International Journal Evolving Sustainable and Renewable Energy Solutions
Regulatory Implications of Utility Mergers on Market Competition and Consumer Pricing: Insights from the Duke-Progress Energy Merger.
Abstract
Sarthak Vij
This paper analyzes the impact of the 2012 Duke Energy and Progress Energy merger on electricity rates in North Carolina and South Carolina. Using Difference-in-Differences and Synthetic Control Method analyses to find the effects on residential, commercial and industrial consumers, this study finds that the merger led to significant price reductions for residential and commercial consumers in North Carolina, where the market became more vertically integrated. In contrast, South Carolina, which remained fragmented among multiple electricity producers, experienced minimal or no beneficial pricing effects from the merger. The findings suggest that vertical integration in regulated, non-RTO states can yield consumer benefits through efficiencies and cost savings, provided effective regulatory oversight is in place. The study concludes by highlighting the critical role of regulation in noncompetitive markets and suggesting areas for future research, including extending the data timeline and comparative analyses with similar mergers.