There is a reason for all of the bluster in North Carolina over the ouster of Bill Johnson as CEO of newly combined Duke Energy and Progress Energy. The regulators are embarrassed for failing to do their job and properly examine the deal. In North Carolina, utility regulators did not even ask about the shuttered Crystal River nuclear power plant. In Florida, they asked but failed to move aggressively and had even less authority to review the merger. If regulators didn't see this coming, they have only themselves to blame.
Former Duke CEO James Rogers replaced Johnson, the former Progress Energy CEO, as head of the combined company. Rogers told the North Carolina Utilities Commission on Tuesday that the board of directors forced Johnson's resignation hours after the merger closed due to "an accumulation of concerns and observations" that began surfacing earlier this year. Among the major issues: the extent of problems at the troubled Crystal River nuclear plant. The facility was shut down in 2009 for repairs, but it remains shuttered after Progress Energy's failed attempt to repair it without hiring an outside firm.
Yet in the days leading up to the merger's completion July 2, the North Carolina commission refused to examine the Crystal River issue despite requests from watchdog groups. North Carolina Attorney General Roy Cooper, who launched his own investigation last week, claimed, "We need to get the bottom of this to make sure we protect consumers." It seems a little late for the cavalry.
For months, Progress Energy customers have been begging the Florida Public Service Commission to take a harder look at the botched repair job in Crystal River and whether it should just be shut down. (The PSC will hear a status report next month.) The PSC also has been unwilling to re-examine its approval of an advanced nuclear fee paid by 1.6 million Florida customers for a proposed Levy County nuclear plant that has more than quadrupled in cost since it was first announced six years ago.
Also absent: the Republican-led Florida Legislature, which has refused to even hold a committee hearing on the advanced nuclear fee, a law so badly written that there is actually a profit incentive for power companies to delay construction.
Considering Progress Energy's track record in Florida alone, it should not have been a surprise that Johnson was replaced by the merged company's board, where Duke directors outnumbered Progress directors 11 to 7. Now the question is whether regulators have learned from their mistakes. Will they work harder to ensure the new combined company doesn't pick consumers' pockets, too?