News Release
Aug. 19, 1998

DUKE ENERGY POWER SERVICES, UTILITIES COMMISSION OF NEW SMYRNA BEACH FILE TO BUILD 500-MEGAWATT POWER PLANT IN FLORIDA

HOUSTON, TX — Duke Energy Power Services, LLC, and the Utilities Commission, City of New Smyrna Beach, Florida (UCNSB) today filed with the Florida Public Service Commission in Tallahassee their plans to build and operate a 500-megawatt wholesale merchant power plant in New Smyrna Beach.

The plant will run on natural gas and will sell power on the open wholesale power market and also to the UCNSB. It is expected to be operational in 2001.

"This plant will provide reliable and low-cost wholesale power to the Florida market to help meet the state’s increasing demands for electricity," said Mike Green, vice president and general manager for Duke Energy Power Services in Florida. "And, as an added plus, the state-of-the-art plant will be fueled by clean-burning natural gas. This will not only be Florida’s first merchant power plant - it will be another building block in Duke Energy’s efforts to be a leading generator of electricity."

Merchant power plants sell wholesale power on a competitive basis to utilities and power marketers that need low-cost power to meet the needs of their customers. However, utilities and power marketers are not required to buy power from merchant plants. In order to be successful, merchant plants must be able to generate electricity at prices more attractive than other power plants operating in the same market.

The initial buyer of a portion of the plant’s output will be the UCNSB — a municipal utility that serves about 20,000 customers in Volusia County, Fla.

"This plant will lower our cost for purchased power and allow our utility to strengthen its financial position," said Ronald L. Vaden, director of UCNSB. "Even though we already have some of the lowest rates in Florida, this plant will help us lower rates to customers even further."

The plant will be located adjacent to a wastewater treatment plant under construction by the city of New Smyrna Beach near Interstate 95. It will connect to the electricity grid via a UCNSB substation that is connected to the transmission system of Florida’s two largest electric companies: Florida Power & Light and Florida Power Corp.

"This plant will be highly efficient, providing cost-effective generation," said Green. "That, plus an ideal location relative to the transmission grid connections, will make this facility a clear benefit to the state of Florida, with no risk and no obligation imposed on Florida utilities or electric customers."

The Utilities Commission, City of New Smyrna Beach is a progressive municipal utility located on the east coast of Florida, about 60 miles northeast of Orlando. It operates electric, water, pollution control and reclaimed water utilities for the City of New Smyma Beach and the surrounding metropolitan area.

Duke Energy Power Services, a subsidiary of Duke Energy Corporation, develops, owns and operates electric generation projects across the United States and Canada.

Duke Energy Corporation (NYSE:DUK) is a global energy company with more than $24 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.duke-energy.com.

Contact: Tom Williams
Phone: (704) 382-3747
24 Hour Phone: (704) 382-8333
Email: tcwillia@duke-energy.com