Prior to its July 2 merger with Progress Energy, Charlotte-based Duke Energy promised 6 percent rate cuts to large energy users and pledged settlement payments to rural electric cooperatives and municipal utilities, including Blue Ridge Electric.

The agreements were revealed in documents filed Aug. 24 with the North Carolina Utilities Commission as part of the commission’s ongoing investigation into the merger, which made Duke Energy the largest utility in the country.

Duke Energy sells electric power to Blue Ridge Electric Membership Corporation, the electric cooperative that serves Watauga County. Blue Ridge also sells electric power to New River Light & Power, which serves the Appalachian State University campus and the town of Boone.

Progress Energy CEO Bill Johnson was slated to become CEO of the merged company, with longtime Duke CEO Jim Rogers becoming chairman. But Johnson was forced out — replaced by Rogers — a day after the merger took effect, taking millions in severance pay.

The surprise ouster, as well as revelations that Duke would have to pump $2 billion into rehabilitating Progress Energy’s ailing nuclear facilities over the next three years, shocked and angered officials and led to the commission’s investigation.

On Aug. 1, the commission announced it had retained legal counsel to assist in its investigation of whether the commission was misled regarding the approval and closing of the merger.

Duke Energy documents ordered by the commission to be filed include various agreements executed by the company leading up the merger, including May 10 and May 30 settlement agreements with the Carolina Utility Customers Association and Carolina Industrial Group for Fair Utility Rates, which are lobbying organizations representing large manufacturers.

The agreements promised an average of 6 percent rate cuts to large industrial customers.

In January the Utilities Commission approved a 7.2 percent rate hike for Duke’s residential customers, though the company had originally requested a 15 percent increase. N.C. Attorney General Roy Cooper has appealed the rate increase in the N.C. Supreme Court.

The documents filed also include settlement agreements with municipal utilities and rural cooperatives, including Blue Ridge Electric. The agreement, originally dated June 2, 2011, and revised April 25, 2012, guarantees Blue Ridge Electric and other area cooperatives will be shielded from merger-related costs for five years.

The agreement also pledges one-time lump sum payments to the cooperatives to compensate them for miscellaneous costs related to the merger.

Blue Ridge Electric spokeswoman Renee Whitener confirmed Blue Ridge Electric received its $280,000 payment from Duke Energy last month.

“We negotiated this into our agreement with Duke to cover our legal and consulting costs related to our work with the Federal Energy Regulatory Commission’s and North Carolina Utilities Commission’s merger approval processes,” Whitener said. “This work was necessary to protect our members’ best interests and to ensure our members receive their fair share of the merger benefits related to our wholesale power purchase agreement.”

Blue Ridge Electric customers are not subject to Duke Energy’s recent 7.2 percent rate increase. Instead, through its power purchase agreement with Duke and through cutting costs, Blue Ridge Electric has worked to keep rate annual increases in a range of 2 percent to 3 percent, Whitener has said in the past.

The cooperative announced it will increase rates 2.5 percent in October due to rising wholesale power costs, its first hike since a 3.4 percent increase in March 2010.

“We believe (the) merger will achieve its purpose of ensuring more efficient and affordable electricity,” Whitener said. “However, merger savings may only reduce the amount of increases consumers are going to see over the next decade. The electric utility industry is in a ‘rising costs environment’ nationwide. Costs are rising due to environmental regulations … and the need to upgrade our nation’s transmission system.

“We support the merger and believe it’s going to help keep electricity bills as low as possible by producing savings that will help offset these unavoidable increases,” Whitener said.