DukeEmployees.com - Duke Energy Employee Advocate
Duke - Page 4 - 2000
Welcome to 2001Duke 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."
Happy New Year!
Duke Energy Employee Advocate - December 29, 2000
The consulting firm, William M. Mercer published benefits survey results December 12 on its website. We refer to the results as predictions, because those who do the surveying can easily influence the results by the questions asked and the way they are asked.
You will remember our old friends at William M. Mercer; they rigged the cash balance conversion for Duke Energy. There is no doubt that they have plenty more great plans to sell to Duke Energy.
Duke Energy certainly would NEVER buy a dubious benefits plan without asking a question: "how much?"
It was stated "most employers simply absorbed the higher (health care) cost in 2000." Most companies may have done just that, but not Duke Energy. Duke had no problems increasing employees health care cost in 2000 and for 2001.
The survey asked about "defined contribution" health care plans. This is a code term. It means that William M. Mercer wants to sell these plans to reduce employee health benefits further. They are only testing the water to see how receptive (gullible) the employers are. Under the guise of a survey, is a sample of what they want to promote for the American workers. They will make money selling these plans; companies will "save" money with these cheap plans. You already know who will foot be bill.
Companies are more concerned about employee benefits litigation. There is no surprise here. Scoundrels will always face more litigation than those who keep their noses clean.
Duke Energy Employee Advocate - December 23, 2000
Everyone is all abuzz because the Duke Energy 2 for 1 stock split, to take place in January. Our take? Bah, humbug! The stock split will be the non-event of the year 2001.
We have yet to understand the general public's fascination with stock splits. Someone will always ask about a stock split at Noon Meetings. Employees have even written Rick Priory at home asking for a stock split! Even some investors on the Duke message boards have been speculating about a possible stock split.
Well, we hope everyone is happy with their newly acquired wealth. Let's figure up what investors have gained on 100 shares of Duke Energy stock due to the split. Counting the fact that everyone's shares have doubled and allowing that everyone will draw dividends on twice as many shares, the total split gain on 100 shares is ZERO!
No, the Duke Energy stock value did not double, and the total dividend amount did not double. The shares doubled; the price halved. Dividends will be drawn on twice as many shares, but the dividend also halved. Any way you slice it, it was a financial non-event!
The only thing that can be viewed as positive about a stock split, is that share price generally appreciates prior to the split. There is no guarantee that price will continue to appreciate after the split. In fact, some studies have shown the opposite to be the case.
The whole stock splitting deal is purely psychological; no change of substance ever takes place. The theory is that small investors will not buy any stock with a high price per share. That may sound reasonable, but the net change is always psychological. Securities are usually purchased in round lots of 100 shares. But there is no law that states that stocks must be purchased in round lots. You may purchase any odd lot quantity - even 1 share. There is no commission penalty for buying an odd lot and you may place a limit order if you wish. If a stock were selling for 1 million dollars per share, there would be a valid reason for splitting it. At a million dollars per share, many investors would be excluded from buying the stock. At less that a hundred dollars per share, no one is really excluded. An investor can always buy less than 100 shares to lower the purchase price.
The game can be played in the other direction. Some investors will not buy a stock that is priced too cheaply. If a company’s stock is selling really cheap, sometimes they will do a “reverse split.” The investors will end up with less shares. But the value still does not change. Either way, it is all a mind game.
At the September Noon Meeting, Rick Priory said: "I even get postcards at home with nothing but the words, 'Split the stock.' on them! Incidentally, a good deal of research has been done on this subject, and results indicate that stock splits really don't create any value."
Mr. Priory was also asked about a stock split at the June Noon Meeting. His answer indicated that he was not too concerned with the small investor: "The reason companies normally do that is to try to make their stock more attractive to small investors. Many investors in regulated utilities are small investors who are resistant to buying stock at $60 a share. However, we're not trying to appeal to small investors..."
Now that the split has been announced, Mr. Priory put out this statement to employees: "The split will ensure that Duke Energy stock remains affordable for all investors."
Does it ever seem to you that the left hand does not have a clue as to what the right hand is doing?
Mr. Priory did congratulate the employees for the results this year. We used to get congratulations and a decent pension and retirement health insurance.
In the press release, Mr. Priory stated: "This split rewards shareholders and ensures that Duke Energy shares remain affordable for investors."
Each statement seems to be made with the assumption that everyone has forgotten the last statement. Just how does this split reward shareholders? Mr. Priory has already admitted that stock splits do not create value. This is an old tactic with Duke Energy: taking credit for giving nothing. Sometimes management takes credit for taking away value. When management took much of the value of our pension from us, they even tried to sell it as a benefit! Phineas Taylor Barnum would be so proud of the Duke Energy senior management.
Yahoo News - December 22, 2000
WASHINGTON, Dec 22 (Reuters) - The U.S. Justice Department filed a lawsuit on Friday against Duke Energy Corp., charging that eight of the electric utility's power plants illegally polluted the air for years.
The lawsuit, filed on behalf of the Environmental Protection Agency (EPA), alleges that Duke violated the Clean Air Act by making major modifications to its coal-fired power plants in South and North Carolina without installing equipment to control smog, acid rain and soot.
The plants increased air pollution near the facilities and also downwind of the plants along the Eastern Seaboard for more than a decade.
The lawsuit is the latest step in the federal government's ongoing plan to stop illegal pollution from coal-fired power plants.
EPA on Thursday announced a $1.4 billion settlement with Cinergy Corp. to cut similar emissions at its plants. ``We hope that Duke Energy also will agree to reduce their emissions,'' said EPA Administrator Carol Browner. ``Until then, we will continue to pursue these cases.''
The lawsuit against Charlotte, N.C.-based Duke seeks to force the utility to install air pollution technology that will reduce emissions of sulfur dioxide and nitrogen emissions.
EPA will also seek civil penalties against Duke, which under the Clean Air Act could reach up to $25,000 for each day of violations prior to January 1997 and $27,500 for each day thereafter.
Coal-fired power plants collectively produce more pollution that any other industry in the United States. They account for almost 70 percent of sulfur dioxide emissions each year and 30 percent of nitrogen oxide emissions.
To fight these environmental effects, the EPA and Justice Department launched a national plan in November 1999 to target electric utilities throughout the Midwest and Southeast whose coal-powered plants violate the law.
In addition to Duke Energy, the EPA has brought similar legal actions against several other utilities.
Duke Energy Employee Advocate - December 20, 2000
Duke Energy Corporation filed form 8-K with the Securities and Exchange Commission November 27, 2000. The company reported that Duke Energy North America ("DENA") and Duke Energy Trading and Marketing LLC ("DETM"), have been named as defendants in a class action lawsuit . The sixteen companies have been identified as "generators and traders" of electricity in California markets.
Duke Energy Trading and Marketing LLC was also named as a defendant in another lawsuit. This lawsuit is against thirteen marketers of electricity in California.
The lawsuits allege unlawful business practices and state antitrust law violations. Plaintiffs seek damages of over $4 billion in one case and over $1 billion in the other.
The Charlotte Observer - December 15, 2000
The Environmental Protection Agency said Thursday it will for the first time force coal-fired power plants to cut their emissions of mercury, a major contaminant in Carolina waters.
Power plants are the major source of man-made releases of mercury, the toxic pollutant the EPA says poses the greatest risks to public health.
Mercury falling from the atmosphere is believed to be a major cause of contamination in 61 rivers and lakes in the Carolinas. The black water of the coastal plain transforms mercury into a particularly potent form that accumulates in some fish species.
Thursday's announcement, made under a court-ordered deadline, came as no surprise to power companies. The question now, the companies say, is how deeply the emissions will be cut. Rules will be developed by late 2003 and go in force a year later.
"We really don't know what the implications are," said Duke Energy spokesman Becky McSwain. "There are no good controls for mercury because it comes from the coal itself." Duke says it releases about 1,400 pounds of mercury a year.
A N.C. science advisory board concluded last week, after two years of study, that curbing mercury emissions would produce "slow but substantial improvements" in fish contamination.
Eating contaminated fish is how most people are exposed to mercury. Pregnant women and young children are at highest risk of nervous-system damage, but state officials also worry about fishermen who rely on their catch as a regular source of food.
A member of the science panel said Thursday that cutting emissions is a better strategy than issuing fish-consumption advisories that health officials admit have limited effect. Warning signs are regularly torn down or defaced, they say.
"For (subsistence fishermen), a fish advisory will not work," said Dr. Woodhall Stopford, a Duke University physician and toxicologist. "The best way of dealing with it is to get mercury concentrations down."
Duke Energy Employee Advocate - December 10, 2000
"Duke's Eye on Ethics, Diversity" was published by "The Charlotte Observer" on December 8, 2000. The article announced to the public that yet another new administrative position is being created by Duke Energy - first vice president for diversity and ethics. That's almost as good as "head of corporate excellence." But that was the Program-of-the-month some time ago. This month, the program is diversity and ethics.
The new vice president will be Ms. Jacqueline Gates. She announced that she is going to hire a staff of six people by January 1, 2000.
Ms. Gates was quoted as saying, "You have no idea who I am. This is a results-oriented person that Mr. Priory hired. This train is moving."
True. We don't know who Ms. Gates is. But we have heard the wind blow before. Are people supposed to faint, dead away, because she was hired by Rick Priory? We rather doubt it.
She is going to update Duke's ethics policy. That is interesting. Just why would an ethics policy need updating? The company does not live up the ethics policy already in place; perhaps they are going to give themselves more wiggle room.
The article stated: "In the past, Duke has faced claims of discrimination. Last year, it paid 292 female and minority workers $769,700 to settle a 1996 discrimination claim, in which the Office of Federal Contract Compliance Programs found that women and minorities received lower base pay than did non-minority men in similar positions.
"In a 1971 case filed against Duke Power Co., the U.S. Supreme Court found it was discriminatory for Duke to require black workers to have a high school diploma to transfer out of a department that employed all of the company's black workers."
Based on these statements and the new position title, it seems that Ms. Gates job will be to protect minorities. Well, not really to protect any employee, but to keep Duke Energy out of more trouble. If a company were treating minorities fairly, why would such a position be necessary? Evidently management is admitting that they have a problem and want to correct it. That is an improvement over their usual tactics of stonewalling and denial. Senior management always seems to get in deeper trouble by denying problems and trying to dance their way out of any admission of guilt.
Richard Blackburn, Executive Vice President and General Counsel stated, "Duke is a business that is very committed to diversity, and does its business on a broad and deep ethics platform, but had yet to formalize that in a separate leadership role."
It is true that there was no ethics policy when the cash balance plan was introduced; it was created shortly thereafter. The cash balance pension plan and ethics can never coexist. Perhaps the new ethics policy will be "Employees will be treated ethically, except in matters pertaining to benefits."
Ms. Gates once ran an executive search firm and said, "I did very well, but I hated every minute of it. I found that I'm a corporate animal - I thrive on bringing value to Corporate America."
Did she really say that? It is really no mystery why she was hired. She came in pre-programmed with all the right buzz words and told management exactly what they wanted to hear. Management is always willing to listen when they are told exactly what they want to hear. The problem is that there is no diversity in senior management; they all came from the same cookie cutter. Another cookie is in the box.
Duke Energy is always more interested in perception than substance. How much ethics could a company have that would take promised money from the employee's pension fund and try to conceal the fact? Duke may need a first vice president of perceived ethics.
Ms. Gates and Mr. Priory will never be able to fly together. No aircraft is available that could accommodate both egos.
No, we do not know who Ms. Gates is. She may be the greatest thing to happen to Duke Energy, and we hope that she is. Welcome to the exciting world of Duke Energy.
Duke Energy Employee Advocate - December 9, 2000
December 8, 2000, Dow Jones ran a story fawning over Duke Energy's "outstanding contribution to the restoration and protection of the Massachusetts' coastal environment."
Hey, when you take millions of dollars from the employee's pension fund, you have money to throw everywhere. Why, you even have money to give bonuses to the executive's cash balance plan.
Duke Energy Employee Advocate - November, 29, 2000
"The Art of the Deal" was published November 27, 2000 in The Charlotte Observer. It featured some of the big "deal makers" in Charlotte, North Carolina. Of course, Rick Priory was taking his bows.
"A $7.7 billion deal in 1997 fast-tracked Duke Power to becoming a global energy company."
The article did not mention the events that occurred shortly before Duke bought Pan Energy. January 1, 1997 the employees pension plan was wrecked. Now, instead of providing retired employees the pension that they had been promised, the plan would serve as a perpetual cash generator for the company. Duke evidently felt so wealthy with this new "found" money that they thought they could buy the world, and have been trying to do so every since.
"There isn't time to deliberate, for extensive analyzing, even though you may have plenty of people ready to do it," Priory said. "You have to rely more on your cunning, your common sense, your decisiveness."
Cunning? Yes! It takes a lot of cunning to get a tax break for putting money into a pension fund, then use that same money to boost the bottom line.
"When all is said and done, if they just want us to go away, just say so," Priory said. "We're not into hostile (deals)."
Hostile deals are reserved for the employees. Employees had zero choice about the unfair cash balance plant that was forced upon them.
"But for these five deal makers, more often than not, the sleepless nights, tense moments, theatrics and long hours of talk end with handshakes all around. That's the sweet moment that keeps them hunting the next deal."
Destroying the retirement promises made to thousands of employees for over twenty-five years should make one have sleepless nights. And, there have been plenty of theatrics every since, trying to convince employees that the cash balance plan was not designed just to take their pension away from them. The clarification "unsuccessful theatrics" could be added.
Duke Energy Employee Advocate - November, 26, 2000
Yahoo reported that Rick Priory proposed the sale of 22,900 shares of Duke Energy stock on November 1, 2000, for estimated proceeds of $1,990,544.
On November 2, 2000, he proposed the sale of 13,700 shares, for estimated proceeds of $1,188,475.
Last year, he announced that he wanted the price of Duke stock to double. He got his wish. No matter what happens to the company now, he will have greater that three million dollars as an extra Christmas bonus.
When Paul Anderson cashed his stock in (exercised his options), it seemed that Duke stock went into a tailspin. Let's see if history repeats itself.
Duke Energy Employee Advocate - October 26, 2000
Duke Energy produced a "webcast" on October 25 to tout their stock. Duke wanted to take some bows for the recent stock performance. Never mind that the utilities sector is in an up trend now, and that "a rising tide lifts all boats." An utility stock would have to be a real dog, not to be rising in price right now. The stock price is increasing and Duke is taking bows. During down turns, senior management will lament that Wall Street just does not understand that Duke is not an utility company.
There was much talk of Duke keeping its growth promise to Wall Street. They have even done a little more bragging to Wall Street investors, boasting of bigger profits to come. Senior management has amnesia when it comes to the retirement promises made to the workers.
Investors did not "beat down the doors" to ask questions. It seemed that most question were asked by one person. The webcast ended early, because no more questions were being asked.
Duke Energy Employee Advocate - October 25, 2000
"The Charlotte Observer" published an article about schools promoting corporate brand names - for a price. These schools were technical and high schools. Hopefully, students of this age bracket will have developed some sales resistance. But some companies are promoting their brand name in grammar schools!
Duke Energy is promoting the Duke name and nuclear power to fifth grade students. The younger the subject of an indoctrination program is, the easier they are to "program." Duke's "program of the month" is "promoting the Duke brand."
For some years Duke has provided tutors to grammar school students. That certainly sounds innocent enough. It sounds as wholesome as apple pie. But, as usual, when you deal with Duke, you always pay a price.
The price is imprinting the Duke Energy brand in the minds of impressionable students. These students will generally trust what their teachers and tutors tell them. If these students can be sold the idea the Duke Energy is great and nuclear power is great, the company stands to reap dividends years later. They will not have to spend money to sell the adult, because the adult was brainwashed as a child. Duke will have a tailor made work force and customer base.
Does this sound too farfetched? Think again. There are posters in Duke Energy nuclear plants now, which were drawn by fifth grade students. These posters hype Duke Energy and nuclear power. These students are supposed to getting an education in state educational systems, not Duke Energy Indoctrination Systems.
Duke knows that nuclear power does not come with zero risk. They will tell you that there is no completely safe amount of radioactive exposure. Yet, after looking at some of these posters, it seems that these children have been sold the idea that Duke Energy and nuclear power are the greatest things since sliced bread.
Click the link below to read "The Charlotte Observer's" article:
REQUESTS FOR COMMENTS BY THE DEPARTMENT OF LABOR
COMMENTS TO THE INTERNAL REVENUE SERVICE
NOTICE TO INTERESTED PARTIES- posted October 19, 2000
Duke Energy Employee Advocate - October 16, 2000
It is true that everyone wants a piece of the action. The problem is the "action" is YOUR pension!
Picture your pension fund as a thick, freshly cut steak. Now, picture it being tossed to a pack of starving wolves. This will give you some idea of what we are up against.
Everyone wants a piece of your pension - management consultants, the government, the employers, the peddlers of financial services, ex-spouses - everyone!
One of the many ploys by employers (hey, maybe that's how they got the name), is to use pension money for things other than pensions. This is a great deal for employers. If they spend pension money, rather than spending earnings, it is the same as putting pension money in their pockets!
Someone had the bright idea that pension money should be spent for health benefits. Although that may sound acceptable to some, spending pension money on anything except pensions, jeopardizes your retirement future.
In 1999 there was much discussion of spending pension money for health benefits. The two statements below are from the "Report/Recommendations of the Working Group Studying Exploring the Possibility of Using Surplus Pension Assets to Secure Retiree Health Benefits."
Mr. Bahr of the CWA: "There should be no means by which an employer can garner any value from the plan it sponsors, other than by delivering benefits to participants. The funds should be used solely to secure dignity in retirement."
Mr. Certner of AARP: "...Our feeling generally is, the funds are put into the pension trust for the exclusive benefit of the participants. And for the purpose of providing current and future pension benefits."
If the advice of these two gentlemen had be followed from the beginning, there would be no pension revolt today. The pension fund was created for the employees - period! Problems will always erupt when those, other that the employees, try to take a share of what NEVER belonged to them.
Now, those who have perpetrated to deprive us of our earned retirement benefits, stand around with looks of consternation upon their faces, wondering what could have possibly brought about the uproar.