Duke Energy CEO apologizes to regulator over probe

The head of Duke Energy said he regrets that officials with the nation's largest electric company went too far in their criticism of North Carolina regulators responsible for setting rates in its top power market, according to a letter released Tuesday.

The North Carolina Utilities Commission released the letter from Duke Energy CEO Jim Rogers, which was required by a settlement ending the commission's probe into whether regulators were misled about a surprise CEO switch at the company. Duke Energy's takeover of Raleigh-based Progress Energy ended with the combined company dumping a Progress executive who'd been promised the top job, in favor of Rogers.

Charlotte-based Duke Energy denies any wrongdoing, but apologized and admitted it had "fallen short of the commission's understanding of Duke Energy's obligations" as a regulated utility — language required by the settlement finalized last week.

Rogers, the former CEO of Plainfield-based PSI Resources Inc., also said the company regrets criticizing the commission about its investigation. The expression of regret went a step beyond what the letter was supposed to contain.

"I wish we could retract the statements made regarding the manner in which the hearings were conducted and regarding the commission's actions. We cannot undo what was said, but we acknowledge that our public criticism of the commission was inappropriate," Rogers' letter said. "We take our bond of trust with all regulators very seriously, and will work hard to continue to earn and maintain your trust."

Rogers and Duke Energy board members called to testify during hearings the commission held in July urged the regulator to drop its investigation and let the company focus on integrating the two Fortune 500 energy companies based in North Carolina. The deal created the nation's largest electric company. Duke director Ann Maynard Gray called the regulatory body's inquiry "unwarranted."

Last month, Rogers said that unless regulators treated Duke Energy fairly and properly, it might not keep its headquarters in North Carolina.

A Duke Energy spokesman later explained that Rogers wasn't warning the largest U.S. electric utility was thinking about moving its headquarters from Charlotte, just that a hostile regulatory environment in North Carolina could weaken Duke and leave it vulnerable to acquisition by a competitor.

Testimony during the commission's hearings and emails released as a result of its investigation indicated that Duke Energy directors considered for months dumping Progress Energy CEO Bill Johnson as head of the combined company, a leadership position promised to him and to regulators throughout the 18-month merger process. Johnson was dumped hours after the deal closed July 2, surprising regulators and investors.

Duke Energy hopes the settlement will clear the air as it gears up to ask the regulator to approve two large rate increases in its largest market. Duke Energy has 3.2 million customers in North Carolina and another 3.9 million in South Carolina, Ohio, Kentucky, Indiana and Florida.

Rogers will retire by Dec. 31, 2013 — a date announced simultaneously with the settlement.

Johnson was hired last month as chief executive of the Tennessee Valley Authority, the nation's largest public utility.