Duke Energy names interim president amid probe

October 12, 2010

Duke Energy Corp. said Tuesday that it has appointed an interim president to lead its Indiana operations while the utility reviews e-mails between employees and state regulators involved in an ethics controversy.

Doug Esamann, senior vice president of corporate strategy for Charlotte, N.C.-based Duke, assumes leadership from the utility’s Indiana CEO, Mike Reed. Reed was placed on administrative leave by the utility on Oct. 5.

The decision comes amid a state investigation that resulted in the dismissal of the chairman of the Indiana Utility Regulatory Commission.

Gov. Mitch Daniels fired IURC chief David Lott Hardy for allegedly allowing an agency official to continue presiding over a Duke Energy case even after talking with the utility about a job opportunity.

The Oct. 5 firing of Hardy follows Duke’s hiring of Scott Storms, who had been administrative law judge for the IURC. Storms was presiding over a handful of cases involving Duke, including matters involving cost overruns at Duke’s Edwardsport generating plant.

Duke also has placed Storms on administrative leave from his position in Duke’s legal-regulatory department at its Plainfield office. Reed and Storms will be on leave “pending the completion of a full evaluation,” Duke said in an announcement.

The company has hired the Los Angeles-based law firm of Gibson Dunn & Crutcher LLP to conduct an independent investigation.

“We regret that hiring an attorney from the IURC has raised questions about the manner in which we conduct our business,” Duke President and CEO James E. Rogers said in a prepared statement. “We will investigate this thoroughly and will take whatever actions are appropriate.”

A series of e-mails, obtained by The Indianapolis Star under a public-records request, show an apparent close relationship between Hardy, Storms and Reed.

Esamann will oversee Duke’s regulatory, governmental relations and economic development activities in Indiana while the investigation continues.

Esamann, a Plainfield native and a graduate of Indiana University, joined Public Service Indiana (later called PSI Energy, a predecessor company to Duke) in 1979. From 2001 to 2004, he served as president of PSI Energy.


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