www.DukeEmployees.com - Duke Energy Employee Advocate
Duke - Page 2 - 2000
between capital and labor." - Frank James (Jesse's Brother)
Retirement Savings Plan - Late FilingDuke Energy Employee Advocate - June30, 2000
Duke Energy has filed a "NOTIFICATION OF LATE FILING" with the Securities and Exchange Commission regarding the Retirement Savings Plan. Click on the link below to view the filing:
Survey - Part TwoDuke Energy Employee Advocate - June 14, 2000
Some employees received the opinion survey Tuesday in Lotus Notes. Some employees answered surveys last week. Under the "Questions About You" heading were some interesting items. The company wanted to know your race, sex, whether a supervisor or non-supervisor, whether exempt or non-exempt, and time employed.
It is known that Duke loves statistics and many degrees of classifications. But just what is the necessity for such information on an employment opinion survey? If the questions are asked, there must be a reason. Do opinions carry different weights based on age, race, sex, or whether a person is in management? It appears improper to even ask such questions. If corporate decisions are based on age, race, or sex, "Duke's law" is challenging federal law once again.
Employee Opinion SurveyDuke Energy Employee Advocate - June 13, 2000
An Employee Opinion Survey will be sent to approximately 1,200 people via Lotus Notes June 13. The survey results can be skewed by the choice of questions and how they are asked. If pension injustice, along with lack of corporate integrity and ethics, are a problem for you - be sure to mention it. The issue will likely be downplayed, but you can always type it in.
Boeing's Pension ProblemsDuke Energy Employee Advocate - June 1, 2000
Boeing's employees have had pension problems for sometime. Now Duke and Boeing are teaming up. Click on the link below to see the Boeing employee's web site:
No Boogey-Man?Gas Processors Report - June 12, 2000
The answer is a punctuated 'NO!' to the question that many in the energy industry have about why Duke Energy Field Services (DEFS) delayed its IPO. "Is there something wrong with this IPO?" No. There is no 'boogey-man' underlying reason hiding in DEFS' closet regarding this annoucement(sic).
DukeSolutions, Boeing Co. Form PactDow Jones - May 31, 2000
CHARLOTTE -- Duke Energy Corp.'s (DUK) DukeSolutions unit received a 20-year, multimillion-dollar contract to provide energy services to Boeing Co.'s (BA) space and communications facility in Huntington Beach, Calif.
Specific financial terms weren't disclosed.
Success 2000?Duke Energy Employee Advocate - May 29, 2000
The "program of the month" at some locations is "Success 2000." We have found the program to be "underwhelming." It started with management's leaving the site for a day or so for a meeting. Later it was announced that each crew was going to have a Success 2000 meeting.
We cannot say that excitement was in the air. The Success 2000 meeting was a bigger letdown than anyone expected, and no one was expecting much. It turned out to be the old "plane crash" exercise, typically encountered by first quarter MBA students. Evidently someone in management was impressed by it. The scenario: A plane crashes in a frozen wilderness. A group of survivors must decide whether to try to find civilization or remain with the plane. The logical choice is to remain with the plane until rescued. There was also a list of items to rank in importance to survival.
Management also did the same exercise at their earlier meeting. The exercise was a test in logical thinking. It was found that some of the members of supervision scored lower than their subordinates (no comment)! The exercise was also supposed to prove that the group's decision is always superior to the individual's decision. Ah! Now we see why management was so eager to promote this. If they can convince you to doubt your own feelings and always trust management's decisions, they have won the game.
In reality things do not work out like the exercise would have you believe. With a truly democratic process, perhaps they would. But we are dealing with an autocratic process. The beauty of it, from management's viewpoint, is that management does not event have to tell the committee members what they want. The sycophants will ferret out what management's true goal is without the necessity of it even being mentioned! The worst case of this was observed when an employee evidently thought he was pursuing an agenda against management's wishes. He changed course in mid sentence! Is this a great process, or what? So, anything that senior management wants will always come out of a "rubber stamp" committee. Presto, you have a "group decision."
It gets better. You know that you are not going to get off with just an exercise. Someone said that the meeting was held because of complaints that management never listens to employees. This meeting was supposed to solve all this. Crewmembers were supposed to come up with a list of goals/actions that would guarantee company success in the year 2000. When questions of this nature are posed to any group, a certain number will quote exactly what they think management wants to hear. So, now each crew has a list of dubious goals/actions. It gets better. This list that is going to "guarantee success" is then framed and placed in each crew area. So what do we have now? A cornball list in each crew area that catches dust. World hunger is still not solved. But, it gets even better. Evidently someone was displeased because employees were not bowing and worshiping to the list each day. So, all of the lists were reduced in physical size, laminated, and attached to a clip. Why? So employees can wear the fool things around their necks!
The framed lists were ignored. So, what will happen now that the lists have become dog tags which dangle from peoples necks? They will be ignored. If a person were to wear every little list with a clip on it that was given to them, they could have 10 or so hanging around their neck! The worst case is that the weight from all the dog tags could swing the neck strap into an area not wanted and cause an undesirable action or injury. The best case is that employees still enjoy a never ending source of amusement. The sad part is that Duke is monopolizing all this management talent while some Cub Scout den is probably going without leadership.
Working For Free: Overtime PayDuke Energy Employee Advocate - May 27, 2000
Duke Energy just became too greedy when the cash balance pension conversion was implemented. They had been getting away with a lot before that, but had been escaping scrutiny. As we began pulling on the ugly cash balance thread, other questionable matters began to unravel.
There may have been little games played with the pension before 1997. The matter of shrinking health insurance coverage needs to be looked into. And, the matter of overtime pay needs to be addressed. Many employees do not get overtime pay; they get paid nothing above 40 hours per week.
Some people in Washington are aware of this injustice. There was a Congressional Hearing held this month on the subject. "The Fair Labor Standards Act: White-Collar Exemptions in the Modern Work Place," was held by The Committee on Education and the Workforce Subcommittee on Workforce Protections.
And, as with all employment issues, if you are not happy with the situation, don’t suffer in silence!
RISKDuke Energy Employee Advocate - May 22, 2000
A new role has been created: Chief Risk Officer. Rich Osborne will leave his position as CFO and assume the new role on June 1st. At least Duke is recognizing the unparalleled levels of risk the company has undertaken.
Rick Priory said: "With about half of our revenues now derived from commodity positions..." No wonder one investor at the shareholder’s meeting said that he had trouble sleeping at night. Rick Priory said that he also had trouble sleeping. His trouble sleeping probably has more to do with the fear of losing a dollar that from remorse for the loss of employees' pension funds.
Even professional futures traders that have traded all their lives sometimes wipe out. One trader can literally bring down a company. If brokerage firms have trouble with overwhelming losses, do you think that a private firm might have some cause for concern? Especially a firm that derives half of its revenues from futures trading.
What if it is close to the end of a quarter and revenues are down? With just a little more exposure to the futures market everything could come out fine. What if the market goes against the position? If the company is long and the price is close to strong support, it may be tempting to double or triple the position. Then only a small upward move would put the company in the black. Does that sound farfetched? It is done every day. Many times the trader pulls it off. But, not always. Major headlines can start in such a manner.
When a trader increases his position to recoup losses and the market continues to mover against him, his loss mounts exponentially. What started as a loss of a few million can easily run into 50 – 100 million dollars or more. Such unexpected losses could start Mr. Osborne's bowtie spinning!
Used strictly for hedging purposes, futures can actually reduce risk. When greedy people get involved with the mentality of a day-trader – look out below. If Duke Energy is so great trading futures, why did it need to take half of our pension? Oh yeah, we bankrolled the crapshoot.
Read the article below to see what happened to a professional broker. The risk is there.
Rogue Brokers Cost Merrill Lynch FinesBoston Globe - May 17, 2000
Boston – Richard Greene was more than Merrill Lynch & Co.’s biggest broker. He was part legend in Boston, where clients liked to drop his name and everybody knew him downtown.
But he could cost Merrill more than $30 million in the coming months, as the Wall Street giant settles charges with Massachusetts securities regulators that it failed to properly oversee the retired broker and his risky investment strategy.
Duke Energy - Quarterly Report – Risk/LitigationDuke Energy Employee Advocate - May 13, 2000
The pension plan suffered a drastic reduction in benefits for most employees in January 1997. Some months later Pan Energy was purchased. Even to the most casual observer, there would seem to be some correlation. To be less genteel, it would seem that the purchase of Pan Energy was financed on the backs of the employees - without our knowledge or consent.
After the purchase of Pan Energy, Duke began buying up plants in foreign countries. Has everything been rosy for the employees since? Hardly! Our benefits have only continued to decrease. So, what has been the net change, other than the loss of benefits that employees have sustained? RISK has increased. That cannot be denied. There are now risks involving, foreign currencies, natural gas, and new environmental risks.
Some attempt has been made to reduce these risks by hedging with futures contracts. While risk can sometimes be contained through hedging, if done ineptly, even more losses can result. If the risk is hedged so tightly that no loss is possible, then the upside potential is lost as well. Derivatives are used, but they provide no magic fountain of money. Does anyone remember Orange County? With all the ongoing trading and fanfare, the fact remains that "there is no free lunch."
Buying other companies does not guarantee profits. Increasing foreign risk does not guarantee profits. Reducing pension benefits does guarantee the employees a dimmer future. With all the dancing around and wheeling and dealing, Duke is attracting litigation like a magnet. Is the company better off that it was in 1996? That is debatable. Are the employees better off than in 1996? Definitely NOT!
Duke Energy - Quarterly ReportSecurities and Exchange Commission - May 12, 2000
Below are excerpts from the 1st quarter filings with the SEC. Click on the link at the end to view the full filing.
"LITIGATION. Duke Energy and its subsidiaries are involved in legal, tax and regulatory proceedings before various courts, regulatory commissions and governmental agencies regarding performance, contracts and other matters arising in the ordinary course of business, some of which involve substantial amounts.
Where appropriate, Duke Energy has made accruals in accordance with Statement of Financial Accounting Standards no. 5, 'Accounting for Contingencies,' to provide for such matters. Management believes that the final disposition of these proceedings will not have a material adverse effect on consolidated results of operations or financial position.
"OTHER COMMITMENTS AND CONTINGENCIES. Periodically, Duke Energy may become involved in contractual disputes with natural gas transmission customers involving potential or threatened abrogation of contracts by the customers. If the customers are successful, Duke Energy may not receive the full value of anticipated benefits under the contracts."
"COMMODITY PRICE RISK
"In March 2000, Duke Energy's exposure to market fluctuations in the prices of NGLs increased as a result of Duke Energy combining its gas gathering and processing business with Phillips Petroleum's Gas Gathering, Processing and Marketing unit to form a new midstream company. See Note 3 to the Consolidated Financial Statements for additional information on the combination. Duke Energy closely monitors the risks associated with NGL price changes on its future operations, and where appropriate, uses crude oil and natural gas commodity instruments to hedge NGL prices. Based on a sensitivity analysis as of March 31, 2000, it was estimated that if NGL prices average one cent per gallon less in the next twelve months, earnings before income taxes would decrease by approximately $10 million, after considering the effect of Duke Energy's commodity hedge positions.
"FOREIGN OPERATIONS RISK
"Duke Energy is exposed to foreign currency risk, sovereign risk and other foreign operations risk that arise from investments in international affiliates and businesses owned and operated in foreign countries. To mitigate risks associated with foreign currency fluctuations, when possible, contracts are denominated in or indexed to the U.S. dollar or may be hedged through debt denominated in the foreign currency. Duke Energy also uses foreign currency derivatives, where possible, to manage its risk related to foreign currency fluctuations. To monitor its currency exchange rate risks, Duke Energy uses sensitivity analysis, which measures the impact of a devaluation of the foreign currencies to which it has exposure.
"At March 31, 2000, Duke Energy's primary foreign currency exchange rate exposures were the Brazilian Real, the Peruvian Nuevo Sol, the Australian dollar, the El Salvadorian Colon and the Canadian dollar. Based on the sensitivity analysis at March 31, 2000, a 10% devaluation in the currency exchange rates in Brazil would reduce Duke Energy's financial position by approximately $123 million and would not significantly affect Duke Energy's consolidated results of operations or cash flows over the next twelve months. Based on the sensitivity analysis at March 31, 2000, a 10% devaluation in other foreign currencies were insignificant to Duke Energy's consolidated results of operations, financial position or cash flows."
"NATURAL GAS COMPETITION. WHOLESALE COMPETITION. On February 9, 2000, the FERC issued Order 637 which sets forth revisions to its regulations governing short-term natural gas transportation services and policies governing the regulation of interstate natural gas pipelines. "Short term" has been defined as all transactions of less than one year. Among the significant actions taken are the lifting of the price cap for short-term capacity release by pipeline customers for an experimental 2 1/2-year period ending September 1, 2002 and requiring that interstate pipelines file pro forma tariff sheets to (i) provide for nomination equality between capacity release and primary pipeline capacity; (ii) implement imbalance management services (for which interstate pipelines may charge) while at the same time reducing the use of operational flow orders and penalties and (iii) provide segmentation rights if operationally feasible. Order 637 also narrows the right of first refusal to remove economic biases perceived in the current rule. Order 637 imposes significant new reporting requirements for interstate pipelines which must be implemented by September 1, 2000. The stated FERC goal of these reporting requirements is to increase transparency of transactions on a real-time basis and to provide additional information on pipeline organizational structure. Additionally, Order 637 permits pipelines to propose peak/off-peak rates and term-differentiated rates, and encourages pipelines to propose experimental capacity auctions. Order 637 is subject to requests for rehearing and possible court appeal.
"Because the ultimate resolution of the foregoing proceeding is unknown, management cannot estimate the effects of these matters on future consolidated results of operations or financial position."
"ENVIRONMENTAL MATTERS. AIR QUALITY CONTROL. In October 1998, the Environmental Protection Agency (EPA) issued a final ruling on regional ozone control that requires revised State Implementation Plans for 22 eastern states and the District of Columbia. This EPA ruling was challenged in court by various states, industry and other interests, including the states of North Carolina and South Carolina and Duke Energy. In March 2000, the court upheld most aspects of the EPA's rule. Petitioners have asked the court to rehear the case and overturn the March decision. In May 1999, the court had ordered that no state need submit a plan "pending further order of the court." That order is still in place, although the EPA had asked the court to lift the order. The EPA has undertaken other ozone-related actions having virtually identical goals to its October 1998 action. These actions have likewise been challenged in court by the same or similar parties. The final resolution of the October 1998 action is expected to resolve these other ozone-related actions as well. The North Carolina Environmental Management Commission (EMC) is considering several competing proposals to reduce utility emissions of nitrogen oxide. The EMC voted in March 2000 to send three alternative nitrogen oxide proposals to public hearing with the intention of adopting a final rule in September 2000. Duke Power announced that it will undertake additional nitrogen oxide control projects between 2000 and 2005, at a cost of approximately $100 million as an interim step to address possible contributions to ozone formation in North Carolina. Depending on the resolution of these matters, costs to Duke Energy may range from the $100 million that Duke Energy has already committed to $600 million for additional capital improvements."
"ITEM 1. LEGAL PROCEEDINGS.
"The Illinois Environmental Protection Agency has initiated an environmental enforcement proceeding against a former subsidiary of Duke Energy relating to alleged air quality permit violations at a natural gas compressor station. Duke Energy has agreed to indemnify the purchaser of this former subsidiary against liability for any penalty or fines resulting from these alleged violations. This proceeding could result in a penalty in excess of $100,000."
The Feds are coming! The Feds are coming!Duke Energy Employee Advocate - May 2, 2000
Duke Energy is offering a seminar on May 8, 2000 entitled: "Reacting To Law Enforcement: What To Do When The Authorities Appear At Your Door." We thought that only criminals became concerned when law enforcement officers appeared. Would you be concerned if law enforcement officers appeared on your doorstep? If so, your conscience is probably not too clear. Law enforcement officers are the honest persons friend. They are the nemesis of criminals. Al Capone probably had drills about what to do when the Feds arrived.
The criminal element never sleeps well. Their minds are constantly squirming, fearing that the truth of their ill gotten gains will see the light of day. It seems that the company is concerned about subpoenas for testimony or the production of documents (evidence). They are concerned about warrants and file seizures. Does this sound like the tactics of someone with nothing to hide? The company has been sowing to the wind for years. The time may be nearing to reap the whirlwind. The tactic always used with employees is deny, deny, deny.
Perhaps it is felt that more is now needed in their bag of tricks. There is a problem when a few shady characters are reaping windfall gains at the expense of everyone else. Just what incentive does the honest majority have in covering for those who have been feeding on them? When Dorothy killed the wicked witch, the witches’ soldiers thanked her for freeing them.
There are some multiple choice questions on the LAN. One is: "What is the first thing you should do when you receive a subpoena requiring your testimony or production of documents related to the company’s business?"
One possible answer is: "Assume a different identity and leave the building as soon as possible."
Another question is: "What should you do when government agents appear at your office with a search warrant and begin to seize files and other objects?"
One possible answer is: "Distract the agents with coffee and donuts, then proceed to shred any documents you can find and delete electronic files."
Many a truth has been revealed in jest.
Meeting of Shareholders 2000Duke Energy Employee Advocate - April, 21, 2000
The Duke Energy Meeting of Shareholders was held on April 20, 2000. For a full report of everything that the company will not tell you, click the link below.
I Had My Head When I Came In HereDuke Energy Employee Advocate - April 17, 2000
An IBM employee pointed out a bit of history from the French Revolution. Early in the revolution, many believed that the noble thing was to walk gallantly to the guillotine without protest. Well, this was just too easy. So, taking advantage of the docility of the people, those in control relived many more of their heads.
Eventually some of the condemned started to loudly protest and create a disturbance about being put to death. The uproars began causing problems for those in control and the beheadings were stopped. Moral of story: "If you are going to fight back, do so while you head is still attached to your body." If you do not like your pension plan, do not suffer in silence.
No Stockholder Resolution For CEO RetirementDuke Energy Employee Advocate - April 15, 2000
The IBM employees have had great success with the stockholder resolution to restore retirement and health benefits. They also presented a resolution to bring the CEO's lavish retirement package in check. This resolution will not be allowed. Why? It seems the CEO has a CONTRACT! Is that not a kick in the pants?
The CEO has a contract; the employees do not. The CEO has a lavish retirement plan; the employees have a crummy cash balance plan. The CEO does not understand what the problem is.