Duke Energy has asked state and federal regulators to combine its two electric utilities that serve the Carolinas in a move it said would result in billions of dollars of customer savings.
Duke Energy Carolinas and Duke Energy Progress have operated as separate utilities since the 2012 merger of Duke and Progress Energy. The two subsidiaries’ combination is legally classified as a merger, but it is more like reorganizing two corporate divisions into one. If approved, the effective date for the combination would be Jan. 1, 2027.
“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,” Duke Energy Carolinas CEO Kodwo Ghartey-Tagoe said in a statement. “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.”
Operating as a single utility in the Carolinas would let Duke meet the growing needs for power there at a lower cost due to more efficient planning and an improved ability to avoid redundant investments. The combination would let Duke build fewer assets to meet the combined systems’ needs, and spreading infrastructure across the larger customer base would moderate impact on rates.
The combined utilities would be able to run fewer and less expensive units, use less fuel and cut down on units cycling on and off, thus saving maintenance costs.
The combination needs to be approved by the North Carolina Utilities Commission, the South Carolina PSC and FERC.
The combination is expected to save about $1 billion between 2027 and 2038, which is the close of the planning horizon for the 2023 Carolinas Resource Plan. Retail rates would start changing as the combined firm goes before North Carolina and South Carolina regulators in 2027 and later.
Duke Energy Carolinas owns 20.8 GW of generation and supplies power to 2.9 million customers across 24,000 square miles in the Carolinas. Duke Energy Progress owns 13.8 GW and supplies power to 1.8 million customers across 28,000 square miles.
