Duke Energy, Integrys Energy Services and Smart Energy Capital Launch Partnership to Build and Finance Solar Projects Throughout U.S.

CHARLOTTE, N.C., Oct. 13 /PRNewswire-FirstCall/ -- Duke Energy, Integrys Energy Services and Smart Energy Capital today announced the launch of a partnership to build and finance distributed solar projects throughout the United States.

Through the partnership, Duke Energy Generation Services (DEGS) and Integrys Energy Services (Integrys) will focus on jointly owning rooftop and smaller ground-mounted photovoltaic (PV) solar projects that deliver electricity to investment-grade commercial, government and utility customers under long-term power purchase agreements. Smart Energy Capital will develop the projects and arrange financing, enabling DEGS and Integrys to create a streamlined, end-to-end approach to bringing solar projects to market.

"What makes this partnership unique in the marketplace is its focus on distributed solar solutions that produce renewable electricity close to where it is used, rather than at centralized power plants," said Greg Wolf, DEGS senior vice president and head of the unit's commercial solar business. "The companies involved bring a wealth of project development, construction, management and financing expertise to the partnership."

DEGS, part of Duke Energy Corporation's (NYSE: DUK) Commercial Businesses, and Integrys Energy Services, a subsidiary of Integrys Energy Group (NYSE: TEG), believe the majority of PV solar growth over the next several years will involve commercial-scale ground-mounted and rooftop applications. While DEGS and Integrys will continue to independently develop commercial solar projects pursuant to their respective strategies, this partnership will serve as a way to cooperatively boost growth in an attractive segment of the solar market.

"We have invested more than $65 million in 20 different distributed generation solar projects across the U.S. with a combined capacity of more than 10 megawatts," said Joel Jansen, managing director and head of energy assets at Integrys Energy Services. "Partnering with DEGS and Smart Energy Capital enables us to expand our presence in this market in an efficient, strategic manner."

DEGS and Integrys will equally supply the necessary equity capital for construction and ownership of the distributed solar projects. Over the next two years, the companies intend to invest up to $180 million in total project capital. Individual project size is expected to be 500 kilowatts and up, depending on the needs of the customer. DEGS and Integrys will be responsible for operating and maintaining the projects.

Smart Energy Capital will work with its strategic origination partners, including CB Richard Ellis (under the name CBRE Solar) and Tremco Roofing, to help customers achieve their sustainability and energy objectives on optimal terms. The financing structure of the partnership enables DEGS and Integrys to monetize all available federal tax benefits associated with the distributed solar projects.

"We believe this partnership provides a solution to one of the fundamental challenges in the commercial segment of the solar market – reliability and certainty of financing," said Rob Krugel, managing partner of Smart Energy Capital. "We are excited to form a strategic partnership with such large, experienced and well-capitalized power project owners as DEGS and Integrys to pursue distributed solar projects wherever market opportunities in the U.S. present themselves."

About Duke Energy Generation Services

Duke Energy Generation Services, part of Duke Energy's Commercial Businesses, is a leader in developing innovative renewable energy solutions, including wind, solar and biopower projects. DEGS builds, owns and operates electric generation for large energy consumers, municipalities, utilities and industrial facilities. DEGS is also working to build commercial transmission capacity to help the U.S. meet its energy needs of the future. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: www.duke-energy.com.

About Integrys Energy Services, Inc.

Established in 1994, Integrys Energy Services, Inc. provides competitive energy supply solutions, structured products, and strategies that allow retail residential, commercial, and industrial customers to manage their energy needs. Its principal energy marketing operations are in the northeastern quadrant of the United States. Through its subsidiary, Integrys Energy Services – Natural Gas LLC, Integrys offers natural gas products to a full range of end-users throughout the Midwest. Areas of generation expertise include cogeneration, distributed generation, renewables such as solar and landfill gas, as well as clean fuel generation, with facilities in selected markets throughout the United States. More information about Integrys Energy Services is available online at www.integrysenergy.com.

About Smart Energy Capital

Founded in 2009, Smart Energy Capital is a leader in the financing and development of solar energy projects. The company manages the development, financing, installation and operations of distributed power plants throughout the United States and Canada using proven photovoltaic technologies. The company delivers fully managed, predictably priced solar energy services for its commercial, government and utility customers. More information about Smart Energy Capital is available at www.smartenergycapital.com.

MEDIA CONTACTS

Duke Energy:
Greg Efthimiou 704-382-1925
24-Hour 800-559-3853
Integrys Energy Services:
Joel Jansen 920-617-6029
Smart Energy Capital
Rob Krugel 914-595-2641

This article brought to by the Indiana Renewable Energy Association.

Duke Energy earnings heat up; regulatory momentum cools

http://www.bizjournals.com/charlotte/stories/2010/08/09/story12.html?b=1281326400^3759041&s=industry&i=green#ixzz0wDvBlT00


Friday, August 6, 2010

With energy bills stuck in Congress, utility prepares for coming EPA regulation

Charlotte Business Journal - by John Downey Senior staff writer

Duke Energy Corp. reported better than expected earnings for the second quarter and has outperformed utility stock indexes since the start of 2009. But in the long term, this may prove the summer of Duke’s discontent.

Federal carbon regulation, which Chief Executive Jim Rogers pushed and on which Duke spent hundreds of thousands in lobbying costs, is dead. Come Jan. 2, the Environmental Protection Agency will impose limits on carbon, and Rogers acknowledges that will be more costly — to Duke and its customers — than the legislation he and Duke supported.

Duke and the industry as a whole have started running into resistance to smart-grid proposals. That digital upgrade to transmission and distribution systems holds considerable promise for energy efficiency and ultimately cutting customer use in a time of rising prices. But the costs of the conversion are giving some regulators pause.

Duke’s basic strategy for producing energy from renewable resources is being called into question in the Carolinas. And Duke continues to skirmish with regulators over treatment of payments under its Save-A-Watt initiative.

Rogers repeatedly says the power industry needs to know what the ground rules will be as it spends billions in the next 10 to 20 years to replace its aging coal plants, undertake nuclear construction, adopt renewable-energy sources and implement smart grid and other efficiency programs.

“We haven’t gotten clarity from the regulators. I don’t think we’ve got clarity from Congress,” he says. “But on some level that is predictable and it should be expected.”

Rogers describes himself as an optimist. The summer of 2010, at least, gives him a lot to be optimistic about.
Adjusted earnings of 34 cents per share reported this week for the second quarter beat analyst expectations by eight cents. While hot summer temperatures across the Southeast and Midwest played a role in that, Chief Financial Officer Lynn Good says it was led by a double-digit increase in industrial demand.

Industrial use is not yet back to pre-recession levels, she says. But when demand first jumped in the first quarter, Duke executives wondered whether that was a blip or the start of the trend. Duke’s industrial customers now say those demand levels are sustainable through 2010, Good says.

And Duke’s stock is performing well. Since January 2009, Duke’s stock has risen 20.6% to close at $17.37 a share at the beginning of this week. The Dow Jones Utility Index, by comparison, rose 4% over that period.

And last month, Duke Energy Indiana borrowed $500 million in the bond market at an unheard of rate of 3.75% for 10 years. “That’s the lowest coupon for utility companies since they started keeping records in 1962,” Rogers says.

So things are good now. But it’s hard to prepare for a future in which Rogers expects rising energy costs and constraints on carbon when rules and regulations have not caught up to the new realities.

While much of the power industry has resisted carbon regulation, Duke joined with other industrial giants and some major environmental groups to shape it. Duke wanted to minimize the impact on coal-dependent regions and utilities — and ultimately utility customers — while setting the rules replacing the existing fleet.
“We were successful beyond expectations with the Waxman-Markey bill (in the House) last year, and we were making progress with the Kerry-Lieberman bill in the Senate,” Rogers says. “We didn’t succeed (and) the failure to get across the goal line is bad news for our customers.”

That deal essentially fell apart in late April. Sen. Lindsay Graham was working on a bill with Sens. John Kerry and Joe Lieberman. But when Senate leaders announced they would push forward on immigration legislation, Graham objected and withdrew his support on energy. The bill never regained traction.

Duke won a big victory on smart grid this year by getting a $200 million federal grant to support a $900 million plan to install the system in Ohio and Indiana. Ohio regulators agreed. Indiana balked. Duke then scaled down its Indiana plan to a $22 million pilot program to install the technology for 40,000 customers.
Duke has yet to approach Carolinas regulators, who have often been less receptive than those in the Midwest on smart grid. “I view this part of the assignment as not a failure,” Rogers says. “I view it as a work in progress.”

Duke has also failed to get rulings in North Carolina that it wanted to clarify the treatment of payments for investing in efficiency under Save-A-Watt. And an issue before N.C. regulators threatens Duke’s plans to rely on wood as a biomass fuel to meet state requirements for renewable energy.

Rogers says he is not discouraged. “We’re meeting predictable, I believe, resistance to changing the model for our business and for our industry,” he says. “If people don’t understand what I’m trying to achieve, I’m failing in my explanation of it. I have more work to do.”

Read more: Duke Energy earnings heat up; regulatory momentum cools - Charlotte Business Journal

Duke Energy Names Michael W. Reed President of Indiana Operations

http://www.duke-energy.com/news/releases/2010060902.asp

June 9, 2010
PLAINFIELD, IND. -

Duke Energy has named Michael W. Reed president of its Indiana service region. Reed will be responsible for the company’s Indiana regulatory work, governmental relations, and economic development and community affairs.

He replaces Jim Stanley, who is transitioning to senior vice president of power delivery for the company’s U.S. operations. Reed is currently commissioner of Indiana’s Department of Transportation. He will join Duke Energy on June 14.

“Mike brings an impressive combination of business and regulatory experience to this position,” said James Turner, president and chief operating officer of Duke Energy’s Franchised Electric & Gas businesses. “We need leaders who know how to run a business and serve their customers well. He will lead our Indiana team as it works with state regulators, legislators, customers and other stakeholders.”
Reed, of Cicero, has led the state’s DOT since February 2009, where he was responsible for approximately 4,000 employees and a $2 billion annual budget to construct and maintain the state’s road system. He reported to Indiana Governor Mitch Daniels and is a member of his cabinet.

Prior to his work with the state, Reed held various leadership positions at GTE/Verizon. He was the senior state executive for the Indiana, Texas and Kentucky operations. In that role, he had overall responsibility for customer service, delivery, construction, maintenance, large and medium customer account management, budgets, and regulatory and legislative relations.

Early in his career at GTE, he was the first quality director for the company’s largest subsidiary, covering 13 Midwestern states. Additionally, he directed annual revenue and expense budgets of more than $1 billion as budget and finance director for GTE’s Midwestern operation.

Reed has a broad base of utility experience. He served as executive director of the Indiana Utility Regulatory Commission from 2006-2009, where he managed the commission’s electricity, water, sewer, natural gas, pipeline safety and consumer utility industry divisions.

“Mike’s broad knowledge of the utility industry and his experience managing large, diverse organizations makes him an ideal fit for this position,” said Jim Rogers, chairman, president and chief executive officer of Duke Energy.

Duke Energy is one of the largest electric power holding companies in the United States. Its regulated utility operations serve approximately 4 million customers located in five states in the Southeast and Midwest, representing a population of approximately 11 million people. Its commercial power and international business segments own and operate diverse power generation assets in North America and Latin America. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: http://www.duke-energy.com/ . To learn more and contribute to the discussion about the energy issues of today and the possibilities of tomorrow see http://www.sheddingalight.org/ .

This article brought to you by the Indiana Renewable Energy Association.

Duke Energy’s solar effort clouding growth?

For additional information about Duke Energy's solar programs, please see http://wp.me/pMRZi-7V

Slow start for Duke Energy CEO Jim Rogers’ big plans

Friday, May 21, 2010 | Modified: Tuesday, May 25, 2010

Charlotte Business Journal - by John Downey Senior staff writer

Four years into an avowed effort to change the utilities-industry business model, Jim Rogers’ report card is filled with incompletes.

Observers give the Duke Energy Corp. chief executive high marks on vision and theory. He also scores well on visibility as his reputation has grown considerably since arriving at Duke four years ago.

That reputation is largely deserved, says John Gartner, a senior analyst with Pike Research, which follows the new energy industry.

“For the head of a big utility that makes its profits from traditional energy, he is perceived as being outside the industry norm and more in line with people with environmental concerns,” Gartner says. “I think he is making progress, but it’s going much slower than he or the company might like.”

That judgment isn’t universal, however.

“They shouldn’t be in the mode of just selling kilowatts — I agreed that he’s got the proper frame for the issue,” says Stephen Smith, executive director of the Southern Alliance for Clean Energy. “But I don’t have the sense that he is leading in that in a big way as much as maybe his rhetoric would indicate.”

Rogers has been clear on what he views as the future model. The industry must decarbonize, decentralize and sell energy efficiency as well as energy.

And he thinks Duke can lead the way.

But Duke’s ambitious Save-A-Watt initiative, giving power companies incentives to promote conservation and energy efficiency, got trimmed considerably in all five states the company serves. Indiana regulators have given a clear “go slow” sign on Duke’s efforts to push smart-grid programs to improve transmission efficiency and promote energy-control technology into customers’ homes.

In North Carolina, Duke proposed a modest foray into distributed energy that could move the company away from total dependence on large centralized plants. But state regulators cut in half its $100 million program to install solar panels on customer rooftops.

“It’s going to be a messy process,” Rogers concedes as he surveys how far Duke has been able to deliver on his vision. “You’re not going to always get what you want. And you are not always going to get even part of what you want when you want to get it.”

To expect strong operational results already on programs such as Save-A-Watt and smart grid would be expecting a lot. But even setting up the framework — regulatory, legislative and even internal — has been slow, observers agree.

John Buckley, who works in Charlotte for Power Plant Management Services Inc., says the recession has undoubtedly played a role in slowing initiatives in the energy sector.

State utility regulators and legislatures have become less open to experiments in rate structures and other initiatives as costs have become a bigger issue. And inside Duke itself, Buckley says, business constraints can make change a hard sell.

“It is probably unfortunate for Rogers that he really got his feet under him just about the time that the economy has slowed down,” he says. “If I was scoring him on how much he has accomplished, I would have to take into account the backdrop he’s operating in.”

Rogers says he isn’t discouraged. Partial victories are the nature of the business, he notes. “In West Texas, they say the pioneers get the arrows; the settlers get the land. In many senses of the word, we are pioneers.”

But he wants the land as well. In talking about his partial victories, he emphasizes the victory. Indiana cut Duke’s smart-grid proposal in half. But Ohio approved the whole proposal. North Carolina cut the solar program. However, “we move forward as best we can with the approval we got, and we prove the program,” he says.

The fight over Duke’s Save-A-Watt initiative has been typical of the fitful progress.

Within months of his becoming CEO when Duke bought Cinergy Corp. in 2006, Rogers began talking about making conservation and efficiency a profit center. Duke filed a proposal in North Carolina in spring 2007 to essentially make the same return on energy it saved as it did on energy it sold.

But regulators had doubts about how that fit into state laws governing the financial returns for utilities. Consumer and environmental groups that generally supported efficiency also had reservations.

The Southern Alliance for Clean Energy, based in Tennessee, took a leading role in challenging Duke’s initial proposal. Analysts with that group contended the program could lead to unjustified profits for Duke.

As the push faltered in North Carolina, Duke proposed Save-A-Watt in South Carolina, Ohio and Indiana. The company finally reached a compromise in Ohio late in 2008 that capped potential profits and cut its rate of return. That became the model adopted in each of the states Duke operates in.

Smith, the Southern Alliance for Clean Energy director, gives Rogers credit for moving Duke along on efficiency issues. But he disputes the idea that Rogers and Duke are national leaders on such issues. He ranks them toward the bottom on the national scale.

Even in the efficiency-challenged Southeast, Smith says Florida’s utilities have shown more innovative spirit. And several municipal power companies are well ahead of Duke. He says some, such as Georgia’s Southern Co. and Progress Energy Carolinas may lag more than Duke. But doing well in a slow class, as Smith put it, does not make Duke a showcase utility. “I know he’s turning a battleship. But he’s still been there long enough that if he was really going to be a revolutionary in the industry, you would see some action matching his words.”

While some doubt Rogers’ commitment to efficiency and sustainability issues, Gartner — the Pike Research analyst — sees evidence that it is real.

Where Duke can act without the need for regulatory approval, for instance, it has weighed in on the side of new initiatives. It has committed to buying electric vehicles for its fleet. And Duke’s largest investments in renewable energy have come at its unregulated Duke Energy Generation Services, which develops and operates power plants for commercial clients. DEGS ranks No. 10 in wind-power capacity in the United States.

In addition, Duke has started investing in solar farms and has a joint-venture agreement with Chinese company ENN Group to develop solar projects.

Regulators — and the regulated side of the business — will come around, Gartner thinks.

“But it’s a contentious issue all public utility commissions are facing, and the companies are facing themselves,” he says. “There is an upfront cost for renewable energy. How do you provide for a return for investors when you make that shift? And how do you incent public companies to sell less of their product?”

Rogers says Duke will make progress step by step, despite resistance to change.

“If you have the vision and you believe in it and you believe it’s good for your customers and it’s good for your state and it’s good for your country, the fact that you get your nose bloodied, that is just part of being in the process.”

This article brought to you by the Indiana Renewable Energy Association.

Big Energy Firms Blocking Solar Power in South

NOTE: The Georgia Solar Energy Association is a state chapter of the American Solar Energy Society (ASES) just as the Indiana Renewable Energy Association is a state chapter of ASES. Although the focus of this article is on the activities of Georgia Power, it also mentions Duke Energy which operates in North Carolina as well as in Indiana.

http://atlantaprogressivenews.com/news/0618.html


By Matthew Cardinale, News Editor, The Atlanta Progressive News (March 31, 2010)

A version of this article originally appeared on the Inter-Press Service website at http://www.ipsnews.net/news.asp?idnews=50862.

ATLANTA, Georgia, Mar 31, 2010 (IPS) - As citizens, businesses and non-profit organisations seek to transition to cleaner power sources like solar and wind, some big energy firms whose business models rely on polluting sources are standing in the way.

In Georgia, the energy company Georgia Power has lobbied for favourable public policies at the Public Service Commission (PSC) and State legislature that are making it difficult for the state's residents to transition to solar power.

IPS learned that the Dekalb County school system wanted to put solar panels on their schools, but could not do it because of state policies like the Territorial Electric Service Act of 1973 which gives Georgia Power a monopoly over the purchase of energy.

"In Georgia, we have about a dozen state policies preventing creation of solar energy," James Marlow, vice chair of the Georgia Solar Energy Association, told IPS. "One of those is the Territorial Act."

"If you're looking at a school, one of the common ways [of setting up solar panels] is using a power purchase agreement or PPA," Marlow said.

Typically, one of the biggest obstacles for businesses and organisations to switch to solar energy is the initial cost of obtaining and installing the panels. A PPA allows a school system, for example, to obtain the panels for no cost from a solar installation company which finances the panels.

Then, the school can purchase the energy from the solar installation company, which would own the panels, for a 20-year period. Marlow said that a PPA client typically pays for the panels after the first five years and then saves money on energy for the next 15, all the while avoiding the use of dirty energy.

However, because of Georgia's Territorial Act, individuals, organisations, and businesses with solar panels can only sell their energy to Georgia Power. This means they cannot enter a PPA with a solar installation company and may have difficulty affording the panels in the first place.

For those who are able to buy or lease their own solar panels, selling that energy to Georgia Power--the only allowed buyer--is subject to the rules of Georgia Power's net metering program. Net metering is where residents and businesses with solar panels sell any excess energy produced by the solar panels to Georgia Power for use by other customers.

"The problem with the current [net-metering] program is... there's a waiting list and it's limited. Net-metering in Georgia has a cap of 100 kilowatt hours," Marlow said, adding that one state in the US South, North Carolina, is taking the lead on solar power. "In North Carolina, that cap is two megawatts."

"We requested a 5 megawatt cap in Georgia. Georgia Power has lobbied to limit that to a smaller number," Marlow said.

But why would Georgia Power put a cap and waiting list on purchasing solar power from Georgia residents and businesses?

The company explains that its ability to purchase solar power from Georgians with solar panels is limited by the proceeds of its "green energy blocks" program, wherein Georgia Power customers are allowed to pay extra to purchase blocks of solar energy.

"We had to cap the amount we would buy back, because there's only so much the program would bear as we rolled it out and it started to be developed," Ervan Hancock, Georgia Power's renewable and green strategy manager, told the Savannah Morning News newspaper in July 2009.

"Georgia Power will only buy solar energy if it's funded through purchase of green energy blocks. Right now they only have 4,500 customers such as the US Center for Disease Control and Warner Robins Air Force Base. The funding from that goes to buy solar energy from your rooftop," Marlow said.

However, Georgia Power charges more for solar power than it does for coal-based power, so there's no incentive for most customers to purchase it. "They [purchasers of the blocks] would pay a slight premium to buy clean energy versus buying coal energy," Marlow said.

Many of the purchasers of blocks of solar energy are government agencies that need to comply with government mandates to support clean energy, Marlow said.

Other states like Colorado have taken a different approach to encourage the use of solar panels. They charge all energy customers 50 cents a month, a very low amount, to support the purchase of solar energy from producers.

According to the Morning News, the Tennessee Valley Authority has enrolled 13,000 green-power customers and has no cap on the annual amount of green energy it will buy from producers. Florida Power & Light "is building three solar facilities that combined will generate 110 megawatts of electricity... Duke Energy in North Carolina plans to invest 50 million in rooftop installations."

To be sure, Georgia Power is only following the regulations established by the legislature and PSC. However, they lobbied for those policies to be enacted in the first place, Marlow said.

"At this point, the utilities are opposed to solar and they're not working to foster its development," Marlow said.

In addition to regulatory tricks, there are more direct ways in which big energy companies like Georgia Power are blocking solar and wind power.

"They are trying to block clean energy by trying to flood the market with cheap, dirty energy," said Erin Glynn, director of the Sierra Club's Beyond Coal Campaign, referring to companies attempting to build two new coal plants and two new nuclear reactors in Georgia alone. As previously reported by IPS, numerous coal and nuclear plants are in planning stages throughout the U.S. South.

"If you build these giant power plants, there will be no demand for clean energy. The clean technologies are here today. People have solar panels. The companies are blocking the market," Glynn said.

Big energy companies are lobbying at the state and national levels to prevent public policies from shifting towards renewable energy production as well. Georgia Power's parent company, Southern Company, employed 63 lobbyists to fight the recent federal clean energy bill.

A recent report from the Centre for Public Integrity (CPI) shows that many big utility companies employed two dozen or more lobbyists to oppose the clean energy bill, while Southern Company had far more lobbyists than any other company.

"We feel it's very important to educate our legislators, and we continue to work with Congress to further address the issues we see as critical to our ability to provide affordable, reliable energy," Southern Company spokeswoman Terri Cohilas told CPI.

Southern Company argues that pursuing renewable energy or taking steps to address carbon dioxide's recent classification as a pollutant will drive up the cost of energy to consumers. However, Marlow believes that dirty and clean energy are quickly approaching "cost parity," and he said there are indirect costs of dirty energy such as high asthma rates near coal plants.

Twenty-nine states have a renewable portfolio standard, which requires that a certain percentage of the state's energy will be renewable by a certain date.

"California and Colorado will require 30 percent comes from renewable by 2020," Marlow said. "North Carolina requires 12 percent. Georgia has no requirement. North Carolina is the only state in the Southeast that has a renewable portfolio standard."
 
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