News Release
June 01, 2001

DUKE ENERGY RELEASES AVERAGE PRICES CHARGED FOR ELECTRICITY IN CALIFORNIA

      Average Price of $76 Per Megawatt-Hour for 2000   

$136 for First Quarter 2001

CHARLOTTE, N.C. -- Duke Energy today released average prices the company charged over the last 15 months for wholesale electricity in California. The average prices of $76 per megawatt-hour charged in 2000 and $136 per megawatt-hour in first quarter 2001 are well below average spot market prices for the same periods.

"Clearly by selling the vast majority of our electricity into the forward markets through long-term contracts we have demonstrated that low average prices can be achieved for California’s consumers," said Jim Donnell, president and chief executive officer of Duke Energy North America.

"The way for California to stabilize prices is to enter into long-term contracts at fixed prices. We continue to work with the California Department of Water Resources to negotiate long-term contracts to help the state avoid purchasing power on the volatile spot market. Just last July, we offered to sell 2,000 megawatts to the state at a fixed price of $50 per megawatt-hour for five years. The state did not act upon our offer," Donnell said.

Duke also reported that the highest price charged during first quarter 2001 was $3,880 per megawatt-hour. That price was for less than 1/10 of 1 percent of the volume sold to California by the company in first quarter 2001 and reflected the significant credit risks associated with selling power through the California Independent System Operator (ISO) to Pacific Gas & Electric (PG&E) and Southern California Edison at that time.

"The few sales made at the highest price reflected the fact that the parties receiving the power were insolvent and would likely declare bankruptcy. In determining the price to charge, we took into account the likelihood that we would only be able to collect a fraction of the sales price if PG&E filed for bankruptcy protection. Obviously our concerns were valid because on April 6 PG&E did file for bankruptcy protection and we still have not been paid," Donnell said.

"On March 26 we said that if we are paid we will not seek to collect the portion of the price charged for the poor credit risk," Donnell added.

Donnell emphasized Duke Energy’s commitment to California -- citing the company’s announcement in 1998 of its intention to add additional generation in California. Duke has currently under construction a 1,060-megawatt plant and eventually could add as much as 1,500 additional megawatts. He also said Duke Energy’s California power plants generated 50 percent more electricity in 2000, providing 15.8 million megawatt-hours versus 9.5 million in 1999.

Duke Energy supplies just over 5 percent of California’s electricity from four power plants in the state with a capacity of 3,351 megawatts -- enough energy to serve about 3.4 million households.

For more information about Duke Energy’s California operations, our modernization projects and our perspective on the state’s electricity crisis, see 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: Cathy Roche
Phone: 704/373-4860
24 Hour Phone: 704/382-8333
Email: csroche@duke-energy.com
Contact: Tom Williams
Phone: 805/595-4270
24 Hour Phone: 704/382-8333
Email: tcwillia@duke-energy.com