Standard & Poor’s downgraded Duke Energy’s corporate credit rating Wednesday, saying the company faces higher regulatory risk amid investigations into its merger with Progress Energy.

S&P lowered Duke’s rating from A- to BBB+ with a negative outlook but affirmed its ratings for Progress, now a Duke subsidiary. It cited the ouster of Bill Johnson as CEO by Duke’s board hours after closing the merger July 2.

While board members defended their duty to choose a leader of the combined companies, S&P noted, “We view the lack of transparency associated with this process and with some board members … as significantly heightening regulatory risk for Duke Energy and weakening its consolidated business risk profile.”

Duke Energy Carolinas and Progress Energy Carolinas, which will continue to operate under the Duke umbrella, had planned to seek rate increases this year. Progress, meanwhile, is negotiating with insurers over coverage for its shutdown Crystal River nuclear plant in Florida, which could need up to $1.3 billion in repairs.

S&P had placed Duke on credit watch following Johnson’s sudden removal.

A credit downgrade has the potential to increase Duke’s borrowing costs as it builds new power plants and transmission lines, although S&P affirmed its ratings on bonds that serve as the primary long-term funding structure for its operating utilities.

Duke said it was disappointed by the ratings cut but touted a strong balance sheet and financial flexibility.

With the merger, chief financial officer Lynn Good said in a statement, “the new Duke Energy has unmatched financial and operational scope and scale and the strength to manage through a time of transition in the utility industry.

“While we disagree with S&P’s rating action and its assessment of the company’s risk profile and governance practices, we remain committed to high credit quality.”

Among other credit services, Moody’s affirmed the combined company’s ratings following the July 2 merger. Fitch began its coverage of Duke with a stable outlook.

Duke treasurer Stephen De May said ratings assigned to Duke’s first mortgage bonds, the primary long-term funding structure for the company’s utilities, aren’t affected by the S&P change.

Still, the downgrade is the latest in a cascade of problems for Duke since its board forced out Johnson.

The N.C. Utilities Commission began an investigation, demanding to know why it wasn’t told in advance of the chief executive change that reinstalled Duke CEO Jim Rogers. Last week the commission finished three days of hearings, airing testimony from Rogers, Johnson and four directors, but has yet to begin plowing through meeting minutes and other documents it has ordered the company to produce by Tuesday.

N.C. Attorney General Roy Cooper, whose office represents consumers, has also launched an investigation.

S&P credit analyst Dimitri Nikas said the ratings downgrade stems from “our view that abrupt leadership changes at the company have heightened regulatory risk in North Carolina and likely in Florida, significantly weakening the company’s consolidated ‘excellent’ business risk profile under our criteria.”

Nikas cited the expected Carolinas rate cases, Crystal River and the “manifestly poor risk management” that Duke demonstrated in building its Edwardsport power plant in Indiana, the subject of ethics claims and more than $1 billion over budget.

S&P said its negative outlook on Duke and its subsidiaries “reflects the potential for lower ratings over the next 12 to 18 months if the company fails to deal with increased regulatory risk in North Carolina and Florida and to effectively manage the integration of the two companies.”