Report: N.C. AG seeks more documents in utility merger
RALEIGH, N.C. (Legal Newsline) - North Carolina Attorney General Roy Cooper is demanding that more documents be released in his investigation into a merger between Duke Energy Corp. and Progress Energy.
Earlier this month, Cooper issued a civil investigative demand to Duke Energy to determine whether there were "misrepresentations" or "misstatements" made by the company to consumers or regulators in proceedings related to its request for a rate increase and its merger with Progress.
The newly formed company will serve more than 7.1 million customers in North Carolina, Kentucky, Ohio, Indiana, Florida and South Carolina.
The attorney general was especially concerned 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."
In his original CID, Cooper demanded that Duke Energy turn over all information leading up to and just after the merger was complete.
"Despite our objection, Duke Energy said it needed a rate increase in order to protect its credit," the attorney general said in a statement earlier this month.
"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."
Standard and Poor's Financial Services had placed Duke Energy on a watch list for potential credit downgrade in the wake of the merger.
According to the Charlotte News & Observer, Cooper's office is now seeking additional documents -- in particular, from the Indianapolis-based firm of Michael Browning, a longtime Duke Energy director, and from a New York-based company that did work for the utility.
The new demands instruct Browning to produce any correspondence related to the merger since January 2011, when the companies first announced their plans to combine, the newspaper reported.
They also ask for any documents between Browning and board members, including Rogers, travel records and Browning's phone records.
Last week, Rogers testified before the North Carolina Utilities Commission that Browning told him the board had doubts in June that Johnson could lead the merged companies.
The commission, also concerned that consumers have been misled, launched its own investigation into the merger earlier this month.
In addition, Cooper's new demands seek records from Joele Frank, Wilkinson Brimmer Katcher, a firm that does investor relations, corporate, crisis and transaction communications.
The firm has done work for Duke Energy, a spokesman for the Attorney General's Office told the News & Observer.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.