Analysis of Duke Energy Corporation

Subject: Analysis of Duke Energy Corporation

In this report I have gathered information on Duke Energy and its position in the public utility industry. With the high overhead cost of getting into the utility industry Duke Energy has a great competitive advantage. I will discuss how the company started, its current stance in the industry, and also the future direction of Duke Energy. Along with the status of the company I will cover the products and services offered by them and how they are constantly changing to meet the needs of its customers, employees and the environment. Through secondary research I will look at the stability and profitability of Duke Energy.

Company History

In the early 1900s Dr. W. Gill Wylie, James Buchanan Duke and William States Lee founded the Catawba Power Company. It all started when Duke, Wylie, and Lee met to determine the future of electric power for the Carolinas. They saw the south's economy struggling over the limitations of energy and developed an electric system of hydro-powered generating stations. They did this in hope of boosting economic growth through powering industries with their new power company (Our History, 2011).

Lee was the chief engineer at this time and drew up detailed plans for hydroelectric plants on the Yadkin and Catawba Rivers. Impressed with Lee's plans Duke and Wylie matched on a $50,000 investment in 1905. By 1907 Catawba Power Company had two electric plants in full operation, in Great Falls and India Hook Shoals South Carolina (Funding Universe, 2006). The majority of the power produced by the hydroelectric went to commercial textile mills, but this was no coincidence. Duke did not only bring electricity to the Carolinas he brought the textile factories that bought the electricity. He made huge investments in existing and new factories and offered financial backing to any mill that bought power from the company. This started an industrial revolution in the Carolinas with Duke Power as its essential base for electricity (Funding Universe, 2006). Duke Power's success by the early 1920s was responsible for the fastest growing textile industry in America. They supplied one sixth of all U.S. spindles and over 300 cotton mills with electricity (Funding Universe, 2006). Over time Duke Power began to provide power not only to textile mills but also to private residences for the growing conveniences that electricity powered (Our History, 2011).

Combined with the emergence of electric lighting and growing appliance use residential service became one of Duke Powers's three main sources of revenue, alone with commercial and industrial (Funding Universe, 2006). As the Great Depression hit the textile industry the utility business also suffered. During the years of the depression all plans for future construction in the Carolinas