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Smarter Utility Services

We’ve made good progress on the utility of the future strategy since we introduced the concept in last year’s Sustainability Report.

We expect to invest almost $1 billion through 2012 to transform our energy delivery system for the needs of the 21st century. Advanced digital technology will replace analog technology, enabling nearinstantaneous communication between our customers and our distribution system. For example, we believe it will be possible to program refrigerators, freezers, and other high-use electrical appliances to reduce operations when demand on our generating stations is especially high. Customers will be able to adjust heating and air conditioning for high comfort at lower cost. Real-time electric meters may show the cost of operating devices just as speedometers show actual speed. This capability will be far more useful for energy management purposes than the monthly “look back” that current systems provide. When the smarter technology is fully implemented, every customer will have access to advanced energy efficiency measures that will run in the background of their home or business.

In addition to smart customer meters, smart grids – substations, transformers and line sensors – will operate and communicate together much like a computer network. Abrupt changes in electric flow, as monitored through the smart grid, will alert us to the approximate location of outages more quickly than present systems, allowing faster service restoration.

We filed information to support these system upgrades with the Public Utilities Commission of Ohio in 2007, and are planning to file in the other states we serve in 2008. We also joined the Gridwise Alliance to work with like-minded companies involved in this complex transformation of the nationwide electric system.

In 2007, we began projects in N.C. and S.C. to test different components of the smart grid technology. We are also opening public demonstration sites in N.C., S.C. and Ky. to provide a “hands-on” experience with the new technologies.