News Release
July 29, 1999

DUKE ENERGY: MERCHANT PLANT CONSTRUCTION TO BEGIN IN OHIO AND INDIANA

HOUSTON – Duke Energy North America (DENA) announced today plans to begin simultaneous construction this month of two 640-megawatt, natural gas-fired merchant peaking power plants, one in Butler County, Ohio, and the other in Vermillion County, Ind.

Commercial operation of the Madison Generating Station (Ohio) and Vermillion Generating Station (Indiana) is expected in the summer of 2000.

DENA, the developer of North American power projects for Duke Energy, has been developing the two wholesale merchant facilities since fall 1998 to address electricity generation shortages experienced in the Midwest in recent years, most notably last summer.

"The need for additional generation capacity in the Midwest is well documented," said DENA President Jim Donnell. "Madison and Vermillion will enhance regional reliability in addition to having direct economic benefits for their local communities and counties. The output from these two peaking facilities will begin to address the existing generation shortfall by next summer."

The Madison and Vermillion projects mark DENA’s entry into the Midwest market.

"These facilities are good additions to our portfolio of generation assets – assets that are actively managed with a strategy of buy, build and when appropriate, sell. As one of DENA’s target markets, we continue to look for other development opportunities to serve the Midwest."

The Ohio and Indiana power plants will be constructed, owned and operated respectively by DENA affiliates Duke Energy Madison, LLC, and Duke Energy Vermillion, LLC. The Madison Generating Station and Vermillion Generating Station have received all appropriate local, state and federal permits and approvals. The estimated construction cost of each facility is more than $200 million.

The 16 combustion turbine generators earmarked for the projects – eight for each plant – are designed to generate approximately 80 megawatts each when the stations begin commercial operation. The turbines are part of a bulk order DENA placed in 1998.

With the high market demand for turbines, contracting well in advance of the actual turbine placement is a key component of DENA’s development strategy.

"In addition to 6,250 megawatts already in operation or under construction, DENA has another 6,875 megawatts in development throughout the Midwest, Northeast, Southeast, Texas and California. Having pre-ordered our turbines, we have the advantage of moving into a project and bringing a facility on-line very quickly," Donnell said.

Construction will likely result in about 250 jobs at each site and up to12 permanent operations jobs at each of the two stations.

"Duke Energy is unequalled in its ability to develop, fund, build and operate these merchant facilities as well as supply the fuel and market the output," said Donnell. "The company’s diversified business units and partnerships will be involved in every aspect of these plants, bringing Duke Energy the economies of scale that no other developer delivers."

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 two 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: Rick Rhodes
Phone: (704) 382-3747
24 Hour Phone: (704) 382-8333
Email: jrrhodes@duke-energy.com