COLUMBIA, S.C. -- The S.C. Public Service Commission unanimously approved a joint operating agreement Monday that clears the way for Duke Energy to merge with Progress Energy.
Duke said it hopes to announce the close of the $32 billion deal within a day, but possibly as soon as Monday.
“From what we heard this morning, it appears the Public Service Commission has given us the approval necessary to drive toward the conclusion of the merger,” spokesman Greg Efthimiou said after the meeting.
The commission approved the same joint-operating agreement that the N.C. utilities commission approved Friday. There is one key difference: South Carolina approved it for only one year, after which the commission will review its results.
“With the protections that Progress and Duke have committed to the Public Service Commission and to the customers, we’re comfortable with it with this caveat – that we review it in one year. That was absolutely imperative,” said Dukes Scott, executive director of the S.C. Office of Regulatory Staff, which represents public interests.
“It’s important to us because there’s a lot of unknowns … whether it’s working to benefit consumers.”
Duke and Progress had agreed to the limited initial term, which was proposed during negotiations with consumer advocates, electric cooperatives and Nucor Steel.
North Carolina’s utility commission approved the merger on Friday, closely adopting the terms previously negotiated by the utilities and the commission’s Public Staff, which represents consumers.
South Carolina’s role, in the utilities’ view, was limited to ruling on the joint-operating agreement between Duke and Progress that lets them control their power plants together. That agreement is the source of the $650 million in fuel savings that the companies pledge to return to Carolinas customers over five to six years.
Duke and Progress initially asked South Carolina to approve both the merger and the operating agreement. Last September, they withdrew their application for merger approval, saying it was premature since the two Carolinas utilities will operate separately – although under the same ownership – for some time.
In his motion to approve the operating agreement, commissioner O’Neal Hamilton said there is “an absence of harm to S.C. ratepayers” from the merger.
“Therefore,” he continued, “the commission does not have to reach the question of whether such harm, if present, would have justified jurisdiction of this commission over the merger to the extent necessary to address such harm ….”
Duke committed to sharing at least $127 million of the $650 million in fuel savings with its S.C. customers. It will also make charitable contributions of $10.6 million over four years after the merger and donate $3.75 million in the first year for workforce development and low-income energy aid.
S.C. commissioner Lib Fleming, who represents Duke’s territory in Greenville and Spartanburg, said “South Carolina will be well-served by the merger” and that commitments to share savings will protect ratepayers.
