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NC official probes utility merger after CEO change

Associated Press Published: July 6, 2012

RALEIGH, N.C. (AP) — The sudden decision to replace the chief executive tapped to run America's largest electric company has prompted North Carolina's attorney general and regulators to launch investigations into whether consumers were misled.

Attorney General Roy Cooper on Friday demanded that the new Duke Energy Corp. provide all information and communications from top company officials and directors leading up to and just after the merger that was concluded on Monday. The North Carolina Utilities Commission said it's launching an investigation and is ordering the new Duke Energy CEO, Jim Rogers, to appear at a hearing Tuesday

Cooper last year opposed a Duke Energy rate increase, which the Charlotte-based company said it needed to protect its credit rating.

"Now this significant management change within hours after the merger has put the company on credit watch, so we need to get to the bottom of this to make sure we protect consumers," Cooper said in a statement.

Standard & Poor's placed its ratings for Duke Energy on watch for a possible downgrade in response to the sudden leadership change. Progress Energy CEO Bill Johnson had been scheduled to lead the combined company as chief executive, but hours after the merger closed Monday, the new company announced he had decided to leave by "mutual agreement." Instead, Rogers was remaining to run the expanded company.

The company has refused to disclose the reason for the last-minute change.

Duke Energy spokesman Tom Williams said Rogers would appear at Tuesday's utilities commission hearing and that the company was reviewing Cooper's request.

State law allows the utilities commission to rescind or alter its prior decision approving the merger. Duke Energy and Raleigh, N.C.-based Progress Energy said in company documents describing their merger and in sworn testimony by Johnson and Rogers that Johnson would be CEO of the combined company.

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