From an editorial in the (Raleigh) News & Observer on Thursday:
Right up to the last moment, the merger of North Carolina’s two big, multistate electric utilities – a merger that creates, in an expanded Duke Energy, the nation’s largest utility – was relatively routine, despite some slowdowns along the path to final approval. Then came that last moment.
Bill Johnson, surprisingly, was out, his resignation announced early Tuesday with no explanation. Contrary to announced plans and all expectations, the CEO of Progress Energy would not be chief executive of the combined company after all.
Instead, the new Duke Energy announced that its own CEO, Jim Rogers, will run the show. The plan, up to Tuesday, had been that Johnson, 58, would be CEO and that Rogers, 64, would be executive chairman.
Was there a rift? A change of heart? Some unrevealed business reason? Whatever its cause, Johnson’s departure fuels doubts about the merger, particularly in Raleigh and in Eastern North Carolina, home to the bulk of Progress Energy’s employees and customers.
In particular, how will Progress employees fare under the new setup? With Johnson at the helm, Progress employees could at least feel that they had an ally in Charlotte, where Johnson, as recently as last month, was looking for a new home.
The fact that the nation’s No. 1 utility would be Charlotte-based contributed to an atmosphere at the N.C. Utilities Commission that allowed the deal to be done. (The speed bumps along the way came mainly from the Federal Energy Regulatory Commission.)
It was certainly a factor, as well, that the head of Progress, not Duke, would be CEO of the combined company. Notably, Robert Gruber, the state’s consumer advocate in utility matters, supported the merger. With news of Johnson’s departure, however, he allowed that “If the Commission had known about this prior to the merger, it might have been a different result. The Public Staff has a lot of respect for Mr. Johnson and confidence in him. We’re not sure how this will work without him.” Edward Finley Jr., Utilities Commission chairman, also made a blunt assessment.
Duke’s Jim Rogers, sensibly enough, quickly made calls to reassure employees and regulators. But with even a hint of mystery in the air, the new leader among the nation’s electric utilities has a powerful lot of explaining to do, in addition to the long-run task of proving that this merger is really good for North Carolina.
