News Release
April 22, 1998

DUKE ENERGY CORPORATION POSTS EARNINGS INCREASE; REPORTS 87 CENTS PER SHARE IN FIRST QUARTER

CHARLOTTE, N.C. -- Led by increased sales and decreased operating expenses in its Electric Operations unit, Duke Energy Corporation today reported 1998 first quarter basic earnings of 87 cents per share, after an extraordinary expense of 2 cents, compared to 84 cents per share for the same quarter in 1997.

The 2-cent item resulted from premiums paid associated with a debt refinancing during the first quarter of 1998 at TEPPCO Partners, L.P., in which Duke Energy is a part owner.

Duke Energy posted earnings for common stock of $313.6 million for the first quarter on revenue of $4.1 billion compared to $300.6 million on revenue of $3.8 billion reported for the same quarter in 1997. Overall earnings before interest and tax (EBIT) for the first quarter of 1998 was $677.9 million versus $644.3 for the first quarter of 1997.

"In the face of unusually mild weather and unfavorable natural gas liquids prices, Duke Energy’s team was able to deliver the promise of the next generation of energy," said Richard Priory, Duke Energy’s chairman and chief executive officer. "In the first quarter, our people worked every day to build a better, stronger corporation. We announced many new energy projects and continue to be fully engaged on all fronts."

Business Unit Results

In Electric Operations, which serves nearly 2 million customers in the Carolinas through Duke Power, EBIT for the quarter was $378.2 million versus $345.6 million for the same quarter last year.

Commercial and general services sales rose 5.3 percent for the quarter while industrial sales increased 3.4 percent. Textile sales, a large component of the industrial sector, had a healthy 5.1 percent increase.

Cooler March weather led to a 4.6 percent increase in residential sales. Overall, improved wholesale and other sales led to an increase of 5.3 percent in total electric sales.

Decreased nuclear expenses (mainly fewer outage days) and decreased storm costs from the previous year’s quarter also helped overall earnings for Electric Operations.

"The increases in industrial and commercial sales are indicators that the health of the economy in the Carolinas is strong," said Priory.

During the quarter, a survey conducted for Fortune magazine ranked Duke Energy’s business unit, Duke Power, as the leader among 20 utilities in overall customer satisfaction. This was the second year in a row Duke Power had led the list.

In Natural Gas Transmission, which operates more than 22,000 miles of natural gas pipeline, EBIT for the first quarter was $208.8 million, slightly above the $206.0 million reported in last year’s first quarter.

In the Northeast Pipelines, EBIT was $131.7 million this year compared to $108.6 for last year’s first quarter. Expansion projects and a non-recurring favorable state tax ruling led to the increase.

For the Midwest Pipelines, EBIT was $77.1 million this quarter compared to $97.4 million for last year’s quarter. The favorable resolution of a regulatory matter that was a positive to EBIT in 1997 accounted for most of the difference.

"The first quarter was eventful for our Natural Gas Transmission business," said Priory. "We announced several pipeline projects and expansions that serve as building blocks for future growth."

During the quarter, Duke Energy acquired a 9.8 percent ownership position in the Alliance Pipeline partnership. The Alliance Pipeline system will transport natural gas from Western Canada to the Chicago-area market center for distribution throughout North America.

Also, Duke Energy and the Williams Cos. agreed to form a joint venture, the Cross Bay Pipeline, that will expand deliveries of natural gas into New York City.

In Energy Services, EBIT for the quarter was $76.9 million compared to $79.9 million reported for last year’s quarter. Lower natural gas liquids prices and lower energy price volatility in trading and marketing resulted in reduced margins.

However, many of the Energy Services units posted improved results for the quarter. Expansions and acquisitions by Duke Energy’s Global Asset Development unit and continued growth at Duke Engineering & Services, Inc., largely offset decreases in the other areas.

For the quarter, Energy Services announced numerous projects that are expected to contribute to the future results. Global Asset Development invested $45 million in a power generating facility in Ecuador; Duke Energy Trading and Marketing, L.L.C., signed an agreement with Puget Sound Energy to manage 5,000 megawatts of power supply; Duke/Fluor Daniel was awarded a contract to design and build a 440-megawatt cogeneration power plant in Texas; and DukeSolutions, Inc., won a contract to provide a variety of energy services to First Union Corp. facilities in the Philadelphia area.

" I’m proud at how the Duke Energy team was able to overcome the items beyond our control -- like weather and gas prices -- and focus on what we could control to turn in a solid quarter," said Priory. "That laser-like focus will keep Duke Energy elevated above the rest of the energy field."

Duke Energy Corporation (NYSE:DUK) is a global energy company with more than $20 billion in assets. Duke Energy companies provide electric service to approximately 2 million customers; operate pipelines that deliver 12 percent of the natural gas consumed in the United States; and are leading marketers of electricity, natural gas and natural gas liquids. Globally the companies develop, own and operate energy facilities and provide engineering, management, operating and environmental services. Contact Duke Energy on the World Wide Web at http://www.dukeenergy.com.

Contact: Randy Wheeless
Phone: 704/382-8379
24 Hour Phone: 704/594-0681
Email: crwheele@duke-energy.com