Duke/Cinergy merger a tale of two men.
Paul M. Anderson, currently chairman and CEO of Duke Energy and James E. Rogers, Cinergy's current chairman, president, and CEO will share the leadership of the new company with Anderson becoming board chairman and Rogers becoming president and CEO. Each has a long history in the energy business and it is a fitting accomplishment that they come together in a new, stronger company.
Before discussion of the two major players, more information on the new company is appropriate. The merged company will keep the Duke name and will compete with other large investor-owned utility companies like Southern Company of Atlanta; Entergy of New Orleans that serves Mississippi, Louisiana, Arkansas, and Texas; AEP/CSW out of east and west Texas and the eastern states of Ohio, West Virginia, Michigan and Indiana; Scottish Power with operating facilities in Oregon, northern California and the midwestern states of Colorado, Utah, Idaho, and Wyoming; Progress Energy in Florida and North and South Carolina; and Excel in the central U.S. in North Dakota, Minnesota, Wisconsin, Colorado, west Texas, and New Mexico.
The new company will have total assets of around $71 billion and annual revenues of $27 billion. Nationwide, the company will employ more than 29,000 employees and serve 3.7 million electric and 1.7 million gas customers with a service territory of 47,000 square miles. The merger gives the new company operations from wellhead and generators to burnertip. It will have regulated and unregulated businesses. The utility business will mainly be in the Carolinas, Kentucky, Ohio, and Indiana.
Duke is about three times bigger than Cinergy and brings to the party an integrated array of operations in the gas and electric business that cover much of the U.S. and Canada. In addition to its gas and electric utility business--service directly to consumers--Duke operates interstate natural gas pipelines, electric generating facilities, energy field services companies, and gas processing facilities. Texas Eastern, East Tennessee, Gulfstream, and Algonquin are U.S. pipelines and Empress and Maritimes & Northeast are Canadian facilities in the Duke family. It has both regulated and unregulated energy businesses as well as an affiliated real estate company.
Cinergy is more localized as a Midwest utility. Its integrated businesses make it a leader in providing low-cost electric and gas service. The merger of three Midwest utilities formed Cinergy in the 1990s. It also has an energy marketing company in Houston, Cinergy Marketing & Trading Inc.
Interestingly, the leadership of both companies has stressed a set of core values for their businesses. In the merger fact sheet, these core values are listed for each company and not surprisingly, many are the same for both. Again, this is a reflection of the leadership coming from each company.
The leadership brought by Anderson and Rogers is as much a value as the physical assets themselves. Both, despite starting out in different areas of industry, have provided strong leadership in a business that in recent years has suffered and, at times, seen in a bad light by customers, co-workers and the financial community.
Anderson was named to his current position in November 2003 after serving as managing director and CEO of BHP Billiton, Ltd.; a diversified global natural resources company based in Australia. Prior to that, he was president and chief operating officer at Duke Energy, which he joined as a result of the merger of Duke and PanEnergy in June 1997 where he was president and CEO. Years earlier, Anderson was instrumental in the strategy and actions that brought a group of natural gas pipeline companies together that resulted in the merger of Texas Eastern, Panhandle Eastern, Trunkline, and other interstate gas pipelines and energy operations into PanEnergy which in turn, was acquired by Duke.
Prior to joining the natural gas business, Anderson worked for Ford Motor Co. as planning manager from 1972-77. Previously he worked in marketing, product engineering, finance, and manufacturing at Ford from 1969-72. He also served as chief financial officer for Inland Steel from 1990-91 before being asked to return to help bail out a struggling Panhandle Eastern. Anderson has a master's degree in business administration from Stanford University and a BS degree in mechanical engineering from the University of Washington.
Equally as interesting is the background of Rogers, who joined the predecessor of Cinergy, PSI Energy Inc., in 1988 as chairman, president and CEO. He was instrumental in merging PSI with Cincinnati Gas & Electric and Union Light, Heat & Power Company into the current company, Cinergy. Before joining PSI, Rogers was executive vice president of Enron. A lawyer, Rogers moved from legal to business operations in coming to Enron. He was a partner in the Washington office of Akin, Gump, Strauss, Hauer, and Feld.
Prior to this, he was Deputy General Counsel for Litigation and Enforcement of the FERC, where he had been assistant to the chief trial counsel. Earlier, he was a law clerk for the Supreme Court of Kentucky and ironically, as Assistant Attorney General for the Commonwealth of Kentucky, acted as intervener on behalf of state consumers in gas, electric, and telephone rate cases before the Public Service Commission.
Rogers holds BBA and JD degrees from the University of Kentucky where he was a member of the Kentucky Law Journal and Beta Gamma Sigma. He received an honorary Doctor of Law degree from Indiana State University.
Anderson and Rogers are big advocates of measures to prevent global warming. Rogers in June spoke before the House Science Committee on the need to reduce greenhouse gas emissions. He believes now is the time for action to begin and advocates a national program. In a speech to Charlotte business leaders, Anderson called for a federal tax on carbon content of fossil fuels.
The similarly varied background of both leaders with experience in consumer affairs and marketing positions is shown in their strong positions on customer relations and concern for core values. Equally interesting in their sharing leadership of the new entity is the division of responsibility agreed upon in the merger. Anderson, although coming from the much larger company, will take the position of chairman while Rogers becomes president and CEO.
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|Title Annotation:||Duke Energy Corp.|
|Comment:||Duke/Cinergy merger a tale of two men.(Duke Energy Corp.)|
|Publication:||Pipeline & Gas Journal|
|Date:||Jul 1, 2005|
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