C.