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Utilities merger inquiry tackles resignation of Duke's CEO

More will be on the line than who's in charge of the largest U.S. electric utility when Duke Energy CEO Jim Rogers testifies Tuesday before the N.C. Utilities Commission.

The panel wants to know why, more than a year after being told that former Progress Energy chief Bill Johnson would lead the merged companies, he was apparently sacked soon after the deal closed.

Duke has said little about the hearing other than that Rogers, 64, a longtime CEO who has survived three mergers, will appear. But the company has every reason to cooperate.

State law gives the seven-member commission (one seat is vacant) authority to "rescind, alter or amend any order or decision" it has made. The commission approved the $32 billion merger on June 29.

It also decides whether to grant rate increases — both of Duke's operating companies in the Carolinas plan to seek one this year — and at some point will be asked to let the two companies become one.

While it's unlikely to try to dismantle a merger that took 18 months across a half-dozen jurisdictions to approve, observers say the commission could use its leverage to extract new conditions if it doesn't like Rogers' explanation.

"I don't think the situation has ever come up before," said Raleigh attorney Ralph McDonald, who has practiced before the commission since the late 1960s.

While its authority is broad, McDonald said the commission could take more limited steps, such as by adding conditions to its approval. In approving the merger, for example, the commission insisted that Progress "maintain a significant corporate and utility presence" in its hometown of Raleigh.

Robert Gruber, head of the commission's Public Staff, which represents consumers, said his staff may recommend what the commission does once it hears from Rogers.

"I think they want to know when Rogers and the board knew that Johnson was going to be asked to resign, so they could determine if it was still while the merger was under consideration," he said. "I think probably the main thing they're looking for is when they knew and whether they deceived the commission."

Duke also faces a demand from N.C. Attorney General Roy Cooper to turn over by July 31 board minutes and other documents from the time the merger was announced.

Utilities merger inquiry tackles resignation of Duke's CEO 07/09/12 [Last modified: Tuesday, July 10, 2012 9:02am]
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