The North Carolina Utilities Commission rejected a request by Duke Energy Corp. (DUK:US), the largest U.S. utility owner, to delay testimony by two directors about the surprise ouster of Chief Executive Officer Bill Johnson.
Directors Ann Gray and Michael Browning have had “ample time” to prepare for testimony scheduled July 20, the NCUC said today in an order. Duke yesterday asked to delay their appearance until the company had filed documents requested by the commission.
Johnson, contracted to succeed Duke CEO Jim Rogers upon his company’s $17.8 billion purchase of Progress Energy Inc., was replaced within hours of the deal’s July 2 close. The shares have fallen 4.5 percent since Duke announced the departure of Johnson, who was CEO of Progress prior to the companies’ merger.
Johnson is scheduled to testify before the commission tomorrow along with two former Progress directors.
Duke said Gray and Browning will appear at the hearing as requested, Dave Scanzoni, a company spokesman, said in a telephone interview.
Rogers told the commission on July 10 he’d learned June 23 from Gray and another director that Duke’s board “had doubts about Mr. Johnson’s ability to lead the combined company” and asked if he’d “step back in as CEO.”
“Growing friction between the two companies’ leadership” on how to resolve federal anti-competition concerns led Duke’s board, except Rogers, to meet with outside lawyers on May 3 to discuss whether Johnson should be CEO, Gray said in a statement filed July 18 with the commission.
Duke’s board decided June 23 the “least bad” option was to close the deal and act on Johnson’s status “immediately thereafter,” according to her statement. The board of the combined company voted 10-5 on a July 2 conference call to request Johnson’s resignation, she said.
North Carolina Attorney General Roy Cooper is also investigating the abrupt CEO switch. Florida regulators have asked Rogers to testify at an Aug. 13 hearing. Shareholders sued the Duke directors July 17, alleging that they misled investors and damaged the company’s reputation.
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