Duke Energy provides no evidence or explanation about charges it hid billions in costs
Statement from Executive Director Jim Warren:
Durham, NC – Duke Energy seems to believe it can simply avoid making a substantive argument against NC WARN’s motion to reopen evidentiary hearings based on the utility’s withholding of information in its merger with Progress Energy. Possibly Duke believes the NC Utilities Commission will simply defer to its corporate giant-ness as Florida commissioners did this week in their “welcome Mr. CEO” session with Jim Rogers.
With Duke failing, in its formal response to our motion, to provide either explanation or evidence to challenge our arguments, and because no other entity has rebutted our case, it seems clear that the Commission should grant our motion. At last, Duke must put on the table – and defend under oath – all information necessary to determine if the merger provides a net public benefit and, therefore, should stand or fall.
The Commission must determine if, prior to the merger’s June 29 approval, Duke knew that repair costs at Crystal River were “trending higher.” CEO Jim Rogers didn’t use that term during his July 10 testimony to the Commission but began using it shortly afterward. Similarly, the Commission must determine why Duke failed to disclose $2.2 billion in planned upgrades to the Progress nuclear fleet even though the associated rate hikes would overmatch the public savings that the merger legally relies upon.
NOTE: Some news outlets have not yet reported on the public advocacy side of the merger scandal, and your audiences are missing out. If you think NC WARN’s case isn’t strong because Duke’s PR team says so, note that Duke’s attorneys continue declining to make that case in the formal record.
Yesterday NC WARN filed our reply motion – the final filing prior to a ruling on this matter. Below are the highlights.
. NC WARN earlier requested that the Commission reconsider the merger order because of new and significant information that has come to light since September 2011 hearings. A “show cause” order would allow the parties to formally present evidence and testimony on the issues, and to cross-examine witnesses, and would be consistent with the Commission’s investigation.
. The response position of Duke Energy was that NC WARN’s motion was premature. But Duke did not provide any basis for this position and more important, did not rebut any of NC WARN’s assertions about the nondisclosure of matters material to the merger.
. In that response, Duke did not address the clear and concise statements of CEO Rogers and others in the investigation hearing, about the changes of circumstances between the September 2011 merger hearings and the June 29, 2012 approval. These factors provide more than adequate basis to meet the Commission’s test for reconsideration. They include the actions and inactions leading to the Duke Energy board’s firing of Bill Johnson as CEO because of the expressed “lack of confidence” in his leadership. Rogers presented a list of factors why the Duke Energy board made its decision, including the lack of transparency (especially around the Nuclear Energy Insurance Ltd.’s refusal to pay for the mismanagement of repairs at Crystal River), the safety and reliability of Progress Energy’s nuclear fleet, and the lack of a realistic assessment of the options at Crystal River.
. Duke Energy knew, or should have known, that the costs of repairs at Crystal River were trending much higher than initially expected. The relevance of the costs at Crystal River, along with the significant $2.2 billion investment in the legacy Progress Energy nuclear fleet in the Carolinas, is crucial to the Commission’s ultimate determination of whether the merger is justified by the public convenience and necessity.
. The announced benefit to the public from the merger is the $650 million in fuel savings promised by Duke Energy, and the costs of Crystal River and the Progress Energy nuclear fleet in all likelihood far outweigh those savings. Those costs are both relevant to the merger, and undisclosed by Duke Energy in the merger docket.
. Since the Commission’s Public Staff and Attorney General took no position on NC WARN’s Motion for Reconsideration, NC WARN asserts that our position represents the best interests of the public.