project section 3

project section 3 - III Environmental Analysis Social...

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III. Environmental Analysis Social Environment An important part of the social environment is demographics. Duke Energy provides energy to homes and businesses primarily in Indiana, Kentucky, Ohio, North Carolina and South Carolina. Based on data from the U.S. Census Bureau, the estimated population of the United States grew 5.3% from April 1 st , 2000 to July 1 st , 2005. Only North Carolina, at 7.9%, and South Carolina, at 6.1%, experienced higher growth rates during this period. Indiana (3.1%), Kentucky (3.2%), and especially Ohio (1.0%) all experienced slower population growth over this same five year span. Operations from the Carolinas make up a majority of Duke Energy’s 3.9 million Utilities customers, however. These states are benefiting from the growing number of Americans reaching retirement age and relocating to areas with better weather and a cheaper cost of living. This strong population growth in the Carolinas will likely more than offset the weak growth in the remaining three states of operation, which bodes quite well for the company in the coming years. Duke also has a stake in real estate through Crescent Resources, LLC. Much like their electricity business, they will similarly capitalize on holdings of property in states with booming populations like Arizona and Florida. And while more than 75% of the company’s operations are in the United States, Duke Energy also has a presence in Central and South America power generation. They operate in Brazil, Peru, Ecuador,
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Argentina, El Salvador, and Guatemala, all of which have greater population growth than the United States. Political, Legal and Regulatory Environment The United States, where Duke Energy is based, is a progressive country that is generally favorable to business. The US Government lessens the risks associated with business through a highly effective court system. These courts can help enforce written contracts and warranties. In addition, the US government helps to minimize corruption through strictly enforced laws. Despite these universal protections provided to all companies located in the United States, there recently has been a strong push towards stricter regulations on environmental issues. This could pose a serious threat to the company in the long term, as Duke uses both coal and nuclear energy as primary sources for electricity. The burning of coal, which is mostly just carbon, causes carbon dioxide to be released into the atmosphere, and carbon dioxide is one of the main greenhouse gases believed to stimulate global warming. Already, these growing concerns have affected the company. Duke had proposed the construction of two new coal-burning power plants in North Carolina to meet the growing demand for electricity in the state, yet only one of the two proposed plants was approved. Also, Duke Energy must follow guidelines set in the Clean Air Act for coal emissions. The issue of nuclear energy as well has significance to the electricity business of
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project section 3 - III Environmental Analysis Social...

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