For one, year was about the power and the gory.

• Position: Utilities

In early 2003, Fortune magazine called Duke Energy the nation's most-admired energy company. But there seemed to be plenty of people who felt something other than admiration for the Charlotte-based company.

Duke customers, especially in the Triangle and Triad, hadn't forgotten about lengthy power outages during an ice storm the previous December. California officials were accusing the company of price gouging. Federal prosecutors were investigating complaints that Duke had underreported earnings and misled regulators. And skepticism among investors had driven Duke's stock price--which traded as high as $40 in the first quarter of 2002--to a low of $12.21 on March 10.

Even CEO Rick Priory didn't like where the company was heading. In March, he announced that Duke, owner of the state's largest electric utility, would restructure and cut capital spending by about $200 million to improve cash flow and pay down debt.

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By the end of the third quarter, Duke's rehab was in full swing. It had shut down its speculative energy-trading business and met a goal of selling $1.5 billion in assets. Its cash supply had more than doubled since the end of 2002 to nearly $1.8 billion, but total debt had decreased only slightly to $23.9 billion. Net income was running 36% below 2002, partly due to mild weather that cut energy consumption.

Duke also shook up management. Bill Coley, president of Duke Power, the electric utility, was replaced in March by Ruth Shaw, then Duke Energy's chief administrative officer. Priory was replaced in November by Paul Anderson, who had been CEO of Houston-based PanEnergy, which Duke bought in 1997. Anderson had briefly been Duke's president and chief operating officer before becoming CEO of BHP Billiton, an Australian mining-and-oil company.

In December, Duke agreed to pay up to $4.6 million to settle the accusations in California. The federal probe into its accounting practices hadn't been resolved. In January, Anderson said Duke would sell whole-sale-power plants in the Southeast, among other assets. "They have a serious challenge in that they own 16,000 megawatts of gas-fired generation that there's not much of a market for," says Tim Winter, utility analyst at St. Louis-based A.G. Edwards & Sons.

Investors seemed more enamored of Raleigh-based Progress Energy, owner of the state's second-largest electric utility. Throughout 2003, its stock traded for about twice the price of Duke's. By mid-December, it...