News Release
June 30, 1997

DUKE ENERGY FILES ELECTRICITY COMPETITION PROPOSAL IN S.C.

CHARLOTTE, N.C., June 30, 1997 -- Duke Energy Corporation (NYSE: DUK) today filed with the Public Service Commission of South Carolina the company’s proposal for introducing electric competition in South Carolina.

Paul Anderson, Duke Energy president and chief operating officer, said that Duke’s proposal supports efforts to address the complex issues surrounding restructuring South Carolina’s electric industry.

"Customers generally benefit when they have choices," Anderson said. "The challenge in moving to a competitive market is to provide those choices while keeping the high-quality electric service that consumers in the state have come to expect. We believe this plan provides a framework for doing that."

The plan proposes that the generation of electricity should be deregulated, while the transmission and distribution of electricity would continue to be regulated -- the transmission system by the Federal Energy Regulatory Commission, and the distribution system in the state, by the Public Service Commission.

"With generation prices unregulated, consumers would then be able to negotiate for the price and terms that best suit their needs -- even to purchase additional services as they wish," Anderson said. "And those of us who provide those services will have the freedom to design the packages that will meet those needs."

Consumers would purchase electricity directly from a supplier, through power marketers or brokers, or through aggregators -- companies that collect many smaller users of electricity into larger groups.

Purchasers would arrange for electricity to be delivered by way of a separately managed regional transmission grid and a local distribution company. The operator of the transmission grid would ensure that the grid is reliable and that the supply of electricity matches the demand. The distribution company would provide many of the customer services now provided by the electric utility, such as metering and billing, as well as maintenance and repair of distribution lines.

"It’s quite a complex undertaking," Anderson said, "but, South Carolina is in the enviable position of having electric suppliers with electric rates at or below the national average. The state has the time to adopt an orderly approach to restructuring its electricity supply."

Anderson noted that consumer education will be critical to the success of any electric industry restructuring plan. "Electricity is absolutely essential to the state’s economy," he said, "and all the state’s electricity consumers will need to understand how electricity will be purchased, delivered and paid for in this new environment. For many, this is entirely new, and we’re recommending that the state contract with a reputable third-party to provide consumer education."

The S.C. Public Service Commission last May requested interested parties to file restructuring proposals by June 30. The commission will schedule hearings on the various plans later in the summer.

Duke Energy Corporation conducts its electric business as Duke Power and supplies electricity to approximately 2 million residential, commercial and industrial customers in North Carolina and South Carolina. Duke Energy Corporation is a global energy company with more than $20 billion in assets. Contact Duke Energy on the World Wide Web at http://www.duke-energy.com.

Contact: Joe Maher
Phone: 704-382-8323
24 Hour Phone: 704-594-0681
Email: jmaher@duke-energy.com