By Andy Owens
Published Dec. 3, 2012
Duke Energy Corp. has reached a settlement with the N.C. Utilities Commission in a dispute over the company’s leadership after a merger between Duke Energy and Progress Energy created the nation’s largest energy company earlier this year.
The agreement requires Duke’s Energy President and CEO Jim Rogers to retire in December 2013, as he originally planned, and requires the company to keep 1,000 employees on staff in Raleigh for at least five years, according to settlement documents from the N.C. Utilities Commission.
"Today's actions by the North Carolina Utilities Commission and the attorney general resolve these matters, and enable us to move forward in a constructive manner with officials in North Carolina," Rogers said in a statement.
|Duke Energy CEO Jim Rogers|
Both companies are headquartered in North Carolina and both have residential and commercial customers in South Carolina.
Dukes Scott, executive director of the S.C. Office of Regulatory Staff, said the company would make similar concessions for South Carolina customers to those outlined for North Carolina utility users. Concessions include $5 million in cash, fuel, fuel-related assistance along with workforce and low-income help, which could amount to as much as $9 million in total, Duke Energy said.
“We’ve been very much watching it. There will be an impact,” Scott said. “We’ll get a prorated share of equal value.”
The dispute with North Carolina regulators arose soon after the merger closed in July and Duke Energy fired the CEO of Progress Energy. The N.C. Utilities Commission along with other state officials felt that the public board had been misled in negotiations regarding the merger.
In a statement about the settlement, Duke Energy said it did not acknowledge any illegal or improper activity, but in the settlement documents, the company agreed to issue a statement admitting that its “activities have fallen short of the Commission’s understanding of Duke’s obligations.”
Duke Energy also agreed to pay attorney fees billed by an outside law firm hired by the commission to investigate the matter. Duke agreed it would not bill those fees back to customers in North Carolina.
The settlement received voice approval by the N.C. Utilities Commission this morning. Scott said though Duke Energy’s operations in South Carolina are much smaller than in North Carolina, he thought the settlement was appropriate.
“I believe, knowing the parties involved and not being directly involved in negotiations and the investigation … that they would not have entered into it if it wasn’t best to do so,” he said.
Among the settlement’s provisions, Duke Energy agrees to:
- Maintain at least 1,000 employees in Raleigh, where Progress Energy was headquartered.
- Guarantee an additional $25 million in fuel and fuel-related cost savings to North Carolina customers.
- Make $5 million in additional contributions to support workforce development and low-income assistance in North Carolina.
- Move Lloyd Yates, executive vice president, customer operations, to executive vice president, regulated utilities among other personnel changes.
- Appoint a new general counsel.
- Create a special committee to oversee recommendation of a successor to the retiring CEO.
- Search for two board members.
- Defer filing a general rate case by Duke Energy Carolinas LLC in North Carolina until February and allow deferring depreciation and operation costs of new generation from the commercial operation until new base rates go into effect.
- Retain the former general counsel of Progress Energy Inc. to advise the company for two years on regulatory and legislative matters in North Carolina.