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The Noon Meeting was held in Charlotte, North Carolina on September 8, 2003. It was hosted by Rick Priory, chairman and chief executive officer.

Mr. Priory spoke of the recent massive blackout, and said that it reminded him of the post-Three Mile Island nuclear accident. He is concerned about any resulting regulations, and has been lobbying congressional members working on the energy policy bill.

There is no realistic comparison between the Three Mile Island (TMI) partial meltdown and the blackout. Blackouts can cause fatalities, but most are only a huge inconvenience. A severe nuclear accident can run up the body count and make regions uninhabitable.

New grid regulations will undoubtedly come because of the blackout, but they will not compare to the new nuclear regulations after the 1979 nuclear accident. Since the TMI accident, no new nuclear reactors have been ordered.

Most energy corporations have proven that they cannot be trusted to do the right thing on anything. They must be regulated right down to the smallest detail. Give them an inch, and they will exploit it into ten miles. That is why electric deregulation was such a joke. The joke was on the ratepayers, stockholders, public, and employees. The energy CEO’s did just fine – until their game was exposed.

It is speculated that deregulation even played a part in the blackout. Regulated utilities must spend money on the grid. The regulators will want proof that the corporations are taking care of business. Under deregulation, the CEO decides if he wants to spend money on maintenance, or spend it all in the quest for fabulous profits. You can begin to see the problem. When the regulators are no longer there to ensure that the infrastructure is maintained, anything goes. And, under deregulation, anything did go.

In addition to any other shortcuts, reactive power did not receive the proper consideration. Utilities do not get paid to produce reactive power, but the grid will not operate without it. Utility executives are not ignorant of this fact, but they were after the big bucks. They wanted to buy, sell and trade. Prudent operation and grid maintenance were the last things on their minds.

Mothers do not let small children plan their own meals. They know that a constant diet of soft drinks and candy is not too healthy. As small children cannot be “deregulated,” neither can energy CEO’s. This has been proven countless times. Even in the face of stiff regulations, some CEO’s will immediately start scheming to circumvent them. If energy corporations cannot be fully trusted with an officer on every corner, it is insanity to close down the police force.

Remember GridSouth? That was to be the Duke Energy deregulated solution to any power grid problems. Duke formed a management hierarchy, and made elaborate, detailed plans.

In 2001, Mr. Priory said “We're off and running with GridSouth… It will happen.”

In 2002, GridSouth imploded and burned up on the launch pad. Everything involved with deregulation has been a disaster. The only thing left of GridSouth is smoke - $70 million worth of smoke.

GridSouth: A $70 Million Deregulation Flop

Mr. Priory said “The blackout gives us one of the best opportunities in recent years to get sensible energy policy passed in this country.”

Every situation is always exploited. The blackout will be used as leverage to obtain rules favorable to Duke.

Mr. Priory said “This energy marketplace is finally resolving some issues with the FERC, the Securities and Exchange Commission and the Commodities and Futures Trading Commission.”

That is a true statement. Even more issues have been resolved since the meeting was held. Duke Energy Trading and Marketing was fined $28 million dollars by the Commodity Futures Trading Commission For Attempted Market Manipulation.

How many times have Duke executives stated that Duke was innocent of manipulating the energy markets? Saying it does not necessarily make it so!

Duke’s Attempted Market Manipulation

Mr. Priory said that costs will be reduced by eliminating expenses that are not “mission critical.” If this is truly the way costs will be reduced, it will not hurt the company at all. Duke is saddled with an unbelievable amount of fluff. Those with nothing to do but create jingles, posters, laminated cards to wear around the neck, ridiculous slogans, silly ads, and white elephant programs are not exactly mission critical. If anything, they impede progress.

If the engine is eliminated from the Duke-mobile and the stereo beefed up, do not expect improved performance.

Mr. Priory mentioned reducing debt. That is good, but it is even better not to incur foolish debt in the beginning. Imagine if Duke had never bought out PanEnergy. What if Duke had not bought plants worldwide? There would be no Duke Energy. There would only be Duke Power, without all the current problems. And, Duke would not have had to take the employees’ benefits and pensions to finance the boondoggle.

Mr. Priory mentioned the North Carolina Utilities Commission’s December ice storm report. He said “This is one of the few times in my career that I can recall a regulatory audit resulting in a positive report!”

If one is truly doing the right thing, he will want all the audits he can get. They can only show what a great job he is doing. Every investigation will result in positive, free publicity. Auditors do not make up the findings; they only report the facts.

The shady operator, who has things to hide, never wants any audits. Audits will always reveal bad news, because there is nothing good to be found. It is not the auditors’ fault. The charlatan never sees this fact. He always feels that the auditors are “out to get him.” He sees his role as an auditor adversary. If he can derail an audit, or conceal the facts, he feels that he has put one over on the system.

In truth, the auditors could not care less how the report comes out; they only report the facts. If anything, auditors would probably prefer not to find a “can of worms.” But once they find it, it is their job to dig into it, and issue a report.

Those who do not rob banks are not likely to be arrested for bank robbery. Those who are caught blame the police, the judge, the jury, and bad luck. They never seem to look in the mirror.

Mr. Priory said “So we were delighted with the outcome of that report.”

Will he ever put cause and effect together? Doing the right thing leads to good reports. Unbounded greed usually leads to actions that generate bad reports. Will Mr. Priory ever learn that the mirror is not out to get him? The mirror only reveals the facts. The mirror has no interest in what the facts are; it merely reflects them. The clock is running out.

Mr. Priory said “The South Carolina Public Service Commission is conducting its own review of the ice storm. We do not know when we will learn the results; hopefully they will be comparable to the outcome in North Carolina.”

When one is doing the best job possible, he knows it, and has no doubts that any reports will reveal it. If one is uneasy about the results of a review, he probably knows that he could have done better. If he has to resort to wishing, he probably knows that there are problems, but is hoping to skate by. If he pulls it off, his deceptive manner is reinforced.

Mr. Priory talked about exceeding the allowed rate of return in South Carolina. He said “I want to emphasize that this is not an issue of us doing something we shouldn't have.”

When one walks into the kitchen and a startled child blurts out “I didn’t take any cookies!” What does this lead one to believe?

No one has accused Duke of doing anything wrong. Problems occur only when a regulated utility exceeds the allowed rate of return and then tries to hide the fact. Duke did not try to hide the overearnigs – this time!

In an earlier incident, Duke was accused of hiding more than $100 million in overearnigs, since 1998. Duke denied the accusation. An outside auditors concluded “Duke undertook a coordinated effort to identify and record (entries) which would lower Duke's net utility operating income reported to the state commissions.” Duke still denied the charge, even after making a settlement. A federal grand jury and the FBI have now taken an interest in the matter.

Duke Takes a Hit in South Carolina

Duke Understated Profits

An employee noted that Duke had provided a degree of assistance to laid off Pillowtex workers, and wanted to know what Duke was doing to “help our own displaced employees.”

Mr. Priory said “We've worked hard to ‘soften the landing’ for Duke Energy employees who are displaced.”

He mentioned “a generous severance package” and counseling. Why is it that the wrong crowd always gets the counseling? Those who caused all the financial and legal problems appear to be the ones who are in dire need of counseling!

Who gets to determine just what is a “generous” package? Well, Rick Priory, of course! Never mind that the generous package is not likely to cover what the employees’ have already lost. On top of lost pension money and lost health benefits, some employees will now lose the job itself.

Someone sent in a question about Duke participation in a job fair for Pillowtex employees, in the mist of its own layoff.

The answer was that Duke took the laid off employees’ job applications.

What Duke actually provided to the desperate ex-employees was false hope. Duke had been on a downsizing binge for years. Duke does hire some freshly graduated engineers and others with highly specialized knowledge. Duke has recently laid off some very experienced workers. Does anyone seriously believe that Duke will replace them with completely green workers from Pillowtex? Taking hundreds or thousands of applications to offer only a few menial jobs amounts to a cruel hoax on employees that have already been abused for years. Duke cannot wear the mantle of concern for downtrodden employees without drawing snickers. Duke is desperate to buy some good press – any good press. The desperation shows.

The question was asked about Duke offer to help finance the new Charlotte arena as employees are being laid off.

The answer was that it was a popular misconception that Duke Energy offered to donate millions of dollars to fund the arena.

The answer is true. Duke never offered to donate anything! Duke was acting purely in the interest of Duke. If the illusion was somehow projected that the benevolent executives of Duke were once again saving the downtrodden, who can be blamed? As was said, every situation is exploited for the maximum benefit of Duke. The arena hysteria was used in an attempt to obtain property and lucrative rights to benefit Duke. It is no accident that the public and many employees thought that Duke was being charitable. These moves are carefully orchestrated to get exactly what Duke wants, and concurrently make Duke look like a savior.

The “generous” severance package is to extract a written promise from laid off employees not to sue Duke. The job fair does not obligate Duke to hire even one former Pillowtex employee. The blackout is used as an opportunity to lobby Congress for the things that Duke wants. Duke has not parted with one cent, but thousands of people believe that it tried to save the arena. Money given to learning institutions often has strict requirements for eligibility. Duke actually buys control under the illusion of benevolence. Everything from Duke comes with a hook in it and a hidden price tag. Paying the price does not guarantee delivery of the promised goods. Many employees found that after paying the price for a specific pension amount, that the promise was bogus.

Here is a nice question: “I was reading about one of our executives vague and ambiguous answers to some of the analysts' questions following the second quarter earnings announcement. This is very disturbing to me as an employee and a stock owner that our own leadership doesn't even know what's going on inside the company, especially when the company is in ‘survival mode.’ Aren't our executives prepped on how to deal with media questions? Aren't they informed? If not, shouldn't they refer analysts' questions to someone who actually knows the answer? Aren't these folks paid enough money to know what's going on around here, and aren't they accountable for not knowing? The rest of us are. Also, I'm curious why Mr. Priory didn't host the call.”

The answer was, in part: “We recognized very quickly that we missed the mark on that call and didn't adequately answer some questions.” The answer to why Mr. Priory did not host the call was because Fred Fowler shares hosting communications “opportunities” with Rick Priory. That was sort of an answer - Rick was not there because Fred was. It was not a good answer. Mr. Fowler was not the party involved!

And, just who could the speaker refer the financial questions to? The speaker was the chief financial officer!

Brace Yourself for This

Here is a very pertinent and reasonable question: “On July 31, a federal judge in the Southern District of Illinois ruled that IBM's cash balance retirement plan discriminated against older workers. How will this recent ruling affect our retirement plan? Will Duke Power offer its employees a choice between the old, traditional defined benefit plan and the current cash balance plan?”

Here is the complete answer: “The IBM case is one of several cash balance-related cases that have been filed on the basis of age discrimination. While the July 31 court ruling found that cash balance plans are age discriminatory, in other cases, the courts have ruled that cash balance plans are not age discriminatory. The IRS has previously issued proposed regulations concerning cash balance plans which indicate that cash balance plans are not inherently age discriminatory. The IRS is currently working on final regulations. We continue to monitor the situation but, at this time, are planning no changes for our plan.”

From the summary plan description, the IBM cash balance conversion appears to be very similar to the Duke conversion. And, why shouldn’t the plans be similar? W. M. Mercer was involved in structuring both plans. Both plans gave choices to employees that were age 50 on the inception date and had at least 10 years of service. The obvious problem is that age discrimination laws protect employees age 40 and older. Why were choices not offered to employees age 40? Because that would have reduced the take of the corporations! In fact, IBM did reduce the age to get a choice of plans to 40. IBM did this the day before a congressional cash balance plan hearing and did not want to lose its head.

The cash balance plan was promoted to Duke employees as being “portable.” This was another illusion. There is absolutely nothing portable about the Duke cash balance plan. When an employee leaves the company, the cash balance amount stays with Duke until the employee reaches age 55. So, at least in two areas, the Duke plan is even worse than the IBM plan.

Is it not interesting that large corporations are falling over themselves to implement pension plans that have no regulations? They apparently thought that if they got in the game before the plans were declared illegal, that they would be grandfathered. Either that or they put their faith in lawyers, actuaries, lobbyist, campaign donations, and their spin doctors. The corporations never really thought the employees stood a chance of winning the case. But through it all, there remains some people that cannot be bought off.

Of course Duke is not planning any changes in the plan. Duke has the employees’ retirement money and it wants to keep it. It will take a court order for Duke to make restitution to employees. Only if it is obvious that Duke will be slaughtered in court, will it settle out of court. The cash balance plan was the beginning of a long procession of flaky ideas that blew up in Dukes’ face.

There was another cash balance plan question: “Eligibility for participation in the retirement program now begins at the time of employment or age 18. In previous years, participation began at age 21. Will the plan go back and pick up years of service for those employees who lost years of service between ages 18 and 21?”

Here is the complete answer: “The change in participation age for the Retirement Cash Balance Plan (RCBP) was changed from age 21 to 18 on Jan. 1, 1999 when the Duke Power, PanEnergy and Nantahala Power & Light retirement plans were merged. There is no plan to give additional credit to those employees whose employment began prior to their participation at age 21 in the former Duke Power pension plan.”

If the Duke Energy cash balance plan is also declared illegal, the above concern will be irrelevant. Duke will have to make the employees whole.

An employee asked why executives broke up Duke Power, bought gas companies, and got on the hook for millions of dollars, worldwide, clinging to the unproven idea of deregulation?

The answer was, in part: “We invested in merchant power and gas transmission to take advantage of attractive growth opportunities.”

Duke did not want to be bound by the profit limitations of a regulated utility. The main reason was that Enron was making a killing, and Duke wanted to be just like it. Men blinded by greed see nothing but dollar signs and can do and say some very foolish things. Like a Moose in rutting season, nothing will deter them from the business at hand.

Simply put, Mr. Priory and the board of directors thought that they knew all. All objections were stifled and Duke boldly marched off the cliff. It has been proven that those who thought that they knew all, actually knew nothing. Duke will scramble for years to make up for the lunacy of the past seven years.

The irony is that the ones who made the foolish decisions, have taken millions of dollars out of the company. Those who made dumb moves made millions, while the innocent shareholders, employees, and customers paid the price. Come to think of it, that’s the American way!

Here’s another good question: “What are we doing to control medical insurance costs for our workers? Older employees—particularly the nonexempt employees in the lower salary ranges—are concerned about not being able to retire at 30 years of service due to insurance costs.”

The answer, in part: “With respect to required contributions for retiree coverage, Duke Energy generally follows a defined-dollar approach in subsidizing the cost of retiree coverage. Under this approach, future increases in the estimated cost of coverage are passed on to the retiree in the form of required contribution rates, deductibles, co-pay amounts, etc.”

Retirees can get sick, get well, or die, but Duke is only paying a fixed amount. It was strongly implied that if you do not go to the doctor, you will not have any medical expenses.

Do you know what would be nice? If all the executives who have schemed to take employees’ pensions and medical benefits and then suggest that they forgo medical treatment were to triple their ill gotten gains. And, spend every cent on doctors.

Question: “Is Duke Energy in a position to be bought out or taken over by another company?”

Answer: “We can't speculate on the likelihood of a potential takeover attempt. If Duke Energy was approached with a serious buyout offer that had the potential to enhance shareholder value beyond what we can achieve by executing our current long-term business plans, senior management, along with the board of directors, would be obliged to consider the offer.”

The executives would probably like nothing better than a good opportunity to cut and run!

The Noon Meeting was held August 11, 2003 in Charlotte, North Carolina. The meeting was hosted by Fred Fowler, president and chief operating officer.

Mr. Fowler started the meeting by saying “I want to hear what's on your minds.” He was off to a good start.

He said “As I told analysts on the earnings conference call, in 2003 we have been obsessive about controlling costs, managing our business and reducing risks.”

Duke does not want to go down the tubes with Enron. It continues to raise cash and reduce debt. Duke is making as 180 degree turn from the disaster that started in 1996/1997.

Duke’s Webcast is designed to pump up the price of stock, but it did no work this time. Mr. Fowler admitted the stock price dropped during the Webcast, and that some analysts were concerned about 2003.

He admitted that 2003-2004 will be a tough period for Duke. Mr. Fowler will not get into trouble for telling the truth. Others have hosted the Noon Meeting, wearing a cheerleading costume. Every breath was “We are doing so great. We’ll make billions – I guarantee it!”

Mr. Fowler quoted Rick Priory. But he really does not need Mr. Priory for a crutch. Let’s face it; since Mr. Priory has been running the show, it has been one disaster after another.

Mr. Fowler said “The charge (lay offs) is to eliminate (lay offs) all expenditures (lay offs) that are not absolutely (lay offs) necessary to the (lay offs) functioning of the (lay offs) business.”

There may have been some subliminal messages included with that statement. He said that an effort is underway to “squeeze” all non-essential cost.

Picture an employee’s head in a big vice, and you can see where this is going. As the vice is tightened, the employee is “downsized.”

The problem with every one of these cost-cutting efforts is that the white elephants are always overlooked. There are executives aplenty hidden around in cubbyholes that contribute zero to the bottom line. They drain resources from the company, but there yearly output is a stack of memos. There is an oversupply of cheerleaders. There is a constant blizzard of “happy talk” memos. Expect even more memos as executives try to justify their jobs.

Some in management performed poorly and have been "kicked upstairs." There are too many upstairs now!

The ax aways seems to fall on the people who are actually producing something. After each lay off, the cheerleader/producer ratio swells. Expertise is lost, morale drops even lower, and the memos fly. And, so it goes.

Mr. Fowler is calling on employees to save nickels and dimes. There was no mention of cutting back on the fleet of corporate jet aircraft, $70,000 country club memberships, vast sums paid for executive moving expense, or the millions of dollars in executive stock options. These are the whitest of white elephants.

The Executive Advisory Council is looking for heads to cut off. But who is looking at their heads?

The Sarbanes-Oxley Act was mentioned. This law is one of the best things ever to happen to employees. Duke was one of the first (maybe THE first) company to feel the wrath of Sarbanes-Oxley.

Mr. Fowler said “Rick and I both consider dependable financial processes to be key to our success.” Ethical executives will not get into any trouble, even if they have no financial processes. They are simply not going to do anything that smacks of impropriety. Executives with the morals of a pickpocket, need all of the financial processes that they can get. And, that still is no guarantee that the feds will not come knocking. That is because the ones that need a tremendous amount of hand-holding to do the right thing will always be looking for loopholes. Such loopholes are how the employees lost their “guaranteed” pension.

Duke is being questioned again about making too much money on regulated power. The executives may be wising up some. They did not try to hide it like the last time!

The ice storm and power line maintenance issue is not dead.

The Connecticut Department of Environmental Protection rejected the Duke Islander East Gas Pipeline for the second time. The current administration has reduced the federal EPA to a paper tiger. The Federal Energy Regulatory Commission (FERC) has approved the pipeline. But all federal agencies are now existing in name only. Their new objective is to rubber stamp anything that corporations want. The protection of citizens is now totally left up to the states.

FERC is letting the state regulator agencies handle some of its work. That is the only hope that citizens have. The federal government is losing more credibility each day.

Mr. Fowler mentioned safety. But safety programs are already being cut back by the budget ax. So, the translation is “Be safe, as long as it does not cost any money.”

Mr. Fowler was asked about the possibility of the dividend being cut. He promptly side-stepped the issue.

A question was asked about why Progress Energy (old CP&L) stock continues to appreciate while Duke stock is going in the other direction.

The answer to this question was given in one of the first “All Hands Meetings.” While Rick Priory wanted Duke to be like Enron, CP&L was happy to stay a regulated utility. Mr. Priory must have thought that the CP&L management was really stupid. But they do not look too stupid now! And, the Enron wannabes are not looking too sharp either.

Mr. Fowler admitted that the companies that are in trouble now are the ones that chased deregulation. He tried to dance a little, but he told the truth in his first statement.

Someone finally asked the question of questions: "How do you justify the huge bonuses and stock options for upper management when there have been poor decisions made, such as the California power fiasco, but the folks that are working hard in the field to keep the power on cannot get a decent contract?"

It sort of cleared the air, didn’t it?

Mr. Fowler rolled out the standard “benchmarking” answer. Here is the true definition of Duke benchmarking: A way to give executives as much wealth as possible, while taking as much as possible form the employees.

Anything else is hype. It is very obvious how benchmarking works at Duke. Mr. Fowler is happy with the way it works.

One employee wanted to know how Duke can give away money when it is not doing that well itself.

Mr. Fowler pointed out that the Duke Energy Foundation is funded separately.

This foundation was set up years ago to make philanthropic gifts. Its purpose is to give away money. Dividends and interest generate income for the foundation, so it never goes broke. It is probably viewed as a plumb by certain individuals, as the employees’ pension fund was. The executives found a way, of questionable legality, to crack the pension fund. No one has been able to crack the foundation – as far as anyone knows.

An employee wanted to know what Duke was going to do with the $8 billion worth of gas-fired merchant stations.

This is another hold over from Mr. Priory chasing deregulation. Mr. Fowler is trying to dump them.

Someone asked about “brand.”

Mr. Fowler said “Brand is a concept that is hard to get your arms around, but it is very real.”

The Employee Advocate agrees that it is always hard to gets your arms around smoke and mirrors. Duke made so many dumb moves that it finally realized that there was gong to be a price to be paid in public perception. So, it cranked up the brand program to save the day. The gist is: The Duke brand is in the dump. This program is supposed to get it back out. It is nothing but rhetoric. If the executives had been doing the right thing, the brand would not be in the dump. Empty talk will not get it back out.

Mr. Fowler does recognize that being a utility is the way to go. It was the deregulation chasing that trashed the brand.

The question was asked “Will anything ever be done about the differences between raise percentages of upper management and regular employees?”

You should know the routine by now. The answer was “benchmarking.”

Here is a pertinent question “What is the purpose of this meeting? Is it to get some input from us, or is it to make us think you really care about what's on our minds?”

The answer was so employees could hear from members of the Chairman's Council and ask questions.

It seems like employees are no longer buying the same worn out routines.

The Noon Meeting was held on July 14, 2003 in Charlotte, North Carolina. It was hosted by Rick Priory, Chairman and CEO.

Rick Priory said that he had a lot of things to bring the employees “up to speed” on. Does he really think that workers live in a vacuum? Does he feel that employees are a blank slate, anxiously awaiting him to bring them up to speed. For anyone that cracks a newspaper, he had nothing new to relate. By keeping abreast of the maneuvers of Duke via outside sources, you will know everything that Mr. Priory will tell you, and a whole lot more.

Anyone who reads a newspaper, knows that the Moss Landing Power Plant in California had a large oil tank fire. The residue still in the tank totaled 1.2 million gallons. It was well publicized that the fire erupted while the tank was being disassembled with a cutting torch.

This almost reads like a Darwin Report: “Bubba lit up his cutting torch and started cutting up the oil tank. He gave no thought to the 1.2 millions gallons of residue in the bottom of the tank…” Even if you did not know about this event, you could instantly see where it was headed in the first two sentences!

Armed with these facts alone, it does not take Sherlock Holmes to conclude that the fire just might have been caused by the cutting torch.

What profound insight did Mr. Priory offer about the fire? He said “There is an investigation underway to determine what went wrong.” For extra enlightenment he added “…such events are unacceptable.”

Golly gee whiz, thanks for bringing us up to speed!

Mr. Priory has realized that making unrealistic promises to investors about company performance will only blow up in his face. He has finally realized that he should be concentrating on survival, not conquering the world. He has come to know that no one was buying his baloney anyway. He has learned that cash in the hand is often better than contracts on horse dung futures in Timbuktu. It is comforting to know that he has been brought up to speed about what everyone else already knew! He will not win any awards for belatedly recognizing the obvious, but it represents real growth.

Mr. Priory said “We must do whatever we can to enhance cash flow…” He is on the right track, but there seemed to be a note of desperation in his statement. The pendulum can always swing too far in the opposite direction. Over compensation brings more problems, only from a different direction. Doing “whatever we can to enhance cash flow” is a guaranteed recipe for failure. That would include selling all assets for ten cents on the dollar. Cash flow would be increased, but the business would be eliminated.

Mr. Priory said “We are pleased that two class-action shareholder lawsuits against the company were dismissed last month.”

These were employee/shareholder 401 (k) lawsuits. So, Mr. Priory is pleased that employees who have suffered staggering losses by holding Duke Energy stock will receive zero compensation. He is also no doubt pleased that you will not receive your promised retirement benefits or promised health care.

As employee pensions, health care benefits, and 401 (k) balances have plummeted, his total compensation has soared into the stratosphere. As investors continue to “bite the bullet,” Rick Priory continues to “bite the caviar.” As some California ratepayers had to visit pawn shops to pay their electric bills, Mr. Priory was only interested in visiting Tiffany’s.

Mr. Priory said “We need to attract investors back to our sector, and we need a lot of help from the government—FERC (Federal Energy Regulatory Commission) and others.”

“Attracting investors” could have a sinister undertone to it. Is this like attracting waterfowl to a duck blind?

And, FERC could not possibly help any more than they already have. They completely ignored all of the underhanded energy tactics in California for as long as possible. When the trail was ice-cold, they decided that an investigation might be in order. The “energy cops” were not only asleep, they were stone drunk.

Mr. Priory said “In late June, the agency called on more than 60 power traders, including Duke Energy, to demonstrate compliance with California market rules governing energy trading.”

How can this be? Years ago, Mr. Priory said that Duke had been completely exonerated. How can one claim to be clean when the dust is still falling? And, this is not even counting private lawsuits.

Mr. Priory is still gleefully pointing his finger at Enron. Enron was a bad actor. But Enron did not act alone. And, it was only a few years ago that Mr. Priory used Enron as an example of where he wanted Duke Energy to be! His goal was for Duke to be an energy company like Enron. He wanted the price to earnings ratio of Duke stock to be in line with that of Enron. Where is the loyalty? If he truly thought that Enron was great while on top, he should not stab them in the back when they are down.

Then again, if one will stab his own employees in the back, everyone else is certainly fair game.

Mr. Priory said “We will respond fully to FERC's request…”

Is this supposed to an impressive show of cooperation? Just what choice does Mr. Priory have other than cooperation? He says the same thing about the FBI and grand jury investigation. But what choice does he have other that cooperation? He can stonewall employees and offer them silly explanations for their lost benefits. If he tries that stunt with the federal government, he will be crushed. Mr. Priory is always humble and cooperative – when the noose is around his neck.

Mr. Priory was questioned about what he meant by “make our own breaks.”

He replied “What ‘make your own breaks’ means to me is that we manage our business with diligence and discipline. We take great care with our use of company resources. We keep our costs down. We stay trim and fit…We do not invest needlessly in systems that are not likely to create tremendous value for us…”

If Mr. Priory would have truly been “up to speed” from the outset, he would have done the very things from 1997. The company would have been prosperous. It would not be scandal ridden. And, it would not have been necessary to take the employees’ pensions and health benefits in an attempt to buy up the world!

It can be said that since 1997, “Mr. Priory has made his own lumps.” And, he should not blame Enron. It is not the fault of Enron that he wanted to be just like them.

Mr. Priory said “The things you do not do can be terribly valuable as well. It's important to find and eliminate those things that we are doing now that we do not need to continue. From 1988 to 1995, this company survived in that mode. Not until 1996 or 1997 did we really achieve substantial organic and acquisition growth in the company.”

What kind of doubletalk is this? If Mr. Priory has not realized that 1996 and 1997 was the beginning of the end, he will never be up to speed! He is now trying to unload the “acquisition growth.”

Ms. Roberta Bowman, senior vice president, external relations, was asked to talk about “brand strategy.”

She said “The current media environment is not business-friendly, and we need to recognize that and use our other avenues to build relationships.”

“Not business-friendly” could be translated as: “The media will no longer look the other way as the CEO cleans out the vault.”

Does “use our other avenues” mean that the silly Wall Street Journal “feel good” ads have finally met their demise?

She mentioned “delivering on our commitments over and over.” Would this be anything like delivering on commitments to employees? If a company cannot keep its word to employees, no one else can ever trust it.

She also said “But advertising only creates an expectation.”

That is very true. When Duke sent pension statement to the employees’ homes for years, it built an expectation that the company would keep it promise. When it was spelled out that you will get X amount at age 55 for X years of service, no one knew that it was all lies.

Duke wanted employees to be aware of each dime that was spent on them. So, they boasted each year of just how much pension would be available to each employee. After years of boasting and statements, Duke reneged. Instead of making the executives look like champions, the statements only made them look like thieves. When one advertises something and doesn’t deliver, after accepting payment, it makes one look like a liar and a thief. When Duke accepted years of labor for the promised pensions and health care, payment for the goods were made. Payment was accepted, but Duke defaulted on the delivery of the goods.

She added “If the business…does not deliver, it does us more harm than good.”

She said it! The Employee Advocate wholeheartedly agrees. What will be done to correct the situation? More stonewalling and denials will also do more harm than good.

Ms. Bowman summed up by saying “As Rick said, our Global Service Event and our ongoing customer communications are the best brand building we can do on a day-to-day basis.”

The Global Service Event is Duke directed community service. So, the best way to build a brand (reputation) is to do community service and try to sell the customers a bill of goods? What rubbish!

What if electricity is not delivered? What if natural gas in not delivered? What if it is delivered at ten times the normal price? Do you think that the customers will over look that just because Duke talks a lot and tries to present a Goody-Two-Shoes image? No! If Duke cannot handle the basics, the window dressing will not save them. Enron tried to play the part of the great benefactor. It did not save them.

The opposite is true. The public will not turn down reliable service and unbeatable prices, because of a lack of fluff.

One employee wanted stock options. The answer was: “a broad-based grant could potentially have significant future financial consequences for the company, which would outweigh any benefits derived from such a grant.”

Yes, just like the executive stock options have enriched a few at expense of many.

TheStreet.com publishes articles on Duke Energy from time to time. Mr. Priory likes to point out these articles. Here are a few that evidently forgot to mention:

Rate Case Means New Headaches for Duke

Sunshine Fades on Duke

Duke Finds More Doubters

Energy CEOs Find the Tank's Still Full

Suddenly, Energy Traders Embrace Change

Duke Throws In the Trading Towel