Who looked after the public in the Duke/Progress merger deal?
July 25, 2012
One of the things that is becoming more and more obvious in the Duke/Progress merger debacle is that the N. C. Utilities Commission simply is not doing its job of protecting the public's interest. We saw exactly the same thing in the way they handled the Pantego Wind Farm application also. But the consequences of shoddy work by the Utilities Commission on the Duke/Progress merger could have much more far reaching implications than a single wind farm. The simple failure to resolve the debt problem with the ElectriCities could not only just cause consumers to pay more for electricity, but it could arguably be the most detrimental factor in depressing economic development in Eastern North Carolina of anything we have faced.
Here's the problem, simply stated. A merged Duke utility would be the largest public utility in the nation. Size is not the problem, per se, but that size means that Duke would effectively have no competition in the industry throughout the state. It can operate as it pleases unless the Utilities Commission were to become more consumer oriented. With a Utilities Commission that rolled over for the wind farm as it did that did not act more assertively in protecting consumer interests in controlling Duke there is little hope that consumers will get a fair shake in the deal.
The ElectriCities debt is but one example. Duke essentially gave ElectriCities a "take it or shove it" deal on buying the portion of Progress Energy's generating facilities that ElectriCities owns. And the City of Washington and other ElectriCities, with a few exceptions, simply tucked tail and slinked away from the negotiating table. What should have happened is that Duke should have been required to buy ElectriCities out if they wanted the generating plants. And Washington and all of the ElectriCities, as well and the State Legislature, should have insisted on that in the merger deal.
Now we are learning that Duke and Progress did not honestly disclose all of the details of the merger deal. Or at least that is what is not be alleged. No doubt the courts will have to decide if that is the case or not.
It is a complex situation and we don't pretend to know all of the details, much less all of the technical aspects of the deal. But this much we do know. Anytime a minority owner is bought out it should be only if all parties agree. If they don't then the property should be partitioned if possible. To the best of our knowledge that was not even considered in the matter of the generating capacity.
If you want to review the full story of the merger the News & Observer has done a thorough coverage of the issue. Click here to review the series.
And be sure not to miss Rick Martinez's assessment of the Utilities Commission failure to do its job. Click here to read that commentary.