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Duke Energy reaches settlement agreement with NC Attorney General

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CHARLOTTE, NC (WBTV) -

Duke Energy announced Thursday that it has filed a settlement agreement with the North Carolina Utilities Commission and CEO Jim Rogers is stepping down as part of the agreement.

This agreement was reached between Duke Energy, the staff of the NCUC and the North Carolina Public Staff.

Following approval, the agreement would resolve all issues related to the matters under review by the NCUC regarding Duke Energy's change in president and chief executive officer following the close of the merger between Duke Energy Corp. and Progress Energy Inc. on July 2, 2012.

"This settlement agreement is an important step forward for the company because it resolves one of our key near-term priorities: bringing closure to the NCUC merger review process," said Jim Rogers, chairman, president and CEO. "We are already delivering significant benefits from the merger for our customers and investors and are well-positioned for the future as a stronger, more efficient organization."

Under the agreement, which is subject to approval by the NCUC, Duke Energy agrees to the following key provisions:

• Providing additional merger commitments, including: maintaining at least 1,000 employees in Raleigh, N.C.; guaranteeing an additional $25 million in fuel and fuel-related cost savings to North Carolina customers; and making $5 million in additional contributions to support workforce development and low-income assistance in North Carolina

• Making certain personnel changes, including moving Lloyd Yates, currently executive vice president, customer operations, into the position of executive vice president, regulated utilities, and appointing a new general counsel

• Creating a special committee of the board to oversee the recommendation of a successor to Rogers upon his retirement, and the search for two new board members

• Agreeing to defer filing a general rate case by Duke Energy Carolinas, LLC in North Carolina until February 2013, with the understanding that it will be allowed to defer the depreciation and operation costs of new generation incurred from the commercial operation of such new generation until the effective date of new base rates

• Retaining the former general counsel of Progress Energy Inc. to advise the company for two years on regulatory and legislative matters in North Carolina.

The parties agreed that the settlement agreement does not constitute and should not be construed as an admission or acknowledgement of any illegal or improper acts by Duke Energy. 

The current general counsel as well as the company's executive vice president, regulated utilities, will assume new leadership roles to be announced following the NCUC's approval of the settlement agreement.

Duke Energy will provide proportional fuel, fuel-related, workforce and low-income assistance financial benefits to its South Carolina customers. These are in addition to and consistent with recent merger-related commitments to customers in the state and are expected to total between $8 and $9 million.

On Monday, the company also reached a settlement with the state attorney general's office.

The following are some of the major details of the settlement:

• The Attorney General will not object to the settlement reached with the NCUC.
• The Attorney General preserves all rights in future Duke Energy rate cases in North Carolina.
• The Regulatory Policy and Operations Committee of the Duke Board of Directors will meet with the Attorney General periodically.
• Duke Energy will retain an independent entity to survey North Carolina customers about their satisfaction with their electric service and how it could be improved, and report the results to the Attorney General within one year.  
• Duke Energy will retain an independent entity to survey its employees regarding merger integration and post–merger operations, and report the results to the Attorney General within two years.
• Duke Energy will designate a liaison in the company to communicate with the Attorney General on customer-related information.
• Duke Energy will pay $250,000 to the Attorney General's office to defray fees and expenses related to the post-merger investigation.

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