sustainability report 2008 Paron Lagoon, Cañon del Pato Complex, Peru REDEFINING OUR BOUNDARIES Contact Information Michael Dean Bernard We welcome your comments General Manager - Sustainability, EHS & CM and questions about this report. Duke Energy International, LLC Send any feedback to: 5555 San Felipe, Houston, TX 77056 firstname.lastname@example.org Contents Letter from the President ......................................................................................................................................................................... 2 About this Report ....................................................................................................................................................................................... 3 section one: Profile ......................................................................................................................................................4 Strategy and Analysis ................................................................................................................................................................................ 5 Organization Profile ................................................................................................................................................................................... 9 Report Parameters ....................................................................................................................................................................................12 Governance, Commitments and Engagement ..............................................................................................................................15 section two: Economic Performance .................................................................................................................... 20 Financial Highlights .................................................................................................................................................................................22 Market Presence ........................................................................................................................................................................................23 DEI’s Economic Impacts ..........................................................................................................................................................................23 System Efficiency ......................................................................................................................................................................................27 section three: Environmental Performance ........................................................................................................... 28 DEI’s EHS Policy and Principles .............................................................................................................................................................29 EHS Organization ......................................................................................................................................................................................30 Management Approach .........................................................................................................................................................................32 Environmental Indicators ......................................................................................................................................................................36 section four: Social Performance ........................................................................................................................... 50 Health and Safety......................................................................................................................................................................................51 Safety Highlights .......................................................................................................................................................................................57 Labor Practices...........................................................................................................................................................................................59 Workforce Highlights..............................................................................................................................................................................64 Human Rights.............................................................................................................................................................................................65 Society ..........................................................................................................................................................................................................65 GRI Standard Disclosure Profile ...........................................................................................................................................................74 Le t ter from t he Pres ident of our markets in a responsible way. • Help build strong communities by actively supporting and involving In this environment, DEI recognizes ourselves in the communities the need to reduce carbon dioxide where we do business. emissions, identify and develop alter- • Be profitable and demonstrate Richard McGee, President native energy sources, support the strong governance and communities where we operate, and transparency through a continue to grow and develop an ex- continued focus on productivity Dear Stakeholders, ceptional workforce, all while remain- and efficiency in our business ing profitable in a way that creates and an internal and external I am proud to present Duke Energy long term value for our shareholders commitment to open, honest and International’s first Sustainability and other stakeholders. frequent communication. Report. This report illustrates how we have been operating our business In order to meet these multi-faceted While we still have much to accom- with a focus on sustainability for many challenges, our sustainability plan plish, I am pleased to report that we years. Additionally, we hope to give focuses on the following five main are off to a good start. This report you a better understanding of who we objectives: details some of our accomplishments are as a company and the values and to date in each of these areas and sets principles that drive our strategy and • Provide products and services for forth our focus areas going forward operating philosophy. You will learn the markets we serve that balance for each objective. We are proud of how our approach to our business and the realities of our markets with what we have accomplished so far, markets is grounded in a long-term the fact that we live in a carbon- but recognize that sustainability is a perspective and the simple yet power- constrained, competitive world. long-term journey. We have a solid ful imperative of operating in a way • Reduce our environmental foundation on which to build and that is good for people, the planet and footprint by maintaining the low I invite your feedback on ways that profits. At Duke Energy, these are not carbon intensity of our generation we can improve and enhance that mutually exclusive concepts; quite portfolio, reducing Greenhouse foundation. Your comments will help the contrary, they are inseparable and Gases and other pollutants, shape and inform our future plans and mutually dependent objectives, all of increasing the efficiency of our progress, and ensure that we continue which must be met in order for us to operations and pursuing genera- to operate our business in a way that sustain success over the long-term. tion solutions for our markets that is good for people, the planet and strike the proper balance between profits. DEI’s business is focused on power cost and reliability on the one generation in Latin America, but the hand, and environmental impact current economic crisis highlights on the other. how we live in a world that is intercon- • Attract and retain a diverse Sincerely, nected and interdependent. Our eco- workforce by maintaining and nomic interdependency, our shared enhancing a work environment and increasingly scarce resource base, and culture that places our Richard McGee and our common living environment employees and contractors at President, Duke Energy International ensure that our actions in one corner the center of a value system with the highest level of priority on June 15, 2009 of the globe have real consequences in other parts of the world. Today, this employee and contractor safety, reality sets the context for a global training and education, and economy in crisis and an energy responsibility to society and the industry that is being challenged to communities where we live and transform itself to meet the demands work. 2 Duke Energy International – Sustainability Report 2008 Ab out t his R epor t This first DEI Sustainability Report is a As this report shows, DEI is truly significant milestone for our company. committed to sustainability It describes our strategies, activities throughout our operations, and I am and performance across the three delighted to highlight our progress areas of sustainability—economic, over the last few years. It is thanks to Michael D. Bernard, General Manager Sustainability, EHS&CM environmental and social—and the hard work of all our employees highlights our contributions and and contractors that we have the commitments toward our people, opportunity to report on DEI’s We are at a defining time in history, surrounding communities, the achievements. where continuing population growth environment, safety of our employees and the associated consumption and our business. It also reflects the This report has been organized of natural resources, global climate profound changes at our company following the Global Reporting change, and the emergence of strong and in the communities we serve, Initiative (GRI) Guidelines, and social responsibility and indigenous and demonstrates we understand after performing a self-assessment people movements are just a few sustainability as a business strategy. following the GRI Guidelines issues fundamentally changing We are learning to take a longer-term Application Levels criteria, we believe our lives and the direction of our view of our decisions, our investments we meet GRI Application Level B. company. To address these issues, it and the potential associated impacts. is critical to establish a new decision- We are embracing the need to I welcome your comments and making framework that will allow consider the economic, community feedback on how we can improve us to maximize opportunities and and environmental nexus of our our processes to drive toward a more efficiently minimize risks presented by decisions. sustainable future. these changes. As we embark on this journey, In 2007, Duke Energy Corporation we will continue to improve and Michael D. Bernard published its first five-year further incorporate sustainability General Manager Sustainability, EHS & CM sustainability plan and report. considerations in our day-to-day June 15, 2009 This plan reflects Duke Energy’s operations, relying on our greatest commitment to proactively manage asset, our people, to meet these goals those areas of sustainability that are and challenges. most material to us in a way that is good for people, the planet and profits. During the past year, Duke Energy International (DEI) assessed our operations and identified the most significant issues under each focus area of the Duke Energy Corporate Sustainability Plan. This 2002 C C+ B B+ A A+ process resulted in prioritizing, In Accordance developing clear objectives and Mandatory Self monitoring progress to support each Declared Report Externally Assured Report Externally Assured Report Externally Assured of these areas. As we move forward Third Party and refine our objectives and targets, Checked Optional we expect to reflect on and gain from GRI the input of our stakeholders. Checked DEI’s GRI Application Level Grid Duke Energy International – Sustainability Report 2008 3 section one: Profile Duke Energy International (DEI)—a subsidiary of Duke Energy Corporation, one of the largest electric generation businesses in the United States, providing energy and natural gas distribution service throughout parts of the Midwest and the Carolinas—operates and manages power generation facilities in Latin America, with hydro and thermoelectric assets in Argentina, Brazil, Ecuador, El Salvador, Guatemala, and Peru, making it a widely diverse company, both culturally and geographically. Our headquarters are in Houston, Texas. 4 Duke Energy International – Sustainability Report 2008 Strategy and Analysis Key Impacts, Risks and Opportunities Duke Energy Corporation operates with an eye on the future, recognizing a responsibility to The three key areas of sustainability – economic, contribute to a healthy economy, clean environ- environmental and social – and the key impacts, ment and strong social fabric today and for future risks and opportunities associated with each are generations. This balanced, long-term approach summarized below. Each area is discussed in more is part of our business strategy and aimed at detail throughout this report. building value for our investors. This commitment is reinforced by clear management expectations and company-wide policies by which progress is Economic Dimension regularly measured. Providing investors a superior and sustainable re- DEI’s sustainability approach, is aligned and con- turn on investment is one of Duke Energy’s sustain- sistent with Duke Energy’s sustainability plan and ability goals. To accomplish this, we work with our goals. It recognizes the interdependence among business units and companies to optimize invest- customers, the health of the communities served, ment capacity, identify strategic growth opportuni- and business success as drivers of our commitment ties, meet and exceed the operational effectiveness to sustainability and environmental leadership. of our assets, and uphold a solid financial structure that helps us meet our strategic objectives. DEI’s sustainability plan reflects our commitment to operate the company such that we benefit Equally important is our ability to provide in- our employees, the surrounding communities, novative products and services, satisfy growing the environment, and our business viability. The demand, and meet stakeholder expectations. Do- plan recognizes and addresses the key economic, ing so, DEI not only creates value for investors, we environmental and social opportunities and also stimulate economic growth in the communi- risks facing the electric industry today and in the ties where we operate, through investments in future, expands on our business strategy and infrastructure, technology, research and develop- values, and focuses on the areas most pertinent to ment, and human resources, all of which directly sustainability. The goals of this plan are described contribute to economic development. on pages 6 and 7. Duke Energy International – Sustainability Report 2008 5 D u ke Ene rg y ’s s us t a i n a bilit y pla n g oa ls Goal: Innovative products and services Provide innovative Goal: products and services for Environmental a carbon-constrained, footprint Goal: competitive world. Reduce our environmental Quality workforce Goal: footprint. Attract and retain a diverse, Strong communities Why it is important: high-quality workforce. Help build strong Our customers want Why it is important: communities. products and services As an energy company, we Why it is important: that keep them have a large impact on the Energy companies will be Why it is important: competitive regionally and environment and depend differentiated by the quality, Our success is linked to the globally, yet respond to on natural resources creativity and customer health and prosperity of environmental concerns. for much of our fuel. focus of their employees. the communities we serve. 6 Duke Energy International – Sustainability Report 2008 D u ke Energy I nter nat ion al ’s ma na gement approach to sustainab i l i t y 1. Develop a sustainability plan Internal inputs: • vision and values • business strategy • input from company Subject Matter Experts (SMEs) Goal: External inputs: k • ey economic, environmental Governance and and social issues transparency • best practices Be profitable and • stakeholder feedback 4. Refine the demonstrate strong sustainability plan • nnual review and improvement a 2. Integrate into the governance and business and execute of the 5-year plan transparency. • oals added or retired based g 5 • -year plan approved by on new developments executive leadership a • ccountable executive Why it is important: assigned to each goal Creating shareholder s • upport of initiatives and value and earning the goals incorporated into annual departmental plans trust and confidence of our many stakeholders keep us in business. 3. Monitor and communicate progress s • emi-annual updates to executive leadership a • nnual update to external stakeholders via the Sustainability Report DEI Headquarters, Houston, TX . Courtesy of Houston Architecture Duke Energy International – Sustainability Report 2008 7 Accomplishing these goals helps us As part of our strategy, we have chain and contractors to improve en- manage potential risks arising from: invested in renewable energy and en- vironmental and social performance. vironmentally responsible technology, • Limited capital availability for ex- demonstrating our commitment to To meet these challenges, we are com- panding electricity infrastructure corporate responsibility. Furthermore, mitted to continuous improvement projects in developing countries. we are constantly working to improve in quality of service, customer service • Need to leverage current genera- energy efficiency both as an electric and supply chain. In recent years, the tion assets, while investing in new generator incorporating technology supply chain has been the object of technologies. to produce energy cleanly and ef- increased auditing and improvement. • Ability to meet demand growth. ficiently, and as an end-user, improv- ing energy efficiency in the workplace Moreover, we are continuously direct- through process improvement and ing resources toward improving the Environmental Dimension employee awareness. levels of health and safety in the work- place, and training and awareness to Electricity plays a vital role in econom- enhance internal skills and capabilities ic development: It supports techno- Social Dimension that create employee development logical advances, fosters infrastructure opportunities. Specific initiatives, such investments and generates jobs. Yet, With an increasingly important pres- as the Continuous Improvement Pro- the electric power generation lifecycle ence in Latin America, DEI must man- gram (PMC for its acronym in Spanish has potential environmental impacts age important challenges. Externally, and Portuguese) prove DEI’s commit- on biodiversity, natural resources, these include gaining community ment to our employees. emissions, noise, discharges, and the support and acceptance, advancing visual landscape. In addition, global fair and ethical business practices, and Relations with the communities where climate change continues to be one balancing stakeholder expectations. we operate have become crucial. We of the most pressing challenges faced Internally, a critical focus is protecting are promoting dialogue and com- by the electric utility sector and the the wellness, health and safety of em- munication with them and adopting world. ployees, and working with the supply measures to facilitate their social and economic development. Through a clear understanding of each commu- nity’s needs, we support and sponsor events and activities geared toward improving their quality of life in education, recreation, environmental protection, infrastructure, and health and safety. Activities we sponsor and take part in include: • Preventive health programs. • Donations of school supplies and toys. • Volunteer activities to improve local communities’ infrastructure and environment. • Local events. • Charitable events. Paron Reservoir, Cañon del Pato Complex, Peru 8 Duke Energy International – Sustainability Report 2008 DEI focuses on activities considered Operational Structure Organization Profile part of our core business, and subcon- of the Organization tracts those that can be performed more efficiently by specialized busi- Primary brands, products and services, nesses. Those businesses are required Our organizational model consists of operational structure, and countries to employ high standards of quality decentralized business units, as well and markets where DEI is present are and responsible behavior regarding as centralized corporate functions, for summarized below. the environment, labor practices and governance and control. This struc- social areas, as stipulated in our Sup- ture allows each business unit and plier, Contractor and Partner Manage- company where we have a majority ment Policy, associated guidelines, and interest to adapt to the market and Primary Brands Products Operating Principles. regulatory conditions where it oper- and Services ates, while aligning it to our overall strategy. The following figure presents our organizational structure: The Duke Energy brand is more than words and a logo. It is an identity. At its heart, it expresses the company’s core values and future ambitions. At its best, it positions us as an industry leader and a good corporate citizen. Richard McGee President Behind every strong brand is a cohe- sive communications strategy. Each employee communicates this strategy John Enloe Mickey Peters in some form or another every day. Senior Vice-President Commercial Senior Vice-President Regional Every interaction—email, phone calls, Operations and Development Operations Brazil speeches, forums or a presentation to a team—whether inside the company or Edward Hile Laine Powell out, reflects our brand. Vice-President Commercial Vice-President Regional Operations and Consulting Operations Argentina DEI’s primary product is electricity for Stacey Schrader Guillermo Fiad the wholesale and retail market. We also Vice-President Accounting Country Director Operations Argentina offer energy commercialization services. Cheryl Lipshutz Héctor Gutiérrez Through our products and services, Vice-President Mergers, Acquisitions Vice-President Regional DEI enhances the quality of life, reli- and Government Affairs Operations Peru and Ecuador ability and safety of our customers. We Michael Bernard Open accomplish this by promoting energy General Manager Sustainability, EHS&CM Vice-President Regional efficiency and offering a high-quality, Operations Central America and reliable electric supply, while car- Jacquelyn Salinas ing for the environment . Managing Director Human Resources Hugo Ferrer To deliver products and services suc- Managing Director Regulatory cessfully, all DEI facilities have imple- and Market Analysis mented DEI’s Environmental, Health and Safety Management System, based DEI’s Organization as of December 31, 2008 on widely recognized international standards for managing quality, envi- ronment, and health and safety. The system, aligned with Duke Energy’s vision, presents the framework to pro- vide and deliver high-quality products and services responsibly. Duke Energy International – Sustainability Report 2008 9 Countries/markets where the organization operates DEI owns and operates power generation facilities throughout Central and South America, including Argentina, Brazil, Ecuador, El Salvador, Guatemala, and Peru. We are the fourth largest generator of electricity in Latin America, based on net capacity, with approximately 75 percent of our generating capacity hydroelectric and nearly 90 percent either currently contracted or receiving a system capacity payment. Our total gross electrical capacity is 4,373 megawatts (MW), produced by our Central and South American power generation facilities. We also own equity investments in Saudi Arabia and Greece. DEI Scale Scale 2008 Employees 1,118 Net Sales (in millions of dollars) 411 Quantity of products and services (GWh sold) 18,066 Proportional Capacity in Operations (MW) 4,018 Detailed information on the scale of DEI appears in the economic and social sections of this report, and in Duke Energy’s 10K filing. 10 Duke Energy International – Sustainability Report 2008 Significant Changes During DEI Brazil Ranked “100 Best DEI El Salvador Wins 3M the Reporting Period Companies to Work For” Industrial Safety Award DEI El Salvador received, for the sec- DEI implemented the following promi- ond consecutive year the first place nent activities in 2008: 3M Industrial Safety Award in the • Integration of Aguaytia Energy Power Generation, Transmission, and group into DEI Egenor in Peru (In- Distribution Section for our demon- tegration has not been complet- strated commitment to employee ed, thus for the purpose of this health and safety. 3M El Salvador cre- report most of the information is DEI Brazil Receives the “100 Best ated the “3M Industrial Safety Award” Companies to Work For” 2008 presented as separate business in 1993 to recognize companies that units). have invested in employees’ training, • Addition of a 6 MW combined provided a safe work environment, cycle thermoelectric unit to the DEI Brazil has for the fourth time and shown outstanding progress in Arizona power facility in Guate- ranked in the “100 Best Companies to implementing health and safety pro- mala. Work For in Brazil 2008,” as declared grams that have reduced workplace • Construction of the following by Great Place to Work Institute in injuries and incidents. projects: partnership with Época magazine. • “Carhuaquero IV” (operational DEI Brazil also placed on the 100 Best The panel of judges included repre- on May 22, 2008) and “Caña list in 2002, 2006 and 2007. In the sentatives from the Ministry of Labor Brava” (operational on No- classification of the 100 Best, Great and Social Security, the Salvadorian vember 17, 2008) hydroelec- Place to Work Institute analyzes a Social Security Institute, the National tric facilities, with 9.68 and 5.5 number of factors, including how Science and Technology Council, MW, respectively in Peru. companies hire and integrate new Professional Consultants in Indus- • “Las Flores” a 195 MW staff, how employees are inspired trial Health and Safety, the Business simple-cycle natural gas for the work at hand, whether good Consulting and Development Center, turbine in Peru. processes exist for listening and and 3M El Salvador. This year compa- • “Las Palmas II,” a 85 MW coal acting on employee opinions and nies were evaluated on management power plant in Guatemala. suggestions, how employees are commitment, risk management, and • “Retiro” and “Palmeiras”, two trained and developed, and how top innovation — DEI El Salvador was small hydropower plants performance honored for the Perfect Day program, (SHP) with 16 MW each, being is recognized. which recognizes all employees and built in the Mirim Sapucai DEI Brazil was contractors for their daily commit- river, Sao Paulo State, Brazil. among the ment to safety. Both SHPs are projected to 25 best in start commercial operations the following in August of 2010. categories: Awards Received • Camaraderie — 5th • Opportunity — 8th DEI has been the proud recipient of • Services — 10th numerous awards and honors over • Respect — 12th the years. These awards recognize • Quality of life — 13th not only our achievements, but also • Communications — 17th our employees’ hard work, innova- • Educational levels — 18th tive thinking, and commitment to a • Staff turnover — 20th high-performance work culture. The • Integration — 20th following case studies describe two prestigious awards received by DEI in 2008. 3M Industrial Safety Award, DEI El Salvador Wins First Place Duke Energy International – Sustainability Report 2008 11 30 Best Companies to Work for in Peru Report Parameters Great Place to Work Institute recognized DEI Egenor for the sixth consecutive year as one of the best companies to work for in This Sustainability Report is the first by Peru. It was the only energy company to be DEI to describe how we are facing the ranked among the top 30 companies. The modern-day call for sustainable busi- Institute acknowledged DEI Egenor for of- ness activities. The reporting period fering an excellent work environment and is 2008; however, since it is our first clear career paths. report, significant activities regarding sustainability that occurred previously are included. We anticipate updating Eloy Chaves Honor Medal this report annually. DEI Brazil was awarded the Eloy Chaves Honor Medal for the eighth consecu- tive time. The award accounts for total incident case rate, lost workday case rate, Boundaries and Scope total severity rate and fatalities, for both employees and contractors. It is granted annually to electricity companies with the lowest rates of work-related accidents during the year. DEI Brazil ranked second in the Generation/ Transmission Utilities This first DEI Sustainability Report category—completing 1.5 million work hours without a lost-time incident in 2007. compiles our strategies, activities and performance across the three areas of sustainability: economic, environmen- Dow Jones Sustainability Indexes tal and social. To define the boundary of this report, we followed the Global Duke Energy was named to the Dow Jones Sustainability Index for North America Reporting Initiative (GRI) Reporting for the third consecutive year. The designation was based on a thorough assess- Guidelines R.G. 3.0, and the Report- ment of our economic, environmental and social performance, with a strong ing Guideline & Electric Utility Sector focus on long-term shareholder value. Supplement pilot version (RG & EUSS). The intention of this first report is to provide internal audiences a clear overview of our sustainability perfor- mance, risks and opportunities, and develop the knowledge to improve EEI Advocacy Excellence Award for Energy Efficiency our process in our next reporting cycle. This report covers: Duke Energy Received the prestigious Advocacy Excellence Award from the Edison • The principles, policies and Electric Institute (EEI)—the association of U.S. shareholder-owned electric compa- guidelines that we approve and nies—in recognition of our comprehensive advocacy program to promote energy adopt as well as the sustainable efficiency with customers and employees, and at the federal, state and local levels. development strategies that apply to all our business units, and are promoted in companies where we hold a majority interest. • The performance metrics and quantitative information for each World’s Most Ethical Companies business unit and company where we hold a majority interest, in Duke Energy was named one of the World’s Most which both the main business is Ethical Companies by Ethisphere Institute—a think- generation and commercialization tank focused on research and promotion of profit- of electric power and natural gas, able best practices in global governance, business and its operations have significant ethics, compliance and corporate responsibility—for environmental or social aspects. the second year in a row. 12 Duke Energy International – Sustainability Report 2008 DEI’s business units that are part of DEI Guatemala the scope of this report are discussed below: DEI Guatemala generates and commercializes electricity through its three thermoelectric plants—Arizona, DEI Argentina Las Palmas and La Laguna—located Cerros Colorados Hydroelectric Complex, DEI Argentina in the districts of Escuintla and DEI Argentina is dedicated to the Guatemala. Total installed capacity is generation of electric power and approximately 290 MW. wholesale commercialization of electricity and natural gas. It has an installed capacity of 576 MW in the DEI Egenor, Peru province of Neuquen, encompassed by the Planicie Banderita hydroelectric DEI Egenor generates and power station that is part of the Cerros commercializes electric power Colorados hydroelectric complex, and through two hydroelectric power the Alto Valle thermoelectric power stations, Cañon del Pato, and plant. DEI Argentina also has licenses Carhuaquero, and six thermoelectric Capivara Hydroelectric Plant, DEI Brazil to commercialize electricity and plants in northern Peru. These facilities natural gas in the wholesale markets. generate approximately 510 MW of power. DEI Brazil / DEI Geração Paranapanema Grupo Energetico Aguaytia, Peru DEI Brazil/DEI Geração Paranapanema operates and manages hydroelectric Grupo Energetico Aguaytia is divided plants along the Paranapanema River, into three independent businesses: between the states of Sao Paulo and • Aguaytia Energy, dedicated to Parana. The eight plants managed by the commercialization of natural DEI include: Jurumirim, Chavantes, gas and its by-products in Peru. Arizona Power Plant, DEI Guatemala Salto Grande, Canoas I, Canoas II, Activities include extraction, Capivara, Taquaruçu and Rosana production, transportation, plants. They have a total installed storage and commercialization. capacity is 2,307 MW. • Termoselva S.R.L., which generates electricity using the dry gas produced by Aguaytia Energy. Electroquil S.A., Ecuador This facility has an installed capacity of approximately 177 Electroquil, located in the province MW. of Guayas—Republic of the Ecuador, • Eteselva S.R.L., dedicated to generates electric power from a the transmission of electricity. thermoelectric plant with an installed A section of this transmission Electroquil Power Plant, Ecuador capacity of 192 MW. line is part of the main national transmission system of Peru— “Sistema Interconectado Nacional DEI El Salvador del Peru.” Located in the Republic of El Salvador, EI also own equity investments in DEI El Salvador generates and Saudi Arabia (National Methanol commercializes electricity through Corporation NMC) and in Greece its thermoelectric plants in Acajutla (Attiki Gas and CSCC). These and Soyapango, with a total installed investments are not part of the scope capacity of 328 MW. of this report. Acajulta Power Plant, DEI El Salvador Duke Energy International – Sustainability Report 2008 13 Basis for Reporting The environmental information is consolidated, apply- ing the percentage of participation, direct or indirect, for each DEI business unit: Cahuarquero Hydroelectric Plant, DEI Egenor Peru Business Units % DEI Argentina 91 DEI Brazil 95 Electroquil S.A. – Ecuador 83 DEI El Salvador 90 DEI Guatemala 100 DEI Egenor – Peru 100 Grupo Energetico Aguaytia – Peru 76 Aguaytia Power Plant, Peru Total MW Owned MW Country Facility Location Fuel Capacity Capacity Argentina 576 523 DEI Argentina Alto Valle Thermoelectric Plant Neuquen Province 97 88 Natural Gas Cerros Colorados Hydroelectric Plant Neuquen Province 479 435 Hydro Brazil 2,307 2,116 DEI Brazil / DEI Geração Jurumirim Hydroelectric Plant Piraju, Sao Paulo State 98 93 Hydro Paranapanema Chavantes Hydroelectric Plant Chavantes, Sao Paulo State 414 393 Hydro Salto Grande Hydroelectric Plant Salto Grande, Sao Paulo State 74 70 Hydro Canoas II Hydroelectric Plant Palmital, Sao Paulo State 72 34 Hydro Canoas I Hydroelectric Plant Candido Mota, Sao Paulo State 83 39 Hydro Capivara Hydroelectric Plant Taciba, Sao Paulo State 640 608 Hydro Taquaruçu Hydroelectric Plant Sandovalina, Sao Paulo State 554 526 Hydro Rosana Hydroelectric Plant Rosana Sao Paulo State 372 353 Hydro Ecuador 192 159 Electroquil Thermoelectric Plant Guayaquil 192 159 Diesel El Salvador 328 296 DEI El Salvador Thermoelectric Plant Acajutla Diesel The Port of Acajulta 150 135 Fuel Oil (Pacific Ocean) Thermoelectric Plant Acajutla Vapor & Gas The Port of Acajulta 163 147 Fuel Oil / Diesel (Pacific Ocean) Thermoelectric Plant Soyapango San Salvador 15 14 Fuel Oil Guatemala 288 288 DEI Guatemala Arizona Thermoelectric Plant Escuintla 171 171 Fuel Oil Las Palmas Thermoelectric Plant Escuintla 89 89 Fuel Oil / Diesel Laguna Thermoelectric Plant Guatemala 28 28 Diesel Peru 690 648 DEI Egenor Cañon del Pato Hydroelectric Plant Ancash, Peru 263 263 Hydro Carhuaquero Hydroelectric Plant Cajamarca, Peru 112 112 Hydro Piura Thermoelectric Plant Piura 40 40 Fuel Oil / Diesel Chimbote Thermoelectric Plant Piura 44 44 Diesel Trujillo Thermoelectric Plant Piura 20 20 Diesel Chiclayo Thermoelectric Plant Ancash, Peru 20 20 Fuel Oil / Diesel Paita Thermoelectric Plant La Libertad 6 6 Diesel Sullana Thermoelectric Plant Lambayeque 9 9 Diesel Aguaytia Energy del Peru Aguaytia Thermoelectric Plant Amazon Basin 177 135 Natural Gas Summary of DEI facilities included in the scope of this report 14 Duke Energy International – Sustainability Report 2008 Data Measurement Techniques The values and commitments in our of natural and human resources, and and the Bases of Calculations vision are fundamental to how DEI improvement of the quality of life in does business. the communities where DEI operates. DEI business units follow “Duke Energy Greenhouse Gas Emissions The following is a description of the Operating Principles. DEI’s Operating Estimating and Reporting Protocol” core elements of our governance: Principles align with Duke Energy’s when preparing annual greenhouse Vision, Mission and Corporate gas (GHG) emissions inventory. This Corporate Strategy - Our Direction Strategy, and promote a culture protocol supports Duke Energy’s work in 2008 and Beyond. Our Direction of work where the company and related to climate change. This work in 2008 and Beyond mirrors Duke stakeholders can reach their potential. requires a consistent, transparent and Energy’s strategy, which highlight verifiable corporate-wide inventory of the activities most important to a GHG emissions and emission sources sustainable future. This corporate by establishing a systematic estima- strategy changes and adapts to the tion and reporting system. market and industry conditions as More information about our needed. highest governance body, including DEI only reports on carbon dioxide its structure, composition, and (CO2), since it makes up more than 99 Code of Business Ethics. The Code of related processes, is available on percent of our GHG emissions (mea- Business Ethics (CoBE) establishes our Web site under “Investors.” sured in CO2 equivalents). Duke Energy’s commitment to the principles of corporate ethics and transparency that drives all business Assurance activities, and provides employees with a framework for decision- No external assurance was sought for making consistent with Duke Energy’s the present report since its main pur- business values. This code applies pose is for internal use. to all Duke Energy subsidiaries, and affiliated companies. It provides the principles and guidelines that guarantee ethical and responsible Governance, behavior from employees worldwide. Commitments and Vision of Safety. Duke Energy’s Vision Engagement of Safety defines the principles for occupational health and safety conducive to a safe and high- performance environment. This Governance vision applies to all employees and contractors, and states the personal commitment at every level of DEI’s corporate vision and mission the organization to demonstrate is always present when delivering continuous safety improvement, products and services. As an electric- striving for a zero injury and zero ity generation and commercialization work-related illness culture. company, we improve the quality of life in the communities where we Environmental, Health and Safety Policy. operate. We always relay our values, The Environmental, Health and Safety which represent the business envi- Policy states DEI’s commitment toward ronment that DEI promotes among the health and safety of employees, employees, inspiring them to strive for clients and communities. It establishes continuous improvement and excel- the principles of environmental Dino Arana, EHS Regional Manager living DEI’s culture lent reliability and customer service. protection, responsible management of engagement and safety, DEI Guatemala Duke Energy International – Sustainability Report 2008 15 Operating Principles Our Mission DEI strives for a work environment that epitomizes a high performance culture, where both the We make people’s lives better by providing company and its employees reach their full potential. We view the following principles as key to creating gas and electric services in a sustainable such an environment and all employees are expected to “live by” and honor these values and principles: way. This requires us to constantly look for ways to improve, to grow and to reduce our Teamwork We work as a team with the common goal of doing what impact on the environment. is right and in the best interests of Duke Energy and its stakeholders. As a team, we support each other and assume innocence in our dealings with each other. Our Values Safety We develop and maintain a world class “Zero Injury Caring Safety Culture” where safety awareness and avoidance We look out for each other. We strive to of risky behavior by our employees and contractors is make the environment and communities a way of life and unsafe practices are not tolerated. around us better places to live. Mutual Respect We treat each other and our stakeholders with respect. Integrity We do the right thing. We honor our Sustainability We will manage our business in an environmentally commitments. We admit when we’re wrong. responsible and sustainable manner. Openness We’re open to change and to new ideas Communication We value open, honest and frequent communication. from our co-workers, customers and We encourage others to approach us to discuss any other stakeholders. We explore ways to issue of importance to our business, particularly grow our business and make it better. safety, and we welcome such feedback. Passion Diversity We embrace and accept our different cultures, backgrounds We’re passionate about what we do. We and experiences, viewing them as strengths rather than strive for excellence. We take personal divisive forces. We welcome diversity of opinion. accountability for our actions. Ethics, In our dealings within and outside of the company, we Respect Integrity and conduct ourselves in an ethical manner with the highest We value diverse talents, perspectives Accountability integrity, and we take responsibility for our actions. and experiences. We treat others the way we want to be treated. Creativity and We recognize that improving our performance and enhancing Safety Initiative our competitiveness will require each of us to take initiative, We put safety first in all we do. be creative and challenge ourselves and one another. Employee We invest in our most important asset, our employees, Development through programs and training designed to help each employee grow and reach his or her potential. Community Together with the company, we actively support and involve Involvement ourselves in the communities where we do business. 16 Duke Energy International – Sustainability Report 2008 DEI’s Environmental Pollution, Health and Memberships in Associations or Other Organizations Safety Prevention Approach DEI affiliates and majority-interest companies belong to numerous associations related to its business activities, including those that promote sustainable devel- opment. The most important are listed below. DEI’s business activities aim to prevent environmental pollution and protect Duke Energy World Business Council for Sustainable Development the health and safety of employees The Nature Conservancy and communities in a way that is World Economic Forum consistent with application of sound World Energy Council science. This is expressed in our vision, Global Environmental Management Initiative (GEMI) mission, strategic approaches and cor- NAEM (EHS Management Association) porate values, and is fundamental to DEI’s Environmental, Health and Safety Duke Energy Occupational Resource Council (ORC) (EHS) Management System. We strive International National Safety Council (NSC) American Society of Safety Engineers (ASSE) to prevent pollution and protect the American Society for Industrial Security (ASIS) environment and communities where we serve mainly by: DEI Argentina American Chamber of Commerce - Argentina (AmCham) • Fulfilling our pledge to care Asociación de Generadores de Energía Eléctrica de la República Argentina (AGEERA) for the health and safety of Comité Argentino de Presas (CAP) employees, customers and Fundación para la Seguridad de Presas communities, and protect and Asociación de Comercializadores de Energía Eléctrica responsibly manage the natural de la República Argentina (ACEERA) environment. DEI Brazil Associação Brasileira de Comunicação Empresarial (ABERJE) • Incorporating environmental, Associação Brasileira de Concessionárias de Energia Elétrica (ABCE) health, and safety risks as part of the integral risk management Associação Brasileira das Empresas Geradoras de Energia Elétrica (ABRAGE) approach and associated Instituto Ethos de Responsabilidade Social prevention and mitigation tools. Instituto Acende Brazil • Performing social and Câmara Americana de Comércio para o Brazil (AmCham) environmental impact Fundação ABRINQ pelos Direitos da Criança e do Adolescente assessments as a preventive Sindicato da Indústria da Energia Elétrica do Estado de São Paulo - FIESP/SIESP management and decision- making tool, when planning Associação Brasileira dos Produtores Independentes de Energia Elétrica (APINE) for new projects or renovating Comitê Nacional Brasileiro de Produção e Transmissão de Energia Elétrica (Cigré) installations. International Hydropower Association (IHA) • Implementing, maintaining and Electroquil American Chamber of Commerce – Ecuador (AmCham) continually improving DEI’s EHS (Ecuador) Cámara de Industria de Guayaquil Management System. DEI El Salvador American Chamber of Commerce – El Salvador (AmCham) • Managing risks and opportunities systematically through FUNDACAJUTLA identification, analysis and control DEI Guatemala American Chamber of Commerce – Guatemala (AmCham) of risks, using prevention and Cámara de Industria de Guatemala (CIG) mitigation measures, as well as Cámara de Comercio de Guatemala (CCG) managing opportunities so they DEI Egenor (Peru) American Chamber of Commerce - Peru (AmCham) benefit the business and the Asociación de Fomento a la Infraestructura Nacional (AFIN) communities. • Training and continuously Sociedad Nacional de Minería Petróleo y Energía (SNMPE) developing DEI’s human Aguaytia Cámara Peruana de Gas Natural resources. Energy (Peru) Cámara de Comercio de Pucallpa Duke Energy International – Sustainability Report 2008 17 Paron Reservoir, Cañon del Pato Complex, Peru 18 Duke Energy International – Sustainability Report 2008 Stakeholder Engagement Collaboration, communication and stakeholder engagement are defining characteristics of successful corporations. DEI is committed to balancing the interests of stakeholders. We have several paths and programs that allow us to hear and respond to stakeholder needs. The following table highlights stakeholders engaged by DEI. Stakeholders Expectations Fulfillments Customers R • easonable costs S • trong Management Systems R • eliable supply E • fficient cost control practices G • ood customer service B • usiness relations managers’ accessibility S • afe operations C • ustomer satisfaction surveys M • inimal environmental impacts E • nvironmental stewardship E • nergy efficiency V • olunteerism C • ommunity involvement C • ustomer communication and information availability (web sites) Employees S • afe workplace S • afe work practices policies, guidelines and training C • ompetitive salary and benefits C • areer training and development O • pen communications B • enchmarking with industry sector C • areer development opportunities O • pen doors policy F • air and consistent treatment C • onfidential ethics line S • trong corporate reputation C • ommunity involvement Communities E • conomic development C • ommunity involvement I • nvolvement with local initiatives E • conomic development assistance P • ublic safety V • olunteerism program (GSE) E • mployment opportunities V • olunteerism Suppliers F • air dealing C • ode of Business Ethics T • imely payment C • ompetitive bidding process O • pportunities to grow their business E • thics line Investors C • ompetitive returns S • trong financial performance S • trong board governance C • omprehensive management M • anagement accountability E • thics policies R • egulatory compliance S • trong balance sheet S • trong corporate reputation A • nnual sustainability and financial reports T • ransparent reporting Regulators R • easonable cost of energy E • ffective management policies R • eliable supply of energy E • ffective Management Systems R • egulatory compliance E • thical practices T • ransparent reporting T • ransparent transactions C • ollaborative policy debates C • ommunity involvement Non-Government A • ccessibility C • ollaboration on several issues Organizations P • roblem solving engagement S • trategic alliances T • ransparent reporting S • takeholder dialogues A • nnual sustainability and financial reports Duke Energy International – Sustainability Report 2008 19 section two: Economic Performance As an electric generator, Duke Energy International (DEI) plays an important role in supporting the economic, social and industrial development in Latin America. Access to electricity is vital to raise living standards, achieve economic growth, and improve the quality of life of our communities. In this sense, we are major contributors to sustainable development. In addition, DEI promotes the transfer of knowledge and generates employment opportunities. 20 Duke Energy International – Sustainability Report 2008 We had a strong year in 2008, surpassing our Included in this approach is the need to balance financial goals and making significant progress economic objectives with sustainability practices. with several new projects. Nonetheless, we are For instance, since power generation technologies aware that financial results alone are not enough, rely mostly on fossil fuels that emit greenhouse as business transparency and accountability gases (GHG), climate change, continues to be a increase because of stakeholders’ concerns about defining issue for the electric utility industry. We social equity, and a resource-constrained and consider several alternatives to meet this chal- fragile environment. For this reason, we are taking lenge: a comprehensive approach toward environmental, social, and economic performance and reporting, • Diversifying the fuel mix based on risks and opportunities. • Supporting policies that call for a reduction of GHG emissions Foremost to this approach is the importance of • Promoting energy efficiency acting in an ethical, honest and integral way. This • Continuing to focus on safe, reliable and is not only evident through our strong Code of efficient power plant operations Business Ethics (CoBE) but also by identifying it as one of the top focus areas of our corporate sus- This balanced approach provides the framework tainability plan, making it an integral part of our for our success as an integral part of the develop- sustainable business development activities with ment in each community where we operate, yield- swift action for unethical or dishonest behavior. ing both direct and indirect positive economic impacts. Duke Energy International – Sustainability Report 2008 21 Financial Highlights million of dollars 450 DEI Net Sales (in millions of dollars) 2007 2008 411 Operating Revenues 1,060 1,185 DEI EBIT 375 Operating Expenses 776 899 Gains (Losses) on Sales of Other Assets and Other (Net) - 1 Other Income and Expenses (Net) 114 146 300 Minority Interest Expenses 10 22 DEI EBIT (Earnings Before Interest and Taxes) 388 411 Latin America EBIT 225 Latin America EBIT 295 300 199 150 2002 2003 2004 2005 2006 2007 2008 DEI’s EBIT Historic Trend 2002-2008 Argentina DEI Operating Revenue by Business Peru (Aguaytia) 2007 2008 $96M Unit (in million of dollars) $129 Brazil Argentina 82 96 $455M Peru (Egenor) Brazil 394 455 $135 Ecuador 45 34 El Salvador 141 173 Guatemala 146 163 Peru (Egenor) 144 135 Guatemala $163M Peru (Aguaytia) 108 129 TOTAL 1,060 1,185 El Salvador $173M Ecuador $34M DEI’s Operating Revenue by Business Unit DEI Operating Expenses by 2007 2008 Business Unit (in million of dollars) Argentina 60 75 DEI Quantity of Products 2007 2008 or Services Provided Brazil 223 218 Sales GWh 17,127 18,066 Ecuador 50 26 Proportional Capacity El Salvador 121 154 3,968 4,018 in Operation MW Guatemala 135 171 Peru (Egenor) 78 110 Peru (Aguaytia) 96 122 Other DEI* 13 23 TOTAL 776 899 *Not part of the scope of this report 22 Duke Energy International – Sustainability Report 2008 They also comply with equal em- Spurring Economic Growth Market Presence ployment opportunity laws, includ- ing those related to discrimination and harassment. Furthermore, all Case studies of spurring economic recruitment, selection, training, and growth follow. Locally Based Suppliers compensation activities are based on merit, experience, and other work-re- lated criteria. Our Equal Employment Guatemala To promote development in the local Opportunity policy “seeks and values communities where DEI operates, diversity. The dignity of each person is Construction of DEI’s thermoelectric business units in each country rely on respected, and everyone’s contributions plant Arizona, located in Escuintla, their Purchasing Department. These are recognized. We expect Duke Energy Guatemala, with an installed capacity departments establish good busi- employees to act with mutual respect of 170 MW, required several local and ness relations with local suppliers, and cooperation toward one another. international contractors and sub- stimulate the local economy by creat- We do not tolerate discrimination in the contractors. This generated employ- ing employment opportunities and workplace.” ment opportunities for 700 people attract additional investment. on average, for about two years, with peak employment demand reaching DEI’s Purchasing Controls Policy covers 900. Once the plant entered commer- the minimum controls required for the DEI’s Economic Impacts cial operation 70 direct, full-time jobs, purchasing function; however, there and several indirect ones—related to is no specific percentage of suppliers operation and maintenance servic- required to be locally based. Never- Since DEI’s business is the generation es—were generated. For both phases, theless, most of our purchases are of electricity, the direct economic local people covered most of the done locally—at a region and country impacts of our operations are evident. employment demand. This not only level—supporting local business in This is due to the vital role electric- contributed to raising living standards the supply chain and having a positive ity plays in economic development, and achieving economic growth, a economic impact in the region. supporting productivity and generat- key to poverty eradication, but also ing wages and jobs in the developing to transferring specialized knowledge For example, for the construction of countries where we operate. through workforce development. the Retiro and Palmeiras small hydro- power plants (SHPs) in Brazil, nearly In addition, DEI also has significant in- Another important benefit of the 98 percent of purchases were through direct impacts. We support economic project was related to local contrac- local suppliers. development in the countries where tor and sub-contractor involvement we invest by: as a source of indirect employment, • Increasing the public creating demand for lodging, security, On average DEI makes 56 percent of our administration income through tax health and transportation services, purchases through locally based suppliers. payments. and thus positively affecting the lo- • Stimulating foreign direct cal economy. Furthermore, because investment in electric electric generation occurs in a geo- Hiring Approach infrastructure. graphically remote location, revenues • Supporting technology and from national and regional taxation knowledge transfer, critical to stimulate economic growth in these DEI’s policies and procedures for increase the competitiveness of disadvantaged regions and provide recruiting and hiring personnel in developing countries. an important source of income for the the countries where we operate are • Supporting creation of various jobs public administration. More than 95 established at the corporate level and through subcontracting services. percent of the contracted and sub- aligned with Duke Energy’s CoBE, re- • Supporting expansion of other contracted work force for the project garding equal employment opportu- industries and businesses during received comprehensive training on nity. They comply with the principles the construction and operation of environment, health and safety pro- of non-discrimination, freedom of our plants. cedures and practices as part of our association, child labor, indigenous policies and standards for contractors rights, and forced and compulsory The following examples describe and sub-contractors. This provides labor. these impacts: an opportunity to positively affect Duke Energy International – Sustainability Report 2008 23 local work force knowledge in sound Brazil The projects also help generate environmental, health and safety work indirect jobs in health (medical and place practices. The Retiro and Palmeiras small hydro- nursing), business (sales, rental, hotel power plants (SHP) are being built on or food) and services (repairs, home Another recent example of positive the Sapucai Mirim River between the or education). Jobs in these areas are economic impact, is the construction cities of São Joaquim da Barra and expected to increase by about 30 of the Las Palmas II plant in Escuintla, Guara (São Paulo State, Brazil), and percent during peak construction. Guatemala. This project was approved each will have an installed capacity of Similarly, our indirect economic im- by The Ministry of the Environment 16 MW. pacts are reaching local vendors and and Natural Resources of Guatemala suppliers of machinery and equip- (MARN) in July 4, 2008, and construc- Along with these benefits, the ment; approximately 97.7 percent of tion started in August 2008. When construction of each SHP will gener- purchases were Brazilian. completed, the plant will have an ate value to the local and regional installed capacity of 85 MW generated community, through creation of by combustion of low-sulfur coal and direct and indirect jobs. During peak Peru will incorporate exhaust gas treatment construction, each SHP will generate for particulate matter (PM) and low about 320 direct jobs, representing DEI Egenor initiated construction nitrogen oxides (NOx)-burning tech- 3.4 percent of the population of cities. of Las Flores thermoelectric power nologies. The first phase of 42.5 MW is Furthermore, for the engineering and plant, located in the Chilca district expected to finish by the end of 2009. construction phases of both SHPs, DEI in Peru, on January 12, 2009. This hired a local contractor, and labor is plant will consist of the assembly of a This project has generated an average being hired locally and regionally; so simple-cycle natural gas turbine and of 520 direct jobs during the first nine far, 35 percent of the jobs are held by its subcomponents to generate 197.5 months. The job demand is expected local people, while the remaining are MW. Construction of this project will to rise to 1,200 direct jobs during filled regionally. Equally important have a peak labor demand of around the construction peak time, and 95 is the transfer of knowledge; for this 350 workers, including contractors, percent of the labor demand has been project 100 percent of the labor force subcontractors and project manage- hired locally. Once operations get that works directly on the project ment staff. started we estimate the generation of received training on our EHS Manage- 60 direct full-time jobs. The indirect ment System. This training improves In addition to these benefits, the impacts related to the provision of the skills and qualifications of the project will help reduce the region’s goods and services associated with labor force, increasing the chance of unemployment rate, estimated to be construction activities are yet to be future employment for jobs requiring around 7.7 percent of the District’s determined. higher qualifications. population, boosting the local income temporarily and thus improving their quality of life. Similarly, during this pe- riod other market sectors expected to benefit from the project include local suppliers of building materials, equip- ment transportation services, security services and raw material suppliers, spurring economic growth. Since Las Flores power plant will be using leading-edge technology, once in operation it will require few person- nel for its operation and maintenance. DEI has estimated 12 workers in three shifts. The staff needs special- ized knowledge of operation and maintenance of power stations and electromechanical equipment. Other activities to be contracted regularly include solid waste management and Construction of Las Palmas II Thermoelectric Plant, DEI Guatemala 24 Duke Energy International – Sustainability Report 2008 Volunteerism Program, Laura Di Cosmo, Accounting Department, DEI Argentina Duke Energy International – Sustainability Report 2008 25 disposal, landscaping, and envi- • Education: book drives for Among others, donations have been ronmental monitoring and control, schools, setup of computers made to: further benefiting the economy. More- and Internet links at schools, over, the Peruvian government and school supply drives, playground • Public schools, to upgrade and the district will also benefit from tax construction, painting and furnish them, help students payments that DEI Egenor will incur landscaping projects at local purchase text-books, supplies, while operating the power station schools, safety programs. musical instruments, and uniforms, throughout the project, increasing the • Assistance to the elderly. help feed students, and support public administration’s income. • Environmental assistance: extracurricular activities. environmental restoration • Medical services, to provide projects and trash pickup from supplies to emergency clinics and trails, parks, creeks, beaches hospitals, rehabilitation services In Kind or Pro Bono and highways, tree planting, and physical therapy, sponsorships Engagement landscaping in parks and other beneficial projects. to medical clinic rotations, and cancer treatment for children. • Shelters and orphanages, to Implementation of the corporate support their operations and help program Global Service Event (GSE) DEI’s Contributions provide food. more than 10 years ago has increased • Sporting associations, to participation from Duke Energy purchase uniforms, and provide employees and retirees. GSE is a Donations by all regions to public accommodations and sporting grassroots community service effort, service organizations and agencies, facilities. enabling employees to give back to such as fire and police departments, • Emergency organizations, to the communities where they live and and libraries, have been a cornerstone purchase necessary equipment work. It was rolled out to DEI and of DEI’s community support. Our com- and supplies for fire departments. named “Programa de Voluntariado mitment to the communities where (Volunteerism Program).” Originally we operate goes beyond providing planned as a month-long program, high-quality, affordable and reli- “Programa de Voluntariado” has able electric generation services and expanded to two months to accom- protecting the environment. We care modate all of the planned projects. about improving the overall quality Participants’ safety is a priority. Before of life of the developing coun- a project begins, steps must be taken tries where we work. Besides Charitable Others to keep participants and others safe. the countless hours of 4% Infrastructure Risks, such as working on a ladder or volunteer work, we have Education/ 14% operating power tools, are assessed contributed approxi- Recreation and controls implemented. Safety mately $500,000 to 29% glasses, hard hats, protective gloves local communi- Health Care and foot protection are basic safety ties in support 12% items contributed by DEI and used of social chari- by volunteers. The program demon- ties, education strates DEI employees’ commitment and recreation to the company values and positively programs and in- influences others to emphasize safety stitutions, health in their personal lives as well. care programs, entrepreneurship In 2008, “Programa de Voluntariado” and agro-industrial Environment was held from April 1 to June 1. Some development, en- 16% of the “Programa de Voluntariado” vironmental protec- events in DEI include: tion, and infrastructure Entrepreneurship/ • Community assistance: food and improvements. Agroindustrial clothing drives, landscaping, Development painting projects, sorting of 25% DEI Contributions by area donations at local organizations. 26 Duke Energy International – Sustainability Report 2008 System Efficiency DEI’s average generation efficiency for our thermoelectric plants by energy source and country is presented below: Efficiency Facility Fuel Technology KWh/gal* or % BTU/KWh Argentina Alto Valle Thermoelectric Natural Gas Simple Cycle & Combined Cycle 32.06 10,650 Ecuador Thermoelectric Electroquil Diesel Simple Cycle Combustion Turbines 33.58 13.76* El Salvador Acajutla Thermoelectric (Diesel) Fuel Oil Reciprocating Engines 38.83 17.06* Acajutla Thermoelectric Fuel Oil Steam Turbines (Boilers) 26.17 11.5* Vapor & Gas" Diesel Simple Cycle Combustion Turbines 23.17 9.5* Soyapango Thermoelectric Fuel Oil Reciprocating Engines 33.94 14.91* Guatemala Arizona Thermoelectric Fuel Oil Reciprocating Engines & Combine Cycle Steam Turbine 39.67 17.43* Las Palmas Thermoelectric Fuel Oil / Reciprocating Engines & 38.28 16.82* Diesel Simple Cycle Combustion Turbine 27.09 11.11* Peru - DEI Egenor Laguna Thermoelectric Plant Diesel Simple Cycle Combustion Turbines 20.73 8.5* Fuel Oil / Reciprocating Engines & 34.33 9,944 Piura Thermoelectric Plant Diesel Simple Cycle Combustion Turbines 25.39 13,448 Chimbote Thermoelectric Plant Diesel Reciprocating Engines 22.74 15,010 Trujillo Thermoelectric Plant Diesel Reciprocating Engines 24.41 13,986 Chiclayo Thermoelectric Plant Fuel Oil / Diesel Reciprocating Engines 34.55 9,881 Paita Thermoelectric Plant Fuel Oil / Diesel Reciprocating Engines 34.72 9,834 Sullana Thermoelectric Plant Fuel Oil / Diesel Reciprocating Engines 33.02 10,339 Peru Aguaytia Energy Aguaytia Thermoelectric Plant Natural Gas Simple Cycle Gas Turbines 30.45 11,213 Duke Energy International – Sustainability Report 2008 27 section three: Environmental Performance Duke Energy’s commitment to environmental, health and safety (EHS) has been established by senior management and is followed closely by Duke Energy International (DEI.) This commitment is demonstrated through our EHS Policy that emphasizes, through an integrated approach, the health and safety of our employees, clients, stakeholders and communities, and enables continuous improvement in EHS performance. It also underscores the importance of protecting and responsibly managing natural resources, critical to the quality of life in the areas we serve, the environment and DEI’s long-term success. 28 Duke Energy International – Sustainability Report 2008 D E I’s E HS Po l i c y and Pr inciples Five principles are at the core of this policy: accountability, stewardship, standards, performance and communica- tion. These are discussed below. Accountability Accountability stretches across the company and beyond: Leadership is accountable for systematically managing EHS risks, opportunities and impacts Performance as an integral part of our business; employees are accountable for understanding and incorporating DEI will set challenging goals and assess perfor- EHS responsibilities into daily work; and suppliers, mance to continually improve EHS results that contractors and partners are accountable for contribute to business success. We will work with meeting applicable EHS requirements. suppliers, contractors and partners to enhance EHS performance. Stewardship Communication In being good stewards of the environment, DEI will use natural resources and energy efficiently DEI will foster open dialogue and informed to reduce waste and emissions at their source. We decision-making through meaningful and regular will also strive to improve operations, focusing on communication of EHS information with manage- preventing environmental and safety incidents and ment, employees, contractors and the public. Our preserving public safety. Moreover, we will engage statement of purpose regarding EHS helps to foster in partnerships that enhance public awareness of this communication: “Duke Energy is committed and address common issues associated with EHS. to a safe, healthy workplace and to protecting the environment. Our employees and contractors are Standards expected to perform their daily assignments safely and in a manner that meets all applicable environ- All business units worldwide will comply with inter- mental requirements.” nal standards, procedures and applicable laws and regulations. Strategic relationships will be devel- oped to promote sound public policy. Duke Energy International – Sustainability Report 2008 29 EHS Organization EHS Management System Business Planning As expressed in the accountability principle, the environmental An EHS Management System is a set Business planning increases the function is distributed throughout of defined processes, both formal and likelihood that desired results will be DEI across all organizational levels, informal, that allow an organization achieved. Planning begins with an- from its president as the maximum to systematically manage its EHS ticipating EHS hazards and evaluating authority, to each employee with local risks, opportunities and impacts. Our consequent risks and opportunities. competence; all have established roles EHS Management System focuses on Understanding laws and regula- and responsibilities, and there is a results while providing flexibility in tions, stakeholder expectations and clear distinction between corporate how EHS risks are managed. Consisting emerging issues assists in evaluating and operational functions. of four phases (Business Planning, risks and opportunities, and roles, Implementation, Measurement and responsibilities and authorities are DEI’s EHS corporate unit, based Performance Measurement), nine defined for employee, contractor and in Houston, Texas, provides a elements and 39 standards, the team effectiveness. Goals and targets strategic function and assistance system is fashioned after the “Plan,” consistent with the EHS Policy and with tactical implementation. This “Do,”“Check,”“Act” cycle of continuous Management Systems are included in includes functional leadership, improvement that models the ISO business plans. monitoring emerging themes 14001 and OHSAS 18001. and innovations, updating and documenting best management The EHS Management System works Implementation practices and sharing best EHS together with EHS Policy to manage practices, improving the Management risks, opportunities and impacts. Effective business plans improve Systems and compliance guidelines, While the EHS Policy provides EHS performance by capitalizing on and communicating, guiding and direction to ensure corporate EHS opportunities created by potentially facilitating adequate implementation values are consistently applied across significant risks. Some risks are man- and maintenance of the overall DEI, the EHS Management System aged through compliance with laws system at the business unit level. establishes standards to direct us and regulations, while emergency in implementing this policy. The situations are controlled by follow- Each business unit has an EHS EHS Policy clearly articulates our ing defined plans. Effective business Department responsible for the values for the health and safety plans emphasize the efficient use of implementation of all processes and of our employees, contractors, natural resources and consider energy procedures that meet or exceed local customers and communities and in developing products and services. regulations. In addition, each unit our commitment to protecting Contractors, suppliers and partners manages all potential EHS, financial the environment and responsibly are prudently selected and monitored, and company-reputation risks. managing natural resources. and overall performance is enhanced through feedback. Investigating inci- dents, responding to community con- cerns and establishing partnerships contribute to desired EHS results. 30 Duke Energy International – Sustainability Report 2008 D E I’s E H S M an agement System 1. Roles, Responsibilities and Accountabilities Management creates the vision, sets 4. Compliance Management the performance expectations and provides the resources to support Identify, communicate and satisfy the EHS Management System. legal and other EHS obligations. 2. Risk Management Business 5. Supplier, Contractor and Partner Relationships Anticipate, prevent and mitigate environmental, health & safety risks and impacts to protect Planning Select and work with suppliers, contractors people, the environment and the business. and partners to improve overall environmental, health and safety performance. 3. Emergency Preparedness and Response 6. Stewardship and Community Relations Anticipate, plan and drill to reduce the occurrence and severity of environment, Implementation Manage the use of natural resources and energy health & safety emergency situations. as an integral part of our business and maintain quality of life and reduce waste and emissions. Open communication builds trust and cooperation with the communities we serve. 8. Incident Reporting and Investigation Report and investigate incidents to determine causes, correct deficiencies Performance 7. Goals Setting and Performance and prevent recurrence. Measurement Measurement 9. Assessment and Management Establish goals, implement business plans and System Review Measurement track progress to improve environmental, health Conduct assessments to determine & safety results and achieve expectations. environmental, health & safety compliance and to assure Management Systems are in place and working effectively. Duke Energy International – Sustainability Report 2008 31 Measurement have 1,672 MW or 38.7 percent of the • Setting Goals and Targets total gross installed capacity certi- Guideline, describes the necessary Measurement defines the degree to fied under ISO 14001, and 1,096 MW steps for developing EHS goals which business plans and Manage- or 25.7 percent certified under the and targets, preparing action ment Systems are being implement- three standards. The table on page 33 plans for achieving the goals and ed. Actual results can be identified by provides detailed information. targets, communicating goals assessing EHS performance, goals and and targets and the progress in targets, regulatory compliance and These certificates demonstrate DEI’s achieving them, and ensuring conformance with EHS Management commitment to business excellence that goals and targets are Systems. Such a review and subse- and continuous improvement in all considered during short- and quent communication of performance relevant aspects of its business, guar- long-term planning. progress leads to corrective and anteeing: • Monitoring and Measuring preventive actions, which improve • High-quality and reliable electric Performance Guideline, contains performance. generation in benefit of our the requirements for establishing clients and end users. and implementing a program • Preventive pollution practices for monitoring and measuring Performance Improvement favoring conservation and natural performance, such as identifying resources preservation. operations and activities that Management System implementation • Safe and healthy work environ- should be periodically monitored and performance improvement con- ment for all our employees, and/or measured, developing tribute to long-term business success. contractors and third parties. monitoring and measuring Opportunities for improvement are procedures, compiling results and identified through evaluating emer- reporting EHS performance. gency plans, investigating incidents, assessing compliance and Manage- Management Approach We expect to see our environmental ment Systems, and sharing lessons indicators continue to improve as we learned. The need for changes to EHS move to a generation portfolio that Policy and Management Systems are DEI’s EHS Policy declares we will set relies more on renewable energy addressed at both corporate and op- challenging goals and assess perfor- sources and natural gas combined-cy- erational levels. These improvements mance to continually improve EHS cle technologies. The following would are implemented through corrective results that contribute to business influence changes in these indicators: and preventive actions and often lead success. We will work with suppliers, • Energy produced from renew- to changes in goals, business plans contractors and partners to enhance able energy sources will reduce and EHS Management Systems. EHS performance. our consumption of fossil fuels, as well as reduce the emissions, Our business units in each coun- Our management approach toward effluents and wastes associated try work with DEI’s EHS Corporate environmental indicators is guided by: with the combustion process. Department in implementing and • Setting challenging goals and • The natural gas combined-cycle is integrating EHS systems into its exist- targets. more efficient, thereby reducing ing systems. Each business unit can • Monitoring and measuring the demand of fuel per MWh, have its own systematic approach to performance against those goals. emission, water use and wastes, complying with our EHS Management • Communicating with both such as ash, among others. System. Some facilities may become internal and external stakeholders. • Electricity generation through certified under ISO 14001, ISO 9001 • Abiding to DEI’s Stewardship cogeneration technologies will and/or OHSAS 18001, since our EHS Program. elevate energy usage per MWh. Management System fulfills the requirement for most of these stan- Monitoring and measuring perfor- Likewise, one of the three elements dards. This is the case for DEI Argen- mance is integral to our EHS. We have in our EHS Management System that tina, DEI Egenor (Peru) and DEI Central established guidelines for ensuring makes up the Business Implementa- America (Guatemala and El Salvador). that EHS goals and targets are devel- tion Phase includes Stewardship and These business units implemented oped and performance against them Community Relations. Stewardship and certified Management Systems measured, with the overall objective involves voluntarily going beyond under ISO 9001, ISO 14001 and OHSAS of continuously improving perfor- what is required by EHS laws and regu- 18001 international standards. We mance. lations (going beyond compliance) by 32 Duke Energy International – Sustainability Report 2008 Business Unit Facilities ISO standard Certified DEI Argentina Hydro facilities DEI Cerros Colorados obtained the ISO 14001:1996 Cerros Colorados 479 MW certification in 2002. In 2006, this hydroelectric facility, along with the Alto Valle thermoelectric facility, were Thermal facilities recertified by Bureau Veritas Quality International, under Alto Valle 97 MW the new version of the standard—ISO 14001:2004. DEI Egenor (Peru) Hydro facilities On July 2003, DEI Egenor became the first electricity Cañon del Pato 263 MW generation company in Peru to receive triple Carhuaquero 112 MW certification—ISO 9001:2000, ISO 14001:1996, and OHSAS 18001:1999—by Bureau Veritas Quality International. This demostrated DEI’s commitment to excellence in managing Thermal facilities its generation, maintenance, and transmission processes. Piura 40 MW Chiclayo 20 MW DEI Guatemala/ DEI El Salvador Thermal facilities Guatemala On March 2006, DEI Guatemala and DEI El Salvador received Arizona 176 MW the triple certification for Quality Management (ISO Las Palmas 89 MW 9001:2000), Environmental Management (ISO 14001:2004), Guatemala Offices and Occupational Health and Safety practices (OHSAS 18001:1999). In February 2009, DEI Central American’s integrated Management System was re-certified with Thermal facilities El Salvador the most recent version of the international standards Acajutla Diesel 150 MW ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007. Acajutla Vapor & Gas 163 MW Soyapango 15MW El Salvador Offices considering EHS risks when design- ered during all phases of our business: in which the generation of pollution, ing and operating assets, and where • Internal and External Communica- off-specification materials and wastes feasible, minimizing their impacts tion Guideline, which includes the can be efficiently reduced, reused or to the environment, employees and requirements for establishing a recycled, and energy and natural re- community. Stewardship embraces community relations program. sources can be managed efficiently by: the concepts of natural resource and • Stewardship Program Guideline, • Conducting a Stewardship Pro- energy conservation and pollution which requires management gram Assessment to identify the prevention. Community relations pro- to communicate and demon- sources of pollution, resources be- motes working and interacting with strate support for a stewardship ing used, wastes generated, etc., the community, environmental organi- program and for assessments and document the results. zations, regulatory agencies and other that identify sources of pollution • Identifying and prioritizing oppor- companies to identify ways to improve and resource (e.g., fuel, electric- tunities for pollution prevention our overall EHS performance, increase ity, water, etc.) usage so that and energy and natural resources EHS awareness and prevent, resolve pollution prevention and resource conservation based on the results or minimize conflicts and concerns on conservation opportunities can of the Stewardship Program As- EHS issues. be identified, prioritized and sessment. implemented. • Screening opportunities for We embrace these concepts and have technical and economic feasibil- developed the following guidelines for Our Stewardship Program establishes ity to disqualify those that have ensuring that stewardship is consid- the requirements for identifying ways marginal value or are impractical. Duke Energy International – Sustainability Report 2008 33 Paranapanema River, Brazil Environmental Impact Assessment Process Global Climate Change Reducing Carbon Footprint As part of our project planning and Global Climate Change is being DEI contributes to Duke Energy’s risk assessment process, we perform debated in cities, states and nations effort to reduce the carbon footprint environmental impact assessments around the world. Stakeholders have primarily by making operations more (EIA) to determine the viability of new differing views on which actions efficient. Duke Energy’s corporate projects or the expansion of existing should be taken to respond to the strategy, Our Direction in 2008 and ones, and support us with licensing. issue. Most scientists believe that Beyond, guides DEI’s action, which These assessments help both to iden- greenhouse gas (GHG) emissions focus on: tify and evaluate potential environ- from human activities are influencing • Securing reliable and cost- mental and social risks and impacts the earth’s climate. Although there is effective energy alternatives to our operations could pose, and to much to learn about the cause and meet the growing demand. In manage and mitigate them appro- effect of climate change, consensus pursuing new energy sources we priately. EIAs also allow us to identify is building that steps should be taken must consider several criteria: potential opportunities that can be now to reduce these emissions. Duke availability, cost, reliability, and leveraged to benefit the environment Energy shares that view. social and environmental impact. and local communities. Balancing these criteria enables We have a responsibility to our us to make the most appropriate customers, our investors and our decision for the client, the communities to play a leading role as community and the company. stewards of the environment. 34 Duke Energy International – Sustainability Report 2008 DEI actions to reduce carbon footprint Central America C • ommitment to invest Brazil U.S.$200,000 per year in renewable projects • Renewable energy in Guatemala 2 - small hydro plants under E • nergy efficiency construction - 33 MW (Retiro & Palmeiras) rizona facility expansion -A N - umerous small/medium hydro projects with additional 6 MW from in early stages of development utilization of waste heat R • eforestation (operational in March, 2008). O - ngoing Concession Program: T - he Certified Emission 7,785 Hectares to date Reductions (CERs) from this I - ncremental Program to offset CO2 footprint project will total 26,700 in Duke Energy Brazil vehicle fleet upon certification. Ecuador R • enewable energy currently pursuing 21 MW small hydro N • atural gas - C urrently analyzing feasibility to convert 180MW liquid fuel plant to natural gas Peru N • atural gas L - as Flores Project – 197.5 MW simple cycle addition R • enewable energy H - ydro projects Carhuaquero IV & Caña Brava – 16 MW total, became operational in 2008 Q - ualified for 46,000 CERs/yr under Kyoto Clean Development. Mechanism - 1st CDM projects for US utility • Evaluating low-carbon tech- nism (CDM) program. The projects, will receive Certificates of Emissions nologies that include clean with an installed capacity of 9.7 MW Reductions (CER) for each metric ton coal and natural gas, as well and 5.7 MW, respectively, were devel- of carbon dioxide equivalent reduced. as renewable alternatives and oped down river of the Carhuaquero These CERs may be traded and sold to energy-efficient technology. hydroelectric plant, and will reduce industrialized countries to help them • Reducing, avoiding and/or se- emissions by 24,000 and 22,000 metric meet their reduction targets or to out- questering carbon dioxide (CO2). tons of carbon dioxide equivalents per side carbon exchange markets. year. Carhuaquero IV began operations During 2008, the Carhuaquero IV and in May 2008, and Caña Brava, began Carhuaquero IV and Caña Brava are Caña Brava projects, in Peru, qualified operations in November 2008. These the first DEI projects under the CDM for carbon credits under the United projects use the water of the Chancay program and show our commitment to Nations Framework for Climate Change River to generate clean energy. Under sustainable development. These and (UNFCCC) Clean Development Mecha- the CDM program, both projects other CDM projects currently included Duke Energy International – Sustainability Report 2008 35 in our development program will sup- Our Stewardship Program fosters best Energy port Duke Energy’s overall emissions management practices for natural reduction goal and will contribute resources and chemical use, by: to our low-carbon emissions profile. • Promoting the efficient use of We promote the efficient use of In addition to the aforementioned natural resources. energy through the adequate design, benefits, both projects used local • Looking for chemical substitution, operation and maintenance of our labor for construction, and contrib- when feasible, for more operations, and the use of new and uted to the maintenance of access environmentally friendly and safer clean technologies. Our direct energy roads, improvement of infrastructure products. use by main sources is summarized in in neighboring schools, and crop the table “DEI’s Direct Energy Use by development in adjacent areas. An example of how we promote the Primary Sources.” efficient use of natural resources is Other specific actions by country are the SPRINT™ system, installed in the presented in the figure above. four LM6000 units at the Electroquil plant in Ecuador, in August 2008. This Water system increased the total generating capacity by 10 MW without using ad- Environmental ditional fuel. Without the system, gen- Water plays an important role in DEI’s erating these additional 10 MW would electricity generation activities. It is Indicators represent an approximate consump- the primary source for our hydro- tion of 690 gallons of No. 2 diesel per power activities, and is critical in the hour per unit, equivalent to an annual thermoelectric generation process average consumption of 1,104,000 where it is used primarily for cooling Materials Use gallons of fuel and 1,600 hours of dis- and steam generation. patch per year for each unit. Moreover, this system prevents the generation Our Stewardship Program has clear As an electricity generator, our materi- of approximately 18,000 kilograms of provisions and measures for water als use is mainly driven by the use of nitrogen oxide (NOx), 3,000 kilograms management that include conserva- fossil fuels (in thermoelectric plants), of sulfur dioxide (SO2) and 1,000 tion, optimization, reuse, recycling, water (hydropower, cooling systems kilograms of particulate matter (PM) and system retrofits to reduce water and steam production), and indirect per year. It also reduces the emissions demand. Furthermore, DEI has estab- energy use. We also use some chemi- rate from 1.62 to 1.44 kilograms of lished the following guidelines for cals during our generation process, NOx+SO2+PM per MW hour gener- water and wastewater management: setup and maintenance of our heating ated, reducing the environmental • Wastewater Quality Management and closed-loop cooling systems, and footprint of Electroquil’s operations. Guideline, establishes require- treatment of discharges. ments for the management of 2007 2008 Country / Natural Gas Natural Gas Fuel Oil Fuel Oil (Thousand (Thousand Business Unit (U.S. Gallons) (U.S. Gallons) Cubic Meters) Cubic Meters) HFO LFO HFO LFO Argentina 0 0 138,569 0 0 139,604 Brazil 0 0 0 0 0 0 Ecuador 0 35,264,967 0 0 18,746,026 0 El Salvador 61,221,114 2,601,518 0 51,701,622 861,354 0 Guatemala 75,739,088 882,143 0 56,991,971 398,064 0 Peru (Egenor) 8,399,530 2,471,295 7,509,108 9,342,174 0 Peru (Aguaytia) 0 0 397,071 0 0 421,748 TOTAL 145,359,732 41,219,923 535,640 116,202,701 29,347,618 561,352 DEI’s Direct Energy Use by Primary Sources 36 Duke Energy International – Sustainability Report 2008 Santa River, Peru wastewater and storm water Power plants within DEI all require Efforts for proper water management discharges from facilities to meet water to operate. Hydropower plants were highlighted through the PMC or exceed applicable laws and use water directly to generate power. (Continuous Improvement Program). regulations. Thermoelectric power plants withdraw The PMC encourages employee • Potable Water Management water from nearby water sources (lakes, teams to identify ways to improve our Guideline, establishes the streams, rivers, estuaries, aquifers, etc.). environmental and safety procedures, requirements for maintaining, This water passes through various enhance revenues, reduce costs, monitoring, and sampling the processes in the power plant, and is ul- simplify work processes and improve potable water supply to meet timately returned to the original water efficiency and productivity. Sev- or exceed local regulatory body (Water Use). eral PMC projects have attempted to requirements. increment the efficient use or natural Water for thermoelectric power is resources such as water. Examples of Both compliance guidelines ensure mainly also used in generating elec- water conservation projects are: that systems are in place and func- tricity with steam-driven turbine gen- • Modification of water transfer tioning for verifying that: erators and in cooling down power- system, increasing thermal cycle • An inventory of discharges has producing equipment. A portion of and water usage efficiency and been developed. the water in power plant operations reducing start-up process for • Both water usage and discharges is lost typically through evaporation steam turbines (Argentina). are permitted and managed (Water Consumption). • Irrigation of green areas around according to regulatory the power plants with recycled requirements. Steam turbines, boilers and heat- water from run-off and treated • Potable water systems and recovery steam generators all require process water. The projects wastewater treatment plant or cooling systems to condense steam, allowed a more efficient use of units are properly operated and generate electricity or cool down natural resources by recycling maintained. heating systems. Water is also required water (Guatemala and Peru). • Potable water meets established for boiler makeup, auxiliary station • Modification of the water limits and discharges and equipment, ash handling, and emis- de-mineralization units of the wastewater is monitored and sions control systems (e.g., Flue Gas Electroquil power plant. This in compliance with applicable Desulfurization (FDG) systems). modification allowed the recovery requirements. of 849,600 gallons of good quality • Water is managed at the facility Water consumption will depend of the water during the first year. The to minimize usage, including type of power generation technology recovered water is being utilized maximizing recycling and reuse. utilized. Some measures adopted for in the air emission control system • Employees are trained according proper water management and water of the LM 6000 turbines. to these guidelines. conservation operations are opti- mization, reuse and modification of systems that reduce water demand. Duke Energy International – Sustainability Report 2008 37 In 2008, certain DEI business units near protected areas. Along with a Water Conservation Program began conducting water balance description of these hydroelectric surveys to better understand how plants, a summary is provided of some DEI Argentina permanently monitors water is used in their operations. The of the most relevant environmental the water quality of the Neuquen surveys will distinguish between wa- programs that have been implement- River and the dams of Cerros Colo- ter withdrawn from the source, water ed to control their impacts. rados. Data collection of physical, returned to the source and losses chemical and biological variables from due to evaporation. Flow schemat- the aquatic ecosystem is undertaken ics and surveys will be reviewed by Hydroelectric Complex Cerros to determine the general state of the plant management. This effort will be Colorados, Argentina water bodies and their seasonal dy- completed during 2009, and a water namics. This enables us to understand: usage measurement, monitoring and The Hydroelectric Complex Cerros • Ecological conditions under inventory plan will be implemented at Colorados is in the lower valley of the which the different aquatic these facility to support DEI’s efforts Neuquen River, 60 km northwest of organisms develop. to address long-term water supply the city of Neuquen. The complex is • Vertical circulation water issues. constituted by the Portezuelo Grande, patterns, how they alternate Loma de la Lata, Mari Menuco, Planicie between stratification and Banderita and the Chanar reservoirs non-stratification intervals, and and the Mari Menuco, Barreales and how it affects the metabolism Biodiversity Chanar dams. DEI’s hydroelectric of the water body, its chemical power station is near the Planicie Ban- composition and the availability derita reservoir and has an installed of nutrients for the production of Biodiversity is evaluated as part of our capacity of 479 MW. organisms (a primary link in the environmental impact assessment, nutritional chains). enabling us to identify, manage and The complex serves to control flood- • General trophic levels are an mitigate potential impacts on the en- ing, generate power, regulate flow indicator of the health of water vironment. This is important because and secure water for both human con- bodies and water systems our large hydroelectric plants have sumption and irrigation. The Barreales (including an analysis of nitrogen, potential impacts to biodiversity. The and Mari Menuco dams allow for nau- phosphorus, chlorophyll). facilities included herein have been tical navigation and recreational use. • Bacteriological quality control in identified because of the extension sites more influenced by human and size of the reservoirs. Nonethe- presence, which allows the less, it is important to highlight that detection of potential situations none of these facilities are located of biological contamination that would affect the use of this resource. • Meticulous monitoring of the state of the water returned to the system to ensure it does not contain polluting agents, chemical elements, etc. Fauna Conservation Program The Cerros Colorados program aims to monitor and control the population of fish of the Neuquen River and the Bar- reales, Mari Menuco and Chanar dams by sampling populations throughout the year. Main program objectives are: Cerros Colorados Hydroelectric Complex, DEI Argentina 38 Duke Energy International – Sustainability Report 2008 Socó (common name) or Tigrisoma lineatum, a common bird of the wetlands close the Paranapanema River, Brazil Duke Energy International – Sustainability Report 2008 39 Cañon del Pato Hydroelectric Power Plant, Peru 40 Duke Energy International – Sustainability Report 2008 • Obtain a historical registry of These dams are central to the gen- Trujillo, Cajamarca, Pacasmayo and the composition of fish species eration of the power plant. The main Chepen. In 1998 DEI Egenor finished and their relative abundance, structures of the facility are built on the expansion of Carhuaquero, to real- detecting seasonal changes the Santa River, between the Quitar- ize its current total installed capacity within these variables. An acsa River and the Cedros Gorge, part of 96 MW. important variation in the of the Cordillera Blanca range forms. obtained values could identify In November 2006, DEI Egenor initi- problems within fish populations. Designed initially to have a final ated the construction of the Carhua- • Collect data of variables such capacity of 150 MW, the hydro- quero IV and Caña Brava projects, with as length, weight, age, state of electric power plant of Cañon del a total installed capacity of 16 MW. the reproductive organs and Pato entered operation in 1958. Its feeding patterns of the different original power was of 50 MW that was DEI Egenor operates both hydroelectric species. These studies expand our extended to 100 and 150 MW in 1967 power stations—Cañon del Pato and knowledge on aspects related and 1981, respectively. In 1999, DEI’s Carhuaquero—with a permanent com- to the growth, development, expansion work for 100 MW increased mitment toward environmental protec- reproductive activities and the installed capacity to 263 MW. tion and conservation. potential competition for food by Currently, the plant has an installed the different species. capacity of 364 MW. • Evaluate the health conditions DEI Geração Paranapanema of fish to proactively detect the At the Cañon del Pato facility, the Hydroelectric Power Plants (Brazil) appearance of pathogens. solid waste from up-river communi- ties is captured and sorted for proper DEI Geração Paranapanema has disposal in a sanitary landfill that an installed capacity of 2,307 MW, Hydroelectric power plant has been opened for this purpose, distributed among eight hydroelectric Cañon del Pato (Peru) benefiting the environment and the power stations along the Paranap- communities down river. anema River: Jurumirim, Chavantes, The facility is on the Santa River, which Salto Grande, Canoas I and Canoas has a catchment area of 4,897 sq. km. II, Capivara, Taquaruçu and Rosana. In 1992, the Paron Reservoir, 4,195 Hydroelectric power plant The Paranapanema River serves as a meters above sea level, and Cullicocha Carhuaquero (Peru) natural limit between the states of Sao dams, 4,617 meters above sea level, Paulo and Parana, and is the last large began operation. These were followed The hydroelectric power plant of clean river—930 km long—in these in 2003 by the Aguascocha Reservoir Carhuaquero is on the Chancay River two states. of 4,285 meters above sea level, and in and has a 1,622 sq. km. river basin 2005 by the Rajucolta Reservoir, 4,274 catchment area, with normal volumes The Paranapanema River crosses meters above sea level. Altogether that vary between 6 and 64.5 cubic several municipalities where farming they contribute 70 million cubic me- meters of water per second. The communities and areas of environ- ters of water during the dry season. power plant initiated its operations in mental preservation are found. In 2001, San Diego dam, 2,006 meters 1991, with three units of 25 MW each. above sea level, was inaugurated. It serves the cities of Chiclayo, Piura, Reservoir Installed Plant Name Location Extension (sq. km) Capacity (MW) Jurumirin Proximity to Piraju (SP) and Carqueira (SP) cities 449 98 Chavantes Proximity to Chavantes (SP) and Ribeirao Claro (SP) cities 400 414 Salto Grande Proximity to Salto Claro (SP) and Cambara (SP) cities 12 74 Canoas II Between Palmital (SP) and Andira (PR) cities 23 72 Canoas I Between Candido Mota (SP) and Itambaraca (PR) cities 31 83 Capivara Proximity of Taciba (SP) and Porecatu (PR) 576 640 Taquaruçu Between Sandovalina (SP) and Itaguaje (PR) municipalities 80 554 Rosana Between Rosana (SP) and Diamante do Norte (PR) municipalities 220 372 DEI’s Hydroelectric Power Plants along the Paranapanema River, Brazil Duke Energy International – Sustainability Report 2008 41 Environmental Program de Botucatu UNESP, Universidade • Improves the environmental Estadual de Londrina UEL, and Univer- and the hydrologic resources DEI Brazil’s aquaculture program looks sidade Estadual de Maringa UEM. conditions, through the reduction to maintain the balance of the ecosys- of the erosion process and tem and to preserve the biodiversity As part of the program, DEI Brazil maintenance of the region’s and wealth of the aquatic fauna of the created the “Paranapanema River biodiversity and water quality. Paranapanema River. This program re- Fish Catalogue” in which 155 species • Preserves an ecosystem that leases 1.5 million fish into the Paranap- present in the river basin are de- serves as refuge for many species anema River basin, and has been taken scribed. Copies of this catalogue were of birds, reptiles and mammals. as a reference program for similar distributed to city halls, libraries, non- • Increases tourism potential efforts across Brazil. The program has governmental organizations (NGOs) contributing to the generation benefited the communities through and universities of the Paranapanema of employment and income the development of professional and River region. opportunities for the region’s sport fishing programs, as well as rais- inhabitants. ing the awareness of the inhabitants toward environmental conservation Natural Vegetation and pollution prevention. Recovery Program Forest Conservation Program The species in the program are bred For decades the flora along rivers in The forest conservation program was in the hydrobiology and aquaculture different regions of Brazil has been implemented in 1999 at the Canoas I station at the Salto Grande facility degraded and in some cases com- and Canoas II stations. DEI Brazil, city through an agreement between DEI pletely lost. DEI Brazil has implement- halls, and agrarian and environmental and the Faculty for Research and ed a program to recover the natural institutions in the area work together Development of Aquaculture, “Luis vegetation along the reservoirs of towards environmental conservation Meneghel” FALM. The agreement, its hydroelectric power stations in to support the forest cover restoration signed in 2007, names FALM as the the Paranapanema River, planting across the river basin of the Paranap- entity responsible for managing and more than 9 million native trees. To anema River. operating the station at Salto Grande date, this represents a recovered for at least four years. area of more than 5,500 hectares.The DEI Brazil donates native species of program: trees of excellent quality and vari- Research at the station includes • Increases social conscience ety, and offers technical support to genetic monitoring, migration, and toward the ecological value of volunteers looking to help planting classification of species. The following the native flora as an essential and maintaining these areas. So far DEI state universities support the pro- element for the balance and Brazil has provided seedlings to refor- gram: Universidade Estadual Paulista preservation of the environment. est 1,200 hectares of land. Natural Vegetation Recovery Program, DEI Brazil 42 Duke Energy International – Sustainability Report 2008 Arizona Thermoelectric Facility, DEI Guatemala Emissions, Effluents and Wastes DEI’s EHS Policy declares that all busi- ness units worldwide will comply with internal standards, procedures and applicable laws and regulations. In agreement with this principle, busi- ness planning is addressed by three key elements of our EHS Management System. All three elements are neces- sary for ensuring businesses develop appropriate plans for managing hazards and contingencies associated with their operations, and employees understand their roles and responsi- bilities for implementing those plans. We have developed a risk manage- ment program that ensures that EHS hazards and their associated risks • Mechanical Integrity Guideline, Emissions are identified and evaluated. The which describes the procedures program’s overall goal is to ensure for ensuring that equipment The amount and nature of air emis- appropriate policies, procedures and critical for preventing, reducing sions from thermal power plants de- programs are in place to prevent, or controlling hazards and risks pend on factors such as the fuel (e.g., reduce or control these risks. The associated with our processes coal, fuel oil, natural gas, or biomass), risk management program is not and equipment are properly the type and design of the combus- contained in a single guideline but in designed, installed, maintained, tion unit (e.g., reciprocating engines, a combination of guidelines. These and inspected. combustion turbines, or boilers), include: • Due Diligence Assessment operating practices, emission control • Risk Assessment Guideline, which Guideline, which provides measures (e.g., primary combustion contains the requirements for guidance in conducting due control, secondary flue gas treat- identifying and evaluating EHS diligence assessments to identify ment) and overall system efficiency. hazards and risks associated with potential EHS hazards, risks and The primary emissions to air from the our operations and activities so liabilities associated with real combustion of fossil fuels are SO2, appropriate measures can be estate and business transactions. NOx, PM, carbon monoxide (CO), and implemented to eliminate, control • Post-Acquisition EHS Integration GHG, such as CO2. or effectively manage these Guideline, which describes how to hazards and risks. effectively integrate new assets Some measures being implemented • Management of Change Guideline, into our EHS Management System by our business units to reduce pri- which ensures all EHS hazards so that EHS hazards and risks mary emissions of multiple air pollut- and risks associated with new or associated with the acquisition ants, including CO2, per unit of energy modified processes or equipment, and its operations are managed generation are: chemical and raw material appropriately. • Utilization of fuels with the changes, design modifications, best emissions specifications etc., are reviewed to determine Furthermore, DEI has developed economically available. whether additional EHS hazards comprehensive EHS Compliance • Consistency with the overall or risks exist, and if so, that Guidelines to provide guidance and energy and environmental policy appropriate measures are in procedures for addressing a full range of the country or region where place for preventing, reducing or of EHS hazards and risks associated new projects are proposed. controlling impacts associated with business operations and activi- • Preference to high-heat-content, with these hazards and risks. ties and deal with emissions, effluents low-ash, and low-sulfur coal. and wastes. Duke Energy International – Sustainability Report 2008 43 DEI’s CO2 Emissions for 2008 • Selection of the best power generation technology available for the fuel chosen to balance These emissions are associated with the company’s stationary sources and fleet the environmental and economic (vehicles owned by the company). benefits. • Choice of technology and pollution control systems based Country / Fuel Tons Tons CO2 Tons CO2 on the site-specific environmental Business Unit CO2/year / GWh* / GWh** assessment. Argentina Hydro + Natural Gas 295,731 578 176 • Stack heights designed according Brazil Hydro 0 0 0 to Good International Industry Ecuador LFO 172,397 805 N.A. Practice (GIIP) to avoid excessive El Salvador HFO & LFO 610,507 834 N.A. ground level concentrations and minimize impacts. Guatemala HFO & LFO 738,089 749 N.A. • Use of combined heat and power Peru - Egenor Hydro + HFO & LFO 200,005 1,115 84 (CHP) or cogeneration facilities. Peru - Aguaytia Natural Gas 681,696 730 N.A. TOTAL 2,698,425 4,812 260 DEI’s CO2 Emissions Organized by Country/Business Unit *Only thermal generation Greenhouse Gas Emissions ** Thermal and hydro combined Our business units follow the “Duke Energy Greenhouse Gas Emissions Estimating and Reporting Protocol” 20,000 to prepare an annual GHG Emis- sions Inventory. The protocol sup- 17,025 ports Duke Energy’s work related to Total Generation 15,000 (Thousand MWh) climate change. This work requires Duke Energy to create a consistent, transparent and verifiable corporate- 10,938 wide inventory of its GHG emissions 10,000 and emission sources by establishing a systematic estimation and reporting system. 5,000 3,556 Thermal Generation (Thousand MWh) DEI started gathering annual data on 897 2,698 GHG emissions in 2000 as part of Duke CO2 Emissions (Thousand of tons) 0 771 Energy’s GHG emissions inventory. 2000 2001 2002 2003 2004 2005 2006 2007 2008 This inventory estimates emissions of DEI’s CO2 Emissions Historical Trend 2000-2008 four of the six greenhouse gases— CO2, methane (CH4), hydrofluorocar- bons (HFC-134a) and sulfur hexafluo- Country Tons of CO2/year ride (SF₆)—identified by the UNFCCC. Business Unit (Company Vehicles) Each business unit estimates and Argentina 74 reports on these four GHGs as they Brazil 561 pertain to a business unit’s operations Ecuador 40 and as specified in this protocol. El Salvador 191 Given that Duke Energy’s global GHG- Guatemala 141 producing activities are dominated by Peru - Egenor 310 stationary combustion sources and Peru - Aguaytia 152 that emissions from these sources are Total 1,469 dominated by CO2, DEI’s CO2 emissions account for over 99 percent of our DEI’s CO2 Emissions from Company Vehicles by Country for 2008 total GHG emissions. 44 Duke Energy International – Sustainability Report 2008 The annual GHG inventory and as- NOx, SO2 and PM Emissions sociated information produced from DEI NOx Emissions 2008 implementation of this protocol will support: Country / Tons / GWh Tons / GWh Fuel Tons/year Business Unit (Only Thermal) (Thermal + Hydro) • Identification and quantification of potential GHG-reduction Argentina Hydro + Natural Gas 663 0.00143 0.00043 opportunities. Brazil Hydro 0 0 0 • Development of potential GHG Ecuador LFO 236 0.0110 N.A. mitigation strategies. El Salvador HFO & LFO 5,472 0.00748 N.A. • Quantification and Guatemala HFO & LFO 8,402 0.00852 N.A. documentation of GHG Peru - Egenor Hydro + HFO & LFO 3,624 0.02021 0.00152 reductions resulting from ongoing and potential future Peru - Aguaytia Natural Gas 1,682 0.00180 N.A. activities and practices. TOTAL 20,079 0.00572 0.00113 • Internal and external GHG DEI SO2 Emissions 2008 emissions reporting. Country / Tons / GWh Tons / GWh • Benchmarking DEI’s performance. Fuel Tons/year Business Unit (Only Thermal) (Thermal + Hydro) DEI’s growth strategy has focused Argentina Hydro + Natural Gas 7 0.00002 0.000005 on increasing production at existing Brazil Hydro 0 0 0 plants, limiting its ability to stabilize Ecuador LFO 32 0.00015 N.A. and reduce emissions in absolute El Salvador HFO & LFO 6,720 0.00918 N.A. terms. DEI’s new strategy looks to Guatemala HFO & LFO 8,497 0.00862 N.A. increase energy generation from low- Peru - Egenor Hydro + HFO & LFO 2,516 0.01403 0.00105 carbon technologies and renewable energy sources, enabling us to Peru - Aguaytia Natural Gas 18 0.00002 N.A. reduce emissions gradually by MWh TOTAL 17,792 0.00507 0.00100 generated. DEI PM Emissions 2008 Country / Tons / GWh Tons / GWh Other factors, including fuel prices Fuel Tons/year (Only Thermal) (Thermal + Hydro) Business Unit and CO2 rights, as well as our hy- Argentina Hydro + Natural Gas 14 0.00003 0.00001 droelectric capacity—75 percent of our generation capacity comes Brazil Hydro 0 0 0 from this source that depends on Ecuador LFO 12 0.00005 highly variable waterfall and reservoir El Salvador HFO & LFO 342 0.00047 capacity—influence which genera- Guatemala HFO & LFO 383 0.00039 tion technology prevails.To meet the Peru - Egenor Hydro + HFO & LFO 113 0.00063 0.00005 requirements related to air quality, Peru - Aguaytia Natural Gas 35 0.00004 CO₂ emissions, and other pollutants, TOTAL 898 0.00026 0.00005 0.015 Tons 30,000 0.012 0.0110 Total Nox, Sox, and PM Emissions 25,000 Normalized by MWh of Electricity Generated from Thermal Sources 20,079 0.009 NOx Emissions (tons) 20,000 0.0079 17,792 SOx Emissions (tons) 0.006 15,000 10,000 0.003 0.0023 5,198 Total Nox, Sox, and PM Emissions 0.0007 Normalized by MWh of Electricity 5,000 Generated from Combined Sources 4,769 898 0.000 258 PM Emissions (tons) 2001 2002 2003 2004 2005 2006 2007 2008 0 2001 2002 2003 2004 2005 2006 2007 2008 Historical Trend of DEI’s NOx, SO2 and PM Emissions Historical Trend of DEI’s NOx, SO2 and PM Emissions by Year from 2001-2008 Normalized by MWh of Generation 2001-2008 Duke Energy International – Sustainability Report 2008 45 Carhuaquero Hydroelectric Facility, Peru 46 Duke Energy International – Sustainability Report 2008 we developed the Air Quality Man- wastes, and back-flush from ion ex- oxygen, suspended solids, nutrients agement Guideline. This guideline change boiler water purification units. (phosphorus, nitrogen), heavy metals establishes the requirements to be (e.g. cadmium, chromium, copper, followed to ensure compliance with Arizona power facility in Guatemala, lead, mercury, nickel, zinc), organic air quality permitting, emissions moni- with 176 MW of installed capacity, chemicals, oily materials, and volatile toring and reporting requirements. incorporates all the above systems materials, as well as thermal character- It includes procedures that cover the and equipment, generating a treated istics of the discharge (e.g., elevated following relevant topics: permitting effluent volume of 31,300 cubic me- temperature). and regulatory compliance, air emis- ters per year. sions inventory, air pollution control To properly manage wastewater, equipment, air emissions monitoring, The characteristics of the wastewaters DEI commonly practices wastewater greenhouse gas emissions, periodic generated depend on how the water characterization (quality, quantity, fre- emission reporting, nuisance odors has been used. Contamination arises quency and sources of liquid effluents and dusts, training and recordkeeping from demineralizers, lubricating and in the facility), segregation of liquid ef- requirements. auxiliary fuel oils, trace contaminants fluents (industrial, sanitary and storm in the fuel (introduced through the water), identification of opportunities ash-handling wastewater and wet to prevent or reduce wastewater (re- Effluents FGD system discharges), chlorine, cycling, reuse, process modification, biocides, and other chemicals used change of technology, and improve- Effluents from thermal power plants to manage the quality of water in ment of operating conditions). include thermal discharges, wastewa- cooling systems. Cooling tower blow- ter effluents, and sanitary wastewater. down tends to be very high in total The Wastewater Quality Management dissolved solids but is generally classi- Guideline establishes the requirements fied as non-contact cooling water. As to be followed to manage wastewater Thermal Discharges such, it is typically subject to limits for and stormwater discharges from facili- pH, residual chlorine, and chemicals ties. It includes procedures that cover DEI thermal power plants require that may be present in cooling tower the following relevant topics: permit- water to cool and condense the steam additives (including corrosion inhibit- ting and regulatory compliance, used to generate electricity. The heat- ing chemicals). wastewater and stormwater discharge ed water is normally discharged back inventory, wastewater and stormwater to the source water (i.e., river, lake, management practices, wastewater estuary, or the ocean) or the nearest Sanitary Wastewater and stormwater treatment, operation surface water body. In general, ther- and maintenance, effluent monitor- mal discharges are designed to ensure Sewage and other wastewater gener- ing program, reporting, training and that discharge water temperature ated from washrooms, etc., are similar recordkeeping. does not exceed relevant standards. to domestic wastewater. Where no regulatory standard exists, the acceptable ambient water tem- Wastewater parameters and corre- Wastes perature change will be established sponding maximum discharge levels through environmental assessment. are normally established through en- The quality and quantity of wastes vironmental assessment on the basis generated in DEI power generating fa- of country legislation and recommen- cilities depend in general on the type Wastewater Effluents dations from international guidelines of fuel and the type of combustion like the World Bank and World Health technology. Oil combustion wastes The wastewater streams in a ther- Organization. Maximum discharge include fly ash and bottom ash, and mal power plant include cooling levels are consistently achieved by are normally generated in significant tower blow-downs; emissions control well designed, well-operated, and quantities when residual fuel oil is systems (wet FGD system discharges) well-maintained pollution control burned in oil-fired steam electric boil- wastewater; ash handling wastewater; systems. ers. Other technologies such as com- material storage runoff; metal clean- bustion turbines and diesel engines ing wastewater; air heater and precipi- Industrial-type wastewater may in- and fuels like distillate oil generate tator wash water, boiler blow-downs, clude acids or bases (exhibited as low little or no solid wastes. boiler chemical cleaning waste, floor or high pH), soluble organic chemi- and yard drains and sumps, laboratory cals causing depletion of dissolved Duke Energy International – Sustainability Report 2008 47 Ash residues and the dust removed El Salvador, Acajutla Power the river and surrounding areas, this from exhaust gases may contain Plant—Header and Recycler project facilitates management of significant levels of heavy metals and for Fuel Drained from Skid plastic waste through physical com- some organic compounds, in addition Selector for Unit No. 5 pacting, reducing transportation costs to inert materials. Ash residues are and the cost of final disposal. not typically classified as a hazardous This project, initiated in March 2008, waste due to their inert nature. connected all the drains from the mechanical and automatic fuel filters PCB The Waste Management, Storage and of the HFO and diesel skid selector so Transportation Guideline describes the unit No. 5 could recover fuel for reuse. Polychlorinated biphenyls (PCBs) are a requirements to be followed for man- Without interconnection of the drains, common hazardous material utilized aging the generation, classification, there was a loss of oil and constant historically in the power generation storage and transportation of wastes risk of environmental contamination. industry. These were widely used in the and for identifying and remediating With implementation of the solution electric industry as a dielectric fluid to areas within the facility contaminated proposed by the employees, spills provide electrical insulation. Their use with non-hazardous and hazardous that could pollute water have been has since been largely discontinued wastes. It includes procedures for eliminated, avoiding possible legal due to potential harmful effects on waste identification and characteriza- sanctions. human health and the environment, tion, waste minimization and reduc- but many pieces of equipment remain tion, waste storage, non-hazardous This project is saving approximately in service. and hazardous waste transporta- U.S. $46,000 per year in fuel that can tion, waste treatment, storage and be reused. However, the project’s main As part of its EHS Management disposal, contaminated sites, training advantages are environmental, since System, DEI has a specific guideline and recordkeeping requirements. It the risk of water contamination has for managing PCBs. This guideline also includes the requirements for been reduced. For each liter of sedi- provides information for the identi- preparing an annual waste inventory ments impacted by oil, 1million liters fication, safe handling, storage and for each facility, where all wastes are of water could be contaminated. This disposal of PCB-containing materials segregated and inventoried by waste is equivalent to the water consump- (materials with PCB concentrations stream. This guideline exceeds, in tion of one individual for 14 years. of 50 parts per million or greater). It most cases, local requirements for defines the procedures, associated waste management. hazards, responsibilities, terms defini- Peru Egenor—Installation tion, and training and recordkeeping Wastes are typically managed in of a Hydraulic Press at the requirements. Its procedures identify: landfills or surface impoundments Cañon del Pato Water Intake PCB and PCB-contaminated equip- or, increasingly, may be applied for ment; labeling practices; equipment, beneficial use. If beneficial use is not Since October 2008, all plastic waste container and waste storage; PCB feasible, disposal of wastes in permit- carried by the Santa River—recovered storage areas; inspections and mainte- ted landfills with environmental con- at the Cañon del Pato water intake— nance of equipment containing PCBs; trols is common. To properly manage has been compacted using a press sampling requirements; spill cleanup; waste, we implement measures such constructed at the plant by main- and proper disposal of wastes. as prevention, minimization and con- tenance personnel. This compac- trol of the volume of wastes, recycling tor was constructed using recycled To implement this guideline through- and reutilization. The following are equipment. The idea came from a out all business units, we inventoried some examples: previous Continuous Improvement all electrical equipment containing di- Program (PMC) idea, where a com- electric fluids. This assessment included pactor was used to compress metal sampling and analysis of dielectric trash generated in the maintenance fluids to determine the presence and shop. All of the waste originates in the concentration of PCBs. In some cases, cities and towns upstream from the like DEI Egenor and DEI El Salvador, water intake, and the debris is being equipment with dielectric fluids having recovered from the river as part of our a PCB content of above 50 ppm were Corporate Responsibility Program. being properly stored, awaiting final Aside from improving and protecting disposal in accordance with our guide- the overall environmental quality of lines and international standards. 48 Duke Energy International – Sustainability Report 2008 Spills handling and spill prevention training • Legal and Other Obligations and has been successful in minimizing the Emerging Issues Guideline, which DEI operates two types of plants: quantity of liquids spilled in relation provides steps for systemati- • Thermal plants, which handle to the volume of liquids handled. We cally identifying, monitoring and large quantities of fuel oil and continue to further lower or eliminate evaluating the impact of appli- have the largest exposure to a future spill occurrences. cable laws, regulations, industry spill risk. The total volume of standards, international treaties fuel handled annually at these Our inspections program identi- as well as tracking and evaluating 17 plants totals over 145 million fies potential spill hazards early on. new and changing EHS require- gallons. These plants also handle The spill response training program ments and emerging issues. significantly lesser volumes of focuses on a proactive and timely This is done so that policies, other liquids such as lubricating cleanup response once a spill occurs. procedures and programs, as oils, cleaning liquids and liquid As a result, nearly all spilled product is appropriate, can be developed chemicals. recovered prior to any lasting impact or modified to meet compliance • Hydroelectric and natural gas to the environment, as illustrated by requirements. plants, which use liquid fuel only the graph below. • Training and Awareness Guideline, for the on-site emergency genera- which includes procedures and tors and have a significantly small- requirements for communicating er spill risk. The primary liquids at these EHS legal and other require- these plants are lubricating oils, Compliance ments (and plans for complying cleaning liquids and other liquid with them) to the appropriate chemicals. employees. DEI has developed a comprehen- • Document Control Guideline, The spills that occurred from 2006 to sive EHS compliance management which requires appropriate docu- 2008 were primarily fuel oil, with com- program to meet applicable laws, ments and records to be main- paratively insignificant occurrences of regulations and internal requirements tained to support compliance and other types of liquid spills. Our liquids and expectations. These include: so that the information is readily available and easily retrievable. • Data Management Guideline, DEI Spills (in U.S. gallons) 2007 2008 which describes for the types Quantity of Fuel Handled 186,579,655 145,550,319 of EHS-related documents that Total Quantity Spill 2,713 20,682 must be maintained to support compliance with laws and regula- Total Quantity Recovered 2,568 20,293 tions, EHS Compliance Guidelines, Quantity Unrecovered 145 389 permits, licenses, etc., and the 186,579 procedures for storing, archiving, destroying and filing these docu- ments. 145,550 Additionally, the EHS Compliance Guidelines contain programs and pro- cedures for controlling EHS risks inher- ent in our operations and activities. We have an excellent regulatory compliance record over the last five years. Our operations averaged fewer 2.7 2.6 20.7 20.3 than two regulatory citations per year, many of which did not have monetary 2007 2008 fines. During 2008, one event was Total Fuel Handled (Thousand of gallons) Total Fuel Spilled (Thousand of gallons) identified and reported as an environ- Total Fuel Recovered (Thousand of gallons) mental regulatory citation. However, DEI Spills for 2007 and 2008 in Thousand of U.S. gallons no environmental monetary sanctions were registered during this period. Duke Energy International – Sustainability Report 2008 49 section four: Social Performance Employee and contractor health and safety performance, labor practices, training and education, and society and product responsibility are key factors to Duke Energy International’s (DEI) overall social performance. This section highlights these areas and how we are meeting and exceeding expectations for each. 50 Duke Energy International – Sustainability Report 2008 Health and Safety • Formalized Contractor Safety Program through a Contractor EHS Management Policy and implementation guidance. • BST Organizational Culture Diagnostic Safety Vision Instruments (OCDI) to gauge the perception of DEI employees regarding organizational effectiveness, team issues and safety culture. DEI’s Safety Vision describes the expectations, • Several initiatives for safety culture values and principles of a Safety Culture, and enhancement (Zero Injury / Zero Illness strives to attain a zero injury culture and zero Campaign and Approaching Others—Tell Me work-related illness. This Safety Vision applies to program, Focus Groups, Safety Mascots). all employees and contractors, and reinforces • DEI Safety Behavior Standards (SBS) for safety a personal commitment at every level of the culture continuous improvement. organization. Our initial safety culture enhancement included development and implementation of safety skills Evolution of DEI Safety Culture for a zero injury / zero illness culture by develop- ing abilities to: Our Safety Culture has evolved from a compliant, • Lead safety through personal actions. reactive approach (comply with laws and regula- • Communicate safety up, down and across the tions, and recognize corporate responsibility) to organization. a proactive, advantageous approach (manage • Approach and coach each other about risky issues and risks not yet regulated to reduce future behavior. risks and liabilities, and manage issue for busi- ness advantage). It continues to evolve towards a sustainable approach (manage for sustainability, DEI Safety Mascots consistent with triple bottom line). Safety Mascots provide periodic and timely safety Our Safety Culture today was developed through: advice, which is essential to our Safety Culture. To • EHS Management System and EHS convey safety messages in a more entertaining Compliance Guidelines. and enjoyable way, we initiated a project using a • Annual “Operations Safety Leaders Workshop.” mascot to provide guidance and suggestions on Duke Energy International – Sustainability Report 2008 51 Evolution of DEI Safety Culture Sustainable Advantage Business E ectiveness Proactive and Value- Added Compliant Reactive Resist Comply with laws Manage issues and Manage issues Manage for Time compliance until and regulations; risks that are not for business sustainability, forced; ght res recognition of yet regulated to advantage consistent with when they are basic corporate reduce future risks triple bottom up responsibility and liabilities line Following actions are implemented R - olling up of DEI SBS pro- D - EI – Argentina implemented and in DEI as part of the BST survey gram and SBS gap analysis DEI developed a certified an Environmental Manage- results to improve DEI safety culture: conducted at the different more thorough, ment System based on ISO 14001. A • pproaching Others (Tell Me) countries. formalized contrac- F - irst version of DEI EHS MS and EHS program. I - mplementation of first DEI tor safety program: compliance guidelines are issued. C • ountry specific mascots. Safety Leading Metrics. Contractor Man- agement Policy in D • EI EHS&CM Quarterly Newsletter. B - egin development of September 13, 2004 • AO Targeted Focus Groups. Sustainability Management D - EI started implementing a corpo- C • ontinue roll-out of Zero injury/ System Contractor Manage- rate Environmental Health and Safe- illness Campaign. S - ixth EHS annual meeting ment Implementa- ty Management System EHS MS. F - ourth annual EHS meeting (Lima “Operations Safety Leaders tion Guidance. F - irst EHS annual meet- – Peru). Workshop” (Houston – TX). ing (Houston – TX). 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Duke Energy expanded DEI Egenor – Peru D - evelopment of DEI Safety Behavior operations abroad, implemented and Standards (SBS) for Safety Culture particularly in Latin certified an Integrated continuous improvement. America, under the Management D - EI project (Carhuaquero IV and Caña name Duke Energy System based on the Brava) hydroelectric plants qualified International (DEI). international standards for carbon credits under the Clean ISO 9001, ISO 14001 Development Mechanisms CDM and OHSAS 18001. in Peru . It will offset 46,000 metric tons of CO2 equivalent per year. F - ifth EHS annual meeting “Operations Safety Leaders Workshop” (Antigua – Guatemala). DEI started D - EI Central America (El Salvador and Guatemala) implementing implemented and certified an Integrated Environmental Management System based on the international Health and Safety standards ISO 9001, ISO 14001 and OHSAS 18001. compliance guidelines D - EI commissioned BST Solutions to administer the (EHS guidelines) . Organizational Culture Diagnostic Instrument (OCDI) to gauge the perceptions of DEI employees with Second EHS annual respect to organizational effectiveness, team issues, meeting (Houston – TX). and safety. I - mplementation of Pro-Active Driving Program (PDP). - Third annual EHS meeting (Lima – Peru). 52 Duke Energy International – Sustainability Report 2008 safety to all employees. Each country behaviors have to be considered, DEI EHS Compliance has its own mascot that represents its cultural values so workers can easily including values and attitudes (e.g. attitude to risk-taking), Management Guidelines identify and connect with it. Systems (e.g. whether procedures are usable and up to date), and organi- In addition to the EHS Management zational values (e.g. how production System, we developed a compre- DEI Safety Behavior Standards vs. safety conflicts are managed). DEI hensive EHS compliance program, SBS Gap Analysis methodology helps consisting of 66 guidelines to address DEI’s EHS Department leadership business units analyze gaps between a full range of EHS hazards and risks identified the need for an alterna- what is described in the SBS and what associated with business operations tive approach to improve our health happens in practice. This methodol- and activities. Each guideline provides and safety culture by reinforcing ogy seeks to capture the views of the specific technical information to con- employees’ perception and attitude entire workforce about how often the trol and reduce potential areas of EHS toward it. To accomplish this, in 2008 behaviors described in the standards risk within our operating companies. we developed DEI’s Safety Behavior are performed. We conducted our first Standards (SBS) and launched them at SBS Gap Analysis from September to The guidelines also introduce global our annual safety-training workshop December 2008, to establish the ex- consistency in how (e.g., procedures in Houston. These standards de- tent to which we meet the standards and practices) we manage EHS risk. scribe behaviors—both positive and in each specific location or facility. The guidelines are not intended to negative—that either support or un- replace local EHS regulations, but to dermine our strong safety culture, and DEI SBS Gap Analysis results were supplement regulatory requirements are characteristic of the most effective examined to identify: and provide specific methods of executives, managers, supervisors • Which behaviors are clearly compliance. They are based on criteria and employees. These standards help strengths (are often or always mostly from U.S. regulations; however, us develop a successful and engaged performed.) other sources were also used to de- workforce that understands which • Where the gaps exist (behaviors velop them. For example, regulations negative behaviors must be avoided that are sometimes, seldom or from other countries (Australia, Brazil, and which positive ones should be never performed.) EU), international Management Sys- emphasized to improve our safety tem standards (ISO 14001, BS 8800), culture. Stemming from the gap analysis industry and trade association stan- results, clear and measurable action dards/guidelines (NFPA, ANSI), and DEI’s SBS have main four theme plans were developed for each facility other multi-national company EHS —safety performance, communica- (including the development of the guidance were reviewed and relevant tion, risk management and engage- behavior toolkit) to reinforce our zero concepts adopted in development of ment. For each theme, distinct and injury safety culture, close the gaps the guidelines as best management specific behaviors are expected of and encourage positive safety behav- practices techniques. executives, managers, supervisors and iors. With these activities we expect to all employees, including contractors. achieve our goal of “zero injuries, zero work-related illnesses.” To establish a successful program, several aspects that influence safety Theme All Employees Supervisors Managers Executives Set High Safety Safety Performance Deliver Safety Excellence Ensure Safety Excellence Expectations Set the Vision Communication Tell Me Encourage the Team Communicate Openly Provide Clarity Risk Management Be Alert Promote Risk Awareness Confront Risk Manage Risk Engagement Get Engaged Engage the Team Engage Workforce Engage the Organization DEI Safety Behavior Standards—Interdependence of Behaviors Duke Energy International – Sustainability Report 2008 53 Organizational Our EHS Management System has EHS Performance Responsibility for guidelines for ensuring operations meet these standards. These Measurement Health and Safety guidelines require businesses to assign clear roles and responsibilities The measurement phase of the EHS to employees so that all EHS hazards Management System determines how As part of the business planning and risks are understood and successfully business plans are being phase of the EHS Management managed appropriately. Employees implemented. Goals and targets need System, roles, responsibilities and with EHS roles and responsibilities to be developed so that performance accountabilities are defined to are trained in what their roles and over time can be evaluated and con- ensure effective implementation. The responsibilities are and how to best tinuously improved. How well goals following EHS Management Systems meet them. These guidelines are: and targets are being achieved must standards define in detail EHS roles, • Roles, Responsibilities and be monitored periodically to measure responsibilities and accountabilities: Accountabilities Guideline, holds performance and, when necessary, to • Hold employees at all levels all employees accountable for identify corrective and preventive ac- accountable for achieving EHS improving EHS performance; tions and improvement opportunities performance expectations, and defines management’s and when performance does not meet our reinforce that complying with employees’ roles, responsibilities expectations. applicable EHS requirements is a and authorities, and reinforces condition of employment. employee accountability through Monitoring and measuring perfor- • Define and communicate clear the performance appraisal process. mance is important to our EHS Man- EHS roles, responsibilities and au- • Training and Awareness agement System and necessary for thorities for employees, including Guideline, requires an effective assessing if EHS goals and targets are managing risks and opportunities, EHS training and awareness being achieved. We have established identifying hazards and prevent- program, identifying EHS training guidelines for ensuring that EHS goals ing incidents. needs, developing formal and targets are developed and perfor- • Identify training needs consider- training programs, evaluating mance against them measured with ing EHS roles and responsibilities the effectiveness of training, the overall objective of continuously and the potential impact of work and maintaining the training improving performance: activities. documentation. • Setting Goals and Targets • Provide EHS training at the ap- • EHS Award Program Guideline, Guideline, describes the necessary propriate frequency and track provides ways that EHS successes steps for developing EHS goals completion. can be communicated and and targets, preparing action • Include EHS performance in re- rewarded. plans for achieving the goals and viewing overall employee perfor- targets, communicating goals mance and providing recognition. and targets and the progress in achieving them, and ensuring that goals and targets are ENFERMIDADE considered during short- and long-term planning. • Monitoring and Measuring Performance Guideline, contains the minimum requirements for LESÃO establishing and implementing ILLNESS a program for monitoring and measuring performance, such as identifying operations and activities that should be INJURY periodically monitored and/or measured, developing monitoring and measuring procedures, compiling results and reporting EHS performance. DEI Safety Vision Logo in Spanish, English and Portuguese 54 Duke Energy International – Sustainability Report 2008 Safety Lagging indicators are usually readily Total Incident Case Rate quantifiable and understandable, Safety is foremost to our labor prac- clear advantages, but they lag or The TICR represents the number of tices. To measure safety performance, reflect situations where corrective recordable injuries and illnesses per we use two broadly classed indicators: action can only be taken afterwards. 200,000 hours worked. We determine “lagging” and “leading.” The distinction Thus, they often incur some type of this value based on Occupational between the two refers to the order cost, whether it be in fines or de- Safety and Health Administration in which events take place. A leading creased credibility with regulatory (OSHA) recordkeeping and reporting indicator precedes an event, while a agencies and/or the public. guidelines. Safety and health regula- lagging indicator follows an event. tions in each country may consider The goal is to understand the causal an incident recordable while another relationship between leading and Leading Indicators country may not; therefore, we use lagging indicators such that leading OSHA standards to normalize our indicators provide valid predictions of We have made a conscious effort to incident reporting. Furthermore, we lagging indicators. improve our safety performance by can compare our performance to U.S.- establishing leading indicators; that is, based companies operating in the indicators that measure the implemen- same industry. We have established Lagging Indicators tation of practices or measures which very aggressive TICR targets from are expected to lead to improved safe- 2003 onward. Since 2003, our TICR has We had, until recently, mainly mea- ty performance. Poor performance in consistently shown a positive trend. sured lagging indicators—most com- meeting leading indicators can be ad- monly used by the electric generation dressed before negative safety perfor- industry—to evaluate safety perfor- mance events (e.g., injuries, incidents, Lost Workday Case Rate mance. Two key lagging indicators, etc.) are realized. Training completion Total Incident Case Rate (TICR) and percentage was the first leading Restricted and lost workdays are Lost Workday Case Rate (LWCR), have indicator to be measured in 2006. DEI monitored and recorded according to been measured the longest, and DEI expanded the use of leading indica- OSHA requirements and represents establishes TICR and LWCR goals an- tors in 2008 by including percentage the number of incidents per 200,000 nually. Other lagging indicators, such of safety inspections conducted and hours worked in which an employee as first-aid and vehicle incidents, and related action items closed on time per was away from work because of an fires and explosions are measured quarter, percentage of pre-job hazard occupational injury or illness. We have also; however, DEI has not established analysis (PJHAs) conducted per month, met our LWCR target each year, except specific targets for these indicators. and percentage of risk assessments for 2006. As with our TICR, the LWCR conducted per quarter. has been trending downward. Safety Culture and Team Work, DEI Argentina Duke Energy International – Sustainability Report 2008 55 How Does DEI Compare process, requiring coordination and Moreover, we have developed a to the U.S.? cooperation among various functions Contractor EHS Manual, designed to within DEI. provide contractors with the overall The U.S. Department of Labor (DOL) EHS requirements for work conducted tracks the incident rates (based on We have developed and implemented at our facilities. The procedures in OSHA incident reporting require- policies and programs to manage this manual apply to all contractors ments) of occupational injuries and contractors’ on-site activities, with the who perform work at DEI sites. The illness by industry sectors. Since DEI goal of continuously improving safety manual contains our contractor EHS produces electricity by hydroelectric performance and implementing an Management Policy, DEI and contrac- and fossil fuel plants, we would be integrated approach to promote tors responsibilities, and safety and grouped in the electric power genera- this commitment. We formalized our environmental procedures. tion industry. We have outperformed contractor safety program in 2002 the average incident rate of U.S. com- by developing our Contractor Safety Contractor TICR and LWCR data has panies in the same industrial sector, Guideline. Moreover, we have consis- been tracked since 2003. This data is indicating that our health and safety tently looked to improve contractor displayed on page 57. programs have been implemented safety performance, and often moni- effectively and employees are working tor work activities and track potential We have invested heavily in develop- towards a Zero Injury Culture. causes for incidents, such as injuries, ing and implementing our Contractor illnesses, environmental releases, etc. Safety Program since 2002, with the goal of instilling the same Zero-Injury DEI Considers Contractor Safety To support these objectives we culture in our contractors as in our a Performance Priority developed a Contractor EHS Manage- employees. Through this training we ment Policy. Under this policy, safety are not only improving our contractor We supplement our workforce is always the first consideration of any safety performance but also transfer- through contractors and subcon- assignment, and is not optional; em- ring knowledge that benefits the tractors, which are hired mostly for ployees and contractors must apply entire community, since it can be construction and maintenance. Thus, safe work practices to their activities applied to protect workers and their EHS performance of contractors af- and exercise good judgment. Business families when performing work at fects us. By the nature of this work, units are expected to identify and home or other locations. contractors and subcontractors may mitigate contractor-related EHS risks be exposed to a higher-level of risk that affect our employees, operations, for occupational injuries and illnesses. facilities and equipment through Ensuring that contractor risks are conformance with this policy. managed appropriately is a complex Safe Work Practices, Carhuaquero Hydroelectric facility, Peru 56 Duke Energy International – Sustainability Report 2008 Safety Highlights 1.5 DEI’s Employee TICR and LWCR Historical Trend 2000-2008 1.0 0.87 DEI’s Employee TICR and LWCR 2007 2008 Total No. of Incidents 6 6 0.79 Total No. of Lost Workday Cases 1 2 0.5 0.40 TICR TICR 0.4 0.4 0.13 LWCR 0.07 0.13 LWCR 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 DEI’s Employees H&S Indicators by Country through December 31, 2008 El Peru Peru DEI Country/ Business Unit Argentina Brazil Ecuador Guatemala Salvador Aguaytia Egenor Total TICR 1.17 0.00 0.00 0.41 0.35 0.00 0.77 0.40 TICR Target 1.40 0.20 0.78 0.44 0.43 1.84 1.20 LWCR 1.17 0.00 0.00 0.00 0.00 0.00 0.00 0.13 LWCR Target 1.40 0.20 0.78 0.44 0.43 1.84 0.40 Fatalities 0 0 0 0 0 0 0 0 Lost Workday Cases 1 0 0 0 0 0 0 1 Restricted Workday Cases 0 0 0 1 0 0 0 1 Other Recordable Incidents 0 0 0 0 1 0 2 3 DEI’s Contractors H&S Indicators by Country through December 31, 2008 El Peru Peru DEI Country/ Business Unit Argentina Brazil Ecuador Guatemala Salvador Aguaytia Egenor Total TICR 2.13 0.18 0.00 0.00 2.96 0.00 0.52 0.89 TICR Target 1.40 0.20 1.40 0.83 0.70 0.22 1.08 LWCR 1.07 0.18 0.00 0.00 0.25 0.00 0.26 0.21 LWCR Target 1.40 0.20 1.40 0.83 0.70 0.22 0.54 Fatalities 0 0 0 0 0 0 0 0 Lost Workday Cases 1 1 0 0 1 0 1 4 Restricted Workday Cases 0 0 0 0 8 0 0 8 Other Recordable Incidents 1 0 0 0 3 0 1 5 3.50 DEI’s TICR vs. U.S. TICR Historical Trend 2003-2007 1.5 1.44 DEI’s Contractor Performance Historical Trend 2003-2008 3.5 1.28 3.0 2.70 1.2 U.S. TICR 2.5 0.89 0.9 2.0 TICR 1.5 0.6 0.98 1.0 0.41 0.3 0.21 0.5 LWRC DEI TICR 0.0 0.0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 2008 Duke Energy International – Sustainability Report 2008 57 Safety is part of our normal work activities, Cañon del Pato Hydroelectric facility, Peru. 58 Duke Energy International – Sustainability Report 2008 DEI Brazil and DEI Argentina and after proving its effectiveness Focus on Improving Contractor there was implemented in El Salvador. Labor Practices Safety Performance Other business units have shown interest in implementing the program DEI Brazil and DEI Argentina took on as part of the efforts to enhance our Today’s energy industry is facing un- the challenge of improving contractor safety culture. precedented change and responding safety performance, and our contrac- to numerous issues in the public spot- tors supported this effort. Key initia- light, from climate change to energy tives in 2008 included: DEI El Salvador efficiency to a secure and sustainable • Monitoring and inspecting Vaccination Programs fuel supply. contractors to ensure appropriate EHS practices were in place. These programs covered all DEI El Sal- A successful business like ours de- • Visiting contractor offices to vador employees and were conducted pends on a diversity of people, ideas evaluate EHS performance at their in June 2008 at DEI El Salvador‘s and talents, a strong team of capable offices and work locations. plants and administrative offices. The people committed to maintaining • Promoting meetings between vaccination programs were preceded our reputation as an industry leader contractor company owners by educational seminars as well as in Latin America, and a reputation for and DEI contract managers and general medical evaluations for operational excellence and customer the vice president to foster an personnel at the electricity generation service. open relationship and open plants. A total of 213 flu vaccinations communication channels. and 280 Hepatitis B vaccinations were As stated in the Operating Principles, • Recognizing contractor administered on a voluntary basis. we strive for a high-performance cul- companies that exhibit good EHS This program is part of our efforts ture in which both the company and performance. to promote a healthy and safe work employees reach their full potential environment for employees. by maintaining a healthy and safe We are looking forward to seeing how work environment, maintaining open, contractor companies and their em- honest and frequent communica- ployees respond to these initiatives, DEI Egenor Peru—Occupational tion; embracing and understanding and how they affect contractor safety Preventive Care cultural differences, backgrounds performance. and experiences; conducting busi- Between August 25 and September 5, ness ethically and with the highest 2008, health exams were performed integrity; providing opportunities for Health on all DEI Egenor employees in coordi- creativity and initiative; and imple- nation with the EHS Department. The menting training programs. We have implemented various exams were conducted by Cardioclin- education, training, counseling and ic, which specializes in occupational risk-control programs to assist our health. This practice promotes preven- workforce. The following case studies tative health care and well being of all Code of Business Ethics demonstrate some of our efforts: DEI Egenor employees. The Duke Energy Code of Business Eth- DEI Guatemala Sponsors DEI Electroquil Ecuador—EHS ics (CoBE) focuses the organization on the Perfect Day Program Employee of the Month areas of ethical risk, helps to recognize and deal with ethical issues, describes This program encourages the par- Electroquil recognizes the employee mechanisms to report unethical ticipation of all employees to report who, during the month, has found conduct and helps foster a culture of unsafe conditions and to promptly and corrected an EHS issue or who integrity and accountability. This code follow up with corrective actions. In has significantly improved the plant applies to Duke Energy, its subsidiaries March 2008, the Perfect Day Program regarding safety conditions. The em- and its affiliates. Contractors, suppliers Award Ceremony for 2007 took place ployee is awarded a certificate and a and vendors are expected to support and recognized the Las Palmas plant bonus. The employee nominating the effective compliance programs within for the best overall improvement rat- recognized employee also receives their own organizations. ing for 2007. The Perfect Day was initi- recognition. ated as a pilot program in Guatemala Duke Energy International – Sustainability Report 2008 59 Labor Policies The following key Human Resources policies summarize our philosophy and expectations regarding labor practices: Affirmative Action and We comply with all applicable country and local laws, regulations and ordinances Equal Opportunity prohibiting discrimination in places where we operate. We make every good faith Employment effort to ensure this policy is implemented in all personnel decisions. Diversity and Inclusion This policy outlines our commitment to creating and maintaining a diverse and inclusive workforce, and doing business with diverse suppliers. Diversity embodies all the differences: life experiences, work experiences, perspectives, cultures, race, gender, sexual orientation, religion, national origin, age or disability. Inclusion entails building an environment in which employee differences are valued, employees are empowered and diverse DEI communities are connected across the enterprise. Workforce Development This policy establishes our commitment to employee development, workforce planning, and succession planning. We recognize the contributions of every individual, and that workforce capabilities and talents are critical to success. Worklife This policy sets forth our commitment to WorkLife balance to the extent permitted by business needs. We understand that part of being a productive, successful employee is finding the appropriate balance between priorities at work and home, and in our communities. Open Door This policy establishes our intent to provide an environment with unrestricted access to management, in which employees feel free to raise work-related concerns to their supervisors or others without fear of intimidation or retaliation. Personal Information This policy is designed to support our business values as we seek to be a leader in considering Privacy and addressing privacy-related concerns of customers, employees and shareholder. Alcohol and Drug Free Our employees are expected to report for work and remain at work in a condition free of Workplace the effects of alcohol or drugs. Alcohol or drug use affecting job performance, corporate reputation, corporate assets, or the safety of employees or the public is not tolerated. Harassment Policy This policy establishes our commitment to provide a workplace free of harassment, and for appropriate action to be taken if harassment occurs. We will maintain a work environment in which employees can perform their responsibilities without being harassed by any other employee, contractor, customer, vendor or visitor. Harassment is defined as any action that singles out an employee, to the employee’s objection or detriment, because of race, sex, sexual orientation, religion, national origin, ethnicity, citizenship, age, marital status, and disability. Corrective Action All employees are expected to conform to established standards of ethical conduct such as honesty, trustworthiness, dependability and professionalism. Inappropriate conduct will be addressed through corrective actions, up to and including termination from employment. General Workplace We are committed to operating safely. It is our intent to maintain a secure Security work environment free from intimidation, threats, or violent acts. 60 Duke Energy International – Sustainability Report 2008 Employee Opinion Survey on next steps. Every employee is en- Diversity couraged to review the survey results. Since 2000, we have conducted The survey questions are categorized Our operations are in all corners of Employee Opinion Surveys (EOS), a into 13 broad areas: Latin America, which, in and of itself, common practice in DEI, to “take the • Goals and direction provide us with the opportunities to pulse” of the workforce regularly. • Supervision work with a diverse group of people. • Role clarity/personal With opportunities also come chal- The EOS provides a snapshot of responsibility lenges, and we are committed, as part employee attitudes, and as such is • Rewards of our charter and values, to creating useful in determining whether senior • Work group dynamics and maintaining a diverse and inclu- managers are aware of issues affecting • Diversity and inclusion sive workforce, and doing business the engagement of employees in • Empowerment with diverse suppliers. accomplishing business strategies. • Job skills and information • Work group resources Diversity embodies all the differences We conduct an all-employee survey • Overall satisfaction and — life experiences, work experiences, every other year (last doing so in commitment perspectives, cultures, race, gender, 2007). In other years, business unit • Retention sexual orientation, religion, national leaders decide whether to have a full • Business ethics origin, age or disability. Inclusion entails survey or random sample. Since 2008 • Sustainability building an environment where em- was an interim survey year, the survey ployee differences are valued, employ- randomly sampled employees in our The sustainability category was ees are empowered and diverse Duke business units in the various countries. included for the first time in 2008. Energy communities are connected. Under this category the statement, The figure below summarizes DEI’s “Duke Energy works hard to An inclusive environment encour- employee positive perception to each strike the right balance between ages all employees to contribute their of the categories. economic, environmental and unique perspectives and capabilities, social consideration,” received an 89 and fully engages a diverse workforce Survey results are shared with both percent positive response from our in achieving superior business results. managers and employees. Managers employees. Inclusion fosters trust, the cornerstone review the data, identify actions to ad- for risking new ideas and fostering a dress concerns and update employees sense of accomplishment—powerful motivators that draw out each per- son’s best performance. It also creates 89% 89% 89% the environment where “every em- 82% 83% ployee can start each day with a sense 81% 79% of purpose and end each day with a 76% 76% 72% 72% sense of accomplishment.” 68% Overall satisfaction and commitment 64% Additionally, we support the win-win Role clarity/personal responsibility relationships that a strong supplier diversity program fosters within the communities we serve. Job skills and information Diversity and inclusion Our diversity and inclusion policies Work group dynamics Work group resources Goals and direction embody the following: • “Respect for the Individual” is Business ethics Empowerment fundamental to building a high- Sustainability Supervision performance team. All employees Retention share the responsibility for creat- Rewards ing a workplace that values and respects diversity and inclusion— enhanced by openness, sharing, DEI’s Employee Opinion Survey Results for 2008 trust, teamwork and involvement. Duke Energy International – Sustainability Report 2008 61 • “Win-win relationships” are es- Training and Education all of Aguaytia Energy employees, and sential to restoring credibility and all passed the training exams. earning the trust of employees, Our training programs extend from customers, suppliers and commu- upper management to employees Examples of ongoing training pro- nities. We demonstrate inclusion in the field—every DEI employee grams throughout DEI include: in our procurement practices is considered an integral part of • Operations Safety Leaders when we provide opportunities the organization and necessary Workshop. for diverse and small businesses for continuous improvement in all • Contractor’s Safety Workshop. to provide goods and services to aspects of business. We use many of • Safety Behavior Standards “Train- the company. the traditional methods for training the-Trainers” Workshop. employees, such as classroom-style • Professional and personal Accountability and responsibility for and on-the-job, as well conferences development training. ensuring that this policy is understood and workshops both for having and implemented across our company employees in one country train rests with the highest organizational those in other countries and for Training Performance Metrics levels: The chief human resources transferring good practices across the officer is responsible for ensuring organization. In 2008, we established a leading enterprise-wide implementation of indicator for measuring how well the diversity and inclusion policies One good example of making sure our employees have completed the and associated initiatives. Groups everyone receives training is at required amount of safety training as which exist to champion and further Termoselva—Aguaytia Energy facili- prescribed in compliance guidelines. diversity performance will coordinate ties, located in the heart of Peru. This Training attendance has been tracked and align efforts with this officer. remote area of the Peruvian Amazon for several years; however, this will be Jungle is near the town of Aguaytia, the first time that a training target (i.e., Management at all levels ensure that the capital of the province Padre 90 percent) had been established by employee differences are respected Abad, in the Ucayali region. Because which to measure each country. “Suc- and valued in the workplace, DEI of its location, employees at Termosel- cessfully” completing a safety meeting inclusive behaviors are personally va—Aguaytia Energy do not receive or training topic means an employee demonstrated, and opportunities are the same exposure to EHS education was present throughout the meet- sought to do business with diverse and training as those at other of our ing or session, completed the hours companies. facilities. To address this issue, we suc- required for a particular topic, and/or cessfully provided online training to passed the test or exam. Huaraz Community, Peru 62 Duke Energy International – Sustainability Report 2008 Our overall performance exceeded Career and Professional • Strengthen and improve their the expected target of 90 percent. We have developed corrective and Development performance through compliance with individual goals, which preventive action plans to address are aligned with the strategic incidents when regions failed to meet Developing a talented pool of people objectives of the company. the established target. is critical for us to achieve our goal of a quality workforce and continue This program was carried out within In addition, we deliver training to be the employer of choice in the the framework of the Personal Devel- focused on the needs of each country. countries where we operate. All em- opment Program, and considered the In September 2008, DEI El Salvador’s ployees are included in a performance results of the 360 evaluation of the managers and supervisors were appraisal process, which, among other employees in 2007. trained in Salvadorian Environmental things, evaluates employees’ safety Law applicable to the operations of performance and helps identify areas Throughout all the countries, similar this business unit. An environmental for improvement. programs were developed to ensure expert in the topic provided the that employees have individual goals training. Participants were trained aligned with those of the Business in the content and priority of Personal Development Program Units. DEI’s core competencies are the environmental law in El Salvador, as basis for employee evaluations, lead- well as international environmental Over two and a half days in May, all ing to development plans specific to conventions applicable to our DEI Argentina employees took part in each individual’s needs. operations. a learning and interactive experience outside the company to: • Optimize and strengthen 100 percent of DEI’s employees In 2008, DEI’s average hours of training communication and leadership in all Business Units receive per year per employee was 37. skills. regular performance and career • Maximize capabilities. development reviews. • Create opportunities for personal growth within the organization. Personal Development Program, DEI Argentina Duke Energy International – Sustainability Report 2008 63 Workforce Highlights DEI Total Workforce 2007 2008 Demographics* # % Argentina 104 110 Gender Brazil 293 308 Men 893 86% Ecuador 39 42 Woman 145 14% El Salvador 149 159 Age Guatemala 162 197 Up to 25 years old 83 8% Peru 307 274 From 26 to 35 years old 298 29% U.S. Based 26 28 From 36 to 45 years old 332 32% Total 1,080 1,118 Above 46 years old 325 31% Years of service U.S. Based Up to 10 years 761 73% 3% Argentina 10% From 11 to 20 years 144 14% Above 21 years 133 13% Peru 25% Job classification Brazil Managerial 121 12% 28% Supervision 135 13% Technician 339 33% Operational 443 43% Guatemala Union representation 18% Ecuador 4% Unionized employees 284 27% El Salvador 14% No Unionized employees 754 73% DEI Workforce by Country Educational level Junior High 41 4% Employee Turnover* 2008 High school 392 38% Argentina 7.20% College 448 43% Brazil 10.30% Technician 85 8% Ecuador 4.80% Post-graduation / MBA 72 7% El Salvador 10.00% *Does not include Peru Aguaytia and DEI Corporate Headquarters Guatemala 9.30% Peru 6.30% * Turnover as percentage of workforce Successful Completion of H&S Training by Employees 10% 10% Country / Business Unit 2007 2008* 9% Argentina 89% 98% 7% Brazil 97% 99% 6% Ecuador 88% 84% 5% El Salvador 90% 91% Guatemala 94% 97% Peru Aguaytia 98% 94% El Salvador Guatemala Argentina Peru Egenor 95% 96% Ecuador Brazil Peru Total DEI 94% 93% DEI Turnover by Country * Target 90% 64 Duke Energy International – Sustainability Report 2008 Human Rights We encourage employees to promptly ing aspects: report possible harassment to their im- mediate supervisor, another manager, • Acknowledge and respect the We do not discriminate against any or Human Resources, or if they are cultural uniqueness of indigenous employee or applicant for employment uncomfortable reporting such matters people. because of race, color, sex, religion, to these parties, they may also use the • Seek to understand and respond national origin, ethnicity, citizenship, external, anonymous EthicsLine. to indigenous people and other sexual orientation, age, marital status, local populations’ expectations disability, status as a Vietnam Era or Where investigation confirms harass- and concerns. disabled veteran. We also comply with ment occurred, the party committing • Minimize (to the extent all applicable country and local laws, the harassment will incur discipline up practicable) or otherwise mitigate regulations and ordinances prohibit- to and including employment termi- adverse impacts of development ing discrimination in places where we nation. We forbid retaliation against on indigenous people. operate. We will make every good faith employees for their actions in bring- • Be a responsible corporate citizen. effort to ensure our policy concern- ing harassment or other concerns to ing equal employment opportunity is management or country and local To grasp the extent of the impacts and implemented in all personnel decisions. regulatory agencies. Retaliation is also make informed decisions we conduct forbidden against employees for their social impact assessments as part or in participation in harassment investiga- addition to the environmental impact tions or resolutions. Persons found to assessments. Harassment have committed such retaliation will incur discipline up to and including employment termination. DEI did not register any incidents We define harassment as any action of violations involving rights of that singles out an employee, to the indigenous people during 2008. During 2008, DEI did not register employee’s objection or detriment, any incidents of discrimination. because of race, sex, sexual orienta- tion, religion, national origin, ethnic- ity, citizenship, age, marital status, Society disability, status as a Vietnam Era or Indigenous People disabled veteran. We also comply with country and local laws, regulations and ordinances prohibiting discrimi- Indigenous people (also referred The Environmental nation in places where we operate. Our harassment policy addresses to as aboriginal, first nation, native or tribal people) are groups with a and Social Impact behaviors or activities that might social and cultural identity distinct Assessment Process constitute harassment: from the dominant national society • Verbal or non-verbal threats, who have at times suffered negative insults abuse or ridicule (sexual or consequences due to development Whenever we build a new power plant otherwise.) of natural resources (logging, mining, or hydroelectric plant or significantly • Unnecessary or offensive physical exploration and production) in their change our operations such that it contact. traditional lands by others. Impacts may impact the surrounding com- • Possessing, displaying, or have included loss of land, spread of munity, we conduct environmental distributing pornographic or diseases for which indigenous people impact assessments (EIAs). These offensive materials. lack immunity, environmental dam- assessments ensure that DEI considers • Attempted or actual intimate age and disruption of traditional social the ensuing environmental and social physical contact. structures. impacts when deciding whether to • Requesting or demanding favors proceed with the project. (sexual or otherwise), explicitly Our commitment to respecting the or implicitly, as a condition of culture, values, and environments of DEI must conduct EIAs in all the employment, promotion, transfer, indigenous peoples in the places we countries where it operates or plans or any other personnel action. do business is described in the Indig- to develop a new project. Guidelines • Physical conduct such as assault enous People Policy. This commitment for conducting EIAs are rigorous and or blocking normal movement. is fulfilled by focusing on the follow- are based on either country-specific Duke Energy International – Sustainability Report 2008 65 regulatory requirements or on stan- mental and physical well being). It can • EIA for the Las Flores Simple dards promulgated by institutions be lengthy (i.e., lasting up to a year or Cycle Natural Gas Turbine with providing necessary funding, such as even more) and requires an extensive a generating capacity of 195 the World Bank. Many countries base allocation of resources, not just finan- MW, located in Chilca, Peru, was their requirements on the World Bank cial but time and effort. This, however, submitted at the beginning standards. does not affect our goal of conducting of 2008 and approved by the the best EIA possible, since the objec- Ministry of Energy and Mines of As mentioned, the EIA considers both tive is to ensure sustainability, which Peru on August 29, 2008. environmental and social impacts of a leads to a better life for everyone • EIA at Aguaytia for the conver- project. The social component: involved. sion from simple to combined • Analyzes how projects may affect cycle natural gas turbines with people. an increased capacity of 100 MW • Identifies and mitigates any was submitted for approval to the adverse impacts. EIA Conducted in 2008 Ministry of Energy and Mines of • Enhances benefits a project may Peru on April 15, 2008. bring to a community. • Helps to effectively manage We had a busy “project development” Two of the EIAs were approved change to the community year in 2008—for very new project or within seven months, a tremendous brought on by the project. business concepts that may affect the feat given how long the approval environment or surrounding com- process typically takes. Social impacts of a new project may munity, an EIA needs to be conducted. result from changes in: We performed three EIAs for signifi- • Demographics, such as cant projects to increase our electrical Community Support population size and composition. generating capacity. The additional • Economics of a community (e.g., electrical generating ability could employment and income). exceed 380 MW, just under an 8.5 per- DEI is a diverse company, operating • Environmental issues, such as cent increase in our overall capacity. in six Latin America countries, each those associated with air and These EIAs are described below: with its own cultures, beliefs, values, water quality. • EIA for the Las Palmas II Coal-fired goals, and attitudes. A common • Laws, regulations, administration, Power Facility, with a generating thread through each is our willingness etc., of a community. capacity of 85 MW, was submitted to give our time and money to make to the Ministry of Environment communities better and improve their The EIA identifies social impacts that and Natural Resources of quality of life. affect lifestyle, culture, community Guatemala (MARN in Spanish) on (e.g., infrastructure, services, and net- January 16, 2008, and approved We are dedicated to building strong works), quality of life, and health (e.g., on July 04, 2008. communities, since our success is linked to the health and prosperity of the communities we serve. The goals that have been set to accomplish this include stimulating economic growth, investing in community programs, implementing tools that will support a community’s long-term planning, increasing spending with diverse sup- pliers, and implementing initiatives to support public safety. During 2008, 680 employees took part in DEI’s Volunteerism Program, investing a total of 4,020 hours of community service. Volunteerism Program, DEI Guatemala 66 Duke Energy International – Sustainability Report 2008 How We Volunteer kilometers of the Puerto Quetzal High- which has sought to make our com- way by planting 500 “Matilisguate” munities better places to live. trees. This activity raised awareness Employees and their families volun- among the DEI family about business In Carhuaquero, Peru, more than 30 teer to help strengthen communities. social responsibility and the impor- DEI Egenor employees constructed They identify needs in their own com- tance of caring for the environment. sanitary facilities for over 300 students munities and provide leadership— The activity was coordinated with the at the La Ramada School in Carhua- from volunteer recruitment to project Ministry of the Environment and Natu- quero. management. While employees and ral Resources of Guatemala, Escuintla their families provide ideas, hard work, Delegation, the Fire Department of DEI El Salvador carried out “Volunteer and time, we support these activities Puerto San Jose and the Highway Day” at a special education school in financially by investing in community Patrol. Acajutla, located near the Acajutla programs. This volunteering “spirit,” plant in the state of Sonsonate. This backed by financial investment, has school cares for more than 60 children supported nearby communities and Children Are Our Future with special needs, including children schools, and helped provide memo- with Down’s syndrome and speech rable events to those less fortunate. Cañon del Pato hydroelectric plant problems. Sixty-five DEI El Salvador volunteers repaired and painted employees as well as 43 community One example is the “Year Round Swim- classrooms, the main patio, and exte- members and teachers helped repair ming Pool” project, implemented by rior rooms at the Huallanca Techni- and paint the roof and playground the Association of Parents of Children cal School, a few meters from DEI equipment, repair bathroom pipes, with Cerebral Palsy of Neuquen, Egenor’s administrative offices and upgrade electrical installations, and Argentina. This project stemmed from maintenance shops. cut the grass in the garden areas. Thus, the initiative of three DEI Argentina one of our Operating Principles— “we employees, who collaborated with the This project, held in late June, early will get personally involved in the association to provide a day center July, was part of “Dia de Accion Re- communities where we work” —was with a new swimming pool. The ef- sponsable” (DAR), or Responsible put into practice. forts and commitment of these three Action Day in English. DAR is part of volunteers, as well as the financing the Global Service Event (GSE) initia- provided through the DEI Safety Fund, tive that Duke Energy Corporation made this project a reality. has conducted for nearly 10 years and Employees from DEI Egenor Lima’s of- fice helped construct a children’s park and a community center in Chilca, south of Lima, where the Las Flores thermoelectric plant will soon be constructed. The residents of the San José settlement now have playground equipment for the children in the area, as well as a furnished community center or social activities. This project benefits more than 200 children. In Trujillo, Peru, volunteers constructed sidewalks in the urban area where one of our plants was located as well as performing cleaning and weeding activities. Employees from Chiclayo and Chimbote traveled to Trujillo to perform this work. Some 100 volunteers in Guatemala, including our employees and family members, reforested areas along 64.5 Volunteerism Program, DEI Argentina Duke Energy International – Sustainability Report 2008 67 Creating Future Leaders • Providing students from the Luiz • Medical services, to provide Meneghel Foundation in Bandei- supplies to emergency clinics One of the best ways to give back to rantes, Brazil, access to the SAG and hospitals, rehabilitation communities is through education hydrobiology and aquiculture services and physical therapy, and training—the fundamental build- station and its facilities, where sponsorships to medical clinic ing blocks for helping communities students take biology, agronomy, rotations, and cancer treatment to prepare for future challenges and and veterinary classes as well as children. opportunities. Most individuals that conduct practical experiments • Shelters and orphanages, to receive financial support to pursue with fish native to the area. support their operations and help their dreams of being doctors, engi- • Supporting Young Businessmen of provide food. neers, farmers, etc., will return back El Salvador, a program that gives • Sporting associations, to to their communities to help improve children and teenagers practical purchase uniforms, and provide their standard of living and way of life. experience in how businesses accommodations and sporting Notable education and training activi- operate and managing their own facilities. ties include: businesses, as well as provides • Emergency organizations, to • Helping over 200 teenagers in the foundation to become young purchase necessary equipment various Brazilian communities leaders in their communities. and supplies for fire departments. become more involved in agriculture and cultivation of the nearby native forests, and Supporting Public Services Helping Communities providing environmental training Help Themselves to over 700 community educators. Donations by all regions to public • Training and educating 10 service organizations and agencies, DEI Peru - Aguaytia is working with students from technical schools such as fire departments, police the surrounding community to in the Province of Neuquen in departments and libraries, have been elevate the standard of living in the Argentina in the operation and a cornerstone of DEI’s community sup- Amazon Province of Padre Abad. maintenance of thermoelectric port. Donations have been made to: This includes helping local farmers and hydroelectric power plants • Public schools, to upgrade and increase production of key crops by DEI Argentina employees, and furnish schools; help students through alternative methods by providing hands-on work experi- purchase necessary books, sup- promoting production of: Noni in ence in the electricity generation plies, musical instruments, and Las Mercedes and Bello Horizonte; industry (“Generar, Escuela de uniforms; help feed students; and high-quality cocoa in Huipoca, Operaciones” program). support extracurricular activities. Irazola and Curimana; sugar cane (ecological sugar and raw sugar) in Bello Horizonte; Palm Oil in Eje Neshuya Curimana; and pork in San Jose, Zorrillos, Las Mercedes and Bello Horizonte. Also, we help develop fisheries in the Curimana district, reactivate the fishery industry in the Manantay district, and produce Amazon species hatchings in the Padre Abad District. Proyecto Dino—Cultural and Scientific Heritage Site We are a major sponsor of “Proyecto Dino,” the biggest paleontological dinosaur site in Argentina and the only dinosaur excavation site open to the public in South America. Doing Children’s Park, DEI Egenor, Peru 68 Duke Energy International – Sustainability Report 2008 so, we further our commitment and compromise the public’s trust, Our Responsibilities to support the well being and every employee is responsible for development of the surrounding being familiar with the entire CoBE. All employees must understand and communities. This is a valuable The CoBE has been adopted by the follow this CoBE in business dealings; paleontological discovery that offers company’s board of directors and as such, employees must follow the incredible scientific and educational promotes an organizational culture law, the CoBE and related policies; potential for the region. The project that encourages ethical conduct and promptly report suspected violation; started in January 2002, led by compliance with the law. complete required training; and paleontologists Jorge Calvo. Initially periodically certify compliance with the project’s objective was to extract Our employees are aware that: the CoBE. a giant dinosaur, but as excavations • The CoBE cannot anticipate every started fossil pieces from plants and possible situation or cover every Those in a leadership position vertebrates representing an entire topic in detail. If a situation is (supervisors, managers and ecosystem from the Cretaceous Age unclear, employees should ask for senior leaders) have additional were found. This gave origin to the guidance before taking action. responsibilities regarding the CoBE. Centro Paleontologico Lago Barreales • Most of the topics covered in this They must set the tone “at the top,” by (Cepalb), the first paleontological CoBE are explained in greater modeling exemplary ethical business center dedicated to education and detail in a company policy. conduct; provide required training tourism in Argentina. • The company may occasionally for employees; answer employee establish training programs to questions about the Code and the Proyecto Dino and Cepalb are address specific areas of risk. company’s values, policies and prototype sites that offer the material • Reading the CoBE is not a procedures; and promptly respond for the paleontological study, substitute for completing training to employee reports of violations or education and tourism of unparalleled and complying with specific requests for guidance. value worldwide, and were declared policies and procedures. natural reserves by the Neuquen Province. Proyecto Dino has become a new center of economic development Reporting Compliance for the region. The project now has a team of 19 people, and so far, more Issues that 40,000 people from 21 countries have visited the site. Our employees have a responsibility to report violations of the CoBE, applicable laws or governmental regulations while performing Anti-corruption Practices work for the company. Employees are also expected to report any threat to human health, safety, the Duke Energy’s CoBE, which applies environment or the company’s assets. to DEI, describes ethical standards Employees can report violations for employees, helps recognize and anonymously through EthicsLine, a deal with ethical issues, and explains worldwide reporting system. There how to report unethical conduct employees can report suspected and foster a culture of integrity and unethical and criminal conduct, or accountability. Contractors, suppliers environmental, health and safety and vendors are expected to support concerns, and other issues, such as effective compliance programs employee misconduct, harassment within their own organizations. in the workplace, fraud, questionable Some sections and topics may be accounting, internal controls or more relevant to certain functions auditing matters, conflicts of interest, or departments than to others. misuse of company assets, regulatory However, since one failure to act violations, and behavior believed to with integrity can damage the damage our reputation. company’s hard-earned reputation Proyecto Dino, Neuquen Province, Argentina Duke Energy International – Sustainability Report 2008 69 Consequences of Violating the CoBE Foreign Corrupt Practices Act Policy Product Responsibility Any violation of the CoBE or our eth- We depend on a responsible and ethi- ics and compliance programs may cal workforce to meet our business We create higher and sustainable result in corrective action up to and goals. Accordingly, our employees value for customers, employees, including employment termination. who may be at risk of exposure to communities and stakeholders by The company may seek civil remedies corrupt practices are expected to generating, delivering and trading from an employee and refer criminal understand the provisions of the U.S. energy products and services. We misconduct to law enforcement agen- Foreign Corrupt Practices Act (FCPA), are committed to solutions that fit cies. to comply with the letter and spirit of customers’ energy needs by opti- • The CoBE does not necessarily this law, and to conduct themselves mizing costs and providing high- account for all applicable legal accordingly. quality products and services. We requirements. More restrictive build strong commercial relationships laws or requirements take The FCPA and similar laws prohibit based on transparency and trust, precedence. When applicable companies and individuals from cor- working openly with customers and legal requirements conflict ruptly offering, promising or giving providing clear and objective informa- with the standards in this CoBE, anything of value to a government tion. We work continuously to develop employees should ask for official to assist the company or innovative commercial models that guidance before acting. individual in obtaining or retaining provide competitive advantages. DEI • The existence and provisions of business or to obtain any improper commercializes electric power with its the CoBE do not by themselves advantage. It is also unlawful to make own generation capacity and/or the create further contractual right to payments to agents, sales representa- purchase of energy from third parties. continued employment. However, tives or other intermediaries while to the extent a contractual knowing or having reason to know We have developed a Quality Manage- right to continued employment that any portion of the payment will ment System that has been integrated is provided by applicable be used illegally. with our EHS Management System, law, the CoBE is part of and is to ensure that our products meet the incorporated into an existing All our employees in the following quality requirements and specifica- employment contract between functions are required to take the tions set by the client, while meeting Duke Energy and employees. FCPA training annually: Business De- the laws and regulations of each • Our employees may be asked velopment, Asset Management, Com- country where we operate safely, periodically to certify compliance mercial, Government Affairs, Finance, efficiently and reliably. The Quality with the CoBE. Accounting, Purchasing, Logistics, HR, Management System encompasses all PR, IT and EHS. In addition, Operations operating and administrative facilities A key mechanism for ensuring compli- personnel at the managerial level or and their related processes. ance with our CoBE is through com- higher are required to take the train- munication and training. Our Human ing. The operating processes include all Resources and Legal Departments activities associated with electricity train all employees on the Foreign This training included a review of the generation, from planning to final Corrupt Practices Act (FCPA) and ap- scope of the law, which stipulates that delivery to the client at the agreed propriate business conduct. a buyer will not directly or indirectly points and agreed requirements make any corrupt payments to offi- and specifications. This includes all cers, agents, or public or government operation and maintenance activities employees, or to candidates or active necessary to guarantee safe, efficient members of political groups, to obtain and reliable generating units. or maintain a business relationship. The administrative processes involve Our online training “Business Con- all other processes that support elec- duct Questionnaire” reaffirms certain tric generation activities to ensure the standards of the CoBE and provides an product is delivered on time and in opportunity to report any noncompli- agreement with contracted stipula- ance. tions and regulatory requirements. The following departmental activi- ties are included: commercialization, 70 Duke Energy International – Sustainability Report 2008 Control Room, Cañon del Pato Hydroelectric Complex, Peru Duke Energy International – Sustainability Report 2008 71 logistics (purchasing and imports), regulations are identified, incorpo- • Monitoring and measuring the human resources, finance, informa- rated and fulfilled to meet customers’ products throughout the different tion technology, regulatory affairs and expectations. We have established the electric generation phases to public and/or community relations. appropriate procedures to manage make certain operating and and control our operations. process control procedures are Our electric generation activities being followed. follow the continuous improvement • Following up and evaluating cycle, as follows: Monitoring conformance with legal requirements applicable in each Each business unit develops and of the countries where we have Planning implements process control and operations measure mechanisms to demonstrate We plan all business activities to pre- that electricity is being generated to serve our integrity, based on the busi- conform to product specifications, Management Review ness strategy, Operating Principles, and to the adequate management corporate policies, and clear objec- of the environment and health and We analyze all the information col- tives and targets, making available the safety. This involves: lected during the implementation and resources to meet those objectives. • Following and meeting our monitoring stages to measure client Operating Principles, corporate satisfaction, conformance to product So that we make the right decisions policies, and objectives, target specifications, characteristics and for each project, we analyze power and budgets as planned. trends of processes involved and the generation technologies and use four • Measuring client satisfaction supply chain, as well as performance criteria to evaluate energy supply related to the fulfillment of on environmental, health and safety options: Is the supply affordable? Is it expectations and requirements. regulations. available? Is it reliable? Is it clean? The (This is achieved by table on page 73 summarizes the cur- communicating with the client Stemming from this analysis, we rent state of power plant technology using different media that develop action plans with corrective and its economics. includes letters, e-mail, meetings or preventive actions with the main and satisfaction surveys.) objective of avoiding the occurrence • Measuring and following up on of non-desired activities that may un- Implementation results to identify if corrective dermine product quality and overall actions are needed, to ensure corporate performance. By establishing an energy commercial- the product conforms to ization process, we guarantee client specifications, and environmental, During 2008, none of our business requirements and applicable laws and health and safety regulations. units incurred regulatory citations or monetary sanctions related to the non-compliance with customer or health and safety codes. Customer Health and Safety Our approach to quality manage- ment guarantees that our customers’ requirements are met and exceeded. This approach along with the informa- tion we collect throughout the EIA process enables us to develop the set of tools and mechanisms to ensure that the health and safety of our cus- tomers and surrounding communities Electrical Substation, DEI Brazil 72 Duke Energy International – Sustainability Report 2008 DEI’s Criteria to Evaluate Energy Supply Options Purpose Affordable Available Reliable Clean Cleaner Coal Supercritical Pulverized Baseload1 Yes Yes Yes Yes, except for CO2 emissions Integrated Gasification Baseload Yes Yes, but limited Yes Yes, except for CO2 emissions Combined Cycle (IGCC)* utility applications Natural Gas Simple Cycle Peaking2 Yes, but volatile fuel prices ` Yes Yes, lower CO2 emissions than coal Combined Cycle Intermediate3 Yes, but volatile fuel prices Yes Yes Yes, lower CO2 emissions than coal Renewables Solar Intermittent4 No, very expensive now Yes, on small scale Yes, if resource Yes available Wind Intermittent Among least cost renewables Yes, but Yes, if resource Yes geographically limited available Hydro Peaking Yes Yes, but most sites Yes, if resource Yes, except for stream have been developed available flow impacts Biomass Baseload Among least cost renewables Yes, on small scale Yes, if fuel available Yes, but not as clean as other renewables Energy Efficiency Demand Response Peaking Yes, less than generation Yes, but customer Yes, once installed Yes alternatives response uncertain Conservation Baseload Yes, less than generation Yes, but customer Yes, once installed Yes alternatives response uncertain *Future carbon capture and sequestration could address CO2; likely easier with IGCC. 1 Baseload – Large power plants that operate continuously at near full load (except for maintenance) to meet the 24/7 electric demand. 2 Peaking – Power plants that operate for short periods, often for just a few hours on especially hot or cold days, to meet spikes in demand. 3 Intermediate – Power plants that operate between the extremes of baseload and peaking electric demands. 4 Intermittent – Power plants that are expected to operate 15 to 30 percent of the time.. is protected. The following are some exposure to typical EMF levels from Upgrade of chimney gate seals to examples of how we are preventing power transmission lines and equip- reduce environmental noise, Ecuador potential health and safety impacts to ment. However, while the evidence of customer and surrounding communi- adverse health risks is weak, it is still The DEI Electroquil facility complies ties. sufficient to warrant limited concern. with the environmental noise parameters established by applicable To respond to this concern, DEI imple- local and international standards. Monitoring electromagnetic mented a voluntary EMF monitor- Neighboring communities have not fields in Guatemala ing program at Guatemala facilities. filed any complaints about noise from This program is assessing potential the plant. Nevertheless, during our Electromagnetic fields (EMF) are exposure and health concerns to the annual generation unit maintenance, invisible lines of force emitted by and surrounding population and DEI em- improvements were made to the surrounding any electrical device (e.g. ployees, by measuring the actual EMF design and insulation of the chimney power lines and electrical equipment). exposure levels against the baseline gates to further reduce noise levels. Although there is public and scientific reference levels developed by the In this way, DEI is being proactive in concern over the potential health ICNIRP (International Commission on controlling one of the environmental effects associated with exposure to Non-Ionizing Radiation Protection). aspects that could potentially affect EMF (not only high-voltage power The monitoring program indicate that communities near the plant. lines and substations, but also from the communities and DEI employee everyday household uses of electric- exposure levels do not represent an ity), there is no empirical data demon- elevated risk. strating adverse health effects from Duke Energy International – Sustainability Report 2008 73 Responsible DEI Seminars (Argentina, Brazil, Peru) Online Monitoring (Argentina, Communications Brazil, Peru) Each year, DEI organizes seminars to bring together renowned experts in This service allows customers to moni- DEI values and respects our client rela- the energy/electricity fields to discuss tor online all the information related to tionships and strives to provide objec- current and future issues. These semi- their energy usage, including contrac- tive, reliable and timely information nars provide valuable information and tual agreements, contracted demand, regarding our products and services tools to improve decision-making as real demand, and pricing, among other to improve customer satisfaction. it relates to electricity and natural gas items. This instant access to reliable Specific activities related to product products in deregulated markets. They information enhances the customer’s responsibility include seminars and also demonstrate our commitment to decision-making process. online monitoring. strong customer relationships, key to our economic viability, by providing expertise and objective advice, aware- ness and support to understand alter- native options in an evolving market. GRI Standard Disclosure Profile 1 Strategy and Analysis 1.1 Statement from most senior decision maker 1-2 1.2 Description of key impacts, risks and opportunities 5-8 2.1 Name of the organization Cover 2.2 Primary brands, products and/or services 9 2.3 Operational structure of the organization 9 2.4 Location of the organization's headquarters Cover 2.5 Number of countries where the organization operates 10, 14 2.6 Nature of ownership 9, 14 2.7 Markets served 10, 13, 14 2.8 Scale of the organization 10 2.9 Significant changes during the reporting period 11 2.1 Awards received 11-12 3.1 Reporting period 12 3.2 Date of most recent previous report none 3.3 Reporting cycle 12 3.4 Contact point for questions regarding the report and its contents Cover 3.5 Process for defining the report scope including 12 3.6 Boundary of the report 12-14 3.7 Limitations on the scope 14 3.8 Basis for reporting on joint ventures, subsidiaries 14 3.9 Data measurement techniques 15 3.10 Re-statement of any information for previous reports none 3.11 Significant changes from previous reporting issues 11 3.12 Table identifying the location of the Standard Disclosures in the report 74-75 3.13 External Assurance 15 4.1 Governance structure of the organization 15 4.2 Indicate whether the Chair of the highest governance body is also an executive officer www.duke-energy.com 4.3 For organization that have a unitary board structure state the number of members that are independent /or non-executive www.duke-energy.com 4.4 Mechanisms for shareholders and employees to provide recommendations to the highest governance body www.duke-energy.com 4.5 Linkage between compensation www.duke-energy.com 4.6 Processes in place for the highest level of governance www.duke-energy.com 4.7 Processes for determining the qualifications and expertise of the members of the highest governance body www.duke-energy.com 4.8 Internally developed vision, mission, codes of conduct 16 4.9 Procedures of the highest governance body for overseeing the organization's 15 4.10 Processes for evaluating the highest level of governance body's own performance www.duke-energy.com 4.11 Precautionary Principle 17 4.12 Externally developed economic, social and environmental charters, principles n.a. 4.13 Memberships in associations 17 4.14 List of stakeholder groups engaged 19 4.15 Basis for identification and selection of stakeholders 19, 26, 34, 65 74 Duke Energy International – Sustainability Report 2008 4.16 Approaches to stakeholder engagement 26, 67-69 4.17 Key topics and concerns that have been raised 19 Economic Management Approach 21 EC1 Direct economic value generated and distributed including revenues, operating costs 22 EC2 Financial implications and other risks and opportunities for the organization's activities due to climate change 21, 34 EC4 Significant financial assistance received from the government none EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation 23 EC7 Procedures for local hiring and proportion of senior management hired from 23 the local community at locations of significant operation EC8 Development and impact of infrastructure investments and services provided primarily 26 for public benefit through commercial, in-kind or pro bono engagement EC9 Understanding and describing significant economic indirect impacts, including the extent of the impacts 23-26 Environmental Management Approach 28-33, 36-37, 43-48 EN3 Direct energy consumption by primary energy source 36 EN6 Initiatives to provide energy-efficient or renewable energy based products and services 34-36 and reduction in energy requirements as a result of these initiatives EN8 Total water withdrawal by source 36-38 EN11 Location size of land, leased, managed in or adjacent to protected areas and 38-41 areas of high biodiversity value outside protected areas EN12 Description of significant activities, products, and services on biodiversity in protected 38-42 areas and areas of high biodiversity value outside protected areas EN13 Habitats protected or restored 38-42 EN14 Strategies, current actions and future plans for managing impacts on biodiversity 38-42 EN16 Total direct an indirect greenhouse gas emissions by weight 44 EN17 Other relevant greenhouse gas emissions by weight 44 EN18 Initiatives to reduce greenhouse gas emission and reductions achieved 34-36, 44-45 EN20 NO, SO and other significant air emissions by type and weight 45 EN23 Total number and volume of significant spills 49 EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation 32-42 EN28 Monetary value of significant fines and total number of non-monetary sanctions 49 for noncompliance with environmental laws and regulations Labor Practices and Decent Work Management Approach 50-56, 59-63 LA1 Total workforce by employment type, employment contract and region 64 LA2 Total number and rate of employee turnover by age group, gender and region 64 LA4 Percentage of employees by collective bargaining agreements 64 LA7 Rates of injury, occupational diseases, lost days and absenteeism, and number of work related fatalities by region 57 LA8 Education, training counseling, prevention, and risk-control programs in place to assist workforce 59 members, their families, or community members regarding serious diseases LA10 Average hours of training per year per employee by employee category 63 LA11 Programs for skills management and lifelong learning that supports the continued 63 employability of employees and assist them in managing career endings LA12 Percentage of employees receiving regular performance and career development reviews 63 LA13 Composition of governance bodies and breakdown of employees per category, according to 64 gender, age group, minority group, membership and other indicators of diversity Human Rights Management Approach 65 HR4 Total number of incidents of discrimination and actions taken 65 HR9 Total number of incidents of violations involving rights of indigenous people and actions taken. 65 Society Management Approach 65-66 SO1 Nature , scope and effectiveness of any programs and practices that assess and manage the 67-69 impacts of operations on communities including entering, operating and exiting SO3 Percentage of employees trained in organization's anti-corruption policies and procedures 69 SO4 Actions taken in response to incidents of corruption 69-70 Product Responsibility Management Approach 70-72 PR1 Lifecycle stages in which health and safety of products and services are assessed for improvement 65-66, 72-73 PR6 Programs for adherence to laws, standards, and voluntary codes related to marketing, 74 communications, including advertising, promotion and sponsorship Electric Utilities Supplement EU1 Installed capacity broken down by primary energy source 14 EU11 System Efficiency: Average generation efficiency of thermal plants by energy source 27 EUEN14 Biodiversity - report on impacts mitigation measures, and monitor residual effects of new and existing sites 38-42 EUEN18 Initiative to reduce greenhouse gas emission 35 EUEN20 NO, SO and other significant air emissions by type and weight - Report on emissions per MWh 45 EU14 Programs and processes to ensure the availability of a skilled workforce 62-63 EU16 Policies and requirements regarding the health and safety of employees and employees of contractors and subcontractors 56, 59 EULA 7 Report on the health and safety performance of contractors and subcontractors working on site 57 Duke Energy International – Sustainability Report 2008 75 Canoas I Hydroelectric Power Plant, DEI Brazil FORWARD-LOOKING INFORMATION This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “con- tinue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” “target” and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements; state, federal and foreign legislative and regulatory initiatives and rulings that affect cost and investment recovery or have an impact on rate structures; costs and effects of legal and administrative proceed- ings, settlements, investigations and claims; Industrial, commercial and residential growth in Duke Energy’s service territories; additional competition in electric markets and continued industry consolidation; political and regulatory uncertainty in other countries in which Duke Energy conducts business; the influence of weather and other natural phenomena on Duke Energy’s operations, including the economic, operational and other effects of storms, hurricanes, droughts and tornados; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; unscheduled generation outages, unusual maintenance or repairs and electric transmission system constraints; the performance of electric generation and of projects undertaken by Duke Energy’s non-regulated businesses; the results of financing efforts, including Duke Energy’s ability to obtain financing on favorable terms, which can be affected by various factors, including Duke Energy’s credit ratings and general economic conditions; declines in the market prices of equity securities and resultant cash funding requirements for Duke Energy’s defined benefit pension plans; the level of credit worthiness of counterparties to Duke Energy’s transactions; employee workforce factors, including the potential inability to attract and retain key personnel; growth in opportunities for Duke Energy’s business units, including the timing and success of efforts to develop domestic and international power and other projects; construction and development risks associated with the completion of Duke Energy’s capital investment projects in existing and new genera- tion facilities, including risks related to financing, obtaining and complying with terms of permits, meeting construction budgets and schedules, and satisfying operating and environmental performance standards, as well as the ability to recover costs from ratepayers in a timely manner; the effect of accounting pronouncements issued periodically by accounting standard-setting bod- ies; and the ability to successfully complete merger, acquisition or divestiture plans. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Duke Energy has described. Duke Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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