News Release
Dec. 16, 2002

PREPARATION, COMMUNICATION, HARD WORK, KEYS TO DUKE POWER'S STORM RESTORATION EFFORT

CHARLOTTE, N.C. – Advanced preparation that began in late November, an army of restoration workers and an extraordinary human effort enabled Duke Power to restore service to nearly 1.4 million customers impacted by this month’s ice storm faster than the company anticipated.

 

That’s the message E.O. Ferrell, senior vice president of electric distribution for Duke Power, will deliver today when he outlines the company’s restoration process at a meeting of the North Carolina Utilities Commission in Raleigh.

 

In nine days, more than 11,000 Duke Power employees, contractors and off-system workers restored service to the nearly 1.4 million customers affected by ice storm related outages throughout the company’s entire service territory in North Carolina and South Carolina. Service interruptions from this December 2002 ice storm were almost twice the number of outages from previous benchmarks:  the ice storm of February 1996 affected 660,000 customers; and 690,000 customers lost service during Hurricane Hugo in 1989.  In the 1996 ice storm, it took 10 days to restore service; in Hugo, 18 days.   

 

“Our preparations began in earnest days before the ice storm,” Ferrell said. “As we monitored weather conditions, we placed all response units on alert and we notified our major vendors and suppliers of potential equipment needs, reserved vehicles and lodging, and contacted neighboring utilities about potential crew needs. When the storm hit, we were ready.”

 

Beginning the week of Thanksgiving, Duke Power forecasters were tracking conditions across the United States that suggested inclement weather was headed to the Southeast.

 

Neighboring utilities released crews to assist in the restoration effort on Thursday, Dec. 5, as freezing rain continued to fall and the outages mounted. In total, utilities from 17 states and the District of Columbia added more than 5,000 employees to the restoration effort.      

 

Duke Power’s storm restoration effort was bolstered by continuing communication with government officials, the media and our customers. Communications included:

 

·         Tripling staffing at Duke Power’s customer call center to 600 strong;

·         Regularly exchanging information with local and state governmental officials, state utilities commissions, and emergency officials, including a conference call with Duke Power president Bill Coley and state and local government officials on the restoration;

·         Issuing 39 news releases and dozens of media updates, and conducting numerous on-air media interviews;

·         Adding Spanish language messages to Duke Power’s 1-800-PowerOn.

 

In all, more than 549 miles of cable and wire was strung; more than 2,300 transformers and 37,000 insulators were installed; more than 3,200 poles were set; and more than 1.6 million calls were received by our Customer Service Center. 

 

Ferrell said the company’s emergency restoration process is based on industry best practices and continuous learning. As is standard practice for the company with any significant interruption, Duke Power has already begun its comprehensive review of its response efforts and communications with communities to document best practices and areas that need refinement going forward.

 

Duke Power’s initial estimates suggest the overall cost of the restoration effort will be in the range of $115 million to $130 million; with less than $10 million capitalized. 

 

The company has told commissioners that it does not plan to ask for a rate increase to recover the storm costs in either North Carolina or South Carolina. Instead it will absorb those costs in existing rates. It has not yet been determined whether these charges will be taken against earnings in fourth quarter 2002, or if the charges will be amortized over a period of several years. A decision will be made soon, after consultation with regulators.

 

“I especially want to thank our customers for their understanding and patience during this entire storm restoration process. Their outpouring of support for each other and for our workers shows community spirit at its best,” Ferrell said.

 

Duke Power, a business unit of Duke Energy, is one of the nation’s largest electric utilities and provides safe, reliable, competitively priced electricity to approximately two million customers in North Carolina and South Carolina. Duke Power operates three nuclear generating stations, eight coal-fired stations, 31 hydroelectric stations and numerous combustion turbine units. Total system generating capability is approximately 19,300 megawatts. More information about Duke Power is available on the Internet at: www.dukepower.com.

 

Duke Energy is a diversified multinational energy company with an integrated network of energy assets and expertise. The company manages a dynamic portfolio of natural gas and electric supply, delivery and trading businesses – meeting the energy needs of customers throughout North America and in key markets around the world. Duke Energy, headquartered in Charlotte, N.C., is a Fortune 500 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: 704/373-4743; pager: 877/364-5170
24 Hour Phone: 704/382-8333
Email: tcwillia@duke-energy.com
Contact: Peter Sheffield
Phone: 704/373-4503
24 Hour Phone: 704/382-8333
Email: pvsheffield@duke-energy.com