Electric exec may explain switch

Duke CEO Jim Rogers. (Raleigh News & Observer/MCT/File)

RALEIGH — Wall Street observers and consumers will be looking for an explanation from the new, surprise CEO of Duke Energy Corp. when he is grilled by North Carolina regulators investigating last week’s takeover of Progress Energy Inc.

The commission is demanding testimony today from Jim Rogers, the Duke CEO who wound up as the top executive of the largest U.S. electric utility.

State law allows the utilities panel to rescind or alter its June 29 decision approving the merger. Duke is based in Charlotte, and Progress is based in Raleigh.

Duke Energy has refused to explain a last-minute decision by its board of directors to reverse its longstanding plans to name Progress Energy CEO Bill Johnson head of the expanded company. Johnson is due to receive up to almost $45 million in severance, pension benefits, deferred compensation and stock awards.

One of the conditions of his separation agreement is that neither he nor the company speak ill of the other.

But legal proceedings are an exception, meaning that Rogers could reveal new details about what happened to sway Duke Energy’s board. “Jim will be able to speak more fully” about the CEO surprise, Duke Energy spokesman Tom Williams said Monday.

The utilities commission and N.C. Attorney General Roy Cooper launched separate investigations after Progress Energy board members said they felt misled about the merger plans.

Rogers’ testimony could be important in helping Duke soothe investors’ anxiety after the company’s share price lost 6 percent in the week after the merger closed, Wall Street analysts said.

A top concern for many investors is that North Carolina regulators could act on their misgivings by responding negatively to rate increase requests by Duke and Progress later this year, Credit Suisse analyst Dan Eggers said in a report to investors Monday. Duke and Progress will continue operating as separate electric providers. Both operate in parts of North Carolina and the Upstate, Pee Dee and Grand Strand regions of South Carolina.

“The question is, therefore, what could happen in the coming rate cases if the commission is in fact upset with the change or feels misled,” Eggers said. “A well-supported and reasonable explanation for the board’s decision to switch CEOs will end the conspiracy fears in the market and give confidence the Carolinas regulators will not be out to ‘get them.’ ”

Johnson signed a three-year contract days before the merger took effect July 2. But hours after the merger closed, the new company said he decided to leave by “mutual agreement.”