AG issues Civil Investigative Demand to Duke Energy
Release date: 7/6/2012
Statement by Attorney General Roy Cooper:
“Despite our objection, Duke Energy said it needed a rate increase in order to protect its credit. Now this significant management change within hours after the merger has put the company on credit watch, so we need to get to the bottom of this to make sure we protect consumers.”
Attorney General Roy Cooper’s office has issued a Civil Investigative Demand
(CID) to Duke Energy in order to determine whether there were misrepresentations or misstatements made by Duke Energy and/or its’ representatives to consumers or regulators in proceedings related to their request for a rate increase and their merger with Progress Energy and to determine whether there will be a detrimental effect on consumers. Standard and Poor’s Financial Services placed Duke Energy on a watch list for potential credit downgrade in the wake of the merger and Cooper is concerned that this could lead to higher utility rates. The CID requests information and all communications from top company officials and directors during the time period leading up to and just after the merger.
At a rate hearing in November, 2011, Cooper opposed Duke Energy’s proposed rate hike based on the recession’s effect on consumers and “changing economic conditions” outlined in NCGS § 62-133. As a main argument for the rate hike, Duke Energy argued that the rate of return to Duke Energy shareholders should be high enough to protect the company’s credit rating and encourage investments. In March, Cooper appealed to the North Carolina Supreme Court the Utilities Commission’s decision to grant Duke Energy a 7% rate increase and that appeal is still in progress.
Media contact: Noelle Talley or Jennifer Canada (919) 716-6413