CHARLOTTE, N.C. and CINCINNATI, July 13, 2005 (PRNewswire-FirstCall) — Duke Energy and Cinergy have filed an application with the Federal Energy Regulatory Commission (FERC) seeking approval of their merger agreement by early 2006.
“This filing represents an important step towards merger approval, and the timing is consistent with the schedule we outlined in May,” said Paul Anderson, chairman of the board and chief executive officer of Duke Energy. “As our application suggests, the combination of Cinergy with Duke Energy will yield benefits for our shareholders, our customers and the energy markets as a whole.”
“We believe this combination clearly meets the standards established by the commission for determining whether a merger is consistent with the public interest,” said James Rogers, chairman, president and chief executive officer of Cinergy. “Our filing makes a strong case for a thorough but expeditious review.”
Filed late Tuesday, the Duke-Cinergy application notes that by combining resources and best practices, the merger will enhance operations and create efficiencies in the new company. The planned combination will result in significant cost savings and other operational efficiencies, offering both strategic and financial advantages in serving the energy marketplace. The companies anticipate that upon review with state commissions, savings will be shared between customers and shareholders over time in an equitable manner.
Specifically, the combined company will create a stronger and larger portfolio of regulated utility businesses that will contribute a substantial percentage of stable earnings and enhance the financial strength of the combined company. The increased scale and scope will strengthen the balance sheet of the combined company, improving financial flexibility and positioning it well to meet future energy and infrastructure needs.
As stated in the application, the combined merchant power operation, with a fleet of more than 16,000 megawatts of unregulated generation, will benefit from increased fuel and market diversity. Consolidation of the trading and marketing units and Midwestern merchant generating fleets will enhance scale and efficiencies — reducing the cost structure of the merchant operation and improving its ability to meet the needs of the competitive wholesale market.
Further, the application notes that the combination raises no horizontal or vertical competition issues, pointing to a detailed analysis of the transaction and its limited impact on affected energy markets.
In addition to FERC, the merger, announced May 9, is conditioned upon approval by the shareholders of both companies, as well as a number of additional regulatory approvals or reviews by state and federal authorities, including the North Carolina Utilities Commission, the Public Service Commission of South Carolina, the Public Utilities Commission of Ohio, the Kentucky Public Service Commission, the Indiana Utility Regulatory Commission, the Nuclear Regulatory Commission, the Securities and Exchange Commission, the Department of Justice and the Federal Communications Commission (for transfer of certain licenses).
In recent weeks, the companies have filed applications related to the merger in Ohio and Indiana, and a draft registration statement with SEC. Duke and Cinergy expect to submit merger applications in North Carolina, South Carolina and Kentucky in the days ahead, with other required filings to follow. The companies anticipate receiving all necessary approvals by summer 2006.
About Cinergy [ www.cinergy.com ]
Cinergy has a balanced, integrated portfolio consisting of two core businesses: regulated operations and commercial businesses. Cinergy’s integrated businesses make it a Midwest leader in providing both low-cost generation and reliable electric and gas service.
About Duke Energy [ www.duke-energy.com ]
Duke Energy is a diversified energy company with a portfolio of natural gas and electric businesses, both regulated and unregulated, and an affiliated real estate company. Duke Energy supplies, delivers and processes energy for customers in the Americas. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK.