The proposed merger of Duke Energy Carolinas and Duke Energy Progress leaves customers with one big question: Will it lower my bill?
Duke implies yes, saying the consolidation will result in cost savings of more than $1 billion through 2028.
Others aren’t so sure.
Historically, Duke Energy Progress customers have paid slightly higher rates than Duke Energy Carolinas customers, said David Neal, senior attorney at the Southern Environmental Law Center.
“How to balance that without any undue discrimination or causing harm to existing customers is going to be a challenge,” Neal said.
Dan Crawford, director of governmental relations at the North Carolina League of Conservation Voters, put it more bluntly, telling NC Newsline in a statement:
“This merger will impact customers the same way everything Duke does impacts customers — their rates will keep going up and Duke will make billions.”
But in its regulatory filing, Duke Energy said the move would optimize efficiency between the two utilities, and is needed as demand on the energy grid grows.
Kendal Bowman, North Carolina president for the two entities, said in testimony with the North Carolina Utilities Commission that the merger would allow “the combined utility to continue to deliver safe and reliable energy to our customers at a lower overall system cost.”
Duke Energy Carolinas serves the western part of North Carolina while Duke Energy Progress covers Raleigh and eastern counties.Duke Energy Carolinas serves western areas of the state, including Charlotte and its surrounding area, while Duke Energy Progress covers the eastern half of North Carolina, including the Raleigh region. It’s a total of about 3.8 million retail customers in North Carolina, according to Duke Energy.
“They’re already part of the same company, so it seems maybe rate cases, expenditures on lawyers, and that sort of thing will go down,” Rep. Pricey Harrison (D-Guilford) said. “There are areas where I would be happy to criticize Duke, but probably not on the merger.”
But there is speculation over what a merger would actually mean.
North Carolina has a multi-year rate plan system where Duke Energy files rate plans for a three-year period. This was last done three years ago.
Following current cycles, observers expect Duke Energy Progress to file for a rate increase sometime this fall and Duke Energy Carolinas to do the same in the early part of next year.
Duke is aiming to complete the merger on Jan. 1, 2027.
“The question in our minds is, ‘what does it mean to be filing for this merger at the same time you’d be filing for new rates?'” said Sue Sturgis, research and communications manager at the Energy and Policy Institute.
Duke Energy spokesperson Bill Norton told NC Newsline the details of that are still being worked out.
In a statement, Kodwo Ghartey-Tagoe, executive vice president and CEO of Duke Energy Carolinas, said no retail rates would change immediately upon the merger’s completion. And Duke Energy Carolinas and Duke Energy Progress retail rates would gradually blend over time.
The company does not expect to make significant personnel cuts as a result of the merger. There are about 13,500 employees for Duke Energy based in North Carolina and 4,000 in South Carolina, according to Duke Energy.
Both utilities operate in neighboring South Carolina as well, serving about 855,000 retail customers there.
Duke Energy previously merged with Raleigh-based Progress Energy in 2012, and maintains a corporate office in downtown Raleigh for Duke Energy Progress.
“Since our teams have largely operated as a combined organization since the 2012 merger, most personnel efficiencies have already been realized. There may be some very limited reductions in corporate-related areas, but we anticipate impacts will be managed through natural attrition and careful headcount management over time rather than anything immediate,” Norton wrote in an email.
In her testimony with the state Utilities Commission, Rachel Elliott, director of rates and regulatory planning for Duke Energy Carolinas, said the company expected about 3% of the projected savings to come from corporate administrative costs, such as having to only file one rate case, saving on legal fees and other regulatory expenses.
The merger would need to be approved by the North Carolina Utilities Commission, the Public Service Commission of South Carolina, and the Federal Energy Regulatory Commission. Any future rate changes will remain subject to regulatory approval. North and South Carolina regulators decide rate cases separately.
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