Duke Energy/Progress Energy merger to create nation’s largest utility
Published 12:00 am Friday, January 14, 2011
Duke Energy of Charlotte and Progress Energy of Raleigh are planning a merger that will create the largest utility company in the nation.
The combined company, which will be called Duke Energy and be headquartered in Charlotte, would serve more than seven million customers in six territories. Most of the service area is in North Carolina, northern South Carolina, northern and central Florida, and southern and central Indiana.
Jim Rogers, chairman and chief executive at Duke, said the merger will allow the companies to improve shareholder value and more economically invest in an “array of new technologies to reduce our environmental footprints and become more efficient.”
“Combining Duke Energy and Progress Energy creates a utility with greater financial strength and enhanced ability to meet our challenges head-on,” he said.
The merger is subject to approval from shareholders along with federal and state regulators, who will consider whether the merger maintains a competitive business environment and benefits customers. Combining operations is expected to result in operational cost savings that will allow a rate cut for customers.
“Together, we can leverage our best practices to achieve even higher levels of safety, operational excellence and customer satisfaction, and save money for customers by combining our fuel purchasing power and the dispatch of our generating plants,” said Bill Johnson, chairman, president and chief executive officer of Progress Energy.
Rogers is expected to become the executive chairman of the new organization, while Johnson is expected to be president and chief executive officer. Job cuts are expected as part of the merger. Duke has about 18,600 employees, while Progress has about 11,000. Duke cut about 1,500 jobs when it merged with Cinergy in 2006. As part of the merger with Progress, Duke said it plans to reduce job cuts through attrition and retirements.
Conservation groups have acquired the first piece of what will be the largest undeveloped, privately-owned tract of land to be permanently protected in Western North Carolina. The Conservation Fund paid $5.5 million to acquire 786 acres along the North Carolina-South Carolina state line that was part of an 8,000-acre tract owned by former U.S. Rep Charles Taylor.
Taylor’s Champion Cattle and Tree Farms agreed last year to sell the tract along U.S. 276 south of Brevard for $33 million to the Conservation Fund and the Carolina Mountain Land Conservancy. The conservation groups said they plan to turn over the entire tract to the state for recreational use once all of the land is conserved.
Kieran Roe, executive director of Carolina Mountain Land Conservancy, said the purchase of 786 acres last month creates momentum to move forward and protect “the entire thing.” A donation from Fred and Alice Stanback of Salisbury and a $1 million grant from the N.C. Clean Water Management Trust Fund provided money for the purchase. The conservation groups said they are seeking private, state and federal funding to acquire the remaining land, a task that was made more difficult by the slumping economy.
The 786 acres protected last month includes part of the 70-mile Foothills Trail and part of Sassafras Mountain, the highest peak in South Carolina.
Perceptis Inc., a company that provides desk and customer support service for the higher education market, plans to create about 200 jobs at a new facility in downtown Greenville, S.C. Over the next five years the Ohio-based company plans to invest $1.125 million in the new support service center on West McBee Street. Since it was formed in 2004, Perceptis has grown to serve more than 100 institutions and 1.5 million end users.
Perceptis’ expansion was supported by $6 million from private equity firm Frontier Capital, one of four funds in the S.C. Venture Capital Authority/InvestSC program. Perceptis plans to begin hiring in January.
Red Hat, a North Carolina based software developer, plans to expand its headquarters in Wake County, creating about 540 additional jobs. The company, which is headquartered in Raleigh and currently employs about 690 people in the state, creates operating system platforms along with middleware, virtualization and cloud computing solutions.
“Red Hat is a homegrown, high-tech, global brand and we fought hard to keep them here,” said N.C. Governor Bev Perdue.
The average wage of the new jobs created by Red Hat is expected to exceed $80,000, nearly double the average Wake County wage of $42,692. The expansion was support by a Job Development Invest Grant awarded by the state’s Economic Investment Committee, which could provide as much as $15 million in benefits for the company if it achieves the economic development targets.
A company that develops low cost solar cells plans to create about 1,000 jobs over the next four years at a new manufacturing facility near Columbia, S.C. AQT Solar of Sunnyvale, California plans to upfit a 184,000-square-foot LEED Silver Certified facility in Richland County and begin producing its CIGS (copper-indium-gallium-diselenide) thin-film solar cells by the beginning of 2012. The facility will be the second manufacturing location for the company, which opened its first facility in California last year.
U.S. Senator Lindsey Graham of South Carolina said AQT Solar will help South Carolina become a leader in the effort to make the country energy independent. “I am very pleased we are welcoming a new partner that will help pave the way to American energy independence while delivering the jobs and technology of the future to our state,” said Graham.
Homeless shelters in the Asheville area have been expanding capacity to meet a greater need during the recent cold snap. Shelters have extended hours and created additional room to accept more people. The WNC Regional Red Cross also was planning to open emergency shelters for residents who lost power at their homes.