@NCCapitol

NC power brokers steer clear of power company power struggle

Posted July 13, 2012

— The fallout over the merger between Duke Energy Corp. and Progress Energy Inc. and the subsequent management shake-up is a sensitive issue for both Democrats and Republicans in North Carolina.

Hundreds of jobs in Raleigh are on the line. Electric customers are worried about their rates. And, as with most things in politics, money is involved.

Progress Chief Executive Bill Johnson had been slated to become president and CEO of the combined company – the nation's largest utility – but the Duke-controlled board of directors forced him to resign an hour into his tenure, replacing him with Duke President and CEO Jim Rogers, who was to have been board chairman after the merger.

The North Carolina Utilities Commission questioned Rogers for four hours on Tuesday about the timing of the move. The commission approved the merger three days before Johnson was ousted.

Johnson and four members of the new Duke board – two from Progress and two from Duke – will appear before the commission next week. The company also must turn over two years' worth of internal communications by the end of the month.

Under state law, the commission has the power to rescind its approval or amend it by adding conditions Duke must meet.

North Carolina Democrats worry the controversy could hamper Rogers' ongoing fundraising for the Democratic National Convention, which is scheduled for early September in Charlotte.

Meanwhile, Pat McCrory, the Republican nominee for governor, is a former Duke employee. According to state financial disclosure forms, he owns more than $10,000 in Duke stock.

"The Utilities Commission is doing their job, but my main focus is, will the merger provide lower electric rates?" McCrory said Friday.

Democratic gubernatorial nominee Walter Dalton owns at least $10,000 in Progress stock, according to his financial disclosure form. Duke Energy CEO Jim Rogers with Charlotte Mayor Anthony Foxx Duke-Progress merger sensitive issue for Dems, GOP

“We are looking forward to finding out more about what happened and are glad the state Utilities Commission and Attorney General's Office are looking into this matter,” said Ford Porter, a spokesman for Dalton's campaign.

North Carolina Attorney General Roy Cooper has launched a separate investigation into the merger, demanding copies of communications between Duke board members and executives.

Longtime political insider Rufus Edmisten said the merger issue is like a live wire for politicians.

"I don't think you're going to hear much out of the gubernatorial candidates," he said. "They're both fine people, but I don't think they'll say much because the utility companies have a lot of money (and) they've got huge PACs."

Edmisten tussled with utilities as attorney general in the 1970s and 1980s, and he said they "blistered me" pretty good when he ran for governor in 1984 and lost.

He criticized the way Johnson was dismissed and the way Rogers disparaged him to the Utilities Commission.

Rogers said the board had lost confidence in Johnson's leadership ability because of troubles with Progress' nuclear power plants, tepid financial results and what Rogers described as Johnson's "autocratic" management style.

"This is, in my opinion, corporate malfeasance. This is pretty bad stuff," he said.

Johnson will still walk away with up to $44.7 million in severance, pension benefits, deferred compensation and stock awards. The commission has ordered that Duke shareholders, not customers, pick up the tab.

Three other former Progress executive who quit in the wake of his departure also will pocket millions through their stock ownership in the new company, according to Securities and Exchange Commission records.

John McArthur, executive vice president of regulated utilities, could earn $7.7 million; Mark Mulhern, executive vice president and chief administrative officer; could make $6.9 million; and Paula Sims, chief integration and innovation officer, could earn $4.4 million.

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  • liskm Jul 13, 2012

    Never did like it when I lost in the game of monopoly. Not looking forward to the outcome of my monthly bill with this game that has been played.

  • MarcoPolo Jul 13, 2012

    Ummm, I don't remember the republicans receiving 10 million dollars.

    Wasn't Johnson responsible for lining up all the merger "arrangements"?

    Crooks vs Crooks

    Democrats are paid off.

    Johnson and other Progress XXXXXXX are leaving with special parachutes.

    Customers lose but what's new? Whether it's one crook or the other it doesn't matter. It's a crooked industry. I'm glad the crooks of one company wii be gone and we only have to deal with one of them.

    I'm also interested in seeing how much data progress hid from duke.

  • geosol Jul 13, 2012

    You know what would be even cooler than having the Public Utilities Commission stacked with industry-friendly flunkies? Having the REPUBLICANS create a whole NEW commission for virtually non-existent oil and gas in NC and appointing right wing political flunkies on it! Wouldn't that be cool?!?!?!

  • Gork Jul 13, 2012

    "I don't think they'll say much because the utility companies have a lot of money (and) they've got huge PACs" -

    Hello? Would there ever be a need for more justification to end this system? The system has now doubled back on itself publicly with this scandal - If Duke has enough money to over fund a PAC, they're using OUR money obviously - the utilities commission should lower their rates in conjunction with this whole action. If they have 10 cents to donate to a PAC, they should reduce rates instead, BY LAW.

  • uscnnc Jul 13, 2012

    Geosol, so you are upset with the $29 billion plus, that was given out by the Obama admin. to companies that sent jobs overseas. Or that a big Obama donor, outsourced the making of the USA Olympic uniforms to China? No need to answer, those familiar with your posts, already know it.

  • Mobile Geek Jul 13, 2012

    $10,000 in stock? Big Deal! Seriously, that's a drop in the barrel. Heck, I'm just an average everyday middle class guy and I have more than that invested. Good grief. If it were $1 million, then maybe it is new worthy.

  • DavidJonathan Jul 13, 2012

    Duke leaders say they started to lose faith in Johnson in the Spring of 2012...HINT: What was going on in NC in April-May of 2012 that probably had a big impact on the ultimate action taken by the Duke Board? Think.

  • Nothing New Jul 13, 2012

    I dont care what they say about the the customers not paying for all the severance benifits to fired/departed employee's. What is the source of either Progress or Dukes income? It is from the the rate payers each month in the form of power bills. I dont care how they slice it, the rate payers are still paying. They can say that the stock holders will pay for the severance packages, where do you think they get the money to pay the stock holders?????, the ratepayers. Sure they say they will cut the dividends payed to stock holders, but then will ask for a rate increase because they are losing stock holders and to attract more stock holders will need to increase rates. Lies, Lies.

  • maryswilson24 Jul 13, 2012

    ......and this merger is creating a utility with far reaching power, its likely other utilities will be acquired by duke later. How big will duke get in the future remains to be seen, i just wonder who would be able to keep them in check then? ........
    .................personally i think duke would get whatever it wanted for rate approvals or whatever, and i believe duke knows that to.

  • KHawk Jul 13, 2012

    Rogers is apparently a big Obama supporter - see this link for more:
    http://www.southernstudies.org/2012/07/will-the-duke-energy-scandal-hurt-the-democrats-in-november.html

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