Duke Energy 2006 Annual Report Download - page 12

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Realizing the efficiencies and cost savings from the
merger while maintaining our operational excellence.
We are on track to realize $650 million in net savings
from the Cinergy merger over the first five years. We are
beginning to see the full benefits of those savings as most
of the merger-related rate reductions expire this year. In
2007, we are focusing on continuous improvement. We
intend to carefully manage our costs and simplify our
operations to deliver our products and services as reliably
and efficiently as possible.
Shaping new federal rules that limit carbon emissions to
ensure our customers and other stakeholders are fairly
treated. Duke Energy is the third-largest consumer of coal
in the United States, so we are mindful of our environmen-
tal responsibilities. A growing body of scientific evidence
suggests that the burning of fossil fuels is changing our
climate. We are committed to making the best technology
choices, ones that will limit our emissions and optimize our
investments so that we can keep our prices competitive.
Reducing greenhouse gases with advanced power genera-
tion technology will take decades and cost billions of
dollars. The work will continue well into this century.
But if we don’t begin to solve the problem now, the costs
will go even higher.
To demonstrate our corporate commitment to tackling this
issue, in January 2007, Duke Energy joined the United
States Climate Action Partnership (USCAP). This diverse
coalition of businesses and environmental groups includes
Alcoa, DuPont, Caterpillar, General Electric and other
utilities — FPL Group, PG&E Corp. and PNM Resources —
as well as Environmental Defense, Natural Resources
Defense Council, World Resources Institute and the
Pew Center on Global Climate Change. Together, we have
begun a dialogue and offered recommendations on national
policies for dealing with this pressing issue. Additionally,
in partnership with the U.S. Department of Energy,
we are researching underground carbon storage at
our East Bend Station in Kentucky.
PATIENCE IS NEEDED TO CHANGE MINDS
AND HABITS
The strategies I’ve outlined will position Duke Energy to
be a leader on several fronts, including new technologies,
energy efficiency, continuous improvement and sustainabil-
ity. Our challenges are as great as our opportunities, but
I am confident that by listening to all of our stakeholders
and engaging them in our efforts, we will solve the new
energy equation — for the benefit of all.
I again thank our employees, management and board
of directors — both past and present — for our many
successes in 2006. You achieved our strategic agenda
while keeping the gas flowing and the lights on.
I thank our investors for your support during the merger
and the spinoff. Your confidence in us is the best evidence
that the new direction we have taken to become one of the
nation’s premier electric companies is the right direction.
We are energized by the prospects of a bright future. We
have a solid investment proposition, and we are in a strong
position to change minds and habits to create significant
value for all of our stakeholders. From a sustainability
standpoint, I believe that our grandchildren will be proud
of how we are addressing the energy and environmental
issues of our day.
James E. Rogers
Chairman, President and Chief Executive Officer
March 2, 2007
“Our challenges are as great as our opportunities, but I
am confident that by listening to all of our stakeholders
and engaging them in our efforts, we will solve the
new energy equation — for the benefit of all.”