Less than a year after a tumultuous merger made it the nations largest electric utility, Duke Energy on Tuesday announced an insider as its first female chief executive.
Chief financial officer Lynn Good will succeed outgoing president and CEO Jim Rogers on July 1. Rogers, CEO since 2006, will continue as chairman until he retires Dec. 31.
The selection puts day-to-day control of Duke in the hands of an executive better known to Wall Street analysts than to much of Charlottes business community.
It replaces a high-profile personality with a numbers expert, and an old lion of the energy industry Rogers, 65, has been a utility CEO for 25 years with only the eighth female chief executive among the 200 investor-owned U.S. utilities.
Duke becomes one of just 21 Fortune 500 companies with a woman at the helm. Good, 54, says shed rather focus on firming up the promise of Dukes $32 billion merger with Raleigh-based Progress Energy last July.
I think our assignment at this point is just to continue to build on that momentum, integrating the companies and delivering on the expectations and promises as we go forward, she said in an interview.
I will be focused on relationships as well. As I look at my transition plan over the next several months, it will be an outreach plan to key stakeholders commissioners, community leaders, customers, employees, the leadership of the company really building on and establishing new relationships.
Analysts are divided on whether naming a CEO from inside Dukes uptown Charlotte headquarters is the best way to mend fences with regulators in Dukes home state.
An outraged North Carolina Utilities Commission launched an investigation when Dukes board dumped Progress CEO Bill Johnson, who was to lead the combined companies, minutes after closing the merger.
A settlement reached last November shuffled Dukes board and top management, with Rogers departing upon his contract expiration at the end of 2013.
Morningstar analyst Andrew Bischof wrote in a research note that his firm believed an outsider would be better positioned to repair North Carolina regulatory relationships.
But he added that Dukes utilities were able to win two North Carolina rate increases since then. He suggested healing relations and praised the boards intention to name an independent director as chairman, providing much-needed oversight that was absent when Rogers was both chairman and CEO.
In a brief statement Tuesday, the commission said Duke met the best efforts target to pick a new chair, president and CEO by July 1.
We believe the boards selection will allow the company to move forward and focus on its mission to provide affordable, reliable electric service to North Carolina consumers, the statement said.
Duke business now before the commission includes a 2012 Duke Energy Carolinas rate hike, sent back for review by the North Carolina Supreme Court, as well as a new rate request that would go into effect later this year.
Robert Gruber, executive director of the commissions Public Staff, which advocates for consumers, said rebuilding trust with the commission is going to be an important task for Good.
I think theyre well on the way to re-establishing that trust, he said.
CEO, chairman roles split
Dukes board will name one of its independent directors as chair-elect in the next few weeks. The person in that position will become chairman of the board on Jan. 1.
The arrangement is the first split of CEO-chairman duties since Rogers joined Duke as chief executive following the merger with Cincinnati-based Cinergy in 2006.
That merger also brought Good to Charlotte, initially as a Duke senior vice president and treasurer. Shed been with Cinergy since 2003 after more than 20 years with the accounting firms Deloitte & Touche and Arthur Andersen.
Good would earn $8.1 million annually if she hits incentive-pay targets based on performance, under the terms of her three-year contract.
Considering Goods previous CFO role at the company, we expect a smooth transition for the company, analyst Daniel Ford of Barclays Capital wrote in a research note.
Investors, he wrote, are likely to focus on tactical matters including the operation of Dukes $1 billion-over-budget coal-fired power plant in Indiana, its shutdown of the crippled Crystal River nuclear plant in Florida and rate cases in the Carolinas.
Dukes stock rose 58 cents Tuesday to $68.23.
The nine-member board committee named to recommend a new CEO interviewed candidates from within the company and outside it. Duke wouldnt say how many finalists were identified.
The committee voted unanimously on June 12 to recommend Good for the job. On Sunday the full board also voted unanimously to elect her.
Lead director Ann Maynard Gray, in a statement, said Goods leadership abilities and strategic vision for Dukes growth made her the top choice.
Good previously oversaw Dukes commercial businesses, including its nonregulated power generation in the Midwest, international operations and Duke Energy Renewables, which owns solar and wind farms.
She described her leadership style as collaborative.
Id like to work toward alignment around a set of priorities, setting context and discussing where were trying to go, she said. And then building a team in a high-trust, high-transparency, respectful environment where members of the team are empowered to move forward and demonstrate accountability for what were trying to accomplish.
She knows Charlotte
Charlotte Chamber president Bob Morgan said that Dukes hiring from within its ranks means the incoming CEO wont need an introduction to the community.
She knows Charlotte and she knows what makes Charlotte work and Dukes role in that. We would expect to see Dukes civic role to continue.
Scott Carlberg, president of the energy coalition E4 Carolinas, said Goods diverse background running business units and financial operations make her a good successor to Rogers.
She has good credibility with Wall Street, he said. Wall Street cares about financial performance, which is a pretty objective scorecard.
Under Rogers, Duke became the largest U.S. utility, took high-profile positions on climate change and other issues and enlarged its civic role.
The rocket has taken it to the top of the clouds, and now its time for a new pilot, Carlberg said. Lynns going to have to forge her own path on who she works with and how she works with them.
Henderson: 704-358-5051; Twitter: @bhender
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