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Federal agency to audit Duke-Progress merger

The Federal Energy Regulatory Commission will audit Duke Energy’s compliance with conditions set in approving Duke’s 2012 merger with Progress Energy.

FERC twice rejected the merger on grounds it could dampen market competition for wholesale power.

In eventually approving the $32 billion deal, the agency set conditions that included power sales to third parties while transmission upgrades that would ease competition concerns were completed.

A private company, Potomac Economics, was named as an independent market monitor to review and report on those transactions.

The audit will also examine the compliance of Duke subsidiaries with FERC rate requirements, accounting standards and operating and financial reporting requirements, says FERC’s letter to Duke on Wednesday.

It will cover Jan. 1, 2011, days before the merger was announced, to the present. The audit is expected to involve heavy data requests and take months to complete.

Duke spokesman Tom Williams said the timing of the notification was unexpected but that the audit itself was not.

“It’s not an unusual thing for them to audit large mergers,” he said. “We’ll be fully cooperating. We expect them to ask for data in the coming weeks and we’ll be complying.”

Williams said Duke is ahead of schedule on its planned transmission upgrades in North Carolina and in compliance with its wholesale power sales in the region to three power marketing firms.

Henderson: 704-358-5051; Twitter: @bhender
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