Merger will create mega utility

Duke Energy Corp. and Progress Energy, Inc. have filed applications seeking regulatory approval of the merger the companies announced Jan. 10. An application to the N.C. Utilities Commission (NCUC) filed today outlines numerous customer benefits that will occur as a result of the merger. They include:

Estimated savings of approximately $700 million in the Carolinas over the first five years after the merger closes through reduced fuel costs and efficiencies gained by jointly operating and managing the Progress Energy Carolinas and Duke Energy Carolinas utility power plant systems.

Efficiencies in siting and building power plants. By combining the generating fleets, planning for future capital expenditures and operating the fleets as a single system, the companies expect to realize efficiencies in location, timing and other factors associated with making large capital investments in new resources.

The savings from operating as a combined utility will help offset the impact of expected rate increases in the next few years. The entire U.S. electric system faces rising costs as aging infrastructure is replaced and as new federal and state regulations become applicable. The merger will enable the Duke and Progress utilities in the Carolinas to make these significant investments with lower overall impact to customers.

As previously announced, the companies are targeting to close the merger by late this year.

Each company will continue to have separate rate schedules for the foreseeable future.

Upon closing, the merger will create the nation's largest electric utility, as measured by enterprise value, market capitalization, generation assets, customers and numerous other criteria. The combined company will have more than 7.1 million electric customers in six states (North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky) and the largest regulated nuclear fleet in the country.

Duke Energy is one of the largest electric power holding companies in the United States. Its regulated utility operations serve approximately 4 million customers located in five states in the Southeast and Midwest, representing a population of approximately 12 million people. Progress Energy, headquartered in Raleigh, N.C., has more than 22,000 MW of generation capacity and approximately $10 billion in annual revenues. Progress Energy includes two major electric utilities that serve about 3.1 million customers in the Carolinas and Florida.