Duke Energy plans to acquire Progress Energy; not a good sign for the coal industry

Duke Energy, based in Charlotte, N.C.,  has proposed a $13.7 billion stock-swap acquisition of Progress Energy, based in Raleigh, N.C., reports Bruce Henderson of the Charlotte Observer.  State and federal regulators, as well as shareholders, still have to approve the deal, according to Henderson. The Federal Energy Regulatory Commission will also review the proposed merger and its nuclear power generation.

Duke plans to file rate cases in North Carolina this year to recover costs of building a new coal-fired power plant, Cliffside, and natural gas-fired plants at its Buck and Dan River plants. Duke also provides power to Florida, North Carolina, South Carolina, Kentucky, Ohio and Indiana. It has relied on coal as a power source, but with the purchase of Progress, appears to be heading towards leaving coal behind. Duke CEO Jim Rogers said, "Nuclear provides 70 percent of the carbon-free electricity in the United States. ... That becomes, to me, the preferred technology." Rogers described "almost a tsunami" of capital needs facing both companies, including the need to replace aging power plants, meet stricter environmental standards and upgrade the grid. "When we look at the challenges we face in the future, we realized that we're in a better position to meet those challenges together than as separate companies," he said.  (Read more)

Rogers is among corporate America's loudest advocates for sharply slashed CO2 emissions, according to Steve Levine of Foreign Policy. "The Duke-Progress deal could not-so-subtly impact U.S. politics. If their deal is approved by regulators, the combined companies would be the country's largest single utility. One of the reasons for the victory of climate skeptics has been the lobbying of coal, oil and other industry lobbyists. But now Rogers' voice would become more influential in that lobby." (Read more)