Duke-Progress Merger Facing Competition Worries
RALEIGH, N.C. (AP) — Federal regulators are blocking the merger of Duke Energy and Progress Energy to form the country’s largest electric company, ruling the companies haven’t done enough to protect competition in their North Carolina and South Carolina home markets.
The Federal Energy Regulatory Commission had scheduled a Thursday hearing on changes to the merger plans in Washington, but regulators surprised the utilities late Wednesday by rejecting the companies’ solution to protect competition.
The FERC action is likely to delay the merger’s year-end target for completion and could require changes that the companies decide make the deal unattractive.
The federal agency said in September the companies should change merger details and suggested steps such as selling power plants. The companies responded last month with a plan to sell excess electricity at a fixed price to wholesale buyers in their Carolinas territories.
Regulators now say the proposal by Charlotte-based Duke and Raleigh-based Progress doesn’t go far enough.
The “mitigation proposal does not remedy the proposed transaction’s adverse effects on competition,” the FERC ruling said.
Spokesmen for both companies said they had no immediate comment.
In January, Duke Energy agreed to buy Progress Energy for $13.7 billion. If the merger is approved, the combined company will serve 7.1 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky.
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