OPERATIONAL EXCELLENCE
Production: 2004 marked the fourth consecutive year in which Cinergy reported the lowest non-fuel operation and maintenance costs among the top 40 power generators in the United States, according to Platts PowerDat, an energy data provider. In fact, Cinergy’s costs were 59 percent lower than this benchmark group’s average.
Our generation teams kept our plants running at the highest availability in our history. Having our low-cost plants available to sell power for more hours continues to enhance our margin opportunity each year. As I noted earlier, over the next four years, the Ohio rate stabilization plan will substantially reduce the margin erosion we experienced in the past two years from higher fuel and emission allowance prices.
Transmission and Distribution: Our commitment to excellence extends to our electric transmission and distribution businesses, where our service cost per customer is 28 percent lower than the Midwest utility benchmark average. We rank among the best utilities in the three states in which we operate in terms of reliability, service restoration following storms and number of customer complaints.
The service of Cinergy’s customer call centers was recognized in 2005, when CG&E and PSI earned the distinction of being the first energy companies in the nation to achieve J.D. Power and Associates certification of call center excellence for providing “An Outstanding Customer Service Experience.”
The commitment of our people to go the extra mile was evident when disaster hit customers outside our service territory. Three times last year we sent more than 100 workers to assist Florida utilities with the massive power outages caused by the devastating hurricanes that hit the state. In recognition of this service, our employees received the Edison Electric Institute’s Emergency Response Award for their dedicated service during these disasters.
As a result of these and other achievements by our employees, Cinergy was named Power Company of the Year by Platts Publishing in their Global Energy Awards competition. Last December, I had the honor of accepting the award on behalf of our 7,800 employees, who every day honor our values and work hard to make our company succeed for all of our stakeholders.
Continuous Improvement: Last year, I challenged our people again to renew our commitment to excellence and efficiency. We called this effort “CIN-10,” which stands for Continuous Improvement Now — 10 years since the merger that created Cinergy. Our employees rose to the challenge.
They generated over 6,500 ideas that were thoroughly reviewed by me and the senior management team. We selected 900 ideas which, when implemented, will deliver approximately $50 million in savings in 2005.
The CIN-10 process is becoming part of our culture and discipline. As I did last year, I will again meet face to face this year with over 1,000 of our frontline supervisors, managers, senior managers and labor union leaders to listen to their issues and concerns. I learn from our employees every day. They set standards and accomplish tasks that show the power of collaboration, imagination and a commitment to excel. As a result, we continue to find ways to conduct our business more productively and efficiently.