Duke Energy buying Progress Energy for more than $13B
Published: Monday, January 10, 2011 at 8:09 a.m.
Last Modified: Monday, January 10, 2011 at 8:09 a.m.
Progress Energy’s plan to build a nuclear power plant in Levy County won’t be affected if North Carolina-based Duke Energy Corp. is successful in its plan to buy Progress for nearly $14 billion in stock.
That was the assurance from Progress spokeswoman Suzanne Grant on Monday after Duke announced its move to buy the North Carolina-based Progress Energy, which has more than 1.6 million customers throughout Florida.
The proposed plant includes two 1,100-megwatt Westinghouse reactors, each capable of generating enough power for nearly 900,000 homes.
In 2011, Progress Energy’s customers will pay $4.99 per 1,000 kilowatt hours per month to cover the costs of the proposed Levy plant and 54 cents per 1,000 kilowatt hours for improvements to the utility’s Crystal River plant. The Levy County plant is estimated to cost between $17.2 billion and $22.5 billion.
Florida “customers are not going to see a difference in their service and they’re not going to see a difference in their price,” Grant said.
Duke Energy has built and continues to operate three of its own nuclear facilities: two in South Carolina and one in North Carolina.
Several regulators will have to sign off on the merger, including the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission and two state authorities.
If the merger goes through, it would create a business with about 7.1 million electric customers in North Carolina, South Carolina, Florida, Indiana, Kentucky and Ohio. It would be the largest power company in the country with $22.7 billion in revenue and 57,000 megawatts of generating capacity. Duke is currently the third-largest U.S. utility.
Grant said the merger would benefit Progress customers in that the expertise and resources of both companies would be available to them.
The agreement is the latest in a string of utility deals as companies seek to cut costs and combat falling prices
In November, PPL Corp. bought Louisville Gas and Electric and Kentucky Utilities from Germany’s E.On. In December, Dynegy Inc. reached a deal to be acquired by Icahn Enterprises. And last year, First Energy Corp. agreed to acquire Allegheny Energy Inc. while Northeast Utilities agreed to buy NStar, though those deals have yet to be completed.
Energy and power deals made up the biggest share of merger activity in 2010, accounting for 20 percent of announced takeovers, based on Thomson Reuters data.
In 2005, Duke bought Cinergy of Ohio in a $9 billion all-stock deal.
Under the merger deal, Progress Energy’s shareholders would receive 2.6125 shares of common stock of Duke Energy in exchange for each share of Progress Energy common stock.
Share holders of both companies still have to approve the merger, however. And under the plan, Duke Energy also would assume about $12.2 billion in Progress Energy net debt.
If the deal is completed, Jim Rogers, Duke Energy’s chairman, president and CEO, would become executive chairman of the new, combined company. He would advise the company on strategic matters and serve as the company’s lead spokesperson on energy policy. Progress’ top executive, Bill Johnson, would become president and chief executive officer of the new company.
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