Cinergy touts competitive benefits of merger

Cinergy touts competitive benefits of merger

Washington (Platts)--3Jun2005


Cinergy told Ohio regulators its proposed merger with Duke Energy would
benefit electric competition in the state by providing opportunities for the
company's inactive Cinergy Retail Sales LLC (CRS) subsidiary to participate in
power auctions and/or direct retail sales in Ohio.

Though CRS is certified by the Public Utilities Commission to engage in retail
sales under Ohio's four-year-old electric choice program, it currently has no
retail customers.

In a PUC filing asking approval of the Duke merger by year-end,
Cincinnati-based Cinergy claims "competition in Ohio will benefit from the
combination of Duke Energy and Cinergy." Duke has an extensive national
deregulated business, including commercial generation facilities located in
the region and inside Ohio, Cinergy noted.

In Ohio, Duke Energy North America, a Duke subsidiary, owns the 1,240-MW Duke
Energy Hanging Rock and 620-MW Duke Energy Washington natural gas-fired
combined-cycle plants in Lawrence and Washington counties, respectively.

"The merger creates the potential for CRS to participate in auctions or direct
retail sales, utilizing the diverse supply created by the combination of the
unregulated generation assets of Duke Energy North America," Cinergy said.

In addition, the merger would further the development of the wholesale
electric market because "Cinergy and Duke Energy will engage in power sales
and will be purchasing transmission service to deliver power between its
regulated public utility operating companies."

The commission has 30 days from the filing date to act on the request, a PUC
spokeswoman said Thursday. If the PUC fails to act, the merger application is
automatically approved. Most likely, the commission will move to suspend the
deadline to give itself more time to evaluate the proposed corporate
combination.

The PUC filing was the first of several merger-related applications that
Cinergy and/or Duke expect to submit to state and federal regulators in the
coming weeks.

This story was originally published in Platts Electric Power Daily. To take a
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