Duke Energy 2007 Annual Report Download

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Building bridges to
a low-carbon future
2007 SUMMARY ANNUAL REPORT

Table of contents

  • Page 1
    2007 SUMMARY ANNUAL REPORT Building bridges to a low-carbon future

  • Page 2
    In 2007, we provided energy when our customers needed it, made plans to build new plants to meet growing demand, developed a new way to promote energy efficiency and continued to confront our industry's biggest challenge - global climate change. As one of the largest emitters of carbon dioxide in ...

  • Page 3
    ... STEP 5: Taking the long view STEP 1: STEP 2: 16 18 20 22 24 For more information about our sustainability activities and environmental progress, please see the Duke Energy 2007|2008 Sustainability Report on the company Web site: www.duke-energy.com. DUKE ENERGY 2007 SUMMARY ANNUAL REPORT 1

  • Page 4
    ... Financial Statements in Duke Energy's 2007 Form 10-K, "Acquisitions and Dispositions"). e 2007 decrease due to the spinoff of the natural gas businesses to shareholders on January 2, 2007 as dividends subsequent to the spinoff were split proportionately between Duke Energy and Spectra Energy such...

  • Page 5
    ... are building bridges to a low-carbon future. My confidence in our ability to succeed is based on the dedication of our people. Their hard work and perseverance was evident in our 2007 results. DUKE ENERGY 2007 SUMMARY ANNUAL REPORT JAMES E. ROGERS Chairman, President and Chief Executive Officer 3

  • Page 6
    ... fuel - energy efficiency. By helping our customers use power more efficiently, we can help them save money and reduce the need for new power plants." 2007 - A STRONG, PRODUCTIVE YEAR Last year, we faced weather-related challenges of record-setting summer heat throughout our service territory and...

  • Page 7
    ...to change that regulatory paradigm so that earnings from energy efficiency are on a par with earnings from investments in new power plants. In 2007, we introduced Duke Energy's energy efficiency plan, which is designed to set investment returns for the costs and savings of energy efficiency programs...

  • Page 8
    ... entire system more efficient, retire inefficient plants and increase renewable generation. Advanced coal technologies When people ask, "How can a company committed to a low-carbon future continue to build new coal plants?" I remind them of these key facts: Today, coal accounts for about 50 percent...

  • Page 9
    ... in rate shocks for customers, cost overruns, the cancellation of half-finished plants and ultimately red ink for shareholders. In the 1990s, we turned to the deregulation of power markets, relying on market signals to build new generation cost-effectively. But these experiments produced other...

  • Page 10
    ...a workable renewable energy and energy efficiency portfolio standard requiring investor-owned utilities to supply 12.5 percent of their power from renewable energy sources by 2021. This far-thinking leadership will allow us to build new plants so we can deliver reliable and affordable service to our...

  • Page 11
    ... for addressing climate change and the associated regulatory risk, now and in the future. For more information on the company's climate disclosure and overall transparency efforts, please also see Duke Energy's 2007|2008 Sustainability Report on the company Web site. DUKE ENERGY 2007 SUMMARY ANNUAL...

  • Page 12
    10

  • Page 13
    ... if Congress will enact carbon limits, but when - and what will be required. We have to be ready to comply in a way that keeps customer prices competitive." MIKE STROBEN Director, Environmental Policy Analysis & Strategy Duke Energy Charlotte, N.C. DUKE ENERGY 2007 SUMMARY ANNUAL REPORT 11

  • Page 14
    12

  • Page 15
    ... with advanced coal, natural gas, renewable energy and energy efficiency, nuclear power must be part of the mix to meet our need for clean, affordable and reliable electricity." DAVID JONES Director, Nuclear Policy & Strategy Duke Energy Charlotte, N.C. DUKE ENERGY 2007 SUMMARY ANNUAL REPORT 13

  • Page 16
    14 14

  • Page 17
    ... their staffs on Capitol Hill. This helps them better understand how we are trying to minimize the impact on our customers as we work to reduce our greenhouse gas emissions." JOHN HAYSBERT Manager, Federal Governmental Affairs Duke Energy Washington, D.C. DUKE ENERGY 2007 SUMMARY ANNUAL REPORT 15

  • Page 18
    1 MARITZA BEGAN HER CAREER WITH DUKE ENERGY IN 1999 AS ONE OF THE COMPANY'S FIRST BILINGUAL CUSTOMER SPECIALISTS. SHE LEADS A TEAM RESPONSIBLE FOR FULFILLING CUSTOMER SERVICE REQUESTS, INCLUDING THROUGH THE INTERNET. 16 STEP

  • Page 19
    ... policy while new technologies develop. This report and our 2007|2008 Sustainability Report are part of that communication process. â- â- intensive nations need to achieve this reduction level by the middle of this century to slow, stop and reverse the effects of climate change. For Duke Energy...

  • Page 20
    2 WILLIAM'S TEAM GENERATES LOAD PROFILES FOR DUKE ENERGY'S VARIOUS CUSTOMER RATE CLASSES. ANALYSIS OF THIS INFORMATION FEEDS RATE DESIGN, LOAD FORECASTING, ENERGY EFFICIENCY PROGRAMS AND PLANNING. 18 STEP

  • Page 21
    ... Manager, Load Research Duke Energy Charlotte, N.C. We are using new technologies to reduce our GHG emissions on both the supply and demand sides. On the supply side, we're building a cleaner-coal integrated gasification combined cycle (IGCC) plant that will replace a half-century-old coal plant...

  • Page 22
    3 NEETA STUDIES AND SELECTS EMERGING TECHNOLOGIES FOR USE AT DUKE ENERGY. SHE ALSO DEVELOPS ADAPTATION STRATEGIES FOR NEW TECHNOLOGIES THAT HAVE THE POTENTIAL TO CONTRIBUTE TO FUTURE EARNINGS. 20 STEP

  • Page 23
    ... at Belews Creek Steam Station will transition to the new gas-fired units being planned on the sites of the Buck and Dan River steam stations. These project management teams will also work on the new Lee Nuclear Station in South Carolina. In the Midwest, Duke's project management teams completing...

  • Page 24
    4 SINCE 2000, CARL HAS BEEN WITH ADVANCED ENERGY, A NOT-FOR-PROFIT COMPANY THAT WORKS WITH UTILITIES AND THEIR STAKEHOLDERS TO CREATE AND IMPLEMENT ENERGY EFFICIENCY AND RENEWABLE ENERGY PRODUCTS AND SERVICES. 22 STEP

  • Page 25
    ...Director, Utility Services Advanced Energy Corp. Raleigh, N.C. The new rules of engagement in our world, our nation and our industry are conversation and collaboration. To effectively address the climate change problem, we are working to engage all of our stakeholders in the debate and in our plans...

  • Page 26
    5 HEIDI IS RESPONSIBLE FOR BUDGETING, FORECASTING AND PROJECT TRACKING FOR DUKE ENERGY'S DEVELOPING WIND ENERGY PORTFOLIO. SHE PREVIOUSLY SERVED AS CONTROLLER FOR THE DIVISION AND BEFORE THAT, SHE WORKED FOR ANOTHER WIND ENERGY COMPANY. 24 STEP

  • Page 27
    ... to get the policy right, get started and stick to it. We need to develop the least costly way to address climate change and do it right. That means policies need to be market based and cover most, if not all, of the economy. The early years of a cap should encourage more energy efficiency and lower...

  • Page 28
    ... He serves on the board of Bank of America and is a trustee of the Duke Endowment. MICHAEL G. BROWNING President and Chairman of the Board, Browning Investments Inc.; Member, Compensation, Corporate Governance, and Finance and Risk Management Committees Director of Duke Energy and its predecessor...

  • Page 29
    ...Vice Chairman, Chief Financial Officer and Board Member, Bank of America Corp.; Chair, Compensation Committee; Member, Finance and Risk Management Committee Director of Duke Energy and its predecessor companies since 2005. A certified public accountant, Hance spent 17 years with Price Waterhouse. He...

  • Page 30
    ... all corporate development and merger and acquisition activities. She previously served as senior vice president and treasurer. Group Executive and Chief Legal Officer Manly leads Duke Energy's office of general counsel, which includes legal, internal audit, ethics and compliance, human resources...

  • Page 31
    ... B. KEITH TRENT Group Executive and Chief Strategy, Policy and Regulatory Officer Trent is responsible for strategy, federal policy and government affairs, energy efficiency and technology initiatives, environmental health and safety policy, corporate communications, and sustainability and community...

  • Page 32
    ...2009 Duke Energy International EXPECTED 2008 ONGOING EBIT CONTRIBUTION 12%* BUSINESS DESCRIPTION Duke Energy International (DEI) operates and manages power generation facilities located in the Central and South American countries of Argentina, Brazil, Ecuador, El Salvador, Guatemala and Peru. DEI...

  • Page 33
    ... investment Costs to achieve the Cinergy merger Tax adjustments Total Diluted EPS impact Pre-Tax Tax Amount Effect $(165) 58 246 (124) (50) - (128) 45 27 2008 EMPLOYEE INCENTIVE TARGET MEASURE Duke Energy's 2007 Summary Annual Report references the company's 2008 employee incentive target. The EPS...

  • Page 34
    ... 8, 2008 Time: 10 a.m. Place: O.J. Miller Auditorium, Energy Center 526 South Church Street Charlotte, NC 28202 Shareholder Services Shareholders may call 800-488-3853 or 704-382-3853 with questions about their stock accounts, legal transfer requirements, address changes, replacement dividend checks...

  • Page 35
    ... Duke Energy has described. Duke Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Products with a Mixed Sources label support the development of responsible forest management worldwide...

  • Page 36
    526 South Church Street Charlotte, NC 28202-1802 704-594-6200 www.duke-energy.com OUR DIRECTION IN 2008 AND BEYOND We must pursue a balanced approach to meeting future energy needs. â- â- In pursuing new supply options, we consider whether they are available, affordable, reliable and clean. By...