Stunned NC agencies investigating CEO switch at Duke Energy

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Duke CEO Jim Rogers has been ordered to testify to state regulators Tuesday about the surprise decision to put him in charge of Duke after its $32 billion merger with Progress Energy.

N.C. utilities regulators and Attorney General Roy Cooper have announced separate investigations into the unexpected switch of chief executives after Duke Energy Corporation? ? Duke Energy Corporation Latest from The Business Journals Could Duke Energy-Progress merger be rescinded?Johnson might get .7M after leaving Duke EnergyReport: New Duke Energy board pushed Johnson out Follow this company and Progress Energy, Inc.? ? Progress Energy, Inc. Latest from The Business Journals Commission may revisit Duke Energy merger after Johnson's departureWhat folks in Raleigh do not know about Duke's RogersDuke, Progress merger puts nuclear projects in doubt Follow this company merged Monday.

While it is not clear what action either group could take, it is clear that they feel misled by representations that former Progress CEO Bill Johnson would run the new Duke (NYSE: DUK) after the merger. The N.C. Utilities Commission says it had no warning that the new board would instead immediately get Johnson?s resignation and reappoint Duke CEO Jim Rogers to the top post.

Duke has been publicly mum on the reason for the switch. Duke?s lead independent director, Ann Maynard Gray, said during a conference call Tuesday that Duke would not discuss Johnson?s resignation.

Commission wants answers

But now the utilities commission has ordered Rogers to appear at a hearing Tuesday to testify about the decision. The commission says it is the ?first step ... in an investigation of the timing of the decision to replace Johnson with Rogers, as well as other matters.?

Duke spokesman Tom Williams says Rogers will appear at the hearing as ordered.

Cooper cited a decision by Standard & Poor's? ? Standard & Poor's Latest from The Business Journals Stunned NC agencies investigating CEO switch at Duke EnergyFriedman: Irving may be saying the 'L' word over developmentS&P drops Dynegy corporate rating to D Follow this company to review Duke?s credit rating because of concerns over the unexpected CEO change. That could lead to higher borrowing costs for Duke if it cannot satisfy S&P on the reasons for the move.

Says Cooper: ?We need to get to the bottom of this to make sure we protect consumers,? who could ultimately face higher bills if the credit rating is downgraded.

Trust issues

Duke has long had a reputation for good relations with regulators, particularly in the Carolinas. But the replacement of Johnson appears to be a clear misstep that could cost Duke years of building good will and trust. And it follows regulatory issues in Indiana over an increasingly expensive coal plant and the questionable hiring of a regulatory attorney during those proceedings.

John Downey covers the energy industry and public companies for the Charlotte Business Journal.

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