Kentucky Public Service Commission approves Duke-Cinergy merger

Washington (Platts)--29Nov2005

Kentucky regulators on Tuesday approved the merger of Cinergy Corp,
parent company of the state's Union Light, Heat & Power Co, with Duke
Energy Corp, making Kentucky the second state to approve the deal. South
Carolina was the first to approve the merger deal. 

     The state Public Service Commission said ULH&P's 145,000 ratepayers in
northern Kentucky would receive credits of at least $7.6-mil over the five
years following completion of the merger. The credits would be used to reduce
the base rates ULH&P charges retail electric and natural gas customers in six
Kentucky counties, it added. 

     In approving the merger, the PSC decided that Duke Energy had met the
statutory requirement of demonstrating that it has the technical, managerial
and financial expertise to manage ULH&P, and that the merger would be in the
public interest. 

     The merger still has to be approved by regulators in North Carolina, Ohio
and Indiana. The Kentucky PSC said that in the event that customers in any of
those states receive a larger proportion of the net savings than customers in
Kentucky, the credits to ULH&P ratepayers would be increased to match the
highest allocation. 

     Other conditions of the merger approval included submission of an annual
report by ULH&P to the PSC on electric outages as a means of monitoring the
commitment to maintain reliability and service quality after the merger and
continued day-to-day oversight of ULH&P operations by executive-level
personnel based in the Cincinnati area. Cinergy is based in Cincinnati.

                          ---Keiron Greenhalgh, keiron_greenhalgh@platts.com

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