News Release
July 16, 2002

DUKE ENERGY PROVIDES INTERIM UPDATE TO SEC QUESTIONS ON TRADING PRACTICES

CHARLOTTE, N.C. – Duke Energy today provided an interim response to the Securities and Exchange Commission’s May 31 informal request for information about “round-trip” energy transactions.

 

The company’s preliminary report was based on findings to date of a comprehensive review of substantially all trading activities between Jan. 1, 1999 and May 31, 2002. The company is continuing detailed information-gathering for approximately 3,000 trades of the total of about 750,000 executed during this period.

 

To date, Duke Energy has found no evidence of any transactions entered into for the purpose of increasing reported revenues or influencing prices.

 

The review has identified 23 paired transactions which had the apparent purpose of increasing volumes on the Intercontinental Exchange (ICE) electronic trading platform. Duke Energy is one of 13 equity owners of ICE.

 

None of these transactions was in the western market and therefore did not surface during the company’s earlier response to the Federal Energy Regulatory Commission inquiry into round-trip transactions in that market.

 

These 23 transactions on ICE had no effect on Duke Energy’s earnings. The effect of the transactions on Duke Energy’s reported revenues, with offsetting expenses, was $126 million in 2001, a tiny fraction -- one-quarter of one percent -- of the company’s $51.4 billion revenues from gas and electricity trading and marketing activity in 2001.

 

To comply with the inquiry, the company has undertaken a review of all of its electronic trading records and has conducted extensive interviews with traders and other employees. Many other sources of information, including traders’ logs, tapes of traders’ telephone calls and accounting records, have been reviewed.  This process will continue until all trades have been thoroughly examined.

 

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 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