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NC critic to challenge Duke Energy merger in court

RALEIGH, N.C. (AP) -- A North Carolina group critical of the merger that made Charlotte-based Duke Energy Corp. the country's largest electric company said Wednesday it will seek to undo or revise the deal in a state appeals court.

NC WARN said it is challenging the North Carolina Utilities Commission's approval of the deal combining Duke Energy with Raleigh-based Progress Energy in the state Court of Appeals.

The commission's failure to fully protect consumers from costs to update and expand the company's nuclear reactors could overwhelm the promised merger-related savings of $650 million, NC WARN said. The state regulatory body should have required Duke Energy to address whether the merger was in interest of consumers in light of the nuclear costs, NC WARN director Jim Warren said.

"In ignoring key merger costs, the NC Utilities Commission helped lock in Duke's business plan for serial rate hikes to build dirty and dangerous power plants North Carolina does not even need," Warren said in a statement.

The company plans to seek a rate increase within weeks. The utilities commission last year allowed Duke Energy to raise electricity rates by 7 percent, an increase challenged in state court by Attorney General Roy Cooper.

Duke Energy said the group's bid to undo the six-month-old merger is meritless.

"The six-month-old merger continues to make good sense for Duke Energy's customers and the communities it serves," Duke Energy spokesman Dave Scanzoni said in a statement.

N.C. WARN and the state branch of the AARP last week asking Gov. Pat McCrory to recuse himself from appointing of several new members to the utilities commission because of the close ties he developed with Duke Energy after working there for nearly 30 years. A McCrory spokesman said the governor plans to use the powers of his office to appoint new utilities regulators.

The merger between North Carolina's two Fortune 500 energy companies was finalized in July. The expanded company serves more than 7 million customers in North Carolina, South Carolina, Florida, Ohio, Indiana and Kentucky.