Filed by Duke Energy Corporation
Pursuant to Rule 425 under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: Duke Energy Holding Corp.
Commission File No. 333-126318
Nov. 1, 2005 CONTACT: Pete Sheffield
Phone: 980/373-4503
24-Hour: 704/382-8333
South Carolina Regulators Approve Duke-Cinergy Merger
CHARLOTTE, N.C. - The Public Service Commission of South Carolina (PSCSC) has
unanimously approved Duke Energy's planned merger with Cinergy, the company
announced today.
In approving the planned combination, the PSCSC signed off on proposals
submitted in early October by Duke Energy and other parties, to resolve all
issues related to the commission's merger review.
"Today's action in South Carolina is an important milestone as we move forward
with the Duke Energy-Cinergy merger," said Ellen Ruff, group vice president of
planning and external relations at Duke Power. "This merger is about building
a stronger company with the size and strength to continue delivering reliable
electric service to our customers at a cost well below the national average."
"The agreements approved by the commission ensure Duke Power customers will
share in the value that is created by this merger," Ruff continued. "This is
truly a win-win, reinforcing Duke Energy's long-standing commitment to its
customers in the Upstate of South Carolina."
Key aspects of the agreement with the Office of Regulatory Staff, the South
Carolina Energy Users Committee and Duke Energy include:
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o $40 million rate reduction for one year. The agreement calls for a $40
million reduction of retail base rates to Duke Power's S.C. customers.
The rate reduction - which represents a 4 percent rate reduction, on
average, across all customer classes -- would flow through a rate
decrement rider to existing base rates for a one-year period following
the close of the merger. Duke Energy expects to amortize the $40 million
over a five-year period.
o Three-year extension for bulk power marketing (BPM) profit sharing. The
agreement extends for three years, through the end of 2010, Duke Power's
non-firm BPM profit-sharing agreement in South Carolina. Duke Power's BPM
division sells the company's temporary excess electricity to municipal,
cooperative and investor-owned utilities and other wholesale customers.
The PSCSC also approved an agreement with the Electric Cooperatives of South
Carolina Inc., Central Electric Power Cooperative Inc., Saluda River Electric
Cooperative Inc. and Duke Energy, which calls for additional transmission
planning activities to be developed in the state.
With PSCSC approval, South Carolina becomes the first state to approve the
merger, announced on May 9, 2005. State regulators in Ohio, Indiana, Kentucky
and North Carolina are also reviewing the planned combination, which remains
subject to other closing requirements, including approvals from various
federal regulatory agencies, and shareholders of both Duke Energy and Cinergy.
In August, the companies satisfied Federal Trade Commission and U.S.
Department of Justice review under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976. The companies anticipate receiving all necessary
approvals by the first half of 2006.
Duke Power, a business unit of Duke Energy, is one of the nation's largest
electric utilities and provides safe, reliable, competitively priced
electricity and value-added products and services to more than 2 million
customers in North Carolina and
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South Carolina. The company operates three nuclear generating stations, eight
coal-fired stations, 31 hydroelectric stations and numerous combustion turbine
units. Total system generating capability is approximately 19,900 megawatts.
More information about Duke Power is available on the Internet at:
http://www.dukepower.com.
Duke Energy is a diversified energy company with a portfolio of natural gas
and electric businesses, both regulated and unregulated, and an affiliated
real estate company. Duke Energy supplies, delivers and processes energy for
customers in the Americas. Headquartered in Charlotte, N.C., Duke Energy is a
Fortune 500 company traded on the New York Stock Exchange under the symbol
DUK. More information about the company is available on the Internet at:
http://www.duke-energy.com.
Forward-Looking Statements
This document includes statements that do not directly or exclusively relate
to historical facts. Such statements are "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. These forward-looking statements include
statements regarding benefits of the proposed mergers and restructuring
transactions, integration plans and expected synergies, anticipated future
financial operating performance and results, including estimates of growth.
These statements are based on the current expectations of management of Duke
Energy and Cinergy. There are a number of risks and uncertainties that could
cause actual results to differ materially from the forward-looking statements
included in this document. For example, (1) the companies may be unable to
obtain shareholder approvals required for the transaction; (2) the companies
may be unable to obtain regulatory approvals required for the transaction, or
required regulatory approvals may delay the transaction or result in the
imposition of conditions that could have a material adverse effect on the
combined company or cause the companies to abandon the
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transaction; (3) conditions to the closing of the transaction may not be
satisfied; (4) problems may arise in successfully integrating the businesses
of the companies, which may result in the combined company not operating as
effectively and efficiently as expected; (5) the combined company may be
unable to achieve cost-cutting synergies or it may take longer than expected
to achieve those synergies; (6) the transaction may involve unexpected costs
or unexpected liabilities, or the effects of purchase accounting may be
different from the companies' expectations; (7) the credit ratings of the
combined company or its subsidiaries may be different from what the companies
expect; (8) the businesses of the companies may suffer as a result of
uncertainty surrounding the transaction; (9) the industry may be subject to
future regulatory or legislative actions that could adversely affect the
companies; and (10) the companies may be adversely affected by other economic,
business and/or competitive factors. Additional factors that may affect the
future results of Duke Energy and Cinergy are set forth in their respective
filings with the Securities and Exchange Commission ("SEC"), which are
available at
www.duke-energy.com/investors and www.cinergy.com/investors, respectively.
Duke Energy and Cinergy undertake no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
Additional Information and Where to Find It
In connection with the proposed transaction, a registration statement of Duke
Energy Holding Corp. (Registration No. 333-126318), which includes a
preliminary prospectus and a preliminary joint proxy statement of Duke Energy
and Cinergy, and other materials have been filed with the SEC and are publicly
available. WE URGE INVESTORS TO READ THE DEFINITIVE JOINT PROXY
STATEMENT-PROSPECTUS WHEN IT BECOMES AVAILABLE AND THESE OTHER MATERIALS
CAREFULLY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT DUKE ENERGY,
CINERGY, DUKE ENERGY HOLDING CORP. AND THE PROPOSED TRANSACTION. Investors
will be able to obtain free
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copies of the joint proxy statement-prospectus as well as other filed
documents containing information about Duke Energy and Cinergy at
http://www.sec.gov, the SEC's Web site. Free copies of Duke Energy's SEC
filings are also available on Duke Energy's Web site at:
http://www.duke-energy.com/investors/, and free copies of Cinergy's SEC
filings are also available on Cinergy's Web site at http://www.cinergy.com.
Participants in the Solicitation
Duke Energy, Cinergy and their respective executive officers and directors may
be deemed, under SEC rules, to be participants in the solicitation of proxies
from Duke Energy's or Cinergy's stockholders with respect to the proposed
transaction. Information regarding the officers and directors of Duke Energy
is included in its definitive proxy statement for its 2005 annual meeting
filed with the SEC on March 31, 2005. Information regarding the officers and
directors of Cinergy is included in its definitive proxy statement for its
2005 annual meeting filed with the SEC on March 28, 2005. More detailed
information regarding the identity of potential participants, and their direct
or indirect interests, by securities, holdings or otherwise, will be set forth
in the registration statement and proxy statement and other materials to be
filed with the SEC in connection with the proposed transaction.
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