Source: Duke Energy Corp.
The Kentucky Public Service Commission (KPSC) approved the merger-related application filed in April by Duke Energy Corp. (NYSE: DUK) and Progress Energy, Inc. (NYSE: PGN). The application sought approval for the indirect transfer of Duke Energy Kentucky that would result from the merger of the companies.
The KPSC's order, approving a settlement agreement negotiated by the stakeholders involved, marks the first state regulatory approval in the merger process. The KPSC requires Duke and Progress to accept all the commitments contained in the order within seven days.
The companies announced their agreement to merge Jan. 10 and have made all regulatory filings necessary to have the merger approved. The companies continue to target the merger closing by the end of the year. If the merger is completed, Progress Energy will become a wholly owned subsidiary of Duke Energy, and the former shareholders of Progress Energy will become shareholders of Duke Energy.
To date, the companies have made the following filings, in addition to the Kentucky filing:
- An application to approve the merger with the North Carolina Utilities Commission, which has scheduled hearings on the matter beginning Sept. 20.
- Merger-related filings with the Public Service Commission of South Carolina.
- Joint filings with the Federal Energy Regulatory Commission and with the Nuclear Regulatory Commission (the latter related to nuclear plant license transfers).
- Hart-Scott-Rodino filing with the U.S. Department of Justice and Federal Trade Commission. The waiting period under the HSR Act expired April 27, 2011.
- The Assignment of Authorization filings with the Federal Communications Commission were approved July 27.
Although there are no merger-specific regulatory approvals required in Indiana, Ohio or Florida, the companies will continue to update the regulatory commissions in those states on the merger. The merger also requires modifications to several existing affiliate agreements; the companies will file those with various state commissions for approval, as applicable.
If completed, the merger will create the nation's largest electric utility, as measured by enterprise value, market capitalization, generation assets, customers and numerous other criteria. The combined company is expected to have more than 7.1 million electric customers in six states (North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky) and the largest regulated nuclear fleet in the country.
In July, the companies mailed a joint proxy statement/prospectus to their shareholders. Both companies have scheduled their respective special shareholder meetings for Aug. 23, in Charlotte for Duke Energy shareholders and Raleigh for Progress Energy shareholders.