The document discusses alternative energies and provides background information on several major energy companies - AES Corporation, Duke Energy, and Exelon Corporation. It includes sections on the companies' histories, management, marketing strategies, energy generation portfolios, litigation cases, and financial comparisons. The document advocates that Exelon Corporation has the most promising future due to its diversified energy portfolio, stable financials, and experienced management team.
2. Why Alternative Energies?
The rise of gasoline and oil prices may be the most prominent concern
driving the consuming public’s interest in alternative fuels, but there are a
variety of other factors that attract investors and consumers to the
alternative energy sector:
Global Industry
Concerns of global warming
Public desire for energy independence
Geopolitical concerns
Expansion of federal and/or state incentives and tax benefits.
The alternative energy sector offers dramatic growth whereas the
oil industry can potentially become stagnant
Significant increase in the generation and distribution of
alternative energies
3. Industry History
1700
Coal Begins to
Displace Use of
Other Energies
1800/1821
Process of Electrolysis
Discovered. First Natural
Gas Well in US Is drilled
1882
First Electric Plant Built by
Thomas Edison in New
York. First Hydroelectric
plan in operation
1888
First Windmill to
Generate Electricity
1906
The "Free Alcohol Bill" Is
Signed to Promote the
Use of Alcohol as an
Alternative to Gasoline
1924-1927
First Federal Law
Established to Control
Pollution from the Oil
Industry. First Commercial
Wind Turbines Sold to
Generate Electricity
1957
First Commercial
Nuclear Power Plant
Begins Operation
1973
OPEC Oil Embargo
Against the US Causes
Gas Shortages and
Rationing
1977
Department of Energy
Organization Act Is
Signed, Creating the US
Department of Energy
4. Industry History (Cont.)
1979
Three Mile Island
Nuclear Accident in
Pennsylvania
1986/1989
Largest Nuclear Accident
Ever Takes Place at
Chernobyl. Exxon Valdez
Disaster in Alaska
Becomes the Largest Oil
Spill in US Waters
2003
President Bush Unveils
the Hydrogen Fuel
Initiative to Promote
Hydrogen Fuel Cell
Development
2009
US Invests $3.4
Billion to Modernize
Energy Grid
2010/2011
BP Oil Rig Explodes &
Causes Largest Oil
Spill in US History.
Earthquake off Coast
of Japan Damages
Six Power plants
2012
US Nuclear Regulatory
Commission (NRC)
Approves New
Nuclear Power Plants
5. Variety of Alternatives
• Nuclear
• Natural Gas
• Biomass
• Geothermal
• Wind
• Solar
• Hydroelectricity
• Wave
• Tidal Power
• Landfill Gas
6. Energy Regulation
• Department of Energy (DOE)
• North American Electric Reliability Corp. (NERC)
• U.S. Nuclear Regulatory Commission (NRC)
• Bureau of Ocean Energy Mgmt. (BOEM)
• Environmental Protection Agency (EPA)
• National Institute of Standards and Technology
(NIST)
• Chemical Safety Board (Recommendations)
• Deregulation of Electricity Utilities
7. Mission Statement
“The AES Corporation is a global power company with
generation and distribution companies. Through our
portfolio of thermal and renewable fuel sources-biomass,
coal, diesel, gas, hydropower, solar, wind—we safely
provide affordable and sustainable energy in 29 countries.
We are committed to operational excellence and to
meeting the world’s changing energy needs.”
Target Market: All Building owners
looking to utilize electricity. Virtually
the entire world.
8. AES History
1980’s
AES is founded
First AES power plant built
AES becomes largest independent power producer in the USA
1998
AES acquires a minority stake in a power plant in the first-and-only
generation privatization in India
2002-2011
AES pioneers new pollution control technology and biomass
conversions in 5 countries.
Brought Renewable energy to market through acquisition and
development of AES Wind generation in the U.S. and Europe
2012
AES Brings patented storage operation system to market
9. AES Corporation Marketing
• The AES Corporation (AES) is a global
power company
• AES owns a portfolio of electricity
generation and distribution businesses
in 25 countries across five continents
• Distribution networks serving over 11 million
people
• Generation capacity of approximately
43,000 megawatts (MW)
Strengths
• Global presence
• Strong financial performance
• Diversified and balanced
energy portfolio
Weaknesses
• Concentrated suppliers and
customers
• Very Slow Growth in latter years
Opportunity
• Project order backlog
• Increasing demand for
electricity in the U.S.
• Focus on alternative energy
Threats
• Rising fuel prices
• Foreign currency fluctuation
• Environmental regulations
Coal
37%
Natural Gas
36%
Renewables
23%
Oil
2%
Diesel
2%
AES Energy Generation
Portfolio
10. AES ManagementCharles Rossoti
Non Executive Chairman of the board
Holds MBA with high distinction
from Harvard Business school. From
1997 to 2002 Rossoti was the
commissioner of internal revenue
for the IRS
Executive Vice
President, CFO
COO, Executive
Vice President
CIO, SVP of
Global
Operations
Brian Miller
Executive Vice President,
General Counsel, and
Corporate Secretary
Andrés Gluski
President, Director, CEO
Holds insightful experience in the
global electricity business. Named
International CEO of the Year by
Latin Trade Magazine
11. AES Litigation
Craig Imler, et al. v. AES Corporation, et al
Claim: AES issued a series of material misrepresentations to the
market between April 26, 2001 and February 14, 2002, thereby
artificially inflating the price of AES securities.
Outcome: AES settled the lawsuits which resulted in them having
to pay a total of $5 million to the settlement fund.
Donald O. Stafford, et al. v. AES Corporation, et al.
Claim: AES materially misrepresented the Company's business
condition and failing to disclose material facts concerning the
impact of the business decline of its United Kingdom operations
Outcome: Court dismissed all of the claims except for the claim
alleging that the registration statement and prospectus
disseminated to the IPALCO stockholders for purposes of the
Share Exchange failed to disclose purported temporary defaults
on their contracts
12. Mission Statement
“At Duke Energy, we make people’s lives better by providing
gas and electric services in a sustainable way — affordable,
reliable and clean. This requires us to constantly look for ways
to improve, to grow and to reduce our impact on the
environment.”
13. Duke Energy History
Early 1900’s
Catawba Power Company is founded by three visionaries
Catawba Hydro Station became CPC’s first electricity providing power plant
Hydroelectric fleet continues to grow and begins to serve both commercial
and residential grids
1965
The first nuclear project, the Keowee-Toxaway Project, was launched
Keowee-Toxaway project earns Duke Energy its first of three Edison Awards, the
power industry's highest honor
1980’s
Duke Power president leads the creation of the Institute of Nuclear Power
Operations
Duke president again takes the lead and organized the World Association of
Nuclear Operators
1990’s
Duke takes interest in natural gas
Duke Power and PanEnergy merged to form Duke Energy
2000-Present
Duke Energy and Cinergy Corp merge expanding services into 3 states
Duke Energy and Progress Energy merge and expands service into Florida and
forms the largest electric utility in the United States
14. Duke Energy Mgmt.
Jim Rogers
Chairman, President and CEO
Rogers has been with Duke Energy
for over 15 years. Also he was
Chairman and CEO of Cinergy
Corp. from 1994 until its merger
with Duke Energy
Jennifer Weber
Executive Vice
President and CHRO
Keith Trent
Executive Vice
President and
COO
Lee Mazzocchi
Senior Vice President
and CIO
Lynn Good
Executive Vice
President and
CFO
15. Duke Energy
Marketing
Strengths
• Strong market position
• Increasing revenues and
operating profits
• Extensive generation,
transmission and transportation
infrastructure
Weaknesses
• Concentrated area of operation
• Unfavorable generation portfolio
Opportunity
• Growing popularity of renewable
energy
• Rising population in Ohio
• Increasing demand for electricity
in the U.S.
Threats
• Consolidation in the North
American electricity utility
industry
• Compliance to enviromental
laws and regulations
• Economic slowdown in the U.S.
• Corporate Social
Responsibility
• New Nuclear Generation
• Smart Grid
• Energy Efficiency &
Conservation Initiatives
Coal
94%
1%
1% 1%
.03% 2%
1%
2012 Duke Energy Generation
Portfolio (Indiana)
Hydro
Renewable
Mkt
EE
CC
CT
16. Duke Energy Litigation
KENNETH WALTON GEORGE, et al, v. DUKE ENERGY RETIREMENT
CASH BALANCE PLAN, et al. (2002)
Claim: The class pursued claims that Duke Energy calculated
interest credits at an incorrect rate and that Duke energy also
failed to properly calculate certain lump sum distributions.
Outcome: Duke Energy and plaintiffs came to settlement resulting
in Duke Energy paying $30 million dollars to class members
Maurine Nieman, et al. v. Duke Energy Corporation, et al.
(2012)
Claim: The class is currently pursuing claims that Duke Energy
issued misleading statements about their merger with “Progress
Energy” in order to obtain approval from Progress Energy’s Board
of Directors.
Outcome: Pending
17. Mission Statement
“We are committed to meet future energy demand with less
impact on our climate and with minimal burden on the
nation’s economy. To meet these challenges, the Exelon
family of companies strives for the highest standards in all
aspects of energy, from generation to marketing to delivery.”
18. Exelon History
Early 1900’s
The Philadelphia Electric Company (PE) is incorporated
Samuel Insull merges Commonwealth Electric Company and
Chicago Edison Company to form Commonwealth Edison (ComEd)
1930’s
PE merges with United Gas Improvement Company
1953
The Public Service Company of Northern Illinois merges with ComEd
1960’s
ComEd operates the nation's first privately financed commercial
nuclear power station
1990-2000
PE adopts the name PECO Energy Company; ComEd becomes part
of a new holding company, Unicom Corporation
PECO and Unicom merge to form Exelon Corporation
2012
Exelon Corporation merges with Constellation
19. Exelon Management
Christopher Crane
President & CEO
Crane has over 30 years in the
alternative energy industry. Since
joining Exelon in 1998, Crane
served as Chief Nuclear officer,
and currently serves as president
and CEO.
Amy Best
Senior VP & CHRO
Best is responsible for setting
the human resources
strategy and service delivery
for 9,500 employees.
Ruth Gillis
Executive VP & CAO
Gillis joined the Exelon
family in 2000. Gillis has
over 35 years in the
financial sectors.
Jonathan Thayer
Executive VP CFO
Thayer has been with
Exelon for over 10
years. Has an MBA
from Harvard University
Sonny Garg
Senior VP & CIO
Controls all aspects
of IT and oversees
1300 IT employees.
20. Exelon Marketing
Corporate Social
Responsibility
Diversified Energy
Portfolio
Exelon 2020
Strengths
• Significant nuclear power
generation assets
• Strong retail customer base
• Extensive generation,
transmission and transportation
infrastructure
Weaknesses
• Sluggish revenue growth and
fluctuating margins
• Weak performance of ComEd
• Dependence to meet financial
obligations
Opportunity
• Growing popularity of
renewable energy
• Investment in solar energy
• Increasing demand for
electricity in the U.S.
Threats
• Consolidation in the North
American electricity utility
industry
• Environmental Liabilities
• Expiry of PPA
Nuclear
55%
Gas
28%
Oil
3%
Wind/Solar
4%
Hydro
6%
Coal
4%
Exelon Energy Generation
Portfolio
21. Exelon Corp. Litigation
Nicholas Stavros, et al., v. Exelon Corporation, et al.
Claim: Exelon repeatedly issued statements concerning the strength
of its operations and repeatedly assured the market that it would
meet or beat its $4.50 per share earnings figure for 2001.
Outcome: Exelon won the case. Defendants' earnings projections
were accompanied by sufficient cautionary language such that the
statements fall under the first prong of the PSLRA's safe harbor.
United States v. Exelon Corporation and Constellation Energy
Group, Inc.
Claim: Exelon’s acquisition of Constellation Energy group would
create one of the largest electricity companies in the United States,
and substantially lessen competition.
Outcome: The courts ruled that the acquisition of Constellation may
be approved given that Exelon sell three electricity-generating plants.
24. Technological Impact
• Technology is always changing and evolving
• New safety and protection to avoid disasters
• More efficient energy generation structures
• The U.S. is investing in technology to increase the production
of Alternative Energies
“The advance of technology, like the growth of population
and industry, has also been proceeding exponentially.”
----CARL KAYSEN, Foreign Affairs
25. Alternative Energy’s Future
• Research into Polymer Solar Cells
• Common Algae for Biofuel Production
• Flying Wind Farms: Future Power Harvesters
26. My Recommendation
• A lot of room for growth
• Diversified Energy generation portfolio
• Stable financials
• Great Management background*
*AES Legislation issues
