Duke Energy Corp's (DUK.N) chief executive will step down at the end of 2013 as part of a settlement with North Carolina regulators over the utility's leadership after it took over Progress Energy.
The dispute began when Duke CEO Jim Rogers assumed control of the combined company after the $18 billion purchase closed in July, even though Bill Johnson of Progress had long been slated to take the helm of what became the largest U.S. power utility.
The CEO decision sparked outrage in North Carolina, the company's biggest market, and the North Carolina Utilities Commission (NCUC) started holding hearings on the change just a week after the deal closed. Rogers then started settlement talks with the regulator in August.
"With his consent and in order to assist with the resolution of these matters, Mr. Rogers has chosen to retire on December 31, 2013, as he originally planned," said the settlement document, posted online by the NCUC on Thursday.
The parties agreed that the settlement did not represent an admission or acknowledgement of illegal or improper acts by the company.
Rogers has been Duke's CEO since 2006, and had been the CEO of Cinergy for 11 years before it became part of Duke. Duke said his retirement would coincide with the expiry of his employment contract.
As part of the settlement, a board committee would be created to oversee selection of a successor to Rogers and help search for two new board members, after a pair resigned in late July in protest against the ousting of Johnson.
The CEO search committee would make its "best efforts" to have a recommendation for a new boss by July 1, 2013, and not later than the end of 2013, said the settlement document.
The settlement must be approved in full by the NCUC, which sets profit margins of power utilities in the state.
Other commitments by Duke include maintaining at least 1,000 employees in Raleigh, North Carolina, for at least five years, as well as guaranteeing certain fuel and fuel-related cost savings for customers in the state.
There are also some executive changes that include moving Lloyd Yates, executive vice president for customer operations, into the position of executive vice president for regulated utilities, and naming a new general counsel by the end of 2012.
Duke will also need to retain the former general counsel of Progress to advise it for two years on regulatory and legislative matters in North Carolina, the company said.