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Duke Energy Gas Transmission

Profile:

Duke Energy Gas Transmission (DEGT) transports and stores natural gas from North America 's major supply areas for customers in the northeastern and southeastern United States and in Canada. DEGT also distributes natural gas to retail customers in Ontario, and gathers and processes natural gas for customers in western Canada. DEGT is based in Houston.

Operating Data:

	2003		2002		2001		2000		1999
Natural Gas Transmission
Throughput, trillion British thermal units (TBtu)a	3,362		3,160		1,781		1,771		1,893
Storage capacity, billion cubic feet	257		254		101		98		75
a Represents share of capacity owned by DEGT.

Performance Highlights:

• DEGT capped a great year in 2003 by placing five major pipeline expansion projects into service in three key growth regions – in time for the winter heating season. The five expansions provide a combined 850 million cubic feet per day of added capacity for customers in the northeastern and southeastern United States, eastern Canada, British Columbia and the U.S. Pacific Northwest.
• DEGT is moving forward with plans to construct the Dominion Expansion Project, which will transport natural gas for distribution by DEGT customer Dominion Transmission in Maryland and Virginia, increasing the reliability and efficiency of natural gas supplies in the Mid-Atlantic region.
• January 2004 brought the U.S. Northeast some of the lowest temperatures in two decades. DEGT's Algonquin and Texas Eastern systems had some of their top delivery days in company history in that region. DEGT's pipelines and storage facilities met shippers' supply demands with the consistently reliable service they expect from DEGT. More than 99 percent of DEGT's Northeast shippers whose contracts came up for renewal in 2003 showed their satisfaction by renewing agreements with the company.
• Natural gas storage has become an increasingly critical part of the energy infrastructure in North America. In August, customers began preparing for winter by storing natural gas in the new Saltville Gas Storage facility in southwest Virginia, the only salt cavern storage facility in the South Atlantic market. Jointly developed by DEGT and NUI Corp.'s Virginia Gas Co., the field has storage capacity for 1 billion cubic feet of natural gas; that capacity will double in 2004 and expand to a planned 6 billion cubic feet by 2007. DEGT also has storage capacity in Texas, Louisiana, Pennsylvania and Maryland, and the largest natural gas storage facility in North America, Union Gas' Dawn facility in Ontario.
• The Gulfstream Natural Gas System, jointly developed by DEGT and Williams, signed a 23-year agreement with Florida Power & Light Co. (FPL), to transport up to 350 million cubic feet of natural gas per day beginning in 2005. Gulfstream, the first interstate transmission pipeline across the Gulf of Mexico, is extending its Florida mainline by approximately 110 miles to enable two FPL plants to serve an additional 400,000 customers on Florida 's East Coast.
• DEGT's Union Gas provided transportation and distribution of 1,250 billion cubic feet of natural gas and experienced a net increase of 24,000 customers.
• DEGT's U.S. operations recorded their lowest ever number of preventable safety incidents in 2003, achieving a 17.6 percent reduction over 2002. Eighty-two U.S. transmission locations were accident-free, and five have recorded more than 1 million work-hours without a lost-time injury.
• In Canada, DEGT's BC Pipeline and Field Services group exceeded its safety performance targets by 45 percent for personal injuries and 22 percent for vehicle accidents, and incurred no lost-time incidents.
• In line with Duke Energy's strategy to strengthen its financial position by selling non-core assets, the company sold ownership interests in a number of pipeline systems and related facilities in 2003.

Strategy Going Forward:

• Produce superior financial results through increased productivity and balanced growth.
• Provide superior customer service.
• Optimize existing asset portfolio.
• Capture efficiencies and control costs.
• Develop new high-return expansion projects.