Utilities Commission may probe exec’s departure
RALEIGH (AP) — The North Carolina Utilities Commission, which last week approved the merger between Progress Energy and Duke Energy based on the plans for Progress’ Bill Johnson to lead the combined companies, is considering whether to investigate his ouster.
The commission could use its subpoena powers to demand documents and witness testimony if it chose to hold hearings into the surprising switch in the corporate suite.
“We are still considering what next step to take,” the commission’s general counsel, Sam Watson, said Friday.
Former board members of Progress Energy also are upset that Johnson, the chief executive of the Raleigh-based company, was ousted as head of the combined company just minutes after the companies merged this week.
Former board member Alfred Tollison Jr. says he felt he was misled about the plans for Progress Energy’s chief to head the newly combined company, forming the nation’s largest electric utility.
“Just from circumstantial evidence you would have to think it didn’t happen overnight, that there was a lot of forethought given to it.”" said Tollison, who was on the Progress board until the merger was completed.
Duke announced Tuesday that the Charlotte-based company’s Jim Rogers was the new CEO, saying Johnson had resigned by mutual agreement. The merger had been completed Monday afternoon.
Another former Progress board member, John Mullin III, wrote the Wall Street Journal on Thursday, stating: “I do not believe that a single director of Progress would have voted for this transaction as structured with the knowledge that the CEO of Duke, Jim Rogers, would remain as the CEO of the combined company.”
Standard & Poor’s Financial Services has put Duke on a watch list for a potential credit downgrade because Johnson was removed. The Wall Street credit rating service said the leadership change raises questions about Duke’s internal stability, planning and management.
Duke spokesman Tom Williams says the utility looks forward to resolving those concerns soon.
Another Wall Street service, Moody’s Investor Services, kept its ratings and its “stable outlooks” for Duke and Progress, citing the merger benefits. But Moody’s did say Johnson’s departure does create uncertainty over long-leadership and could lead to additional turnover in senior management.
A number of former Progress executives recruited by Johnson were moving to Charlotte to take their new jobs.
Johnson several weeks ago said he was planning to move. He had signed his new contract June 27. By resigning, Johnson is entitled to a $10.3 million severance.
Published: July 6, 2012
Time posted: 1:54 pm