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Ties to Duke Energy abound in N.C. Utilities Commission appointees

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In January, clean energy activist Jim Warren did his civic duty the old-fashioned way.

In a formal letter to then Gov.-elect Pat McCrory, Warren and state AARP Director Doug Dickerson asked McCrory, a 28-year Duke Energy employee, to recuse himself from appointing the newest members of the N.C. Utilities Commission, a regulatory panel with the power to grant sweeping rate hikes for companies such as Duke.

Warren says he never received a formal response or an invitation for a meeting; there was only, as Warren puts it, a "muddled" reply through the media. "The governor-elect is going to do the job he was elected to do by the people of North Carolina," McCrory's team told reporters.

Five months later, Warren is still not satisfied. "He has not made any sort of justification for why he believes his obvious conflict of interest should not require any recusal," Warren says. "It's pretty obvious to most observers that he is conflicted."

Warren is bound for more disappointment this week. The N.C. Senate is preparing to confirm McCrory's second round of commission appointments this year, including the much-criticized selection of a longtime utility company lawyer as a public advocate in rate hike cases.

"It's pretty clear to us that Duke vetted these people," says Warren. "And that Duke still has far too much influence over various aspects of our state government."

If so, Duke's incentive is clear. Leaders announced last week that the utility giant, the nation's largest, reached a deal with the state's public staff to raise rates by roughly 5 percent for its North Carolina customers, about half the hike Duke requested in February. If approved, it would be the third rate increase for Duke in four years.

Duke Energy spokesman Tom Williams said the company is "looking forward" to working with McCrory's appointees. He added, however, that Duke is not playing a role in commission appointments. "Nor should we be," he said.

McCrory's late-April commission appointments—Rep. Jerry Dockham, R-Davidson, and Greensboro public relations consultant James Patterson—have not generated the attention spurred by McCrory's choice to lead the commission's public staff, an independent state body charged with representing the public's interests in energy rate cases. For that job, McCrory tapped Chris Ayers, a Wake County lawyer with a background repping for electric, water and wastewater utilities in regulatory cases before the commission.

Ayers, who did not return multiple INDY Week phone calls, acted as an outside counsel in state Attorney General Roy Cooper's ongoing bid to roll back Duke Energy rate increases from 2011. But critics say the bulk of his experience, which includes time as a utilities lawyer at Raleigh-based Hunton & Williams alongside current Commission Chairman Ed Finley Jr., indicates a looming conflict of interest. A letter from the state Ethics Commission to McCrory in April echoed that concern.

Under state law, the governor makes the appointments, but they require the confirmation of both chambers of the N.C. General Assembly. Rep. Paul Luebke, a Durham Democrat, unsuccessfully attempted to block Ayers' confirmation in the House last month.

"(Ayers) has spent his entire career working for the utilities side of the street, for the corporate side of the street," Luebke says. "He has no experience as a consumer advocate. He's not a legal aid lawyer. In no way has he any history of representing the using or consuming public."

Sen. Ellie Kinnaird, an Orange County Democrat, says she will oppose Ayers' confirmation if, as expected, it comes to a vote in the Senate this week. "It's very disturbing," Kinnaird says. "I think we have had a good public staff up until now."

The website for Ayers' current firm, Raleigh-based Poyner & Spruill, links to a blog where Ayers reports on various utility matters. The blog includes a March 26 entry—roughly a month before his nomination—in which he mostly sums up opposing arguments, but not the arguments in favor of, a now-stalled state House bill banning the public staff from giving advice or guidance to utilities.

As for Dockham's and Patterson's appointments, Democrats have indicated no major opposition. Dockham, a 12-term representative from Denton with a background in insurance, is vice-chair of the House's Public Utilities and Energy Committee.

Patterson, through his Greensboro public relations company, has worked with several big businesses, including Home Depot, Sara Lee, Waffle House and GlaxoSmithKline, according to the company's website.

Records checks show a relatively clean background for both men, though Patterson had a $23,911 state tax lien filed in Richland County, S.C., in 2009. Patterson did not return INDY Week phone calls to discuss his appointment or the lien.


N.C. Utilities Commissioners

If approved by the Senate, Gov. Pat McCrory's appointees to the N.C. Utilities Commission will join a seven-member roster tasked with regulating the rates and services of North Carolina's public utilities. Members once served eight-year terms, but lawmakers reduced that term by two years in 2011.

Here's a rundown of the commission's current members:

Chairman Ed Finley Jr., a Wilkes County native, was appointed by former Gov. Mike Easley in January 2007 to fill a vacant post. He was reappointed by former Gov. Bev Perdue in July 2011 for a term that expires in June 2019. Like Ayers, Finley is a former Hunton & Williams attorney with a history of working with utility companies, the same companies he now regulates on the commission.

William Culpepper III, of Elizabeth City, is an attorney with an extensive history in state politics. Culpepper served in the N.C. House from 1993 to 2005 and was an attorney for Chowan County for more than 25 years. Culpepper assumed the post in January 2006. His term expires at the end of this month.

Bryan Beatty, a New Jersey native and Easley appointee, spent most of his career in public safety, serving as secretary for the N.C. Department of Crime Control and Public Safety from 2001 to 2009 and leading the state's homeland security efforts. Prior to that, he led the State Bureau of Investigation. His term expires in June 2017.

ToNola Brown-Bland, a native of Alamance County appointed by Perdue in 2009, is a former attorney for AT&T. Brown-Bland led the business licensing office in the N.C. Department of the Secretary of State in 2001 before joining the Utilities Commission as an administrative attorney a year later. Brown-Bland's term ends in June 2017.

Susan Rabon, an attorney from Onslow County, was a top budget advisor for Easley. Before that, she served as chief of staff for the N.C. Department of Justice and worked in the Wilmington law office of Carr, Swails, Huffine & Crouch. Her term expires in June 2015.

Lucy Allen is a former state House member and former middle school teacher from Franklin County. Allen also served for 16 years as mayor of Louisburg, which owns and operates its own municipal electric system. Allen is a Perdue appointee whose term expires at the end of this month.

Don Bailey is the newest member of the Utilities Commission. A retired engineer, he was sworn in Monday morning after McCrory appointed him in February. Bailey is a former engineer and manager with Monroe alloy manufacturer ATI Allvac. Before that, he was a regional engineer for the N.C. Department of Environment and Natural Resources. His term expires in June 2017.


This article appeared in print with the headline "Power grab."

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