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CEO’s rise at Duke Energy grew from Enron fiasco

A life-changing career disaster and the moxie to plunge into industries dominated by men led Lynn Good from small-town Ohio to the 48th floor of the Duke Energy Center.

The tower’s top floor, whose views show steam rising from Duke’s Catawba and Allen power plants on the horizon, is a pinnacle in a few ways.

Duke is the nation’s largest utility, and Good, 54, will join only seven other female CEOs among the 200 U.S. investor-owned utilities.

Good’s promotion from chief financial officer solves a pressing problem – replacing CEO Jim Rogers after Duke’s board dumped his successor-apparent last summer.

In choosing an executive whose entire utility career has been under Rogers, it boosts hopes for a seamless leadership transition and presents investors with a familiar, well-regarded face.

And after a merger with Raleigh’s Progress Energy that ignited an investigation by regulators who sensed a bait-and-switch in Progress CEO Bill Johnson’s abrupt firing, Good brings a straight-shooting persona that colleagues say isn’t hype.

Bechtler Museum of Modern Art President John Boyer gushes that Good, his board’s treasurer, is “exceptionally brilliant when it comes to the rhythm of the numbers” in making quick sense of spreadsheets.

“She has a wonderful candor with which she reports to the board,” he said. “There’s a native sense of transparency around her that can only be a good thing.”

Sanford C. Bernstein analyst Hugh Wynne says Duke missed a chance to hire a chief executive from outside the company to recover from a string of problems, from ethical scandals to cost overruns, during Rogers’ “erratic performance” as CEO.

“Nonetheless,” Wynne wrote last week, “our own view is that Good’s personality and professional background augur calmer days ahead.”

Bright and passionate

High in the corporate headquarters at the Duke Energy Center, Good looked relaxed amid hectic days of interviews, employee meetings and calls to regulators last week.

As CEO, she promises a leadership style “that really brings people together in a respectful, trusting way, accountable for an outcome.” The promotion goes into effect July 1.

Good grew up in the small town of Fairfield, Ohio, the daughter of educators who she said imparted support and a firm work ethic. She spent much of her career not far from home in Cincinnati before moving to Charlotte when Duke merged with Cinergy in 2006.

“My approach will be to work through (problems) in a fashion that will be deliberative and thoughtful, engaging the team and the board as we tackle tough issues, and deal with it in a high-integrity, high-respect manner,” she said.

Former co-workers say that approach harkens back to the “think straight, talk straight” mantra of the once-acclaimed Arthur Andersen accounting firm, where Good worked for two decades.

A former Andersen managing partner, Cincinnati resident Dave Phillips, said Good was part of a second wave of women who broke into the male-dominated world of public accounting in the early 1980s. She became the first female partner in Andersen’s Cincinnati office.

“She was superb. First of all, she’s extremely bright, very passionate about the work, very committed,” Phillips said. “She’s a total professional, very clear on what needs to be done and has the kind of attitude that ‘I’m going to get it done.’ She’s a bright but caring person, soft-spoken but you know who’s in charge.”

Breaking new ground

Good shrugs off the significance of a woman being named Duke’s day-to-day leader.

She’s worked so long in male-dominated fields, starting with her computer science studies at Ohio’s Miami University in the late 1970s and later with utilities, that “it probably seems normal to me.”

“The reality is, it was harder for her,” said Valerie Newell, who worked at Arthur Andersen when Good was hired as a young CPA. Newell is now chairman of Riverpoint Capital Management in Cincinnati.

Good and her husband, Brian, who has worked in computer science and software development for IBM and other companies, have been married for 30 years, swapping job demands and child-rearing duties.

Despite her partner status, Good worked part-time at Andersen for several years when her two sons, now a rising college sophomore and incoming freshman, were toddlers.

“The women executives in Cincinnati are whooping it up,” Newell said. “We always knew she had the competence to do a job like this; we just never knew if she would get the chance.”

At Andersen, Good became one of the first women allowed to audit Cincinnati Gas & Electric, Newell said, a prestigious boy’s club of an account. Good was “willing to tackle any challenge.”

“The way Lynn really wins people over is that she is likable and charming – but then they find out how gosh-darn smart she is,” Newell said.

While Good speaks with pride of her years at Arthur Andersen, the company was also the source of her biggest professional heartbreak.

Shifting paths

Good had been a partner for a decade when, in a flash, everything changed. Found guilty of obstruction of justice related to the collapse of the Houston energy company Enron, Andersen surrendered its accounting licenses.

“Everything I’d worked for, 20 years of my career, was gone between March 15 and May 15 of 2002,” she said. “And so it was really a time to be a little bit introspective about what was important to you. Where does happiness come from? What is your asset? Is it who you work for or is it you?”

Happiness, she concluded, came from family and relationships. Her best asset, to be nurtured and prepared for a next step, was herself.

After less than a year at another accounting firm, Deloitte & Touche, Good knew it was time to leave accounting for a field where having been an Andersen partner wouldn’t be a handicap.

“I was really looking for an opportunity to restart my career,” she said.

The fresh start began at Cinergy, which merged with Duke in 2006.

Good had long loved the complexity of utilities – a Kentucky natural gas company was her first client at Andersen. Duke Energy Carolinas’ most recent rate-hike filing runs a virtually impenetrable 5,000 pages and is still growing.

Good found utilities’ arcane mix of financial and regulatory problems “interesting and challenging.”

Off the job, Good has been a supporter of the arts. Apart from her work with the Bechtler, she served three years as president of the Cincinnati Ballet.

Rogers enlarged Duke’s civic role in its headquarters city, notably in bringing the 2012 Democratic National Convention to Charlotte. Under Good, Duke says, the company may choose different projects but won’t lower its profile.

“We’ll still be very much involved in Charlotte, no question,” spokesman Tom Williams said.

Good’s down-time focuses on family. Her husband and sons are golfers, although Good won’t reveal her own handicap. Lately the family has embraced the dizzying speeds and burning rubber of Formula 1 racing.

Egged on by her elder son, John, an F1 fan, the family attended the Canadian Grand Prix last summer and now watches televised races together.

“Fernando Alonso of team Ferrari is the driver we love in our family,” the incoming CEO says.

Daunting to-do list

At work, Good’s appointment checks off one more item on Duke’s daunting to-do list.

In the past year, the company has resolved cost overruns at a new power plant in Indiana that was also the source of an ethics scandal. The Edwardsport plant, which uses new technology to reduce pollution from coal, cost Duke shareholders $865 million in write-offs. It finally started operating this month.

“I do think the first-of-a-kind technology was more challenging than the company identified and embraced at the time the project was announced,” Good said.

Allegations of improper contact between Duke officials and Indiana regulators also led to the resignation in 2010 of the president of Duke’s regulated utilities, Jim Turner, who had been viewed as a possible successor to Rogers.

The aftermath of the Progress merger, and subsequent state investigations, soured Duke’s relationship with its most important regulator, the North Carolina Utilities Commission.

Duke agreed to management changes, including Rogers’ departure as Duke’s chairman by the end of the year. In May it won the commission’s approval of a Duke Energy Progress rate hike, which some analysts see as a signal of healing relations.

“We are working hard to maintain and build on trust and confidence in our relationship with the commission,” Good said. “It’s been a very high priority for (Executive Vice President of Regulated Utilities) Lloyd Yates and his team, and it will be a very high priority for me.”

Good called commission Chairman Edward Finley the day Duke announced her promotion. She’ll meet with Finley and other commissioners in a few weeks.

She’ll hit the road after the July 4 holiday to spend time with employees, regulators and community leaders in each of the six states that Duke serves – the Carolinas, Florida, Ohio, Kentucky and Indiana.

Within the company of about 27,000 employees, she said, there’s work left to meld two corporate cultures and operating systems. Financial and human resources systems will be unified for the first time next January, 18 months after the merger’s close. Other changes will unfold into 2016.

“I don’t think there’s anything I’m burning to change,” Good said. “In a transition like this, your objective is smooth stability. When you think about where Duke has been over the last year and then you expand that to an 18-month (merger) approval process, I think the workforce has been waiting for stability.”

Good said she supported the Progress merger, and still does, because it gives Duke the financial heft to attract financing on good terms and spread costs over a broad asset and customer base. She said she had no input into the board decision to fire Johnson.

“The position we have today as the largest utility in the industry is an enviable position,” she said. “The merger has put us in a place that positions us very well for the future.”

The company will also press for regulatory changes.

Duke wants its commercial side to be able to build renewable-energy projects within its regulated Carolinas service territory, as it does in other states. It wants to refine the way it compensates customers with small solar arrays. Duke would also like to be able to increase rates gradually instead of in big chunks every few years, a change Good says would help customers and Duke.

As it digests Progress, Duke might not be done with mergers.

As it spends billions of dollars to replace older, dirtier, less efficient power plants, Duke’s electricity sales have flat-lined. Utilities across the nation are experiencing similar problems, and some see consolidation as a way to operate more efficiently and profitably.

“These things develop opportunistically, so we’ll look at them if they become available,” Good said, “but it’s not our highest strategic priority.”

Henderson: 704-358-5051 Twitter: @bhender
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