Former Progress Energy CEO Bill Johnson testified before the NC Utilities Commission that after federal regulators failed to approve the Duke-Progress “merger” for a second time, Duke Energy wanted to cancel the deal. We wish they had after learning more about what transpired.
In truth, even though Johnson (for whom we have great respect) and others have said how beneficial this “merger” will be, they never made the case to us. Saving on new nuclear power plants? They could have formed a join venture anytime. Economy of operation? The jury is out on that one. Rate savings to customers? They are back-peddling on that one as fast as they can. Greater returns to shareholders? Both stocks were doing pretty well before the merger but you can bet it will be years before Wall Street looks kindly on the new Duke stock, especially after the debacle that took place the day of the merger.
Duke’s lawyers were upset they didn’t get a chance to ask questions of Johnson during his testimony. Neither did we get the chance to interrogate Jim Rogers when he appeared. We would like to hear more from both sides. This deal not only tarnishes the reputation of two fine public utilities, but also negatively impacts all business. We do wonder, however, why we haven’t heard more indignation coming from political and other business leaders. It leaves the door open to speculation that harsh commentary could lead to loss of political support, charitable gifts, advertising, dues or other emoluments. Unfortunately, this whole “merger” feeds into the public’s fear and perception of corporate America, where large corporations gobble up others, decisions are made without thought of customer and employee interests, and all that matters is the monthly P&L and stock price. In the end, consumers are left disillusioned and reminded that bigger is not always better.
Sadly, the Utilities Commission is not likely to undo the deal because it will cause greater harm to undo it than to allow it to progress. But they can put the new company on notice that any new rate increases will bear intense scrutiny, as will management direction moving forward.
The more we learn the more many across our state are likely to agree, we want our Progress Energy back. But it isn’t likely to happen.