News Release
Feb. 04, 1999

DUKE ENERGY BREAKS GROUND ON HIDALGO ENERGY

HOUSTON, TX – Duke Energy Power Services officially broke ground on its Hidalgo Energy power plant today in a public ceremony at the plant site in Edinburg, Texas. The plant is the company’s first major wholesale merchant power plant in Texas.

When the 500-megawatt, $175 million power plant comes on line in the summer of 2000, it will generate enough wholesale electricity to serve approximately one-half million homes.

"We are grateful to the citizens of Edinburg, McAllen and Hidalgo County and their local governments for working with us over the past year to make Hidalgo Energy a reality," said John Norris, chairman and CEO of Duke Energy’s Global Asset Development division. "With the extraordinary growth the region has faced in recent years, there is a clear need for additional high-quality electricity generation in Hidalgo County and south Texas, and Hidalgo Energy will play an important role in meeting that need."

Hidalgo County is part of one of the nation’s fastest-growing metropolitan areas, due in part to the local benefits of economic growth related to increased trade between Mexico and the United States. Due to this growth, the region faces a severe energy shortage during times of peak demand in the summer months.

Duke Energy has had a local presence in Hidalgo County since the late 1940s when it began construction of the Texas Eastern Pipeline.

"Edinburg officials have been working with Duke Energy Power Services officials for more than a year to develop Hidalgo Energy in a way that is beneficial to both Duke and the citizens of Edinburg," said Edinburg mayor Joe Ochoa. "We have developed a true partnership as we have worked through many details and I look forward to continuing to work together with Duke in the years to come."

Hidalgo Energy will be cooled with treated wastewater from McAllen’s water treatment plant under an agreement with the city of McAllen.

Hidalgo Energy is approximately 40 percent more efficient than traditional power plants, due in large part to its state-of-the-art combined-cycle design. About two-thirds of its electricity is generated by two large combustion turbine generators that are fueled by high-pressure air mixed with natural gas. The exhaust from this combustion process, which is unused in traditional fossil-fueled power plants, is recycled to produce high-pressure steam to drive a steam turbine generator.

Hidalgo Energy is owned by Duke Energy Hidalgo L.P., an affiliate of Duke Energy Power Services L.L.C. Duke Energy Power Services develops, owns and operates electric power plants across the United States and Canada. It is the unregulated domestic power developer for Duke Energy.

Duke Energy (NYSE:DUK) is a global energy company with more than $26 billion in assets. Headquartered in Charlotte, N.C., the company reaches into more than 50 countries, producing energy, transporting energy, marketing energy and providing energy services. In the United States, Duke Energy companies provide electric service to approximately 2 million customers in North Carolina and South Carolina; operate interstate pipelines that deliver natural gas to various regions of the country; and are leading marketers of electricity, natural gas and natural gas liquids. Additional information about the company is available on the Internet at: www.duke-energy.com.

Contact: Randy Wheeless
Phone: (704) 382-8379
24 Hour Phone: (704) 382-8333
Email: crwheele@duke-energy.com
Contact: Tom Williams
Phone: (888) 365-5641
24 Hour Phone: (704) 382-8333
Email: tcwillia@duke-energy.com