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Duke Power

Profile:

Duke Power is one of the nation's largest electric utilities and provides safe, reliable, competitively priced electricity and value-added products and services to more than 2 million customers in North Carolina and South Carolina. In 2004, Duke Power celebrates 100 years of service. The company operates three nuclear generating stations, eight coal-fired stations, 31 hydroelectric stations and numerous combustion turbine units. Total system generating capability is approximately 19,900 megawatts. Duke Power is based in Charlotte.

Operating Data:

	2003		2002		2001		2000		1999
Franchised Electric
Sales, gigawatt-hours	82,828		83,783		79,685		84,766		81,548
Nuclear capacity factora	91%		95%		92%		92%		90%
Average number of customers	2,160,000		2,117,000		2,117,000		2,072,000		2,023,000
a Includes 100 percent of Catawba Nuclear Station, which is 12.5 percent owned by Duke Power.

Performance Highlights:

• Duke Power achieved a critical milestone last year, with the Nuclear Regulatory Commission's renewal of Catawba and McGuire Nuclear Stations' operating licenses – allowing the stations to continue providing electricity, jobs and revenue into the 2040s. Oconee Nuclear Station's license renewal was approved in 2000. Duke Power is the first utility in the United States to have seven nuclear units with extended licenses.
• Oconee celebrated 30 years of operation in 2003, and was the first U.S. nuclear station to reach 500 million megawatt-hours of electric generation. McGuire generated more electricity than in any previous year, and also set station records for reliability and cost efficiency. Even with planned maintenance and refueling outages, Duke Power's three nuclear stations produced at more than 91 percent of their capacity in 2003.
• Duke Power's fossil and hydroelectric fleets achieved 98 percent commercial availability for the second year, and the hydro stations set a new generation record of 6.4 million megawatt-hours.
• Duke Power is investing nearly $2.2 billion in emission controls for its fossil-fueled power plants over the next decade, to bring air emissions well under current federal limits. At Belews Creek, Duke Power's largest coal-fired station, new environmental equipment is expected to reduce the utility's nitrogen oxide emissions by 75 percent from 1998 levels by this summer.
• The formal relicensing process is underway for Duke Power's Catawba-Wateree hydroelectric operations. The utility is working closely with stakeholder groups to ensure that its hydro facilities continue to serve customers and communities in an environmentally responsible manner.
• In 2003, Duke Power renewed its commitment to economic development in its service area, the surest way to draw new customers to the region and keep existing ones. The Carolinas have seen substantial and ongoing declines in traditional industries such as textiles, furniture, chemicals and tobacco, and Duke Power is working with government and community interests to spur a more diverse business and manufacturing economy. It's working – General Dynamics has moved a division headquarters to Charlotte and will open a plant in the area, and Sterilite is building a manufacturing facility in Laurens, S.C.
• Duke Power received the 2003 Edison Electric Institute Emergency Response Award, recognizing the swift restoration of electric service to 1.4 million customers affected by the December 2002 ice storm. That unprecedented effort heightened the utility's readiness for weather events like Hurricane Isabel, which hit the U.S. East Coast in September. After restoring service to thousands of Duke Power customers, crews moved on to help Dominion repair Isabel's damage in harder-hit areas in Virginia and eastern North Carolina.
• Duke Power launched an electronic billing and payment service in 2003. This new service allows customers to receive and pay their bills online. Nearly 5 percent of customers have already signed up for e-Bill, saving the mailing of more than a million bills annually. If just half of Duke Power's customers were to choose this option, the utility would save approximately $2 million per year.
• Mill Creek Combustion Turbine Station is the newest addition to Duke Power's generation fleet. The $300 million, 640-megawatt natural gas-fired station in Cherokee County, S.C., can generate enough power to serve more than 500,000 homes.

Strategy Going Forward:

• Deliver on the financial plan through management of cash, costs and capital, and through win-win regulatory policy.
• Operate assets with superior safety, reliability, efficiency, availability and responsibility.
• Improve customer satisfaction and deliver valued products and services.
• Create and realize opportunities for sustainable sales growth.
• Earn trust and build confidence with employees, customers, communities, regulators and elected officials.