Progress Energy's already shaky merger with Duke Energy hit another snag this week as federal regulators again questioned how the utilities plan to resolve concerns that the deal will hurt competition.
The Federal Energy Regulatory Commission said in a letter Tuesday that the agency still needs more information to evaluate the proposal the utilities' filed in March to resolve the concerns. The commission has given Progress and Duke seven days to provide more supporting data, models and benchmarks to bolster their case.
The commission twice rejected the merger deal, which would create the largest electric utility in the country, because of concerns that it would hurt competition in North and South Carolina. On March 26, Duke and Progress filed their latest plan to resolve the commission's concerns.
"We believe the planned merger continues to offer substantial benefits for our customers, shareholders and communities," Bill Johnson, chairman, president and chief executive officer of Progress Energy, said at the time of the March filing. "We are focused on securing the remaining approvals necessary to begin to deliver on the promises of this combination."
The plan proposes to increase the ability to import power from competitors into the Carolinas with seven expanded transmission projects at a cost of $110 million. The added power from other utilities would promote more market competition, Progress and Duke say.
While those transmission projects are under development, the new combined Progress and Duke company would sell power to three firms that market electricity.
The two North Carolina-based utility companies want the commission to approve the merger by June 8 so that they can gain local approval for the deal from regulators in the Carolinas before the merger agreement expires in July.
The utilities have said they are committed to completing the merger and could extend the agreement if they have not cleared all necessary regulatory hurdles.
But if the agreement expires, neither party is required to pay the costly fees associated with pulling out of the deal.
Ivan Penn can be reached at [email protected] or (727) 892-2332.