Merger of Duke and Progress approved in Kentucky

The Kentucky Public Service Commission approved a merger application between Duke Energy (NYSE: DUK) and Progress Energy (NYSE: PGN). The application sought approval for the indirect transfer of Duke Energy Kentucky that would result from the merger.

Kentucky regulators barred Duke from passing along any merger costs to state ratepayers. They also said Duke must have at least one member of its board who lives in Duke's Midwest region. Duke also must offer a full range of cost-effective energy conservation and efficiency programs and to pass on no merger costs to Kentucky ratepayers.

An agreement between Duke and the state's attorney general, which the regulatory commission accepted, stipulated the Duke would not seek any rate increases for two years.

The companies announced their agreement to merge Jan. 10 and expect it to close by the end of 2011. Under terms of the merger, Progress Energy will become a wholly owned unit of Duke.

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