News Release Dec. 02, 1998

CHARLOTTE, N.C. -- Duke Energy today announced that on December 31 the company will redeem six issues of first and refunding mortgage bonds.

The company expects to take advantage of the general decline in interest rates and replace these bonds with lower-cost securities. The bonds being redeemed are:

• The 7.37 percent Medium-Term Note Series first and refunding mortgage bonds, due February 2, 2004, with a face value of $3 million. Bondholders will receive $1,029.48 per $1,000 principal amount held, plus accrued interest to the redemption date.

• The 7.38 percent Medium-Term Note Series first and refunding mortgage bonds, due February 10, 2004, with a face value of $50 million. Bondholders will receive $1,029.52 per $1,000 principal amount held, plus accrued interest to the redemption date.

• The 7.40 percent Medium-Term Note Series first and refunding mortgage bonds, due February 10, 2004, with a face value of $8 million. Bondholders will receive $1,029.60 per $1,000 principal amount held, plus accrued interest to the redemption date.

• The 7.41 percent Medium-Term Note Series first and refunding mortgage bonds, due February 10, 2004, with a face value of $39 million. Bondholders will receive $1,029.64 per $1,000 principal amount held, plus accrued interest to the redemption date.

• The 7 percent Series first and refunding mortgage bonds, due 2005, with a face value of $200 million. Bondholders will receive $1,025.10 per $1,000 principal amount held, plus accrued interest to the redemption date.

• The 7 3/8 percent Series first and refunding mortgage bonds, due 2023, with a face value of $200 million. Bondholders will receive $1,033.70 per $1,000 principal amount held, plus accrued interest to the redemption date.

Call notices for these issues were mailed to bondholders December 1 by The Chase Manhattan Bank, the bond trustee.

Duke Energy (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.