News Release
June 10, 2002

DUKE ENERGY REAFFIRMS RESPONSES TO FERC; UPDATES EARLIER RELEASE ON SAME-PARTY TRANSACTIONS

-- Duke Energy today reiterated its sworn affidavit filed with the Federal Energy Regulatory Commission (FERC) on May 22:   the company did not engage in any of 10 trading strategies described in Enron memoranda. The company filed this affidavit after a thorough investigation of its transactions and interviews with its energy traders.

This affirmation is in response to the public release by Xcel Energy of a conversation between two traders in which they speculate about trading practices of other companies, including Duke Energy.

 

“It is irresponsible to treat gossip or speculation with the same regard that is given to sworn statements,” said Jim Donnell, president and chief executive officer of Duke Energy North America. “In the hundreds of thousands of hours of taped traders' conversation, there is probably idle speculation or gossip about every trading entity, with little knowledge of or regard for the facts. This is the trading floor equivalent of locker-room chatter.”

 

Duke Energy has filed three sworn affidavits in response to FERC requests of market participants about trading activities in the western market. Each of the affidavits affirms that Duke Energy did not participate in the questionable activities under FERC inquiry. Based on extensive internal investigations, the company has not engaged in the “Enron memoranda” tactics. Duke Energy has also not participated in so-called “wash” or “round-trip” trades in western gas and power markets in order to boost its revenues or volumes, or to affect prices.

 

On May 17, before FERC’s request for information on so-called “wash” trades, Duke Energy released publicly a report on all transactions it had identified that occurred with the same counterparty for the same amount of energy at the same price any time during the same day, a substantially larger set of transactions than those considered to be simultaneous. Duke Energy’s broad review indicated that all such same-party, same-day transactions contributed about $1 billion to the company’s revenues over three years – less than 1 percent of trading revenues. The $1 billion in revenue is substantially more than the actual value of simultaneous transactions, because any number of transactions occur within a 24-hour period with the same counterparty, price and volume.  Simultaneous trades as defined by FERC are a tiny fraction of this amount.

 

FERC’s data requests, issued May 21 and May 22, asked companies for information on simultaneous power and natural gas transactions with the same counterparty at the same volume and price in the western market during 2000 and 2001. Duke Energy’s analysis identified only 16 simultaneous, same-party transactions out of more than 80,000, representing a tiny fraction of volume and revenue.  

 

“We are cooperating fully with all inquiries,” said Donnell. “If we find any indication of wrong-doing, we will be the first to admit it, and to take prompt steps to correct it. Thus far, we have found no such indications. We will continue to be diligent, thorough and forthright, and we will deal with the facts, rather than with speculation.”

 

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