Duke Energy Juggernaut Won’t Stop Shakedown Artists

Jim Rogers photoIf it wasn’t already obvious, then a report in Friday’s Raleigh News & Observer about the merger hearings between Duke Energy and Progress Energy into the nation’s largest utility makes it clear: That Duke’s strategy is continued growth into “a political juggernaut.”

That’s what came out of the final day of testimony about the deal before the North Carolina Utilities Commission, which appears to be the final major hurdle for the merger’s approval. The N&O cited “hints” by company executives about “further acquisitions down the road,” in which Duke would wield even more power than they do now.

Perhaps at some point the U.S. Justice Department will be required to approve Duke’s acquisitions to examine possible monopoly interests (which in reality, investor-owned utilities already enjoy). After this merger’s approval, in fact, Duke will be the service provider for almost the entire state of North Carolina – the exception being a small territory handled by Virginia’s Dominion Power. Some N.C. municipalities are the utility for some citizens, but they mostly purchase their power from Duke or Progress.

Duke is a major electricity provider in the Carolinas, Ohio, Indiana, and Kentucky – and after the merger is complete, Florida. Both Duke CEO James Rogers and Progress CEO Bill Johnson claim the new combined Duke Energy will be better able to finance capital expansions – replacing old power generating facilities with newer ones – with less dramatic rate increases for their customers.

Two weeks ago NLPC reported how environmental groups that are engaged in the NC Utilities Commission hearings are demanding payoffs into government weatherization programs, which have been shown time and again to be wasteful boondoggles. NLPC’s previous report noted how the extreme anti-coal and –nuclear group NC Waste Awareness and Reduction Network – which argues that even nuclear power contributes to global warming because of the energy required to produce concrete, copper and steel for the plants – sought $27 million from Duke to go to the NC Housing Finance Agency for weatherization, in exchange for NC WARN’s approval of the merger. 

That wasn’t quite right – make that $27 million per year for ten years, or $270 million (see page 4). Add that to the demands made by the NC Sustainable Energy Association, Sierra Club, Environmental Defense Fund, and the Southern Environmental Law Center, and you’ve got the equivalent of Jesse Jackson and Al Sharpton corporate campaigning for millions of dollars into their interests’ projects. Even more, the burdensome regulatory climate created by the environmental groups is forcing utilities nationwide to upgrade – or construct new – power plants.

The extortive demands by NC WARN and their fellow eco-comrades, rather than ease the onus of their excessive regulatory demands and financial payoffs, would worsen the burden in terms of costs and lost jobs. Any contributions the new Duke Energy would pay into some “public interest” weatherization (or other) fund would be recaptured in its rates, pushing electric bills even higher (in addition to what the new power plants cost), or would be paid by shareholders, many of whom might be upset that their retirement investments aren’t what they should be.

The environmental groups also cite job losses – estimated to be about 2,000 – as a result of the merger as justification for Duke to contribute to their cherished community interest slush fund. But one of the utilities’ lawyers wondered where the Greenies’ concern was when Duke and Progress were putting people out of work thanks to the new regulations forced upon them. Attorney Len Anthony asked during the last day of hearings, “Would it surprise you to know that Progress Energy is going through a coal-to-gas conversion and the natural gas power plants will require fewer employees to run? The environmental community didn’t object when we were reducing jobs to reduce emissions.”

The fact is, environmentalists routinely ignore economic realities and job impacts by continuing to push for inefficient renewable energy sources such as wind and solar. As if studies don’t already make the case, President Obama’s three-year push for Green jobs (in addition to Europe’s experience) has provided plenty of evidence that so-called clean energy initiatives are economy killers. And as other evidence shows, most renewables are not even cleaner for the environment.

From jobs, to costs, to healthier water and air, eco-activists’ prescriptions to improve each of those situations accomplish exactly the opposite of what the say they will do. The only reason anyone should take them seriously is because they keep showing up at these public hearings, and rare is the corporation – even “political juggernauts” – that will put up a fight against them, and challenge their facts and their shakedown tactics.

Paul Chesser is an associate fellow for the National Legal and Policy Center and is executive director of American Tradition Institute.