News Release
July 02, 2001

DUKE ENERGY WILL OFFSET RECEIVABLES ABOVE FERC PROXY PRICE

CHARLOTTE, N.C. – Duke Energy announced today that it will offset its receivables due from the California Independent System Operator (ISO) and the California Power Exchange (PX) for electricity it sold the two entities in January and February 2001 by about $20 million. The company will make the appropriate filing with the Federal Energy Regulatory Commission (FERC) today.

Duke Energy’s prices for electricity sold during March, April and May do not require offsets based on the criteria used by FERC to determine the need for offsets or refunds during these months.

In its June 19 order, FERC required Duke Energy to offset any invoiced amounts above the proxy price it set for electricity in January, which was $273 per megawatt-hour. Based on the ISO data FERC used to develop its order, Duke Energy’s invoiced amounts above that price totaled $17.8 million for the month.

Duke Energy also announced it would take the additional step of offsetting approximately $2.1 million for prices it invoiced above the FERC established $430 per megawatt-hour proxy price in February.

Duke Energy will provide the ISO and PX with revised invoices to reflect the offsets. Even with the adjusted billings, Duke Energy has only been paid for a small fraction of the power it sold to the ISO and the PX for the California spot market during January and February.

"We are continuing to work diligently with other parties for rational, long-term solutions to the flawed restructuring of the California electric power markets," Jim Donnell, president and chief executive officer for Duke Energy North America. "We look forward to the resolution of the many outstanding issues and final settlement of the debts owed electricity suppliers so we may all totally focus on providing a reliable supply of electricity for California’s consumers."

Duke Energy operates approximately 5 percent of California's electricity capacity from four power plants with a generating capability of 3,351 megawatts. For additional information about Duke Energy’s California operations and the California electricity crisis, please visit our Web site at www.duke-energy.com/california.

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: Terry Francisco
Phone: 704/373-6680
24 Hour Phone: 704/382-8333
Email: thfrancisco@duke-energy.com