News Release
Dec. 14, 2000

DUKE ENERGY OUTLINES POSITION IN CALIFORNIA ELECTRICITY MARKET

CHARLOTTE, N.C. – Duke Energy distributed information to the financial community today in response to questions about the effect of the current energy shortage in California and the federal Department of Energy’s decision to declare a power emergency in that state.

The company shared information on its operating practices in western markets as well as on the credit practices it follows. This news release contains the same information according to the requirements of Regulation FD of the Securities and Exchange Commission.

Duke Energy owns 3,317 megawatts of generation in California. Of that amount, approximately 890 megawatts are out of service for retrofitting of emissions equipment. All available equipment is being used around the clock to provide power to our customers in California. Approximately 70 to 80 percent of the California generation has been sold into the forward markets for 2001.

When engaging in forward sales, the company’s practice is generally to establish collateral agreements with the counterparty to the transaction. Under the collateral agreement, the value of the transaction is marked to market each day. The counterparty with the credit exposure will require collateral to be posted to back the exposure. For example, if our net mark-to-market exposure is greater than that of the counterparty, under the agreement the counterparty will provide collateral. The opposite is true if the counterparty has the greater net exposure to Duke Energy, which is currently the case in the western markets. In this instance Duke Energy posts the collateral. This is the normal credit practice of the company in accordance with our risk management policies.

Duke Energy, a diversified multinational energy company, creates value for customers and shareholders through an integrated network of energy assets and expertise. Duke Energy manages a dynamic portfolio of natural gas and electric supply, delivery and trading businesses -- generating revenues of nearly $22 billion in 1999. Duke Energy, headquartered in Charlotte, N.C., is a Fortune 100 company traded on the New York Stock Exchange under the symbol DUK. More 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