Duke Energy CORP — Call Transcript 2012

Speaker 2: Hi, good morning, ladies and gentlemen. My name is Bill Currens , I am Managing Director of Investor Relations for Duke Energy. Welcome to the 2012 annual meeting of shareholders. We are broadcasting this annual meeting by teleconference and webcast. I also welcome everyone online and on the phone. It is our custom to start the meeting with a safety message. In the unlikely event of an emergency, the primary exits from this auditorium are the doors behind this stage to your right. Please exit through those doors, turn right, and proceed down Stonewall Street. For those of you in the atrium area, you can exit out the front door, turn right, go out the building, then turn right again, and proceed down Stonewall Street. If anyone needs assistance, security and safety personnel will be available to assist you. If we do have to evacuate, please do not reenter the building until you have been told that it's safe to do so. As you entered the auditorium this morning, you should have received a copy of the meeting program. If you did not, please raise your hand. We will bring one to you. In order to provide for an orderly, safe, and informative meeting, I would ask that you please take a moment to read the conduct of the meeting procedures found inside the meeting program. Please be sure that all cell phones are turned off at this time. Let me quickly review the items for this morning's program. In a moment, I will introduce our Chairman, President, and Chief Executive Officer, Jim Rogers, who will call the meeting to order. After taking care of certain procedural matters, Jim will introduce Duke Energy's Board of Directors. We will move on to the business portion of the agenda, which includes the following items: the election of the board of directors for one-year terms expiring in 2013, the ratification of Deloitte & Touche LLP as the company's independent public accountant for 2012, the approval on an advisory basis of Duke Energy Corporation's named executive officer compensation, also referred to as say on pay, the approval of the amended and restated certificate of incorporation of Duke Energy Corporation to reduce the required affirmative vote needed for certain actions from 80% to 75%. The consideration of two shareholder proposals that are described in your proxy statement. All of these matters will be voted on before moving to the question-and-answer section of the meeting. Let me inform you that today's discussion will include forward-looking information and the use of non-GAAP financial measures. You should refer to information contained in our SEC filings concerning factors that could cause those results to differ from this forward-looking information. A reconciliation of non-GAAP financial measures can be found on the investor relations section of our website at www.duke-energy.com. It is my pleasure to introduce our CEO, Jim Rogers.

Speaker 5: Bill, thank you very much. Good morning to all of y'all. The meeting will please come to order. I'm Jim Rogers. I want to welcome all of you to this 2012 annual meeting of shareholders. In accordance with Delaware general corporate law, I appoint Nancy Wright, Associate General Counsel here at Duke Energy, and Sid Rodrigue of Broadridge Investor Communication Solutions, our proxy tabulator, to act as inspectors of election for this meeting. Nancy and Sid, would y'all please stand? Our Group Executive Chief Legal Officer and Corporate Secretary, Mark Manley, also acting as secretary of the meeting, will now report the number of shares entitled to vote and the number of shares and votes represented in person or by proxy at this meeting.

Speaker 6: Thank you, Jim. As of the close of business on March 5, 2012, Duke Energy Corporation had outstanding and entitled to vote 1,337,961,335 shares of common stock, each of which is entitled to one vote. There are here at this meeting, represented by proxy, 1,129,133,026 shares of the corporation's common stock, which constitute 83.39% of the total shares entitled to vote. The final report of the inspectors of election will include votes, if any, of the shareholders present and voting in person at the meeting.

Speaker 5: Thank you, Mark. Legal notice of this meeting has been duly given. A quorum is present, and the meeting is now lawfully convened for the transaction of business. I have the pleasure of introducing the members of your board of directors, all of whom are here with us today. As I introduce each of them, I'll ask them to stand and be recognized. Bill Barnett, Chairman, President, and CEO of Barnett Development Corporation. Alex Bernhardt, Chairman of Bernhardt Furniture Company. Michael Browning, Chairman and President of Browning Investments. Dan DiMicco, Chairman, President, and CEO of Nucor Corporation. John Forsgren, retired Vice Chairman, Executive Vice President, and Chief Financial Officer of Northeast Utilities. Ann Gray, former president of diversified publishing group of ABC Inc. and our lead director. Jim Hance, retired Vice Chairman and Chief Financial Officer for Bank of America. Jim Rench, retired Senior Vice President and partner of Bechtel Group. Jim Rhodes, retired chairman, president, and CEO of the Institute of Nuclear Power Operations. Phil Sharp, President of Resources for the Future. Also seated in the first few rows are the members of our management team. In the interest of time, I will not introduce them individually. I hope you had a chance to meet some of them on your way in. If not, I urge you to do so after this meeting. I want to express my personal appreciation to the directors and the management team for their support and commitment to the company and also to you, our investors. I would also like to introduce Tom Bowman from our corporate security department, who is serving as Sergeant of Arms. Finally, I would like you to meet Charlie Mulhall and Jason Enoch of Deloitte & Touche, the company's independent public accountant. We will now proceed with the matters to be voted on. We have a declassified board of directors, which means all of the directors are up for election every year at the annual meeting. The board of directors has duly nominated directors Barnett, Bernhardt, Browning, DiMicco , Forsgren, Gray, Hance, Rench, Rhodes, Sharp, and myself. They have been nominated for election as directors for one year, terms expiring in 2013. These nominees, as set forth beginning on page five of the proxy statement, are hereby considered presented for the purpose of voting for their election as directors. The selection of Deloitte & Touche as the company's independent public accountant for 2012, as set forth on page 18 of the proxy statement, is also hereby presented for the purpose of ratification. A vote on an advisory basis of our named executive officer compensation, as disclosed on page 20 of the proxy statement, is hereby presented for approval. The amendment of the amended and restated certificate of incorporation of the company, as set forth on page 21 of the proxy statement, is hereby presented for approval. Also to be presented are two proposals we have received from our shareholders. The first relating to the preparation of a report on the financial risk of continued reliance on coal, and the second regarding an amendment to our organizational documents to require majority voting for the election of directors. We take all proposals submitted by our shareholders very seriously. I would like to ask Mark Manley to introduce these proposals at this time. Mark?

Speaker 6: Thank you, Jim. As Jim mentioned this year, we're not able to resolve two proposals, for the reasons outlined in our proxy. The board of directors has recommended a vote against both of these shareholder proposals. In the interest of time, we will not discuss our reasons for our opposition, but they are spelled out in the proxy statement made available to all of our shareholders. I will now ask the proponents and give them an opportunity to present his or her proposal and a brief supporting statement. I'd like to remind those presenting that your remarks should be limited to the proposal. There will be time later in the meeting for Q&A if you're interested. The first shareholder proposal relates to the preparation of a report on the financial risks of continued reliance on coal, as set forth beginning on page 22 of the proxy statement. Here to present this proposal on behalf of the proponent is Andrew Behar. Mr. Behar, would you come forward to the mic to present your proposal?

Speaker 1: Thank you. Members of the board, Mr. Rogers, and assembled shareholders, good morning. My name is Andrew Behar, and I'm the CEO of As You Sow, a shareholder advocacy organization. I'm here to move resolution number 5 on the proxy. As You Sow has filed this proposal on behalf of Lisa Renstrom. The proposal requests that Duke Energy Board of Directors report to shareholders on plans to reduce our company's exposure to coal-related costs and risks, including progress toward achieving specific goals to minimize commodity risk, emissions other than greenhouse gases, costs of environmental compliance, and construction risks. The proponent asks you to vote yes on proposal number 5. We believe that Duke's reliance on coal exposes our company to material financial risks and that Duke has not disclosed a long-term plan to mitigate these risks. In the past several years, a combination of environmental compliance costs, commodity and construction risks have rendered older, unscrubbed coal units uneconomical, and the prospects for the remaining coal plants are increasingly uncertain and risky. Coal is already a negative financial driver for our company. Duke has just announced that it will take a $420 million charge, $0.20 a share, for cost overruns at the Edwardsport plant , where costs have skyrocketed from $1.9 billion to $3.3 billion. This proposal is subject to the approval of the Indiana Utility Regulatory Commission, which is also examining charges of fraud, concealment, and gross mismanagement by Duke executives related to the plant construction. Duke already recorded a pre-tax charge of $265 million related to the project. Construction costs at another new coal plant, Cliffside Unit 6, have also risen to $2.4 billion from the $1.8 billion initial estimate. Despite its investment in new coal plants, our company is trying to defer or cancel coal deliveries from its existing plants. Duke expects to burn 40% less coal in Indiana than last year. Progress is also renegotiating coal contracts and selling coal to exporters, sometimes at a loss. Reports point to record low natural gas prices and weaker demand as the main drivers behind these moves. We're concerned that Duke's new coal plants might never be economical to operate. Like the new Spiritwood Station in North Dakota that was built with state-of-the-art controls but was mothballed before it generated any electricity. According to Fitch Ratings, fully 25% of Duke's total coal capacity is at risk of retirement due to lack of environmental controls. Once the merger with Progress is complete, the combined company will be the nation's largest utility and will depend on coal for 42% of its generating capacity. With 89 coal-fired units, 56 units lack sulfur dioxide controls. None have mercury controls. While both Duke and Progress are retiring coal plants, pending regulations and more stringent enforcement of existing regulations make it highly likely that Duke will have to make additional large investments to bring the remaining coal plants into compliance with evolving rules. At a time when coal's share of the U.S. electric market is shrinking and coal assets are losing value, investors must exercise enhanced diligence regarding investments in coal-dependent utilities. Duke's mitigation plan should provide specific goals to reduce the commodity, regulatory compliance, and construction risks from its reliance on coal so that investors will be more fully informed about how our company is reducing these material risks to shareholder value. We therefore urge you to vote "Yes" on proposal number five on the proxy. Thank you very much.

Speaker 6: Thank you, Mr. Behar. The second shareholder proposal relates to an amendment to our organizational documents to require majority voting for the election of directors as set forth beginning on page 25 of the proxy statement. Here to present this proposal on behalf of the proponent, the United Brotherhood of Carpenters and Joiners of America, is Randy Jenkins. Mr. Jenkins, would you come to the podium and present your proposal?

Speaker 8: Thank you, Mr. Chairman. I'm Randy Jenkins, representing the United Brotherhood of Carpenters pension fund, which along with other carpenter funds, holds approximately 610,000 shares of Duke Energy common stock. Our funds take a long-term patient investment perspective, and it is that ownership perspective that motivates our advocacy for majority voting in director elections. The majority vote standard proposal presents a simple proposition. In board elections, when there is no opposition to the slate of candidates, each nominee should receive half the votes cast to be elected. It's fair and reasonable. Unfortunately, the board continues to support plurality voting in director elections, which means that in uncontested elections, the outcome is guaranteed. Every nominee will be elected. Shareholders have no meaningful voting rights in these elections. The board's response to the majority vote proposal has been to establish a director resignation policy but keep plurality voting. Under the board's resignation policy, a director who is duly elected but who receives a majority of so-called withhold votes is required to tender his or her resignation for board consideration. Two questions for the board. First, why is this resignation policy built upon withhold votes that are not even legal votes? Second, why should a director who is duly elected in accordance with state law and the company's governance documents be required to tender his or her resignation? A director resignation policy only makes sense when combined with a majority vote standard. A majority vote standard used in uncontested director elections establishes a meaningful vote threshold and provides shareholders real voting rights. A companion resignation policy provides a post-election process in which the board can exercise its judgment and make decisions on the continued status of unelected directors. That is exactly what over 400 of the S&P 500 index companies and every major Duke Energy peer company has done in recent years. Once again, we urge the Duke Energy Board of Directors to establish a majority vote standard along with its director resignation policy and join the mainstream of American corporations on this important election reform. Thank you, Mr. Chairman.

Speaker 6: Thank you, Mr. Jenkins. That concludes our presentation of the proposals before us at this annual meeting. If you, our shareholders in the audience, have not previously voted your shares or if you'd like to change your vote, a vote by ballot will now be taken for each of these items. I turn it to Ms. Wright.

Speaker 7: Mr. Chairman, shareholders, the polls are now open. If you want to vote by ballot, please raise your hand. The polls will close in just a few minutes, so after you've received your ballot, please complete it and raise your hand again so we can collect it. Does anyone need a ballot? Does anyone else need a ballot?

Speaker 5: There's one down here and two over there.

Speaker 7: The polls are now closed. If you've not yet returned your ballot, please raise your hand so we can collect it now.

Speaker 5: I will now ask Mark Manley for the Inspectors of Election report.

Speaker 6: Thank you, Jim. Based on the proxies we received prior to this meeting, first, each nominee for director has received the approval of more than 90% of the shares voted, more than sufficient for his or her election. Second, the ratification of Deloitte & Touche as the company's independent public accountant for 2012 has received the required affirmative vote of shareholders sufficient to ensure ratification. Third, the approval on an advisory basis of our named executive officer compensation has received the required affirmative vote of shareholders sufficient for approval. Fourth, the amendment of the amended and restated certificate of incorporation has failed to receive the votes necessary for approval and therefore is rejected. Finally, the two shareholder proposals have not achieved their required votes necessary for approval, they have failed as well. As Nancy mentioned, any shares voted at the meeting today will be tabulated and included in the final vote and filed with the minutes of this meeting.

Speaker 5: Thank you, Mark. The final reports of the Inspectors of Election are hereby ordered to be filed with the minutes of this meeting. This concludes our 2012 annual meeting. What I would like to do at this time, if I may, since all of us are gathered, is to spend a few moments and make a few comments with respect to our company and where it is, then answer any questions that y'all might have. If I look back to last year from a shareholder's perspective, we did a terrific job. A 30% total shareholder return. We increased our dividend. We outperformed the indexes. We outperformed the indexes for not just last year, but for the last three years and for the last five years. At the heart of our value proposition, at the very heart, is our dividend, and we are very committed to maintaining that dividend and growing that dividend going forward. Also, I would say that from a customer's perspective, we have gone to work to modernize our generation fleet. We are spending over $7 billion that will allow us to retire 3,700 megawatts of old, high-emitting coal plants. As a consequence of that, we're building plants, because at the end of the day, our customers care about affordable, reliable, clean electricity 24/7. We're working as hard as we can to make sure that happens and we make this transition. Because when you invest $7 billion for modernization, by definition, that translates into higher prices, and we're very mindful of that. We're trying to make the transition in a way that minimizes the cost impact. At the end of the day, our consumers continue to get reliable electricity 24/7, and it is much cleaner than the electricity that they have received from us in the past. The other important thing that I would share with you is that while we've invested in our regulated business and traditional generation, two of the cleanest coal plants in the United States, one here in North Carolina, the other one in Indiana. The one in Indiana is using a scale-up of an advanced technology. That both of these plants really allow us to retire more the inefficient plants, the high-emitting plants. We're building two gas combined cycle plants, both here in North Carolina. Those plants, one was brought online last year, and as a consequence of bringing that online and with low gas prices, it's being dispatched after our nuclear and before our most efficient coal plants. The point is that we are really working to make this transition. We're also investing in our grid, our distribution grid. We're investing in productivity gains in the use of electricity, so that our customers will use energy even more wisely in the future than they have in the past. The other thing that we have done is we've made significant investments over the last three to four years in wind and solar. In fact, we're the fifth largest producer of electricity from wind in the U.S. We're building this generation in areas where the wind blows. We're building it in areas where there is a huge demand for wind. We have a video that I would like to share with you that talks about our investments in wind and the progress that we've made in developing the wind. If we could roll this quick video, it will give you a sense of our investments in wind.

Speaker 35: Since 2007, Duke Energy Renewables has invested more than $2.5 billion to build wind farms in communities across the country. Duke Energy Renewables is part of Duke Energy, one of the largest electric utilities in the U.S. Headquartered in Charlotte, North Carolina, Duke Energy serves approximately 4 million customers. In addition to operating fossil fuels, nuclear, and hydroelectric power plants in North and South America, Duke Energy owns and operates large-scale wind and solar farms across the U.S.

Speaker 10: Investing in wind power is just one way Duke Energy can create long-lasting quality generation assets that help us serve our customers with clean, affordable, reliable power. We're proud because in doing so, we extend the long, rich history of Duke Energy in benefiting our communities and the environment.

Speaker 26: The turbine directly behind me is Charlie, and he's about 1,200 feet from our house. The only time we hear him is when we step out the door if the wind is just right. Charlie doesn't bother us any at all. He don't bother the cattle. The wildlife are around underneath him. They get used to it just like they get used to anything else. The wind turbines haven't changed our life one bit. They've actually made it better, really. It allowed me to retire. It allowed my mother-in-law some security. My husband's happier because I'm home. We get the biggest kick out of watching them. It's fun to watch them.

Speaker 35: By investing in emission-free wind power, Duke Energy is reducing its environmental footprint and helping meet demand for clean, affordable, and reliable electricity. A key to Duke Energy's success is its commitment to work collaboratively with leaders in the communities that host its wind power projects.

Speaker 26: They were interested in hearing what the community had to say and how they can integrate a wind farm into the existing community and keep the good things that were here. I think they did that well, and I think that other communities will see the same result if they approach it with an open mind and have a good open dialogue with Duke. Tell you that Duke came on, they were the single largest individual donor ever for the Wyoming Senior Olympics in their 25-year history. They aren't just here for the short haul to get their money and get out. They're in and going to be a community partner for a long time, and we're excited about that.

Speaker 35: Duke Energy has earned a reputation as a premier renewable power project developer and operator. Virtually all of the zero-emission electricity generated at Duke Energy's wind farms is sold through long-term agreements to regional utilities, municipalities, and electric cooperatives throughout the U.S. These clean energy projects make good financial sense for the company and its customers.

Speaker 26: Like most entities, we're going to do a request for a proposal for a wind project, we're going to consider price, obviously. That's important to us. There are many other factors that we consider as well. We consider what is the experience of the developers that respond to our request. What's their track record with other projects? Financial stability is important. We want a strong counterparty to deal with. Duke is obviously a strong financial partner, they were building a project in our area that we could take advantage of, and we're happy we did.

Speaker 35: Duke Energy's wind power projects provide supplemental income to participating landowners, as well as valuable tax revenue that communities can count on year after year.

Speaker 26: What I am really excited about is my husband and I are both retired, and we have two daughters and four grandchildren. You look out here, and you're not only, in the future, leaving them this farmland, but you're leaving them a legacy of wind towers. What could be better than that? I mean, that'll be extra income for them, for their children's children. Hopefully, they're here forever.

Speaker 10: We take pride in conducting business in a forthright and responsible manner, focusing on safety and environment, and building long-lasting relationships with our partners in the community who make these wind power projects possible. At the end of the day, we're only going to be successful if everyone stands to benefit. If they can look back in five, 10, and even 20 years and say, "Yeah, I'd definitely choose to work with Duke Energy again," then we'll have accomplished our goal.

Speaker 5: We've invested in wind, which is so critical and an important component to the mix of generation in the U.S. in the future. I would now turn to carbon-free nuclear energy, which also remains a key component of our long-term modernization strategy. Nuclear energy is vital to our nation's and our world's energy future. It is the only technology that is available today that can reliably generate carbon-free baseload electricity 24/7. We're firmly committed to retaining our option to build new nuclear generation. The operating licenses for our existing nuclear facilities will begin to expire in the early 2030 timeframe. Now is the time to begin the process of determining how to best replace that generation or develop plans to extend the lives of those units. We expect to receive the operating license for our proposed Lee Nuclear Station in South Carolina next year. This two-reactor station could go online as early as 2021, only if we get appropriate construction cost recovery assurances from regulators in North Carolina. Our demand increases, and we see rising prices in gas. Additionally, we continue to perform due diligence on a potential purchase of a 5%-10% interest in the V.C. Summer Nuclear Station in South Carolina. As you are most likely aware, this project received its COL earlier this year. We believe that regional nuclear generation makes a lot of sense as it smooths out the customer rate impact and adds less immediate stress to the balance sheet, providing greater flexibility for our projects. Of course, the cleanest generator is the one we don't have to build. That's why we continue our efforts to help folks use energy more efficiently through a variety of financial incentives. Our programs, accompanied by new digital smart meters and transmission upgrades, have not only reduced electric usage, they have helped us to improve our system's reliability. This corporate commitment was recognized in 2011 when Duke Energy was named to the Dow Jones Sustainability World Index for the second year in a row. We were one of only 13 utilities worldwide selected out of 102 candidates in our industry sector. It's important, as I conclude, to say that every person in this company is committed to providing affordable, reliable, clean electricity, but doing it in the safest way possible, because safety is our highest priority of all the things that we do. With that, let me stop and open it up to any questions that y'all might have. Yes, sir.

Speaker 27: Thank you so much for the opportunity to make a comment. As a matter of perspective, my first job was working at the Bowater plant down in Fort Mill, South Carolina, working 10 hours a day, breaking concrete forms with a sledgehammer or digging ditches. The job at the time paid $6.10 an hour, and at almost three times the minimum wage, I thought it was all the money in the world. I worked all summer and bought my first two stocks at age 18, Duke Power and Republic Bank. I was told then that Duke Power was a regulated monopoly in a growth market, the kind of stock that was appropriately safe for widows and orphans. In my 27 years working for and owning a small family business in Charlotte, I've seen some changes. My grandfather remembered when Trade and Tryon were dirt roads. He was forced to quit school at 12 and go to work for AT&T as a messenger boy. He worked through the divisive labor strikes, and he told his family that the scab lists he was on were honor rolls. My dad, John K. Moore, was very much influenced by his father-in-law, having grown up on a family farm, and he worked from can't to can't, or can't see in the morning for lack of daylight to can't see in the evening for the same time. What I've seen lately are family fortunes built over generations dashed by the unavoidable fact that Wachovia and Bank of America were financially insolvent. I saw Glass-Steagall, the financial law of the land since 1933, scrapped by the banking lobby. The corporate leaders at the time and their bought politicians ensured us, the Charlotte residents, and the world, that we needed less regulation for growth and job creation. Wachovia shares now are worth a dime on the dollar. Bank of America limps along like a welfare queen by the grace of the American taxpayer.

Speaker 5: Do you have a question for me, sir?

Speaker 27: No, sir. I have some brief comments, and then I'll be out of your hair. If the merger goes through with Progress Energy, Duke will now become the largest lobby in the country, replacing Bank of America. Such an unholy marriage of big government and big business will not end well. Yourself and the politicians are going to push for new nuclear facilities that Wall Street, Main Street, and no private market on the planet will touch for two reasons, danger and cost. Since 1940, all the world's technology has produced no solution for uranium or plutonium waste, a carcinogen so toxic a dose the size of a pinhead is fatal for humans if ingested. If a merger goes through, the scrubberless coal plant and unlined coal ash ponds that share an aquifer with Charlotte's sole source of drinking water will remain. If the plan resumes, Charlotte, the City of Trees, will continue to have the worst air quality east of the Mississippi. Now, are we ready for the good news? Duke has the political might and the financial wherewithal to reverse course. Since the Fukushima nuclear disaster, Germany has shuttered its nuclear program and closed eight plants. Viewed as an honorable stance but risky financially, these plants closing have led to less emissions and 23% renewables Germany now boasts at its power generation. Also, since it has shuttered its nuclear program, it has become a net exporter of energy, and that's something that nobody saw. Not only that, let's see here. Also, it created tens of thousands, creeping up on 100,000, of new energy-related jobs in an economy that may just save the European continent. I've owned stocks all my life, and I've only sold two. I sold Duke Power at a loss after 20 years when it became clear that nuclear and coal were the plan for its future. I look forward to buying the stock again when the announcement is made to eliminate nuclear and go full on into wind conservation and smart grid technology. Thank you very much.

Speaker 5: Thank you for that eloquent statement.

Speaker 27: Thank you for the opportunity.

Speaker 5: When you move to Germany, you'll find that your rates are about four times greater than they are here in North Carolina.

Speaker 27: When you factor in the health costs, my daughter has asthma. She's been hospitalized.

Speaker 28: You have a humongous megaphone as it is.

Speaker 5: Shh. Okay. What I'd like for each of y'all to do, you've been here many times, I'd like for you to state your name and ask me a question and try to do it, if you would, within two minutes.

Speaker 27: Sure.

Speaker 28: My name is Scott Rubel from Fort Mill, South Carolina. I'm on the direct reinvestment plan, which I've enjoyed since October of 2008. I got in at the right time. I would like if you would look at this and add two elements to the statement. One regarding the cost basis and the other cost basis per share. That would save me a lot of time because every month I have to figure it out.

Speaker 5: Okay. I'll be delighted to have someone do that.

Speaker 28: Thank you.

Speaker 5: I don't know if you can trust me to do that.

Speaker 21: My name is Sarah Banky, and I've lived in the Mountain Island Lake community for 12 years.

Speaker 28: This guy is screaming about Duke, like you got to get off nuclear, you got to move to wind.

Speaker 21: I was 37 years old. My daughter, who's standing behind me, and you will hear from in a minute, was in kindergarten, and my son was still in preschool. As you can imagine, the words you have cancer are not ones the mother of young children wants or expects to hear. A few months earlier, when my daughter Anna had started kindergarten, I cried my eyes out, mourning her growing up too fast. Now, I wondered if I would see her grow up. I wondered if I'd even see her finish kindergarten. Life, at that point, became a seemingly endless series of doctor's appointments, CT scans, PET scans, biopsies, and surgeries. Even after I finally began chemotherapy, I underwent additional pulmonary function tests and scans of my heart. In cancer treatment, there is a fine line between the medicine that's strong enough to kill the cancer, but not so strong it kills you. Thankfully, I'm here five years later, alive and well, and now I wonder more and more, how did this all happen? What caused me to get sick? The doctors can't tell me for sure, but environmental issues are always suspect. From my living room window, I can see the smokestacks of Riverbend Steam Station. My house is a mile and a half from the pile of coal and the two massive unlined coal ash ponds. The school my children attend has purchased land less than half a mile from these two coal ash ponds. Since I've learned of these plans, I've asked my oncologist and my children's pediatrician their opinions on the school location. I wanted to see if either of them could make me feel better about it. My oncologist said he finds it disheartening how schools often seem to be put in the worst places because of cheap land. Strike one for feeling better. A cloud of worry came over my pediatrician's face when I asked her. "That's where they're putting the school?" she said. "I bet we're going to see a lot of respiratory issues. A lot of respiratory issues." Strike two. I recently had the opportunity to meet the renowned biologist, Dr. Sandra Steingraber. I asked her if she would let her kids go to a school that close to a coal-fired plant and coal ash ponds. "I wouldn't do it," she said. "I wouldn't do it." Strike three. Someone recently showed me an aerial photo of the coal ash ponds and the ring of dry ash around the edges. I'm sure that I don't have to remind any of you what is in coal ash. Arsenic, lead, mercury, cadmium, chromium, and selenium. These and other toxicants in coal ash can cause cancer and neurological damage in humans if inhaled or ingested. Children are at particular risk because of their growing and developing bodies, and because pound for pound, they eat and breathe more than we adults do. A school doesn't get built overnight. My children will be going to school on a construction site for years. How do I know that coal ash will not be getting stirred up during construction or blowing through the breeze from the coal ash ponds next door? Can you tell me what three doctors couldn't? Can you tell me with 100% certainty that my children will be safe going to school near Riverbend Steam Station? Can you tell me with 100% certainty that Riverbend Steam Station will not make my children sick? Can you tell me that living near it won't make me sick or hasn't already made me sick? If not, why is it still there? First, we thought the plant was going to close in 2015. Now we're hearing it may be as late as 2020. Can you please tell me exactly when it is going to close? Thank you.

Speaker 5: Thank you. That's a wonderful story.

Speaker 21: It's a wonderful story.

Speaker 5: It's wonderful because you're here today.

Speaker 21: I don't want my daughter to go through it.

Speaker 5: No, I understand. Been there, understand that. Let me assure you, I can't guarantee you 100% certainty, but I do know the Environmental Protection Agency of the U.S. has reviewed this, and they found no problem. Our plants are in compliance with all regulatory requirements, which means that they're not creating any harm downwind. If they were, I'm sure the EPA would regulate them in a way, as they have in the past.

Speaker 21: It's my understanding that the EPA does not regulate coal ash.

Speaker 5: That's correct, because they found there is no need to regulate coal ash. It is now under consideration. More to come on that. Let me hear from your daughter, if I may. Can you get that?

Speaker 29: Yes.

Speaker 5: Let's get this where you can do it. There you go.

Speaker 29: Hello, my name is Anna Binkey. I live on Mountain Island Lake, and I'm a fifth grader at Mountain Island Charter School. At my school, we are in mobile units, but we will soon be permanently located next to the Riverbend Coal-Fired Plant. That's a big problem. You rarely use the plant, but you still put out hazardous fumes and let water from the coal ash ponds into our lake. I like to swim in what I thought was clean lake water. Guess not. Now I know that I've been swimming in a coal dump. Not only is Mountain Island Lake for family fun and boat rides, it's also a source for Charlotte's drinking water. I don't want to drink ashes from coal. That's gross. It's a lot easier to shut down the plant than to contaminate our drinking water and have the risk of health issues. I go to bed every night scared that I could get cancer from that plant. My mom is a cancer survivor, and I saw what she had to go through. I don't want to go through that also. First, we thought that the plant was going to close down in 2015. Now we're hearing 2020. Can you please tell me when you are going to close down the plant and clean up the coal ash? Thank you.

Speaker 5: Thank you very much for your question, and I'm glad you're here today. I will assure you that when we operate our coal plants, we operate them in the cleanest way possible. I believe that lake is safe, and I believe the air is safe, and I think you'll be fine. Yes, sir.

Speaker 21: Thank you, Mr. Chairman. As a point of reference, I believe you serve as chairman and CEO. In the interest of hearing from an independent director, I would like to direct my questions to the lead director. Would she be able to answer my questions?

Speaker 5: She would be able to, but in the interest of, we have a long line of people here that want to talk. If you would, please, I will answer questions on behalf of the board. If you could quickly ask your question so I can answer it.

Speaker 26: Okay. You're on record for affordable, reliable, and clean. At the same time, you find it necessary to file for a rate this past year of 16.9%. Is that correct?

Speaker 5: That's correct. We settled for 7.5%.

Speaker 26: Yes. Wanting a 10, 11.9% return on equity. Is that correct?

Speaker 5: We negotiated a 10.5% return on equity.

Speaker 26: Okay.

Speaker 5: Now you only have one more question left.

Speaker 26: Why is that?

Speaker 5: We have a limited amount of time. We have a lot of people here.

Speaker 26: Yeah.

Speaker 5: I'm just asking you to be respectful of others.

Speaker 26: Yes

Speaker 5: Ask just one more question.

Speaker 26: Okay. I would ask you, at a time when we are in one of the worst recessions in our history, and our ratepayers are being asked to increase their payout at a time when Duke Power wants 11.9% return, and the attorney general has filed a lawsuit, are you acquainted with Mr. Warren Buffett?

Speaker 5: I can't say he's a personal friend.

Speaker 26: Yeah.

Speaker 5: I'd like to be able to say that.

Speaker 26: Okay. Well, I would like to.

Speaker 5: I actually would like to be his son. That's another story.

Speaker 26: Well, I would like to remind you that he spends hours answering questions, and this is the only time that a shareholder can come and have an opportunity to discuss it. In the interest of the seriousness of this period in our history, which I think we can all agree, we have seen something that we have never seen before. What I want to talk to you about, and I want to direct this to the directors, and I want to direct it to the independent directors. Your corporate governance has a lot of similarities to Bank of America and Wachovia. I spoke at those meetings a number of times, and it's in this respect, high risk, taking undue risk, without accountability and disclosure. You also have a corporate governance that allows the chairman to be the CEO. This is bad policy. It is not in the best interest of we, the shareholders. The other thing is, you have continued to authorize extreme compensation. $7 million last year, $10 million this year, or $11 million, $15 million next year. The other thing, you do it in a way that your CEO receives stock, so he pays less taxes on his income than the average person sitting here. I'm paying the maximum on earned income, but on dividends, they're taxed at 15%. I want to tell you today.

Speaker 5: What's your question, sir?

Speaker 26: My question is that Duke Power and you, the leadership, are not paying your fair share of taxes, and you are operating in a business, in my judgment. Now this is my opinion.

Speaker 5: Your question

Speaker 26: The question is that you are destabilizing our society and our community, and you are headed in the direction of Wachovia and Bank of America. How, at a time in our history, can you take out millions and millions of dollars, and many people cannot afford to pay their light bill?

Speaker 5: Thank you for your comment. I never heard a question. Thank you for being here.

Speaker 26: My question is, how can you take out millions of dollars while the many homeowners are having difficulty paying their light bill?

Speaker 5: I will answer that, and please take your seat so someone else could come up here. The answer to your question. is simply this. I get paid in stock. I get no cash. On the stock that I get paid, I pay the ordinary income tax rate. I do not pay the 15%. It's only when I get dividends that I pay it.

Speaker 26: Yeah.

Speaker 5: That's point one.

Speaker 26: Yeah.

Speaker 5: Point two, we had a 7.5% rate increase. You hear these people talk about cleaning up the environment, reducing the emissions from our plant, using more efficient plants. That's what that investment was about. There's a cost. There is cost to cleaner energy. This country has had the good fortune of having low-cost energy. We provided universal access, and we now are cleaning that up, and it is not for free. When the man talked about Germany a moment ago, they pay four times more than what you pay, and they have a policy that will prove to be a failure because they will import their nuclear from France and the Czech Republic. Thank you very much.

Speaker 26: Isn't that good? Let me make one more point.

Speaker 5: No. No, no. Please sit down.

Speaker 26: May I make one more point?

Speaker 34: No.

Speaker 26: If they have to pay four times as much, if this young woman can grow up and lead a healthy life, I agree with you, it costs money to clean up our environment.

Speaker 5: Why are you complaining about the rates?

Speaker 26: You're taking out millions of dollars. You've lost the proportionality between the front-line worker.

Speaker 5: Thank you for being here.

Speaker 26: Well-

Speaker 5: Thank you.

Speaker 26: Thank you.

Speaker 5: Thank you.

Speaker 26: I would-

Speaker 5: Thank you.

Speaker 26: I would hope that you would.

Speaker 5: Yes

Speaker 26: you would move forward.

Speaker 5: I'll-

Speaker 26: at a less risky place.

Speaker 5: Thank you. Yes, ma'am.

Speaker 30: Okay. I'm going to.

Speaker 5: State your name.

Speaker 30: Sure. Okay.

Speaker 5: State your question and- quickly.

Speaker 30: Okay. Jim, I'm Debbie Arneson. I live in Wadesboro, Anson County. As the cold winds blow, I have grandchildren, and they are affected by it, and this is why I'm here today. I have one thing. I want to bring some information to you and to the board members. I have a very urgent and very special request at the end, and I want to know if you can help me. All right? I'm serious. I felt like crying over there before. I have a very different message this year after speaking with other shareholders. I did speak to some on the phone, by email, and some of them have very different ideologies than I. Different politics, different everything. We completely agree Duke should not be squandering shareholder money on politics, lobbyists, and media to sell the public more Fukushima-style nuclear or dirty coal and gas factories that cause our precious grandchildren asthma. Since Wall Street thinks nukes are too risky to finance, coal has never come clean, spending shareholders' funds without our approval to buy political support to force taxpayers and ratepayers to fund the consequences is risky business. Duke should be investing aggressively in distributed renewable energy like solar, wind, and geothermal while it works out a Google-type smart grid and energy storage model that is profitable, sustainable, and clean no matter how fickle politics, fuel prices, and public policies go. You can't pay those guys. They won't come around anyway. I was glad to learn Duke is doing a little better. Charlotte went from 10th worst ozone to 18th worst. Unfortunately, these half measures have not saved my second grandson from developing asthma living east of Charlotte as the cold winds blow. I am furious at the thought of ratepayers like myself and the parents of my sick grandchildren being forced to pay in advance to build more fossil fuels and nuclear factories. I am furious that residents and small businesses will pay two-thirds more to subsidize huge commercial businesses like Google, Yahoo, and Apple. I am furious that the air my grandchildren and the rest of us are forced to breathe will be polluted to produce dirty energy to sell cheaply out of state. I feel like we are on the Titanic, and the captain, Jim Rogers, and crew, board members, and other executives are so far unwilling to look just ahead at the climate and environmental disasters we are racing towards. With others, I have tried, and you know I have, Jim. I've been here every year since 2007. I've only gotten greenwashing and half measures, which are going to avail us nothing once we hit the iceberg. Energy corporations and municipally owned utilities in Europe and cities in the U.S., like Gainesville, and you well know it, and Canada, Ontario, have democratized their grids with distributed rooftop solar. Duke Energy could make more money in a third industrial revolution based on smart grid energy storage and connection, not sales of ever more finite resources that harm customers and depend on huge cash flows to politicians, lobby groups, and the media. Sounds like risky business to me. Here's my request. Jim, I love you. I do love you. Please stop collecting visionary awards and just look ahead. Board members, please help him turn this Earth ship around before it is too late. I have individual copies of this for each board member. I have looked up your backgrounds. I have addressed that.

Speaker 5: Thank you

Speaker 30: Here's your copy, Jim.

Speaker 5: Thank you.

Speaker 30: I'd like to have those handed to the board members, please.

Speaker 5: I'll do that. Thank you so much. Next, then I'll go over there.

Speaker 31: Hi, I'm Nancy Ellett Allison. I pastor Holy Covenant United Church of Christ here in Charlotte. I want to thank you publicly, first and foremost, for taking a justice stand on Amendment 1, saying that it is an inappropriate amendment for business. I also want to call you to a greater justice, and that is the justice of being a steward of all creation. Our world's difficulties since 2008 demonstrate the ways our self-serving greed, all of ours in this room, has caused us to lose our moral center. Duke's amazing profitability in these last five years reminds me of the scripture passage that says, "To whom much has been given, of them much is expected." Every system, Duke Energy, the church, my church, every system is inherently evil. It serves itself alone. Within every system are individuals who can act as moral agents to redeem the work of that system. What I would like to call you to today and to ask you is can you expand your understanding of your role as a steward of God's creation, truly focused on renewable energy rather than as someone who simply serves the coal-consuming system? Can you serve not just the shareholders in this room and the billion shareholders beyond or even your consumers, but can you serve the common good of a world in the throes of climate change caused by our ongoing fossil fuel consumption. Can you be that moral agent to make a difference?

Speaker 5: Thank you very much. I'm doing my best. I think the film demonstrates the commitment that we have made to wind. I think that here in North Carolina, where a lot of our power comes from hydro, which is clean, 50% of our power comes from nuclear that has zero greenhouse emissions.

Speaker 31: It has terrible consequences otherwise.

Speaker 5: Yep, I understand, but we're managing that in a safe way. The most important point that I can leave with you, and I thank you for being here, the most important is electricity is key to prosperity of our economy. Every way you generate electricity has pluses and minuses. There's good parts of coal, and there's a lot of bad parts. Same with nuclear, same with hydro. There are a lot of people that don't want to see dams built. Same is true of wind and solar. The opposition to wind and solar is great. My job is to serve the customers, to serve the investors, and to serve all these stakeholders in a fair way. Thank you for your call to action. I'll take it as a mission. Thank you.

Speaker 31: Remember, your first duty is to the Earth.

Speaker 5: Thank you. Yes, ma'am.

Speaker 32: Hello, Mr. Rogers, board of directors, shareholders. My name is Nathalie Simmons Jorge. I have been a Charlotte resident for almost 10 years. I studied mathematics and economics at the University of Virginia and received my MBA from Chapel Hill. I'm an entrepreneur and the mother of two children, ages 10 and eight. Sometimes before I go to bed at night, I write reminders to myself and leave them by my bathroom sink. For as long as I can remember, my early-to-rise physician husband has humored himself by sneakily adding his own agenda items to my to-do list. One that makes a recurring appearance is for me to make $100 million. To my husband's dismay, I have not yet checked that accomplishment off. Duke Energy

Speaker 5: I get that request also.

Speaker 32: Duke Energy, on the other hand, generates $100 million in revenue every few days. Not only do customers and shareholders depend upon Duke Energy for reliable power and positive rates of return, but our entire region also views Duke Energy as the engine for future economic growth. The stakes are high, multi-billions of dollars high, which leads to my question about nuclear power. I tried to Google how much it costs to build a nuclear power plant, and I couldn't come up with a straight answer. $10 billion, $20 billion, $30 billion. The numbers are huge. Many variables affect the ultimate cost projections, and small variations in future fuel and operating costs can have an exponential impact. The lengthy 10-year-plus construction timeline adds additional risk. 10 years and possibly more to build a nuclear power plant seems like a risky bet when we think about how much technology can evolve in that same timeframe. A little over 10 years ago, in October of 2001, while we were still reeling from September 11th and I was learning how to care for a newborn, a new device was introduced, the iPod. A little over 10 years ago, the first iPod weighed 6.4 oz, was 4 in high by 2.4 in wide, had a black and white display, and cost $400 for five GB of storage capacity. 10 years later, the iPod Nano weighs less than an ounce, is 1.5 sq in, has a multi-touch color display, provides eight GB of storage capacity, and costs $129. 10 years later, we also have the iTouch, the iPhone, and the iPad. My questions are these: If Duke Energy ties up the majority of our investment capital for the next 10 years building huge nuclear power plants while the rest of the world continues to develop sleeker, smaller, and more mobile energy solutions to manage the production, distribution, and utilization of energy, what is the opportunity cost? Where will our community be in 10 years if nuclear power turns out to be more like a cassette player than an iPod? Wouldn't it be great if a premier North Carolina company like Duke Energy instead became a world leader in alternative energy development and efficiency measures?

Speaker 5: Thank you. That's a very good question. I would just quickly answer that by saying you saw the film and the investment in wind, we're investing in solar. We're investing in technologies that help customers reduce their use, I think that's the great frontier. We're investing in a digital grid that'll allow us to reduce line loss, which makes our system more efficient. We're looking at small modular reactors instead of large. We're looking at different distributed generation sources, which all could be the iPods of the future for our industry. At the same time, we are making sure the light, when you throw the switch at home, your lights come on. We're looking at ways of transitioning the system to a cleaner system, but in the recognition that in that transition, it obviously will cost more. We're trying to get the balance right between affordable, reliable, and clean. That's our mission. Thank you very much. If you would please, we're kind of running out of time. Just state your name, please.

Speaker 25: I have a question. I'm not going to have a story. If you would stop interrupting and let people talk. Oh, no. Come on. Hi. Thank you for letting me speak. My name is Lydia Drummond Ryan Becker, and I just have a few questions here. Just because you believe the rivers and water are safe doesn't make it so. I'm sorry, I cannot take your word for it, and with the statements you've made here today, you've lost a lot of credibility in my eyes. I want to know whose pockets you are in in the EPA, because obviously there's a problem that you and the EPA are turning a blind eye to, and I want to know why. What steps are you taking to properly dispose of coal ash instead of in our drinking waters? I don't mind paying more for electricity as long as it's clean and safe, and it's safe for everyone, for us, and for our future generations. Also, I want to know if you're going to be passing out free potassium iodine for all of us here, your precious customers and shareholders. I have hypothyroidism, and so does my dog.

Speaker 33: It's kind of a coincidence. We both drink the same water. What are you doing to prevent Fukushima from happening to us? Building another nuclear power plant doesn't sound like you're taking it seriously. Thank you.

Speaker 5: We are taking the operation of our nuclear plants very seriously, and they've operated over 40 years with no fatalities. We've operated them in a really safe way. We've also operated all our units consistent with the laws. I can't speak to what the drinking water is. I'm not in that business, but I will tell you that with respect to the emissions from our plants, our emissions are consistent with EPA regulations. Yes, ma'am.

Speaker 11: Hi, Mr. Rogers. I'm Gail Touch, and I've been here a couple of times before.

Speaker 5: Hi.

Speaker 11: I'm a longtime shareholder, starting with my family having shares in Cincinnati Gas & Electric. I'm also a lawyer. I've got a master's in environmental science from the '80s. I'm now the board chair of the Yadkin Riverkeeper up in Forsyth County with the Yadkin River. I'm not here on their behalf. I'm here as a shareholder, and I really care about my investment, and I'm also a ratepayer. I care about how much I have to pay for electricity. Several years ago, when I was here, I made a lot of points about coal. Quite frankly, I know that you're moving, we are moving towards trying to get rid of the coal power plants. It's not fast enough. It probably will never be fast enough until they're all gone. My concern is that just like it's slower than what you had told me it would be about five years ago on the timescale, same with the nuclear power plant. Here we want to get a license and construction permit and construct the Lee nuclear power station. How much longer is that going to take? It always takes more time than what we anticipate. It always costs more than we anticipate, and those statements that have been made before me are accurate. The overruns are extraordinary. The Fukushima accident did happen. Three Mile Island happened. Chernobyl happened. Nobody expected that to happen. Fukushima was extraordinary. That can happen here. The weather patterns that are taking place now, today's supposed to be 90 degrees Fahrenheit, and it's May the 3rd. When I was studying environmental science back in the '80s, global warming was supposed to be 50 years. It's 25. It's where they probably thought it would be back then now. I've got more comments than I really need to make.

Speaker 5: How about a question?

Speaker 11: My question is: Can I sit down with you and any of the board members and discuss these issues? Can we schedule a time to do that? The environmental issues, and I just need to make a couple of comments, because you said that.

Speaker 5: Ask me a question, please.

Speaker 11: greenhouse gases, there's no greenhouse gases from running nuclear power. The processing of uranium has very intense greenhouse gases. The pollution, we're forgetting, or you're leaving out, that all that pollution and where the waste is going. Since I was here last time, two things have happened that are different that I'll state. One is Fukushima, which I already mentioned. The other is the closing, or the termination, of the Yucca Mountain high-level radioactive waste repository. Now we've got a whole other issue of where those wastes are going to go. Last time I was here, you were very upset that the federal government took our money to be able to use it towards the construction of the high-level radioactive waste repository. Now we're stuck with the waste, and we don't have that money. My question really is, although there's a whole lot of other things I wanted to say, I'd really like to be able to schedule a time to sit down with you and any of the Board of Directors that would like to join us, and if I can do that.

Speaker 5: I'd be delighted to find a time to sit down with you and talk to you about this in detail.

Speaker 11: Will you find the time?

Speaker 5: I will find the time.

Speaker 11: Okay.

Speaker 5: Thank you. Yes, sir.

Speaker 33: Good morning, Mr. Rogers.

Speaker 5: Good morning. Your name?

Speaker 33: My name is Gus Presley. I live in Clemmons. I also have property in Mooresville, I'm a shareholder and a ratepayer. A few years ago, I had the opportunity to visit Europe, I saw something astonishing there. I saw wind turbines much like yours, except off the coast in a number of countries. Being an engineer, I thought I'd do a little bit of studying, I want to tell you what I found, then I want to ask you what is in the future for Duke Energy with offshore wind. This is really an astonishing story, I'll be brief. First of all, offshore wind turbines have been generating power in Europe for 30 years. Proven technology. Prices have plummeted. At the end of 2011, there were 1,371 turbines at 53 farms in 10 countries generating 3.8 gigawatts of power. There's 10 times that much in planning, under construction, or on the drawing boards. China already has 233 megawatts of offshore wind installed and plans almost 5,000 megawatts by 2020. Jobs, of course, many jobs, but I know that's not a shareholder's, not our major concern. By comparison, I did a lot of research. I found your sheet indicating you have 1,776 megawatts. That's an interesting number, isn't it? The birth of our nation. That's a great start, but it's all onshore and it's all out West. Let's bring it home. North Carolina, the research says, and the universities have been studying this, has the best, underlined, the best, most reliable, strongest wind on the East Coast of the U.S. It's a great power source. Can meet most of our energy needs over the next decades. New Jersey, Massachusetts, Virginia, Maryland are all marching ahead. North Carolina, as far as I can see, has no firm plans. We heard about coal, we've heard about nuclear. Offshore wind should be in our portfolio, I believe. The U.S. is generating 10% of its power from renewables. North Carolina, less than 2%. My question: What is so unique about North Carolina and Duke Energy that we have no serious plans to mine this clean, reliable, and ever more affordable form of energy? Isn't our company in danger of failing to meet power demand as our nuclear plants are delayed, failing to deal with climate change and health issues, and failing to invest sufficiently in alternative energy in order to meet our power demands and for industry and jobs? Just like other forms of technology, it is more expensive now. I know that. It's dramatically more expensive. Based on your latest rate applications, cost of our forms of energy now continues to go up. All the charts show that the cost of offshore wind continues to come down, and those charts have gone across in my lifetime and yours, and probably within the next 5 to 10 years. You don't get there overnight. I ask you, what are your plans? What are Duke Energy's plans? To not, I won't say slow this project down, but you did initiate and then canceled a pilot program a few years ago.

Speaker 5: Sure.

Speaker 33: What are you going to do aggressively, as aggressively and more aggressively than nuclear to go after this clean, reliable, and more affordable, in the long run, form of energy?

Speaker 5: That's a good set of questions, and I'm going to walk over here as I answer it, so I can start down the other line. Here's the way to think about it. We operate on all the above. We're reluctant to pick any one source and go with it. Not all wind, not all solar, not all nuclear, not all coal, not all gas. It's the balance, because we don't know what the technological developments are going to be with any of those. That's an important point. With respect to the wind, when you look at wind maps, there is no wind, as some of you all have heard me say before, in North Carolina. Now, you can get it on the ridge lines, but I don't think an environmental group will allow us to do that. We could build it around the State House. There's a lot of wind there. Okay. We could build it offshore. If we build it offshore, and we looked at a project like that, the costs were prohibitive, and the Army Corps of Engineers made it impossible for us to build a transmission line to the offshore wind. More work to do on that. We have not given up. This film today should give you a sense. We wouldn't have shown it if it didn't demonstrate our commitment to wind. Thank you very much. Yes, sir.

Speaker 12: Yes, my name is Jim Center, and first I'd like to thank you and the board for being here and taking the time to listen to us. I know there's some hard comments to listen to. I am president of Potluck Power Company, which is a small solar generating company. We sell our electricity through Piedmont EMC, I'm part of the distributed renewable generation system that was mentioned before. We've heard about risk, the risk of coal, the environmental risk, the health risk. I'd like to talk about another risk, and that is the risk of terrorism. It was said after 9/11 changed everything, that's not true. One of the things that hasn't changed is our dependence on large, centralized power plants that are extremely vulnerable to people who would wish to do us harm. One transmission tower goes down and through a cascade of failures, an entire region could black out. I'm sure you're aware of this. There are alternatives. John Blackburn, former chair of the Duke Economics Department, former chancellor of the university, has demonstrated how with a combination of wind and solar, we could meet our needs. We don't have to build these big, centralized power plants with bat targets painted on their sides. While I'm glad to see that Duke Power is developing these means I would encourage you to do more and be as aggressive with the lobbying to get on the Corps of Engineers, to see it happen. That's my comment. I have two questions. As CEO of an operator of a nuclear power plant, are you really not aware that the enrichment of uranium is one of, if not the most energy-intensive industrial processes known to humankind? I think only smelting aluminum uses as much power. To claim that nuclear energy is carbon-free, is inaccurate. Well, it is inaccurate, I would hope that you would be aware of that. My one question is, if coal ash is so safe, when are your grandkids going to be going to school at a school next to a coal ash pond?

Speaker 5: Well.

Speaker 12: If it's that safe.

Speaker 5: Thank you for your questions, and two answers. One, neither my children or my grandchildren, unfortunately, live in North Carolina. The second is, I would be comfortable with them living in that same situation, mainly because, based on the studies I've seen, I'm not concerned. I know the EPA is looking at it, and I have confidence in our government to do the right thing on environmental issues. With respect to uranium enrichment, you're right. The actual production of electricity, they're zero. Here's another important point. Even those solar panels that you saw, I mean, the wind turbines, the actual manufacture of those wind turbines generate a lot of CO2. All I'm saying is, there is no perfect answer in the generation of electricity. I wish there was. I wish I could snap my fingers and tomorrow morning produce electricity in every home without any environmental footprint. That is not for today, maybe not tomorrow. It's going to take many years before that happens. Thank you very much for being in the solar business. I actually think solar will trump wind in the long term because of its distributed nature. You're on the right mission.

Speaker 12: Thanks.

Speaker 5: Yes, sir.

Speaker 13: Good morning, Mr. Rogers. Good morning, shareholders and board. My name is Todd Zimmer. Begin by asking everybody to just take a deep breath. Get calmed down. I grew up in Charlotte, North Carolina. A lifelong Charlottean. I want to give a little bit of background about myself, because I'm not unique, and then ask my question. It will be within two minutes.

Speaker 5: Okay.

Speaker 13: Yeah, I grew up here. I can tell you that one in four children in my generation, and one in four children today, 24 years later, are going to grow up to have respiratory disease and asthma because our air quality is so poor in Charlotte. These are ailments that they're going to live with their entire life. They're going to pay for these ailments every single day for the rest of their life. I remember when I was on the playground in first grade, being jealous of other children who had asthma inhalers on the playground because it was so common that I thought it's a toy or something like that. My playmates across the street had to hook themselves up to electric nebulizers twice a day so they could breathe. My younger sister developed asthma while living in Charlotte. I remember taking a walk around our block one summer and having her collapse to the ground and struggle to breathe and even face death because she didn't have her inhaler. My mother is a pediatrician in Charlotte. Maybe she's cared for some of your children who may have asthma as well. She's developed asthma from living here. My story is not unique. There are many children in our community and communities across the country who have similar experiences because of pollution from coal plants. Additionally, this generation is looking at a future where we may see a nine-degree increase in global average temperature. There's a whole generation growing up right now who are having their health and their future mortgaged by our continued reliance on dirty energy. I know this is a risky business model for us, for your customers, and for every person in this room who's breathing air. We know it's risky because there's a full month out of every year where we risk permanent lung damage by walking the dog. If you look at the Mecklenburg County Air Quality website, there's a heading that says, "Afternoons are unhealthy." That's truly extreme. What I want to ask you, is about making a commitment to change. In your business plan for North Carolina, it shows a 3% energy generation from renewable energy over the next 18 years. That's business as usual. That is a whole other lifetime from birth to adulthood, where we're going to be subjecting children to air pollution, to the risks of nuclear energy, which are severe, and we can look to current events to know this. The business plan we have for this state right now is risky for Duke, because the days of denial and confusion about who's responsible for these pollutions are over. The children who are growing up now are not going to sit idly by. We know, Mr. Rogers, that Duke Energy spends money to prevent necessary and reasonable environmental protections for coal ash, which is making the woman who spoke earlier sick and many others. You're spending money at the state house level and at the federal level to prevent protection from the pollutions that we're paying for. This generation is going to make sure that Duke is held responsible for those malpractices. I think I could ask a lot of things from you for change. What I'm asking right now is Shareholders, please don't let Duke Energy sink massive amounts of capital into new coal plants and nuclear plants over the next 20 years. It will not pay off. It will be a huge liability, and you'll have to sell your Duke shares at a loss, massive loss. Please don't do that for the sake of people and for your own self-interest. Mr. Rogers, you know that there's more offshore wind potential in North Carolina than any other state on the East Coast. Will you please make a commitment to increase the amount of energy generation in North Carolina that comes from renewable energy and walk us back from the edge of climate change and the edge of nuclear waste that will persist not just for our grandchildren, but for our grandchildren's grandchildren, our grandchildren's grandchildren. You're making decisions that are going to impact the entire human race's future and the children of every living species on planet Earth. Can you make a stronger commitment to developing renewable energy and walk us back from dirty energy, please?

Speaker 5: Thank you very much. We are doing our best to develop renewables. There's evidence of it today. We have gone from no investment to the fifth largest in the U.S. This is a long cycle business, and again, you can't snap your fingers and do it overnight.

Speaker 13: I wish you could.

Speaker 5: If I could, one way to do this is to ask everybody to turn off their lights, turn off their TVs, turn off your computers, don't use electricity. That's not going to happen. That would ruin our economy. We've got to make the transition. I am with you on this. We will make the transition. We've got to do it in a thoughtful, reasonable way.

Speaker 13: Yeah

Speaker 5: Not in a way that drives cost up. Trust me, here in Charlotte, the afternoon problem, that's tied to the use of cars. Maybe you ought to be ride bike.

Speaker 13: I do

Speaker 5: Not driving a car. It's not just our power plants, it's really the cars that create the smog and the pollution.

Speaker 13: Sure.

Speaker 5: The only other point I'd make, because I have asthma, but it's allergy-induced asthma, and in this time of the year, it's always worse than any other time of the year. Thank you very much.

Speaker 13: Sure.

Speaker 5: Now, we only have 10 minutes left, and so I'm going to ask everybody to just give me your name, ask me your question, and I'll do my best to answer it.

Speaker 14: My name is Tommy George. I'm an entrepreneur in Charlotte, grew up in Charlotte, 20 years in business here. My concern is this is a headline from The Charlotte Observer on December 15th. I'm not sure if you remember the article. It goes as such, just the first paragraph. "The developer of the largest wind farm ever proposed in North Carolina says the project has stalled because no utility wants to buy the power the project would produce." That's a concern because it speaks to maybe because it wasn't Duke's project that didn't want to buy the power. My concern is companies like Facebook, Google, the big Apple, the big centers that come here, they're offered this power at nearly nothing. I'm a small business person. I'm paying, I couldn't tell you the rate, but a much higher rate than they're paying. I just think it's unfair. My business with the 20 employees I have, I know those data centers generated jobs to begin, construction jobs. Once the projects are finished, there's not as many jobs as I have as a small businessman. I just think it's unfair that I pay more and the homeowners, ratepayers pay more than these people pay, where you're having to put more projects online because these data centers come, they use so much power, not to mention the water that they use. I'm just concerned that people like myself, small businesses like myself, need to be incentivized to be able to have cheaper power. I'm willing to pay more for my power. I'm paying a lot for my power, and I'm happy to pay more if it comes from renewables. One other question is, the $4 to the North Carolina green on the bill that I pay every month, where does that money go and how is that being spent? I've been paying that for years, and I just want to know where that goes. Thank you.

Speaker 5: Thank you. I understand your point on the economic development and bringing the server farms, in that part of our state, that creates jobs and tax base that allow us to fund the schools. There's always issues about how you allocate costs between different customer classes, including special rates to attract business to our state. I get that point. The other thing is I don't really know where that $4 goes, if you take it off, I think it probably goes to where we say it does, I'll check into that. Thank you. Yes, ma'am.

Speaker 15: Hey there. Thank you very much.

Speaker 5: Yeah.

Speaker 15: My name is Jacqueline McClure. I'm a member of Charlotte Greenpeace, I'm here on behalf of thousands of North Carolinians who are concerned with Duke Energy's current business model. I'm a shareholder, I'm a ratepayer. We all know that coal is risky business. Think back to 2009 when you were interviewed with "60 Minutes" and you took a helicopter ride. You were remembering when you were 41 years old, the first time that you flew over a coal-fired power plant, and you said, "Oh, gosh, I'm responsible for this?" Well, I'm here to remind you that you are responsible for that. You and Duke Energy are responsible for destroying the mountains of Appalachia. You and Duke Energy are responsible for polluting our air. You and Duke Energy are responsible for poisoning our water. I'm here today to present you with over 8,000 petitions that people across the state of North Carolina have signed. I'm here with people who face the ravages of mountaintop removal. I'm here with people living near Riverbend Coal Plant who are concerned about the coal ash ponds on Mountain Island Lake. I'm here with a group of children who are standing outside who have asthma because of the coal plants. We're all here, and we all know what Duke Energy is doing. I'm here to tell you, Mr. Rogers, that we're not going to stand by and allow you to continue to make profits at our expense. We're asking you to take full responsibility for the impacts of your risky business model. We will not pay for dirty energy. I'm sure you remember last October when thousands of people from across the state of North Carolina came together to protest the rate increase that you requested, 20%. It was lowered to 7%, that's not enough. We will not stop. We will continue to stand together. We will continue to attend public hearings. We will continue to contact our legislators, we will continue to rally in the streets to protest the rate increase that we know you're going to ask for by the end of this year. We're not going away. We want clean, renewable energy for our community and for our country. We want drastic energy efficiency. We want you to stop destroying the mountains that we love, stop polluting the air that we breathe, stop poisoning our drinking water, and stop raising our rates to pay for electricity that hurts us. Last week, Cincinnati, Ohio, dropped Duke's dirty energy and replaced it with FirstEnergy Solutions that will provide 100% renewable energy for the people of Cincinnati. That cost our company about $100 million. I'm asking you, are you going to wait around for Charlotte to drop you? Are you going to stand together with me and with the people of this community and invest in clean, renewable energy that's sourced from the state of North Carolina?

Speaker 5: Is that your question?

Speaker 15: I'm asking you, and the people of North Carolina are asking you, will you commit to not renew a single contract for mountaintop removal coal?

Speaker 5: Can't do that. What we have done is put in place a policy to try to reduce our use of mountaintop mining. We've reviewed it with the state regulators because they're concerned not just with mountaintop mining, they're concerned about the price increase on consumers. More work to do there, and we're committed to doing it. Thank you. I look forward to your opposition to everything we do. It's your right, and I value it, we're doing our very best to live up to our commitment of providing affordable, reliable, and clean electricity. Thank you for being here.

Speaker 15: Two more questions. Will you commit to provide us with at least one-third of our energy from renewable sources by 2020?

Speaker 5: I can't make that kind of commitment.

Speaker 15: You're the CEO. You're in charge. You can make that commitment.

Speaker 5: I can, but I'm regulated, and I have certain requirements there. I also very fundamentally, and that will be your last question, is this. I have to balance affordability and clean and reliability. It's not so simple to do. If I could do what you asked me to do, I would do it.

Speaker 15: You would.

Speaker 5: I can't. I can't do it that fast, and our country can't do it that fast. I think that we ought to go study what's going on in Ontario Hydro and what they have done, or in Germany, or in California. Getting the balance right is really critical, and I'm sure with your advocacy, you will help us get it right. Thank you.

Speaker 15: Thank you.

Speaker 5: Yes, sir.

Speaker 16: Good morning, Mr. Rogers. My name's Harry Phillips. I live in Chapel Hill. I will ask a question at the beginning and the end of my brief comments, and I'm very disappointed that we're having to rush through now, and you're sort of controlling the process, and it's very, very disrespectful to me and the other folks who want to speak and folks who've studied and done the research and prepared statements. This is the one opportunity a year that we have to speak to you, so I'll be very brief, sir.

Speaker 5: Maybe the right answer, because everybody has got speeches. Everybody's got a strong opinion, which I respect. Maybe the right answer is for me to schedule a public meeting and have all of you come and tell me exactly what you think, and I'll do my best to answer.

Speaker 16: With the board in presence?

Speaker 15: That would be amazing.

Speaker 5: No, no. I'll record it. I'll give a summary to the board. They'll understand the issues that are on your mind.

Speaker 16: The power belongs to the board, Mr. Rogers.

Speaker 15: We pay for them to come.

Speaker 16: We look forward to your gesture. I appreciate it.

Speaker 5: If you could, again, I don't mean to rush you. I apologize for that. We have to get back to our board meeting. We have issues to deal with. If you just ask me a question, I will set up, I will guarantee it, I will post it, and everybody that's here that's talked, I'm trying to look and see who can-

Speaker 15: We'll go to the end of the line. It's okay.

Speaker 5: We'll make a list. We'll hold a meeting. Bill Currens is the first guy I see, okay, you're the one. Everybody give your name to Bill.

Speaker 4: There are only eight of us left, we can just finish off the last eight.

Speaker 5: Okay, commit to me you'll ask me one question after telling me your name, please.

Speaker 16: Yeah.

Speaker 5: Not comments. I'll do comments later.

Speaker 16: Harry Phillips, Chapel Hill, longtime Duke Energy customer. My question to you, sir, is what is Duke Energy's strategic plan for conserving water at its nuclear and fossil plants? I will read just two or three sentences from my prepared statement in the interest of time. Some brief context. The Dan River Basin and the Catawba River Basin are among the nation's most stressed waterways because of Duke's massive withdrawals. As a concerned citizen, convenience and profit seem to trump safety in terms of Duke's water use. The science says that droughts and higher than normal summer temperatures make water conservation essential. Energy plants like Duke's draw nearly 70% of all water used in our region and exacerbate the problem. A recent study conducted by the National Oceanic and Atmospheric Administration concludes that if Duke continues to withdraw at its current rate from the Catawba Basin, in a few decades, the river will no longer be able to meet demand. From what I can tell, Duke Energy is environmentally unconscious. Duke needs to reconcile energy and water, profit and sustainability, good citizenship, and a 1% mentality. I ask you again, what is Duke's strategic plan for conserving water?

Speaker 5: Well, first, 98% of the water we take from the rivers, we put back into the rivers cleaner than we took it out. The other 2% is evaporated and eventually returns. Our use of water is regulated at the state level, at the federal level, and we're returning all the water we use back into the rivers.

Speaker 16: The science says that we will face a crisis, that you will not be able to meet water demand if you continue withdrawing it at the current rate.

Speaker 5: Important point, 98% is returned, 2% is evaporated. The reality is water, you're correct, is going to be the oil of the 21st century in terms of being a major issue. We're sensitive to that and are working on those issues. Thank you. Yes, ma'am.

Speaker 18: Hi, Mr. Rogers. I'm J.D. Doliner.

Speaker 5: Yes.

Speaker 18: I'm here representing my mother, Dr. Doris Breckenridge. She's a physician in New Jersey. I actually want to start by congratulating you on helping to prove the commercial viability of renewables. I think that Duke has done a lot for that, and now there's something to build from. What I would like to see happen is for Duke to now take what is a small portion of its portfolio in renewables, use that great success, and diversify. I know that the government could do a lot more for you if that R&D budget that they have for energy was a lot bigger on renewables and perhaps a little bit smaller in other places. I wanted to ask you if you would be willing, I had an eloquent speech to convince you to say yes to my question, but I'm trying to respect the time.

Speaker 5: You know what? If you just ask me the question, I might actually say yes.

Speaker 18: It's another meeting request. I would love to sit down with you and understand what you're doing to lobby the government for more funding of renewables to bring cost parity and to enable implementation to happen at a much faster level. I would love to help make that happen.

Speaker 5: That's great. I will be delighted to sit down with you. The important point is the government is actually cutting off the funding of wind-

Speaker 18: It's very impolite

Speaker 5: Starting in 2013. We'll see the inability to economically build wind because we need the subsidy.

Speaker 18: I'm worried about that.

Speaker 5: I will be delighted. Give . We'll get a sheet of paper, let everybody put their name down. I am delighted to meet with you all and have a long conversation. Each of you has got statements which I respect, and we'll have to do it in that context. Thank you. The answer is yes, I'll sit down with you.

Speaker 18: Thank you. I'd love to help.

Speaker 5: Yeah.

Speaker 4: In the interest of time, I will shorten what I was going to say.

Speaker 5: Okay.

Speaker 4: All right. My name is Hector Baca. I'm a community organizer with Action NC, which is a community group made up of people from our community, working-class people who cannot afford another rate hike. The people came together a few months ago, we stopped the incredibly high rate hike. This happened through public hearings, we would like for this to continue. As it has come to my attention recently, Duke Energy is lobbying to pass legislation that would not allow us to have any more public hearings in order for us, the people, to actually have a voice in this. Everyday people in our community, as I said, I'm a community organizer. I actually talk to the people in our community, unlike a lot of the executives. People in the community are telling me every single day they cannot afford any more rate hikes. They can barely afford the seven-point-something rate hike that happened a few months ago. Many North Carolinians are out of work. The gas prices are going up. The price of food is going up. Many are having to choose between paying the light bill or feeding their children. In 2010, Duke had a 23% increase in profits. You, Mr. Rogers, had a 25% raise, bringing your salary up to $6.9 million. As I said, poor people cannot afford higher bills. Better options would be to freeze the pay of the execs, starting with you, Mr. Rogers. My question is this. In order to make it more affordable for the people of North Carolina who cannot afford to pay these high bills, would you be willing to take a freeze in your pay or cut your pay in order to subsidize all these plants that you want to build? Will the execs do the same thing? Because I know we can't afford it. You're making six digits a year or more, while the rest of us are barely scraping by with just two digits, the lows on seven digits. Would you make a commitment to actually freeze your pay as opposed to making us pay more?

Speaker 5: Well, the simple answer is I get paid only when I perform. Payment is not automatic. It's only when I deliver value to the customers as well as the investors. Last year, the investors had a 30% total shareholder return. They had the value of this company increase $7 billion. What I get paid in that context is rather small. Thank you, though. I used to be a consumer advocate just like you, fighting rate increases of utilities. I get it. Next question, please.

Speaker 17: Thanks. Hi, Jim.

Speaker 5: Hey.

Speaker 17: My name's Jenny Merino. I live here in Charlotte, and I'm here wearing a couple of hats, but I'll keep this short. I'm here because I'm a shareholder, but I'm also here because I'm a young person on this planet. A lot of the things that I wanted to say I think have already been stated. As a shareholder, I'm very concerned about looking at our North Carolina IRP, which states that we'll be relying heavily on nuclear and natural gas and coal over the next 18 years. I work for a group called 350.org that focuses on climate change as the biggest problem that we face as a planet. These three pieces are false solutions to climate change. We're often told that if we want to go away from coal, that we're going to have to rely either on natural gas or nuclear. Unfortunately, neither of those are a safe solution for our planet and for our people. I'm asking you to invest heavily in renewable energy. We need to be invested heavily in renewable energy yesterday if we're going to stop the worst effects of climate change. I guess my question is, and I'll give you a little background on this, and this may be of interest to all the others in the room, but at this very moment, there are activists with Greenpeace and with Mountain Justice who have blocked a train on its way to the Marshall Steam Station. They're preventing coal from reaching that steam station at this very moment. My question is, how can you ensure that coal and natural gas and nuclear are not risky investments for your organization and for everyone who's involved with it when there will be active protests and active resistance to the energy that's killing our planet?

Speaker 5: I think the only thing I would say is that if you block the generation of electricity from our coal plants, if you block the generation of electricity from our nuclear plants, you're going to block the flow of electricity to our schools and to our hospitals and to people across our state that rely on it. There's a more reasoned way to go about this. If that is your way of expressing your opinion, I value it. I respect it, but it isn't in the long-term interest of our community. Again, I hope you join with these others and meet with me later.

Speaker 17: Thank you

Speaker 5: We can have a full vetting of all of this. Thank you.

Speaker 17: Thank you. I do just want to point out that my generation is forced to take these actions to protect our future. If our energy did come from safe, renewable energy, we wouldn't be forced to do these sort of things. You can expect more of it in the coming generation.

Speaker 5: I'm ready. Yes, ma'am. Good to see you again.

Speaker 26: Thank you.

Speaker 5: I'm surprised you're not out there.

Speaker 26: I'm everywhere I can be to try to-

Speaker 5: I know. Everywhere I go, you're there.

Speaker 26: Yeah, I will keep coming, Mr. Rogers. Only because I care so much-

Speaker 5: I know you do

Speaker 26: about my children and grandchildren.

Speaker 5: I do. Please just ask me.

Speaker 26: Yeah. Well, you keep talking about affordable, but I'm sure you've seen the same studies I have that say nuclear energy, the so-called renaissance, is not happening, not because it's dangerous, but because it's not affordable. I know you also know that the rate structure is being challenged because your biggest customers aren't going to be on the hook for the extravagant price of nuclear plants. Small businesses like Mr. George and other people are coming together to try to make sure if you do build nuclear plants, they'll be paid for in a fair way and not just by residential and small businesses, the way the rate structure works now. My question is, you said at the beginning that you would need construction cost recovery assurance from the legislature to be able to build nuclear plants. I would like to know, because lots of folks are trying to find out, does Duke Energy intend to pursue in the short session of the legislature that's about to begin, that sort of cost recovery assurance legislation?

Speaker 5: Well, I can assure you in the short session, they're going to be focused on a range of issues they need to be focused on, like education, getting the balanced budget. In all likelihood, they will not be focused on this issue in this session.

Speaker 26: Is that a no, you're not going to try to get it in the short session?

Speaker 5: If they offered it to me, I'd take it, but I'm not going to go get it.

Speaker 26: Okay.

Speaker 5: Okay?

Speaker 26: Thank you for answering that.

Speaker 5: Thank you.

Speaker 3: Hi, Mr. Rogers. My name is Greg Tanner. I'm representing AARP and our 100 and some million members in this state. Let me first of all say that we recently have met with some of your staff here, and it was a very fruitful and engaging conversation, and it was very positive in many ways. At the same time, though, I returned here on this past Monday, and on the poverty tour, one of the things that came up was so many individuals, like you just heard, not being able to afford to pay utility bills. One of the things that they often was faced with was either paying for medicine or transportation or other issues when it came to those high-rising utility costs. My question to you, and I'll be brief, is that why then is Duke Energy proposing automatic annual rate hikes? How then does that benefit the customer? I heard you say that you're customer-driven. Could you explain that to us?

Speaker 5: Well, a couple of important points. Context. The real price of electricity today compared to 1960 is lower today than it was in 1960. It's been flat to declining over all those years. Today, the price of electricity in North Carolina is 20%-30% below the national average. I know nobody likes a rate increase. We're investing $billions in North Carolina to modernize our grid, to build modern generation fleets so we can retire high-emitting coal plants. The consequence of these investments require us, consistent with our business model and the regulations in this state, to get recovery of these $billions of investment. We don't like rate increases. The reality is to modernize our grid, to clean it up for all the people here that are concerned about clean energy, it's going to cost more. The good news is, maybe not comforting news, it is still cheaper here than the majority of America. Thank you.

Speaker 34: Thank you.

Speaker 5: Yes, sir.

Speaker 19: My name is Greg Jocoy, and I live in Simpsonville, South Carolina. I am a Duke ratepayer and representing a shareholder. To get to my questions right away, do you realize that it makes me feel that you don't value shareholder input when you make us watch a film that could have been placed on YouTube and all of us told about in advance, and then told that we don't have enough time to have you hear our questions and then answer them? Do you know how that makes me feel?

Speaker 5: I know how it makes you feel, and that's why.

Speaker 19: Thank you, sir. Do you know how it makes me feel when you tell us that the board of directors is going to have to go because you have important stuff to do?

Speaker 5: I know how that makes you feel. That is why.

Speaker 19: Thank you, sir.

Speaker 5: That is why.

Speaker 19: Thank you, sir.

Speaker 5: Thank you, sir.

Speaker 20: Hello, Mr. Rogers.

Speaker 5: Hi.

Speaker 20: My name is Gautam Desai, I'll extract some questions from here. I'm here to also respect Mr. Richard Farman. He's a retired physician who was here to read his statement, he had to go back all the way to Asheville because of an accident in the family. He's fine. I'll just be very quick.

Speaker 5: Maybe you give me the statement and ask me the question.

Speaker 20: Sure. Based on this and based on what I hear, I have questions about three things. One is the rate of change. It doesn't look like that you and the activists differ in the long-term goals, the rate of change that you are making feasible, or you claim that it is feasible, is definitely a lot slower, glacial pace than what they think is possible right now in this world, and it is cost-effective. Who is to determine? That's one thing. Second thing is about the political power and the cloud. You are the co-host of the DNC. You are one of the largest corporations with the legislature and a lot of other politics in North Carolina. There is a lot more power within you. If you can do the rate hikes, you can also do some of the other things, from renewables to energy efficiency to a number of things. We feel that you are not doing enough on that account. Finally, you are constantly talking about affordability, but it looks like that the greater investment and riskier, difficult investment like nuclear and gas fracking and so on, which even some of the banks would not finance. Now there are protests coming up against Bank of America for financing coal, and they will start rethinking this. This money is being reinvested to go invite corporations like Apple, Google, and Facebook that you yourself sort of admitted that could be of dubious taxpayers' incentives. These are not used to fund the electricity requirements of the hospitals and schools and poorer households. They are funded to do the electricity production and then invite subsidized corporations from outside. The whole model is flawed. The questions are about the rate of change, about the actual affordability and cost effectiveness as a tool to continue to be dependent on coal and nuclear. Third thing is using the political power even more judiciously and more proactively for change rather than trying to soothe the current model of Duke Power. Thank you.

Speaker 5: Thank you. Please make sure I get a copy of that. The only thing I would say is that we are working hard to make the transition as fast as it makes sense. What we're balancing is as we build new plants that are cleaner and we retire old plants that are fully depreciated, that's going to translate into higher rates. I'd rather do it in a smooth way. You are right, it's not a question of where we're going, it's a question of how fast we get there. We are on that road, and we can debate about how fast, but we're trying to do it in a way that smooths out the cost impact on our consumers. Yes, sir.

Speaker 22: My name is David Pasik. I'm a shareholder, I live in Charlotte here. I'm a ratepayer. Mr. Rogers, whatever the board is paying you, it is not enough from what I've heard here today.

Speaker 5: Thank you. Thank you.

Speaker 22: I've heard a lot of nonsense here today. I'm a retired medical doctor. I treated asthma for 26 years, and let me tell you, the particulate matter put out by Duke Energy is trivial compared to the asthma-causing effects of cigarette smoke and emissions from tailpipes. There's also a theory, of course, that the epidemic of asthma is caused because of the urbanization of America, because so many million Americans now no longer have exposure to farm animals like they did 100 years ago. Of course, asthma is an immunologic problem. My question is, I'd like to hear your comments and bring us all up to date about the proposed merger with Progress Energy, why FERC is giving you a hard time about it, what your approach is to this, and what the future might hold for us. Thank you very much.

Speaker 5: Thank you, sir, for those comments. I think the important point is that our plans are to close this merger by July 1, this is the third time we've asked for an okay to do this. The bottom line is they've really struggled with defining the issue of market power, we're two companies that are contiguous, but we're regulated, it's difficult for me to see what their issue is, they haven't been clear in terms of how to address their issue. We're doing our best to close this transaction. Duke Power.

Speaker 23: Yes, sir. Mr. Rogers, my name is Fred E. Council.

Speaker 5: Yes, sir. Delighted to see you.

Speaker 23: I'm a shareowner. I affirm I'm a shareowner. Again, I suggest the name Duke Power. Fellow shareowners, if you would consider keep the name the same or a change to Duke Power, please would you convey to Mr. Manley, our corporate secretary, on the matter I think it would be beneficial. Our business, our primary business, power. America's north-south electric power. Duke Power.

Speaker 5: Thank you.

Speaker 23: Thank you.

Speaker 5: You ask me every year, I will tell you, as I travel around the country, the number of people that still refer to us as Duke Power is amazing. Obviously, that's a name that works. Vlad, how you doing?

Speaker 9: I'm doing. Thank you, Jim. I was actually not going to speak, I feel compelled to say a few things. My name is Vladimir Prerat. I'm a CEO of United Hydrogen. We are an environmental firm. We exist to establish infrastructure of fueling stations to enable automotive hydrogen-fueled vehicles to exist and lessen our dependence on foreign oil. We're essentially an environmental firm. However, I'm extremely surprised at so many negative comments regarding Duke Energy. I think Duke Energy is doing a tremendous job in this transition process Jim is describing. I heard Europe quoted several times. I'm a European. I can tell you that the European policies are right now bankrupting Europe. I don't think you would want it here. One thing about renewable energy, everybody forgets. I didn't hear it said once. It's intermittent. It's not an energy you can rely on. It has to have a backup power. Every megawatt somebody installs has to have a backup power. Now, if the people who have this attitude want electricity only when there's sunshine, Duke Energy can provide it tomorrow. You want electricity all the time, and that's where Duke Energy comes through with a complex program of balancing the need for energy all the time so that we, industries, can grow and yet be responsible to the environment. I felt I had to say that because what I've heard here was so negative. Totally surprised. Thank you very much.

Speaker 5: Thank you. Yes, sir.

Speaker 24: My name is Walter Batista. I'm Cuban by birth, American by the grace of God. The statements that I hear coming out of the White House occupant right now remind me too dead bleeding much of what I heard in Cuba 1952, 1953, and I do not appreciate you being the co-chair, if you will, but if you want to put your own personal fortune on the board of directors, please feel free. Okay. I do not appreciate you granting our $10 million, or is it because what your employee, Mr. Forest in Greensboro, said that the only reason you gave the $10 million was because you wanted to be named, how can I say, the chairman of the Energy Commission for the present administration. Thank you, sir.

Speaker 5: Thank you for trying to get me promoted into the government, that isn't the purpose. No, I know that. The important point is just to kind of complete and thank everybody that stayed with us today, is that we made that investment for the city of Charlotte because the spotlight will be on our city, and it will give us great recognition around the world. I want to thank everybody for being here today. I want to thank everybody for the questions. I'm looking forward to the people that want to meet with me independently. Put their names down, put their email address down, and I will host that meeting with you and listen to your concerns and address them. Again, thank you all very much.