www.DukeEmployees.com - Duke Energy Employee Advocate
Open Forum - Page 5
we know now that it is bad economics.” - Franklin Delano Roosevelt
Open Forum – May 2012Employee Advocate - www.DukeEmployees.com – June 11, 2012
CEO Jim Rogers talked about the 2012 Democratic National Convention at the May 3, 2012 Open Forum. He acknowledged that there has been “less than universal support” concerning Duke’s support of the convention. He said that the convention will help Charlotte.
If the Democrats maintain control of the White House, it will certainly give Duke even more political clout. The administration has already been freely handing out taxpayer’s money to electric utilities.
Jim Rogers mentioned again that last year he hosted a fundraiser in his home for Republican Sen. Rob Portman. Portman has been weakening pension laws for years. That fundraiser will, no doubt, reap major dividends.
Jim Rogers said that the Duke/Cinergy merger “went flawlessly and very smoothly.”
There was a long period after the Duke/Cinergy merger that company benefits features crashed. Employees had difficulty filing insurance claims. As soon as one problem was fixed, another one would appear.
Jim Rogers wants a tax holiday on repatriated corporate earnings. He said “We refer to it as trapped cash, because we can’t bring it back to the United States without paying a penalty for it.”
There is no “penalty” for bringing the money back to the U. S; it’s called “income tax.”
Corporations get to indefinitely postpone their U.S. tax on foreign income by operating through a foreign subsidiary. But when the money is brought back to the U. S., it’s time to pay up.
“Creating jobs” in the U. S. is always used by corporations as a lobbying ploy for bringing the money back tax-free or at a reduced rate.
Point one: If corporations are so interested in creating jobs in the U. S., they could have left the money here to begin with.
Point two: On 10/11/11, The U.S. Senate Permanent Subcommittee on Investigations reported that after the 2004 repatriation holiday:
Open Forum – February 2012Employee Advocate - www.DukeEmployees.com – February 22, 2012
Open Forums are now few and far between. But one was held 2/16/12 in Charlotte, NC.
Jim Rogers sad that the Greenpeace demonstrations are entertaining, but not productive.
The Greenpeace people will probably view the comment as proof that they have hit a nerve and will really pour in on now.
After being rejected twice by the Federal Energy Regulatory Commission (FERC), Mr. Rogers referred to “a dark cloud of uncertainty” hanging over the proposed Duke-Progress merger.
It appears that FERC has refused to be steamrolled by Duke.
On promoting Duke to potential new employees, Mr. Rogers said “If you come to work for Duke, you’re going to be involved in a very noble purpose of providing electricity to millions of people.”
Also be aware that the total compensation that you are promised has the potential to actually be something less than advertised.
Open Forum - August 2011Employee Advocate - www.DukeEmployees.com – February 22, 2012
The Open Forum was held 8/2/11 in Charlotte, NC. On the proposed Duke-Progress merger, Jim Rogers said “To be totally honest, I think there’s a bigger difference in our companies culturally than I would have imagined at the beginning.”
Open Forum - May 2011Employee Advocate - www.DukeEmployees.com - May 23, 2011
The May 3 Open Forum was held by CEO Jim Rogers.
On the Japan nuclear accidents, he said "Think about Three Mile Island. It created a huge shift in public opinion regarding building new nuclear generation in the United States, and it was nothing like what happened in Japan…I've seen several studies that say people's opinion about nuclear hasn't changed in a dramatic way as a consequence of the Japan situation."
But a CBS News Poll taken in March and reported in the New York Times tells a different story. The poll indicated that support for new nuclear plants in the US is actually lower than immediately after the Three Mile Island partial meltdown in 1979.
Some executives have said that it was not the Japan earthquake that damaged the nuclear plants, but the following tsunami.
But on May 19, Bloomberg reported that a high radiation alarm was activated about 1 mile from the No. 1 reactor. This alarm came in immediately after the earthquake and minutes before the tsunami hit.
Mr. Rogers went on to say "But those who have always been opposed to nuclear will seize on this. They will put a magnifying glass on it. They will put a megaphone on it and they'll make it seem a lot worse than it is for the future of nuclear in our country."
True enough. But some that once fully supported nuclear power are having second thoughts as they assess the new information coming in daily. And, those with nuclear dollar signs in their eyes will try to downplay the disaster in Japan as no real problem at all!
Then there is Duke's credibility issue. Employees who have been misled on benefits issues for years are no longer willing to "just trust Duke" on anything.
Mr. Rogers tried to justify his support of the 2012 Democratic National Convention coming to Charlotte by pointing out that he has supported candidates on both sides of the aisle. He mentioned hosting a large fundraiser in his home for Sen. Rob Portman.
That is not something to boast about. When Rob Portman (R-IL) was in the U. S House of Representatives, he and his sidekick Benjamin Cardin (D-MD) wrecked pension laws for years:
Open Forum - February 2011Employee Advocate - www.DukeEmployees.com - March 1, 2011
CFO Lynn Good held the Open Forum on Feb. 17 in Charlotte. She had to cover Stock Splitting 101 for employees who thought that the reverse stock split would cost them money. Stock splitting or consolidating are non-events, but some employees will always get in a tizzy.
Ms. Good said a contribution was made to the pension fund in 2010 and that another is planned for 2011. She said keeping the pension fully funded (as defined by government requirements) was an important priority.
That is a good point. Of course, it takes less to fund the pension since the cash balance plan conversion. For a period of time after the conversion, no contributions were made. Smaller pensions for employees equals smaller contributions for the company.
An employee noted that "We don't hear much about power trading anymore," and wanted to know how much was made or lost trading.
Ms. Good said that the Cinergy power trading business was closed shortly after the merger with Duke.
There is a very good reason that you do not hear much about power trading anymore. Duke got burned big time by trying to follow Enron to financial glory. Enron was once the darling of Wall Street because it appeared to be making huge profits. People did not understand how Enron made money, but piled into the stock anyway. This can be compared to people begging to get into Bernie Madoff's investments.
Enron's smoke and mirrors could not last forever. When it imploded, the end came fast. Did this tell Duke anything? No. The then Duke CEO salivated at the opportunity to become the new Enron. His wishes were granted. But as often happens, things did not turn out as planned. All of the CEO's dubious schemes started coming unwound at once.
Open Forum - January 2011Employee Advocate - www.DukeEmployees.com - February 7, 2011
Thursday, Jan. 13, Duke CEO Jim Rogers and Progress CEO Bill Johnson spoke to employees about the merger at the Knight Theater in Charlotte, NC. There was no December Open Forum.
Mr. Johnson said "Let's be focused on what's in front of us. Let's live in the present. It doesn't do us any good to worry about things we can't control, so let's manage what we can control. Let's do the best job we can do."
The fact remains that employees can control much more than Mr. Johnson would care to admit. CEO's can provide a framework, but Employees will make the merger a success or a failure.
Mr. Johnson was once a clerk for a federal judge. Only the brightest law students get such positions. So, we are not dealing with a dunce.
Bill Johnson said that common procedures could be used and employees swapped around at the various plants. That statement shows that one can be both intelligent and extremely naive.
Even Duke Energy's nuclear plants are not identical. Even plants built on the same site at the same time have differences. The Duke and Progress plants are radically different in design. Can you imagine a common procedure to maintain a submarine and a jet aircraft?
Even if common procedures were possible, all sites would have to agree in order to make even the slightest change. The already bloated bureaucracy would mushroom out of control.
Mr. Johnson said that he believes in "truth telling and trust" and that "openness builds credibility and trust."
He is preaching to the choir!
Bill Johnson also said that one of his mottoes is to "Tell the truth as fast as I can."
If he actually practices this motto, he will have absolutely no problems as CEO of Duke Energy. But the motto will fly in the face of Duke's long standing policy of "Stonewall and Deny It To The Grave."
Open Forum - November 2010Employee Advocate - www.DukeEmployees.com - January 4, 2011
The Open Forum was held by Jim Turner, then president and COO of U.S. Franchised Electric and Gas, on Nov. 10, in Charlotte, NC. Jim Turner's resignation was effective December 31, 2010.
He covered benign subjects that could not get him into any more trouble: paperless billing, compact fluorescent lights, smart meters, and electric vehicles.
But what about the ethics scandal in Indiana that Jim Turner was in the center of? Well, it's just easier to put a positive spin on compact fluorescent lights than an ethics meltdown.
On the value of the Cinergy merger, Mr. Turner said "You get at least regulatory diversity."
True, but it will be hard to find enough diversity to pull Duke out of the Indiana regulatory black hole. This black hole appears to be strong enough to pull everything else into it. There is no end in sight.
The Courier-Journal stated: "So many shoes are dropping in the ongoing Duke Energy-Indiana Utility Regulatory Commission scandal that you'd think there was a centipede involved somewhere."
Duke is hammering employees to delete documents, delete documents, delete documents.
Jim Rogers promised to take action on the Indiana ethics scandal. Two Duke employees were terminated and Mr. Rogers accepted Jim Turner's resignation. Anything less would have been seen as covering for the good old boys.
There is no indication that Jim Rogers was involved in the ethics sandal, but he is still in a pickle. He needs to distance himself from the scandal. Yet, he does not want to say anything that smacks of accepting any liability for the company. He is going through a lot of contortions.
Corporations will always try to put a positive spin on everything. Mr. Rogers came just short of declaring Jim Turner a national hero for resigning. Does that mean that business as usual would have continued if Mr. Turner had not resigned?
In the email published by the Indianapolis Star, Mr. Turner was asked when his drug test results came back. He replied: "I'm still waiting on mine. There is concern about a history of delusion-inducing substances."
The reply resembled something that an 18-year-old, making minimum wage and enamored with the drug culture may have written. It was most inappropriate for the 51-year-old, number two Duke Energy executive, who made $4.35 million in 2009.
The email cannot all be explained away as mere "frat-boy talk." Ethics as a joke was a reoccurring theme. And, it appears that Mr. Turner tried to make an end run around Mr. Rogers to get his cronies into the company.
Email published by the Star indicate that Jim Turner tried to grease the wheels for the hiring of Mike Reed while Jim Rogers was in China.
Jim Rogers has over 22 years experience as an electric utility CEO and has achieved much. Jim Turner rode into Duke on Mr. Rogers' coattails. He had been in his position only since the Duke merger with Cinergy.
Jim Turner was in executive nirvana. He was in line to become the Charlotte Chamber of Commerce chairman in 2012. He was on the board of EnerNOC. As second banana at Duke, he may have become CEO, unless he did something incredibly stupid.
Jim Turner has resigned from Duke Energy, EnerNOC, and is no longer eligible for membership in the Charlotte Chamber of Commerce.
But don't feel too sorry for him; he deployed his golden parachute. Jim Turner will get a retirement package of $6.7 million. Employees who have experienced retirement benefits reductions will note that some still get exactly what they were promised. Even if they did make a few big time blunders.
But that's not all. He will get a $3.75 million severance package for agreeing, among other things, not to spill the company beans. Not bad at all.
But then, there is the $12.75 million in future stock awards. It's no mystery why Jim Turner was in favor of the extension of the dividend tax cut.
Of course there is the annual bonus of more than $500,000. Some employees received VOP parachutes, but they were made of tissue paper.
The ethics scandal fallout has not yet settled. In addition to the investigation by Duke Energy, the Indiana Utility Regulatory Commission (IURC) is conducting its own probe. The FBI is also investigating.
IURC has ordered Jim Turner to appear at a deposition in Indianapolis for questioning by the Citizens Action Coalition of Indiana, the Sierra Club, Save the Valley and Valley Watch.. His severance package agreement does not prevent such testimony.
As Duke Power devolved into Duke Energy, the employees lost and the company lost. Duke Power used to be the only company in the world to design, build and operate its own nuclear plants. Duke had competent design engineers and construction workers that could handle any task. The nuclear plants came in on time and under budget. Duke's plants were also built at the lowest cost.
Under Jim Turner, Duke could not even build a coal-fired plant without cost overruns. And, a nuclear plant is infinitely more complex than a coal-fired plant. The Edwardsport plant is now projected to cost $2.9 billion! The original estimate was $1.2 billion. Plus, the carbon sequestering capability is not ready for prime time and will not be activated. If it is ever activated, it will be parasitic lode of about half of the electricity produced by that plant. In other words, it will take half of the power produced by the plant just run the sucker!
There was a deal that the ratepayers had to pay the ongoing cost of constructing the plant. This almost sounds like an electric Co-op, except the ratepayers receive no capital credits. The ratepayers pay for the plant, but Duke gets all the profits.
Anyway, the ethics scandal has blown up that deal; it will now be renegotiated. It is still being questioned whether the plant should even be built.
Jim Turner did excel in one area. He was in charge of reducing the number of employees. He did such a great downsizing job that he blew himself and two other executives out the door.
Sources: The Indiana Star, The Charlotte Observer and The Courier-Journal.
Open Forum - October 2010Employee Advocate - www.DukeEmployees.com - December 6, 2010
There was no September Open Forum. CEO Jim Rogers held the Open Forum in Charlotte Oct. 28, 2010. He said that he will be preparing to appear before the Indiana Utility Regulatory Commission (IURC) to explain the need for the Edwardsport coal plant in Indiana.
The Edwardsport case was reopened only because of certain irregularities regarding Duke Energy hiring the IURC's general counsel and chief administrative law judge. The Indianapolis Star has chronicled the whole mess in detail.
Citizens have complained for years about the revolving door between government regulators and the industries that they regulate. Some bounce multiple times between being a government regulator to an industry lobbyist to a high position in the very industry that they once regulated. Corporations are often willing to pay huge compensation to the insiders who know how to get them off the hook. And, who knows better than a former regulator?
For that matter, Jim Rogers was a consumer advocate and Jim Turner was once Indiana's utility consumer counselor before being hired by Duke Energy. Jim Rogers is now chairman of the board, president and CEO of Duke Energy. Jim Turner is now president and COO of U.S. Franchised Electric and Gas.
There is a pay difference between regulators and corporate executives. For example, the Star put the salary of the former IURC chairman at $109,000. It put the compensation package of Jim Rogers at $6.93 million and the total compensation for Jim Turner at $4.35 million.
The Duke Energy, IURC Scandal Cast of Players:
IURC: The Indiana Utility Regulatory Commission.
Unethical matters are not always illegal. The revolving door is often used with impunity on state and federal levels. Any designated cooling off period must be observed before the job swap. The regulator also should not be actively involved in regulating a corporation while negotiating for employment with that corporation.
The Perfect 'Storms'
The problem is that Scott Storms was negotiating for a job with Duke Energy while acting as an IURC judge over Duke hearings. He never reported the potential conflict of interest to IURC. Storms was able to avoid the cooling off period because fellow IURC employee, Loraine L. Seyfried, wrote a three-page recommendation for the move. She recommend no cooling off period and indicated that there was no conflict of interest.
After Storms left IURC, Seyfried became the judge for Duke Energy cases. Recently, she was removed from that position.
The good old boy network may have pulled it off, except citizens groups got involved. They questioned the ethics of Duke Energy hiring an IURC attorney to represent it. Then Indiana Governor Mitch Daniels fired IURC chairman David Lott Hardy for knowing about the situation and not reporting it.
After the IURC chairman was fired, Duke put Scott Storms and Mike Reed on leave. Duke hired a law firm to investigate the matter. Duke then fired Storms and Reed, apparently based on the law firm's report.
The facts were documented in email communications between Duke and IURC, which were obtained by the Star.
Jim Rogers said "I want to have all the facts before we take action - and we will take action…We're going to restore whatever credibility that was lost. I am personally committed to fixing this."
When Paul Anderson came back to Duke Energy as CEO, he cleaned up ethics scandals and business incompetence.
When Jim Rogers came to Duke Energy, almost all of the problems had already been solved by Paul Anderson. There could be smooth sailing, as long as he did not run the ship aground. It soon became apparent that the new ethics scandals seemed to be coming from former Cinergy, rather than pre-merger Duke Energy.
Mr. Rogers has impressive credentials and has earned the right to be Duke Energy CEO. His greatest failure may have been in putting too much trust in unworthy individuals. Covering for them will restore zero credibility. The only lesson they will have learned is to be more careful the next time.
Open Forum - August 2010Employee Advocate - www.DukeEmployees.com - November 29, 2010
CEO Jim Rogers held the Open Forum in Charlotte on August 3, 2010. There was no July Open Forum.
Jim Rogers is concerned that the favorable tax treatment on dividends will not be extended. His concern is understandable; his salary is paid in stock. On April Fools Day 2006, Jim Rogers told The Charlotte Observer: "I will be the single largest individual shareholder of Duke."
Mr. Rogers is paid in stock, but collects the dividends immediately as they a paid each quarter. So, he has a greater concern than the average shareholder over dividend tax rates.
If Congress is serious about reducing the deficit, the tax rate on dividends will be raised. If Congress is really serious about reducing the deficit, the pre-Reagan top tax rates will be restored.
There will be no need to scuttle Social Security and Medicare if loopholes for the wealthy are closed.
Dave Johnson, of Campaign for America's Future, says "We didn't have massive deficits until we reduced the top tax rates."
In "Roll Back the Reagan Tax Cuts," Thom Hartmann details the advantages of higher tax rates. Low tax rates for the wealthy breed market bubbles. He says tax rates have little effect on working people. If tax rates go up, wages go up. If tax rates go down, wages go down.
Jim Hightower, radio commentator, said of the hedge fund managers, who make billions, "Pathetically, the real root of this sad Hedge Fund Rebellion is a feeling by these powerful, super-privileged megalomaniacs that they are being picked on."
In his November 2010 newsletter, Senator Bernie Sanders wrote "The billionaires and their supporters in Congress are hell-bent on taking us back to the 1920s, and eliminating all traces of social legislation designed to protect working families, the elderly, children and the disabled."
Repealing the ill conceived tax cuts for the wealthy will be good for the country.
Open Forum - June 2010Employee Advocate - www.DukeEmployees.com - November 7, 2010
Commercial Businesses President Keith Trent and Chief Technology Officer David Mohler held the June 30 Open Forum in Charlotte, NC.
They talked about the Duke partnership with China to develop power generating technology.
Jim Rogers has come a long way on China. At the 2008 and 2009 shareholder meetings, he used China as an excuse to build more coal plants. He reasoned that it did not matter how much coal pollution Duke produced, because China would produce even more!
Open Forum - May 2010Employee Advocate - www.DukeEmployees.com - June 30, 2010
CEO Jim Rogers held the May Open Forum in Charlotte, NC. He is concerned that paying 900 employees to take a voluntary lay off may not achieve the desired cost savings. He said "In my 21 years as CEO, I've been through a number of these programs and many times we did not reduce the work or improve our processes. Over a period of time, we ended up hiring replacements for everyone who left, and not getting any benefit."
The way the workforce has been manipulate has always been a puzzlement. Early retirement was once encouraged. Employees were then forced to work years longer. From time to time, employees were paid to leave the company. Some of the departing employees have been hired right back as vendors, sometimes at a higher pay rate. All the convolutions send a message of total chaos.
There is no question that when employees leave the company, those remaining feel the increased burden. To aggravate the situation, some departments are not reducing the workload at all. Incredibly, some are even adding to the bureaucratic overhead. The very last thing needed is another cumbersome process of dubious value. Some have an agenda to force more red tape on workers who do not need or want it.
Open Forum - April 2010Employee Advocate - www.DukeEmployees.com - May 5, 2010
The April 14 Open Forum was held by John Stowell, vice president of Environment, Health and Safety Policy in Cincinnati.
You might have suspected that a meeting about corporate lobbying, CO2, and Senator Joe Lieberman would not exactly blow your socks off. And, you would have been right!
There are a lot more exciting things going on right now than CO2 and "Loser" Lieberman.
Open Forum - March 2010Employee Advocate - www.DukeEmployees.com - March 19, 2010
CFO Lynn Good held the March Open Forum in Charlotte, NC. Neither she nor Jim Rogers are expecting 2010 to be a banner year.
As the new CFO, Ms. Good has big shoes to fill. But from all indications, she is off to a great start.
Open Forum - February 2010Employee Advocate - www.DukeEmployees.com - March 8, 2010
Jim Rogers held the Open Forum on Feb. 15 in Charlotte, NC. He said to further reduce costs "We might really have to make a real deep and profound look at all our processes. We have a little bureaucracy that we probably could eliminate that might make us a little more efficient and more cost-effective in our operations."
Saying that Duke has a "little" bureaucracy is like saying the oceans have a little water in them. When Paul Anderson became CEO, he immediately took note of Duke's archaic and disconnected processes.
Jim Rogers is concerned about strings that may be attached to federal loan guarantees for nuclear construction. But such guarantees should come with ample provisions to discourage irresponsible spending just because the money is available. The bank loans are a prime example of government deals without enough strings to protect taxpayers. Wall Street finds nuclear construction too risky to finance. When all risk falls to ratepayers and taxpayers, what incentive do utilities have to make prudent decisions? It's always easy to gamble with someone else's money.
Open Forum - December 2009Employee Advocate - www.DukeEmployees.com - December 9, 2009
Commercial Businesses President Keith Trent held the December 2009 Open Forum in Charlotte, NC. He touted Duke's unregulated businesses and expressed an interest in name changing.
This sounds like were Duke was about a decade ago. Duke was preaching the glory of deregulation. The name "Duke Power" was too dull and limiting. The name had to be changed to "Duke Energy." The CEO was embarrassed about power generation. He even refused to attend meetings with analysts if any utility CEO's would be present. He hitched his caboose to the Enron engine and almost derailed the company in the process.
But today's deregulated businesses are a vast improvement over the energy trading casino. Duke now claims to produce more renewable energy than any other U.S.-based company.
Mr. Trent acknowledges that he does not see much growth in coal plants.
That is one way to put it. Another way is "Who wants a tombstone made of coal?"
Mr. Trent knows his game and was able to answer detailed questions without resorting to the old soft shoe.
There was no Open Forum in November and there will be none in January. Jim Rogers will hold the February 2010 Open Forum in Charlotte.
Open Forum - October 2009Employee Advocate - www.DukeEmployees.com - November 23, 2009
CEO Jim Rogers held the October 2009 Open Forum in Charlotte, NC. He was happy that the federal government offered Duke a $200 million smart grid stimulus. But he was concerned about strings being attached to it.
Mr. Rogers said "This would be great if it comes through. But we need to look at what this implies - taking the government money. I think the auto and banking industry have found out that government money comes with strings attached."
It is ironic that strings are a concern. Duke Energy donations and employee benefits often come with strings attached. But Duke never likes being on the receiving end of its own tactics.
Details have not been worked out for a voluntary separation program that may be offered in early 2010. If the voluntary separation offer comes to pass, just count the number of strings attached to it. A Fish hook will be on the end of each string. So, always be careful what you bite on!
The recently retired CFO did not escape without strings attached. As CFO, he was the chief bean counter. He is now bound by strings aplenty to make sure that he does not "spill the beans."
Duke Energy Form 8-K, June 2009 - "Retirement Agreement by and between Duke Energy Business Services LLC and David L. Hauser"
Voluntary separation subsidies for years of service typically come with a cap. It is impossible for the youngest employees to have built up long years of service - they have not been alive long enough. Employees with the longer years of service, naturally must be the older employees. Why is a cap on the years of service subsidy not a form of age discrimination? Is it not enough to get run over by the corporate truck once? Must the truck back up and run over older workers one more time for good measure?
Addressing the third contractor fatality for 2009, Mr. Rogers said "Our goal line should be zero injuries on the job."
That goal can be achieved only one way - when Duke Energy ceases operation. Otherwise, accidents will occur. The safety hazards in Duke's plants were literally cast in concrete decades ago. The hazards are real, and cannot be talked away. Even if all safety hazards could be magically eliminated, accidents would still occur. The law of probability can never be repealed by happy talk.
Open Forum - September 2009Employee Advocate - www.DukeEmployees.com - October 12, 2009
The September Open Forum was held in Cincinnati by Bill Tyndall, senior vice president of Federal Government and Regulatory Affairs, and Beverly Marshall, vice president of Federal Policy and Government Affairs.
Many legislative issues that Duke Energy has an interest in were mentioned.
It would be fair to say that Duke has an avid interest in these issues. The Charlotte Observer reported that Duke has spent over $10 million on lobbyists since 2008, and counting.
Beverly Marshall said that Duke was going to stay on top of the health care debate. She fears tax code changes that would be “detrimental to the company.”
Translation: “Detrimental to the company” = “Giving employees a fair shake.”
Corporations have had a great racket going on for years. Political donations and money thrown at lobbyists have bought laws that allow them to write their own ticket. Corporations get to write their own benefit rules, change them willy-nilly, and even change them after employees have retired!
When laws are proposed that would make corporations actually do what they have promised, they scream “Oh my God! That would be ‘detrimental to the company.’ ”
After decades of promising one thing to employees and delivering something less, corporations are naturally perturbed that their ability to write their own laws may be curtailed.
Ms. Marshall also fears that pending reforms on the use of derivatives by companies could hamper Duke’s flexibility. “Customer impact” was cited as a concern.
From Duke’s spin, one would think that its only concerns are its customers and employees. But it’s a safe bet that the $10 million spent on lobbyists was to benefit someone other than the customers or employees.
It’s understandable that Duke is concerned about stricter derivatives regulation. A 2001 The Wall Street Journal article indicated that Enron helped write the derivatives regulations, or more correctly, lack of regulations. It stated “Enron had provisions inserted in the law that blocked federal oversight of some of its major corporate product lines, such as energy and metals derivatives, and its EnronOnline energy-trading network.”
You will remember that there was once a time when Enron was the role model for Duke Energy.
But there may be little need for Duke to get too stressed out over pending derivatives regulations. An Oct. 6, 2009 Bloomberg article was titled “Caterpillar, Duke, Apple Are Winners in Frank Derivatives Plan.”
An employee wrote in about the Charlotte Observer article, "Some United Way money bypasses needy; Guidelines are different for top corporate contributors." The employee wanted to know if Duke Energy would endorse "open campaigns."
The answer was “No.”
The solution is obvious. If anyone has problems with the United Way, just select “no donation” on the pledge card. One is always free to give or not give money as one sees fit.
It is realized that some employees have an overpowering need to be dominated. They will submissively endure any amount of browbeating their entire careers, and then even jump when told to after they retire! Occasionally, one of these will actually question why they are doing the things that they are voluntarily doing. But such occasions are rare and totally out of character.
Open Forum - August 2009Employee Advocate - www.DukeEmployees.com – August 12, 2009
CEO Jim Rogers held the Aug. 4 Open Forum in Charlotte, N. C. He said that he is not in favor of the health care legislation now being debated in Congress. He fears a burden on corporations.
There has been zero concern about the burden placed upon employees by the many benefit reductions over the years. Jim Rogers said "Like it or not, we have the best health care in the world.”
It may be the best health care in the world for corporate executives. But many American have zero insurance. Those who have corporate controlled insurance face benefits that dwindle away more each year. Each year the insurance changes to keep employees off balance.
At the last two shareholder meetings, Mr. Rogers used China as an excuse for Duke to continue to build coal plants. But now he acknowledges that China is leading the way in producing solar panels and wind turbines. He also acknowledged that China is building advanced coal technology facilities. Instead of using China as justification for Duke to build more coal plants, he has now agreed to work with China to mutually develop cleaner energy.
Question sent in: “How will the used nuclear fuel waste that is created by Duke Energy nuclear power plants be disposed of?”
Answer, in part: “…scientific studies support Yucca Mountain as suitable as the U.S. used nuclear fuel repository site.”
Over the years, a lot of money has changed hands in the promotion of Yucca Mountain as a nuclear waste dump. As the money flows, so do the “scientific studies.” But Yucca Mountain has problems.
Click the link below to learn of some of the Yucca Mountain problems:
Open Forum - June 2009Employee Advocate - www.DukeEmployees.com – June 22, 2009
Jim Turner, U.S. Franchised Electric and Gas president and COO, held the June 4 Open Forum at McGuire Nuclear Station in North Carolina. Alerts were sent out about a week before the meeting to drum up attendees. Employees could attend the meeting only if they replied to the email. Apparently management was concerned about the meeting being overcrowded.
Evidently the response to the first meeting notice was underwhelming, because a second one was sent out. Once again, to attend the meeting employees were required to respond to the email.
Apparently employees were still not breaking down the doors to get into the meeting. Shortly before the meeting, a third notice was sent out. The requirement of a reply to attend the meeting was dropped. This time, management only requested that people show up for the meeting.
After each Open Forum, pictures of the audience are always posted on the Duke Energy portal. This time, there was only a picture of Jim Turner. There were zero pictures of the audience.
Employees attending Open Forum meetings receive their regular pay. It is probably a good thing that Duke was not trying to extract an admission charge to get into the place!
Jim Turner said that Ohio was deregulated in 1999. Pricing agreements were negotiated in 2003, because Ohio was afraid of rate shock. As a result, Ohio has seen a number of rate increases.
That’s the rub with electric deregulation; customers are promised low rates, but only get higher bills. Attempts have been made to keep the prices artificially low after deregulation. But these attempts only work for a while. Sooner or later, customers have to pay the real price of deregulation.
Open Forum - May 2009Employee Advocate - www.DukeEmployees.com - May 12, 2009
CEO Jim Rogers held the May 5 Open Forum in Charlotte. He said "I think our industry has not been as effective in Washington as it should be."
That was a bold statement to be coming from an energy CEO. Energy companies ran roughshod over Washington during the 8-year Bush administration. Bush handed corporations anything that they wanted, particularly energy corporations.
Open Forum - April 2009Employee Advocate - www.DukeEmployees.com - May 12, 2009
Keith Trent, group executive and chief strategy, policy and regulatory officer, held the Open Forum on April 30.
Question Sent In: When is it justifiable for management to deny an employee the opportunity to accept a lateral position outside of his or her current department or business unit?
Answer: Limitations on lateral transfers may be put in place to address specific business circumstances. In such situations, managers are encouraged to evaluate each transfer request on a case-by-case basis and to inform the affected employee of a possible future date when a lateral transfer may be approved.
Open Forum - March 2009Employee Advocate - www.DukeEmployees.com – April 6, 2009
Chris Rolfe, soon to retire CAO, held the March 25 Open Forum in Cincinnati. He said that the company is trying to avoid freezing 401 (k)’s and layoffs.
Duke is way ahead of the curve in cutting back employee costs. Our benefits were ransacked over a decade ago.
It was said that Jim Rogers is a carbon “thought leader.” Did you realize that you needed someone to lead your thoughts? Duke has been trying to lead the employees thoughts for over a century, with limited success. The sycophants’ thoughts are easy to lead, but no one else is looking for someone to lead their thoughts.
Mr. Rolfe will retire at the end of May, after 37-years with the company. It’s the only place that he has ever worked. When he leaves, his position will not be filled.
Open Forum – February 2009Employee Advocate - www.DukeEmployees.com – February 16, 2009
CEO Jim Rogers held the Feb. 5 Open Forum in Charlotte, N. C. He said "One of the reasons we froze merit increases for most employees and are cutting other costs is to operate the company without layoffs…In 17 years, I've never laid anybody off. Does that say I never will do it? I don't know, but quite frankly, I think the 17 years speaks for itself."
Open Forum - November 2008Employee Advocate - www.DukeEmployees.com - November 12, 2008
CEO Jim Rogers held the Nov. 5 Open Forum in Charlotte, N.C. Last month he said “I think voters are going to sweep out Republicans.” And so they did!
On President-elect Barack Obama, Mr. Rogers said “I also believe that our new president deserves, regardless of whether you’re Republican or Democrat or whether you voted for him or not, our wholehearted support and deserves the benefit of the doubt in every event.”
Third-quarter earnings were down from 45 cents last year to 33 cents for 2008. This news is not a problem and is no reflection on Jim Rogers. Spreadsheets and profit projections do not control the weather. Mild weather, on one extreme, and storm damage, on the other, took its toll on earnings.
Things are a lot better than they may seem. There could have been a loss, rather than merely lower than expected earning. If the lower than expected earning had been hidden through the use of smoke and mirrors, it would have not gone away. The burden would have only been carried into the future.
Jim Rogers anticipates a longer, worldwide recession, but the company is still light years ahead of the Enron envy days. Jim Rogers never promised investors certain earnings. A previous CEO did promise investors certain earnings. He pulled his numbers game off for a while. It was only a matter of time until it blew up in his face, which it did.
Duke is managing the unexpected reduced earnings the old fashioned way, by reducing expenses. Duke’s capital spending will be $200 million less than planned for 2008.
In the footsteps of Paul Anderson, Jim Rogers is totally committed to being a successful CEO.
It’s noteworthy that Jim Rogers specifically rejects the very things that the Enron envy CEO used to boast of!
Open Forum - October 2008Employee Advocate - www.DukeEmployees.com – October 20, 2008
The October 2 Open Forum was held by CEO Jim Rogers at Oconee Nuclear Station in South Carolina. He said that Lee Nuclear could cost one-third of the total value of Duke Energy. The term “bet the company” was used. He added that jobs of existing employees or Duke’s financial viability would not be put in jeopardy to build it. A tough battle is expected to get the nuclear plant built.
The last time Duke started building a nuclear plant on the Lee site, it was abandoned. If the plant is abandoned this time, the ratepayers will pick up the tab, not Duke. The plant cold cost $8 or 9 billion to build.
Mr. Rogers is committed to building the plant and even said “I look at building Lee as going to war.”
Even after all these years, there is still no place to store the radioactive spent nuclear fuel. The Yucca Mountain nuclear dump has had one problem after the other and may never open.
Mr. Rogers said “I think we need to find a way to trade Yucca Mountain for something else.”
Duke had concerns about the weak credit markets. Mr. Rogers and CFO David Hauser wisely agreed to borrow $1 billion while the getting was good.
On the upcoming election, Mr. Rogers said “I think voters are going to sweep out Republicans.”
Comments from this and the last Open Forum indicate that Duke is not opposed to a future merger.
On deregulation, Mr. Rogers said “We have a hybrid situation in the United States today. There are almost 20 states that are deregulated, and the rest of them are regulated. Four of our states are regulated. Ohio is almost re-regulated now with the recent legislation (Electric Security Plan). It is a hybrid – but more regulated than not. I believe states are going to stay right where they are. States are not going to go back – although they might. Virginia has gone back. Ohio has gone back – but not all the way. Time will tell.”
The deregulation of electricity has been painful for affected ratepayers. The deregulation of banking has been painful for everyone. The corporate spin was that “depression era” laws should be repealed. But these regulations were designed precisely to prevent the second great depression. Removing all regulations was like removing all stop signs, so as not to impede traffic flow – disaster was guaranteed!
Open Forum - September 2008Employee Advocate - www.DukeEmployees.com - September 29, 2008
CFO David Hauser held the September 9 Open Forum at Catawba Nuclear Station in South Carolina.
An employee questioned the creditability of ratings agencies, since they blew it on mortgage debt.
Mr. Hauser said that when he was the treasurer, a ratings agency told him “You need to present like Enron does. They show great numbers of where the cash will come from.”
The advice to emulate Enron was clearly bad advice! But Duke rushed headlong into the Enron mania. The results were disastrous. The blame for chasing Enron does not go to Mr. Hauser. He was not driving the train when it almost derailed.
Mr. Hauser said that Crescent Resources lost a lot of money in the second quarter.
The losses would have been double if Duke had not dumped half of Crescent two years ago.
It was stated that the cost of any carbon credits would be passed on to the ratepayers.
Just how is making customers pay more for electricity supposed to lower carbon emissions? There is little incentive to reduce carbon emissions, as long as someone else pays the bill for polluting.
There were several references made to the possibility of future mergers. It was pointed out that Jim Rogers thinks that we have earned the right to do another deal.
When Duke ponders a merger, executives wonder what windfall profits will be possible.
When Duke ponders a merger, employees wonder what benefits will be lost this time.
Jim Rogers, David Hauser, and Dhiaa Jamil
David Hauser adequately fills one of three critical rolls at Duke Energy: CEO, CFO, and CNO.
When Jim Rogers became the CEO, it was much the same as when Paul Anderson came back to Duke as CEO. Both were the best possible candidates at the time. Jim Rogers represents the company well and it is hard to imagine him making a really harebrained decision.
David Hauser replaced the CFO of Enron envy days. It is hard to imagine him making a serious blunder.
Chief Nuclear Officer Dhiaa Jamil took his new position early this year. He is very level headed and extremely qualified for the position. He would never sacrifice nuclear safety in a wild quest for more profits.
A cowboy in any of the these position could be disastrous, either financially or physically.
Open Forum - August 2008Employee Advocate - www.DukeEmployees.com – September 2, 2008
Jim Rogers held the August 19 Open Forum in Plainfield. He said “This isn’t reflected in our load forecast, but I have a point-of-view that the demand for electricity will actually be flat or decline over the next 30 years.”
That’s an interesting admission for someone hellbent on building new coal and nuclear plants. There have been charges that Duke is not building new plants to meet the needs of local customers, but to have excess power to sell to the highest bidder.
Earlier this year, the Opinion Research Corporation (ORC) took a poll of the support for more coal plants in North Carolina. The results were 59% against and only 7% in favor of coal.
The public is way ahead of Jim Rogers on clean energy. But more coal plants now mean quicker short term profits for Duke. The long term price is the toll taken on everyone’s health.
Groups representing the public were also way ahead of Duke on Save-A-Watt.
Jim Rogers said “The significance of Save-A-Watt is that it paves the way for us to create a new business model that creates a new line of business to help our customers use energy wisely.”
Save-A-Watt paves the way to nothing. Other utilities have plans that save more electricity and cost less. Save-A-Watt, as originally proposed, only paves the way to excess profits for Duke.
Jim Rogers testified for about two and one-half hours, trying to save Save-A-Watt. In the end, he was no match for the many groups who opposed Save-A-Watt.
Open Forum, Number Two - July 2008Employee Advocate - www.DukeEmployees.com – August 4, 2008
Open Forum, Number Two was held July 24 in Cincinnati. It was conducted by Jim Turner, group executive and president and COO of U.S. Franchised Electric & Gas, and Sandra Meyer, president of Duke Energy Ohio and Kentucky.
The themes were “News Coverage Doesn’t Paint a Complete Picture of Duke” and “Good work being done by company doesn’t always get covered.”
The Employee Advocate agrees completely that the news doesn’t paint a complete picture of Duke. If it did, the picture would be much worse than it is.
And, there is a very good reason that every little “good work” of Duke Energy does not get front page coverage – it is just not newsworthy. Space is not available to trumpet every single public relations stunt pulled by Duke Energy.
There are people who donate tremendous sums of money to charity anonymously. They shun publicity and never seek glory. Conversely, Duke Energy demands publicity and glory for everything or it squaws loudly.
Those who donate anonymously clearly only want to help. Duke clearly only seeks good press. A tiny percentage of revenue is spent for the sole purpose of generating good press. It is viewed as a necessary expense, and a return is expected on the investment. Political contributions are also viewed as a necessary expense, and a return is definitely expected in the form of corporate friendly laws.
What do you suppose would happen if there were a law that corporations could not boast of charitable donations and no tax deductions were available? The donations would drop to zero overnight.
Duke Energy’s true motive is transparent when it howls because it did not get the expected good publicity. When negative press abounds, Duke has the gaul to blow its own horn, touting unrelated PR gambits. Sadly, Duke Energy has regressed back to days when the press was blamed for everything and the company sought to rewrite history.
Jim Turner said that it makes him feel terrible to read bad thing about the company. Hearing the truth can make people fell terrible or make them feel good. Some feel terrible only because they find out that their smoke screens are not working. When investors, customers, and employees find out too much, it can make executives feel really terrible!
Jim Turner says that what gets printed is only part of the story. That’s true, because Duke is so secretive about its machinations. Often, the only way to get the truth is through a lawsuit, and Duke will drag that out as long as possible. Duke puts forth a great effort to ensure that the whole story never gets out.
Sandra Meyer said that Duke wants to raise rates in Ohio. She also said that in a recent Ohio survey, customers rated Duke low in price and value.
Duke cannot very well blame that one on the news media. Maybe Duke will tell the customers how they should have filled out the survey.
Sandra Meyer 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.”
Duke Energy relies on two ploys to shield it from everything – stonewalling and denial. Getting the truth out of Duke Energy can take years. Then one can never be sure what hidden factors were never disclosed. Accusations are invariably met with knee jerk denials.
Even after Duke has been nailed, it will still profess innocents. Is it any wonder that people get to the point that they believe nothing said by Duke?
Duke Energy strenuously denied that it overcharged customer by making more profits that the law allowed. Duke denied doing anything improper, even when confronted by one of its own accountants. Duke also denied retaliating against the accountant for exposing the truth.
Duke’s only concern seemed to be that one of its own accountants blew the whistle.
Duke denied accusations by the regulators.
Then CEO Rick Priory tried to spin away all culpability, saying "You'll find that Duke dealt fairly with all parties."
Even after Duke Energy was found guilty by auditors of understating profits and misleading regulators, it still denied any wrongdoing!
Sometimes The Charlotte Observer appears to shield Duke Energy from negative headlines. At other times, it clobbers Duke right between the eyes.
A Duke Energy Chairman and CEO repeatedly denied that Duke manipulated energy prices.
But Price-Manipulation settlements of $207.5 million were made.
Duke Energy executives denied price gouging. A CEO claimed that Duke had been “completely exonerated.” But in the end, Duke made settlements in numerous price gouging lawsuits.
Duke Energy denied engaging in round-trip trading. Then, Duke Energy was found to have indeed engaged in round-trip trading.
So, if you are waiting on Duke Energy to actually admit to any wrongdoing, don’t hold your breath. And, a denial by a Duke Energy executive is worth less than a dime a dozen.
An employee had concerns about the negative effects of losing experienced workers. Jim Turner said that Duke severely limited hiring in the 80’s and 90’s in anticipation of deregulation. The company has finally figured out that it may need to hire some people.
The lust for big profits from deregulation has caused the bulk of Duke Energy’s problems. Even decades after the deregulation quest began, a price is still being paid.
Jim Turner did not like the coverage of the shareholder meeting by The Charlotte Observer. So, he took it upon himself to explain how the story should have been written in his Blog. He admitted “There was nothing specifically inaccurate in the story,” but complained that “it certainly didn’t tell the ‘whole truth.’”
Hey, that would be a good question to ask all employees. “How many times has Duke Energy told you the whole truth – about anything?”
The Employee Advocate attended the shareholder meeting. The Observer’s story was factual. Jim Turner did not like the story because it did put Jim Rogers on a pedestal and fawn over his speech. But it is not the Observer’s job to write PR copy for Duke Energy. The speech was OK, for one given by a CEO at a shareholder meeting. But still, it only was an attempt to sell Duke’s agenda, nothing to write home about.
Jim Turner apparently did not like it because environmentalist were allowed into the meeting. But they were all shareholders and legally entitled to be there. The Securities and Exchange Commission governs shareholder meetings, not Jim Turner.
Jim Rogers did not appear to have any problem answering all questions at the meeting. He even asked for the support of the environmentalist. Jim Rogers took everything in stride. Only Jim Turner got his jockeys in a wad over the meeting.
Jim Turner’s attempt to rewrite the story only served to cheapen an otherwise good meeting. And, if employees chose not to attend the meeting or listen to the webcast, that’s a good indication that they do not really care what happened at the meeting. Those not interested will not read his Blog either. So, his attempt at force feeding his shareholder meeting spin will fail.
Jim Turner’s attempts to rewrite the news has been tried before. It did not work then either. Duke Energy has absolutely no qualms about resurrecting failed policies.
That is not to say that the blog has no function. The blog serves as an excellent platform for Jim Turner to keep his picture in the paper, perpetuate the corporate spin, and to curry favor with Jim Rogers.
One employee did leave a pension comment on the blog:
Something to think about
A report on the Open Forum stated: “But the company is doing a lot of great work that will never make the news.”
This is déjà vu.
In 2002, the world was crashing around the head of Duke’s CEO. There were an unprecedented number of lawsuits against the company and Duke was trying desperately to rewrite the news.
What could the CEO do to turn the perception around? He grabbed a paint brush and started slapping paint on houses. In the July 15, 2002 Noon Meeting, he boasted about what he was doing and lamented “we may not get much credit today for the good things we do.”
If the only one who will boast of your “good works” is yourself, maybe they are phony and everyone sees through them as a self-serving attempt to exalt yourself in the eyes of others.
Ken Lay, then chairman and CEO of Enron, was a master at using “good works” to mask unethical shenanigans.
Between the good works glory train and political donations, Lay road high – for a time. In the end, he went up in flames, along with his company. He avoided prison only by dying before being sentenced. Some guys will do anything to beat the system!
Open Forum - July 2008Employee Advocate - www.DukeEmployees.com - July 28, 2008
Chief Administrative Officer Chris Rolfe held the July 16 Open Forum in Charlotte. He mentioned the recent fatality at Belews Creek Steam Station. He admitted that many employees perform dangerous work every day for Duke energy.
The number of fatalities at Duke Energy makes the Zero Injuries and Illness fantasy seem even more ludicrous.
A question was sent in asking if current employees are being encouraged postpone their retirement, due to the looming knowledge drain.
Duke says that managers can offer options to encourage employees to postpone retirement. And, additional options are being explored.
Duke Energy cannot say that it was not warned about the future dearth of experienced workers. Employees have been telling Duke for years that it has not been hiring enough new workers.
Duke runs hot and cold on retaining a knowledgeable staff. Duke Energy constantly vacillates between ridding itself of senior employees and trying to retain them.
Sometimes Duke pushes the most experienced employees out the door. Sometimes Duke forces employees to work longer than they had planned. At other times, Duke pushes employees out the door with one hand, while simultaneously snatching them back with the other hand.
For decades, Duke promised an early retirement subsidy for those who retired at age 55. This subsidy was part of our deferred compensation. Duke clearly wanted to encourage experienced employees to retire at 55.
In 1988, Duke further reduced knowledgeable workers by having its first companywide layoff.
But the layoff was a disaster. Too many employees were lost, and many were immediately hired back!
The cash balance conversion eliminated the early retirement subsidy in 1997. Employees were forced to work past 55 or suffer a pension reduction.
Duke started charging retirees health insurance premiums, and continually raised the rates. With little pension and rising insurance rates, fewer employees were able to retire at 55.
Over the years, Duke has tried to shove the most experience employees out the door by offering “Voluntary Separation Opportunities” – paying people to retire.
But many of the retiring workers were right back at work the next day as contractors! Duke paid some of these contractors substantially more than when they were Duke Energy employees.
Paying employees to retire and then paying them more to come back may seem like total lunacy, but Duke gained something from the deal. These employees ended all future pension accruals AND signed a waiver not to sue Duke over the cash balance pension plan.
In 2007, eligible employees were enticed to retire with a $50,000 insurance benefit.
Open Forum - June 2008Employee Advocate - www.DukeEmployees.com - July 21, 2008
Group Executive and Chief Legal Officer Marc Manly held the June 25 Open Forum in Charlotte. He said that Duke Energy must improve the responsiveness of Human Resources to employee questions.
Marc Manly is leading the project to improve the situation. He said “Our HR people have been the most frustrated people by all of this.”
It use to be that employees could never get a straight answer about the Cash Balance Pension Plan. Now, employees have a difficult time getting a truthful answer about anything. If an employee talks to three different representatives, he may get three different answers – all of them wrong. Communications have completely fallen apart since the merger with Cinergy.
One employee had to threaten to bring in the news media before his insurance questions were answered.
A major portion of the problem has been the downsizing of HR and outsourcing it to Hewitt Associates. Corporations have fallen in love with outsourcing to save a buck. Many have received exactly what they paid for – shoddy service.
The outsourcing corporations look for a cheap price to save money. The companies contracting to provide the services often cut corners to make more money. Everyone comes out ahead, except the employees, who ultimately pay the price.
Mr. Manly said “Stronger agreements will be put in place specifying the service levels we expect to receive – and that must be delivered to our company, our employees and retirees...We can’t afford to mess this up”
The “but all the other kids are doing it” excuse was offered: Mr. Manly said “If we were alone in this suffering, I would say, ‘Shame on us.’ But I take some comfort that companies like Wachovia did the same thing. Another lesson I take is that when things are screwing up, we ought to fess up to it a lot quicker than we did. This didn’t bubble up as quickly as it should.”
Following another big corporation does not guarantee the path is correct. Following Enron certainly blew up in Duke Energy’s face! Duke has always been reluctant to admit mistakes. It would rather throw millions of dollars at attorneys than to just admit a mistake.
The most amazing thing of all is that the board of directors actually understands that a problem exists! Their normal role is to wear smiley faces and deny all problems. Mr. Manly said the board told him “Marc, we get it. Go get this fixed. This is unacceptable. We have got to improve credibility with the employees.”
New ground has been broken if the board finally realizes that it has a credibility problem with employees. The conversion to the cash balance pension marks the day most employees stopped trusting Duke Energy.
Mr. Manly understands the problem of a new time reporting program being introduced with only sketchy training. Time sheets have been completed in a variety of ways, because no one was exactly sure how to do it. As you can imagine, this has been no picnic for accounting personnel. They have to educate employees on the new process one by one, question by question. This huge bottleneck was created because a few dollars were saved by neglecting to provide up front training.
A question was sent in about attracting and retaining a diverse employee population. Corporations evidently believe that diversification will solve all problems known to man. But to have a truly diverse employee population would require hiring a true cross section of the general population – none could be excluded. Axe murders, rapists, crack heads, bank robbers, pyromaniacs, embezzlers, illiterates, idiots and terrorists must all be hired.
Could this be another case of what Duke says is not what it really means? Duke Energy claims that there will be zero injuries and illnesses on the job. But no one can be stupid enough to really believe this. So, Duke throws in weasel words and tries to spin everything so that it does not sound like a big lie. Every now and then, an executive admits the truth that there will be accidents. Every time they come right back babbling about zero injuries. It is obvious that they have been “coached and counseled” for not touting the company line. There comes a time when people just get tired of constantly lying, even if they get paid for it.
Look at the enormous energy wasted trying to justify untenable positions and pure fantasies. Duke would not have to play these charades if it only told the truth up front. It is not as if it is actually fooling anyone anyway. Duke’s gaffs only leads employees to question its veracity more and more with each passing day.
Three questions were sent in about working less days, due to outrageously high fuel costs.
Duke recommends carpooling.
This very same argument took place in the 1970’s. Employees signed a petition requesting a four day work week, due to a fuel shortage. Management picked out everyone in supervision who had signed the petition and fired them all. These individuals apparently did not realize that free thought is not allowed in the ranks of management. The company line must always be touted.
An employee wondered why Duke is against a straight-forward carbon tax since Paul Andersen was a proponent of a carbon tax.
Duke said its policy is in favor of a cap and trade over a carbon tax.
Both Paul Anderson and Jim Rogers felt that some form of carbon regulation was coming. If they opposed it, they would have been branded as obstructionists. By supporting carbon regulation, they hoped to help craft the details. If the new Cliffside coal plant could be grandfathered and discounts given for all coal plants it would effectively be a tax on everyone else.
Duke Energy was ranked 13th largest carbon emitter prior to the merger with Cinergy. Since the merger, Duke Energy is the third largest carbon emitter in the US.
Question Sent In: When Paul Anderson took over the position of chairman of the board and CEO at Duke Energy replacing Rick Priory he publicly stated that he would be the last person to hold both positions at Duke Energy because he believed that separating the two positions was the right thing to do from a corporate governance standpoint. My question is: What is Duke Energy’s position on this issue and are there any plans to separate these positions at Duke Energy in the foreseeable future?
Answer: Currently, there are no plans to separate the two positions. Our board does have a lead director position to address any governance concerns.
Open Forum - May 2008Employee Advocate - www.DukeEmployees.com – June 9, 2008
Keith Trent, group executive and chief strategy, policy and regulatory officer, held the May 13 Open Forum in Charlotte, NC. He talked about the struggling save-a-watt program. Duke claims the program is not really an effort to charge customers for using less electricity. But remember, Duke also tried to sell the cash balance pension plan as the greatest thing since sliced bread!
The save-a-watt program is touted as reducing electricity usage, resulting in lower bills. The last hard sell was the deregulation of electrical power. It was going to produce lower rates for everyone. Deregulation delivered windfall profits for corporations and higher rates for most customers.
Mr. Trent does realize that too much cost-cutting can jeopardize safety and operations. He encourages employees to report those situations.
Open Forum - April 2008Employee Advocate - www.DukeEmployees.com - May 21, 2008
Jim Turner, group executive, president and chief operating officer, U.S. Franchised Electric and Gas, held the April 23 Open Forum at the Durham, N.C., Operations Center.
A question was asked about carbon legislation.
Mr. Turner said that some form of carbon legislation would likely be passed.
Be Careful What You Ask For
Jim Rogers came to Duke Energy wanting carbon regulation. He freely admitted that he intended to influence the legislation and that his support of the legislation would give him a seat at the table.
Duke is 100 percent in favor of carbon regulation, but only if it gets to craft the rules. If the new Cliffside coal plant is grandfathered and exempt from the new regulations, that’s a get-out-of-jail-free card for carbon emissions.
As long as G. W. Bush remains in office, corporations will continue to get anything that they want. If Duke can get the plant built prior to any new regulations, it may be home-free. It sounds ludicrous to say that you want carbon regulations, but that you want your plant exempt from them.
Duke is not in favor of proposed carbon legislation that will require the purchase of rights to release carbon to the atmosphere. Duke wants free rights to release carbon. Duke says that coal plants produce a lot of carbon and that it does not want to pay the full tax. Duke wants a carbon tax, but does not want to pay the full tax for emitting carbon.
It looks like Duke Energy wants a carbon tax for everyone else, as long as it can get plants exempt from it and get discounts for coal use.
There is a lot of hype about carbon sequestering at one of Duke's proposed coal plants. But Jim Turner admits that the technology is not developed. So, part of Duke’s answer to carbon emissions is to build more coal plants with unproven technology.
Carbon sequestering may turn out to be the greatest thing since sliced bread. But the whole idea sounds ridiculous. “I know what we’ll do with all this carbon; we’ll blow it into a hole in the ground!”
That sounds like the proposed solution for spent nuclear fuel. “We’ll just dump into a hole in the ground and it will be out of sight and out of mind.” Years and billions of dollars later, it still has not worked out.
If one says that he wants a tax for producing carbon and gets the tax, what’s the beef? A carbon tax is a tax on carbon. Companies that do not produce carbon should not have to pay the tax. Companies that produce a lot of carbon should pay a lot of tax. Hey, this is what Duke asked for!
Open Forum - March 2008Employee Advocate - www.DukeEmployees.com – April 15, 2008
Chief Administrative Officer Chris Rolfe held the March 18 Open Forum at Belews Creek Steam Station in North Carolina. He said “Many Duke employees perform dangerous work everyday. We need to do all we can to eliminate our exposure to risks. The company’s safety record the first two months of 2008 has been terrible.”
It’s good that he recognizes the fact that many employees do dangerous work. He even admitted a terrible safety record for 2008. In another 100 years or so, the company may realize that thousands of employees cannot do dangerous work every day without anyone ever getting hurt. Attempting to improve the safety record is one thing. But proclaiming that there will never be any injuries and illness at Duke Energy is pure fantasy.
And cherry picking one group to tout for having no injuries for a certain period of time is meaningless. Out of 18,000 employees, there will always be some group that had no injuries for some period of time. At the same time, there will always be other groups with accidents. Thus, the Zero Injuries hype is a pure myth.
The only way to declare a success of the boastful Zero Injuries prediction is to cook the books. The Zero Injuries safety effort could be converted to a cash balance safety effort. With enough footnotes, disclaimers, exclusions, fuzzy math, hidden steps, and actuarial assumptions anything could be possible. Perhaps zero reported accidents could be reached if they were reduced at the same rate that pensions were reduced!
When asked about the future of retiree health care and benefits, Mr. Rolfe said “I do not see greater subsidies for retiree health care.”
That was an extremely conservative answer than no one will dispute. Employees once thought that when they retired all their benefits were locked in. Over the years, they have discovered that the written promises of benefits were only as good as Duke’s word. Houston, we have a problem.
For years the company painted the illusion of guaranteed benefits after retirement, to the point of sending annual statements playing up the benefits. Now, Duke never misses an opportunity to insert the disclaimer: “The company reserves the right to amend or terminate our plan at any time."
Duke is belatedly trying to protect itself from being burnt for misleading employees about retirement benefits. But nothing can change the fact that Duke Energy mislead employees about retirement benefits for years. Only after age discrimination charges were filed, did Duke start publicizing the disclaimer at each opportunity. After the damage was done, Duke effectively said “Oh, by the way, you are not really going to get the pension benefits that you have earned.”
A question was asked about former Cinergy employees being converted to the Duke cash balance plan and plan funding.
Mr. Rolfe said that former Cinergy employees were offered a choice between keeping their old plan or moving to the Duke plan. About 90 percent of the eligible employees moved to the Duke plan. The Cinergy pension plan is 95% funded. All of Duke’s pension plans combined would be more than 100 percent funded.
Mr. Rolfe added “The cash balance plan provides a great benefit if you work until 65. Is the Duke benefits programs better in every way – ‘No.’ For example, the cash balance plan does not subsidize early retirement at age 55. You know what? You can probably say that for hundreds of benefit programs for companies in America. You could probably say that in France, Italy, Spain and the UK. We all face the same demographic issues.”
It’s wonderful that former Cinergy employees had a choice of pension plans. Some former Cinergy employees have said that they did not lose any pension benefits by moving to the cash balance plan. Did Duke sweeten the deal to entice former Cinergy to make the switch?
In 1997, all Duke Energy employees were forced into the cash balance plan. Employees complained because of the pension reductions due to wearaway and the loss of the early retirement subsidy. The Pension Protection Act of 2006 outlawed wearaway in new cash balance plans and protected the early retirement subsidy. Since the new law did not cover Duke’s pension plan, employees were forced to sue in federal court to regain the true value of their pensions.
A new wrinkle has now appeared in the pension game. The Treasury Department is trying to retroactively legalize wearaway in certain older cash balance plans through the use of rulings.
The cash balance plan may provide “a great benefit if you work until 65.” But employees were told repeatedly that they would receive these benefits at age 55. Employees were enticed to work for decades under false pretenses.
Duke Energy employees are not interested in what other companies said or did. We are not interested in what may have occurred in France, Italy, Spain and the UK. Employees know that Duke Energy reneged on delivering their deferred compensation, after they had labored for years to earn those benefits. Pointing fingers at other companies and other countries will not allow Duke to escape accountability for its greedy actions.
Open Forum - February 2008Employee Advocate - www.DukeEmployees.com - February 19, 2008
Jim Turner, President and COO of U.S. Franchised Electric & Gas, held the Open Forum on Feb. 5 in Charlotte, N. C. He said that safety improved in 2007, but it’s still not good enough to put the company in the top 10% of utilities.
To his credit, he did not use the overused and pathetic “zero injuries” refrain. To predict zero injuries is to invite inevitable failure. Duke Energy has consistently failed to deliver zero injuries since it first started babbling about it in the last millennium!
Duke started out with an injury on Jan. 2 this year, and the accidents keep coming. The zero injuries sham only guarantees failure and makes liars of all who tout it.
Can the safety record be improved? Certainly, it’s possible to improve the safety record. But all accidents, illness, and deaths will never be prevented, as some executives have claimed.
A site vice president recently wrote: “It is impossible to remove all risk from operating a power plant.” He used the Radiation Protection concept of As-Low-As-Reasonably-Achievable (ALARA) as a realistic safety approach.
At least two executives have a grip on reality. Nothing built on falsehoods will ever endure. That is why so many of Duke’s nifty programs come and go with the wind.
Question: What happened to the idea of empowered employees? Why is there so much bureaucracy? Many in the Midwest feel we are taking steps backwards – whether it’s the process for scheduling a conference room or getting a human resources question answered. Is there anything being done to improve this?
Jim Turner: We’ve got more work to do in the area of reducing bureaucracy, but we have been working on attacking it. In some areas, we’re making progress. In others, we are still fighting through the bureaucracy to attack the bureaucracy...
Advocate: Bill Lee introduced the drive to empower employees around the early 1990’s. It was introduced not long after the fall of the Berlin wall. The timing could have been symbolically significant - if things had worked out.
An employee asked one of the instructors how companies faired after undertaking the employee empowerment approach. She said that companies that stayed on the path to employee empowerment continued to excel. However, the companies that reverted to their autocratic ways became worse than ever. Needles to say, Duke Energy backslid big time!
Not only has bureaucracy mushroomed, but a new effort emerged to strip employees of all possible benefits.
The “Berlin wall” between management and employees is higher than ever. The “Berlin wall” separating executive and employee compensation now reaches to the sky!
Open Forum – January 2008Employee Advocate - www.DukeEmployees.com - January 21, 2008
There was no December or January Open Forum, but answers to questions sent in were posted in January.
Question: (short version) What is it about Duke that investors are shying away from?
Answer: (short version) Duke Energy had a good 2007.
Advocate: Employees continually ask the executives about the price of stock. That is a lot like asking a salesman if you should make a major purchase today or wait a few months. The answer will always be the same: “BUY - BUY NOW – BUY WITH BOTH HANDS!”
Company executives are not the best place to go for objective stock advice. When employees asked CEO Ken Lay about Enron stock, he encouraged them to buy more. All the same time, he was dumping his shares!
When it became obvious to everyone that Enron was tanking, the employees were blocked from selling their shares. They could only watch the price go down to near zero. That is why so many Enron employees had their 401(k) savings wiped out.
A single stock is always the most risky investment. Shares of a single stock in the company where you are employed carries the greatest risk of all. When employees put their whole 401(k) savings in the stock of the company that they work for, they are really putting all their eggs in one basket. In the worst case scenario, all their savings will be wiped out AND they will have no income!
If a married couple work at the same company and put all their savings in the company stock, they are in a very precarious position. Both could end up with no savings and no job. When employment terminates, any 401(k) loans become instantly due.
The Enron employees did not think it could happen to them either.
Question: An employee asked why Duke Energy was not doing more to retain skilled nuclear employees, given the recent high demand. He pointed out that the competition is offering greater compensation than Duke.
Answer: As always, the answer included the benchmarking song and dance. Duke encouraged employees considering accepting a better offer to consider everything, including benefits.
Advocate: There was a time that worthwhile benefits were a valid reason not to accept another job offering better pay. But since the cash balance pension conversion, the benefits argument is wearing thin. Employees have been hit hard on pensions, health benefits, and retirement health benefits.
Duke always tries to play everything from both ends. Our benefits were decimated for the sake of company greed. Yet, the company still expects the sparse remaining benefits to keep employees from accepting better offers.
Hey, this is what Duke asked for. The cash balance plan was supposedly implemented to cater to the young mobile employee! If you are going to be mobile, you might as well go for the big bucks. Why wait around for you benefits to be reduced even more? Why work for 30 years for benefits that can be taken away with the stroke of a pen?
Question: What happens to a new retiree's Duke medical insurance at age 65? I called HR24 and was first told that Duke's insurance became secondary to Medicare and then was referred to another HR24 rep for another question. I was confirming what I had been told and they then told me that Duke's insurance went away at 65 when Medicare started. I asked for them to direct me to written information on the HR24 Web site, and they could not find any info on retiree insurance. What happens to Duke insurance at age 65 for a retiree? Also, what are the current requirements for retirement options?
Answer: The requirements for post-retirement medical coverage under the Duke Energy Medical Plan are subject to change and vary based on your legacy company, your years of service, your date of separation, etc.
For legacy Duke former employees, retiree coverage available under the plan upon Medicare entitlement also varies, depending on the year during which an employee satisfied/satisfies the applicable retirement criteria. For legacy Duke employees who were eligible to retire (under the applicable retirement criteria then in effect) before 1999 (regardless of whether they retired then or later), access to both post-retirement medical coverage and prescription drug coverage under the plan is offered at Medicare entitlement (and beyond) (this coverage is secondary to Medicare). For legacy Duke former employees who became or become eligible to retire (under the applicable retirement criteria then in effect) on or after Jan. 1, 1999, only access to prescription drug coverage is offered at Medicare entitlement (and beyond) (this coverage is secondary to Medicare). Legacy Cinergy former employees who satisfy the applicable eligibility requirements for access to retiree medical coverage under the plan generally have access to both medical and prescription coverage under the plan before and after Medicare entitlement (this coverage is secondary to Medicare).
Importantly, employees also should consider how their choices with respect to their retiree coverage may impact their ability to obtain coverage under the plan for their spouses and/or dependents. As these rules are complicated and subject to change, you may want to call the myHR Service Center at 1-888-465-1300 for more details. If you happen to receive conflicting information from a center representative, ask to speak with a supervisor.
Duke Energy reserves the right to amend, modify or terminate the coverage provided under the plan, including, but not limited to, post-retirement healthcare coverage, at any time.
Advocate: If you have any doubts as to just how shaky your benefits are, just read the above answer. Here was an employee that did not realize that he lost his retirement health insurance at age 65.
Bill Coley was the only executive to ever show any remorse over what happened to the employees’ benefits. The cash balance conversion was in 1997. Bill Coley said that the company had overdrawn the employees good will bank account and that 1998 was to be the Year of the Employee.
1998 did not turn out so hot for employees. Employees were notified that the next year, most would lose their retirement health insurance at age 65.
There was once a program touted for years called Zero Injuries by 1998. In 1998, it failed as miserably as the year of the employee!
The greatest line of all was: “If you happen to receive conflicting information from a center representative, ask to speak with a supervisor.”
It really does not matter what any HR representative tells you; none of it is binding. Only what is spelled out in writing has any chance of being enforced.
Duke Energy does not want any more benefit questions sent to the Open Forum. Duke wants you to call HR. The cover story is that this will reduce confusion.
It is true that employees who are blissfully ignorant of their reduced benefits are less confused. They will only become confused when they retire and find that the promised benefits are no longer there.
It will then be too late for the new retirees to make up what has been taken from them. But it works out great for the company!
If one employee at a time finds out how flimsy his benefits really are by calling HR, that can be managed. But if the benefits truth is published in the Open Forum for all to see, absolutely too many employees will become informed! We simply cannot have the Open Forum actually informing employees about their benefits or the lack thereof.