Experts say Duke Energy merger agreement may go too far

CHARLOTTE, N.C. — A day after Duke Energy and the North Carolina Utilities Commission agreed on a merger settlement, some experts say the settlement may go too far and hurt customers' wallets.

It requires major changes within Duke Energy and an additional $25 million dollars in savings for consumers, but Wake Forest University School of Business Professor Dan Fogel said he believes it also creates too much governmental intervention.

"I think it's fundamentally wrong for a utility commission or a government agency to dip so far into the governance of a public company," Fogel said of the agreement, which, among other things, requires Duke to create a committee to meet with the commission regularly and discuss the company's actions.

He said he believes the new relationship will help Duke Energy when it asks state regulators for a rate hike in February.

"They're going to get the increase now," he said, saying he doesn't believe regulators will push Duke in the same way the company was bargained down from 17 percent to 7 percent in its last rate increase request.

"The utilities commission is not going to say no because then Duke's going to come back and say, ‘Look, we did everything you wanted, and now you're still telling us no.’ That's my prediction," he said.

The agreement does add $25 million dollars in fuel savings to the $650 million over five years originally promised to customers in the merger.

Duke Energy said by June 2013, it expects to have already saved customers about $72 million.

The agreement also requires that Duke hire the former general counsel of Progress as a consultant for two years on "regulatory and legislative matters," including "maintaining good relationships with government officials."

The commission confirmed Duke can pass the cost of his paycheck on to customers.

Sheigh Jackson said it's frustrating.

"It upsets me," she said. "It upsets me because I am a consumer."

The NCUC has to officially approve the merger settlement, which is scheduled for presentation at its regular meeting on Dec. 3.

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