Duke - Progress Merger Provides Shakedown Opportunity for Activists

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Rogers photoIt seemed the merger of Duke Energy and Progress Energy into the nation’s largest (by several measures) utility would sail through by the end of this year, but several activists in North Carolina have intervened at the last minute. The moves by environmental groups to extract funds for their pet projects out of the deal would make shakedown artists proud. Among the organizations – who have myriad methods of wringing dollars from taxpayers through lawsuits and corporate campaign-type pressure tactics – are Sierra Club, Environmental Defense Fund, and Southern Environmental Law Center.

Armed with dozens of millions of dollars each, the litigation-loving Greenies made the laughable assertion – with help of friendly consultant Richard Hahn of La Capra Associates – that the new Duke Energy would produce more air pollution after the merger. It’s as if eco-group suck-up James Rogers, the CEO of Duke Energy, never had anything to do with promoting cap-and-trade or fattening up on wind energy subsidies and renewables mandates.

It’s the programs contained within those policies where the eco-groups want the payoff, in exchange for their approval of the merger. According to The News & Observer of Raleigh, “One solution to these negatives, the groups say, would be to require the utilities to commit to more clean energy and conservation programs.” Hahn – who admitted that he hurriedly scratched out his written testimony in only two days after receiving a copy of the agreement between Duke/Progress and consumer advocates – wrote in his submitted testimony to the North Carolina Utilities Commission, “one way to mitigate the increased reliance on coal generation is for the Commission to condition approval of the merger on additional use of cleaner resources such as wind, solar or energy efficiency.”

There is apparently no bottom in the well of love for failed “renewable” energy technologies. Wind has already been shown to produce a greater rate of pollution on the electrical grid than if natural gas or coal generation produced power without it, because those fossil fuels create more pollution as back-ups than as base load generators. Thus the claim by Hahn that wind is a “cleaner resource” is fraudulent.

Other interest groups joined in the shakedown effort as well, in testimony before the Utilities Commission. North Carolina Waste Awareness and Reduction Network (NC WARN), known best for its anti-nuclear activism, demands that Duke and Progress put $27 million into the weatherization funds of a state low-income housing agency.

And the NC Sustainable Energy Association, a band of renewable energy developers who are upset that Duke has mostly built its own solar projects to meet North Carolina’s solar mandate, rather than purchase such power from independent solar contractors, wants combined Duke-Progress to pour $75 million into weatherization and related programs. The News & Observer reported that is five times the amount the companies had already promised to contribute, so they are balking. These are programs similar to what were in President Obama’s failed agenda to “stimulate” Green jobs.

Speaking of jobs, the environmental and sustainable energy groups pretended to care about those too. Reduction in workforce is inevitable in huge mergers like this to eliminate redundancies (that’s part of the reason for them!), and the new Duke Energy expects to eliminate 700 to 1,000 positions in Progress Energy’s former base in Raleigh.

“With unemployment in North Carolina hovering near 10 percent,” Hahn wrote in his testimony, “and state debt above $6 billion, the potential loss of so many jobs in the next few years could harm the state’s already struggling economy.”

Predictably, Hahn then advocated a (non-)remedy that rather than relieving the burden on the state, would instead add to its burden by pushing for more heavily-subsidized “Green” jobs. “One way to (mitigate harm from job losses) is to require new investment that will create new jobs in North Carolina’s growing clean energy sector,” Hahn wrote. 

The only reason the Tar Heel state’s clean energy sector has grown is because it has implemented a strong dose of subsidies, hidden taxes on electric bills, and a mandate that investor-owned utilities (like Duke and Progress) get 12.5 percent of their power from “renewable” sources by the year 2021. And any new “investment” is code for placing a hidden tax on customers’ electric bills to pay for the continuation of their clean energy schemes.

As if the failure of the Obama renewable energy economy scheme has not already proven that it doesn’t create jobs, Hahn and his eco-cohorts ignore the many studies that show for every “Green” job created, many more are destroyed due to increased costs for energy.

Duke Energy and James Rogers have spent plenty of their time trying to appease environmentalists, because they so often find ways to game the regulatory system to make it work in their favor. But it appears that in their merger deal with Progress Energy, their tolerance for Green shakedowns may have reached its limit. 

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