News Release
May 22, 2002

DUKE ENERGY AFFIRMS THAT CALIFORNIA TRADING STRATEGIES WERE APPROPRIATE

-- Duke Energy today affirmed to the Federal Energy Regulatory Commission (FERC) that its activities in the California energy market were appropriate and that it did not engage in any of the 10 trading strategies described in Enron memoranda.

“Following a thorough investigation in response to a FERC inquiry, we have not found any activities that Enron allegedly engaged in,” said Jim Donnell, president and chief executive officer of Duke Energy North America. “Our operations have followed the market rules in place in California. Our FERC filing supports what we have always said, that we have acted in good faith in supplying the California market’s energy needs.”

 

In addition to the information required by the inquiry, Duke Energy also provided FERC with information about other activities that have some of the characteristics described in the Enron memoranda, but are within market rules.

 

“While Duke Energy will continue to cooperate with FERC on this matter, the need for all stakeholders to work together and continue the job of making competitive power markets work in California is far from over,” Donnell said.

 

Donnell cited the need to add additional transmission capacity in California and to create a wider western transmission grid to assure efficient flow of power within California and between neighboring states. In addition, the state needs to encourage construction of new power plants and long-term contracts to assure consumers a reliable supply of power at stable prices.

 

“A well designed energy market will benefit California consumers and assure the state has the infrastructure it needs to support economic growth,” Donnell said. He noted that throughout California’s energy crisis, output from Duke Energy’s plants was at historically high levels and the company’s average wholesale prices are among the lowest in the state.

 

The complete text of Duke Energy’s response to FERC is available on the Internet at www.duke-energy.com.

 

A teleconference for the news media will be held today at 4:45 p.m. Eastern time. Jim Donnell will lead the call. The toll-free teleconference number is 1-800-406-5356. International participants should call 913-981-5572. The confirmation code is 451048.

 

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 $59 billion in 2001. 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: Becky Nash
Phone: 713/627-5505
24 Hour Phone: 704/382-8333
Email: ranash@duke-energy.com
Contact: Pat Mullen
Phone: 805/595-5597
24 Hour Phone: 704/382-8333
Email: pwmullen@duke-energy.com