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Duke Energy and Progress Energy are submitting a new proposal for their corporate merger this month as the North Carolina power companies make a third attempt to appease federal monopoly concerns.  According to Progress CEO Bill Johnson, who would run the combined Duke Energy out of Charlotte,  the challenge will be to preserve the $650 million in savings promised to regulators in the Carolinas while also selling off a sizable chunk of electricity into wholesale markets to appease federal regulators. Part of the modeling process is: What would you sell and at what price, and who would buy it?

Federal regulators have not questioned the merits of the proposed merger, which would create the nation's largest electric utility. Duke and Progress believe the efficiencies achieved through the merger would make it easier to pay for building new power plants, comply with costly environmental regulations and upgrade the aging power grid.

Executives at Duke and Progress had expected to have the merger completed in December, but they ran into snags when the Federal Energy Regulatory Commission (FERC) twice rejected their proposals. The federal commission said the companies must address concerns that the combined Duke would become so large it could manipulate wholesale electricity prices.  FERC said they could sell off wholesale power, sell off stakes in their power plants or build more transmission lines. (Winston-Salem Journal, 1/5/2012)