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Duke

Duke Energy lucked out in the Securities and Exchange Commission (SEC) trading probe, according to the Associated Press. The SEC let Duke Energy off with no fine for a lack of sufficient internal accounting controls.

Duke Energy traders misclassified about $56.2 million in trades from 1997 through 2002. Duke Energy traders gamed the system by manipulating records and drawing huge bonuses.

Have you noticed? There has not been anything resembling a scandal since Paul Anderson became chairman and CEO. Only a few years ago, lawsuits were popping like popcorn at Duke Energy.

Duke Energy agreed to cease and desist from future violations. This settlement was a new twist for Duke. Often Duke Energy makes a settlement, but does not admit any quilt. This time Duke agreed to stop making violations and received no fine.

Last month, Duke Energy was let off the hook in an air pollution case by a U.S. Appeals Court.

Ex-Duke VP’s Face 20 Counts

When Duke Energy spend years floundering around, making every conceivable mistake, it blamed all its problems on the media. Rather than promptly correcting the many mistakes, Duke chose to buy newspaper ads of the “I’m not a crook” Varity.

I Am Not a Crook

The media was only reporting the truth. Duke’s spin was that the media was out to get it. The executives, who preached accountability to employees, were totally unaccountable for their own actions. They were willing to blame anyone else, including the messenger.

The media does not care one way or the other about Duke Energy. No stories were fabricated to make Duke Energy look worse than it was. The reporters only reported the business news. When companies do stupid things, it will be reported. Only the most irresponsible executives will blame the media for reporting the news.

A case in point is TheStreet.com. It regularly roasted Duke Energy for legitimate reasons. But it also covered the one time that Duke Energy did something right. Former CEO Rick Priory was quick to point out the favorable article to employees. He ranted against the media for telling the truth, but touted the same media when it suited his purpose.

When Rick Priory was replaced by Paul Anderson, TheStreet.com was only too happy to report the improvments it brought about.

Duke Energy Cleans House in Finance Unit

As Duke Energy continues to improve, TheStreet.com continues to recognize the progress. It is not about “liking or not liking” Duke Energy. It is about reporters and financial commentators reporting the facts as they see them.

TheStreet.com recently featured this question from the 'Mad Money' Mailbag:

“Would you pick up Duke Energy with extra cash?

Christina from Brooklyn, N.Y."

James J. Cramer replied: “Even though the stock is trading at a 52-week high, up 18% for the year, Duke remains my favorite utility stock. CEO Paul Anderson has done a great job turning the business around, and the recently raised 31-cent quarterly dividend (4.1% yield) is above the industry average.”

Does that sound like someone “out to get” Duke Energy?

If a number of people tell you that you stink, there is a good change that you really do stink. Blaming the messenger will never solve the problem. Taking out newspaper ads that proclaim that you do not stink will not stifle the truth. Coming up with more slogans and "promoting the brand" will never help. If you stink, you do not need more spin doctoring, you need a shower.

Fox Convention Update

Power poles are created from trees and then are locked into an eternal battle against trees for domination. Trees have the advantage – they can grow. Duke Power attacks the trees around its power lines with chain saws and wood chippers.

Some customers approve of their trees being trimmed or cut down. Some customers do not care one way or another. When some customer find their trees mutilated, they are ready to do battle with Duke Power, according to the Winston-Salem Journal.

Some residents of Winston-Salem's Town and Country neighborhood consider themselves to be casualties of a chainsaw maniac, contracted by Duke Power. Some now call the neighborhood "Stump City."

John Giles describes Duke Power’s tree trimming as "Plundering, raping, butchering, destroying. You're looking at people who have been in these yards for 30 or 40 years, and their yards are their pride and joy. And they're just butchered."

Residents have complained that the contractor has been known to exceed the 15-foot right of way and ignore owners’ concerns. Officials of Pennsylvania’s Asplundh Tree Expert Company did not return calls.

If an ice storm knocks out power this winter, Duke Power will catch it from the other side for not keeping the trees adequately trimmed.

Hey, it was Duke executives who once promoted “100 Percent Customer Satisfaction.” That cute little slogan is about as realistic as “Zero Injuries.”

Another Duke Watchdog

A prize of 100 grand would be sweet. A “100 Grand” candy bar is sweet too, but not as sweet as 100 grand in greenbacks. A radio station tried to get cute with its prize of 100 grand, according to the Associated Press. Norreasha Gill was led to believe that she could win 100 grand in cash, but only won a “100 Grand” candy bar.

When Norreasha Gill won the contest, she bounced down to the station to collect her one-hundred-thousand dollars. She was told to come back later. The station manager left a message on her answering machine that she had actually won a Nestle's 100 Grand candy bar. Ms. Gill was not amused. Trying to weasel himself out of a tight spot, the manager offered her $5,000.

Ms Gill: "I said I wanted $95,000 more. Nobody would watch and listen for two hours for a candy bar."

The DJ’s probably had a good laugh. But now, Cumulus Media, which owns WLTO-FM in Lexington, Ky., is facing a lawsuit over breach of contract.

This is no joke: Duke Energy has given Nestle's 100 Grand candy bars as awards to employees. Of course, the workers did not really expect for Duke to give them 100 grand in cash.

Duke Energy employees did expect to receive the pensions that had been promised to them, in writing, for decades. They fully expected to received the retirement health care benefits that had been promised to them, in writing, for decades. Many workers feel that they received the financial equivalent of a candy bar, in lieu of their earned benefits.

To paraphrase Ms Gill: “Nobody would work for 30 years for a candy bar.”

She Won a New Toyota – Sort of

Be sure to complete your 2005 Duke Energy Employee Opinion Survey before the deadline. Below are some comments that have been sent in:

Values and Integrity

The 2005 Duke Energy Charter contains a number of bogus statements regarding values and integrity. It states:

"In conducting our business, we value: Integrity – Ethically and honestly doing what we say we will do."

Duke Energy is very integrity challenged and does NOT honestly do what it says it will do. In fact, Duke Energy expends great effort to avoid keeping commitments to employees. Duke Energy then distorts the facts and pleads ignorance, in an attempt to avoid taking responsibility for its actions.

Duke Energy sent statements to employees for years that detailed exactly what retirement benefits we would receive. Then Duke Energy used dubious methods to avoid doing what it said it would do.

Duke Energy has steadfastly refused to acknowledge its abuse of employee trust and even tired to sell the loss of pensions as a benefit!

Duke Energy took away retirement health benefits that were also part of employees' deferred benefits. Duke Energy told employees that if they worked the required number of years that these lifetime benefits would be earned. Only after having met the conditions to earn these benefits, did employees learn that Duke Energy will definitely NOT do what it said it will do.

The Duke Energy Charter also mentions "Respect for the Individual, trust, and teamwork." By baiting and switching on the benefits actually earned, Duke Energy has shown zero respect for the individual. Duke Energy has only shown contempt for employees. Duke Energy has a lot of nerve even using the word "trust."

The only teamwork at Duke Energy is the team of executives working over the employees by taking their benefits. Thousands of employees have lost basic benefits, so that a few individuals can reap obscene compensation.

The Duke Energy Charter lists as a value: "Win-Win Relationships – Having relationships which focus on the creation of value for all parties."

The actions of Duke Energy produce Win-Lose relationships between the executives and employees.

Another value listed in the Duke Energy Charter is "Initiative – Having the courage, creativity and discipline to lead change and shape the future."

Duke Energy shaped the future for employees, but the change was in the negative direction. Duke Energy did not even lead the negative change. It merely FOLLOWED the shaky schemes that other corporations seemed to be getting away with. Duke Energy paid a consulting firm to find ways to take benefits from employees.

The Duke Energy Charter states: "We will be successful when...Every employee starts each day with a sense of purpose, and ends each day with a sense of accomplishment."

In actuality, "Every employee starts each day with a sense of having had his benefits ripped off, and ends each day with a sense of having been lied to about it."

Other Topics – Safety

Duke Energy has made preposterous claims about preventing all injuries, sicknesses, and deaths on the job. But the actions of Duke Energy only promote more injuries. Many employees are forced to work a minimum of 12 hours a day, six days a week, during refueling outages.

Employees are also forced to travel long distances to work these long hours. Then the company appears surprised when accidents occur. It is well documented that as work hours increase, so do injuries. It is also well documented that as work hours increase, more mistakes occur and the quality of work diminishes. It is ludicrous to make impossibly optimistic safety predictions, while ignoring the most basic safety practices.

Mergers and Acquisitions

Until Duke Energy can get its own house in order, it does not need to be meddling in other companies. Duke Energy's reputation for dealing with its own employees is very bad. This gives workers of companies a feeling of dread when they find out that they will be acquired by Duke Energy.

Employees of other companies do not want to lose their pensions by being forced into Duke Energy's Cash Balance Plan. Only the executives, who stand to reap a windfall of stock options, wish to be acquired by Duke Energy.

Duke Energy has created its own reputation as "employer of poor choice." Duke Energy is well on its way to becoming "The Wal-Mart of Energy Companies."

New Employee Opinion Survey

Duke Energy announced that (at least some) employees will receive the 2005 Employee Opinion Survey. Some workers feel these surveys are a waste of time and never fill them out. It is true that Duke Energy will spin the results to put it in the most favorable light. But, if you neglect to fill out the survey, you only make it easier for Duke to game the system.

If you do fill out the survey, only address what is important to you. Duke always sets up straw issues to distract employees. By asking the bulk of questions on namby-pamby, meaningless topics, Duke hopes you will forget your real complaints.

Expect the bulk of questions to be about community service. Do you know of any worker who is losing sleep worrying about community service?

Expect every other question to be something about diversity. How many coworkers have come up to you and said “Diversity is really the main issue on my mind”?

Employees have told the Employee Advocate that they are losing sleep over their lost retirement benefits.

Daily, employees ask if there is any hope of ever regaining their full pensions. It is a legitimate question, since some employees have worked 30 years to qualify for benefits that they will never receive.

Some Duke Energy employees have said that their lost retirement health care was even more devastating than their lost pension benefits.

Duke Energy employees once had decent pensions and fully paid health care that they could not outlive. Now the pension is smaller. It can easily be outlived and retirement health care will be nonexistent. Do really think the main concern of employees is community service and diversity?

Here is how to deal with PR type questions, that are thrown in only to muddy the water. Either ignore them or give a negative answer.

Do not expect to be asked if you are happy about losing your retirement benefits. Do not expect to be asked if you would like to be represented by a labor union. You will have to write in those comments. But even then, Duke still gets to game the system. Write in comments are never categorized or reported.

Even if 100 % of the employees wrote in that senior management should be ridden out of town on a rail, it would never be mentioned in any report. The report will always say that X % of employees somewhat agree that management encourages community service. It will also say that X % of employees strongly agree that Duke Energy has more diversity that the average kumquat.

In spite of the inevitable skewing of the results, you should still write in what is important to you. If nothing else, you will feel better about it.

2004 Employee Opinion Survey

It is understandable that some Cinergy employees are regarding the proposed merger with Duke Energy with trepidation. Duke Energy has earned itself a reputation for being a slash and burn corporation with maximum profits as its only goal.

But after the merger, some Cinergy employees will keep their benefits, at least for a while, according to the IBEW local 1393 website. Duke Energy has a very long history as a union buster. But busting well established unions may not be a piece of cake. The IBEW has earned a reputation for helping Cinergy employees. Duke Energy has earned a reputation for taking away employee benefits. Do not expect Cinergy employees to be willing to dump their unions on Duke’s say so.

Duke will not be able to make union threats to Cinergy employees as it has to its long-term employees. Duke will not be able to tell them “If you vote in a union, you will all be fired!” It makes a difference when the union is already established and Duke Energy is but a newcomer – a newcomer with an appetite for taking benefits.

Cinergy employees who are members of IBEW Local 1393 will not lose any compensation and benefits for a period of 5 years after the merger. Non union Cinergy employees will have their compensation and benefits protected for a period of one year after the merger.

IBEW Local 1393

If employees have a good union, they have someone actually looking out for their best interest. Those without a union are willing for the executives to take full control of their lives.

Belonging to a good union is like falling into a pool of dolphins. If you start to drown, the dolphins will push you to the poolside.

Leaving your fate in the hands of executives is like having several blood-gushing wounds and jumping into a pool of sharks. Someone will eat well, but it will not be you!

Pension Fund Sues Cinergy Over Duke Merger

It did not take long for the merger lawsuits to start popping, according to the Associated Press. The NECA-IBEW Pension Fund has already sued Cinergy and its board over the proposed merger with Duke Energy.

The fund alleges James Rogers and other board directors made the deal so they could cash out unvested stock options when the merger is completed.

The Cincinnati Business Courier reported that stock is being unloaded by at least one Cinergy executive. A Securities and Exchange Commission filing showed that William Grealis, executive vice president of Cinergy, sold 75,000 shares on May 16. Mr. Grealis pocketed over $3 million from the sale.

Duke Energy, Cinergy Merger Positives

IBM agreed to pay a settlement of $314 million to employees shortchanged by its cash balance pension conversion, according to the St. Louis Post-Dispatch. The Thursday hearing at the federal courthouse in East St. Louis took less than five minutes.

U.S. District Judge G. Patrtick Murphy ruled last year that the IBM cash balance conversion discriminated against older workers. The shadowy methods used to compute the opening cash balance amount is where employees lose money with cash balance conversions.

As expected, IBM will appeal the ruling on the calculation methodology. If the appeal is lost, IBM will have to cough up another $1.7 billion. The $1.7 billion, the $314 million, and the other millions of dollars in settlements will still not cover what IBM has taken from their employees’ pensions.

IBM was not the only greedy corporation to convert to a cash balance plan. Duke Energy was right there rooting in the cash balance trough. Duke Energy, then Duke Power, even used one of the same actuarial firms as IBM.

When all the “me too” CEO’s saw one corporation raid its pension plan, they started piling on. Warnings that cash balance plans were illegal fell on deaf ears. When billions of dollars in pension money is at stake, CEO's are not interested in legalities! Their retirees may live in poverty, but the executives could retire with private jets, yachts, and castles in Spain on the spoils!

May all the corporate followers, who converted to cash balance plans, also pile on in making millions of dollars in restitution to the victimized employees! Over seven million cash balance victims anticipate their day in court.

The most inept electric utility CEO’s of all followed every loser that came down the pike. They envied Enron and ran after each and every flaky scheme going, including: energy trading, merchant power, market manipulation, hiding regulated profits and cash balance plans! What’s so bad is they caught them all – and all proved to be disastrous. Some corporations survived; some did not. These greed-crazed CEO’s have been “flushed” out of the system. The most perplexing thing is that they left filthy rich for their “work” of bleeding employees, customers, and investors.

The Bush administration has made attempts to legalize age discrimination in cash balance plans. How it this possible? It tried issuing Treasury regulations that basically said that cash balance age discrimination is not age discrimination! That lame attempt did not fly.

Bush may now try to get an actual law enacted that says that cash balance plan age discrimination is not age discrimination. The Los Angles Times reported that Republican Rep. John A. Boehner “plans to introduce comprehensive pension legislation within the next several weeks.” Some pension observers think that this will be yet another attempt to legalize cash balance conversions.

This is no time for employees to be caught sleeping. Those who do may very well sleep away their pensions.

Age Discrimination Lawsuits Green Light

It easy to find other things to do with one’s time other that lobbying. But every so often a bill come along that is so bad that all the stops must be pulled out. On those occasions, face to face lobbying is in order. S984, introduced in the North Carolina Senate, is such a bill. As originally written, the bill would have nearly destroyed the NC workers compensation laws.

S984 is being redrafted, but the bill is so bad that it cannot be salvaged. There are no good parts to save; The bill is rotten to the core. Not only does S984 reek, but so do the legislative games played with it.

When a politician introduces legislation that is good for the people, he is proud of it and wants the public to know about it. He wants the bill to receive publicity. He is delighted to meet with constituents and talk about it. Sometimes he will even talk, talk, talk, talk, talk about it. That’s because he knows he has a good bill and wants the world to know about it.

The situation is reversed when a senator introduces a putrid bill. If the bill only serves the interests of corporate lobbyists and his own hidden agenda, publicity is the last thing he will want. He will try to sneak the bill through the process and let the public wonder what hit them. In the absolute worst case, the senator will hide himself and his bill from public view, hoping things will blow over.

Speaking of public-dodging senators, consider N.C. Sen. David Hoyle, who introduced S984. He introduced this workers compensation bill, which is little more that a wish list for corporations that wish to evade paying the just claims of injured employees.

S984 is now in the Commerce Committee. S984 stinks so badly, no bloodhound was needed to sniff it out. When workers saw buzzards circling over Raleigh, they knew the bill was bad. Citizens were headed for the S984 hearing on May 3, 2005. Some traveled great distances and were staying in hotels in Raleigh, awaiting the hearing.

A large number of citizens protesting S984 was not what Sen. Hoyle had in mind. Under such conditions, trying to sneak S984 through the committee would have been like trying to sneak a raw slab of meat through a lot full of pit bulls. It would not have been pretty.

In a primordial bid for survival, overnight, Sen. Hoyle called an appropriations meeting, which cancelled the S984 hearing. That was about as subtle as burning down one’s house to kill a housefly – zero finesse. It revealed sheer panic and desperation. Under no circumstances did Sen. Hoyle want to defend his bill before the public.

The tactic bought the senator a little time. It also enraged the citizens who had planned to attend the hearing. The next hearing was set for May 17, 2005. That provided citizens with time to inform others about the bad provisions of the bill. Even more citizens were prepared to attend the next S984 hearing.

If Sen. Hoyle did not want to face a crowd of angry citizens on May 3, do you think he wanted to face an even larger crowd on May 17? He most certainly did not!

This time the senator temporally pulled the bill for “redrafting.” If Sen. Hoyle knew the bill was bad, why did he introduce it and only later pull it to be redrafted? He thought he could sneak the bill through the committee. Only the fear of facing the angry public caused him to pull the bill.

The concerned citizens could have waited for Sen. Hoyle’s next move. They could have waited. But that would have allowed the senator to have full control of the game.

The citizens turned the tables and brought the campaign to Sen. Hoyle. They showed up at the May 17 Commerce Committee meeting anyway!

The Employee Advocate joined hundreds of employees and retirees of Duke Energy/Duke Power, Alcoa, Philip Morris, Celanese, and other companies in Raleigh to protest S984.

Petitions against S984 were left at all of the senator’s offices. At least one senator called an impromptu news conference to address S984. Citizens then converged on the Commerce Committee meeting. The room was jam packed and hundreds of people overflowed into the hallways. Some of the senators were visibly taken aback by the large turnout to oppose S984.

No doubt, few senators expected to see such a large crowd protesting S984, when it was not even officially on the agenda. They must have wondered what would happen if an actual hearing were to be held.

S984 was addressed and the large number of people opposing the bill was acknowledged more than once. There is zero doubt in the senator’s minds that passing S984 will not be a cakewalk and will not come without repercussions.

Thanks to everyone who visited Raleigh to oppose S984.

Workers 2, Sen. Hoyle 0

"Mr. Smith Goes to Washington"

The negatives of the Duke Energy, Cinergy merger have already been covered. The good news is that the positives outweigh the negatives. All one really needs to know is who is promoting the deal – Paul Anderson. Mr. Anderson is not noted for making stupid moves. Since returning to Duke Energy, his financial performance has been above reproach. He covered more merger details at the Duke Energy Shareholders Meeting.

Duke Energy North America (DENA) has been bleeding money like a sieve. It was just one more problem that Mr. Anderson inherited from his Enron-chasing predecessor. The merger with Cinergy should put DENA in the black. This is nothing like the merger with PanEnergy.

Most of Duke Energy’s woes commenced with the purchase of PanEnergy. The whole premise was faulty; it could not have possibly been successful. Just prior to PanEnergy, the Bill Grigg and Rick Priory team decided to raid the pension fund, via a cash balance conversion. The plan was to buy companies worldwide, trade energy, wheel and deal in derivatives, and ride energy deregulation to glory. All the while, the bottom line was fattened by more benefits reductions.

Mr. Anderson is not trying to finance this merger by raiding employee benefits. This merger will carry its own weight. This merger is driven by sound logic, rather than the blind greed of the past. Raising the dividend brings the company closer to being the old blue chip Duke Power, rather than Enron wannabe Duke Energy.

The electric and gas businesses may even be separated. The greed of executives brought about new laws that nullify any advantage of owing both gas and electric companies. Any move to get away from Duke Energy and back to Duke Power is good.

The plan is for Cinergy Chairman and CEO Jim Rogers to become president and CEO of Duke Energy. Mr. Anderson would remain as chairman for at lease one-year after the merger.

The new president and CEO had to come from outside. Duke Energy promoted from within twice before Paul Anderson came back. Each time proved to be disastrous.

Duke Energy President and COO Fred Fowler will move on to be president and CEO of the gas distribution business. What’s not to like about this merger?

Dan Monk and David Mildenberg quoted Paul Anderson in The Cincinnati Business Courier: “Duke suffered significant difficulties during the post-Enron period, (while) Cinergy quietly kept returning and increasing shareholder value. I have every confidence that Jim will lead the new Duke Energy well into the future."

In the May Open Forum, Paul Anderson said everything will be looked at, including benefits. It is not known if he will be just looking, giving back, or taking away more. If he truly wants to restore Duke’s reputation, the benefits plunder can no longer be overlooked. Half-way measures will not cut it.

There is more good news about Jim Rogers. He bucked the electric utility industry and fought for stricter environmental standards. What good is cheap power if one kills all the customers while producing it? He has cited the need to addressed global warming. He and Paul Anderson are both more knowledgeable about environmental conditions than the current White House dweller.

Jim Rogers has a background as a consumer advocate. Everyone is a consumer. So, in actuality, a consumer advocate is a people advocate. The opposite is the greedy executive, willing to destroy people for more profits.

Mr. Rogers is in favor of handling the reduction of employees without a layoff. He told The Charlotte Observer that he has never laid off anyone.

Is Mr. Rogers perfect? Far from it. He was once recruited by Enron’s Ken Lay and, even worse, he is a supporter of G. W. Bush.

Jim Rogers is willing to accept all compensation in stock, as Paul Anderson does. He may be able to fill Mr. Anderson’s shoes. Now, if he would just renounce support for G. W. Bush!

Duke Energy, Cinergy Merger Negatives

The Charlotte Observer reported that on Tuesday N.C. Sen. David Hoyle temporarily backed off on pushing through S984, the worker’s Comp bill. Reporter Mike Drummond described a “cavalcade of opposition” to the bill.

This is by no means an ultimate victory. North Carolina workers just won round two. They won round one on May 3, 2005, when numbers of employees were converging on the public meeting in Raleigh. Sen. Hoyle showed weakness by dodging the wrath of his constituents. Overnight, he called an appropriations meeting that blocked the public meeting.

Sen. Hoyle may have thought his ploy would save him from facing the citizens of North Carolina, but it backfired. The legislative dirty trick only infuriated citizens that had traveled to Raleigh to attend the public meeting. Even more people intend to go to Raleigh on May 17 to protest S984.

Employees won round two when Sen. Hoyle again showed weakness by pulling the bill for redrafting. At least this time he did not do it in the middle of the night.

Make no mistake, YOU won this round. Thanks to everyone who called and e-mailed senators to protest S984. A special thanks to everyone who made plans to attend the next public meeting in Raleigh. Twice the enemy has decided not to set foot on the battlefield. Once the enemy slipped away in the dead of night. He knew he could not win.

Sen. Hoyle’s plan to sneak S984 through the Commerce Committee failed; crowds awaited him. The crowds were composed of North Carolina citizens that he did not want to face.

Since the chance to sneak the bill through has evaporated, Sen. Hoyle must now try to dress it up. He is taking his pig into the back room to put lipstick on it. He has threatened to trot it back out in June. But it will still be a pig of bill!

Late Duke Power Chairman Bill Lee once said “Laurels wilt fastest when sat upon.” We must be ready when Sen. Hoyle tries to ram S984 through the Senate again. He is now trying to drum up support from his corporate and lobbyist pals.

The bill is not dead. Even more people need to go to Raleigh on May 17, 2005 and voice opposition to this sorry bill.

Sen. Hoyle is now trying to "fine tune" S984 (make it sound better, but still be devastating to N. C. workers).

N.C. Academy of Trial Lawyers Legislative Chairman Jim Lore said "There's nothing socially redeeming about this bill. The oldest maneuver in the legislature is serve up terrible bill, and then resubmit half a terrible bill."

S984 has many bad provisions for all North Carolina workers, but asbestosis victims would really lose out. They would be reduced to receiving pocket change for compensation.

Sen. Hoyle said "We put a bill out there that was probably a little aggressive."

N.C. State AFL-CIO president James Andrews said that even Sen. Hoyle described S984 as "draconian"! Mr. Andrews wants to see the bill die a quiet death without reaching the Senate floor for a vote.

The Employee Advocate want to see S984 die a loud, screaming, kicking, agonizing death and never make it to the Senate floor!

If you would like to attend the Tuesday meeting, contact: ksellers@wallacegraham.com

D-Day: Tuesday, May 17, 2005

The proposed merger between Duke Energy and Cinergy could go in a number of directions. The devil is always in the details.

There is a potentially positive side to the merger, but let’s get the negatives out of the way first. Wall Street is not exactly eating up the announced merger. Tuesday, Standard & Poor's reported that it had placed Duke Energy and Cinergy on negative credit watch.

Citigroup Smith Barney downgraded Duke Energy from buy to hold. It specifically cited the acquisition of Cinergy and valuation.

Also, the announced merger is having a negative effect on the price of Duke Energy stock.

Most of Duke Energy’s many legal problems and employee dissention began with the preparation to buy PanEnergy in 1997. To the original Duke Power employees, the PanEnergy merger represented only one thing – lost benefits.

There has been much said about how much bigger the merged company will be. But bigger does not always mean better. In fact, it was Duke Energy’s quest to dominate the world that almost destroyed it.

Half of the touted synergy savings comes from the elimination of an estimated 1,500 jobs.

Cinergy is facing a Clean Air Act lawsuit by the government. Involvement in another lawsuit is about the last thing that Duke Energy needs.

Some fear that Cinergy will suffer lower standards from a merger with Duke Energy. There was a time when no one would have entertained such a thought. The slash and burn CEO’s of the last decade have taken their toll.

Alan Schreiber, chairman of the Ohio Public Utilities Commission, said "We recognize that Cinergy has a certain level of service quality and reliability, and we're interested in seeing that maintained, above all else."

Subsidiaries of Cinergy, which are being gobbled up by Duke Energy, are gobbling up an Indiana power plant. It seems like a case of the big ones eating the little ones.

It was said that attrition and early-retirement programs will take care of some of the job losses. But many employees cannot retire after all of the benefits cuts. Retirement was once attractive, with an early retirement subsidy, a pension of 60 percent of salary, and fully paid, lifetime health care. Now that all the incentives to retire have been taken away, people are not flocking to the doors.

Even offering early retirement bonus packages will not attract everyone. Employees who have lost hundreds of thousands of dollars in benefits may not be too eager to sign away their right to sue for a few thousand dollars.

The positive side of the merger will be covered, but not today.

Sources: Duke Energy, The Cincinnati Enquirer, and The Charlotte Business Journal.

Duke Energy Seeks Cinergy Synergy

Duke Energy announced Monday that it will acquire Cinergy. As luck would have it, the very same day The Wall Street Journal reported that the Securities and Exchange Commission (SEC) is challenging the merger of two other electric utilities. Sometimes it takes the SEC a while to get their sights adjusted. American Electric Power merged with Central & South West in June 2000!

Duke Energy had so much money and stock laying around that the executives were tripping over it. Something had to be done to create room to walk.

The latest information obtained is that the public meeting on S984 will be on Tuesday, May 17, 2005. S984 is the workers compensation bill designed to reduce or eliminate asbestosis compensation. It has other provisions that will negatively affect all workers in North Carolina.

S984 was introduced by N. C. Senator David W. Hoyle. The Employee Advocate called Mr. Hoyle’s office at (919) 733-5734 to confirm the public meeting date. His office would only say that S984 will not be taken up in the session on May 10.

Mr. Hoyle has already postponed the meeting - overnight - once! Expect more cat and mouse games on the meeting date.

Employees can beat this game by using each attempt to dodge the public as an opportunity to recruit more people to oppose the bill.

Plan to attend the meeting if you can. This bill is still in the Commerce Committee and this is the best time to kill it.

Destroying Workers Compensation Insurance

In a state where workers' compensation insurance rates are relatively low and injured workers must meet tough standards before collecting benefits, Sen. David Hoyle wants to cut costs for businesses. He proposes to cap benefits for workers, put younger injured workers at a distinct disadvantage and force many workers to rely on welfare programs after workers' comp benefits run out.

It's a bad bill, made only slightly better by a provision that would extend workers' benefits for partial disabilities. But the bill's main impact would be to harm injured workers and their families -- apparently to give a financial break to employers who say they're spending too much for workers' compensation insurance. Its sponsors ought to chuck the whole idea.

Workers' compensation systems were created a century ago as part of an early tort reform movement. In exchange for giving up their rights to sue their employers, workers and their families are eligible for compensation when accidents, diseases or death rob them of their wages.

The system has worked reasonably well for employers and employees, but lately employers in some high-risk businesses have complained that their workers' comp costs are rising too fast. Yet advocates for workers point out that North Carolina's rates have declined by 27 percent since 1995, except in certain industries. Two reasons for the higher costs are the recent rapid increase in medical care costs, and the general rise in wages that workers' comp covers.

Employers want to hold down costs by capping benefits for totally disabled workers at 500 weeks or age 65, whichever comes first, and limiting benefits to five years for those injured after age 60. There have been no caps since the 1970s, when the legislature abolished a 400-week cap.

The proposed caps would do two things: Penalize younger workers by imposing a cap where there is none now; and discriminate against older workers by ending compensation payments at age 65. That's bad public policy.

Perhaps worse, the N.C. Industrial Commission, which handles contested workers' comp cases, would no longer have the authority to determine whether proposed employment for a disabled worker is suitable. The commission would only be able to determine whether there is a job that the injured worker could perform -- regardless of whether the worker could get or hold that job. If a job exists, benefits would end.

The proposal has other problems. It would diminish a worker's medical privacy, cut benefits for asbestosis and generally force taxpayers to pick up the slack for taking away workers' comp benefits. If there's a good argument to be made for stripping workers' protections and forcing the public to assume more responsibility for their welfare, it's time to hear it. Otherwise, lawmakers should send this proposal to the trash can.

Duke Energy’s Legislative Assault on Employees

On Tuesday, May 03, 2005, the Employee Advocate met with workers and individuals knowledgeable of the inner workings of the North Carolina Senate. The plan was to go to the state capitol and protest the horrible workers compensation bill, S984. Among other things, the bill would make it next to impossible for employees to obtain compensation for asbestosis and silica related illnesses.

A large crowd of employees from Duke Energy, Alcoa, Phillip Morris, and other companies were prepared to descend upon Raleigh to register outrage over S984. This is not something the corporations pushing this bill had in mind. They always operate best in the shadows and dark and damp places.

Keep in mind that N. C. Senator David W. Hoyle is the chap who introduced S984. Overnight, he called an appropriations meeting to replace the compensation bill discussion! You see, some senators do not want to hear anything from their constituents – except at election time. They do not want to hear from the people whose lives will be destroyed, because of their loony legislation.

What these senators do hear is the sound of millions of dollars of lobbying money fluttering in the wind! It flitters and floats so softly, why it’s almost musical. The music has all the seductiveness of a siren. Some senators can hear nothing else.

Make no mistake, corporations have poured huge amounts of money behind this bill. The corporations have lost in the courts. They must now compensated employees for the health problems caused by the corporations. There is no way out – unless - they can get the law changed! It is all dollars and cents. A few million dollars paid to lobbyists will stop employees from receiving the compensation that they are due. It’s all more money in the bank for the guilty corporations.

The Employee Advocate will admit the appropriations meeting switcheroo was slick, in a dirty tricks sort of way. But did Sen. Hoyle really think the employee would give up and go away? Ha! There is now time to stage a larger protest!

It is anticipated that the next dirty trick will be trying to schedule the meeting so quickly that employees do not have time to react. In the end, workers can always make the senators pay at the polls. Some senators may need a new line of work.

This bill affects more that just Duke Energy employees. It will negatively affect all workers in North Carolina. Click the link below for an opportunity to help level the playing field:

Duke’s ‘Naked Greed’

It is not enough that Duke has reduced pensions and retirement health care. Duke is now in favor of placing a limit on workman’s compensation benefits, according to the Associated Press. Duke Power and Kelly-Springfield were specifically mentioned as two companies seeking to reduce insurance costs.

A bill has been filed that would limit benefits to 500 weeks.

The bill will work fine, as long as the injured employee either gets well or dies within the time limit.

But what if the disabled employee outlives the time limit but is unable to return to work?

Then they would be thrown to the taxpayers to support.

State Sen. Doug Berger said "This bill is all about naked greed."

Just think how much more the executives could make if injured employees could all be thrown off of worker’s comp!

Gaming Executive Compensation

In 1999, when employees complained about the Duke Energy Cash Balance Plan pension losses, executives offered a strange response. They pointed to a magazine article as proof of what a great company Duke was! It sounds incredible, but executives wanted employees to forget all about the pension losses and go read a magazine.

When Business Ethics Magazine published its list of “100 Best Corporate Citizens for 2005, the Employee Advocate checked to see how highly Duke was rated. Duke could not be found in the top ten or even in the top half of the list. In fact, Duke did not even make the list.

When Duke makes some dippy list, the executives turn cartwheels and launch roman candles. When Duke is passed over, which is often the case, the silence is deafening.

One wonders why Duke failed to make this list, as All companies listed on the Russell 1000 Index are considered. The first clue is that the magazine is about ethics; that could pose a problem. The magazine considered such things as profit sharing, retirement benefits, employee involvement, union relations, and workforce reductions. Mystery solved. With such criteria, Duke would have difficulty placing in the 1,000 Best Corporate Citizens.

Other areas included pollution prevention, emissions, regulatory problems, SEC actions, and excessive CEO pay. It’s clear that Duke went to a gun fight armed with a Whoopee Cushion.

Duke did not make the list last year either. Duke also failed to make the list in 2003, 2002, 2001, and 2000.

Duke Misses the Mark Again