News Release
June 22, 2001

DUKE ENERGY REFUTES FALSE CHARGES; PLANT OUTPUT WAS CONTROLLED BY CALIFORNIA ISO

SACRAMENTO – Duke Energy today said the output of its South Bay power plant in California was directed by the California Independent System Operator (ISO) to track fluctuations in electricity demand, and the plant operated at top reliability.

The company strongly denied allegations by three former plant employees that power output was reduced at Duke Energy’s own direction.

The workers making the allegations were employees of San Diego Gas & Electric (SDG&E) who were not hired as part of the new operating team when Duke Energy assumed full control of the South Bay power plant in April.

Bill Hall, vice president of Duke Energy’s western operations, said, "These allegations represent just one more page in a very long chapter of misinformation disseminated by people who don’t know the full story."

Hall reviewed the charges and the facts:

Charge: Output from South Bay was ramped up and down to manipulate prices during times when energy supplies were short.

The facts:

Charge: The most expensive unit was run at South Bay to drive up ISO prices.

The facts:

Charge: Inventory management (including "throwing out spare parts") at South Bay resulted in increased outage time to accomplish repairs.

The facts:

Duke Energy continues to deliver real solutions to the state’s energy needs and to operate its business with integrity.

Duke Energy will hold a media briefing immediately following the state Senate hearing at approximately 4 p.m. (ET). Reporters not in Sacramento can call-in at: 888/664-9965, passcode DUKE.

For additional information, 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: Cathy Roche
Phone: 704/373-4860
24 Hour Phone: 704/382-8333
Email: csroche@duke-energy.com
Contact: Tom Williams
Phone: 877/364-5170, pager
24 Hour Phone: 704/382-8333
Email: tcwillia@duke-energy.com