WASHINGTON (dpa-AFX) - Duke Energy corp. (DUK) and Progress Energy (PGN) have entered into a supplemental merger settlement agreement with the North Carolina Utilities Commission or NCUC Public Staff. The companies continue to target July 1 to close the merger.
As per settlement agreement with the N.C. Public Staff, the companies will continue to guarantee $650 million in system savings for Carolinas retail customers. The settlement clarifies a number of issues related to the $650 million guarantee and provides up to 18 months beyond the original five-year timeframe in which the savings can be achieved if coal consumption at certain plants is less than originally forecast due to declines in natural gas prices.
The companies noted that they will not seek recovery from North Carolina retail customers for the seven transmission projects in the mitigation proposal (estimated to cost approximately $110 million) for five years following merger close.
The companies noted that they will reduce retail rates by approximately $70 million total over that two- to three-year period to reflect the power plant capacity no longer available to retail customers during the interim mitigation period while the transmission projects are being built.
Duke Energy Carolinas and Progress Energy Carolinas will not seek recovery from North Carolina retail customers for any revenue shortfalls or fuel-related costs associated with the three-year interim mitigation power sales agreements (estimated at approximately $40-50 million over three years).
The companies said they will not seek recovery from N.C. retail customers for any of their allocable shares of the merger severance costs (estimated to be approximately $220-230 million total).
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