Duke Energy asked state and federal regulators today for permission to combine Duke Energy Carolinas and Duke Energy Progress, its two electric utilities in the Carolinas.
WHO: Those two utilities are Duke Energy Carolinas (serving Charlotte, the Triad and Piedmont, along with parts of South Carolina) and Duke Energy Progress (serving the Triangle, eastern North Carolina, Asheville and part of South Carolina). They have operated as separate utilities since the 2012 merger of Duke Energy and Progress Energy.
WHAT: A merger would cost about $143 million to complete. However, an initial Duke analysis projects $1.6 billion in customer savings through 2038. A second analysis, which Duke officials characterize as more comprehensive, projects $3.2 billion in customer savings through 2038.
Company officials describe the combination as a merger of systems rather than people, so minimal job losses would occur. A merger would allow the two utilities to share power sources and infrastructure, like wires, more easily. For example, Duke Energy Progress generates more solar power. Company officials say a merger would make it easier to use that power across the state.
Although legally considered a merger, Duke characterizes the proposal as more in line with reorganizing two corporate divisions into one. Eventually, residents in North Carolina would have the same utility rates. Currently, Duke Energy Progress rates are slightly higher. No retail rates would change immediately. A combined company would blend retail rates gradually, over time, in future rate cases.
WHEN: The targeted effective date of the combination would be Jan. 1, 2027, pending regulatory approval. The combination needs approval from the North Carolina Utilities Commission, the Public Service Commission of South Carolina and the Federal Energy Regulatory Commission.
WHY: Duke Energy says combining the companies would result in more efficient planning across the utilities’ combined 52,000-square-mile service area in the Carolinas, avoid redundant investments, improve grid reliability and more, while helping it keep costs low.
“Combining our two utilities reduces customer costs, simplifies operations, supports economic growth and promotes regulatory efficiencies, all of which will create value for customers in both states,” said Kodwo Ghartey-Tagoe, executive vice president and CEO of Duke Energy Carolinas. “There will be no immediate changes to retail customer rates or services. We look forward to sharing more details with our customers on how rates will evolve over time if the combination is approved by regulators.”
BENEFITS: As part of the 2012 merger, Duke Energy and Progress Energy received regulatory permission to jointly dispatch power generation resources. Joint dispatch, fuel savings and other efficiencies have already produced more than $1 billion in cumulative savings, according to Duke.
A full combination can unlock additional savings, according to the company. A combined company could more easily generate power and distribute it across the Carolinas. It would also simplify the offering of programs, services and rates, according to Duke.
Over the past 13 years, most corporate functions were merged, but the planning and operation of the respective power grids and generation resources in the Carolinas remained separate, according to the company.
Customers and profits: Duke Energy Carolinas owns 20,800 megawatts of energy capacity, supplying electricity to 2.9 million residential, commercial and industrial customers across a 24,000-square-mile service area in North Carolina and South Carolina.
Duke Energy Progress owns 13,800 megawatts of energy capacity, supplying electricity to 1.8 million residential, commercial and industrial customers across a 28,000-square-mile service area in North Carolina and South Carolina.
Duke Energy, a Fortune 150 company headquartered in Charlotte, is one of America’s largest energy holding companies. The company’s electric utilities serve 8.6 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, and collectively own 55,100 megawatts of energy capacity.
Duke Energy reported $30.4 billion in revenue last year, up 6.1% from 2023. It had $4.4 billion in profit, up 5% from the prior year. It reported $985 million in profits in the last quarter, up 7.6% from the prior year.
Duke is making the request after North Carolina lawmakers passed the Power Bill Reduction Act, which removes the utility’s 2030 carbon pollution reduction target. The law also allows Duke to recover annual costs related to ongoing capital projects, such as nuclear reactors.
Duke Energy has 13,500 employees in North Carolina and about 4,000 employees in South Carolina.