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Duke merger fair, but could be greener

Utilities Commission should push for energy alternatives.

A merger of Duke Energy and Progress Energy would make Charlotte home to the largest utility in the United States. At a time when our city's corporate footprint is unsteady - the Wednesday sale of Charlotte-based aerospace firm Goodrich is the latest troubling news here - the strengthening of a significant corporate citizen is no small thing.

That merger, however, shouldn't come at the expense of Carolinians, as well as Duke's customers in four other states.

This week, the leaders of Duke and Progress made their cases for the merger - and heard arguments against it - at public hearings before the N.C. Utilities Commission in Raleigh. By law, the $26 billion deal can't go through without the commission's approval, and federal authorities also have to sign off on the merger. The companies hope to complete the deal year's end. Duke CEO Jim Rogers and Progress CEO Bill Johnson reiterated to the commission the merger's benefits: A financially stronger company that would better serve customers with fuel savings, new power plants and updated infrastructure. Opposition to the deal settled mostly into three camps: concern about the 2,000 jobs the companies have said they would eliminate; worry about a larger Duke becoming too powerful politically; and disappointment that Duke hasn't committed more robustly to alternative energy such as wind or solar.

The latter group fears that if the merger is approved as is, Duke will continue to make most of its electricity the old-school way - with nuclear, coal and natural gas-fueled power plants. The commission has the leverage right now to push Duke in a different direction, and green energy advocates say such a nudge is necessary. Rogers says that Duke has aggressively pursued renewable energy; still, he refused to commit the company to creating more green energy than the 12.5 percent of its total electric generation that state law requires by 2021.

The commission can't change that law, but it can seek to strengthen the terms of a merger agreement reached with the commission's Public Staff, which represents utility customers. One possibility: Requiring Duke to invest more in N.C. renewables and energy efficiency, such as wind power projects, which Duke already operates in other states. We're skeptical, as was commission chairman Ed Finley Jr., at Rogers' contention that "the wind doesn't blow here" in North Carolina. Finley noted that his panel had two wind-energy applications from other companies.

The commission aggressively looked out for consumers during Duke's 2006 merger with Cincinnati-based Cinergy, and we urge it to do the same now by adding such green energy mandates to what overall is a fair merger agreement with the state. That deal includes $650 million in savings over five years for Duke and Progress customers.

Although we're saddened by the job losses that would come with a Duke-Progress merger, the pairing of two regional entities with adjoining coverage territories makes sense. The efficiencies gained by the merger should ultimately produce cost savings that allow Duke to reinvest in its energy production. It's up to the commission to ensure that customers realize those benefits, both in our bottom lines and our environment.


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