Duke Energy and Progress Energy have announced a merger agreement to combine the two companies. Subject to shareholder and regulatory approval, the merger of Duke Energy and Progress Energy will create the nation’s largest utility, with more than 7 million customers in six regulated service territories – North Carolina, South Carolina, Florida, Indiana, Kentucky and Ohio. The two companies’ mix of coal, nuclear, natural gas, oil and renewable resources will total approximately 57 gigawatts of U.S. generating capacity. The combined company will be called Duke Energy and headquartered in Charlotte, N.C.
The Settlement Agreement includes the following terms and conditions:
(1) DEC and PEC guarantee that South Carolina retail customers will receive their
allocable portion of $650 million in savings to be achieved over the first five (5)
years following the closing of the merger.
(2) DEC and PEC will provide community support and charitable contributions for
four (4) years at a level no less than the average of each company’s
contributions over the past five (5) years.
(3) DEC and PEC will contribute a total of $3.75 million for purposes such as
workforce development and low-income energy assistance in the first year
following the closing of the merger, to be distributed as mutually agreed upon by
the ORS, DEC, and PEC.
(4) DEC and PEC agreed to a Most Favored Nation’s Clause that will allow South
and North Carolina customers to receive jurisdictionally equivalent benefits. Page 2 of 2
(5) The ORS has reserved its right and will address all issues related to the Joint
Dispatch Agreement (JDA) before the Public Service Commission of South
Carolina (Commission).
(6) The parties agree, with respect to capital costs and severance costs incurred to
generate future savings, that the Public Service Commission of South Carolina
(Commission) will be the ultimate decision maker as to whether the capital and
severance costs should be included or excluded in any general rate case filed
before December 31, 2014. DEC and PEC may request recovery of such costs,
and the ORS has reserved its right to oppose such costs.
(7) DEC’s and PEC’s South Carolina retail customers shall be held harmless from all
current and prospective liabilities of Florida Progress Corporation and its
subsidiaries from any outages at and repairs of Crystal River 3, among other
matters. Additionally, DEC’s and PEC’s South Carolina retail customers shall be
held harmless from all current and prospective liabilities of Duke Energy
(unrelated to DEC and PEC) and Cinergy Corp. and its subsidiaries from costs
associated with the Edwardsport plant in Indiana
http://www.duke-energy.com/progress-energy-merger/assets/pdfs/DE-PE-combined-map.pdfThe combined company, to be called Duke Energy, will be the country’s largest utility, with:
1. Approximately $65 billion in enterprise value and $37 billion in market capitalization
2. The country’s largest regulated customer base, providing service to approximately 7.1 million electric customers in six regulated service territories North Carolina, South Carolina, Florida, Indiana, Kentucky and Ohio
3. Approximately 57 gigawatts of domestic generating capacity from a diversified mix of coal, nuclear, natural gas, oil and renewable resources
4. The largest regulated nuclear fleet in the country.
