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The Ultimate CEOs: James E. Rogers, Chairman, President and CEO, Cinergy

The CEO Power Forum: Not all utility CEOs are created equal...

Fortnightly Magazine - June 2005

where they will likely be less expensive because of efficiency differences in some sectors. We don't see them as barriers but as future markets to buy low-cost reductions and to sell the technology solutions that will be developed here in the United States. Harvard's Stavins suggests the key may be in a trigger mechanism where developing countries agree to binding commitments once GDP reached an agreed level. Alternatively, growth targets could be used whereby CO 2 limits tighten if economic growth exceeds a target level and eased if it fails to meet target (acting as a sort of economic throttle while controlling emissions). Major developing countries must be participants, but they will not necessarily have the same targets until they achieve a certain level of wealth.

Fortnightly Some have been advocating a carbon tax proposal that would incorporate all fuels that impact climate change. Do you support such an initiative?

Rogers There is a hole in the federal budget big enough to drive a super-tanker through. Much of federal spending is for non-discretionary items like defense, Medicare, Social Security, and so on. The president wants to reform Social Security, including private accounts. This will create even more debt. There is also a real interest in simplifying the tax code. Some note that a consumption tax is less of an economic drag than an income tax. It's more efficient. If forced to choose between raising income tax rates or implementing a small consumption tax, which would be preferred, the consumption tax would cause less of an economic drag. So, there is a big need to raise revenues combined with a desire to reform taxes. A cap-and-trade on GHG would raise revenue. It would be the economic equivalent of a consumption tax on fossil fuels. This would slow imports of oil and force a more efficient use of coal and natural gas, migrating us to cleaner technologies. It would also likely cause less of a drag on the economy than if marginal income tax rates were raised. This may be an elaborate "political-science fiction" but wouldn't it be surprising if it weren't the environmentalists who resolved climate change, but fiscal conservatives?

Fortnightly Is broadband-over-power-lines a viable business? Do you really believe in the technology? How might it change the valuation of the company if it takes off?

Rogers We believe in the technology, but we're taking a go-slow and a low-profile approach to learn all we can from our initial deployment in some Cincinnati neighborhoods. Given the changing dynamics of the broadband industry and the number of competitors, we want to under-promise and eventually over-deliver.