Impact of Duke, Progress merger still unclear for WNC

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Duke rep: Merger will reduce workforce by about 1,860

With the N.C. Utilities Commission’s July 2 approval of the merger of Duke Energy and Progress Energy, North Carolina is now headquarters for the nation’s largest electric company. As questions remain about a recent CEO shake-up within the new company, one thing is certain: Progress Energy is now a subsidiary of Duke Energy and will be known as Duke Energy.

According to information about Duke Energy, the new company will have customers across nearly all of the 17 westernmost counties of the state. The new company will have more than a quarter-million miles of primary and secondary distribution lines in six states — almost the distance from the Earth to the moon, according to a company fact sheets.

But, other exact details on the merger and its impact on the company’s employees and customers throughout the region are less clear.

A spokeswoman for Duke Energy could not provide a breakdown of how many customers Duke Energy and Progress Energy serve in Western North Carolina, or say how many people employed by the two companies in Western North Carolina will be affected by a planned workforce reduction.

Image courtesy of Duke Energy and used with permission.

“The new Duke Energy today has a total of about 7.1 million customers and 29,000 employees,” said spokeswoman Paige Layne. “Over three years, the merger will reduce the number of employees by about 1,860 positions.”

The majority of the company’s customers — 3.2 million — are in North Carolina followed by 1.6 million in Florida, 790,00 in Indiana, 715,00 in South Carolina, 690,000 in Ohio and 140,000 in Kentucky.

“Of the planned layoffs, 1,153 positions will be eliminated through a voluntary buyout offer; 370 currently vacant positions will be left unfilled and 337 positions will be eliminated through either normal attrition (employees departing for normal reasons) or through involuntary severance plan (layoffs),” Layne said.

“We expect layoffs to be minimal, due to normal attrition over the next three years, she said.

Information filed during the hearings noted that most reductions would occur during the first year and that 8,177 employees are eligible for the voluntary severance plan.

James Rogers, who has served as CEO for Duke Energy, was named president and chief executive officer of the combined company immediately following the merger approval (See State regulators to investigate controversial Duke Energy CEO appointment). Rogers testified during the hearings with the N.C. Utilities Commission that most of the reductions would be in corporate staff functions rather than operational functions.

Area businesses, workers watch merger development

Evergreen Packaging, a paper mill located in Canton, was among those who challenged the merger or aspects of the merger. The company agreed to a settlement with Duke Energy and Progress Energy on Sept. 22, 2011; however, spokesman Mike Cohen would not talk about what the issues were or what the settlement entailed. All Evergreen testimony was subsequently removed from the records of the hearing.

“Our issues were addressed and have been settled, and that’s all we will say,” Cohen said.

Evergreen Packaging is one of the larger electric customers for Progress Energy, but also generates about half of their own electrical power.

The International Brotherhood of Electrical Workers, which has a local office in the Asheville area, was represented during the hearings, criticizing the merger agreement for failing to guarantee any level of employment for the Duke and Progress employees working in North Carolina, according to notes from the N.C. Utilities.

IBEW representatives criticized the joint agreement for failing to guarantee any level of employment for the Duke and Progress employees working in North Carolina, according to the commission’s notes. The IBEW contended that the merger should not be approved until it guarantees that the merger will not result in involuntary layoffs and that the operational workforce will be maintained at a level that ensures reliability and dependability.

The IBEW did not return a call from Carolina Public Press for comment.

North Carolina’s 26 electric cooperatives, which serve more than 2.5 million in 93 of the state’s 100 counties, in addition to the transmission lines of Duke Energy and Progress Energy, were also represented during the hearings.

One of those rural providers is Haywood Electric Membership Corporation (HEMC), which provides electric service to 25,800 customers in Western North Carolina.

“HEMC purchases wholesale (electrical) power from both Duke Energy and Progress Energy,” said Ken Thomas, manager of marketing and communications for Haywood Electric Membership Corporation. “The merger is expected to generate millions of dollars in savings and HEMC expects to realize lower costs as a result.”

According to the joint agreement, the merger will allow Duke Energy and Progress Energy to serve their retail and wholesale customers more efficiently and economically than they could on a stand-alone basis, guaranteeing an estimated savings of $650 million in the first five years alone.

The agreement also stipulates annual community support and charitable contributions of $9.2 million from Duke Energy and $7.3 million from Progress Energy over four years following the close of the merger, and a contribution of $15 million in the first year to support workforce development and low-income energy assistance within their service territories.

In addition to the $15 million contribution, the companies were ordered to contribute $2 million to NC GreenPower during the first year after the merger. NC GreenPower is an independent, nonprofit organization whose goal is to supplement the state’s existing power supply with more green energy.

Under the terms of the joint agreement, Duke shareholders will own approximately 63 percent, and former Progress shareholders will own approximately 37 percent, of the company stock. The board of directors will consist of 18 directors, 11 designated by Duke and seven designated by Progress.

All customers of Duke Energy and Progress Energy will receive an insert in their next bill that will provide information about the merger, Layne said.


Facts for consumers

According to Duke Energy:

  • There will be no immediate changes to services and consumers will continue to pay their bill in the same way.
  • The merger will not create rate changes. However, the costs of producing and delivering electricity continue to rise, and both utilities have previously scheduled rate increase requests that will be filed later this year and next year in the Carolinas.
  • For now, each company will continue to have separate rate schedules.
  • Customer service contact numbers remain the same. Progress Energy customers can call 919-508-5400 and Duke Energy customers can call 1-800-777-9898.
  • For now, outage reporting remains the same. To report an outage by phone, Duke Energy customers can call 1-800-769-3766, and Progress Energy customers can call 1-800-419-6356.
  • The merger will not affect electronic payment schedule. Electronic payments will continue as they were before the merger.
  • Internet users can continue to use progress-energy.com and duke-energy.com. Log-in information remains the same.
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About the Author

Peggy Manning

Peggy Manning is a contributing reporter for Carolina Public Press. Contact her at pntmoody@bellsouth.net.

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