Cinergy Corp. shareholders will probably hear a lot about global warming and carbon dioxide emissions when they gather today for the company's annual meeting at the Northern Kentucky Convention Center.

The first 31 pages of the utility's latest annual report deal almost exclusively with the issue and Cinergy CEO Jim Rogers has come forward and called for uniform regulations across the industry.

"To simply avoid this debate and fail to understand the implications of the regulation of carbon dioxide and greenhouse gases on our company is not an option," Rogers said in his letter to shareholders.

As one of the country's largest operators of coal-fired power plants -- burning more than 25 million tons of coal annually -- the parent of Cincinnati Gas & Electric Co. and Union Light, Heat & Power Co. has a lot at stake in the outcome.

"It's a factor that's really been built into the investment outlook. It's part of the environment they work in," said Justin McCann at Standard & Poor's.

Cinergy's strategy has been to take the lead on regulatory matters so it knows where it stands and where it's going, McCann said.

The future value of its coal-fired power plants depends on Cinergy's response to global warming, said Mark Sadeghian, a utility analyst at Morningstar.

"It preserves the value of the assets," he said.

"Coal-fired assets are highly profitable, (but only) if they can run. The only thing that could prevent them from running is regulation. I think they're trying to address that by getting out in front. It's kind of a self-preservation move," Sadeghian said.

Sadeghian characterized Cinergy's decision to accelerate its investment in pollution controls as a pragmatic response to rising coal costs and skyrocketing prices for market-traded emissions allowances. Once installed, the new controls will allow its plants to burn cheaper grades of coal and also sharply reduce its need for costly emissions allowances, he said.

Cinergy said those investments, including scrubbers at its Miami Fort power station run by Cincinnati Gas & Electric Co., will cost an estimated $1.8 million by 2009. Most of the costs should be recoverable through higher electric rates for Ohio and Indiana utility customers, pending anticipated approval by regulators.

Cinergy has committed less money to reducing emissions of carbon dioxide and other greenhouse gases. Although it has called for the establishment of greenhouse gas emissions standards sooner rather than later, the outlook for those regulations is uncertain, so the financial risk is greater.

Sadeghian said one of the things utility companies fear most is not being able to recoup investments through higher rates.

Rogers noted in the annual report that Cinergy has reduced its reliance on coal-fired power from 87 percent in 1998 to 73 percent in 2004.

Text of fax box follows:

$21M commitment

Last year, Cinergy committed to spend $21 million between 2004 and 2010 on projects that will reduce or offset its emissions of greenhouse gases.

The projects include research into new technologies, carbon sequestration, and energy conservation.

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