For the second time in a decade, customers of Florida's second-largest electric utility find their power company will be folded into a North Carolina corporation. Executives for Progress Energy Florida say they expect few changes for their customers or employees in the proposed merger with Duke Energy that was announced last week. But the Florida market will be a smaller part of the new combined company headquartered in Charlotte that will be the nation's largest electric utility. It will be up to the Florida Public Service Commission to ensure a multistate corporate parent treats its Florida customers fairly.
In the short term, the anticipated 2012 merger won't mean much for Florida customers. The mechanics of delivering power to the Florida peninsula from traditional sources — coal, natural gas and nuclear — won't change. And Progress Energy has a rate settlement agreement in place with the PSC through the end of 2012.
But customers will likely see a rate increase in 2013, in part because Progress Energy is using financial reserves to hold the line on rates now. Progress Energy contends the merger should mitigate those rate increases. The reason: The combined company will be able to purchase fuel and borrow money more cheaply. The PSC must ensure those savings, and any other savings from efficiencies from merging corporate headquarters, are properly passed through to Florida consumers.
Progress Energy Florida president and CEO Vincent Dolan expects few Floridians will lose their jobs in the deal and does not foresee a change in the company's commitment as a leading civic partner in Tampa Bay. Duke Energy — considered a generous corporate citizen in the Carolinas — will be asked to exercise the same philanthropy in Florida. A utility is perhaps the broadest-based business in a community and traditionally is a major player in civic life.
The combined company will become the nation's third largest in nuclear generation capacity, with a hunger for more. It also will have more capital to cope with escalating costs for building new nuclear plants. But that does not mean that Progress Energy's proposed nuclear plant in Levy County is a certainty. Spending has slowed on the project and the monthly fee Progress customers are paying toward it has declined as the focus has shifted toward obtaining the required federal licenses by the end of next year or early 2013. By then, the new Duke Energy Corp. is expected to be in place — and the fate of that proposed nuclear plant will be among the most important decisions the company makes that affects its Florida customers.
The merger also should bring more focus on other forms of renewable energy. Duke Energy has invested in wind power and it should find its niche for Florida. Right now, renewable bragging rights in the state belong to Florida's largest utility, Florida Power & Light, which has distinguished itself in pursuing solar power. Progress Energy has been too skeptical about the long-term financial viability of renewable sources such as solar and too willing to let other utilities take the lead in that area.
Ten years after Florida Power was sold to Raleigh-based Progress Energy — robbing downtown St. Petersburg of a major corporate headquarters and Florida of many corporate jobs — there is general consensus that consumers are ultimately better off being served by a better-run company that invests in the community. Florida will be looking for the same sort of reliable, quality performance and civic commitment from Duke Energy.