Agreement Reached on Utilities’ Merger Proposal

Guest Blog | December 12, 2011 | Press Releases

Columbia, S.C. (December 12, 2011) — Clean energy groups have reached an agreement with Duke Energy and Progress Energy to address concerns the groups raised in a South Carolina Public Service Commission proceeding on the proposed merger of the two companies. If the merger is approved, the newly formed holding company, Duke Energy, will be the largest electric utility in the country. Two subsidiaries, Duke Energy Carolinas and Progress Energy Carolinas, will continue as operating companies in South Carolina and North Carolina. Under the agreement, the two operating companies will set specific energy efficiency targets, contribute funding to renewable energy development in South Carolina, and commit to an enforceable schedule for retiring certain older coal-fired power plants (previously announced by the utilities) in the Carolinas that lack modern pollution controls. The Southern Environmental Law Center negotiated the agreement on behalf of Environmental Defense Fund, the Coastal Conservation League, and Southern Alliance for Clean Energy. The groups intervened in the merger proceedings to advocate for inclusion of clean energy programs as a result of the merger. The agreement, which impacts the companies’ operations in both South Carolina and North Carolina, was signed by the parties December 8. CONFERENCE CALL: SELC Senior Attorney Gudrun Thompson will be available for questions today from 2:00-2:30 p.m. Call-in number: 1-916-233-4244; PIN 107631#. Please identify yourself and your news organization at the prompt. A copy of the agreement can be downloaded here. “We are proud to have worked with the two companies to reach this agreement, which will yield consumer, public health and environmental benefits for both the Carolinas,” said SELC senior attorney Gudrun Thompson. “And because this merger will create the nation’s largest electric utility, we think it’s fitting that the new Duke Energy is showing leadership on moving the Southeast and our nation toward a clean energy future.” “This agreement sets firm deadlines for phasing out older technology in favor of energy efficiency and clean power. These are smart, practical business decisions that help position Duke Energy to meet pending environmental regulations and lower consumer costs,” said Greg Andeck, manager of Environmental Defense Fund’s Utility Initiative. “We are pleased to reach an agreement that puts the new Duke Energy on a path to modernize its fleet and phase out old, polluting technology in favor of energy efficiency,” stated Dr. Stephen A. Smith, executive director of SACE. “We hope this agreement serves as a cornerstone for company initiatives to meet future energy challenges in a manner that benefits the environment and its customers.” “This agreement will help create jobs through smart investments in energy efficiency and renewable energy, spur innovation in clean, renewable energy sources, and save customers money. It’s a win-win-win,” said Hamilton Davis with Coastal Conservation League. Under the agreement, the two operating companies, Duke Energy Carolinas and Progress Energy Carolinas, will: • Each adopt an annual energy efficiency (EE) savings target of 1% of retail sales starting in 2015, and a cumulative target of 7% of retail sales from 2014 to 2018. The targets are subject to the companies’ good-faith efforts to submit and obtain approval of EE programs under applicable North Carolina Utilities Commission and South Carolina Public Service Commission processes; • Contribute a total of $1 million a year for two years to Palmetto Clean Energy, Inc., a South Carolina non-profit organization that promotes and supports locally produced renewable energy and delivery of renewable energy to the electric grid; and • Commit to schedules to retire older coal-fired power plants that lack modern pollution controls, totaling more than 3,000 megawatts. The companies previously announced these coal-plant retirements as part of the non-binding, long-range plans they submit each year to the state utility commissions. The settlement agreement renders those commitments enforceable. A provision in the agreement allows the companies to seek an extension if these retirements would compromise reliability in its service area. Parties to the agreement are Environmental Defense Fund, the Coastal Conservation League, Southern Alliance for Clean Energy, Duke Energy Corp., Progress Energy, Inc., Duke Energy Carolinas, LLC, and Progress Energy Carolinas, Inc. # # # Southern Alliance for Clean Energy is a nonprofit organization that promotes responsible energy choices that create global warming solutionsand ensure clean, safe, and healthy communities throughout the Southeast.?