Escalating inquiry: North Carolina regulators call in outside investigators of Duke-Progress Energy fiasco
A series of cracks like these that have appeared in Progress Energy's -- now Duke Energy's -- containment wall surrounding the Crystal River 3 nuclear power reactor in Florida, now offline since 2009, are one of the primary reasons for the Duke-Progress merger mess now being sorted out in North Carolina. Should Duke try to fix this for a multi-billion dollar price tag or just shut down the nuke plant for good? Will that require a new natural gas plant to be built to make up for that lost source of electricity? (Photo: Progress Energy.)
Wake up and good morning. The merger fiasco spawned by Duke Energy board's high-handed dumping of CEO Bill Johnson on the same day Duke and Progress Energy combined is escalating rapidly. Not only is Johnson testifying on Thursday this week before the North Carolina Utilities Commission, a hearing sure to stir the nasty pot of this saga of greed and power. Now that same commission has decided to bring in outside investigators, according to coverage in the Charlotte Observer here.
Adding investigative horsepower suggests this ballooning inquiry will only get more embarrassing for Duke and, at the very least, a lot more expensive since there is no doubt a hefty fine coming Duke's way for its manipulative ways. At the same time, the Observer notes, the investigation is rife with conflicts of interest involving cozy ties between Progress Energy and the state utility commission. And, of interest, the paper says support for Johnson is not unanimous -- despite this new web site created by Progress Energy employees to laud Johnson.
"Some environmental activists and economic developers prefer doing business with Duke, and view Rogers as a bold innovator who is raising Charlotte's profile," the paper states. (Johnson just got bounced as chairman of the Nuclear Energy Institute now that he's lost his executive credentials. Read more here.)
A wild card in this mess is North Carolina attorney general Roy Cooper who's got a separate inquiry under way and may want to make his own splash later. In the end though, business analysts predict Duke will end up paying another penalty to make this go away, says this AP story.
But, as this Raleigh News & Observer column notes, don't underestimate Duke Energy's political clout. Nobody among the senior state leaders, including the governor, has even whispered the word "Duke" during this debacle. Says the column: "One might think that, at the very least, North Carolina's political leaders would be standing up and demanding answers." The "silence has been deafening," one political strategist admits.
Remember, Duke Energy now controls all of the electric utility assets in Florida once run by Progress Energy. Floridians have a big vested interest in demanding an electricity provider that's a straight shooter... if that's possible in this monopoly industry. Just don't expect Lapdog Tallahassee to offer much leadership on this Duke-Progress issue -- even though it was the bungled repair attempt of the Crystal River nuclear power plant in Florida by Progress Energy that played a big role in Duke's last minute decision to oust Johnson. Read Ivan Penn's October 2011 Tampa Bay Times story that details Progress Energy's bungle that's led to today's merger fumble.
-- Robert Trigaux, business columnist, Tampa Bay Times