Something about the reports coming out of Charlotte are making the Duke Energy merger feel more like a break-up than the start of a new relationship. The merger with Progress Energy was supposed to create one of the biggest utilities in the world, with some 7.1 million customers. Instead, the only thing it seems to be creating so far is a lot of bad press for the newly merged company.
For those who are still catching up, Progress Energy CEO Bill Johnson was supposed to take charge of the newly merged Duke Energy. Instead, shortly after the merger was finalized, reports came out that Jim Rogers would be the top man at Duke instead of Johnson, as was previously agreed upon.
In effect, Rogers was swapped out for Johnson with Johnson having "served" as CEO for less than a day. Duke called this a "mutual agreement," but that phrasing has sounded fishier as time has gone by and people have talked to the press.
Jim Rogers himself laid out Duke's side of the story, telling the North Carolina Utilities Commission, which is looking into the CEO shuffle that followed the merger, that the board simply lost confidence in Johnson as the merger process advanced.
Rogers' people were concerned about Johnson's management methods, Rogers said, adding that the Duke people were afraid Johnson and his people would try to impose Progress Energy's culture onto the merged company.
Rogers said Johnson's management style was "autocratic" and tended to crowd out other points of view. These concerns were held by the Duke people for quite a while, but apparently weren't bad enough to stop the merger in its tracks. It seems they decided that Johnson was the issue, even as they agreed to make him CEO of the combined company.
Duke Energy officials have said, somewhat defensively, that they had a contractual obligation to make Johnson the CEO, and they did — albeit for less than a day.
Meanwhile, the mainstream press is full of stories about Johnson's "$44 million payday," with "nice work if you can get it" being the go-to punchline.
What we're not hearing much of yet, though, is Johnson's side of the story. Right now it's looking like less of a merger of equals and more that Duke Energy simply swallowed Progress Energy whole. Keeping Johnson as CEO was supposed to ensure that Progress Energy's interests were well-represented in the early days of the new Duke Energy's operations, but now that won't be happening.
One thing's for sure: People will be talking, and soon. The latest development in this story is the departure of many Johnson loyalists from Duke. The vice president of regulated utilities, the executive vice president and chief administrative officer and the chief integration and innovation officer have each just handed in their resignations. We'll be keeping an eye on this story, so stay tuned.
Wednesday, July 11, 2012
Thursday, July 5, 2012
Fukushima a disaster made in Japan
The Japanese government's official report on the Fukushima-Daiichi nuclear disaster hit the internet earlier this morning and now everyone is picking apart what it means.
The parliamentary report purports to assign some level of responsibility for the accident, and the part that is making headlines so far is the finding that it was "man made," which must be opposed to a natural disaster — even though it was a natural disaster that touched the meltdowns off in the first place. The report, by the way, took half a year to put together, and the commission who authored it had the authority to compel government agencies to surrender pertinent information whether they wanted to or not.
Man-made failures that occurred both before and after last year's earthquake and tsunami were chiefly to blame for the Fukushima disaster, the report holds. This is probably the strongest-worded rebuke that plant operator TEPCO has received through official channels to date.
The commission's chairman wrote that the triple meltdown cannot be regarded as a natural disaster, but went on to say that it could have been prevented with a more effective human response.
In a twist that might be hard for Westerners to understand, the report places blame on Japanese culture itself.
"Its fundamental causes are to be found in the ingrained conventions of Japanese culture: Our reflexive obedience, our reluctance to question authority, our devotion to sticking with the program, our groupism and our insularity," according to the preface of the report. "Had other Japanese been in the shoes of those who bear responsibility for this accident, the result might well have been the same."
It's sharply worded indeed, but it also comes right on the heels of the 1 trillion yen (or about $12.5 billion) bailout from the Japanese government that will both save the company and put the government in charge of it. At least temporarily, if all goes as planned.
It's interesting to note that this report, unlike some others, did not specifically say that the magnitude-9 earthquake did not damage equipment or structures at the Fukushima plant. Most other reports held that the plant withstood the earthquake only to succumb to tsunami damage.
These findings could challenge some of the design assumptions the Japanese nuclear industry and the Japanese government (which are, even now, regarded as especially cozy) have stood by over the past few decades.
The report devoted a good deal of attention to the relationship between industry and government in Japan, implying that TEPCO lobbied the government to slacken regulations. To build this case, the commission requested information from Japan's Nuclear and Industrial Safety Agency.
Government mismanagement of the situation as it evolved, the report also said, didn't help matters. The report's writers made it explicit that TEPCO can't and shouldn't try to pin blame on the government, however.
When Japan's government gave the nod to restart the first reactors to complete their required stress tests, those restarts were met with public protests. The public, perhaps understandably, thinks nuclear energy is too dangerous. A suite of new safety requirements — maybe passed in the wake of reports like this one — could create a new argument for protesters: That nuclear power is too expensive.
The parliamentary report purports to assign some level of responsibility for the accident, and the part that is making headlines so far is the finding that it was "man made," which must be opposed to a natural disaster — even though it was a natural disaster that touched the meltdowns off in the first place. The report, by the way, took half a year to put together, and the commission who authored it had the authority to compel government agencies to surrender pertinent information whether they wanted to or not.
Man-made failures that occurred both before and after last year's earthquake and tsunami were chiefly to blame for the Fukushima disaster, the report holds. This is probably the strongest-worded rebuke that plant operator TEPCO has received through official channels to date.
The commission's chairman wrote that the triple meltdown cannot be regarded as a natural disaster, but went on to say that it could have been prevented with a more effective human response.
In a twist that might be hard for Westerners to understand, the report places blame on Japanese culture itself.
"Its fundamental causes are to be found in the ingrained conventions of Japanese culture: Our reflexive obedience, our reluctance to question authority, our devotion to sticking with the program, our groupism and our insularity," according to the preface of the report. "Had other Japanese been in the shoes of those who bear responsibility for this accident, the result might well have been the same."
It's sharply worded indeed, but it also comes right on the heels of the 1 trillion yen (or about $12.5 billion) bailout from the Japanese government that will both save the company and put the government in charge of it. At least temporarily, if all goes as planned.
It's interesting to note that this report, unlike some others, did not specifically say that the magnitude-9 earthquake did not damage equipment or structures at the Fukushima plant. Most other reports held that the plant withstood the earthquake only to succumb to tsunami damage.
These findings could challenge some of the design assumptions the Japanese nuclear industry and the Japanese government (which are, even now, regarded as especially cozy) have stood by over the past few decades.
The report devoted a good deal of attention to the relationship between industry and government in Japan, implying that TEPCO lobbied the government to slacken regulations. To build this case, the commission requested information from Japan's Nuclear and Industrial Safety Agency.
Government mismanagement of the situation as it evolved, the report also said, didn't help matters. The report's writers made it explicit that TEPCO can't and shouldn't try to pin blame on the government, however.
When Japan's government gave the nod to restart the first reactors to complete their required stress tests, those restarts were met with public protests. The public, perhaps understandably, thinks nuclear energy is too dangerous. A suite of new safety requirements — maybe passed in the wake of reports like this one — could create a new argument for protesters: That nuclear power is too expensive.
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