DukeEmployees.com - Duke Energy Employee Advocate
Duke - Page 1 - 2001
Duke Energy Employee Advocate - March 26, 2001
“Business Ethics” has published a list of the “100 Best Corporate Citizens for 2001.” It should come as no great surprise that Duke Energy Corporation was NOT included in the list. If Duke Energy had been included in the list, they would be screaming it from the rooftops. Since Duke was not included, they will never acknowledge the existence of the list.
Let’s face it, “Duke Energy” and “ethics” do not fit very well in the same sentence. It is just not very ethical to lie to employees for decades about the retirement benefits they will receive and then not deliver. It is not ethical to lie to employees about retirement health coverage for years and not deliver. It is not very ethical to attempt to hide the damage inflicted upon the employees. Duke recently offered new, mandatory “ethics training” to employees. They missed the boat again. What is needed is “Senior Management Ethics Training”!
Duke Energy has never had any commitment to ethics. The only reason the first ethics training was offered was because “everyone else was doing it.” Ethics training was invented in an attempt to instill a modicum of morality into brokers. A broker can rip you off in more way that you can count. Shooting them through ethics training was the corporate answer to the unscrupulous broker epidemic. In true corporate, copycat fashion, everyone began to offer ethics training.
By some freak circumstance, IBM managed to get on the list. But “Business Ethics” did penalize them for their pension greed:
“This year’s booby prize goes to IBM (No. 5), which dropped from its top position last year largely due to its mishandling of the change from a defined benefit to a cash balance pension plan, which drew widespread employee outrage. The switch cost some older employees as much as 50 percent of their pension, while it saved the company an estimated $200 million. The company did agree to offer more employees a choice of plan, but the unpopular move is still a blot upon IBM’s otherwise positive leadership in the area of employee relations.”
Duke Energy Employee Advocate - March 16, 2001
Duke Energy filed Form 424B2 with the Securities and Exchange Commission on 3/15/01.
Duke Energy Employee Advocate - March 14, 2001
Duke Energy filed these reports with the Securities and Exchange Commission on 3/13/01:
Duke Energy Employee Advocate - March 6, 2001
Duke Energy filed its Current Report with the Securities and Exchange Commission on 3/5/01. It is no surprise that they did not contribute anything to the retirement plan. They seldom had to contribute anything to it before the cash balance conversion. Now that our retirement benefits are reduced, the plan actually generates cash for the company! The promised retirement money that the employees will never see did not just evaporate, as some would have you believe. It just no longer goes to the rightful recipients; it is now reported on the bottom line.
"Duke Energy's policy is to fund amounts, as necessary, on an actuarial basis to provide assets sufficient to meet benefits to be paid to plan participants. No contributions to the Duke Energy Plan were necessary in 2000 or 1999. The net unrecognized transition asset, resulting from the implementation of accrual accounting, is being amortized over approximately 20 years."
Duke Energy Employee Advocate - March 6, 2001
Duke Energy filed a Preliminary Prospectus with the Securities and Exchange Commission on 3/5/01.
"Duke Energy Corporation is offering 25,000,000 shares of common stock. Our common stock is listed on the New York Stock Exchange, or NYSE, under the trading symbol "DUK." On March 2, 2001, the last reported sale price of our common stock on the NYSE was $40.49 per share."
Duke Energy Employee Advocate - March 5, 2001
Duke Energy filed its Preliminary Proxy Statement with the Securities and Exchange Commission on 3/2/2001. The Shareholder's meeting will be on April 26, 2001 in Charlotte.
There is a proposal to dilute Duke Energy stock shares by 100%! "A proposal to amend the Articles of Incorporation to increase the amount of authorized Common Stock from 1,000,000,000 to 2,000,000,000 shares."
The company can issue "Phantom Stock Awards." These awards must be for employees. We can put them with our phantom early retirement and our phantom retirement health coverage.
There is a shareholder's resolution to ban company "Contributions to Political Movements and Entities." Duke does not like this one. They always sleep better in bed with a few politicians.
There is a resolution to make "Investments in Alternative Energy Sources." Duke does not like this one either. Duke knows that the big bucks are in "dirty energy."
The company is keeping Mr. Priory's base salary below a million dollars per year. "In October 2000, the Compensation Committee recommended, and the Board of Directors approved, an additional adjustment to Mr. Priory's base salary, increasing it to $962,500, retroactive to March 1, 2000." Mr. Priory also gets a few incentives. He has been eligible for an incentive of 100% of his salary. That is a little better that the employees get. Now he gets more. "Based on 2000 EPS performance, Mr. Priory received a payment of $1,908,328, representing 200% of his target incentive opportunity." He gets a few more jellybeans. "In February 2000, Mr. Priory received a stock option award for 400,000 shares of Duke Energy Common Stock with an exercise price at fair market value on the date of grant. The stock option has a ten-year term and will vest 25% on each of the first four anniversaries of the grant date." He will get phantom stock too.
Duke Energy Employee Advocate - February 14, 2001
Duke Energy is filing a lawsuit in California because the rules of the energy game were changed.
Apparently Duke’s senior management does not like it when the rules are changed in mid game. They are upset because they feel that they are not getting what they were promised. The poor dears.
Duke’s management had no problems whatsoever in changing the retirement rules for its employees! Duke Energy reneged on 30 year old promises to employees. They took back the early retirement subsidy. They took back retirement health insurance. Their retirement promises to loyal employees turned out to be retirement lies.
Employees now get to work ten years longer than what they were promised, while the executives reap large bonuses and millions of dollars worth of stock options. “Excess” pension money can now find its way to be corporate bottom line.
Duke Energy feels that its should be allowed to break agreements that were entered voluntarily if they gain money from it. But they feel that others should never alter their agreements, or they will be sued.
The company pretends it cannot understand why the employees do not like the stingy cash balance plan that was forced upon them. We cannot understand why Duke does not like having the energy rules changed and would like to testify in the trial.
Duke Energy Employee Advocate - January 31, 2001
Rick Priory was quoted in “The Charlotte Observer” as denying that Duke Energy Corporation is engaged in profiteering from the California energy crisis. He said: "Duke is being accused of doing things we would never engage in…"
All we know is the Duke’s management has been scheming to get into the deregulation game for over a decade. And just why did they want to get into it? They wanted big profits, of course. Just how far they went to get those profits remains to be seen.
Management’s excessive greed prompted them to avail themselves to the employees pension fund. Employees certainly thought that this was something Duke Energy “would never engage in.” But we found out just how overpowering their greed is.
The charges of profiteering are not just idle talk; Duke is facing lawsuits in California. Employees may have been willing to give Duke the benefit of the doubt - before the cash balance pension conversion. Now, who is to say? If a company will do unthinkable acts to its own employees for money, just what would they do to perfect strangers?
Mr. Priory stated: "Duke is a risk management company; that's what we do for a living, But in California, they didn't manage their price risk."
What about the risk to employee's retirement future? The retirement promises made to them were destroyed when it was too late for many employees to do anything about it.
No one is excusing the California government. They made a comedy of errors implementing deregulation. The people of California became helpless victims. The predator is constantly looking for victims, be they ratepayers or employees.
Click the link below to read the entire article:
Associated Press – By MICHAEL LIEDTKE - January 19, 2001
The financial pain of California's major utilities translated into a handsome gain for power generator Duke Energy, which more than doubled its revenues in the fourth quarter and topped Wall Street's earnings expectations.
The Charlotte, N.C.-based company reported on Thursday fourth-quarter net income of $284 million, or 38 cents per share, a considerable improvement over last year's fourth quarter, when it had a net loss of $189 million.
Excluding special charges, Duke had earnings of $352 million, or 94 cents per share, beating the consensus estimate of 88 cents by analysts polled by First Call/Financial Thomson.
Duke Energy benefited handsomely from the energy price spike because it owns four California power plants that generate with a total capacity of 3,300 megawatts, enough to supply more than 3 million homes. The company didn't break down its profits by state.
The company had fourth quarter revenues of $15.4 billion, compared with $6.2 billion in revenues during the same period a year earlier. For all of 2000, Duke Energy earned $1.78 billion, or $4.78 per share, up from $1.51 billion, or $4.08 per share, in 1999.
Duke's shares rose $1.88 to $73.81 in early afternoon trading Friday on the New York Stock Exchange.
Duke is the first major provider of California electricity to disclose how much it prospered from market conditions that have pushed the state's two largest utilities, Pacific Gas and Electric and Southern California Edison, to the brink of bankruptcy.
On Friday, Duke Energy raised its annual earnings per share growth target to 10 percent to 15 percent. The previous target was 8 percent to 10 percent.
Richard B. Priory, the company's chairman, president and chief executive officer, said in a statement that the increased expectations reflect confidence in the company's proven performance, solid strategy and successful expansion into key regions around the world. He did not mention the California crisis.
Other power generators are expected to register profit gains much larger than Duke, which has most of its operations outside of California.
For instance, Houston-based Dynegy's fourth-quarter profits are expected to double. Other major California power generators scheduled to release their results during the next three weeks include Reliant Energy, Southern Energy and San Jose-based Calpine Corp.
The generators are releasing their robust profits against a backdrop of rolling blackouts in California, creating a potentially awkward situation.
On the one hand, the companies are hoping the profits will push up their recently slumping stocks, but they don't want to provide ammunition to Californians who believe out-of-state generators are gouging the state.
"They have a bit of a juggling act to do," said analyst Tim Winter of A.G. Edwards & Sons in St. Louis.
The financial distress of California's utilities is starting to infect the out-of-state generators.
Duke, for instance, reserved $110 million in the fourth quarter in case it doesn't collect on debts owed for electricity sales in California. As of Dec. 31, Duke said it had about $400 million in outstanding electricity bills in California.
With their cash reserves evaporating and no borrowing power, both PG&E and SoCal Edison have started defaulting on their bills.
The volatile market conditions in California also have hurt the stocks of power generator's. Thursday's closing price of Duke's stock represented a 20 percent decrease from the company's record high of $90.44 reached during the fourth quarter.
Even so, Duke's market value has increased by $8 billion, or 44 percent, since the end of 1999.
The Charlotte Observer – By JIM MORRILL - January 19, 2001
Corporations with Carolinas connections helped bankroll the presidential campaign. Now they're helping pick up the inaugural tab.
Corporate largess will be on display throughout Washington this weekend. That includes tonight's N.C. State and S.C. State Society balls and a special party Saturday for North Carolinians at the venerable Willard Hotel. At least one corporation is even providing free transportation to and from Washington for a handful of N.C. lawmakers.
"I would imagine that just about every corporation in America is sponsoring some of the inauguration, and would, irrespective of who the victor was," says Charlotte's Lauren Steele, a spokesman and lobbyist for Coca-Cola. Steele flew several Republican legislators to Washington on Thursday on his company's corporate jet, including Rep. Ed McMahan and Sen. Bob Rucho of Mecklenburg and Senate Minority Leader Patrick Ballantine of New Hanover.
Corporations, many with interests before the federal government, are spending millions to entertain the thousands of visitors streaming into Washington to fete the inauguration of George W. Bush.
Defense contractor Lockheed Martin, for example, has given the inaugural committee $200,000. General Electric, AT&T and U.S. Tobacco are among dozens of $100,000 donors. Even Major League Baseball has given $100,000 to celebrate the inauguration of the former owner of the Texas Rangers.
"It's definitely a very pragmatic move, especially if you're trying to edge your way to the table in terms of policy for the next four years," says Holly Bailey, a spokesman for the Center for Responsive Politics, a Washington-based group that tracks such contributions.
Bank of America, Wachovia, BellSouth, Duke Energy and R.J. Reynolds are among the N.C.-based companies helping sponsor the N.C. State Society Ball, a black-tie affair at the Hotel Washington with a tab of more than $80,000.
The American Council of Life Insurers, Duke Energy and Westinghouse are partly sponsoring tonight's $90,000 S.C. State Society Ball at the Corcoran Gallery of Art.
Then there's a separate party Saturday afternoon for about 250 invited North Carolinians in the Willard's Franklin Pierce Ballroom.
According to the organizer, state Rep. David Miner, R-Wake, the event will feature plenty of champagne, an open bar and appearances by N.C. members of Congress from both parties and cameos by VIPs such as Attorney General-designate John Ashcroft.
Defraying the estimated $60,000 cost are companies such as Bank of America, BellSouth, Sprint, Duke Energy and Martin Marietta Materials. Companies gave as much as $5,000.
For their part, legislators say they won't be influenced by corporate donations, or even a plane ride from Coca-Cola, a company that gave party groups $860,000 in soft money last year.
"In my four years (in the Senate), I've never even had them ask me for time to sit down and talk," says state Sen. Rucho.
Favors such as Coke's plane ride are legal but must be reported by the lobbyist only if any lobbying is done on the flight. For his part, Rucho says he would be willing to pay for the lift. "As far as I'm concerned, I'm willing to pay my share."
Sen. Ballentine agreed the trip wouldn't influence him. "I can't let a plane trip influence me if (a vote) was against my better judgment," he says. "Hopefully I wouldn't be persuaded by that. You hear about corruption all the time. You always think about conflicts of interest. I've never been offered anything that would tempt me." But, adds Ballentine: "I hope it won't be the last time any corporation does anything for me."
Duke Energy Employee Advocate – January 15, 2001
Duke Energy’s recent press release, “Nuclear Stations Eclipse Company Records,” tells of their three nuclear stations setting new standards in efficiency and reliability in 2000 by generating more electricity than ever before. Catawba, McGuire, and Oconee nuclear stations, in North and South Carolina, all broke records for the year.
The employees are doing their part. What do they get for their efforts? Their early retirement benefits were taken away from them, and they were stuck with a cheap cash balance plan. As if this were not enough, the company then stripped away retirement medical coverage which had been promised for decades. Employees lost two holidays for two years. The company begrudgingly gave them back only this year. Also, the medical coverage gets crummier each year.
Senior management is making out fine with record revenues, and high rating left and right. Some of the ratings, such as those given by the Nuclear Regulatory Commission and the Institute of Nuclear Power Operators, are not made available to the public. This must be a federal regulation, because it is not like Duke to miss an opportunity to toot its own horn! Duke officers cashed in stock options last year. If they had been flat broke when they cashed them in, they would have walked away millionaires in one day. Of course, this is not to suggest that they were broke to start with.
The CEO is getting by. One year he received a 75% raise in salary. The salaries of many employees have been frozen for years.
He has received over a third of a million dollars bonus to his “executive” cash balance plan. The employees only lost money with the cash balance plan. They lost money and 10 years of their lives.
The CEO cleared over a million dollars cashing in stock options. The employees got back their two holidays!
He may wake up in a cold sweat one night, realizing that he and his company are nothing without the employees. He might. But more than likely, he will just snore all night long, with visions of stock options dancing in his head.
Duke Energy Employee Advocate – January 14, 2001
“The Wall Street Journal” published “Power Suppliers Pressured to Share Pain With California Utilities.” The California governor wants profiteering companies to bankroll them until they can see farther.
Lots of luck to the California governor. Duke Energy will not even give the employees back their hard earned pension benefits. Nothing short of a court order will shake Duke loose from a dime. Even then, they will stall as long as possible before complying. Ask anyone who has tried to settle an asbestosis claim with them. Duke Energy gets a death grip on each and every dime possible. It matters not to them if the money came from the employees pension plan or from other utilities bankrupted by price gouging. Duke has it, and they are not letting loose of it.
Duke Energy has been known to prosecute ratepayers for twenty-five dollars. If they will prosecute the poor guy who has his lights turned off and cannot pay a twenty-five dollar bill, do you think that they are going to let millions of dollars slip by?
It is cold this winter. But it will have to get a lot colder toward the center of the earth for that to happen, if you get our drift.
Duke Energy Employee Advocate – January 13, 2001
How do employers manage to keep pulling some version of pension skullduggery each year? That’s easy. Employers have groups of lobbyist at their beck and call. These groups relentlessly lobby congress and never fail to send their opinions to the various government agencies. One the other hand, most employees are sound asleep during the whole process. Do you see how things may get just a little lopsided? Congress and the federal agencies only hear one side of the story. Getting laws passed to favor employers has been child’s play. The opposition has been almost non-existent. These groups have offered to assist George W. Bush in selecting the “right” people for various federal positions! These lobbyist groups have absolutely no objection if employees wish to go back to sleep. Go ahead and catch a few winks. These groups will gladly “take care” of your interest!
If you were not aware of this ongoing pension battle, do not feel bad. Most employees did not know of the unscrupulous dealings going on. In this case, ignorance is a valid excuse for not being engaged in the pension battle. How could you be involved in things that you were not aware of?
If you have read anything about pensions on this site, you no longer have the excuse of ignorance. At least you now have a choice of whether to get involved or not.
It does not take a prohibitive amount of time or money to make your opinions heard. A total of a few hours per year and some chump change can make a world of difference in your retirement future. Your action or inaction can gain or lose ten years of your life! Does anyone really want to work an extra ten years if they do not absolutely have to?
You can write congress at any time, but the really good opportunities only come around a few times per year. Keep tabs on this site and/or sign up for the e-mail newsletter. Be ready to act on all opportunities to provide input regarding your pension and your future.
Duke Energy Employee Advocate – January 11, 2001
A decade ago, Duke senior management demonized Piedmont Natural Gas. The company was painted to be the enemy. We were told that Piedmont Natural Gas was going to “eat our lunch.”
We always thought that management was overreacting. It was entirely unjustified to blame Piedmont Natural Gas for doing a better job that Duke of giving the customers what they wanted. People generally prefer “warm” gas heat over “cool” heat pumps. Many people just preferred gas over electricity for water heating, cooking, and home heating.
Not only that, but Piedmont Natural Gas proved to be better marketers that Duke. They offered new home builders an attractive deal to install gas appliances. Duke only offered a few dollars incentive to anyone who would build a total electric home.
Times have changed since then. Now, Duke Energy is also in the gas business. And, they have announced that they will be joining Piedmont Natural Gas in mutually beneficial projects. They are discussing sharing trenches, meter reading, etc. Duke could have been doing this for the past decade, instead of blaming others for their own shortcomings.
Duke is now enlightened enough to see an ally in a former enemy. Duke’s employees have not faired as well. Duke employees are now treated as the enemy, to be stripped of as many benefits as possible. Treat people as your enemy and they just might fulfill your expectations – in spades.
Duke Energy Employee Advocate – January 5, 2001
Your letters to the Department of Labor can have an impact, particularly if there is a large volume of them. The impact of the letters can be maximized if copies of them are sent to your senators. You can include a cover letter if you wish, but if you only send the copy, they will get your drift. Congress is gearing up for more pension debate. Your representatives need to know exactly where you stand on this vital issue.
There is not much time left, but there is enough time to let your coworkers know about DOL’s request for cash balance plan information.
Duke Energy Employee Advocate – January 1, 2001
Welcome to the year 2001 and officially the new millennium.
The year 2000 was the year for Duke officials to unload Duke Energy stock, according to “Yahoo Finance.”
On November 1, 2000, Rick Priory exercised options for 22,900 shares at $58.94. They were sold for $86.92 per share. Cash taken away from the deal: $640,742.
Over a half of a million dollars just does not go as far as it used to. So, the next day he exercised options for 13,700 more shares at $58.94. They were sold for $86.75. Take home cash: $380,997.
In two days, he cleared over a million dollars. No doubt, he will be rushing to after Christmas sales with his new wealth.
Mr. Priory was not the only Duke officer unloading shares in 2000. Bill Coley, Rich Osborne, Fred Fowler, Mike Tuckman, and Dennis Hendrix also exercised options for a significant number of Duke Energy shares.
Recall that Paul Anderson sold out at just the right time a few years ago. Company officials have to report their stock sales, because they are the ultimate insiders. Who could possibly know better when to get out?
In the year 2000, we reported the Duke Energy Stockholder’s Meeting events that Duke never got around to mentioning. Peter Wylie, grandson of Duke cofounder Dr. Gill Wylie, gave the other side of the MOX nuclear fuel issue. Steven Dolley, Nuclear Control Institute, also presented information about the downside of MOX fuel. A doctor also testified about the dangers of MOX fuel.
Mr. Wylie said that he asked Duke Energy management about Virginia Power’s involvement with them in the MOX fuel venture. He was repeatedly told that they cold not comment on the business of another company. When Virginia Power rejected the MOX fuel deal, Mr. Wylie asked Duke management if they were going to rethink the matter. He was informed that they could not answer his question, because it was proprietary information. We suppose that MOX fuel is good for us, because Duke Energy said so, and that’s that!
We attended the EEOC Workshop, presented by the American Bar Association. We met Ida Castro, EEOC Chairwoman, and heard her speech at the luncheon provided.
A letter that employees of several companies had written to the Department of Labor in 1999, gained us an invitation to meet with their officials and officials of the Treasury Department in Washington. The center of our complaints was cash balance pension conversions.
We were able to enlighten the officials as to how the cash balance conversions were really being implemented. It was a very different version than they had been hearing from the employer’s lobbyist! The officials wanted to know more about the information that was hidden from the employees concerning the conversion details.
The decision was made during the meeting to request comments from all employees affected by a cash balance plan pension conversion. The window for comments will be open until February 22, 2001. The comments must be submitted by letter. This could be the most important letter you have ever written. Please do not miss the opportunity to send in your cash balance plan comments.
There were several articles published about the DOL/Treasury Department meeting with employee representatives. The “Wall Street Journal” published an article about companies who secretly take money from employees through pension conversions and other tactics. Duke Energy was specially referred to in the article.
Has Duke Energy made any effort to mend its ways? Yes, there have been some improvements. At the very least, the company did not fall for some of the other outrageous benefit changes that management consultants are trying to sell. One such plan is "Personal Time Off," where employees lose all of their sick days and holidays, and only get a few personal days off. The company has not fallen for the "defined contribution" health care plan – yet, anyway. Any new benefit plan touting “flexibility” is always designed to take money from the employees. We have been bent double with pension changes; we do not need more “flexibility.”
The company restored the two holidays that were effectively taken from many employees. This was an easy call; it cost no money. We just now have the holidays that we originally had.
Instead of continuing to make thin excuses for the lack of current benefit information, the company implemented a benefits website. Employees can now check balances from any internet connection.
Some exempt employees have an increased incentive payout percentage. Many of these employees work much of the time for no pay. “Exempt” means exempt from wage laws. They deserve any increases that they get.
And, just when will you get you full pension restored? You did not expect this one to come without a fight, did you? If you are dissatisfied with the cash balance plan conversion, continue to let it be know. Potentially, the most effective way is through the letter to the Department of Labor – hint – hint.
2001 will be no year for employees to sleep. When you sleep, you wake up with less money. Rest assured that the managerial bean-counters are like rust – they never sleep!
Duke Energy failed to make Fortune’s list of the 100 best companies to work for in 2000 - again. We would not really care. But in 1999, Rick Priory, Mike Tuckman, and a Duke spokesperson made the biggest deal possible, because Duke was rated in a Money magazine benefits article. This was Duke management’s answer to the pension issue. Employees were just supposed to forget what they had taken from them in pension and health benefits. Everything was supposed to be just fine because Duke was mentioned in a benefits article! Duh! Since management set the precedent of looking to magazine articles to validate their effectiveness, we feel compelled to point out when they do not even make the list. Since Duke does not make the “good company” lists anymore, they downplay the importance of them. It is business as usual; just make up the rules as you go.
Duke has been trumpeting deregulation as the greatest thing ever for over a decade. What a miserable flop deregulation has turned out to be. It has been a flop for individuals and business in California, facing double to quadruple electricity prices. It has been a flop for employees; deregulation has been used as an excuse for each benefit take-away. Only one group is smiling like the Cheshire cat – Duke management. Well, all the money had to go somewhere.
Duke did manage to pick up a few more lawsuits in the deal. Their new motto may be: "If you are not sued once a day, you are not trying hard enough."