President Ronnie called the meeting to order at 12:40 pm.  Ric Killian introduced the guests and visiting Rotarians.  David Zimmerman gave the Health and Happiness Report.  Chuck Lineberry led the singing of "Home, Home, on the Range."
     At the Head Table were Patricia Baldwin, Hope Lanier, Christie Taylor, Corrine Allen and Mary Rinehart, who gave the invocation.
     Bill Wood, in his usual inimitable way, introduced the speaker, a former President of our Rotary Club, Ruth Shaw, Senior Vice President at Duke Energy.  Bill also stated that she was "The Head Kilowatt."  Her topic was, "Happenings at Duke Energy."
     Ruth began by commenting on the two tables where certain members have been eating for years.  She also took time to tell us how much Rotary and its members had meant to her over the years.  She thanked us for our business with Duke Power.  She began with Duke Power in 1992, a time when Duke began as a prime innovator in the business.  Since then there has been a transition of Duke into a world-wide energy company.       The forces driving the change have been competition and convergence. There has always been competition, but in 1992 the Federal Government's Policy Energy Act changed the rules -- transmission lines were to be used in common, not privately owned.  Localities could now choose their own energy suppliers and get lower rates.  Competition became real.
     Today all states except Hawaii have passed regulation in which enabled consumers to be able to choose their electric supplier.  We now use energy marketing, which Bill Lee foresaw.
     In 1994-1996, the hierarchy of Duke Energy met to plan what the new Duke Power would look like.  They chose for Duke Energy to be large, successful, consolidated.
     Convergence refers to the concept that different forms of energy are interchangeable.  Duke believes that customers can get great value from different forms of energy at different seasons, at different times of day in different locations.
     How does one extract value from different forms of energy?   Natural gas is rapidly becoming the fuel of choice.  "Sparkspread" is the concept of achieving value through the differential of purchasing and use. Our industry is becoming an energy risk management business.
     There are four fundamental strategies today for Duke:

1. Providing superior energy service in the Carolinas; always with an eye to improvement.  Duke is number one in the world in customer satisfaction.
2. Owning and operating strategic energy assets world-wide.  Investing in properties where there is possibility for growth -- Australia, Latin America, for example.   Trading and selling various forms of energy.
3. Using energy risk management, especially in electricity.
4. Providing services and solutions world-wide.

     It is an exciting time to have been with Duke.  Duke's commitments to its communities, however, has not changed and will not change.  Our pledge is still superior service to you.
     A question and answer period followed:
     Question on the use of nuclear power
     Answer: Still extraordinarily important.  Cost of regulation here is also extraordinary.  No new nuclear additions recently, but 30% increase at existing nuclear plants.
     Question on Y2K
     Answer: Duke is in the forefront here in electricity and in natural gas. Duke started early in addressing the problem.  April 9 and September 9 are dates for testing the power grid nationally.
     Question as to the relative size of components of business and as to Duke's moving its headquarters from Charlotte.
     Answer: Electricity still largest.  Working on increasing the use of natural gas.  Headquarters will remain here.
     Question on the dinner-time frenzy of calls after the industry is deregulated.
     Answer: The calls by the dinner-time marketers will increase. We anticipate legislation by 2000 to deregulate the industry in North Carolina and in South Carolina and to regulate the transition.
     Question: Will a homeowner in Boston pay for electricity from NM?
     Answer: No, the economics prohibit, but we currently can't tell where the electricity comes from.
     Question regarding the Nuclear Waste Cleanup contract with the Department of Energy.
     Answer: There is a very large long-standing contract to clean-up nuclear waste.  The results have been good, but the profit has not been excessive.
     Question: How did gas go from the most expensive fuel to the least?
     Answer: More efficient technology has changed.  The cost of other forms of energy rising.  Coal-fire disappearing.
     Question: Will Mobil and Exxon get into the field?
     Answer: Perhaps.

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