News Release
Feb. 22, 2001

DUKE ENERGY NORTH AMERICA BREAKS GROUND ON NEW MERCHANT POWER GENERATION FACILITY IN MARICOPA COUNTY, ARIZONA

HOUSTON -- Duke Energy North America (DENA) today breaks ground on a new $250 million electric power generating facility in Arlington Valley, Ariz. The Arlington Valley Energy Facility, a 570-megawatt merchant power plant, will supply electric power to the wholesale market by summer 2002.

The DENA facility has successfully completed the required permitting process and has the approval of Maricopa County and the Arizona Corporation Commission. It also received broad community support throughout the permitting process. The state-of-the-art facility will supply enough energy to light and heat about 570,000 households, significantly adding to the availability of reliable power in Arizona and the Southwest.

Combined-cycle natural gas technology, which is environmentally superior and much more efficient than the technology used in older plants, will be utilized. In a combined-cycle plant, about two-thirds of the plant’s electricity is generated by two combustion turbine generators fueled exclusively by natural gas. The exhaust heat from these turbines is captured and recycled to create high-pressure steam, which drives a steam turbine generator, producing the balance of the plant’s electric output. This recycling process allows the plant to be 40-percent more efficient than plants using older technology and will help conserve valuable resources. The Arlington Valley Energy Facility’s production is the type of safer, cleaner and more efficient energy that local elected officials, community leaders and citizens have indicated to Duke Energy North America that they want.

"It is with great pleasure that I congratulate Duke Energy North America on the occasion of the groundbreaking of the Arlington Valley Energy Facility, and welcome you to our great state of Arizona," said Governor Jane Hull. "As governor, it is critically important to me that Arizona's electricity consumers have confidence in our electric generation system, and knowledge that the energy they desire will be available as needed. That is why I am grateful for the investment Duke Energy is making here in western Maricopa County.

"The Arlington Valley Energy Facility will provide critically needed electrical generation capacity, add to our local economy by employing hundreds of skilled workers during construction and pay millions of dollars in taxes that will go to support local schools," added Governor Hull.

The project has met and exceeded environmental and community requirements and gained support of Maricopa’s county supervisors.

"Part of our task as county supervisors is not simply to deal with current issues, but to plan for the future of the citizens in Maricopa County," said Supervisor Mary Rose Wilcox. "Duke Energy's Arlington Valley Energy Facility will help us provide the electricity generation we need to ensure an excellent future for our citizens. While we address the need for new power generation, we must never forget the impact that development has on our community. We must make sure that air quality, groundwater and every environmental concern is satisfied by the companies that locate in our community. Duke Energy has met and exceeded our standard on every level. This facility will be a great addition to our community."

"As supervisors, we must balance citizen and business objectives," said Jan Brewer. "In order to encourage economic development in our county, we must encourage the production of reliable, affordable electricity without compromising the needs of our citizens. The Arlington Valley facility is exactly what we need. Duke Energy has been open and responsive to citizen concerns and input. We look forward to a great relationship throughout the next phase of this project."

Jim Donnell, president and chief executive officer of DENA, confirmed that construction of the technologically advanced power plant represents a significant investment by Duke Energy in the West Valley’s economic future. "We are proud to be a part of this community and look forward to providing reliable energy for all Arizonans.

"I cannot overemphasize the importance of the excellent support we received from the community and state and local officials to make this day a reality," said Donnell. "The process that got us here today is an excellent example of private industry, government and community leaders working together to bring a valuable economic asset to Maricopa County."

The Arlington Valley Energy Facility also offers a unique opportunity for the West Valley’s ecology. A joint project between Duke Energy and a team of University of Arizona students and faculty will return 2,000 acres of currently fallow farmland to its former natural desert state. The land will be set aside and not developed.

"Duke Energy has given us an incredible research opportunity and donated land, plants and all the materials necessary to begin a massive re-vegetation project at the site," said Dr. Martin Karpiscak, professor of plant ecology at the University of Arizona. "We will design, implement and monitor this large-scale desert revegetation program. By summer 2001, we will make significant progress toward returning this land to a desert ecology and for the next several years, we will monitor this project and learn from our research. Without Duke Energy's help, a project of this scale would not be possible."

The general contractor for the project is Duke/Fluor Daniel, formed in 1989 by Duke Energy and Fluor Daniel. During the 18-month construction period, the project will generate approximately 500 construction-related jobs. Upon commercial operation, a permanent staff of about 25 employees will operate and maintain the plant.

Duke Energy North America is Duke Energy’s Houston-based merchant energy company. Currently, DENA’s merchant portfolio includes 6,200 megawatts of generation located in the western, midwestern and eastern regions of the United States. By summer 2001, DENA will deliver six new merchant facilities totaling 3,400 megawatts. DENA also has more than 13,500 megawatts in advanced development and will construct between 10 and 12 new merchant facilities every year through 2003, expanding its merchant portfolio to more than 23,000 megawatts.

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 more than $49 billion in 2000. 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: Richard A. Fernandez
Phone: 713/627-5984
24 Hour Phone: 704/382-8333
Email: rafernandez@duke-energy.com