Duke Energy wins 29 lenders' consent to merge its Carolinas utilities

A Raleigh utility signs itself out of existence

On November 9, Michael Hendershott, an assistant treasurer at Duke Energy·+1.22% — Duke Energy, up 1.22 percent as of its last quote, signed Amendment No ¹². 4 eight times, once for each borrower on the company's $10 billion credit agreement: the parent and its seven utilities ¹². Wells Fargo·+0.46% — Wells Fargo, up 0.46 percent as of its last quote, the administrative agent, and 28 other banks, including Bank of America·+0.40% — Bank of America, up 0.40 percent as of its last quote and Goldman Sachs▲+0.42% — Goldman Sachs, up 0.42 percent today, signed the consent↗ ².

It permits one act: on January 1, 2027, Duke Energy Progress, the Raleigh-based utility formerly known as Progress Energy Carolinas, merges into Duke Energy Carolinas, and its separate existence ends ¹². The exhibit adds what no outlet has carried: the Federal Energy Regulatory Commission, the North Carolina Utilities Commission and the Public Service Commission of South Carolina have already authorized the merger↗, and the lenders' consent dies on January 31, 2027, if it slips ². The only public trace so far is an aggregator's one-line notice ³.

One borrower for the $103 billion build

Duke had announced the January 1 combination date in October, saying the two utilities "will be combined into a single utility as of Jan ⁵. 1, 2027" ⁵; the filing shows the machinery, and the machinery exists to move money.

Capital spending has outrun operating cash flow in six of the last eight quarters ⁴, outlays are running near $1.5 billion a month with a step to about $2 billion next year ⁶, and Duke pays out 63.45 percent of earnings in dividends at 1.49 debt-to-equity ⁷. The plan also needs $10 billion of new equity, one-third of it secured so far ⁶.

The rate increases land on the merger date

The two Carolina settlements now before the NCUC would add $496 million of revenue at Duke Energy Carolinas and $338 million at Duke Energy Progress over two years ⁶, raising residential rates about 9.5 percent and 6.8 percent, with bills moving beginning January 1, the merger's own effective date; state Attorney General Jeff Jackson urges rejection↗ ⁸.

Florida cut the other way, with regulators approving lower 2027 rates, as The Inference reported on November 8 ⁷. And in September the same commission denied a $584 million Duke Energy Progress gas turbine↗, calling data-center demand "insufficiently reliable for the Commission to act at this point" ⁹.

Data centers pay upfront, Duke says

Duke's answer is contract structure. An October 7 settlement with the North Carolina Public Staff, the state agency representing utility customers, plus Amazon▲+1.71% — Amazon, up 1.71 percent today, Google, Meta▲+0.49% — Meta, up 0.49 percent today, Microsoft▼−1.83% — Microsoft, down 1.83 percent today and the Department of Defense, puts connection costs on large-load customers in advance ⁵. "Data centers will pay upfront for all costs to connect to the grid↗," said Kendal Bowman, Duke's North Carolina president ⁵. Signed contracts cover 7.8 of the pipeline's 15.4 gigawatts ⁶, and profit reached $4.2 billion through September, up 11.2 percent ¹⁰.

Three dates decide the trade

The NCUC's ruling on the settlement is expected by mid-November ⁵; the commission's order on Duke's long-range resource plan, due by year-end, gates any refiling of the rejected turbine ⁹; and the merger must close before the consent's January 31 expiry ². Whether Duke then files one combined Carolinas rate case appears in no filing. Duke has permission from 29 banks to become one utility; it still needs North Carolina's permission to bill like one ⁸.