Duke And Progress Shareholders Say Yes To Merger
The merger of Duke Energy and Progress Energy has gotten the go ahead of shareholders to become the country's largest utility company. Now, the deal awaits the approval of state and federal regulators. Industry analysts have looked favorably on the deal. So it wasn't surprising that shareholders said yes to the merger. For more on the planned merger, WFAE's Mark Rumsey spoke with Dennis Sperduto, vice president of Regulatory Research Associates, which is an affiliate of SNL Financial. Listen In Raleigh, the Progress meeting was over in 15 minutes with few questions. The Duke shareholder meeting in Charlotte was also a low-key affair. Over 90 percent of shareholder votes within both companies backed the deal. Duke CEO Jim Rogers repeated the deal is good for both shareholders and customers. "The larger size resulting from the merger will bring added financial strength, allowing us to more economically modernize our generation fleet and simultaneously comply with new far more stringent federal environmental regulations," Rogers told shareholders. The two companies estimate customers in the Carolinas will save about $700 million over five years due to lower fuel costs and combining plant operations. Rogers says there will be job reductions, but he hopes to avoid layoffs through attrition and voluntary retirement packages. "I've managed to go through all these mergers when I was in a leadership position without laying anybody off. I'd like to see that achieved with this merger. I think we can," says Rogers. Progress CEO Bill Johnson who will become head of the combined companies says there's at least a chance of that. State and federal regulators still need to approve the merger. Dennis Sperduto follows the industry for Regulatory Research Associates. "I would not at all be surprised if they add conditions to it. But given the logic behind the lower cost structure, there's a good chance they'll approve the deal," says Sperduto. He says regulators could force Duke and Progress to reduce rates, but probably not by much. North Carolina regulators are holding a hearing on the merger September 20th in Raleigh. Federal regulators are expected to issue rulings this fall. Even if the merger is approved, Duke and Progress plan to separately seek rate increases for their current customers. Duke has already requested a 15 percent base rate increase in North and South Carolina. And Progress plans to make a request for a rate hike next year.