Duke director grew wary of 'controlling' ex-Progress CEO
RALEIGH, North Carolina, July 20 |
RALEIGH, North Carolina, July 20 (Reuters) - Duke Energy's board grew frustrated with then-Progress Energy Chief Executive William Johnson's lack of transparency about a troubled nuclear power plant in the months before their merger closed, Duke's lead director said on Friday.
Ann Maynard Gray, the Duke director, told the North Carolina Utilities Commission that lack of disclosure about the plant and Johnson's "controlling" management style prompted Duke's board to seek his resignation just minutes after Duke completed the $18 billion deal that put him in the CEO job.
"I think the reasons why Bill was asked to resign were unique to his leadership style," Gray testified.
Duke's purchase of Progress created the nation's largest utility but sparked anger from the regulators in Raleigh, where Progress was based, because of the removal, which returned Duke's James Rogers to the top job.
Johnson got off to a rocky start in his first meeting with the Duke board in 2010, when he gave a presentation and discussed how he liked to operate.
"He did describe himself as an individual who likes to learn but not to be taught. That was an expression that stayed with the board," Gray said.
Later, as regulatory approvals dragged on, the Duke board judged information provided by Progress on the status of repairs at Progress's Crystal River nuclear plant as lacking.
Duke's board requested that Johnson set up a face-to-face meeting with Rogers and the head of Nuclear Electric Insurance Ltd (NEIL) to discuss a claim Progress filed with NEIL, but it only yielded a telephone call with NEIL nine weeks later. NEIL insures electric utilities for expenses arising from nuclear contamination and other problems at nuclear plants.
That type of delay to a board request would never have happened inside Duke, she said.
"I think a number of the Duke directors were stunned," Gray said.
On Thursday, Johnson testified before the Utilities Commission that he believed Duke tried to back out of the deal after the Federal Energy Regulatory Commission imposed expensive requirements on the companies to reduce their market power.
Duke has denied it sought to scuttle the deal, and said it made every effort to comply with the merger agreement.
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