By Sue Sturgis
Two North Carolina-based electric utilities plan to merge, creating a company that will surpass the Southern Co. as the nation’s largest power provider.
Duke Energy of Charlotte intends to buy Progress Energy of Raleigh in a $13.7 billion all-stock deal.
The new company — which would have about 57 gigawatts of domestic generating capacity and the nation’s largest nuclear fleet — would be called Duke Energy and headquartered in Charlotte. The CEO would be Bill Johnson, who currently holds that position at Progress Energy, with current Duke Energy CEO Jim Rogers staying on as board chair.
Duke currently supplies energy to about 4 million customers in the Carolinas, Kentucky, Ohio and Indiana, while Progress has about 3.1 million customers in the Carolinas and Florida.
The deal — which still needs to be approved by the companies’ shareholders and various federal and state regulatory agencies — is expected to provide a boost for the companies’ nuclear ambitions, the Wall Street Journal reports:
North Carolina-based neighbors, Duke and Progress have talked about the advantages of a merger, namely swinging massive investments in nuclear-development projects. Joining forces also would allow them to trim utility duplicative functions at a time when growth in electricity sales is tepid.
The companies are seeking to build a total of six nuclear reactors: two each at Duke’s Lee Plant in South Carolina, and at Progress Energy’s Shearon Harris plant in North Carolina and its Levy County plant in Florida.
But the merger will also create a single target for anti-nuclear activists and those who object to taxpayer subsidies and pay-in-advance schemes for new reactors.
The Obama administration recently proposed tripling the Department of Energy’s loan guarantee program for nuclear and other energy technologies to $54 billion. At the same time, Duke Energy has been pressing for permission to charge ratepayers for its South Carolina reactors before they’re built.
“Duke’s purchase of Progress is being seen largely as an effort to power up financially to build nuclear plants,” says Jim Warren, executive director of the nonprofit N.C. Waste Awareness and Reduction Network. “If so, Duke should now be strong enough to gamble its own money on new nukes instead of saddling ratepayers and federal taxpayers with the monumental risks of cost overruns and project abandonments.”
Another concern for nuclear watchdogs is that the reactors being planned by Duke and Progress are the Westinghouse AP1000 design, which still has not received final approval from the Nuclear Regulatory Commission amid concerns that a design flaw makes them vulnerable to through-wall corrosion and the possibility of leaking radiation in the event of an accident.
A report released last year that was commissioned by the AP1000 Oversight Group, a coalition of nuclear watchdog organizations, documented these problems. That group released another report [pdf] today charging that the NRC is continuing to dodge problems with the reactor’s design.
AP1000 reactors have also been proposed for Tennessee Valley Authority’s Bellefonte plant in Alabama, Florida Power & Light’s Turkey Point plant south of Miami, and Southern Co.’s Plant Vogtle in Georgia.