Duke Energy Corp. asked state regulators Tuesday for a weekslong postponement of testimony by two top directors about the surprise CEO switch at the top of America's largest electric company.
The North Carolina Utilities Commission last week ordered Duke Energy board members Michael Browning of Indianapolis and Ann Maynard Grey of Stamford, Conn., to testify on Friday.
Longtime local businessman Browning has been director of Duke and its predecessor utilities in Indiana and Ohio since 1990. The chairman of Browning Investments Inc. is a member of the Central Indiana Business Hall of Fame.
State regulators say they want to know whether they were misled in approving Charlotte-based Duke Energy's takeover of Raleigh, N.C.-based Progress Energy with the understanding that Progress CEO Bill Johnson would lead the combined company. Corporate directors had privately discussed changing that arrangement weeks before the commission's June 29 approval cleared the last major hurdle to the deal.
Johnson was dumped within hours after the merger closed July 2. Pre-merger Duke Energy CEO Jim Rogers regained his job atop the company that now serves more than 7 million customers in North Carolina, South Carolina, Kentucky, Ohio, Indiana, and Florida.
Duke Energy told the commission that any testimony Friday would be unfairly soon for Grey and Browning. It added that the regulatory body doesn't have the authority to subpoena out-of-state residents. Both directors are willing to appear after Duke Energy produces documents that regulators want by the end of the month, the company added.
In an accompanying statement, Grey said she believes the commission's "line of inquiry is unwarranted."
"I respectfully request that the commission accept the decision that the board has made, even if the commission disagrees with it, and allow Duke to move forward," Grey wrote. "I am concerned that the inquiries and investigations that have now been launched may delay Duke's ability to accomplish" the task of integrating the companies.
State law allows the commission to rescind or change its decision approving the merger. The regulatory board also approves electricity rate increase requests. Both Duke Energy and Progress Energy, which remain separate operating companies in the Carolinas, are expected to seek rate increases later this year.
Grey said she would not publicly discuss the reasons Duke Energy directors dropped Johnson unless required to do so by the commission, but emphasized that Rogers did not seek out the chief executive job.
Rogers testified last week that directors told him they were disappointed with Johnson's authoritarian-seeming style, his handling of ongoing problems with Progress Energy's closed Crystal River nuclear plant in Florida and the company's financial performance.
Johnson has not responded to the criticism, in part because one of the conditions of his separation agreement is that neither he nor Duke Energy speak ill of the other. Johnson leaves the company with nearly $45 million in severance, pension benefits, deferred compensation, and stock awards.
But legal proceedings are an exception, meaning that Johnson could offer his version of events when he testifies under oath to the utilities commission Thursday. His testimony will be followed by with two former members of Progress Energy's board of directors who joined Duke Energy's board.
Also Tuesday, a Duke Energy shareholder filed a lawsuit alleging company directors hurt investors by misleading North Carolina regulators about who the CEO would be.
The lawsuit filed in a Delaware court by Alabama shareholder Lesley Rupp contends Duke Energy's directors engaged in a bad business practice by appointing and dumping Johnson within hours after the merger closed. The lawsuit contends the CEO surprise antagonized regulators who set electricity rates worth billions of dollars in annual revenues.
Duke Energy says the lawsuit lacks merit.