by James E. Rogers
Chairman, President and CEO
Duke Energy

Just as engineers at the turn of the last century harnessed rivers to generate power to launch our industrial revolution, today’s industry leaders are.investing billions in capital to meet customers’ energy needs more cleanly, efficiently and sustainably. Here at Duke Energy, we are striving to be at the forefront of this green revolution.

Today, we are the third-largest generator of electricity and the third-largest emitter of carbon dioxide in the United States. However, there are 11 major electricity suppliers in this country with higher carbon intensities in tons-per-megawatt-hour than Duke Energy. The focus of our work is to further reduce carbon intensity and our overall environmental footprint.

New-generation Coal

We are the only utility building two state-of-the-art plants at once. The two projects – Cliffside and Edwardsport, the latter an integrated gasification combined cycle (IGCC) plant – collectively received more than $565 million in local, state and federal tax incentives. This will substantially reduce our customers’ costs of bringing these plants online.

We aggressively moved forward to build these projects in 2008, despite continued opposition from dedicated and highly organized groups. Cliffside and Edwardsport enable us to retire 1,160 megawatts (MW) of older and much less efficient coal generation. Our carbon intensity will decline dramatically, as will our emissions of sulfur dioxide, nitrogen oxide, mercury and particulates.

Both projects represent milestones in the industry. The Cliffside project is the only coal plant project to have a commitment in its air permit to be carbon-neutral by a defined date (2018) due to coal unit retirements and other commitments.

Last fall, ongoing analysis yielded good news about our new Cliffside coal plant. Working with experts from North Carolina’s Division of Air Quality (NCDAQ), we learned that the innovative, redesigned air-pollution control system being installed at Cliffside will make emissions from the plant even lower than originally believed. In fact, our environmental engineering experts determined that the emission of hazardous air pollutants will be so low that the plant will be a minor source, rather than a major emitter.

Given this news, we asked NCDAQ to amend an already-stringent air permit to add the minor source limits. Our existing permit already met or exceeded all state and federal environmental standards, which are designed to protect public health and safety. In March, the state NCDAQ formally agreed to our amendment.

The Cliffside plant will be one of the cleanest, most efficient coal plants in the nation when it comes on line in 2012. At Duke Energy, we work to provide our customers with energy that is as affordable, reliable and clean as possible. It is all about balance.

That need for balance led us to invest $5 billion over the past decade to retrofit existing coal plants to significantly reduce emissions; to modernize the entire Cliffside site by retiring units 1 through 4, installing new pollution controls on Unit 5, and adding a new Unit 6 that includes some of the best emission-control technology ever installed on a power plant; and to mitigate CO2, a greenhouse gas, by agreeing to retire an additional 800 MW of coal units between 2012 and 2018.

Thousands of people, including plant neighbors, chambers of commerce, local businesses and economic development groups, have endorsed the Cliffside project. They understand our region’s need for energy to fuel the economy and that Cliffside is the best way to meet those energy needs as we work toward transitioning to a low-carbon future.

The Edwardsport project is the nation’s largest IGCC power plant under construction and represents what many experts believe is the best site in the nation for a large-scale carbon capture and storage demonstration site.

We continue to pursue plans and seek regional partners to build the 2,234-MW Lee Nuclear Station by the end of the next decade. This will significantly reduce our carbon and overall environmental footprint and enable us to retire additional plants that are less efficient and higher in emissions.

To meet intermediate and peaking power needs, we received approval in 2008 to build two gas-fired units by 2012. This likewise enables us to retire less-efficient units and further reduce our carbon intensity.

Smart Grid Initiatives in 2008

While other utilities say they are involved with smart-grid activity, they are generally referring to the implementation of advanced metering infrastructure (AMI).

According to a report prepared for the GridWise Alliance, Duke Energy currently is the only utility whose regulatory business case filing “explicitly embodies both AMI and Smart Grid efforts in a full deployment scenario.” These efforts are taking shape in several regions of the United States:

• Duke Energy Indiana is preparing for a sweeping modernization of our power delivery system, including the installation of more than 800,000 new digital “smart meters” – one for virtually every home and business in each of the 69 counties served by the state’s largest utility.
• Duke Energy Ohio and the state’s Public Utilities Commission have agreed upon an electric security plan under Ohio’s new energy law that includes a new infrastructure modernization program to install smart-grid technology. The agreement also replaces the existing energy-efficiency tracker with a new Save-a-Watt model that will provide incentives to Duke Energy based on the success of its energy-efficiency programs and the avoided cost of building new generation.
• Duke Energy Carolinas has installed thousands of smart meters in Charlotte as part of a pilot program in that region. Over last year’s Christmas season, the system detected five outages before customers even knew about them. It also detected a near-cable-failure by monitoring the strength of the communications signal on the power line.
• To help the public understand its energy-saving initiative, Duke Energy has created the Envision Center in Erlanger, Kentucky. The center is the first interactive exhibit to demonstrate integrated smart-grid technologies. Thousands of people toured the center in 2008 and saw the Hollywood-style studio featuring modern power equipment, a “smart” home complete with solar panels, an apartment complex with advanced meters and a power-delivery work center with real-time monitoring capabilities.

Alternative Energy Initiatives

As America’s electricity appetite continues to grow, it is critical to encourage the development of renewable energy. In the greenhouse-gas-constrained world we see coming, low- or zero-emission technologies will play an increasingly larger role in meeting the nation’s future energy demand. We are active in bringing more renewable energy to the market, including these initiatives:

Wind. By the end of 2008, Duke Energy had approximately 400 MW of wind power in operation and a wind-development pipeline of more than 5,000 MW in 14 states. Our strategy is to secure long-term purchase power agreements and then immediately invest our capital in these assets.

We partnered with Wal-Mart to provide clean, renewable energy to up to 15 percent of 360 Wal-Mart stores and other facilities in Texas. This partnership is the first substantial purchase of wind energy in the United States by Wal-Mart. The deal also represents one of the first sales of power directly from a specific wind project to a major retailer.

Biomass. Duke Energy and AREVA formed ADAGE to develop green biopower energy solutions for U.S. electricity customers. The ADAGE process uses wood debris from forest operations to generate electricity. This green electricity is carbon-neutral energy that reduces our reliance on fossil fuels and associated greenhouse gases.

Last September in South Carolina, the County of Greenville, Greenville Gas Producers, Duke Energy Carolinas and Blanchard Machinery Company completed the Enoree Landfill Gas-to-Energy Green Power Project. Greenville Gas Producers made a $5 million investment in the project, and Duke Energy will purchase the power produced.

The Enoree project captures the gas produced through the natural decay of Greenville County’s household trash and uses two Caterpillar G3520 engines to convert it into electricity. This project can generate about 3.2 MW of electricity, which is equivalent to powering about 2,000 average-sized homes annually.

Butch Kirven, chairman of the Greenville County Council, said: “The County of Greenville is dedicated to improving the air quality of our environment and our community. By combining the benefits of carbon destruction, power production and the added sale of carbon credits, this project will be an asset to the community for decades to come.” It is believed to be the first U.S.-based landfill project validated under the voluntary carbon standard.

Solar. Last year, Duke Energy Carolinas proposed a solar program that would install electricity-generating solar panels on the roofs and land of up to 400 North Carolina homes and businesses served by the company. Our Carolinas operations would be one of the first utilities in the nation to generate power at dispersed locations, close to customers, rather than at one large, centralized power plant. Together, the project would generate about 10 MW in direct current (8 MW alternating current) – enough electricity to power 1,300 homes.

This project has faced a roadblock, however. Under a ruling by the North Carolina Utilities Commission, our company would be ineligible to recover its full costs for the solar rooftops initiative, a loss of more than $250 million in tax credits for solar and other renewable energy projects. The ruling represented a financial risk we could not take as a company. Hopefully, we will be able to come up with a workable formula so this important project can move forward.

Hydroelectric. Duke Energy began operations in the Carolinas as a hydroelectric company. Harnessing the water power of the Catawba River, the company’s first power plant provided electricity for the area’s emerging textile industry and, later, for the region’s growing appetite for the convenience that electricity could provide. Duke Energy is today the second-largest investor-owned hydroelectric operator in the United States.

In addition to ensuring a reliable supply of electricity for our customers, the lakes created by our hydroelectric facilities provide communities with recreational opportunities, such as boating, fishing and swimming. The lakes also sustain wildlife habitats and offer water sources for everyday use to local communities, including drinking water.

Quick start-up times make hydroelectric plants ideally suited to provide peaking power. They can provide electricity in a matter of seconds when customer demand is high.

Plug-in Hybrid Electric Vehicles. Duke Energy has collaborated with both General Motors and Bright Automotive to support the development of plug-in hybrid electric vehicles that will be capable of getting more than 100 miles per gallon of gasoline.

Summary

While all of these initiatives will take a considerable investment, we are certain that the dividends will become apparent in the form of a more energy-independent United States for generations to come. There is no more crucial time than now to design an energy system to meet customer needs in a clean, efficient and sustainable manner.

To that end, we are partnering with innovative companies and organizations to shrink our collective carbon footprint. To look at everything we are doing, from new generation to Save-a-Watt, the smart grid, renewables and carbon legislation, it is obvious our goal is to clear the air, both figuratively and literally.

James E. Rogers is chairman of the board, president and chief executive officer of Duke Energy. He has more than 20 years of experience as a CEO in the electric utility industry. He was named president and CEO of Duke Energy following the merger of Duke Energy and Cinergy in April 2006. Before the merger, Mr. Rogers served as Cinergy’s chairman and CEO for more than 11 years. Prior to the formation of Cinergy, he served as chairman, president and CEO at PSI Energy.

Mr. Rogers served as deputy general counsel for litigation and enforcement for the Federal Energy Regulatory Commission (FERC); executive vice president of interstate pipelines for the Enron Gas Pipeline Group; and a partner in the Washington, D.C., office of Akin, Gump, Strauss, Hauer & Feld. Prior to those appointments, he served as assistant to the chief trial counsel at FERC, as a law clerk for the Supreme Court of Kentucky and as assistant attorney general for the Commonwealth of Kentucky, where he acted as intervener on behalf of state consumers in gas, electric and telephone rate cases. He was also a reporter for the Lexington Herald-Leader.

In the course of his career, Rogers has served more than 40 cumulative years on the boards of Fortune 500 companies. He is past chairman and ex officio member of the executive committee of the Edison Electric Institute and is chairman of the Institute for Electric Efficiency. He serves as a member of the board and the executive committee of the Nuclear Energy Institute, and he is a board member of the Institute of Nuclear Power Operations. Mr. Rogers also serves on the boards of the U.S. Chamber of Commerce, the Business Roundtable, the National Coal Council, the National Petroleum Council and the Nicholas Institute for Environmental Policy Solutions.

Mr. Rogers is chairman of the Edison Foundation and cochair of the National Action Plan for Energy Efficiency and the Alliance to Save Energy. He serves on the board of directors and the executive committee of the World Business Council for Sustainable Development. Mr. Rogers is also a member of the Honorary Committee of the Joint U.S.-China Cooperation on Clean Energy (JUCCCE). He has testified 19 times on energy and environmental policies before congressional committees. In 2007, he was named the energy industry’s CEO of the Year by Platts and Business Person of the Year by the Charlotte Business Journal.

Mr. Rogers earned a bachelor’s degree in business administration and a juris doctorate from the University of Kentucky, where he was a member of the Kentucky Law Journal and Beta Gamma Sigma National Honor Society. He was named to the Hall of Fame at the Carol Martin Gatton College of Business and Economics and the Hall of Fame of the College of Law, both of the University of Kentucky. He and his wife, Mary Anne, have two daughters, a son and seven grandchildren.

To purchase a PDF version of this article as it appears in World Energy magazine, add this item to your cart.