Charlotte, N.C. and Raleigh, N.C., March 26, 2012 — Duke Energy and Progress Energy filed a revised wholesale market power mitigation plan with the Federal Energy Regulatory Commission as part of their proposed merger.
The plan provides more details on the notice of intent to file a mitigation plan submitted to the North Carolina Utilities Commission on Feb. 22. Click here for previous coverage of the Duke Energy and Progress Energy plan.
It requests that the FERC issue orders approving the mitigation plan, the Joint Dispatch Agreement and the Joint Open Access Transmission Tariff within 60 days of the filing, and no later than June 8, 2012. The companies intend to seek final merger-related approvals from the NCUC and the Public Service Commission of South Carolina prior to the July 8, 2012, merger agreement termination date.
The NCUC must also approve the merger and the Joint Dispatch Agreement in the Carolinas. The PSCSC must approve the Joint Dispatch Agreement.
* The FERC filing features a permanent mitigation plan with seven transmission projects, estimated to cost about $110 million. The transmission projects increase the power import capabilities into the Progress Energy Carolinas and Duke Energy Carolinas service areas and enhance competitive power supply options in the region.
* The proposal also features a two-to-three-year interim mitigation plan with must-deliver, must-take power purchase agreements signed with Cargill Power Markets, LLC; EDF Trading North America, LLC; and Morgan Stanley Capital Group, Inc. The companies will sell 800 MW during summer off-peak hours, 475 MW during summer peak hours, 225 MW during winter off-peak hours, and 25 MW during winter peak hours. The agreements, or similar power purchase agreements, will be in place from the date the merger closes until the transmission projects are operational.
* Potomac Economics will serve as independent monitor of the interim power purchase agreements and a component of the permanent mitigation plan.
For planning purposes, the companies are targeting closing the merger on July 1.
To date, the companies have received merger-related approvals from, or met the requirements of the U.S. Nuclear Regulatory Commission, Kentucky Public Service Commission and the shareholders of both companies.
Additionally, the companies have met their obligations with the U.S. Department of Justice under the Hart-Scott-Rodino Act. However, because the merger will not close by April 26, 2012 — 12 months from the expiration of the waiting period of the initial HSR filing — new HSR filings are required. The companies made new HSR filings on March 22, 2012.
Consummation of the merger is contingent upon receipt of all regulatory approvals, agreement on state regulatory issues related to the merger, and satisfaction of all of the conditions to the merger in accordance with the terms of the merger agreement.