Squeezing out sparks: facing tight credit and diminished demand for power, utilities see themselves between a rock and a hard place.

• Position: ENERGY

Three months before panic hit the financial industry, Charlotte-based Duke Energy Corp. started seeing demand for electricity soften. With industrial customers cutting production, unemployment rising, disposable income falling and homeowners paying more attention to energy costs, 2009 might be another light year for energy producers. Meanwhile, they're laying plans to meet a state mandate that 12.5% of electricity come from alternative energy source and operating efficiencies by 2021. Duke CEO Jim Rogers says it won't be easy.

BNC: What part of your business will be hit hardest?

Rogers: Where we might see a steeper decline is with industrial customers, where they're going from three shifts to two or two shifts to one or they're shutting down their operations. We've seen a continuous decline for many years in the textile industry in North Carolina. One of the toughest projections we have to make is whether this recession will be a short one. Virtually every recession in this country since 1980 has been two to three quarters. And I think that's tied to the globalization of financial markets. The flow of capital has been smoother and quicker, and it allowed economies to bounce back more quickly. This recession could last four to six quarters or longer.

How will your industry deal with it?

We'll probably focus more on internal costs. When the economy's softer, you're not getting the growth in earnings from growth in demand, so you have to focus on cost more. What makes this more complicated is that we have very tight credit markets. Our company is projected to spend $4.7 billion this year, and we are expected to raise roughly $2 billion from financial markets, primarily in debt. There are only two other industries in America that have to access capital as often as we do, and that's the government and financial institutions, so the state of the credit markets is critical. One other observation: If this turns out to be a longer recession, what we've seen historically is a huge rebound in the demand for electricity at the end of the period. So we have to plan carefully for that pent-up demand as people go back to work and businesses crank up.

What effects will the latest election results have?

National energy policy will change significantly. There will be more emphasis on renewables, more emphasis on energy efficiency. Our company is in step with that. We have created a wind-energy business. We have 500 megawatts of wind operational and 5,000...