CINCINNATI - Duke Energy Corp. confirmed Monday that it has reached an out-of-court settlement with a former employee who claimed he was fired for questioning payments the utility made to some major corporate customers.
Former employee John Deeds’ lawyer also confirmed that a settlement was reached over the weekend. Both sides refused to disclose terms of the agreement.
Deeds filed the lawsuit after losing his job in 2005. He accused Duke of retaliating against him after he told supervisors the $22 million in annual payments appeared to be sham transactions.
Companies receiving the payments included Procter & Gamble Co., AK Steel Holding Corp., General Electric Co., Ford Motor Co., General Motors Corp., BP North America, Marathon Petroleum Co. and several hospitals, according to court documents in the case.
Duke described Deeds as a disgruntled employee and said the contracts were legitimate option agreements that ensured the businesses would buy electricity from Duke instead of a competitor.
A separate lawsuit charging antitrust violations also has been filed over the contracts. It claims the payments were kickbacks that Duke paid in exchange for the companies dropping opposition to a rate increase in 2004.
The increase pushed residential rates up nearly 30 percent. Duke officials said the deals had no impact on rates and the increase was needed because rates had been frozen for about 10 years.
The Ohio Consumers’ Counsel, which represents residential customers in rate cases, has opposed the agreements, claiming they discriminate against residential customers.
The lawsuit charging antitrust violations is still pending in U.S. District Court, and both sides said the settlement of Deeds’ lawsuit will have no effect on the federal court case.
The utility was known as Cinergy Corp. in 2004 when it requested the increase in rates for electricity. Charlotte, N.C.-based Duke bought Cinergy in 2006.