Retroactive merger review of Duke and Progress Energy in North and South Carolina

In July 2012, Duke Energy Corporation completed its acquisition of Progress Energy, Inc., forming the largest electric utility company in the United States. This merger occurred within the unique regulatory environments of North and South Carolina, which operate regulated electricity markets outside the governance of Regional Transmission Organizations (RTOs). This study investigates the impact of the Duke-Progress Energy merger on electricity prices for residential, industrial, and commercial consumers in these states using a synthetic control method. Our analysis reveals that post-merger, North Carolina experienced significant reductions in electricity prices across all sectors, indicating that merger efficiencies were effectively transferred to end-users. Conversely, South Carolina saw a relative increase in electricity prices despite a more competitive market structure. These contrasting outcomes highlight the complex interplay between market dynamics, regulatory oversight, and operational efficiencies in the electricity sector. The findings underscore the importance of considering local market conditions and regulatory environments when evaluating the effects of utility mergers.