News Release
June 08, 2001

DUKE ENERGY ANNOUNCES ASSET SWAP WITH CINERGY

Companies Dissolve Partnership in the VMC Generating Company

HOUSTON – Duke Energy North America (DENA) and Cinergy Capital and Trading, Inc. (Cinergy) announced today that they signed an agreement providing for the dissolution of VMC Generating Company (VMC). VMC is a general partnership in which affiliates of DENA and Cinergy each own a 50-percent interest. VMC was formed in September 1999 and owns 100 percent of Duke Energy Vermillion, LLC (Vermillion), Duke Energy Madison, LLC (Madison), and CinCap VII, LLC (Cadiz).

Pursuant to the dissolution agreement, VMC’s 100-percent interest in Vermillion and an undisclosed amount of cash will be transferred to an affiliate of DENA. VMC’s 100-percent interest in Madison and Cadiz will be transferred to an affiliate of Cinergy. The dissolution is subject to obtaining all necessary regulatory approvals.

"Asset swaps are a fundamental part of Duke Energy’s portfolio management approach," said Jim Donnell, DENA president and chief executive officer. "The swap of our 50-percent interests in Madison and Cadiz for 100 percent in Vermillion is a trade that gives Duke Energy operational control of a strategically located asset."

Vermillion owns a 640-megawatt, simple-cycle generation facility in operation located in Vermillion County, Ind. Madison owns a 640-megawatt, simple-cycle generation facility in operation located in Butler County, Ohio. Cadiz owns a 129-megawatt, simple-cycle generation facility under development in Henry County, Ind.

Duke Energy North America (DENA) is Duke Energy’s Houston-based merchant energy company. DENA’s generation portfolio currently includes approximately 6,990 megawatts in operation; seven facilities under construction totaling more than 5,200 megawatts; and 13,500 megawatts in advanced development scheduled for commercial operation by summer 2004.

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: Jennifer Pierce, Duke Energy
Phone: 713/627-5719
24 Hour Phone: 704/382-8333
Email: jmpierce@duke-energy.com
Contact: Dave Woodburn, Cinergy
Phone: 513/287-4373
24 Hour Phone: n/a
Email: n/a