Written by David Pomerantz, crossposted from Greenpeace USA's blog, the EnvironmentaLIST.
The new hot spot for solar energy in the US is North Carolina. The state was second in the nation in solar growth in 2013, behind only California. In fact, if US states were considered as countries, North Carolina would have been among the top 10 countries in the world for solar growth last year.
All of that solar growth, driven by policies like the state’s renewable energy portfolio law, has been great for the NC economy, generating $1.7 billion in revenue for the state. At the end of 2012, 137 solar companies employed 1,400 people in NC - a number that increased during solar’s record 2013 year.
But while North Carolina’s solar sector shines brighter, a cloud is approaching on the horizon that places all of the benefits of solar power at risk of disappearing: Duke Energy, the state’s monopoly utility and the largest power company in the country, is about to launch a major attack on solar energy.
On Jan. 7, Duke’s president of North Carolina operations, Paul Newton, fired the first shots of the war. Speaking in front of a joint energy committee of the state’s legislature, Newton attacked net metering, one of the key policies to North Carolina’s solar growth.
Net metering allows customers with rooftop solar panels to get credit for any extra electricity that they send back to the grid, like rollover minutes on a cell phone bill.
Newton argued that solar customers aren’t “paying their fair share” to Duke, and that his company would thus be forced to charge higher rates to all of its other customers in response.
Those allegations are false. A study conducted last year showed that the benefits of rooftop solar in North Carolina - even for customers who don’t have the panels - would outweigh any costs by 30%. That’s because as more homes and businesses go solar, Duke wouldn’t have to keep building expensive gas and coal plants and raising rates on its customers to finance them. Those rate benefits are aside from the job creation, climate, and public health positives of solar power.
But Duke’s shareholders profit by building those gas and coal plants, which is exactly why rooftop solar is in the crosshairs.
Duke’s key ally in its war on solar: ALEC
Duke isn’t the first utility in the country to attack net metering; utilities in California, Arizona and Colorado began similar campaigns in 2013, and others are forming battle plans now.
In December, The Guardian newspaper revealed that these power companies have been coordinating their efforts under the guise of the American Legislative Exchange Council, (ALEC), a group that lets corporations like Duke ghostwrite laws for right-wing state legislators.
Many utilities are ALEC members, and they have made it ALEC’s top priority to attack net metering laws around the country. Forty percent of NC state lawmakers are ALEC members, and Duke will rely on them to do their bidding.
So far, Duke and ALEC’s communications strategy has been to stigmatize solar energy as being only for the wealthy. Their argument is that we shouldn’t be letting rich families with solar panels get even richer on the backs of non-solar households.
It wouldn’t be surprising if early adopters of solar do have higher incomes, since buying the panels involves an upfront cost. But recent research shows that solar penetration is increasingly happening in middle class neighborhoods. In any case, if ALEC and utilities are so worried about the poor, they should be trying to give more solar access to working and middle class communities, since it will help them save money, not take away their chance to go solar by attacking policies like net metering.
The idea that the nation’s power companies, which have raised rates on customers to pad corporate profits and sited coal plants in the nation’s poorest communities for decades, suddenly want to act as champions for social justice doesn’t pass the smell test.
Duke will eventually learn to bask in the sun.
— Duke Energy (@DukeEnergy) January 16, 2014
It’s not the only public display of support for solar power Duke has shown in recent months. Previous CEO Jim Rogers said that he saw rooftop solar as an opportunity as much as a threat, and in March, Duke bought a stake of a distributed solar power financing company, Clean Power Finance.
Were these moves signs that Duke is embracing the solar revolution, or just greenwashing? Both answers may be true: Duke is feeling its way around the edges of solar opportunities while it mostly stalls for time by attacking net metering. One thing that would hasten Duke’s solar transition is if it loses on net metering, since that would force the company to more quickly come to terms with the inevitability of rooftop solar.
A Duke loss on net metering is far from a given, considering Duke and ALEC’s almost unlimited influence in North Carolina politics. But for all of Duke’s money and political power, it can’t change a simple reality: Rooftop solar is immensely popular. A 2013 poll showed that 88 percent of North Carolinians support solar energy. Last year, when ALEC attacked North Carolina’s renewable energy law, the effort failed because Republicans in the legislature recognized solar power as a job creator. In fact, ALEC’s efforts to attack renewable energy laws failed in every state where it tried in 2013.
Now, solar advocates will gear up to bat away the next attack wave in 2014. The sooner they win, the sooner utilities like Duke will have to face the music and realize that they need to join their customers in the sun.
Written by Madhura Deshpande of Greenpeace's Frontline program.
On September 27th I had the opportunity to attend Jim Rogers’ first public appearance as CEO of Duke Energy Corp--which just completed a messy takeover of Progress Energy--and listen to his keynote speech about their future energy policy. The most surprising portion of this event was when Jim Rogers stated Duke’s mission is to provide clean, sustainable energy to its ratepayers. What a fantastic statement to make when comparing words to actions: Duke’s true, actionable mission is and has been to minimize the percentage of renewable energy in our portfolio and maximize funding for more coal, unregulated natural gas, and nuclear energy plants.
At the end of the event we asked Mr. Rogers why Duke Energy continues to support climate science denial (an obviously global and critical issue facing us today) and voter suppression by funding the American Legislative Exchange Council (ALEC), especially since Duke’s policies seem to oppose such efforts. Conveniently, Mr. Rogers declined to answer on the grounds that he was leaving the event and did not have any more time.
ALEC is a group of big industry leaders (oil, coal, gas, tobacco, healthcare, etc) that help create state bills that limit the responsibility of their companies, and thus make more money. How can they do this? It’s easy: they use the massive profits from their respective industries to rub elbows with State lawmakers and ‘ghostwrite’ bills to be passed. Through these meetings, ALEC has helped disseminate state laws that disenfranchise voters and policies that deny climate science and solutions to global warming.
It’s time for Duke Energy and Jim Rogers to commit: drop ALEC and match your rhetoric with your actions. This nation and our environment cannot afford to wait any longer.
Mitt Romney released new TV ads this week about Obama “ruining” the coal industry, conveniently timed with a sudden House Republican push for the so-called “Stop the War on Coal Act.”
A Greenpeace investigation released last week highlights the recurring themes of Big Coal advertising, with decades of ads from coal mining companies, coal-burning utilities, and industry front groups. The Big Coal industry advertising machine has been working for decades to “keep America stupid,” as Rolling Stone put it.
This week’s political messaging about a supposed “war on coal” illustrates a troubling trend that the Big Coal public relations machine is co-opting America's elected leaders.
New Romney TV ads on coal mirror the industry’s old and new ads
One of Big Coal’s main advertising themes since the 1970s has been abundance of coal and energy security. Romney's new TV ad highlights this theme, featuring a stump speech clip with Romney declaring “We have 250 years of coal! Why wouldn’t we use it?”
The 250-year coal supply figure is an extreme overestimate, since US coal reserves can only be confirmed to last about 100 years, according to a National Academy of Sciences report five years ago. So, where did Romney get that number?
Maybe Romney got it from this coal industry front group advertisement, claiming that using less coal will make dictators smile. Check out the ad up close.
Or maybe Romney got the 250-year claim out of this internet ad from ACCCE, the coal industry’s public relations association.
Coal industry estimates of incredible abundance are notoriously incorrect. At least Romney’s estimate was slightly more accurate compared to this National Coal Association ad from 1977, claiming coal would last 500 years. In 1976, an American Electric Power ad used the 500-year coal supply along with an estimate that America would run out of oil and natural gas by 1988. People say hindsight is always 20/20.
Not only does the coal industry provide talking points for Romney’s stump speeches and TV ads, but it also provides the human props. The Romney TV ad features shots of the candidate speaking with a crowd of coal miners behind him. Murray Energy Company forced these miners to miss a day of work without pay, and told them that attendance was mandatory at the Romney event.
Obama also influenced by Big Coal advertising
Unfortunately, the Republican candidate is not the only one susceptible to coal industry public relations. The Obama campaign aired radio ads criticizing Romney for saying a dirty coal plant “kills people” when he was Governor of Massachusetts. Obama has made so-called “clean coal” and CCS technology part of his energy platform. As a way to keep their industry alive, Big Coal invests heavily in “clean coal” advertising, even though the touted CCS technology that captures carbon dioxide is unproven at scale and exorbitantly expensive. Check out this nonchalant Peabody Energy ad from 2009.
The clean coal advertising theme existed decades before CCS technology, when simply “washing” coal meant that it was now “clean,” like in this AEP ad from 1979.
Congress is another vehicle for coal industry public relations
The coal industry advertising doesn’t only influence presidential politics. Republicans in the House Friday morning passed the so-called “Stop the War on Coal Act.” The Act is several coal-friendly bills packaged into one big wish list for the coal industry, including stripping EPA authority to regulate greenhouse gases, restricting EPA from regulating coal ash and delaying the EPA mercury rule. The bill package will be dead-on-arrival in the Senate.
The Act provided Republicans with the opportunity to lambast the EPA for protecting public health from coal pollution. As two Republicans wrote in a Sept 20th op-ed, “President Obama and his extreme EPA have issued new rules and regulations that are crippling the coal industry” and “this ‘Train Wreck’ of new EPA regulations is already…costing jobs in places where unemployment is staggering.”
Considering that energy experts will tell you that competition from renewable energy and natural gas are actually causing the decline in coal, why are these Republicans so focused on EPA regulations? One could list several political reasons but, coincidentally, blaming the EPA has been a regular theme for Big Coal advertising since Nixon established the EPA in the 1970s.
In this 1974 ad, EPA is blamed for blocking the use of coal which somehow, in a bizarre twist of logic, would result in Middle Eastern oil moguls buying American coal fields from under our noses.
Another 1974 American Electric Power ad criticized EPA for encouraging the use of pollution scrubbers on coal plants. In comparison, the coal industry now celebrates scrubber technology for making coal “clean" while still attacking the EPA for new clean air rules. This ACCCE internet ad claims the EPA will cost 1.65 million jobs.
Coal advertising themes like "coal is abundant," "coal is clean," and "EPA kills jobs" are completely integrated now into Presidential and Congressional debates. After decades of Big Coal advertising efforts, some of our elected officials have mutated into Big Coal spokespeople.
UPDATE: Student activist Ben Wiley details his question to Duke Energy's Vincent Davis about support for ALEC, which was ignored.
Yesterday, members of Greenpeace, Energy Action Coalition, and other groups sent a message loud and clear to Duke Energy that we want them to dump ALEC (the American Legislative Exchange Council) before the end of the Democratic National Convention.
ALEC is a rightwing bill mill group that connects corporations with our elected officials to draft model legislation in support of corporate profits over the welfare of people and our planet. ALEC has written legislation including Arizona’s racist immigration law SB1070, Stand Your Ground Laws relating to the murder of Trayvon Martin in Florida, and many voter suppression laws such as Voter ID here in North Carolina. But that’s not all, ALEC also has an Energy, Environment and Agriculture Task Force which is working on legislation to stop regulation of coal fired power plants and to prevent laws from being passed that support renewable energy.
Duke Energy, headquartered in the heart of Charlotte and at the center stage at the 2012 Democratic National Convention this week, is a major contributor to this dirty front group. Last May, Duke Energy spent $50,000 to bring ALEC’s annual meeting to Charlotte. Especially in South Carolina and Indiana, Duke representatives work very closely with ALEC to draft such legislation.
This is why yesterday, dozens of activists gathered in Charlotte to ask Duke Energy’s CEO Jim Rogers to make the call and dump ALEC! We gathered in front of the Knight Theater where Rogers was speaking on a panel and urged passersby to make a phone call into the Duke Headquarters. Then we hand delivered 150,000 petition signatures that have been collected in the past week. At the same time in Ohio, local activists gathered to deliver the message to Duke’s Midwest corporate headquarters. And all throughout the day yesterday activists took action online on Facebook and Twitter sending their messages directly to Duke Energy.
We know that it’s working. We ran into Jim Rogers at an event and he said that he’s listening. The question remains, will Duke act?
I spoke with Duke Energy's Jim Rogers at the DNC. He's hearing from us! And 150k people. And Senators.
Written by Whit Jones, Energy Action Coalition Campaign Director, crossposted from We Are Powershift
Today Greenpeace joins a coalition of environmental, civil rights and democracy reform groups that are calling upon Duke Energy to join the 38 other companies that have left the American Legislative Exchange Council, or ALEC -- see the letter the coalition sent to CEO Jim Rogers this morning.
Why, you ask? And WTF is ALEC??
ALEC is a corporate bill mill--it brings companies like Duke, Exxon, Koch Industries, Phillip Morris and other bad actors together with conservative state lawmakers in order to draft laws. You may have noticed how certain controversial state laws spread like wildfire across the country, including voter suppression, union-busting bills, attacks on clean energy programs, and other items you wouldn't expect the average person to ask their politicians to do. ALEC was behind all of these on behalf of its corporate members, who are eager to dodge lobbying laws and get relatively cheap access to our Statehouses.
Duke Energy in particular has deep ties to ALEC, sending it tens of thousands of dollars in support, helping ALEC oversee state operations in South Carolina and Indiana, and supporting the creation of ALEC's anti-environmental bills.
Duke Energy has distinguished itself from other polluters with rhetorical commitments to tackling global warming and implementing clean energy, but stops short of meaningful action. By dumping ALEC, Duke would take a step in the right direction toward the potential it has to become a cleaner energy company.
The full text and coalition signatories of the letter is posted in full here:
We, the undersigned, a coalition of environmental, civil rights, and democracy reform groups are writing to express our concern for the extensive support provided by Duke Energy to the American Legislative Exchange Council (ALEC), and request Duke Energy disassociate and stop funding ALEC immediately.
ALEC is not only responsible for drafting model state laws attacking renewable energy programs and climate policies, it is also intentionally crafting and supporting Voter ID bills and other legislation designed to suppress people from voting and participating in our democracy. We are concerned about this fundamental attack on our democracy and civil rights, and Duke Energy’s support for it.
Duke Energy has repeatedly stated concern over climate change, yet is participating in ALEC’s Energy, Environment and Agriculture task force, which includes notorious climate skeptics like the Heartland Institute and the American Coalition for Clean Coal Electricity (which we understand Duke Energy disassociated from in 2009 due to its role in obstructing national climate policy). In direct opposition to Duke Energy’s position on climate, ALEC’s Energy, Environment and Agriculture task force continues to advance legislative efforts that attempt to deny the realities of climate change.
ALEC more broadly demonstrates an attack against state action on climate change and renewable energy, promoting laws and resolutions that undermine state’s abilities to address climate change and expand clean energy. While Jim Rogers has called for the US to “wean [itself] from the use of foreign oil,”[viii] Duke works alongside multinational oil companies like ExxonMobil, BP, Shell and Chevron within ALEC, all of which are known for their heavy obstruction of U.S. climate and clean energy policies.
Perhaps most alarmingly, ALEC is spearheading attacks on our democracy and civil rights, promoting Voter ID legislation and other bills intended to make it more difficult for people to vote and participate in our democracy. These bills will most dramatically hit young people, people of color and poor people, suppressing them and their ability to vote.
You may have recently noticed that Duke Energy, the nation's largest utility, launched a major advertising campaign. This includes airing their first television commercials in 15 years. In light of the controversy surrounding their merger with Progress energy, it comes as no surprise they would attempt to repair their public image.
The ads all begin with someone flipping a power switch. A narrator explains how we “don't think about what it's connected to or how the power gets there,” but instead about what really matters in life, like family reunions, your son's basketball game, proposing to your wife... I think you get the idea. These ads try to illicit an emotional connection between us and Duke. Each ad ends with the line “You don't think about all that's going on behind that switch, because we do.”
Well Duke, we actually do “think about all that's going on behind that switch.” Last week, concerned members of the community came out to discuss the ways Duke works behind the scenes to maximize its bottom line. More importantly, we discussed what we as a community can do about it.
The meeting was held in Charlotte, NC, where Duke Energy has its headquarters. Greenpeace's NC field organizer, Monica Embrey, began by giving an overview of Duke's relationship with dirty energy. Duke owns dozens of coal-fired power plants, many just outside of Charlotte. Coal is the leading contributor to climate change, and releases harmful toxins into our water and air. This coal is obtained through a destructive strip-mining technique known as mountaintop removal . Embrey explained how we pay for dirty energy not only through out utility bills but ultimately through our healthcare costs.
Beth Henry, one of the leading experts on Duke, discussed how Duke uses our money to buy access to politicians in order to influence policy. Duke is on pace to become North Carolina’s largest political spender after having recently merged with Progress Energy. In the 2009-2010 election cycle, the companies collectively spent over $19 million on lobbying and state and federal campaigns. The company has a number of links to members of the NC Utilities Commission, a group that is supposed to regulate the industry. Henry explained how Duke has a long history of influencing legislators and regulators in its favor. Duke truly epitomizes the idea of the revolving door.
Henry also highlighted Duke's relationship with universities and charities. Duke essentially purchases allies and good PR through their contributions. Many of these institutions are beholden to Duke for funding. She gave specific examples of organizations reluctant to act or speak out against Duke due to this relationship.
I spoke about the relationship between Duke and the Democratic National Convention, which will be held in Charlotte. Duke's CEO, Jim Rogers, has been intimately involved in the fundraising process. He is co-chair of the the convention host committee and has personally given $100,000 to the group. Rogers has paid out of his own pocket to hire a personal assistant to work full-time on DNC fundraising. In fact, Duke is providing $1 million worth of uptown office space, rent-free, for the entire host committee. The company has even guaranteed the host committee a $10 million line of credit in case their fundraising runs short. Duke is also one of the leading contributors to New American City, Inc., a fund setup by the host committee in order to accept corporate money.
Tony Ndege, of Occupy Winston-Salem, described the troubling relationship between Duke and the American Legislative Exchange Council. Ndege explained how ALEC is essentially a corporate bill mill where corporations and special interests help craft model legislation. Duke has helped create bills attacking environmental regulations and attempts to reduce greenhouse emmissions. Corporations like Duke fund most of ALEC's operations. They sponsored ALEC's 2012 spring meeting in Charlotte. Duke has given ALEC $116,000 since 2009, according to the Charlotte Business Journal.
Afterward, members of the community engaged in an open discussion. People suggested what we can do to fight back against the destructive effects of dirty energy. Updates were given about key actions taking place around the state and nation. People were energized, inspired, and ready to act.
Now more than ever, people in Charlotte know what's “going on behind that switch.” No amount of Duke propaganda will hide the true facts of how they operate.
Missed the event but still want to hear what happened? Check out the video recorded live stream here.
Lobbyists for the "Electric Reliability Coordinating Council" attack clean air rules on behalf of Arch Coal
The Environmental Protection Agency is holding a public hearing today in Washington DC on the first-ever rules to limit carbon pollution from new power plants. It's a popular rule, and EPA has already heard a lot about it: over a million comments supporting the rule were delivered to EPA last week.
But this is DC, so not everyone is thrilled. Scott Segal, a lobbyist at Bracewell & Giuliani, will be testifying on behalf of coal interests at the EPA hearing. When lobbying against clean air rules like the carbon pollution standard or mercury air toxics standard, Segal likes to use the title of director of the "Electric Reliability Coordinating Council" (ERCC); I suppose it sounds better than coal lobbyist. But what exactly is the ERCC? When he wrote a letter requesting a meeting about the carbon pollution rule with the Office of Management and Budget (OMB), Segal claimed that "ERCC is a group of power-generating companies." But OMB meeting records reveal that the only lobbyist that joined ERCC for that meeting was Arch Coal's Vice President of Government Affairs, Tom Altmeyer.
Arch Coal, of course, is not a power-generating company, but rather the second largest coal mining company in the US, and one increasingly focused on exporting US coal to foreign markets. Burning coal is a major source of carbon pollution, so it's no surprise that Arch is lobbying against rules that will help move us away from their dangerous product. But what about utility companies like Duke Energy, a known member company of ERCC? Does it secretly support ERCC's misleading attacks on clean air rules that will protect their ratepayers from mercury and carbon pollution, while encouraging investment in cleaner sources of electricity?
This is not the first time, after all, that ERCC's lobbying appears out of step with its member companies' public positions. Last year Greenpeace sent Duke CEO Jim Rogers a letter asking if Duke was a member of ERCC, and whether the company supported the ERCC's efforts to delay and weaken the mercury rule. In response, a spokesman for the company told the Charlotte Business Journal that Duke is a member of ERCC, “But, as with many organizations we are affiliated with, we don’t agree with them on every issue.”
Segal has avoided revealing the full list of ERCC member companies. When challenged in a debate by John Walke of NRDC to disclose ERCC's full list of member companies, Segal declined after naming just four companies: Southern Company, Duke Energy, Progress Energy, and EFH (Energy Future Holdings, which owns Luminant) - but made no mention of Arch Coal. Indeed, Segal and other lobbyists at Bracewell & Giuliani like Jeff Holmstead have used ERCC for more than a decade to obscure which coal mining companies and utilities are behind their efforts to weaken and delay clean air rules.
A New York Times article about the creation of ERCC in 2001 describes it as "a consortium of power companies that is so new that its spokesman could not name the 8 to 10 companies he said have joined so far." Right.. well, now that it has been over a decade, we'll see if Segal is able to recall - and willing to reveal - which companies are behind his efforts to weaken and delay clean air protections that will save thousands of American lives. In the meantime, public officials and reporters would be wise to question whose interests Scott Segal and Jeff Holmstead represent.
After years of delay, the Environmental Protection Agency is finally issuing safeguards that will protect Americans by reducing the amount of mercury pollution and other poisons emitted by coal plants around the country. It's good news for mothers, children, communities near dirty coal plants, people who eat fish - pretty much everyone, actually, so it's no surprise that Americans overwhelmingly support rules to reduce mercury pollution from power plants. So who isn't pleased? Well, lobbyists for the dirtiest utilities like Southern Company seem pretty down about it - Scott Segal, for example, called the upcoming rule "unfortunate."
You might remember Scott Segal from his appearance on The Daily Show, in a bit about how lobbyists kill legislation. Mr. Segal works for K Street lobby firm Bracewell & Giuliani, where he represents clients like Southern Company, Arch Coal, and Duke Energy, along with his colleague Jeffrey Holmstead. (Holmstead has worked for years against meaningful mercury protections, as a top George W. Bush EPA official and as an industry lobbyist - read our new report: Jeffrey Holmstead: the Coal Industry's Mercury Lobbyist for much more). They’ve got the tough job of trying to weaken and delay these popular, life-saving rules so their clients can keep dumping mercury into our air and water without restriction.
But Mr. Segal is just a lobbyist, so we should ask which corporate interests he represents when he calls "unfortunate" a rule that will save thousands of lives and prevent tens of thousands of illnesses every year, according to the Environmental Protection Agency. As it turns out, it's really just a few companies that have pushed hard against the mercury safeguards. Most utility companies have prepared for this long-delayed rule, and one analysis found that "Companies representing half of the nation’s coal-fired generating capacity—eleven out of the top 15 largest coal fleet owners in the U.S.—have indicated that they are well positioned to comply with EPA’s clean air rules because of early investments in their generating fleets."
To help hide this, Mr. Segal often represents himself as the director of a coal industry front group called the "Electric Reliability Coordinating Council." For example, a few weeks ago Mr. Segal, writing as the director of ERCC, sent a letter requesting a meeting with the Office of Management and Budget as it was analyzing the Mercury Rule. And when Mr. Segal testified before Congress against the Mercury Rule in April 2011, he also used his preferred title of director of ERCC, instead of, say, a lobbyist for Southern Company.
But what exactly is this "Electric Reliability Coordinating Council" that has spent much of the last year trying to weaken and delay these badly needed mercury safeguards? ERCC's website describes the group as "a broad-based coalition of energy companies committed to the continued viability of diverse, affordable and reliable electric power supply in the United States." But nowhere does its website list the member companies in ERCC's supposedly "broad-based coalition." When challenged in a debate on the Mercury Rule by John Walke of NRDC to disclose ERCC's full list of member companies, Mr. Segal declined after naming just four companies: Southern Company, Duke Energy, Progress Energy, and EFH (Energy Future Holdings, which owns Luminant).
It's no surprise for Southern Company and EFH - those companies have openly attacked the Mercury Rule, and were the second and third worst mercury polluters in 2010, after American Electric Power. But what about Duke Energy? Has it been using this front group to lobby against the Mercury Rule? After we sent Duke CEO Jim Rogers a letter asking if Duke was a member of ERCC, and whether the company supported the ERCC's efforts to delay and weaken the Mercury Rule, a spokesman for the company told the Charlotte Business Journal that Duke is a member of ERCC, “But, as with many organizations we are affiliated with, we don’t agree with them on every issue.”
So are ERCC's attacks on the Mercury Rule too extreme even for its coal industry member companies? Or is Duke Energy backing those attacks after all, and misleading the public about what exactly it has been doing with the $1.6 million it spent on lobbying in just the last three month period? Well as it turns out, Mr. Segal got that meeting he requested with the Office of Management and Budget. According to White House records, he was there with Jeffrey Holmstead, three executives from Southern Company - and Duke Energy's Vice President for Federal Affairs. It seems like Duke Energy has some explaining to do.
UPDATE 4/13/2012: The Indianapolis Star's John Russel has compiled a full timeline of this scandal: Prying Open the Duke Energy Scandal
Duke Energy is experiencing the departure of its second-top executive (after CEO Jim Rogers), utilities division president James Turner, making Turner the third Duke casualty in an ethics scandal that has already led to the firing of two other Duke officers and an Indiana state utility regulator.
Emails between Turner and David Lott Hardy, the recently-sacked chairman of the Indiana Utility Regulatory Commission (IURC), revealed that the two men had a particularly cordial relationship that extended itself into professional circumstances. As Duke negotiated positions for Michael Reed (coming from the state's Department of Transportation and with three years of experience in the IURC) and Scott Storms (an administrative law judge and general counsel for the IURC), Turner and Hardy frequently discussed the hiring process. The Indianapolis Star revealed that in one message to Turner, Hardy encouraged the executive to hire Reed, asking, "Is this decision yours and I don't need to sell Jim [Rogers, Duke CEO], or is his buy-in pivotal?"
In order to avoid honoring a customary yearlong pause before moving from the IURC to Duke, Storms was given an express pass through the IURC's ethics panel investigation with help from Reed and Hardy. Reed, concerned that Storms would not get the panel's go-ahead, urged Hardy to enlist the help of the IURC's ethics officer, Loraine Seyfried, who then wrote a memo to Storms denying any conflict of interest. The ethics panel mirrored Seyfried's conclusion and allowed Storms to move to Duke; Seyfried got his old job as administrative law judge. Reed and Storms were both fired in November, just before emails revealed the full extent of the scandal. While Seyfried was not fired along with Hardy, she was removed from cases involving Duke.
What made the Duke-IURC revolving door particularly improper was Scott Storms' role as a judge presiding over Duke cases while arranging to work for the utility giant. Chairman Hardy, Storms' boss, ignored the clear conflict of interest, which included Storms' approval of a utility ratepayer hike in order to cover massive cost overruns of Duke's new Edwardsport coal plant.
The new Edwardsport plant, which is intended to both replace an existing facility built in the 1940s and to demonstrate integrated gasification combined cycle (IGCC) technology, has swelled in costs originally estimated at $1.5 billion to just under $3 billion. The difference in costs will be reflected in the estimated 16% ratepayer increase that Storms approved before joining Duke. Indiana's Citizens Action Coalition, which has been a strong voice of opposition to the Edwardsport plant, warns that other hidden expenses will likely wind up in utility bills as well.
The debacle's most recently disgraced figure, James Turner, boasted Duke's second highest annual compensation--$4.3 million--after CEO Jim Rogers ($6.9 million). The Indianapolis Star insinuated that part of Turner's "incentive pay" (last year an almost $800,000 portion of his total compensation) could have been a result of the very revolving door relationships that forced him out of the company. While we can hope the lesson in this case is "don't cheat the system," industry sentiment is much more likely to be, "don't get caught like Duke did."
Important to consider is how similar scandals could be possible on the federal level. Duke has a total of five lobbyists with former experience in the U.S. Environmental Protection Agency, including Bill Tyndall, who was announced as one of the individuals reporting directly to Jim Rogers following Turner's departure.
David Lott Hardy: "Don't tell the utilities I'm being accommodating -- bad for my reputation."
James Turner: "Don't worry. Your reputation in this regard is unalterable."