The real story of the Progress Energy Duke Energy merger isnt about Bill Johnson. Thats why the N.C. Utilities Commission and Attorney General Roy Cooper should drop their investigations into his resignation and butt out.
The new Duke Energy has much bigger problems to contend with than questions about Johnsons ouster. It doesnt need the distraction of two showboat inquiries. The Utilities Commission has the biggest hammer and can do real damage. It can withdraw its merger approval, and the possibility of that action could depress Duke and Progress Energys market value. Lets not forget that numerous North Carolinians and retirees own Duke and Progress stock.
More importantly, the AG and utilities commission have no case. Duke didnt deceive anyone. Even though Johnsons boat was sinking when Duke representatives appeared before the commission in late June, they were right to keep their leadership concerns private. As new Duke CEO Jim Rogers told the commission Tuesday, "Corporate decisions are announced when they are made, not when they are contemplated." At that time - as it is today - the issue before the commission was whether or not the Progress-Duke merger was in the best interests of North Carolina citizens, not Johnsons career.
Ironically, it is the commissions actions since Johnsons departure that have sullied his professional reputation. By forcing Rogers to publicly account for Johnsons forced resignation, weve learned the Duke board was dissatisfied with Johnsons management of Progress Energys nuclear portfolio as well as his inability to hear different points of view.
That cant help Johnson at his next job interview.
Thats not to say theres been no harm, no foul in this whole affair. Duke shareholders will probably come to the next annual meeting loaded with pointed questions. Were I a Duke shareholder, Id ask the board why they agreed to merge with a company whose nuclear assets are in such sad shape.
Johnson may be gone, but the problems that helped cost him his job remain. Primary among those problems is the Crystal River nuclear plant in Florida. What a mess.
In late 2009, Progress crews cut a 23 by 27 foot hole into the 42-inch concrete containment wall around one of the plants reactors in order to replace a steam generator. However, that hole led to serious cracks in the containment wall and the plant has been shut down ever since. All accounts Ive read agree that repair attempts by Progress have only made the problems worse.
Progress has finally contracted with an outside firm to make the repairs, but the bill could be north of $2 billion. Mothballing the reactor is an option, but that could cost just as much as repairing it. All along, Johnson has downplayed the cost of Crystal River damage, saying ultimately the industrys insurer will pick up most of the tab. However, the insurer hasnt made that commitment.
Then theres the possibility of a secret, independent study ordered by the Duke board. Jim Warren of NC Warn maintains there was one and it concluded that problems at Crystal River are far worse than reported. The studys existence has not been acknowledged by Duke but more could be known Aug. 13, when the Florida Public Service Commission gets a Crystal River status report.
Regardless, Crystal River is Dukes problem now, and thats a relief in Florida. The Tampa Bay Times asked two environmentalists and a nuclear industry consultant which management team Duke or Progress was best equipped to resolve the Crystal River quagmire. For a variety of reasons, all three agreed on Rogers and the new Duke team.
Ironically, the North Carolina utilities commission had an opportunity to hear concerns about Crystal Rivers possible impact on North Carolina ratepayers under a merged company. It declined. Therefore, the commission has a moral obligation to drop its pointless investigation so Rogers and the new Duke team can give full attention to the merger that has gotten off to a less than powerful start.
Contributing columnist Rick Martinez (email@example.com) is news director at WPTF, NC News Network and SGRToday.com