News Release
March 05, 2001

DUKE ENERGY SIGNS MEMORANDUM OF UNDERSTANDING FOR LONG-TERM POWER SALES TO CALIFORNIA

MORRO BAY, CALIF. – Duke Energy announced today that it has signed a memorandum of understanding with the California Department of Water Resources (CDWR) for long-term power sales to the state totaling approximately $4 billion over a nine-year period.

"This is a significant step toward definitive long-term contracts between Duke Energy and CDWR," said Bill Hall, head of the company’s California operations. "We believe long-term contracts provide the critical underpinning for a stable electricity market and are happy the state is moving in that direction. We will continue to work with the governor and the legislature as they develop the legal and regulatory framework necessary to make such contracts viable."

Hall said negotiations are continuing with good progress being made. Once an agreement is finalized, Duke Energy will provide 550 megawatts beginning Jan. 1, 2002. Beginning Jan. 1, 2003 the amount will increase to 800 megawatts and the contract will continue through Dec. 31, 2010.

"We appreciate Duke Energy’s efforts in developing a long-term power supply agreement and their ongoing cooperation in helping us meet California’s electricity needs," said Dave Freeman, adviser to the California Department of Water Resources.

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