Our Strategic Focus — 2010 and Beyond

Commercial Businesses

Compete effectively
in Ohio
 
 
 
  • Use Duke Energy Retail Sales defensively and offensively to mitigate impact of customer switching in Ohio
  • Continue to optimize Midwest coal and gas generation assets in the wholesale market
Grow renewables
and underpin with
long-term contracts;
shape federal and
state policies
  • Bring approximately 250 megawatts (MW) of wind energy on line each year
  • Expand into solar and biomass energy
  • Achieve and utilize federal and state tax incentives
Reinvest offshore
cash in international
businesses
 
 
  • Maintain earnings diversity and steady cash flows
  • Grow these businesses by investing in projects that fit our business model and our return expectations
2009 and
Early 2010 Progress
  • Retained margin in Ohio with retail customer strategy
  • Added more than 360 MW of wind energy in 2009, and ended the year with approximately 735 MW of wind power in commercial operation in three states
  • Acquired first solar project in early 2010

Frequently Asked Questions

Q: What is the value proposition for your commercial businesses, and how do they grow earnings and cash flow?
A: Our commercial businesses consist of: Midwest Generation, Renewables and Duke Energy International (DEI). Combined, these businesses provide diverse geographic, technological and fuel-sourcing advantages. This diversity is key to generating strong cash flows and earnings.

Q: What is the Midwest Generation strategy?
A: Midwest Generation includes about 4,000 megawatts (MW) of predominantly coal-fired generation plants that currently are dedicated to Duke Energy Ohio customers, and about 3,600 MW of gas-fired plants located in Ohio and other Midwestern states that serve wholesale markets. This is a mature business that has historically provided good cash flows and earnings.

In Ohio, generation is deregulated, which allows retail customers to switch to alternative suppliers. In 2009, we mitigated this threat by launching a strategy to attract customers through our own retail supplier. We expect this business to continue focusing on producing strong cash flows and solid returns. We don’t anticipate investing growth capital in this business over the next several years, and we’ll carefully manage our operating and maintenance expenses.

Q: What is the Renewables strategy?
A: We launched our Renewables business in 2007 with investments in wind energy. We now have approximately 735 MW of operating wind projects in Texas, Wyoming and Pennsylvania, and we expect to have nearly 1,000 MW of commercial wind power in operation by the end of 2010. Over the past two years, we have created solar photovoltaic, biomass and commercial transmission businesses. Like our wind business, the output from these projects will be highly contracted with creditworthy partners. Near-term growth in renewables will be driven by favorable federal and state public policy, including renewable portfolio standards and tax credits.

Q: What is the International strategy?
A: DEI consists of predominantly hydroelectric generation assets in Brazil, and a combination of hydro and fossil generation in Peru and other Latin American countries. DEI provides diverse and consistent earnings growth. Our strategy is to reinvest internally generated capital into growth projects that fit our business model and meet our return expectations.