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Letter to Shareholders

March 31, 2004

Dear Shareholder:

I am pleased to invite you to our annual meeting to be held on May 13, 2004, in the O. J. Miller Auditorium located in our Charlotte headquarters building. We will discuss our 2003 performance, our goals for 2004 and respond to any questions you may have. Enclosed with this proxy statement are your proxy card, voting instructions, Duke Energy's 2003 summary annual report and Duke Energy's 2003 Form 10-K.

As in the past, we are offering you the opportunity to cast your vote by telephone or online via the Internet. Whether you choose to vote by proxy card, telephone or Internet, it would help if you would vote as soon as possible.

I look forward to seeing you at the annual meeting.

Sincerely,

Paul M. Anderson
Chairman of the Board
and Chief Executive Officer