aof culminating final industry assessment
DESCRIPTION
The AOF Industry Assessment is a powerful culminating project experience that encompasses a wide range of curriculum and themes, helps students develop valuable skills and provides evidence of college and career readiness. Hear how employer partners join with academy teachers to implement this engaging assessment experience.TRANSCRIPT
Johnathan H. Christoforatos
Alternative Energy
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
Industry History
1700
Coal Begins to Displace Use of Other Energies
1800/1821Process of Electrolysis
Discovered. First Natural Gas Well in
US Is drilled
1882First Electric Plant Built by Thomas
Edison in New York. First Hydroelectric plan in operation
1888First Windmill to
Generate Electricity
1906The "Free Alcohol Bill" Is Signed to
Promote the Use of Alcohol as an Alternative to
Gasoline
1924-1927First Federal Law
Established to Control Pollution from the Oil
Industry. First Commercial Wind Turbines Sold to
Generate Electricity
1957First 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
Industry History (Cont.)
1979Three Mile Island Nuclear Accident in Pennsylvania
1986/1989Largest Nuclear
Accident Ever Takes Place at Chernobyl.
Exxon Valdez Disaster in Alaska
Becomes the Largest Oil Spill in US Waters
2003President Bush
Unveils the Hydrogen Fuel Initiative to
Promote Hydrogen Fuel Cell
Development
2009US Invests $3.4
Billion to Modernize
Energy Grid
2010/2011BP Oil Rig
Explodes & Causes Largest Oil Spill in US
History. Earthquake off Coast of Japan Damages Six Power plants
2012US Nuclear Regulatory
Commission (NRC) Approves New Nuclear Power
Plants
Variety of Alternatives
• Nuclear• Natural Gas• Biomass• Geothermal• Wind• Solar• Hydroelectricity• Wave• Tidal Power• Landfill Gas
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
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.
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
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
Coal36%
Natural Gas36%
Renewables23%
Oil2%
Diesel2%
AES Energy Generation Portfolio
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 GluskiPresident, Director, CEOHolds insightful experience in the global electricity business. Named International CEO of the Year by
Latin Trade Magazine
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
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.”
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
Duke Energy Mgmt.Jim Rogers
Chairman, President and CEORogers 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
Duke EnergyMarketing
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
Coal94%
1%1% 1%
.03% 2%1%
2012 Duke Energy Generation Portfolio (Indiana)
Hydro
Renewable
Mkt
EE
CC
CT
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
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.”
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
Exelon Management
Christopher CranePresident & 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 BestSenior VP & CHRO
Best is responsible for setting the human
resources strategy and service delivery for 9,500
employees.
Ruth GillisExecutive VP & CAOGillis joined the Exelon family in 2000. Gillis has over 35 years in the financial sectors.
Jonathan ThayerExecutive VP CFO
Thayer has been with Exelon for over 10 years. Has an MBA
from Harvard University
Sonny GargSenior VP & CIO
Controls all aspects of IT and oversees
1300 IT employees.
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
Nuclear55%
Gas28%
Oil3%
Wind/Solar4%
Hydro6%
Coal4%
Exelon Energy Generation Portfolio
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.
Financials
Current Ratio
Debt Ratio
Growth Rate
P/E Ratio
AES Corporation
1.02 .89 7% N/A
Duke Energy Corporation
1.01 .64 35% 20.64
Exelon Corporation
1.3 .72 23% 14.28
6 Month Comparison
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
Alternative Energy’s Future
• Research into Polymer Solar Cells
• Common Algae for Biofuel Production
• Flying Wind Farms: Future Power Harvesters
My Recommendation
• A lot of room for growth• Diversified Energy generation portfolio• Stable financials• Great Management background*
*AES Legislation issues