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Creditors Fight Crescent Bonus PlanEmployee Advocate - www.DukeEmployees.com - February 27, 2010
The article below was published by The Charlotte Observer:
Creditors Fight Crescent Bonus Plan
By Bruce Henderson
Friday, Feb. 26, 2010
Creditors of Crescent Resources are fighting the company's plan to give bonuses to its employees while under bankruptcy protection.
The Charlotte-based development company wants the bankruptcy court's blessing to create a $4 million incentive bonus pool, at least $3.5 million of which would go to management employees. The court hearing the case in Austin, Texas, has not ruled.
Unsecured creditors who stand to lose $428 million under Crescent's reorganization plan hotly objected in a court filing. Those creditors expect to recover nothing but proceeds of an insolvent trust fund, a creditors' committee said in court papers.
The committee charged that Crescent intentionally misrepresented the book value of its assets at $2.2 billion when it filed for Chapter 11 protection last summer. The company's recent filings put the market value of its assets at $640 million.
"No explanation is given for the cataclysmic decline in Debtor's representations of asset values from June 2009 to January 2010," the committee said, "but the Debtors are asking the court to award a bonus to the employees of the Debtors for their excellent work."
Asked if the committee is claiming illegal activity over Crescent's asset estimates, attorney Joseph Martinec of Austin said, "It's a matter that is under investigation by the committee."
Crescent wouldn't comment on the objections Friday. Its court filings say the plan would motivate Crescent's 218 remaining employees to do their best work, adding value to the company and benefiting creditors.
Crescent called the unsecured creditors' objections baseless. The reorganization filed last month would shave about $1 billion from the company's secured debt, giving those creditors about 40 cents on the dollar for the nearly $1.5 billion they're owed.
"Unsecured creditors are out of the money. This is an unfortunate circumstance, but true," Crescent said in its response to the objection.
"Similarly unfortunate, and true, is that the prepetition secured lenders' collateral is worth far less than the amount of their claims. Their significant deficiency claim is also out of the money. Equity holders have also lost hundreds of millions of dollars and will receive no recovery."
Crescent, which has developed dozens of residential and commercial projects across the Southeast, is a joint venture of Duke Energy and Morgan Stanley Real Estate Funds. The company has said it expects to leave bankruptcy protection in this year's second quarter.
Crescent paid its top executives more than $3 million in what appear to be bonuses in the year before it filed for bankruptcy last June, the Observer has reported.
Bonuses have historically been part of Crescents' pay structure, the company says, but most were suspended when it filed for bankruptcy protection. The proposed plan would start if the company meets financial targets. Individual managers could get bonuses of up to $500,000 each.
Bank of America, as Crescent's debtor-in-possession agent, said the bonus plan resulted from negotiations among Crescent, the bank and lenders holding more than half of Crescent's secured debt. It called the creditors' criticism of the reorganization plan irrelevant to the bonuses.
The government trustee overseeing administration of the bankruptcy case, however, also objected to the bonus plan. The bonuses would serve as an incentive for work already done, trustee Charles McVay said, and the plan is too vague in describing who would be eligible.
Crescent hasn't shown that it lost employees as a result of the bankruptcy, McVay said, or that it couldn't find able replacements for current employees.
The Duke Energy Voluntary Offer PlanEmployee Advocate - www.DukeEmployees.com - January 27, 2010
The actual Voluntary Offer Plan (VOP) was not quite as good as it was rumored to be. But hey, nothing ever is. We did gain another nifty acronym, which will soon become an anacronym.
Jim Rogers never misrepresented it. He always said that it was an effort to save money. Still, it was almost twice as good as any previous plan offered.
At any given time, there are always some employees ready to leave the company. All it takes is a little nudge. Duke should have no trouble finding 5% of the work force willing to take it.
For the total handling of the VOP, the Employee Advocate will give Jim Rogers a grade of A+. He avoided all the mistakes of the past.
First, and most importantly, it is voluntary. The first company-wide layoff in 1988 was not voluntary. Duke kept the pending layoff a secret from the employees, until The Charlotte Observer broke the story. When the pending layoff made headlines, Duke immediately dropped the axe. It was a classic example of "dumbsizing." Indispensable employees, who were axed, were immediately hired back. The employees that were left were resentful of the hamhanded implementation of the whole process. Morale never fully recovered.
The VOP sets limits on the number of takers in each work group. In Duke's first "voluntary separation opportunity," some entire departments were wiped out.
It was amazing the number of employee who did not realize that they would have to sign a waiver to collect any money. The money is the bait; the waiver is the hook. There will always be a hook.
This is not to say that the VOP will not be a good deal for some employees. But the waiver should be read completely and understood before anything is signed.
Will You Be a Victim of Killer Coal? - "dirty coal is not only unsustainable...it is also extremely deadly to human life"
Welcome to 2010Employee Advocate - www.DukeEmployees.com - January 1, 2010
The cash balance plan lawsuit, brought against Duke Energy by employees and retirees, will be going to trial. The class certification ruling was issued on September 4, 2009. Potential class members will be contacted.
The class definition was ordered to be modified on 9/28/09.
Attorney Mona Lisa Wallace was elected president of Public Justice in July. Public Justice is the largest and most successful public interest law organization in the country. It could not have possibly done better than gaining Ms. Wallace as president. She relentlessly carries the fight to oppressors of every stripe. Ms. Wallace was named North Carolina Super Lawyer in 2007, and that she is.
As a partner of the law firm Wallace and Graham, Ms. Wallace will continue to represent employees of various corporations, including Duke Energy. Congratulations to Ms. Wallace on a well deserved honor!
There were three Duke Energy contractor fatalities in 2009. In one case, it was difficult to identify the victim. No one on the crew could speak English and the victim was carrying multiple ID's.
The Employee Advocate is glad that Jim Rogers has signed on as CEO until 2013.
In the footsteps of Paul Anderson, Jim Rogers has put 100% of his energy into running Duke Energy. His example is more effective than all the employee indoctrination attempts by his underlings.
His continuing effort to avoid layoffs will serve him well. Employees will go out of their way not to let him down. Those who tried to run continual con games on employees were consumed by the monster that they created. They have been flushed out of the company.
It is unknown what the voluntary separation offer will look like, or if there will actually be one. No bank will accept the deposit of rumors. There have been a number of "sucker packages" over the years. Duke has picked off about all the employees possible with low-ball offers. A meaningful offer could mitigate the employee distrust of management over the many benefit reductions. Some employees will never sign any waiver of rights.
Happy New Year!
Duke Energy's $93 Million Clean Air Violation SettlementEmployee Advocate - www.DukeEmployees.com - December 28, 2009
Duke Energy agreed to settle a lawsuit charging the Indiana Gallagher Station of violating the Clean Air Act, according to the U.S. Justice Department and the Environmental Protection Agency. It will cost Duke about $93 million for making unauthorized changes which increased air pollution.
Duke will pay a $1.75 million civil penalty and spend $6.25 million on environmental mitigation projects. The federal government suit, filed in 1999, was joined by New York, New Jersey Connecticut and two environmental groups.
Two of the coal-fired must be retied or converted to natural gas.
Burned Duke Energy Worker Air Lifted to HospitalEmployee Advocate - www.DukeEmployees.com - December 18, 2009
A Duke Energy worker was burned on Thursday, according to the Cincinnati Enquirer. The accident occurred at the W. C. Beckjord Coal Station in New Richmond, Ohio. The injured employee was airlifted to University Hospital.
An electrical arc ignited the worker's pants as he was performing routine circuit breaker maintenance. He suffered burns to his face, upper chest and limbs.
"Retirement Agreement by and between Duke Energy Business Services LLC and David L. Hauser"
Duke Energy Scratches Backs of LegislatorsEmployee Advocate - www.DukeEmployees.com - November 17, 2009
The editorial below was published by the Indianapolis Star on 11/16/09
Citizens left out in cold
State Rep. David Wolkins isn't shy about what he likes: golf, basketball and football.
As ranking Republican member and former chairman of the Indiana House Environmental Affairs Committee, he's in a position to indulge his interests thanks to the very companies he's supposed to help regulate.
In a single year, Wolkins, a Republican from Winona Lake, accepted more than $3,200 in tickets and lodging at major sports events from Duke Energy, Vectren Corp., the Indiana Energy Association and the Indiana Statewide Association of Rural Electric Cos.
Wolkins is hardly alone. Lobbyists routinely channel handouts to members of key legislative committees. Even relative newcomers to the Statehouse, who otherwise normally take a back seat to higher-profile lawmakers, can attract lobbyists' attention if they're assigned to the right committees.
Second-term state Rep. Kreg Battles, D-Vincennes, for example, received more than $1,000 in meals and tickets to sports events from companies in the energy and telecommunications sectors. Not by coincidence, Battles is a member of the House Commerce, Energy, Technology and Utilities Committee. While corporations and high-priced lobbyists buy access to legislators, ordinary Hoosiers and grass-roots organizations can be shut out.
"We have observed that with some legislators there doesn't seem to be impartiality in regard to access,'' Jesse Kharbanda, executive director of the Hoosier Environmental Council, said.
Kharbanda contends that even if the environmental council had the money to buy time with lawmakers, he would consider it "unprincipled'' to do so. "We would rather win our arguments on their merits,'' he said.
That may sound noble, but given Indiana's extraordinarily lax lobbying laws, it's a formula for failure in the Statehouse.
For the price of dinner at Indianapolis' St. Elmo Steak House or a suite at Lucas Oil Stadium to watch the Indianapolis Colts, lobbyists can buy hours of face time to pitch their clients' interests to lawmakers.
Under state law, legislators may accept gifts of unlimited value from lobbyists. They even can interview for jobs with lobbying firms while still serving in elected office.
To be clear, however, no one has shown evidence of outright bribery.
"It's not about quid pro quo,'' state Sen. Mike Delph, R-Carmel, said. "It's about the politics of subtlety.'' Or, as Julia Vaughn, public policy director for Common Cause Indiana, puts it: "Is it the first steak dinner or the 12th steak dinner that influences a vote?"
In the General Assembly, there are insiders and there are outsiders. Lobbyists can buy their places on the inside by building relationships with the right lawmakers, and those relationships are often forged over dinner and drinks or the charged atmosphere of an NFL game.
A friendly lawmaker may agree to help a lobbyist's client by sponsoring a bill. Or by blocking unfavorable legislation in committee. Or by inserting desired language in an amendment while the legislation is in committee or on the House or Senate floor.
In the tough, occasionally tense atmosphere of the Statehouse, it's of immeasurable value for lobbyists and their clients to have allies on the inside, where one phrase in a bill can mean millions of dollars won or lost.
Left on the outside are residents of a state where unemployment is nearly 10 percent, personal bankruptcy and home foreclosure rates are among the nation's highest, and air and water quality remain among the worst in the United States.
Perhaps the most damaging aspect of the cozy relationships between legislators and lobbyists is that some lawmakers don't realize, or at least won't admit, that they are being played. The inability to recognize the reality of why lobbyists want their attention means that lawmakers can let their guard down, believing it's about friendship.
State Sen. Greg Taylor, D-Indianapolis, for instance, was genuinely amazed to learn that he had accepted 29 meals -- worth more than $700 -- in one year from the same lobbyist employed by Baker & Daniels, one of the state's largest lobbying outfits. In Taylor's mind, he and the lobbyist are old friends, who were simply catching up on each other's lives.
Many legislators insist they aren't influenced by tickets to Colts games, or out-of-state trips, or rounds of golf paid for and played with lobbyists. That raises a question, however. If lobbyists and their clients aren't getting satisfactory returns on their investments, then why do they continue to pour more money -- more than $25.8 million in the most recent annual reporting period-- into influencing votes?
It's time for Hoosiers to demand that their elected leaders set common-sense limits on lobbyists' ability to buy access to power.
5 steps toward better representation of Indiana
1. Legislators may not accept any gift worth more than $50 in value from registered lobbyists.
2. Lobbyists must disclose the value of all goods and services offered to individual legislators or groups of lawmakers, including meals, tickets to sporting and entertainment events, or other gifts.
3. Legislators may not accept gifts, including payment of travel-related expenses, from businesses, organizations or individuals that do business with the state.
4. Legislators may not accept meals, tickets to athletic games or other events, or any other gift valued at more than $50 from state universities or colleges.
5. Former legislators may not work as registered lobbyists until one year after they leave office.
One lawmaker's bounty: $3,231.75 in gifts
Legislator: Rep. David Wolkins, R-Winona Lake
His reported gifts, their value, and the lobbyists who gave them:
» Ryder Cup tickets; $1,025 from Duke Energy.
» Ryder Cup gift and lodging; $662 from Duke Energy.
» Pacers tickets; $748 from Indiana Statewide Association of Rural Electric Cos.
» Colts ticket; $198 from Vectren Corp.
» Tickets and dinner; $276.75 from Duke Energy.
» Sporting event ticket and meal; $322 from Indiana Energy Association.
Total value of gifts: $3,231.75
What he had to say: "In my 20 years, I've gained a lot of friends in the lobbying community. They know that I like sporting events.''
Source: Indiana Lobby Registration Commission
Third Duke Energy Contractor KilledEmployee Advocate - www.DukeEmployees.com - November 9, 2009
Duke Energy contractor, Gary Wayne Vaughn, was electrocuted on Oct. 29, according to ABC News 13.
He was on a pole working on a transformer when the accident occurred. He was pronounced dead at Harris Regional Medical Center in Sylva, N.C.
This is the third Duke Energy contractor killed on the job this year.
Jim Rogers Has ArrivedEmployee Advocate - www.DukeEmployees.com - September 22, 2009
Jim Rogers has accomplished much over the years, but now he truly has arrived. On 9/21/09, The Drudge Report displayed an ad with a wanted poster for Jim Rogers at the top of its website.
There was an unflattering likeness of Mr. Rogers on the poster, with the words: “WANTED CARBON BETRAYER.”
Why does this mean that Jim Rogers has arrived?
The Drudge Report and its advertisers are continually on the wrong side of every issue going. If they are so upset with Jim Rogers that they have issued a wanted poster for him, that means that he is doing the best job possible!
Paul Anderson and Jim Rogers were both early supporters of a carbon tax on corporations. They had the conviction to break ranks with other power companies and to see past the next quarterly earnings report.
Yet, Jim Rogers has been straddling the fence on coal use. He has started building new coal plants, and has tenaciously clung to the pipe dream of “clean coal.” He has continued to buy coal obtained through mountaintop removal.
At the last two shareholder meetings, he justified building more coal plants because China would build even more.
But it appears that Mr. Rogers has experienced a coal epiphany. The Washington Independent reported Mr. Rogers as saying “Most of the coal we use in the southern part of the country is from mountaintop mining. I’m doing the math now and looking to determine my contracts and posing the question to my team, what if we made a policy decision that we’re not going to buy coal as a consequence of mountaintop mining.”
Mr. Rogers has also raised questions about the viability of clean coal technology!
Mr. Rogers is now working with China to develop green energy, rather than using China as an excuse to pollute even more.
Duke Energy has dropped out of the coal front group, Americans for Clean Coal Electricity.
This is real growth!
Duke Fails to Make the AARP Top Companies ListEmployee Advocate - www.DukeEmployees.com - September 22, 2009
AARP has compiled the 2009 list of the 50 top companies for people over 50 to work for.
If you had automatically assumed that Duke Energy would not make the list, you would have been right.
Jim Rogers and Health Care ReformEmployee Advocate - www.DukeEmployees.com – September 15, 2009
At the August Open Forum, Jim Rogers said that he is not in favor of the health care legislation being debated in Congress. He fears health care reform could place a financial burden on companies that provide health care coverage for employees.
It seemed strange that Mr. Rogers would even comment on the health care debate. It does not immediately appear to have a lot to do with generating electricity. It is also doubtful that any reform would place an undue “burden” on Duke Energy. Duke already provides health coverage. True, it shrinks every year, but it is not like Duke would have to go from providing zero coverage to actually providing coverage. What could possess Jim Rogers to speak out against improved health care for American citizens?
But when you consider that Jim Rogers is a director on the board of CIGNA, things start to come into focus. While any health care legislation would likely have little effect on Duke Energy, it could have a profound effect on CIGNA. CIGNA is making a literal killing on today’s warped heath care system. A former CIGNA executive has exposed how the corporation grows wealthy by denying claims.
It appears that interlocking boards of directors have once again offered friends and opportunity to help friends.
Jim Rogers said "Like it or not, we have the best health care in the world.”
We do not have the best heath care in the world, only the most expensive. But that is not a problem for CIGNA, since it is on the receiving end of the wealth transfer.
The leading cause of bankruptcy is staggering medical bills, according to a Harvard study. Most of the bankruptcy filers were middle class, owned a home and had attended college. In America, there is an illusion of health care coverage for some, until one really needs it.
If a person is too sick to work, company sponsored coverage ends. If an insurance company refuses to cover an illness, coverage ends and perhaps the person’s life.
Millions of others do not even have an illusion of coverage. They have zero health coverage, and they know it.
Jim Rogers Sees the Light on ChinaEmployee Advocate - www.DukeEmployees.com – August 11, 2009
Jim Rogers has used China as a pollution whipping boy for some time. He has implied that it is irrelevant how many coal plants Duke Energy builds, because China will build even more.
What’s next? Will he say that it is irrelevant how many employee benefits Duke takes away, because some corporations are taking even more?
Jim Rogers has caught on that instead of bashing other countries, he could be setting an example for them, according to the Charlotte Observer.
It’s true that Mr. Rogers is still clinging to coal, but now he is joining with China to share pollution reducing technology. It is a step in the right direction.
Duke Energy Coal Ash Basins on Hazard ListEmployee Advocate - www.DukeEmployees.com – July 1, 2009
Duke Energy has ten coal ash basins on the Environmental Protection Agency’s hazard list, according to The Charlotte Observer.
The criteria for getting on the list is the potential for loss of human life from a collapse.
Duke does not expect any of its ash basins to collapse. But the Tennessee Valley Authority did not expect its basin in Tenn. to collapse. But it did collapse, allowing 5.4 million cubic yards of sludge to spill. Toxic metals in the sludge included arsenic, selenium, cadmium, lead and mercury.
The national coal ash site list had been kept a secret from the public. There was a fear that the sites could become tempting terrorist targets.
Duke Energy Contractor KilledEmployee Advocate - www.DukeEmployees.com - June 26, 2009
A Duke Energy contractor was killed by a falling limb June 23, according to the Cincinnati Enquirer. The victim worked for Lewis Tree Service of New York. The accident occurred in Ohio.
Notifying the next of kin was complicated because most of the victim's family lives in Mexico.
Getting the details of the accident was complicated because none of his coworkers could speak English.
Positively identifying the man was complicated because he had more than one ID on him.
A Spanish speaking deputy, who was called in, was told that the age of the man was 22.
CFO David Hauser to RetireEmployee Advocate - www.DukeEmployees.com - June 18, 2009
Chief Financial Officer David Hauser will retire from Duke Energy and become the chairman and CEO of FairPoint Communications. He came to Duke Power in 1973 at age 21.
When Paul Anderson came back to Duke Energy as CEO in 2003, one of the first things he did was appoint David Hauser to interim CFO. It was apparent that Mr. Hauser was the best person for the job, so he was later appointed permanent CFO. Paul Anderson and David Hauser were instrumental in turning around Duke Energy’s headlong plunge towards disaster.
Duke Energy’s loss will be FairPoint Communications’ gain.
Lynn Good will become the new CFO. She has no shortage of experience.
Carbon Capture Can't Make Coal Clean - "Carbon capture is perhaps the worst possible economic investment"
2009 Employee Opinion SurveyEmployee Advocate - www.DukeEmployees.com - June 3, 2009
The 2009 Duke Energy Employee Opinion Survey is available to take this month. As usual, the questions meander around. But there are three slots to write in your comments.
Below are comments submitted on the 2009 survey:
Benefits are constantly evolving - evolving for the worst. There is always some trick, some angle, some deception designed to make the benefits seem more valuable than they really are. What you see is never what you get.
Benefits promised to employees are illusions. The benefits illusions disappear as people get closer to actually receiving them. The retirement benefit illusion disappeared. The retirement health coverage benefit disappeared. The chiseling away of benefits is endless.
It is true that the large print giveth and fine print taketh away. Dealing with Duke Energy senior management is like dealing with carnival hucksters.
Duke Energy’s relationship with employees can best be described as a confidence game. The employees always feel the sting.
Values and Integrity
Duke Energy has turned the employees’ benefits package into a profit center.
This financial gain has not been without a price. Duke Energy eagerly traded its values and integrity for the employees’ benefits money.
Senior leadership and management
The current management did not create the worst of the employees’ benefits losses. But the current management is sullied by the previous deceptions.
Duke Energy Ordered to Shutdown 3 Coal-Fired UnitsEmployee Advocate - www.DukeEmployees.com June 2, 2009
Duke Energy was ordered to close three coal-fired units in Indiana by Sept. 30, according to Bloomberg News.
U.S. District Judge Larry J. McKinney ruled that Duke violated the federal Clean Air Act.
Duke was ordered to run the units at a reduced rate until they are closed. Duke must also surrender pollution allowances due to the plant's sulfur dioxide emissions.
Duke Energy Violated Clean Air ActEmployee Advocate - www.DukeEmployees.com May 22, 2009
This week, a federal jury ruled that Duke Energy violated the Clean Air Act, according to the Associated Press.
Duke failed to obtain permits for changes at its coal-fired Gallagher plant in Ind. Sulfur dioxide emissions increased 40 tons a year because Duke failed to install modern pollution-control equipment.
The "New Source Review" lawsuit was filed in 2000.
Citizens Protest Property Seizures by SpectraEmployee Advocate - www.DukeEmployees.com May 14, 2009
A reader wrote that citizens are protesting Spectra’s use of eminent domain to seize property. The following link was sent:
Before Spectra was spun off, Duke Energy had its share of pipeline versus property rights problems:
IBEW Contract with Duke Energy ApprovedEmployee Advocate - www.DukeEmployees.com April 24, 2009
The tentative accord between Local 1347 and Duke Energy has led to an approved five-year contract, according to the Dayton Business Journal.
The International Brotherhood of Electrical Workers Local 1347 contract specifies yearly wage increases.
Worker Discord at Duke EnergyEmployee Advocate - www.DukeEmployees.com March 29, 2009
There are signs of a possible strike by IBEW Local 1347. WLWT.com reports that negations with Duke Energy have become strained.
IBEW Local 1347 represents about 1,000 electrical workers.
Duke Energy has brought in trailers to house scabs in the event of a strike.
Jim Rogers Signs New Contract with Duke EnergyEmployee Advocate - www.DukeEmployees.com – March 2, 2009
This article was published by the Business Courier of Cincinnati on 2/27/09.
Duke Energy Corp. Chief Executive Jim Rogers has signed a new employment contract with the company that runs through 2013.
According to a filing with the Securities and Exchange Commission, his previous contract was slated to expire April 3.
Rogers receives no salary or cash bonus. His compensation comes largely through stock grants. The purpose of that arrangement is to align his interests with those of Duke’s shareholders, the company said.
Duke paid Rogers $9.9 million in 2007, down from $12.9 million the year before, according to a separate company filing with the SEC.
In 2006, Rogers received a payment related to that year’s merger of Duke and Cinergy Corp. That accounted for much of the decrease.
Because Rogers receives no standard salary or bonus, his compensation can be tricky to understand. For instance, Duke’s regulatory filing lists $5.5 million in stock awards and $3.7 million in stock options as making up the bulk of his compensation in 2007.
But Rogers actually received no stock or option awards in 2007. All the stock and options were awarded in 2006, subject to the provisions of his contract. The dollar figures in the filing represent the portion of his compensation that Duke expensed in 2007.
Before being named Duke’s chief executive in 2006, Rogers was CEO of Cincinnati-based Cinergy. His compensation in 2007 included $255,125 paid to cover his moving expenses to Charlotte, N.C., from Cincinnati, plus $43,464 to account for the taxes paid on that amount.
The compensation also included $157,587 for his personal use of corporate aircraft.
Charlotte-based Duke Energy (NYSE: DUK) includes the former Cincinnati Gas & Electric Co., Union Light, Heat and Power in Kentucky, and PSI Energy in Indiana. The company also operates Duke Energy Carolinas.
Welcome to 2009Employee Advocate - www.DukeEmployees.com - January 6, 2009
The employee lawsuit against Duke Energy’s cash balance plan continues on into 2009. Two mediation hearings and a second round of depositions were held in 2008.
There will be a salary freeze for some employees in 2009.
A federal judge has ruled that lawyers for Duke Energy misled jurors.
The Cliffside coal-fired plant continued to meet opposition in 2008.
In 2008, corporations were already screaming for exemptions from The Pension Protection Act Of 2006.
Voters finally flushed Sen. Elizabeth Dole out of Washington.
Charlotte Mayor Pat McCrory failed in his bid to become governor of North Carolina.
In only a few days, American citizens will be relived of the curse of G. W. Bush and Dick Cheney!
2008 was a tough year for almost everyone. But the CEO of the Charlotte United Way was raking in big bucks, until the public caught on.
IBEW local 1347 held a press conference on illegal aliens allegedly working for Duke Energy.
Duke’s Save-A-Watt program was not a smash hit in North Carolina.
Duke Energy settled a retaliation lawsuit filed by an ex-employee.
A Duke Energy worker was burned in Ohio.
Former Duke Energy COO Fred Fowler retired from Spectra.
Duke Energy made a top 100 list in 2008, such as it was.
A former Duke Energy trader was fined for falsely reporting natural gas prices.
In 2008, it was reported that Duke Energy broke a record for lobbying spending in 2007.
Duke came up with a new “vision” in 2008.
Happy New Year!
Duke Energy’s 2009 Salary FreezeEmployee Advocate - www.DukeEmployees.com – January 5, 2009
The Duke Energy salary freeze, as reported by The Charlotte Observer, will affect about half of the employees. Specifically, exempt employees, with the exception of first-line craft supervisors, will have their salaries frozen. The salary freeze was framed as a way to avoid layoffs.
It is not expected that anyone will be overjoyed about having their salary frozen, but consider these points:
The corporate knee-jerk reaction to almost any event is to lay off employees. But some are catching on that there is a price to be paid for layoffs:
Jim Rogers has said on several occasions that he tries to avoid layoffs. But he has never been so foolish as to say there never will be a layoff. No one knows just how ugly the current economic mess will become.
Duke Energy Lawyers Misled JurorsEmployee Advocate - www.DukeEmployees.com – January 5, 2009
Judge: Duke Energy misled jurors about witness
EVANSVILLE, Ind. (AP) - A federal judge has ruled that lawyers for Duke Energy misled jurors about a witness who testified during a trial over whether the utility broke federal clean air laws at power plants in Indiana and Ohio.
In last year's trial of a clean air lawsuit, Duke Energy portrayed a witness with knowledge of improvements at its coal-fired power plants simply as a former employee - even as it painted government witnesses as experts who were paid for their testimony.
The Evansville Courier & Press reports that after the trial court records showed that Duke had agreed to pay its witness $200 an hour for his testimony.
In his Dec. 18 ruling, a federal judge wrote that knowing that information could have changed the jury's perception of the facts and its decisions.
The jury ruled largely in Duke's favor in May.
The ruling paves the way for a new trial on most of the charges.
Duke Energy Ordered to Fully Assess CliffsideEmployee Advocate - www.DukeEmployees.com - December 3, 2008
A federal judge ordered Duke Energy to perform a full environmental assessment of its Cliffside plant, according to the Associated Press.
U.S. District Court Judge Lacy Thornburg wrote that constructing the plant without the assessment may lead to "emissions capable of causing serious health problems, or the shut down of construction and/or in costly retrofitting that would result in unnecessary rate increases."
AARP Senate InquiryEmployee Advocate - www.DukeEmployees.com – December 1, 2008
A Senate inquiry into the marketing practices of AARP has found evidence of deception, according to the New York Times. AARP has since hired its own investigator to scrutinize its sales practices.
The major goal of AARP was never to be an altruist lobbying group for senior citizens. Its main goal was to sell insurance to senior citizens, and that’s were the money is made. The AARP membership is little more than a database of potential insurance customers.
AARP has been on the right side of many issues facing senior citizens. But when the choice is to help senior citizens or to help AARP, guess who comes out on top.
The complaint is that AARP sold insurance as offering comprehensive coverage, while the policies offered only limited benefits. AARP and UnitedHealth Group, have voluntarily suspended sales of the insurance policies under investigation.
Senator Charles E. Grassley said "In fact, there's no basic protection against high medical costs. The products may leave consumers seriously in debt if they need intensive medical care."
In 2003, AARP spent billions of dollars lobbying for the Medicare reform bill. The bill was a curse for senior citizens, but helped AARP roll in the profits from increased insurance sales.
The bill started as a prescription drug plan for seniors, but ended up helping corporations at the expense of seniors. It was the first step in privatizing Medicare. Drug corporations and insurance corporations reaped the benefits of the Medicare reform bill.
The marketing of prescription drug plans by UnitedHealth and endorsed by AARP is not part of the current investigation.
Corporations Object to Obeying Pension LawEmployee Advocate - www.DukeEmployees.com - November 19, 2008
The Sarbanes-Oxley Act of 2002 was passed due to accounting scandals by major corporations, including Enron, Tyco, and WorldCom. Corporations brought the strict reporting requirements upon themselves by their roguish behavior. It did not take long before corporations started whining for the law to be weakened. They simply did not want to go to the trouble of complying with the law.
The Pension Protection Act Of 2006 was enacted to protect employees from corporate pension raiding through cash balance plans. It outlawed wear away and protected the early retirement subsidy in new cash balance plans. The law also tightened pension funding requirements. It did not take long before corporations started whining for the pension law to be weakened!
Hundreds of corporations are lobbying for the funding requirements to be suspended, according to the Associated Press. Why do corporations want the requirements suspended? Corporation do not want to tie up cash in pensions. Doh! Failure to properly fund pension is part of the reason the law was passed.
Corporations had lobbied to have so many loopholes put into the pension funding requirements that the old law was useless. The new law was also passed because cash balance plans had been used take pension benefits from employees by hook or crook. Cash balance plans did not exist prior to 1985, thus there were no laws to regulate them. Corporations took advantage of the legal vacuum to cobble together cash balance plans that transferred pension money from employees to the bottom line.
The current economic downturn/recession/depression makes a handy excuse to ignore more laws and place the burden on employees. But employees did not create the economic crisis; corporations created it. It was corporations who created nearly worthless mortgage derivatives with AAA ratings. It was corporations who lobbied Congress to repeal the very laws designed to prevent another economic depression.
Corporations whined to Congress that if strict pension laws were passed, they may not be able to provide pensions. Now they are whining to Congress that if they have to actually following the funding law, it may hamper their ability to provide pensions.
Corporations blame Congress for passing new pension laws. But if they had not lobbied to have existing laws nullified, no new laws would have been required. Corporations blame employees who try to reclaim the pensions that they have earned. But if corporations had not used underhanded, unethical, and legally shaky methods to take pension benefits from employees, there would be nothing to reclaim.
It is rare for a perpetrator to actually admit any culpability for his predicament. He will blame the police, courts, society, bad luck, and even his own victim for problems that he alone created. He will blame everything and everybody, rather than taking any responsibility for his own actions.
Corporation are once again trying to blame employees for problems created by corporations. Corporations do not want to obey current laws because it might intensify the economic crisis. But obeying laws is not what caused the problems. Corporate greed caused the problems. Lobbying to be exempt from regulations caused the problems. Inventing “creative” ways to shortchange employees of their pension benefits caused the problems.
Corporations continue to repackage their shopworn threat. “If you do not joyfully agree to let us take your pension, then we will take your pension.”
Vote Sen. Elizabeth Dole Out of Office!Employee Advocate - www.DukeEmployees.com - October 30, 2008
If you will draw a smaller pension, you can thank Sen. Elizabeth Dole for it. Elizabeth Dole has fought tooth and nail to allow corporations to keep pension money taken from employees through cash balance plan conversions. The people of North Carolina now have the opportunity to boot her out of office.
Elizabeth Dole sent a letter to other senators, urging them to deny employees the legal right to sue corporations over cash balance plans. She repeatedly referred to pending pension litigation as “copycat lawsuits,” alluding to the IBM pension lawsuit. But Duke Energy employees were laying the groundwork for their lawsuit well before the IBM suit was ever filed!
This could be the year that Elizabeth Dole must pack her bags and get out of Washington. Even top Republicans have no hope for Dole in North Carolina, according to The Politico. A New York Times article stated "In North Carolina...Elizabeth Dole, is looking like a goner."
Elizabeth Dole has backed the G. W. Bush plan to privatize Social Security all the way. Many employees and retirees have seen their retirement savings decimated by the banking crisis. How would you like to see your Social Security benefits cut in half by the next wave of market manipulation?
Social Security was designed to be guaranteed by the federal government. Banks are supposed to be private. Now the security of banks is being guaranteed by the government, while people like Elizabeth Dole try to force citizens to bear all the risk of losing their Social Security benefits.
Elizabeth Dole has voted for legislation, written by the HMO and insurance industries, to deprived victims of medical malpractice a fair settlement.
Do not miss this opportunity to flush Elizabeth Dole out of Washington!
Buffett Rescues Constellation EnergyEmployee Advocate - www.DukeEmployees.com – October 6, 2008
MidAmerican offered to buy all outstanding shares of troubled Constellation Energy, according to the Wall Street Journal. MidAmerican is a subsidiary of Warren Buffett's Berkshire Hathaway.
Constellation experienced an urgent need for more capital in its energy-trading business and was facing a downgrade by credit-ratings firms. Many corporations were burned by energy-trading after the implosion of Enron. Constellation is now paying the price for clinging to energy-trading.
In the past, Mr. Buffett has said that nuclear plants are too expensive to build. But MidAmerican CEO Gregory Abel said that Berkshire intends to allow Constellation to operate autonomously, including development of nuclear plants.
Chief Nuclear Officer Brew Barron retired from Duke Energy this year and became president, CEO, and chief nuclear officer of Constellation Energy Nuclear Group.
Jury Acquits Activists Who Damaged Coal-Fired PlantEmployee Advocate - www.DukeEmployees.com - September 15, 2008
A UK jury cleared six Greenpeace activists of criminal charges for inflicting damage to a coal-fired plant, according to The Independent. The courtroom erupted with cheers when the verdict was delivered.
Last year, the protestors climbed the 630ft chimney at Kingsnorth and painted “Gordon” on it in huge letters. It cost over £35,000 to have the graffiti removed.
The Maidstone Crown Court jury acquitted the defendants because they had a "lawful excuse" to damage the property. The damage to the plant, which temporally shut it down, could prevent even greater damage to the environment.
This was not the first time that the "lawful excuse" defense has prevailed. In 1999, 28 activists were acquitted of trashing an experimental field of GM crops in Norfolk. In both cases, the damage was not denied. The verdict in both cases found that the activists were justified in their actions.
During the trial, the world's leading climate scientist, NASA Professor James Hansen, called for an moratorium on all coal-fired power plants.
Outside the courtroom, acquitted activist Ben Stewart said "This verdict marks a tipping point for the climate change movement. When a jury of normal people say it is legitimate for a direct action group to shut down a coal-fired power station because of the harm it does to our planet, then where does that leave Government energy policy? We have the clean technologies at hand to power our economy. It's time we turned to them instead of coal."
In the US, public sentiment is also against coal-fired plants. The Earth Policy Institute said that in 2007, 59 proposed U.S. coal-fired power plants were either refused licenses by state governments or otherwise canceled. Almost 50 more coal plants are being challenged in courts.
New coal-fired plants being built by Duke Energy have been protested. Duke is always quick to call in the Gestapo. College students have been shocked with Tasers and arrested.
Not Your Grandfather’s United WayEmployee Advocate - www.DukeEmployees.com – September 10, 2008
Once, when Duke Energy browbeat employees to contribute to the United Way, it always stressed two things. Duke said that “only 5%” of the funds were spent on overhead and that the United Way was the only agency that it supported.
Neither of the two main selling points are true any more. Duke now solicits money from employees for other agencies. And, the United Way’s overhead is considerably more that 5%, even with creative booking, according to The Charlotte Observer.
It seems that Charlotte's United Way lowers reported overhead the old fashioned way – by HIDING IT!
71% of former CEO Gloria Pace King’s pay was not listed as overhead. As she made more and more money, less and less of it was reported as overhead to the IRS.
The United Way board approved King’s $1.2 million in salary and benefits. But when the public protested her outrageous compensation, the board gave her the axe. The board created the monster and then tried to kill it.
If all of King’s pay had been counted as overhead, it would have boosted the group's overhead by perhaps 2 percent. Experts estimate that it would have pushed overhead to around 16%. So, gone are the days of 5% overhead, if that ever was an accurate number.
In 2002, The Observer reported that the United Way made about $2 million in overhead disappear by shifting it around. King’s salary was included in the financial hocus-pocus. The United Way promised to clean up its act. We see how that went.
The United Way keeps its meetings hidden from the public. All the public needs to know is how much to give to the agency.
Press Conference on Illegal Workers at Duke EnergyEmployee Advocate - www.DukeEmployees.com - August 25, 2008
Steve Feldhaus, IBEW local 1347 member, said that a press conference concerning illegal aliens allegedly working in Duke Energy power plants is to be held on August 28, 2008. Contractor Sunbelt Insulation is accused of knowingly hiring illegal aliens.
At the July 24, 2008 Open Forum, in Cincinnati, an employee said that he had been told that Duke Energy uses illegal aliens to do tree trimming, and these workers cannot speak English.
Jim Turner said “I have no reason to believe that’s true.”
The answer was as politically correct as it gets. He did not flat out deny it. He just said that he did not believe it.
At the same Open Forum, Sandra Meyer said “We’ve had our hands full with image issues. All of us should remember that anyone can make an accusation.”
Are Duke Energy employees questioning the legal status of contract workers just to be making accusations?
Are employees questioning the legal status of contract workers just because they “believe that’s it’s true”?
You be the judge. Members of IBEW local 1347 have been collecting evidence for at least 3 years. A number of audio recordings are linked at the union’s website. Hear discussions about buying fake ID’s, circumventing ICE, and how many illegals are employed.
What if a corporation wanted to complete a project and knew that it would cost 3 million dollars to do the job right, in house. It would be reasonable to assume that a contractor would have to charge more than 3 million dollars in order to make a profit. But what if a contractor submits a bid substantially below 3 million dollars? It is a financial no-brainer to hire the contractor.
But it also a no-brainer that some corners will be cut somewhere, if not everywhere.
The corporation looking only for the cheapest price could not care less. It has plausible denial. No matter what happens, the corporation can always claim “We didn’t know. All we did was hire a contractor.”
The contractor willing to do everything right will have to charge accordingly. The corner-cutting contractor will win the bid every time.
Even with all the questionable contractor work, Duke is still under the delusion that it will have zero injuries. As anyone can make accusations, any corporation can made fanciful, unattainable, and naive predictions.
Duke Fails to Steamroll Save-A-WattEmployee Advocate - www.DukeEmployees.com - August 24, 2008
Duke Energy failed to saddle the North Carolina ratepayers with its Save-A-Watt program, according to The News & Observer. Save-A-Watt may eventually be approved, in some form. But it will no longer be the huge profit center that Duke dreamed of.
The Public Staff rejected the Duke Energy compromise as bad for customers and too lucrative for the corporation.
Duke went up against the Public Staff, Wal-Mart, the city of Durham, environmentalists, consumer advocates and church groups. Not a single group fell for the Save-A-Watt propaganda.
Then Duke Energy rolled out its big gun to blow away the opposition - Jim Rogers.
John Murawski wrote: “Despite the stiff resistance, Duke's CEO James Rogers crusaded for Save-a-Watt as the utility industry's white knight in the fight on global warming. The gambit apparently backfired.”
Sherri Zann Rosenthal, Durham's senior assistant city attorney, said "Duke overplayed their hand. They know it's their own hubris and overreaching that's caused Save-a-Watt to stall…Duke offered very little energy efficiency, and it charged a remarkable premium."
Robert Gruber, director of the Public Staff, said “We thought the profit margins here were too high.”
If the Public Staff and other groups had not been vigilant, Duke would have made enormous profits for providing very little in energy savings. When Duke’s capers are not challenged, everyone suffers – except Duke Energy.
Duke Energy Settles Retaliation LawsuitEmployee Advocate - www.DukeEmployees.com - August 19, 2008
Monday, Duke Energy confirmed that it has settled a retaliation lawsuit filed by ex-employee John Deeds, according to the Associated Press.
Mr. Deeds filed the lawsuit in Ohio, charging that Duke Energy terminated his employment in 2005, as an act of retaliation. He maintained that his dismissal was due to his informing his supervisors of apparent sham transactions, in the form of $22 million in annual payments to corporations.
The out-of-court settlement was reached over the weekend, according to Mr. Deeds attorney.
Duke Energy is still facing an antitrust lawsuit in U.S. District Court over the secret payments to corporations. The suit claims the payments were kickbacks to entice corporations not to oppose a 2004 rate increase.
Not opposing the rate hike may have raked in millions for corporations. But all that residential customers received was a rate increase of nearly 30 percent.
The secret payments are opposed by The Ohio Consumers' Counsel, citing discrimination against residential customers.
Duke apparently thought that labeling Mr. Deeds as “disgruntled” would magically make the case go away. But just how many plaintiffs bring a lawsuit because they are tickled pink?
In the last Open Forum, a Duke executive said “We’ve had our hands full with image issues. All of us should remember that anyone can make an accusation. But many times accusations are not true – and from what we’ve learned, these claims are not true.”
Yes, anyone can make accusations. And, anyone caught with his hand in the cookie jar can blame the press and say “I didn’t do it and I’m not a crook.”
Duke Energy Worker BurnedEmployee Advocate - www.DukeEmployees.com August 11, 2008
Last week, a Duke Energy employee was burned by an electrical flash in Kenwood, Ohio. Rescue crews responded and the worker was transported to University Hospital.
The employee was repairing an underground cable in response to a power outage.
A Duke Energy contractor was killed this year when he made contact with an energized transformer at Belews Creek Steam Station in North Carolina.
Sources: The Cincinnati Enquirer and Duke Energy.
Paying Duke to Control Your Thermostat?Employee Advocate - www.DukeEmployees.com – August 5, 2008
JOURNAL EDITORIAL STAFF
Duke Energy makes a guaranteed profit when we buy its electricity. Now the utility says it should make an even healthier profit when we choose not to use electricity, when we conserve.
In the upside-down world of mandated energy conservation programs, Duke is trying to comply with a new state law designed to encourage both conservation and more electrical generation through alternative means. Duke's Save-A-Watt program went before the N.C. Utilities Commission last week.
Duke argues that it will invest money in programs designed to get consumers to use electricity more efficiently. For example, the Duke program calls for breaks on electricity charges when customers purchase and use high-efficiency appliances or when they agree to having their heating and cooling systems remotely controlled by the company.
If consumers take advantage of the program's offerings, they'll use less electricity and they will save money.
When the legislature debated its new energy-conservation law, the electrical utilities begged for consideration. They argued that they were being told to sell less of their product and to pay for the campaign to persuade customers to make that change.
The legislature, as is its habit when the big utilities have concerns, listened. Then legislators gave the utilities the authority to charge us to try to persuade us to use less energy. Save-A-Watt is Duke's proposed persuasive program, and it is asking the utilities commission to grant it a much higher return on the investment it makes trying not to sell us electricity than it is guaranteed for the investment it makes producing the electricity we use.
If you need time to understand that, we understand. We had a lot of trouble just writing that sentence.
Anyway, the principle is ridiculous. The General Assembly should have never granted the state's utilities any special breaks or favors for undertaking a very much needed electricity-conservation effort. Instead, the legislature should have mandated aggressive electricity- conservation benchmarks and said that the utilities commission should consider reasonable costs to achieve those savings as part of a utility's rate base.
The effort to save energy should be part of a utility's normal course of business. Considering that utilities are guaranteed a profit on the costs of doing that business, the profit from trying to save electricity would have been in line with that for trying to sell it.
The commission won't have an answer for North Carolinians until the fall. It should see this matter clearly and grant Duke no more return on investment than is normal in this industry. Anything else is unfair to customers.
Another Protest Against Duke EnergyEmployee Advocate - www.DukeEmployees.com - July 29, 2008
The latest protest against Duke Energy was over the proposed Save-a-Watt program, according to The News & Observer. Monday, July 28, a public protest marked the beginning of the week long hearing in Raleigh.
Save-a-Watt could be compared to government programs that pay farmers not to grow crops. Duke Energy wants to be paid by the ratepayers for NOT generating electricity.
Hey, why don’t we pay OPEC not to pump oil?
There is nothing wrong with conservation, but there are thousands of devils in these details.
Who is for Save-a-Watt?
Who stands to reap a 61% profit from Save-a-Watt?
Who is against Save-a-Watt?
Over a dozen organizations, including the N.C. Public Interest Research Group, Clean Water for North Carolina , church groups, consumer advocates, environmentalists, businesses, the city of Durham, and N.C. Public Service Workers.'
Shana Becker, NC PIRG staff attorney, said Duke Energy is "trying to take advantage of people's good will for energy efficiency. They're trying to make the most money that they can without effecting their business model, which is to try to generate energy."
Who would have ever thought that Duke Energy would try to create a profit center out of not producing electricity?
There was once a time when investors, ratepayers, and employees would have believed almost anything that Duke Energy said. But they have all been burned too many times. Those days are over.
Duke officials say that without generous financial rewards for the company, efficiency will always be the last option.
There you have it. Duke Energy will do the right thing, but only if there are generous financial rewards involved.
Duke Save-A-Watt of Little Benefit to CustomersEmployee Advocate - www.DukeEmployees.com - July 7, 2008
A News & Observer article on Duke Energy’s Save-A-Watt program stated “Duke would turn energy efficiency into a corporate profit center.”
Five environmental groups, industrial customers, the N.C. Council of Churches, Wal-Mart, AARP, the city of Durham, and other groups view the Save-A-Watt program, as being exorbitant, ineffective, and designed to gouge the public.
The North Carolina Public Staff also opposes Duke’s energy efficiency plan. It said a that a $1.65 compact fluorescent light bulb would cost $18.23 under Save-A-Watt.
Public Staff expert Richard Spellman filed testimony stating the costs to ratepayers "are two to three times the costs of similar programs to ratepayers in other states. As such, the SAW approach is a bad deal for Duke ratepayers.”
Mr. Spellman’s testimony stated: “Duke is projecting that it will take the company 7 1/2 years, until December 2015, to save 1 percent of annual sales, an amount that the top twenty electric utilities achieved in just one year."
The Public Staff charged that Duke would be allowed a margin of about 50% on its Save-A-Watt expenditures. It recommends a margin of no more than 6.8 percent from Save-a-Watt
The Public Staff also said that Duke is repackaging other programs, available for years, and calling it Save-a-Watt. It says these existing programs should not be counted.
Duke Energy is notorious for recycling programs. The fact that some of the programs are proven failures is completely ignored. Duke once proclaimed that there would Zero Accidents by 1998. The program was a colossal failure, but Duke continues trying to resuscitate the rotting corpse.
It is not unprecedented that “Duke would turn energy efficiency into a corporate profit center.” Duke Energy’s Cash Balance Plan turned the employees’ pension plan into another corporate profit center.
Fred Fowler to Retire from SpectraEmployee Advocate - www.DukeEmployees.com - July 2, 2008
President and CEO Fred Fowler will retire at the end of the year, according to the Spectra board of directors. Paul Anderson and Fred Fowler left Duke Energy with the Spectra spinoff.
Duke Energy Sued Over ‘Sham Deals’Employee Advocate - www.DukeEmployees.com - June 28, 2008
This article was published by The Cincinnati Enquirer on June 26, 2008:
Ex-employee sounded warning; company calls him disgruntled
By Dan Horn
A former Duke Energy employee warned his bosses in 2006 that payments the utility made to big corporate customers appeared to be illegal "sham transactions."
John Deeds, who worked for Duke and its predecessor companies for 16 years, said e-mails he exchanged with supervisors show that they knew the payments were improper and warned him to keep his mouth shut.
The payments, totaling about $22 million a year, are the focus of a federal antitrust lawsuit and Deeds' whistle-blower lawsuit, which he filed last year in Cincinnati.
The suits accuse Duke of making secret, illegal payments to corporate customers in exchange for their support of a rate increase the utility sought in 2004.
Duke officials deny the allegations and say Deeds' latest claim arose after the company refused to give him a promotion.
Deeds says he was denied a better job and eventually fired because he challenged the legitimacy of the payments. "They pushed him out," Randy Freking, Deeds' lawyer, said. "He thinks he's been blackballed in the industry."
Duke's lawyers have described the whistle-blower and antitrust claims as "utterly baseless," saying the payments, also known as side deals, are a legitimate and common practice in the industry.
They describe Deeds as a disgruntled employee who lost his job in the shakeout of Cinergy's March 2006 merger with Duke.
"He did not raise any complaint or comment about administering the contracts until he learned he did not have a post-merger position," Duke spokesman Steve Brash said.
Freking said Deeds, the utility's former director of regulatory initiatives, was fired in April 2006, about two months after he raised concerns about the payments.
Court records show that Duke has made annual payments for several years to about 20 corporate customers, none of which has been identified because the contracts on file with the state are heavily redacted.
Duke officials have argued that the contracts contain proprietary information and were signed with the understanding that they would remain private. Officials at the Public Utilities Commission of Ohio have not required full disclosure of the agreements.
The payments were made through a company, Duke Energy Retail Sales, created to sell power competitively on the open market.
But the company had no customers and, according to the lawsuits, was a shell set up to pay illegal rebates to Duke's biggest customers. Court documents filed this week say an employee with that company, then known as Cinergy Retail Services, put up a sign in his office that read: "CRS, LLC ... We sell nothing."
The company is where Deeds worked when he said he raised concerns about the $22 million payments.
A February 2006 e-mail from Deeds to a supervisor stated that if the terms of the payments "ever did see the light of day, they could very easily be construed as sham transactions."
According to a memorandum Deeds filed this week in court, his supervisor responded by warning that his e-mail was going to cause "big trouble internally" and told him to never put such concerns in writing.
Deeds also said he asked to see copies of the contracts and was told the utility had successfully fought a subpoena in the past to prevent people from seeing them.
He said he was told to "not ruin the battle we have already won."
Deeds said he was responsible for processing the payment checks and raised concerns about doing so. He said his bosses then pressured him to make the payments without asking questions.
Freking said Deeds eventually refused to sign off on the payments and, soon after, his career began to fall apart. He said Deeds applied for several in-house jobs after the merger but received no interviews, despite a history of good job evaluations.
The e-mails and other details were filed this week in Hamilton County Common Pleas Court as part of a dispute over evidence in the case. Duke has sought to bar some evidence related to its contracts with corporate customers, while Deeds says the documents are relevant to his case. Judge Robert Ruehlman is expected to settle the dispute next month. A trial could be set for later this year.
2008 Employee Opinion SurveyEmployee Advocate - www.DukeEmployees.com – June 5, 2008
Some Duke Energy employees will receive Employee Opinion Surveys during the month of June. As always, the Employee Advocate encourages you to fill them out.
Some of the questions are guaranteed to make you laugh out loud. But do not get hung up on the inane questions. At the end of the survey, there will be 3 spaces to write in your own comments. That is your opportunity to ignore the fluff and cut to the chase.
Below are comments made on the 2008 Employee Opinion Survey:
Cash Balance Pension Plan
Duke Energy has given a variety of thin reasons for converting the pension to a cash balance plan. Every excuse from “the young mobile employee” to “the plan was just too lucrative for employees” has been given.
The true reason for the conversion will more likely be found in the selling point touted by the firms that sold them. The actuarial firms selling these plans offered them as a way to take money from pension plans, without employees knowing what happened.
The conversion rendered hundreds of millions of dollars for Duke to squander on global investments, later sold at a loss.
Employees have worked for years with no new pension accruals, due to the cash balance conversion. Pension benefits were squandered so that Duke could roll the dice - and lose.
The current members of management had nothing to do with the conversion, but have refused to wash their hands of it. As long as the new management continues to cling to the conversion, it will forever be tainted by it.
Until employees have received pension justice, The Duke Energy Code of Business Ethics, various Creeds and Visions will be viewed as only so much propaganda.
The pension damage to employees will never be spun away with happy talk. The only way to break free of the Machiavellian past is to make a fresh start. Duke Energy will never be clean until the pension issue is settled.
Duke Energy Makes the Top 100 ListEmployee Advocate - www.DukeEmployees.com – May 20, 2008
Duke Energy has made it into a top 100 list, but do not expect a lot of press releases touting the "achievement." Duke came in number 13 in The Toxic 100: The Top Corporate Air Polluters in the U.S.
Just think, with only a few more coal-fired plants, Duke could surge into the Top Ten!
The pollution rank was bestowed upon Duke Energy by the Political Economy Research Institute (PERI) at the University of Massachusetts.
The PERI website is: http://www.peri.umass.edu/421/
Public Would Pull Plug on Duke Energy's Coal-Fired PlantEmployee Advocate - www.DukeEmployees.com - April 23, 2008
The North Carolina public is not sold on Duke Energy’s proposed coal-fired Cliffside plant, according to a recent survey by the Opinion Research Corporation (ORC).
NC WARN Executive Director Jim Warren said: "The pressure to cancel Cliffside will keep growing as the public learns the intensity of our climate crisis. We urge CEO Rogers to avoid dragging Duke Energy through a four-year battle against the people of North Carolina. The public is eager for some real leadership."
Executive Director, North Carolina Interfaith Power and Light, Alice Loyd said: "What the poll shows would certainly be true for the people we've met as we make presentations in faith congregations over the state. They see that emitting the kind of pollution this plant would create is just wrong. Recently Pope Benedict XVI named environmental pollution as a sin. Jim Rogers' coal plant is not what people want, and building it at this time of climate crisis would fall into the category of moral failure."
Source: Centre Daily Times
Duke Energy Pension Expert ReportEmployee Advocate - www.DukeEmployees.com - April 8, 2008
An expert report, prepared by Actuary Claude Poulin, was recently served on Duke Energy.
Protestors Arrested at Duke Power Plant SiteEmployee Advocate - www.DukeEmployees.com – April 2, 2008
This morning, deputies in Rutherford County arrested eight people protesting Duke Energy's Cliffside coal-fired power plant.
It is under construction and the protestors chained themselves to the construction equipment. The protest is over pollution caused by burning coal for energy.
There were twenty protestors in all, but the deputies only arrested those chained to the equipment.
Ex Duke Energy Trader to Pay False Reporting PenaltyEmployee Advocate - www.DukeEmployees.com – March 7, 2008
For Release: March 6, 2008
Former Duke Energy Trader Michael Whitney to Pay a $55,000 Penalty in Natural Gas False Reporting Case
Washington, DC − The U.S. Commodity Futures Trading Commission (CFTC) announced today that it obtained a $55,000 civil monetary penalty and a permanent injunction in a consent order that settles charges against Michael Whitney, a former Houston-based natural gas trader and marketing representative at Duke Energy Trading and Marketing, LLC (DETM). Whitney was charged with false reporting and attempting to manipulate natural gas prices.
The consent order also prohibits Whitney from applying for registration, engaging in any activity requiring registration, acting as a principal (as defined by the National Futures Association) of any registered entity or person or any entity or person required to be registered, for a period of four years. The order, which resolves the CFTC’s enforcement action against Whitney in its entirety, was entered on March 5, 2008, by the Honorable Kenneth M. Hoyt of the U.S. District Court for the Southern District of Texas.
The order arises from a CFTC lawsuit filed on February 1, 2005 (see CFTC Press Release 5045-05, February 1, 2005) alleging that, between June 2001 and August 2002, Whitney submitted false reports of natural gas transaction information directly to at least two natural gas reporting firms, in an effort to attempt to manipulate the price of natural gas in interstate commerce. As alleged, Whitney knew that the reporting firms, including Gas Daily and Enerdata, compiled their natural gas price indexes using submitted price and volume information, and that such indexes were used in the natural gas markets to price and settle transactions.
The following CFTC staff members are responsible for this case: Glenn I. Chernigoff, Michael J. Otten, Michael Solinsky, Gretchen L. Lowe, Richard Wagner, and Vincent A. McGonagle.
Duke Energy’s Record Breaking Lobbying BillEmployee Advocate - www.DukeEmployees.com - February 29, 2008
The Charlotte Observer reported that Duke Energy spent a record $2.8 million on lobbyist in 2007. This amount represents only a portion of Duke’s actual lobbying bill, because certain expenses are not reported.
The lobbying time spent by Jim Rogers is not included. The full salaries of Duke’s permanent lobbying staff in Washington is not included either.
Not only has Duke lobbied for a carbon dioxide emission tax on industry, but it has also lobbied for exemptions from it! Duke has talked alternative energy, but has lobbied against laws requiring it. Laws can be so accommodating for the corporation that gets to help write them.
Duke has lobbied on certain employee issues, such as pay. It is reasonable to assume that Duke was not trying to get employees more pay.
Duke has previously lobbied to legalize its cash balance plan - after the fact.
Duke Energy Cash Balance Lawsuit BriefEmployee Advocate - www.DukeEmployees.com - February 6, 2008
The latest federal court filing on behalf of Duke Energy employees was on January 4, 2008.
Duke Energy’s Impaired VisionEmployee Advocate - www.DukeEmployees.com – February 1, 2008
We’re saved! Duke Energy has come up with a new vision!
The vision is a lot like the Code of Business Ethics, the Charter, and the Safety Guiding Principles. It may sound good to the totally clueless, but everyone else knows that it is not true.
The Employee Advocate conducted an experiment with the new vision. The vision was shown to a number of employees who had never seen it before. Included were hourly, exempt, and employees in supervision. These employees were not coaxed or influenced in any manner. They were simply asked to read the new vision.
Not a single one could read it with a straight face!
Most howled with laughter!
Some even accused the Employee Advocate of making it up!
The vision did accomplish one thing. It boosted morale. There has not been so much laughter on the job in a long time.
The executives could have went all year with bringing up integrity, but bring it up they did:
“Integrity – We do the right thing. We honor our commitments. We admit when we’re wrong.”
Doing the right thing is not chiseling away employee compensation, while loading up executives with even more.
Honoring commitments is not using occult methods to deprive employees of the pensions that they have earned.
Admitting when we’re wrong is not denying any guilt, even after being fined millions of dollars. One of the most glaring examples was the case of hiding excess profits.
There was credible evidence that Duke Energy was understating profits. A Duke Energy accountant exposed the book cooking, only after his supervision brushed aside his concerns.
The executive director of South Carolina's Public Service Commission said that he has never seen anything like it in thirty years.
The North Carolina Utility Commission also suspected foul play.
The independent auditor found that Duke Energy was indeed guilty of hiding profits.
Even after paying a settlement of millions of dollars to ratepayers in North and South Carolina, Duke is still in total denial that it did nothing wrong. Duke never admits when it is wrong. Duke always denies it to the grave.
Read of any of the many fines imposed upon Duke Energy. Duke always cuts a deal to pay the money, without admitting any fault.
Listed as a value was “Openness.”
Openness is not hiding kickbacks paid to large companies from the public.
Credit is given to Duke Energy for having “Passion.” Duke has passion for squeezing extra profits out of employees, ratepayers, and retirees. No one is safe when Duke smells a dollar! Duke Energy earned the title of Biggest Price Gouger during the California energy crisis.
“We take personal accountability for our actions.”
As mentioned, Duke consistently takes zero accountability and always denies all culpability!
“Respect…We treat others the way we want to be treated.”
Duke has no respect for the intelligence of the employees. Otherwise it would not put out such rot and expect anyone to fall for it!
Cleaning out the retirement fund is not treating other the way we want to be treated.
“Safety – We put safety first in all we do.”
Many employees questioned why “safety first” was on the bottom of the list. In fact, so many questioned it that Duke posted a disclaimer that the values were listed alphabetically. Employees caught that it was dumb to put what was touted to be first in the last position. But it went right over the executives’ heads.
Then there was a laundry list of “My Commitments.”
These commitments can only apply whoever wrote them. Employees certainly did not give anyone permission to attempt mind control on them. Only the weakest, most gullible, and groveling employees will allow others to dictate what their values and commitments are, if any.
Duke Energy Deals Need SunshineEmployee Advocate - www.DukeEmployees.com - January 20, 2008
Keep lights on electricity deals
Friday, January 18, 2008
The controversy over whether Duke Energy made improper deals with some of its largest customers to win their support for a rate hike might have been avoided if the company was as open about how much electricity costs those customers as it is about how much the rest of us pay to keep the lights on.
An antitrust lawsuit, filed Wednesday in U.S. District Court on behalf of Ohio consumers, accuses Duke of engaging in a conspiracy with large industrial and commercial customers against the rest of its electric customers.
The suit claims Duke set up a "sham" company, Cinergy Retail Services, to pay $22 million a year since 2004 to the unidentified industrial and commercial customers. The purpose of the payments, according to the suit, was to get those customers to back off their opposition to the energy company's 2004 request to the Public Utilities Commission of Ohio (PUCO) for a rate increase. The company, then known as Cinergy Corp., received the rate increase. A company e-mail that surfaced in the case Thursday characterized the opposition from the large customers as a "roadblock" to approval of the rate increase.
Duke spokesman Steve Brash acknowledges the payments, but says they were perfectly legal. They weren't payments from the public utility company, but from "a non-regulated entity" owned by Duke. Such maneuvers are legal options for utilities in Ohio trying to keep their biggest customers from buying their electricity from competing companies in the unregulated energy market, he said. He said the timing of the payments in 2004 was simply coincidental to the large customers dropping their opposition to the rate increase.
We don't know exactly how good these deals were - the details are redacted from company records included in the court files. That's all confidential information for competitive reasons, Brash said.
But that is a big part of the problem. For most of its customers, Duke is the only practical source of electricity. That monopolistic status ought to oblige the company to conduct all of its business openly, so customers can see that they are getting a fair deal and are not paying higher rates to benefit favored customers. Setting up an unregulated subsidiary the sole function of which was to make payments to opponents of a rate increase raises suspicions.
The allegations of the suit will be settled in court. The Ohio Legislature, now studying changes to the regulatory system, needs to take careful note of this case and make sure that in the future electric companies are required to keep the lights turned on high to illuminate all the details of how they charge for their services.
Duke Energy Sued over Alleged KickbacksEmployee Advocate - www.DukeEmployees.com - January 17, 2008
Suit against Duke Energy alleges kickbacks
Wednesday, January 16, 2008
Lawyers Randy Freking and Stan Chesley have filed a class-action complaint in federal court in Cincinnati charging that Duke Energy has been overcharging tens of thousands of residential and business customers because of illegal kickbacks given to large corporate customers.
The complaint outlines an alleged illegal scheme by Charlotte, N.C.-based Duke (NYSE: DUK) and its predecessor companies Cinergy Corp. and Cincinnati Gas & Electric Co. to funnel kickbacks to unidentified corporate customers in Greater Cincinnati in exchange for their withdrawal of opposition to rate increases that Duke sought from Ohio regulators.
The corporate customers were members of two groups, Industrial Energy Users-Ohio and Ohio Energy Group, that initially opposed a 2003 rate increase request by Cinergy.
The lawsuit was filed Wednesday in U.S. District Court in Cincinnati. It seeks full restitution of all charges that affected electric customers paid and that beneficiaries of the alleged scheme did not pay since the rate increase at issue became effective in January 2005. It also seeks punitive damages.
The named plaintiffs on whose behalf the lawsuit was filed include BGR Inc. of West Chester, Munafo Inc. of Cincinnati, and Aikido of Cincinnati.
Copies of various agreements between an unregulated Cinergy subsidiary and unidentified beneficiaries of the alleged scheme were filed with the lawsuit, but the identities of the corporate customers are blacked out.
The redacted copies were supplied to Ohio regulators as part of a utility rate case in 2006, during which the so-called "side deals" became an issue, according to a statement released by Freking and Chesley.