Cinergy's
Rogers sees wave He's due to become CEO of Duke once it merges with Cinergy (RT, 12/2) and he's in line to lead EEI in June. The repeal of PUHCA (RT, 10/20) helps mergers, Rogers added, but it's not the primary factor. The industry is under pressure from the financial community to grow earnings. But while the economy is growing, power demand is not growing as quickly as the economy or as it has historically, Rogers said. The US is less energy-intensive than it was 30 years ago, he added, and he expects the trend to continue. Rogers thinks upward pressures on natural gas, coal and emissions credit prices will last for a while. That's going to keep power prices higher and boost volatility. He sees consolidation as the answer for firms seeking to meet Related story: Rogers BPL pioneering leads the power industry Cinergy's core business includes BPL and it's obvious that the merged Duke is poised to become the clear leader in the field. Meanwhile focus for BPL has changed ... Use this link to read the rest of the story high Wall St earnings hopes and dividend growth and to ease the impact of high fuel prices. Mergers could give firms growth beyond what's inherent in demand, he added. Does that mean Duke will try another merger after the Cinergy deal is finished? Duke will have to earn the right to do a second merger, Rogers replied, and that's his top assignment. The first goal? Delivering on promised customer savings while keeping reliable service and high customer satisfaction, he responded. Duke, said Rogers, has to prove it can make mergers work for customers and can get agreements with states in a timely manner. If he pulls it off, Duke would become an attractive partner for other firms looking to merge to ease the pressure of high fuel prices and lofty earnings goals, he said. Duke's going to have to structure the Cinergy deal in a way that lets the company easily bolt on another firm, Rogers added. He stressed a back-to-basics approach for the industry. He's watched companies try to embrace other business concepts over the past 17 years and they've all been total failures. He sees the industry staying focused on its core business -- delivering energy into homes and businesses, trying to create value for stakeholders. Originally published in Restructuring Today on December 7, 2005 Did you find the in-depth news and analysis in this story insightful and crave more? Visit Restructuring Today's website to subscribe. You'll get up-to-the-minute coverage of ongoing efforts to open competitive wholesale and retail energy markets with perspective on why some fail while others succeed. Full premium online access to thousands of back issues and scores of exclusive CEO interviews is included with your subscription.
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