N.C. AG investigating utility merger due to CEO change
RALEIGH, N.C. (Legal Newsline) - North Carolina Attorney General Roy Cooper has launched an investigation into a merger between Duke Energy Corp. and Progress Energy after a last-minute decision was made to replace the combined electric provider's CEO.
Progress Energy CEO Bill Johnson was supposed to lead the new company.
However, after the two companies completed the merger July 2, Duke Energy announced in a news release the next day that its new board of directors appointed Duke Energy CEO Jim Rogers to continue to run the expanded company.
"Rogers will also maintain his responsibilities as chairman of the company's board," according to the July 3 release.
"Bill Johnson has resigned as president and chief executive officer of the combined company, by mutual agreement."
On Friday, Cooper demanded that Duke Energy turn over all information leading up to and just after the merger was complete.
"Now this significant management change within hours after the merger has put the company on credit watch, so we need to get to the bottom of this to make sure we protect consumers," Cooper told The Associated Press.
The North Carolina Utilities Commission -- also concerned that consumers have been misled -- has launched its own investigation into the merger.
In a two-page order filed Friday, the commission ordered Rogers to appear at a hearing Tuesday.
"As the first step in this investigation, the commission finds good cause to require James Rogers to appear before the commission on Tuesday, July 10, 2012 at 2 p.m. to provide testimony in this investigation addressing the timing of the decision to replace Johnson with Rogers, as well as other related matters," it wrote.
Duke Energy has not said why the change in executives was made.
However, a spokesman for the company told the AP that Rogers would appear at the commission's hearing Tuesday and that it was reviewing the attorney general's request for information.
The newly formed company will serve more than 7.1 million customers in North Carolina, Kentucky, Ohio, Indiana, Florida and South Carolina.
This isn't the first time Cooper has tangled with Duke Energy.
In March, he asked the state Supreme Court to overturn the utility commission's decision approving a company rate hike.
The attorney general had argued that the 7 percent increase, approved earlier this year by the commission, was wrong for consumers and businesses.
From Legal Newsline: Reach Jessica Karmasek by email at firstname.lastname@example.org.