Progress Energy CEO Bill Johnson, who will lead the nation's biggest utility company when the merger between Raleigh-based Progress and Charlotte's Duke Energy is completed later this year, is suddenly in demand by the national media.
Johnson has taken advantage of his increased national profile to act as the electric industry's ambassador to a broader audience, extending far beyond the borders of North Carolina. In his speeches, Johnson has warned of higher energy costs and the perils of misguided regulation.
Just in the past week, Johnson, 57, has granted interviews to Fox News, Associated Press, Bloomberg News and Forbes.com. More media interviews are expected this week as Johnson continues making national appearances at industry conferences and events.
In the filmed Forbes.com interview, Johnson laid out the rationale for the Duke-Progress merger as a matter of economic survival.
"We're a small company compared to the capital program we have ahead of us," Johnson told interviewer Josh Wolfe. "The capital outlay ahead of us is just so daunting that we weren't big enough to do it [alone]."
Johnson was referring to planned nuclear reactors, smart grid transmission upgrades, power plant construction and other major projects that will cost in the tens of billions of dollars.
This morning Johnson spoke to state regulators in Washington, warning them that increased regulation could raise the cost of electricity for the poor and for cash-strapped businesses, along with all other customers.
"Call this regulatory picture what you will – “a train wreck” ... “a tsunami” ... or
“an overdue change that’s ultimately do-able," Johnson said. "It’s not hard to imagine the customer pushback that will occur because of the resulting increase in the price of electricity. This pushback will come from industrial customers struggling to be competitive, and from residential customers and small businesses struggling to make ends meet. As indicated, I’m especially sensitive to the households of modest means, where energy represents a disproportionately large share of disposable income."
Once the merger is completed, the combined Duke Energy would be ranked 109, right behind McDonalds, on the current Fortune 500 list of major American corporation. Progress's current ranking is 239, based on annual revenue.
The combined companies expect to save between $600 million and $800 million in fuel costs over five years by jointly operating their power plants for maximum efficiency. That estimated savings will range between 3.3 percent to 4.4 percent on the cost of coal and other fuels needed to run power plants.
Despite the corporate effciencies from the merger, the corporate union is expected to result in staff reductions and layoffs, many of which are expected to come from Progress's downtown Raleigh operations.
Johnson also said that Progress and Duke customers contributed to the merger.
"The other thing that's happened in recent years is customers are using less of the product, so we have an erosion of the top line," Johnson said. "In 2009, for the first time since World War II, there's a 4 percent decline in [electricity] usage nationwide."
Johnson noted that business and commercial customers go through usage cycles, but residential usage had been increasing for a half-century, until the recession crimped the public's appetite for energy.
"Never seen it in residential," Johnson said.