News Release
Jan. 04, 2001

Duke Energy Updates Information Concerning California Sales

To news media covering California's electricity crisis:

The attached press release was distributed on January 4 following a virtually identical communication Duke Energy sent the investment community regarding California electricity crisis. It again focuses on Duke Energy's very prudent risk management strategy to sell the large majority of the output from our California power plants in forward markets to effectively manage exposure to the volatility of natural gas and electricity prices.

This kind of strategy of using forward markets not only is effective in managing Duke Energy's risk, but can also be used by the state's utilities to manage their own risk exposure instead of their practice of purchasing the large majority of their customer's electricity in very volatile day-ahead and spot markets.

If you have questions about Duke Energy North America's California operations, our extensive power plant modernization plans or our position on California's electricity crisis, please call me at 805-595-4270 or reach me via my pager at 877-364-5170. Also, see our California-specific web site at

CHARLOTTE, N.C. -- Duke Energy distributed the following information to the financial community today in response to questions about the effect of the current energy shortage in California. 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.

On Dec. 14, 2000, a Duke Energy news release stated that 70 percent to 80 percent of available generation in California has been sold forward. That number now stands at about 90 percent. These forward sales are to a diversified portfolio of non-utility buyers, who have strong balance sheets and good credit ratings. In addition, Duke Energy has credit limits and collateral agreements in place.

Duke Energy also has some longer-term contracts with the regulated California utilities at attractive prices in today's marketplace. The company believes its credit practices in California have positioned it well in the event of credit failure there.

The company is working to provide long-term solutions to the energy shortage in California, but at the same time Duke Energy will continue to employ prudent hedging and credit practices to protect its investors.

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:

Contact: Randy Wheeless
Phone: 704-382-8379
24 Hour Phone: 704-382-8333