Duke Energy settles Ohio suit

Duke Energy Corp. settled a lawsuit over the weekend brought by a former employee who said he was fired after questioning payments made to some of the utility's largest Ohio customers.

Details of the out-of-court settlement are confidential.

The payment program, which Duke calls option agreements, is also the subject of a federal anti-trust lawsuit brought in January. That suit claims the Charlotte-based utility improperly rewarded industrial customers in Ohio with privately negotiated rebates in exchange for support for a rate increase in 2004.

The lawsuit claims large industrial users were opposed to the rate hike until they started receiving special prices, which offset the rate increase just for them. The lawsuit says that was unfair to other customers and constituted fraud. The lawsuit said Duke has paid as much as $100 million since 2004 to its biggest Ohio customers as part of the scheme, which the suit says amounted to “kickbacks" and "sham transactions.”

Duke says that the option agreements were not rebates and were reviewed by Ohio regulators last year, said Steve Brash, a Duke spokesman. The utility plans to fight the federal lawsuit, he said.

The lawsuit, filed in federal court in Ohio, seeks unspecified damages to pay back customers and to punish the utility.

The Charlotte-based utility provides electricity to about 4 million customers in the Carolinas and three Midwest states – Indiana, Kentucky and Ohio. It has 1.1 million electric and natural gas customers in Ohio.

There are various rate structures in North Carolina, depending on the size of the user. Up until Jan. 1 – when N.C. rates decreased across the board – base rates had not changed in 16 years.