This story is about the utility that serves the majority of TWW users, so I thought it deserved a chit chat thread. In case you didn't know, Duke and Progress Energy merged and is now the largest utility in the nation. So:

Duke + PE --> "merged entity"

old Duke CEO: Rogers
old PE CEO: Johnson

--- mrfrog summary ---

Duke was the larger of the two, so Duke ate PE. They combined their executive boards (who vote on the big decisions), but since Duke was larger, the old Duke board makes up the majority of the board of the merged entity. This means they can fire the CEO if they want. When the merger deal was struck, Johnson was set to become the CEO of the merged entity. Specific details are unclear, but it appears that Duke executives knew at the time of the deal that they didn't want Johnson to be the CEO. They let the merger go through anyway and on the first day as the new merged entity, they used the force of their majority to fire Johnson and make Rogers the CEO of the merged entity.

Now, there are some stakeholders (from PE) who say they wouldn't have approved the deal if they knew this would happen. The company also owes Johnson $44 million for firing him. Oh, and a part of his contract was that Johnson can't speak negatively about the company in order to get the payment. So it's a little bit like shut-up money.

3 of the board members quit over the matter, and shareholders don't like it because the utility board doesn't like it - and they're the ones who set rates. But for some reason, having Rogers as CEO was just that important to the board members.

-- end mrfrog summary and the attack of the words --

What do y'all think?

7/11/2012 2:03:39 PM

TLDR

mrfrog thinks we read books #YOLO

7/11/2012 2:04:18 PM

Just tell me what to think.

7/11/2012 2:04:51 PM

i think who cares

7/11/2012 2:06:29 PM

Does any of that really matter? On the scale of corporate shenanigans this registers pretty low.

7/11/2012 2:08:20 PM

^ i disagree. i think it's damn shady, myself

the official line from Rogers is that as the merger progressed, the Duke Board members found Johnson's management style to be cause for concern and that's why they chose to oust him. And they couldn't make their intentions known before the deal was finalized b/c it would mean Duke would owe Progress a bunch of money for letting the deal fail and as such it was their fiduciary responsibility to complete the merger.

[Edited on July 11, 2012 at 2:12 PM. Reason : i don't trust a single one of them. i just know consumers are gonna get screwed eventually]

7/11/2012 2:09:34 PM

Quote :

"Just tell me what to think."

There is concern that "consolidation" of utilities is a way for corporations to build negotiation power to increase rates. So a valid thought might be that the consumers will get screwed. The fact that Duke execs played tricks for a power grab does not instil confidence.

I've actually attended a seminar by Rogers before. It wasn't very special, his words were very political. But fyi, his background is as a trial lawyer.

mrfrog's opinion of former trial lawyers is not high.



[Edited on July 11, 2012 at 2:11 PM. Reason : ]

7/11/2012 2:10:05 PM

screw you too mrfrog

also, I'd be pretty happy with a $44 mil severance.

[Edited on July 11, 2012 at 2:11 PM. Reason : not all trial lawyers are evil. ]

7/11/2012 2:11:03 PM

Quote :

"On the scale of corporate shenanigans this registers pretty low."

Because the formation of the largest utility entity in the US based on deception is pretty small. Not to mention the first act of this company was to back out of a promise and now they control the electricity for almost everyone in NC.

7/11/2012 2:12:53 PM

not all supervillains are evil either

[Edited on July 11, 2012 at 2:13 PM. Reason : they should have written into the deal that dude couldn't get the boot within X number of days]

7/11/2012 2:12:53 PM

typical corporate bullshit

7/11/2012 2:13:38 PM

The entire merger has been shady. They initially wanted to pay for severance packages (for the people laid off as a result of the merger) with a massive rate increase. The utility board had to shoot that down.

7/11/2012 2:17:26 PM

Quote :

"Because the formation of the largest utility entity in the US based on deception is pretty small."

It may have taken a bit longer but the merger would have gone through anyway, so using a little deceit to speed things along... plus of course people are going to come out of the woodwork to say that I wouldn't have done x if y. They seize opportunity to make themselves out to be a good guy with yet more deceit.

I guess they were just following typical business practices - or maybe pulling a page out of the local politician handbook. Hold vote after vote on a lottery until some key dudes finally go on vacation, hold votes at 2:00AM to wear down old ladies to the point where they can't tell the difference between a yes and no button, etc.

Also: I'm guessing the true issue is the merger itself. How much difference is one CEO over another going to make? Was the old CEO Mr. Charity McSaint and the new guy Dr. Fatneck Exxon Jr.?

[Edited on July 11, 2012 at 2:25 PM. Reason : -]

7/11/2012 2:17:43 PM

Quote :

"the first act of this company was to back out of a promise "

I can hear the Fox News argument now, if you didn't want them to change CEOs you shouldn't have given that power. This is the kind of slime that makes people hate our corporate and political leadership. It comes down to an argument that you can't trust anyone beyond what you've written in contract and put a monetary penalty behind.

If you want my real opinion, it's that the regulated utility model is dangerous at this point. You see deregulation happening all over the nation and that change has been resisted here. Why? Do you want your electricity prices to come from a bidding process in a real market, or do you want to appoint a utilities board to babysit the corporate players?

Regulated monopolies are not the way to go anymore. This mega-utility is scary in a certain sense.

7/11/2012 2:18:47 PM

oh snap! A central issue to the disagreement between Johnson and the old Duke board was over the Crystal River nuclear plant that's been shutdown for a long time. Apparently Rogers thinks PE might have pushed too hard for restart.

Reinforces the idea that new leadership may axe segments that are in the red short-term. Problem is, these are multi-decade assets.

7/11/2012 2:47:05 PM

whats the new entity's stock symbol

i wanna see what my old PE stock is worth

7/11/2012 2:51:31 PM

I WANT THE POWER

7/11/2012 2:54:04 PM

http://www.google.com/finance?q=NYSE%3APGN
The PGN symbol is historical, it is not trading anymore

http://www.google.com/finance?q=NYSE%3ADUK

7/11/2012 3:01:12 PM

just tell me who to pay my electric bill to!

7/11/2012 3:03:11 PM

fuck yeah, 66 dollar bucks

it was always around 52 when it was PGN

7/11/2012 3:05:54 PM

mine has gone from 70 to 110.

granted it was hotter last month. that's bullshit though

7/11/2012 3:18:11 PM

i'm talking about stock prices dog, not electric bills

7/11/2012 3:19:46 PM

Both companies increased in value ~5 yr time frame

It's no surprise why.



If you're with PE, then you've seen your winter rate go from about 8.5 cents/kWh to 9.5 and the summer rate from about 9.5 to about 10.5 in the last 5 or so years. You probably don't notice, but I promise you the stockholders noticed.

[Edited on July 11, 2012 at 3:43 PM. Reason : ]

7/11/2012 3:41:17 PM

I mean listen, we're sitting here talking about stock prices
not an electric bill, not an electric bill, not an electric bill
but we're talking about stock prices.

7/11/2012 3:41:17 PM

Shenanigans?

7/12/2012 6:23:54 PM

So how do I get hired with DE/PE? I bet you get paid well and have great benefits don't you, mrfrog?

7/12/2012 6:42:54 PM

Corporations gonna corporate

I'm Krallum and I approved this message.

7/12/2012 7:11:16 PM

Progress Florida is worse...

http://www.tampabay.com/opinion/editorials/stop-the-fleecing-of-progress-energy-customers/1228472
http://in.reuters.com/article/2012/07/12/utilities-nuclear-crystalriver-idINL2E8IB9JF20120712
http://www.mcclatchydc.com/2012/03/01/140475/floridas-crystal-river-nuclear.html

Summary: they broke their nuclear plant trying the first ever "do it yourself" steam generator replacement, and got their customers rates jacked to start saving for not only the repairs but for another plant that likely will never be built.

7/12/2012 10:43:19 PM

Quote :

"In 1908, Raleigh Electric, Central Carolina Power and Consumer Light & Power merged to form Carolina Power & Light. In 1952, CP&L added southeastern North Carolina to its service territory with the acquisition of Tide Water Power. In 1987, CP&L placed the Shearon Harris Nuclear Power Plant into service. In 2002, subsequent to the 2000 acquisition of Florida Progress Corporation, CP&L began doing busines as Progress Energy, Inc.[1] It then distinguished its operations as Progress Energy Carolinas and Progress Energy Florida. In 2012, now swallowed up by Duke Power. "

7/12/2012 11:20:44 PM

Quote :

"the official line from Rogers is that as the merger progressed, the Duke Board members found Johnson's management style to be cause for concern and that's why they chose to oust him."

What's the unofficial reason, if there is one?

This is not dissimilar from how Jobs was ousted from Apple, I wouldn't be surprised if this kind of thing wasn't responsible for a lot of CEOs losing their jobs.

It's not TOO uncommon, but it is shady.

7/12/2012 11:26:17 PM

Our next Governor, Pat McCrory, is basically being sponsored by Duke Energy as their official candidate.

7/12/2012 11:38:07 PM

how does this affect the ratepayer?

7/12/2012 11:39:39 PM

Quote :

"Our next Governor, Pat McCrory, is basically being sponsored by Duke Energy as their official candidate."

I bet he's praying this inquiry doesn't blow up in his face

7/12/2012 11:40:29 PM

He has such a fundraising advantage that the election is simply a formality, even if this does blow up.

Also, the Republican controlled state senate turned down 4 million dollars from the feds to boost early voting in NC when all they had to do was put up a much smaller amount of money to qualify, but instead they increased the budget for the inauguration ceremony for the Governorship after the election. That's how sure they are about who is getting elected.

7/13/2012 12:21:09 AM

Quote :

"What's the unofficial reason, if there is one?"

Rogers, in the interview with the utilities board, made the point over and over again that the board "decided" to fire Johnson in the first few hours after he officially became CEO. The WSJ reported that sources (who remained anonymous so they could keep their job) confirmed that the board knew "weeks" in advance that they would fire Johnson.

If they had decided they were going to fire Johnson before the merger they would have had an obligation (on several legal levels) to disclose this information (to several stakeholders). But it turns out they just had a meeting and decided to fire him that day. Sure, they had talked about firing him before the merger, but they didn't decide to do so. They were mutually confident that they would later decide.

See, I can be 100% sure I'm going to do something tomorrow. But if my wife asks, then I can say I haven't decided. I'll just think to myself that I know I'm going to do it, and put the deciding off until later.

No harm no foul amirite?

[Edited on July 13, 2012 at 12:49 AM. Reason : ]

7/13/2012 12:48:22 AM

BUt why would they want Rogers of Johnson?

Was Johnson a jerk? an idiot? a maverick? Just dirty personal politics?

7/13/2012 12:58:34 AM

Ok, a CEO and his board are like BFF.

Think of 2 single parents marrying. Kids have innate loyalty to their original parent, and just won't see the step parent the same. It's just like that here, except that the kids have voting power. So the parent (CEO) who has one more kid (board member) than the other parent will be elected chief of everything should it come to a vote.

Make more sense now?

[Edited on July 13, 2012 at 1:21 AM. Reason : ]

7/13/2012 1:21:01 AM

I get that.

So are you saying it was just personal? Since there were more Duke people, they wanted to see their own Duke guy in charget?

They had no specific beef with Johnson?

7/13/2012 1:32:04 AM

The board's vote was along company lines.

7/13/2012 1:36:07 AM

http://www.wral.com/news/state/nccapitol/video/11314450/#/vid11314450

So crazy. The General Assembly is banking on McCrory winning to the tune of $750,000.

It's absurd that they are increasing the funds for the coronation, but rejected $4 million from the Feds for North Carolina's economy in terms of assistance for more poll worker training, more election equipment maintenance, and more voting sites when the amount of matching funds they'd have to put up to get the $4 million is less than they are spending on the inauguration.

7/13/2012 8:13:48 PM

Rogers is more willing to get the supertility where it's planning to go. Hope you P&I traders are ready.

7/13/2012 9:55:59 PM

Maybe I don't recall correctly, but I could have sworn Duke/Progress said this would save consumers money... but both are expected to request rate increases this year... so... save money?

7/18/2012 10:00:32 AM

I think I'd be okay with getting fired if I was handed $44 million

Quote :

"So crazy. The General Assembly is banking on McCrory winning to the tune of $750,000. It's absurd that they are increasing the funds for the coronation, but rejected $4 million from the Feds for North Carolina's economy in terms of assistance for more poll worker training, more election equipment maintenance, and more voting sites when the amount of matching funds they'd have to put up to get the $4 million is less than they are spending on the inauguration."

I'd laugh if he ends up losing.

[Edited on July 18, 2012 at 10:16 AM. Reason : a]

7/18/2012 10:12:56 AM

we are going to get fucked over my this. Nothing good will ever come of it.

7/18/2012 11:34:09 AM

buy stock in the company and use the earnings to help supplement the raised rates. the only thing i don't like is the 3-1 stock split that just went through thus lowering my total shares owned. granted the total value is the same but still..

7/18/2012 1:37:21 PM

Quote :

"3-1 stock split that just went through thus lowering my total shares owned"

Does not compute

7/18/2012 3:01:53 PM

come to rocky mount, where ALL of your utilities (electricity, gas, water, sewer, trash, recycling) come from the city & cost about 25% more than progress/duke energy.

the logo is a little creepy imo

7/18/2012 3:05:53 PM

7/18/2012 10:06:08 PM