More than 1,000 former Progress Energy employees piled into Raleigh's downtown Marriott on Wednesday as their "new" boss — Duke Energy CEO Jim Rogers — tried over the next two and a half hours to regain their trust.
Progress workers remain upset and skeptical after Rogers testified under oath for four hours Tuesday to North Carolina regulators and repeatedly trashed their former chief executive, Bill Johnson. Defending Duke's actions in buying Progress Energy, Rogers said Johnson came across as so "autocratic" that Duke's board of directors lost confidence in his ability to meld the two companies into one. The board ousted Johnson as the new CEO on the same day the companies merged and named Rogers CEO instead.
Why should Floridians care about such Carolina intrigue?
• Because Duke now controls Progress Energy Florida. We need to understand who Duke is in the wake of clearly questionable actions taken during this merger.
• Because after absorbing Progress Energy, Duke is now the nation's biggest electric utility. And we all know from experience that behemoth monopolies never act with impunity, never become bureaucratic bullies and never lose touch with customers.
• Because a key reason for ousting Johnson, says Rogers, is Progress Energy's poor handling of the Crystal River nuclear plant north of Tampa Bay, which has been shuttered since 2009.
• And because Duke says higher electricity rates are coming, even though Progress Energy Florida customers already pay 25 percent more for electricity than Floridians south of Tampa Bay whose power is provided by Florida Power & Light.
Already one Wall Street analyst suggests Duke Energy's merger shenanigans may cost the company dearly. Analyst Hugh Wynne of Sanford C. Bernstein expects Duke will be fined by the North Carolina Utilities Commission, and faces a possible fine from the North Carolina attorney general and pricey severance payments owed to at least three Progress executives leaving Duke in response to Johnson's exit. Wynne also sees "unfavorable treatment" in upcoming rate reviews by regulators soured by Duke's tactics as well as costs to defend shareholder lawsuits spawned by Duke's unorthodox behavior.
After Wednesday's Marriott meeting with Rogers, most Progress employees declined to speak to reporters out of fear for their jobs. One Progress Energy executive who did comment is Jeff Lyash, who used to serve as CEO of Progress Energy Florida in St. Petersburg before being promoted to North Carolina. He acknowledged the skepticism in the Marriott meeting to a reporter with Raleigh's News & Observer newspaper.
Lyash recently ran Progress Energy's nuclear business. Now he'll stay on at Duke in a similar role with an executive vice president title. His remarks reflect a pragmatic style, a good-soldier sense of duty and presumably the seven-figure compensation package he will still receive.
"I have great optimism for this company," he told the Raleigh newspaper. "There is a great opportunity for this company to set the industry standard."
Exactly what standard he means remains to be seen. Setting a higher ethics standard at Duke is a good start.
Contact Robert Trigaux at [email protected]