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The Employee Advocate was tipped off that people at the May 8 meeting were protesting the proposed Cliffside Coal Plant construction. Sure enough, dozens of protesters were outside the shareholder meeting, carrying anti-Cliffside signs and passing out literature.

There was a huge crowd at the meeting. When a lady was spotted entering the meeting with a backpack, it was a good clue that anti-coal protesters were also inside the meeting.

The first order of business is always to subject the shareholders to the boredom of verbal “fine print.” Duke Energy wants to ensure that it is not actually held accountable for anything that may be said in the meeting by issuing endless disclaimers. A summary of the disclaimer high points is as follows: Blah, blah, blah, blah, blah, blah, blah, blah.

Shareholders still awake after the disclaimer assault we able to hear Jim Rogers speak. Usually everyone has voted by proxy prior to the meeting. But this time a number of shareholders asked for ballots and voted on the spot.

Jim Rogers said that 2007 was a good year, and he thanked employees for their efforts.

He spoke of the paradox of preaching the reduction of carbon dioxide emissions, while building two new coal-fired power plants. He blamed China for everything. It was explained that China would build the equivalent of 1,000 Cliffside plants in the future, so one more plant in North Carolina would not matter that much.

The problem with that explanation is that one coal plant in North Carolina will probably pollute the local air more than all the plants in China. Stopping pollution worldwide is a worthy idea, but one must start with what one can control, and that is not China.

Jim Rogers noted that he was having a hard time talking and breathing, due to allergies. Could North Carolina’s polluted air be contributing to his breathing problem?

Usually few questions are asked at Duke shareholder meetings. In at least one meeting, zero questions were asked. This time, the Employee Advocate counted 15 shareholders with questions or comments! Meetings often last about an hour. This one ran almost two hours. Most of the shareholders speaking were opposed to new coal and/or nuclear plants. A few supported burning coal, and one even said that he liked carbon dioxide and mercury.

With a packed house, anti-coal protesters on the sidewalk, protesters in the meeting, and security wall to wall, one might have expected pandemonium. It could have been a recipe for bloodshed, arrests, stun-guns, and pepper spray. Actually the meeting was very civil, almost congenial. There were no reports of any arrests. Only one voice was raised, when a man shouted for a lady asking questions to sit down. But, hey, there will always be at least one jerk in any crowd.

Some of the environmentalists thanked Jim Rogers for his green efforts and asked for more. Some offered to work with him to promote renewable energy. Jim Rogers, in turn, asked the environmentalists for their help in promoting Duke’s conservation efforts.

Jim Rogers said that he would lateral any hard questions to his subordinates. But he answered all question, in detail, without any assistance.

Here is an overview of each shareholder’s comments:

• NASA’s Dr. James Hansen says do not build Cliffside.

• Cain’t eat the fish in the Catawba River because of mercury contamination.

• Don’t get caught up in the anti-global warming movement.

• No new coal or nuclear plants. Thanked Jim Rogers for having an open mind.

• There is a glut of electric capacity now. Duke wants to build plants to sell power to other utilities.

• Concerned about the liability exposure of pursuing coal and nuclear. Duke will be sued if it pursues Cliffside.

• Offered to work with Duke to promote renewable energy. Concerned about the risk of Cliffside.

• Opposed to coal. Wants a moratorium on nuclear construction. Wants mountaintop removal mining abolished.

• Had a laundry list of issues. Wants name changed back to Duke Power to promote trust. Wants red and green traffic lamps replaced with LED’s. He was willing to leave the amber lamps in place, since they do not burn as much.

• Wants number of shares reduced and the dividend reduced. Likes CO2 and likes to play with mercury. Said those concerned about pollution should plant a tree in their yard.

• Does not own stock in China coal plants - opposed to coal plants here.

• Massive wind and solar use by Duke would lower the price and encourage China to follow suit.

• Likes coal.

• Concerned about water usage of nuclear plants.

• Concerned about smog.

• He expects Duke’s lawyers to be fully employed.

• The government failed utilities on Yucca Mountain.

• He is opposed to mountaintop removal mining, but cannot promise a moratorium on it.

• He does not want to run from the issues.

• Cliffside is a transition plant. Older plants will be decommissioned.

• He will meet with Dr. James Hansen.

Jim Rogers said that what he likes about his job is the opportunity to transform people’s lives through the production of electricity. Duke Energy is certainly noted for transforming people’s lives, but it is not always a positive transformation. The lives of thousands of employees were negatively transformed when the pension was converted to a cash balance plan. Newsletter subscribers were informed of the upcoming pension mediation hearing.

The May 10 meeting of shareholders did not fill the auditorium to capacity, but it ran smoothly.

Chairman and CEO Jim Rogers said that he loves his job, transforming the lives of millions of people.

It’s good that he loves his work. The Employee Advocate does not contest his power to transform the lives of millions of people, but suggests that he ensure that this transformation is always in the positive direction.

Last year, Jim Rogers put a restrictive three minute time limit on the length of questions. He redeemed himself this year by putting no restrictions on the length of questions.

The toughest question asked was about decommissioning nuclear power plants. With the spent fuel issue unresolved after all these years, what will the company do with the decommissioned plant components? The question received no specific answer, other than relying on future developments.

A shareholder suggested that the name “Duke Energy” be changed back to “Duke Power.” He correctly pointed out that many problems faced by the company did not start until the name was changed to “Duke Energy.” Many people never use “Duke Energy” anyway. The company has always been “Duke Power” to them and that’s the name that they are going to use.

The Duke Energy Name Game

Changing the name back to “Duke Power” would symbolize a return to the days of making profits from generating power, not day trading and Enron-inspired market ploys.

Jim Rogers said that he would rather spend the money paying dividends than changing the name back. Jim Rogers has a valid point. Everything has a cost, even changing the name of the company. The list of things that would need to be replaced is endless. The task is so daunting that not everything has been changed from “Duke Power” to “Duke Energy,” even ten years after the first name change!

The smartest move would have been to left the name alone to start with. But there was a former Duke CEO who was embarrassed to be associated with power production. He wanted a name more…more…more…Enronish.

Along with not changing the name, Duke would have been better off not buying PanEnergy, not following Enron into energy trading, and not buying plants worldwide.

The shareholder is correct. The name change to “Duke Energy” symbolized the greediness of the new company. Employees felt the shift to greed with the cash balance plan conversion and missing pension benefits

Paul Anderson reversed the suicidal path the company was on in record time. Jim Rogers continues with the work that Paul Anderson started. He said that he wants to continue to lower risk and to raise the dividend. That is exactly the opposite approach from the death spiral days, which means it is exactly the right approach.

To change the name back to “Duke Power” and leave the injustice of the cash balance plan would be an exercise in hypocrisy! Changing the name back would be saying that everything is now fixed. Everything is back as it was. No more day trading, no more book-cooking, no more round trip trading. Don’t forget about the employee’s missing pensions; the employees have not forgotten about them!

The regular meeting of Duke Energy shareholders was held on October 24, 2006. Board Chairman Paul Anderson and new CEO Jim Rogers were both present. The silly “safety briefing” was toned down from past years. It was not even called a safety briefing this time. The shareholders were only given instructions to be followed in the event of an emergency (how to evacuate). Most would view brief evacuation instructions as reasonable albeit useless. In the event of a true emergency, the shareholders would scramble out of the building like a herd of wild pigs. Anyone getting in the way of the escapees, to give instructions, would be trampled by the departing horde.

In January, Paul Anderson will become the chairman of the board of the spun off gas company. Fred Fowler will become the president and CEO of the gas company. The Employee Advocate had high expectations of Paul Anderson when he came back to Duke Energy. He has exceeded those expectations. Mr. Anderson said that he was brought back to “get the ox out of the ditch.” He extricated the ox by reversing almost all of the inane decisions made by his predecessors. The one major blooper remaining is the confiscation of employee benefits. The loss of pension benefits, due to a cash balance plan conversion, is now before a federal court.

Mr. Anderson is not a power production neophyte, but he knows even more about the gas business. His move to the, now separated, gas company is a wise one. Fred Fowler also came from the gas industry, so his move will benefit all. It is suggested that Mr. Fowler stick to business issues and not make wild proclamations of zero deaths, injuries, and sickness, as he did at Duke Energy.

Fast Freddie Fowler Flounders

Paul Anderson would never leave Duke Energy in unqualified hands. The track record of new CEO Jim Rogers speaks for itself. At Cinergy, Mr. Rogers avoided the backlash and litigation that would have resulted from forcing employees into a cash balance plan. Existing Cinergy employees were given a choice of staying in their promised retirement plan or choosing the watered down cash balance plan. The former Duke Energy management had no such foresight.

Paul Anderson and Jim Rogers are now left holding the putrid pension bag created by others. There was no easy action that they could have taken to correct it. Any insurance to cover unsuccessful pension litigation would preclude just giving the pension money back to its rightful owners. The insurance would demand a “vigorous defense” of the pension conversion, no matter how untenable it was.

Paul Anderson spoke of driving forces behind the Duke/PanEnergy merger, which occurred nearly a decade ago. Management types were absolutely giddy over the prospect of energy deregulation. Gas-fired generating plants made owning a gas company seem like a “competitive advantage.” A competitive advantage would be achieved by mutually owned companies giving each other sweetheart deals. But the government cracked down on such ploys. The crackdown was a direct result of the criminal conduct of Enron. And who was trying hard to be another Enron? It was Duke Energy.

The federal crackdown on corporate hanky panky was not an accidental occurrence. It came about as a direct result of energy trading, merchant energy, market manipulation, and etc. The Duke Energy cash balance pension conversion was right in the mist of all the other sordid activities. Correcting all mistakes but one is like changing clothes each day, but wearing the same underwear for ten years. It tends to stink!

Mr. Anderson made one mistake in his presentation. He said that Duke Energy emerged with its reputation intact. That is not the case. Duke Energy faced an enormous amount of lawsuits and paid millions of dollars in fines. Ask any employee who lost pension benefits in the energy trading crapshoot what he thinks of Duke Energy. The company definitely did NOT emerge unscathed.

The Duke/Cinergy merger and gas company spinoff effectively reverses the Duke/PanEnergy merger.

The time limit for asking questions was reduced to three minutes from the customary five minutes. This reduction in time was made even though there were zero questions asked at the last meeting. There was one comment last time, but no questions.

The room was not full, but there were a number of questions asked at this meeting. Jim Rogers mentioned that one problem with nuclear power was waste storage. He said that we have Yucca Mountain, but it has not been approved for use.

There are a number of valid reasons why Yucca Mountain has not been approved. Namely, it was a very poor idea to begin with. It may have sounded like a good idea decades ago. But today, Yucca Mountain is known to have a host of problems – show stopper problems. Yucca Mountain was not originally pushed through Congress because of a concern for nuclear safety. Yucca Mountain was pushed through Congress because of an overwhelming concern and lust for money!

Yucca Nuclear Dump is a Sham

It was not mentioned that Duke Energy wants its customers to pay nuclear licensing costs upfront. They would be stuck with hundreds of millions of dollars in cost, even if the reactors are never built. More on this later.

Mr. Rogers paid tribute to his Duke Energy predecessors in the ‘40’s, ‘50’s, ‘60’s, and ‘70’s. It is noteworthy that he did not mention the 1990’s. That was the period that Duke Energy began its downward slide.

A question was asked about the long-term performance incentive having no penalty for poor performance. Mr. Anderson said that there is a short-term penalty of five percent if the company has a fatality. He mentioned other penalties for operations managers.

Apparently upper level executive can reap huge bonuses, but only risk five percent. And, the five percent penalty is not for poor financial performance, but for fatalities. There is one five percent penalty for one or one-hundred deaths per year.

Paul Anderson mentioned that some investors said that owning a real estate company did not make sense. He would tell them that it might not make sense, but it made money. That it did. Crescent originally bought farmland, well, dirt cheap. Later this farmland was developed and sold for megabucks as lakefront property. It was hard not to make money. The trick was to buy the land before there was a lake.

Concerns have been raised about over development around nuclear plants.

Project Poses Threat to Area

As expected, all directors were approved, the long-term incentive plan was approved and Deloitte and Touche was approved as auditor.

The meeting lasted 53 minutes.

A good crowd was on hand for the 2006 special shareholder meeting, on March 10. Paul Anderson did a good job of conducting the meeting and most of his statements were straightforward. The part about the merger being good for employees could not be swallowed.

The meeting started with the usual silliness – the safety briefing. Duke Energy employees have performed every dangerous job imaginable from restoring power in storms to erecting steel. Now it has come to requiring a safety briefing to sit in a padded chair on a carpeted floor! The biggest danger from sitting in an auditorium is the chance of one’s head exploding from being subjected to the safety briefing!

Next, executive legal safety was covered by reading the “safe harbor” statement. It is a warning not to put too much stock in what the executives may tell you. What the executives tell you may or may not be exactly true. Employees have known this for years!

Naturally, Paul Anderson was building up just how great the merger would be for everyone. He even said the bigger company would provide more opportunities for employees. That’s not the way it worked the last time the company became bigger. The bigger Duke Energy only meant bigger bonuses for executives. The bigger company meant smaller pensions, holidays, and health benefits for employees. 90 percent of employees’ complaints can be traced back to preparations made for the merger with PanEnergy. Employees cannot stand anymore of these opportunities.

Former Cinergy employees will now get loaded up with these “opportunities.” They will get opportunities to become unemployed, to get outsourced, to get less benefits, and to see various union busting tactics up really close.

Cinergy Union Workers Ready to Strike

Mr. Anderson projected a $650 million savings from the merger, over the first five years. That is an interesting figure. That amount of money could be enough to make all Duke Energy employees whole from the devastating cash balance pension losses. The cash balance plan was implemented the same year as the merge with PanEnergy.

With all the talk of the money to be saved, a shareholder wanted to know about all the DENA losses and why money was paid to Barclays Bank. Mr. Anderson said the money paid represented the difference in the value of DENA from acquisition to now. He conceded that Duke got into a bad business and is now trying to get out of it.

DENA was supposed to generate fabulous profits by trading energy, just like Enron. But Enron’s profits were proven to be phony. DENA has been losing massive amounts of money every since. Of all the companies in the world, Enron is the one that Rick Priory chose to envy.

As for paying a 13 percent premium for Cinergy, Mr. Anderson said that Cinergy has performed better than Duke Energy.

The reasons for Duke Energy’s lackluster performance all go back to 1997. Everything bad can be traced to 1997. It was the year of the cash balance pension conversion, the merger with PanEnergy, and Rick Priory as chairman. Chasing Enron led to risky maneuvers, which led to lawsuits by the dozens.

Mr. Anderson said that the merger would add 3600 megawatts of gas generation to Cinergy’s coal fired plants.

The plants will also be included in Cinergy’s rate base. Then the plants will make money whether they make electricity or not.

Of the 1500 employees to get the axe, 800 volunteered for the layoff, and 350 job will go with DENA. So, some employees may still get an offer that they cannot refuse.

A shareholder was concerned about the knowledge lost when employees are laid off. The loss of expertise has been a problem that management has ignored for years. Duke Energy has been getting by with poor documentation for years, because employees knew what to do anyway. More reportable events are occurring, because less experienced people are having difficulty in interpreting the sketchy instructions. This problem will only get worse.

In the middle of the meeting, a portable jukebox went off. It was actually a cell phone with a musical ring tone. The man with phone was feeling around for the phone, but could not find it. Meanwhile, it continued to blast away. He finally left the meeting to find the phone and turn it off.

The company is finally wising up, and all of its businesses except two are going to be called Duke Energy. This website was way ahead of Duke Energy on this. It was never called the “Duke Power Employee Advocate.” It has always been called the Duke Energy Employee Advocate – representing ALL Duke Energy employees.

As expected, the merger was approved by 95 percent. Cinergy shareholders approved the merger by 96 percent.

This meeting had only one item of business – the merger. But it lasted longer and more questions were asked than during the last regular meeting. Unlike the last meeting, many questions were asked. In the 2005 meeting, there was only one comment and zero questions asked. The merger meeting lasted 50 minuets. The 2005 meeting lasted only 40 minuets.

The N.C. or the Indiana Utility Commission can still shoot down the merger.

The Cinergy shareholders were greeted by about 150 members of International Brotherhood of Electrical Workers Local 1347, according to the Cincinnati Enquirer. They were conducting informational picketing. They are not too happy about the benefits and job squeeze that Duke Energy is already promoting.

Kenny Gross, Local 1347 president, said "These two companies have made record profits and they want to get rid of benefits and replace us with non-union contract workers."

Well, Duke Energy has over a century of union busting experience. If the unions do not stand strong against Duke Energy, they will be rendered irrelevant.

Duke Energy Squeezes ALL Cinergy Employees

The meeting was held on May 12, 2005, in Charlotte, North Carolina. The shuttle driver to the shareholders meeting predicted it would be exciting because of the many recent events. It sounded like a safe prediction, but it did not pan out.

The meeting may have broken records, but only because of its brevity. The meeting only lasted 40 minutes!

The meeting could not be opened without a “safety briefing”!

Vital information was given, such as, “Be sure to look around as you move about, to be sure there are no obstacles such as handbags or other such items in your way.”

There are some klutzy people in the world, but who cannot sit in an auditorium without getting hurt? Duke Energy has plenty of jobs that present real danger to employees. Executives cannot pick out all the danger in these jobs, even if they wanted to. So, they are content to settle for another dog and pony show – safety briefings in auditoriums!

People have surely been killed on Duke Energy property. But these people died while doing dangerous work, not sitting in padded chairs in an auditorium! There are plants that are unsafe to walk through, but management intends to stop accidents, sickness, and death by giving safety briefings in auditoriums.

Can't Sleep for Worrying About Safety

The next topic covered legal safety for senior executives; it was the recital of the “Safe Harbor Statement.” The Safe Harbor Statement is the equivalent to the “Not Responsible for Accidents” sign at an amusement park. The things that the executives say will happen may not actually happen. The Safe Harbor Statement can be summed up as: “No Matter What We Say, Don’t Sue Us.”

Chairman and CEO Paul Anderson used good judgement in not showing a horn-tooting video. When all the executives are on hand, who wants to waste time watching a propaganda video?

It is no surprise that last year Duke Energy opposed the shareholder proposal that all directors be elected each year. As a general rule, corporations will oppose all shareholder proposals. Executives do not want shareholders making any suggestions. They only want shareholders to fork over the money and keep quiet.

The staggered election of directors allows the good ole boys to remain in control, no matter how poorly they perform. Staggered elections make it impossible to clean house.

Submitting shareholder proposals can be an exercise in futility. There are hoops to jump through and the corporation will likely try to get the SEC to throw the proposal out. Proposals that do make it to a vote have a high mortality rate. Some that do not pass, manage to get enough votes to come back for a vote the next years. Some proposals hang on for years, only to be ultimately defeated. The interesting part is, even if a proposal passes, the directors are free to ignore it!

Last year, the shareholder proposal to elect all directors each year passed, with 63 percent of the vote! The proposal passed and Mr. Anderson said: “We will abide by the will of the shareholders.”

But with shareholder proposals, nothing ever happens fast. One-year had passed since the proposal passed. What do you think happened this year? The shareholders had to vote to amend the articles of incorporation to allow the proposal to become effective.

The vote was in favor of declassifying the board of directors, which will put everyone up for election annually. All directors will resign at the next shareholders meeting and be up for reelection. Even with everything going perfectly for the proposal, two more years were required to see the end results. The proposal won in 2004. The articles amendment won in 2005. The actual change will not occur until 2006.

An advantage of attending the meeting in person is the opportunity to get a better feel for what is really happening, that transcripts can never provide. Plus, one always has the option of setting the record straight if the executives get too far removed from reality.

Paul Anderson appeared relaxed and confident, as he spoke of the dividend increase. This was good news. It moves the company further away from the day trader mentality of the past decade. In only a year and a half, Paul Anderson has purged the company of most of the get rich quick boondoggles of the past regime. And, he did it without the lunacy of promising shareholders specific rates of earnings growth, as his predecessor did.

Mr. Anderson noted the reputation of Duke Energy is improving on Wall Street. Unfortunately, there has been zero improvement from an employee prospective. The name “Duke Energy” continues to be tainted. The old “Duke Power” represented integrity and delivering on promises. To employees, the name “Duke Energy” only represents weaseling out of paying benefits, earned over many years. The name “Duke Energy” represents all that is bad in the company.

Mr. Anderson mentioned the ill famed “Zero Injury and Illness Culture.” Why is it ill famed? It is a delusion. It is a deception. It is a denial of reality. Making unrealistic safety projections is no better than making fanciful earnings predictions. By making unrealistic safety predictions, he has ensured his failure. COO Fred Fowler has previously went as far as to predict no injuries, no sickness, and no deaths on the job. Throwing in the weasel word “culture” does not exempt the pipe dream from failure.

Paul Anderson started out with a believable plea for safety. Then he shot himself in the foot with untruthful corporate rhetoric. Fred Fowler divorced reality by lecturing other companies to “admit mistakes, and learn from them.” This is an area that he has failed to master.

Fred Fowler Lectures Others

Mr. Anderson said the profits from the merger with Cinergy will be shared between the shareholders and customers. There was no mention of employee lost benefits. There is never any mention of employee benefits that were taken by unethical, if not illegal, means. Workers have these losses as a reminder of Duke Energy’s Enron envy.

Separating the gas and electric businesses after the merger was mentioned. That would be step it the right direction. Anything that gets the company back toward pre Duke Energy can only be an improvement. To many, Duke Energy will always be synonymous with Enron. It will forever be tainted with greed, unethical behavior, and seeking to profit at the expense of employees.

When Paul Anderson asked for questions, there was silence. When a chairman asks for questions at a shareholders meeting, it can be like diving into a pool of sharks. He seemed astonished that no one had any questions.

Finally one person had a comment. He thanked Duke Energy for the dividend reinvestment program. That was it – no questions and only one comment.

Last year, Mr. Anderson cut off the questions abruptly when questions about MOX fuel were asked. The plutonium reactor fuel will actually be used in about 30 days and there were no questions. Any way you slice it, that was a vote of confidence in Paul Anderson’s performance.

Of course Deloitte & Touche will remain as auditor.

Deloitte & Touche Settling with the SEC