North Carolina utilities regulators said Wednesday they have hired a veteran federal prosecutor to oversee the state’s investigation of Duke Energy and the company’s abrupt firing of its chief executive last month.
The N.C. Utilities Commission hired Anton Valukas, chairman of the Chicago-based law firm Jenner & Block, to handle the state’s probe.
Valukas and his legal team are expected to request internal documents and to interview current and former Duke executives and board members. The commission has already made voluminous document requests and conducted hours of hearings on its own to hear testimony from four Duke board members, ousted CEO Bill Johnson and current CEO Jim Rogers.
Under state law, Charlotte-based Duke will be billed for Jenner & Block’s investigative work. The firm has 450 lawyers and offices on the East Coast and West Coast but does not have an office in the Southeast.
The commission is investigating whether it was deliberately misled by Duke as to who would lead the power company after it merged with Raleigh-based Progress Energy. The commission approved the merger in late June with the expectation that Johnson – who had been CEO of Progress since 2007 – would run the combined company.
Hours after the merger was finalized on July 2, Duke forced Johnson to resign as CEO and reinstalled Rogers. Johnson’s firing triggered a firestorm of protest from Progress employees and former board members.
The commission has the authority to rescind the $32 billion merger or modify its terms. The hiring of a special investigator suggests the commission could reopen the merger proceedings.
Valukas, a former U.S. attorney in Illinois, has expertise in special investigations and was the court-appointed examiner in the bankruptcy proceedings of investment bank Lehman Brothers, the largest such case in U.S. history. The resulting 2,200-page chronicle, which became known as the “Valukas Report,” detailed the implosion of Lehman Brothers in 2008, an event that brought the global financial system to the brink of collapse.
Duke spokesman Tom Williams issued a short statement saying the power company will not interfere with the law firm’s probe.
“We have fully cooperated with the North Carolina Utilities Commission in its recent investigation of Duke Energy, and that will continue,” Williams said.
The combined Duke has 7.1 million electricity customers in six states, including 3.2 million in North Carolina.
Robert Gruber, director of the state’s Public Staff consumer advocacy firm, said he doesn’t expect the commission to repeal the merger but said the selection of a firm of the caliber of Jenner & Block signals a long-term commitment to a thorough investigation.
“I think they’re going to let this firm work through this, before they (the commission) do anything,” Gruber said. “But that doesn’t mean the commission won’t consider (settlement) proposals (from Duke).”