The nation's top utilities regulator, who oversaw the approval of the merger between Progress Energy and Duke Energy last month, staunchly defended the right of a corporate board to fire the CEO and replace him at will.

The comments by Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission, suggest that even if such a CEO switch is unpopular with other board members, employees and state regulators, "everybody needs to move on."

Wellinghoff made his comments Tuesday at an industry conference in Washington. His remarks were reported by Bloomberg News.

Wellinghoff's remarks came in response to reporters' questions about Charlotte-based Duke's firing of CEO Bill Johnson, 58, just hours after the merger was completed July 2. Wellinghoff noted that he's not specifically discussing Duke or Johnson because the FERC docket on the matter remains open and he can't comment on it, Bloomberg reported.

"I believe that a board of directors of a utility has the right to decide whoever they want to run the utility," Wellinghoff said at a Platts Energy Podium. "Once the board of directors does that, regardless of their timing, I think everybody needs to move on."

State regulators want a thorough explanation why private settlements made by Duke Energy and Progress Energy with large power customer should be considered trade secrets and kept from public view.

The N.C. Regulatory Commission said this afternoon it wants the two electric utilities, along with those who entered the confidential settlements, to justify by Friday their rationale for keeping the settlements sealed.

Raleigh-based Progress and Charlotte-based Duke reached about 15 private deals with rural electric cooperatives, municipal power agencies and large industrial power users last year. The deals protect the co-ops, munis and industrials from paying any costs related to the Progress-Duke merger, which was completed July 2.

N.C. Waste Awareness and Reduction Network, a Durham group that opposes the merger, petitioned the N.C. Utilities Commission to unseal the settlements, saying the private deals could be detrimental to the public. N.C. WARN was joined by a coalition of media organizations, including The News & Observer, that contend the contents of the private deals should be disclosed.

The parties to the settlements have argued their settlements contain trade secrets, but they have not provided specifics or details. The utilities commission wants "the settling parties to file statements designating the specific provisions of their settlement agreements that they contend are exempt from public disclosure."

Call it the unofficial Bill Johnson Fan Club.

Current and former employees of Progress Energy and Duke Energy are posting their testimonials about the deposed utility chief executive on a web site created by a former Progress PR handler who considers Johnson a personal friend and mentor.

The site -- http://mybilljohnsonstory.com/ -- is reminiscent of a virtual memorial wall funeral homes create for the deceased, suggesting the sorrow Johnson's firing from Duke Energy has engendered among his admirers.

Aaron Perlut, the architect behind the site, wanted to provide legions of Johnson admirers an outlet for their emotions.

Johnson was ousted from Charlotte-based Duke Energy on July 2, mere hours after the company finalized its merger with Raleigh-based Progress Energy. Johnson, 58, had been CEO at Progress since 2007 and was slated to run the combined company.

The N.C. Utilities Commission and the N.C. Attorney General are investigating the ouster. Duke CEO Jim Rogers testified before the commission last week, saying Duke's board lost confidence in Johnson for his "autocratic" bearing. Johnson is set to testify on Thursday.

"The tipping point for me was the use of the word 'autocratic' in Jim Rogers' testimony, because nothing could be farther from the truth," Perlut said by phone. "[Johnson] is really the most democratic leader I have ever dealt with."

Obviously, this is not how Duke Energy wanted things to go. Big, powerful companies and their top executives do not like to be embarrassed.

In case this letter makes you laugh in the midst of your anger over the Duke-Progress Energy merger situation. Anybody got a better name?

In light of recent events, I suggest a contest to select a new name for America’s largest electric utility. I’ll start things off: Duplicity Power.
Jim Sampson
Youngsville
 

One of the leading Wall Street credit firms placed Charlotte-based Duke Energy on a watch list for a potential downgrade in the wake of the sudden departure of Bill Johnson, who was slated to be CEO of the company after it merged with Raleigh-based Progress Energy.

Standard & Poor's Financial Services made its "CreditWatch Negative" announcement on July 4 when the stock markets were closed. S&P cited "negative implications in response to the abrupt change in executive leadership" made right after the merger closed on Monday afternoon.

S&P will next make a decision whether to downgrade Duke from A- to BBB+ or keep the current rating unchanged. A downgrade would potentially increase the interest rates at which Duke borrows money.

"The sudden shift in management raises concerns about effective corporate governance, successful handling of the anticipated merger integration, and the ongoing effective management of pending challenges that face the combined entity," said S&P credit analyst Dimitri Nikas in the statement.

Translation: Johnson's abrupt departure threatens the status of formerly Progress executives who have suddenly lost their patron and protector.

Corporate mergers are known to trigger power struggles and turf battles among executive ranks fueled by outsized ambitions for power and money. Analysts are concerned that Johnson's departure could cause internal turmoil and distractions from the company's mission.

Duke said Tuesday morning that Johnson left the company by mutual agreement. Johnson had been CEO of Progress for five years and was to be CEO at Duke after the merger, creating the nation's largest electric utility. His departure shocked employees and dismayed state regulators who had approved the merger on the understanding that Johnson would head the combined company.

To many Johnson's exit increasingly looks like a palace coup in which other ex-Progress executives could depart or be pushed out. However, Duke has offered assurances that all the ex-Progress executives have safe jobs if they want them.

S&P also put Duke's subsidiaries, including Progress Energy, on CreditWatch with negative implications.

Long-time Progress Energy CEO Bill Johnson who was expected to lead the new Duke Energy has resigned.

In a press release Tuesday morning, Charlotte-based Duke Energy announced the formal completion of its merger with Raleigh-based Progress Energy. The statement also announced that Duke's board of directors had appointed Jim Rogers as president and chief executive officer of the combined company, effective immediately.

According to the statement Bill Johnson "resigned as president and chief executive officer of the combined company by mutual agreement."

When the merger was announced in January 2011, both companies said Johnson would become CEO of the country's largest utility. His plan was to move to Charlotte, and various members of Progress Energy's executive team were relocating as well. There was no explanation given as to why he stepped aside.

A conference call is planned for 8:30 this morning to discuss the announcement.

State regulators are already hearing from organizations that have cut private financial deals with Duke Energy and Progress Energy and want those agreements kept out of public view.

The N.C. Utilities Commission set a Thursday deadline for organizations to make their arguments, and all are expected to argue that their private deals with the electric utilities contain "trade secrets." Some 15 deals were made in the past year with Progress and Duke in exchange for the organizations agreeing not to oppose the power companies' proposed merger.

Now, as the proposed $26 billion merger enters its endgame phase, the secrecy of those private deals has emerged as a subplot in the bigger drama. Their secrecy is being challenged by N.C. Waste Awareness and Reduction Network. The Durham environmental group that says the confidential financial guarantees could harm other customers, particularly the elderly and low-income.

The organizations in the private deals are industrial power users, rural electric cooperatives and municipal power agencies, together representing about 1.4 million power customers in the state. They have received written assurance that they will not have to bear any financial costs from the proposed merger between Raleigh-based Progress and Charlotte-based Duke.

"It seems obvious that the contents of these agreements have commercial value to all parties in this Docket," said a filing made today by municipal power agencies.

N.C. WARN, the Durham-based nuclear watchdog group, wants to grill Progress Energy CEO Bill Johnson or another top-ranking company executive in a public hearing. And if the Raleigh-based electric utility resists, N.C. WARN wants to use subpoena power to force executives to submit to questioning.

N.C. Waste Awareness and Reduction Network laid out its strategy in a filing made Wednesday with the N.C. Utilities Commission. The Durham group's request is part of the endgame in the proposed merger between Progress Energy and Duke Energy.

The N.C. Commission had denied N.C. WARN's previous requests for full hearings, but asked the organization to outline its claims for the legal record. The commission is expected to rule on the proposed merger soon, possibly this week.

Monday's hearing in the proposed merger between Progress Energy and Duke Energy lasted less than an hour and takes up all of 74 pages.

The N.C. Utilities Commission, which strictly limited the scope of the hearing, issued the transcript Tuesday afternoon. The actual questioning by the sole remaining opponent to the merger, N.C. Waste Awareness and Reduction Network, took about a half-hour, the rest of the time being devoted to procedural matters.

It was clear from the brief hearing that the N.C. Commission plans to rule quickly, potentially this week. The N.C. Commission on Tuesday afternoon gave parties until Thursday to make last-minute filings, signaling again that the ruling could be imminent.

Raleigh-based Progress and Charlotte-based Duke plan to form the nation's largest electric utility and hope to get the deal done by July 8. Their merger was approved conditionally this month by the Federal Energy Regulatory Commission.