News Release
August 12, 2003

DUKE ENERGY SELLS 25-PERCENT OWNERSHIP INTEREST IN INDIANA FACILITY

CHARLOTTE, N.C. -- Duke Energy announced today that its wholly owned subsidiary Duke Energy North America LLC (DENA) has entered into an agreement to sell a 25-percent undivided interest in its Duke Energy Vermillion facility to Wabash Valley Power Association Inc. (Wabash), a generation and transmission cooperative headquartered in Indianapolis, Ind.

The Vermillion facility, a 640-megawatt, simple-cycle natural gas-fired peaking plant, is located in Vermillion County, Ind., and has been in operation since June 2000. Duke Energy will continue to own the remaining 75 percent of the plant. 

The value of the sale of Duke Energy's 25-percent interest in the facility is $44.4 million. Duke Energy expects to take a pretax charge of approximately $19 million during third quarter 2003 in relation to this sale.

The agreement is subject to customary closing conditions, including approvals from the Federal Energy Regulatory Commission and Indiana Utility Regulatory Commission, and is expected to close by second quarter 2004.

In addition, DENA and Wabash will enter into two new 50-megawatt tolling agreements upon closing of the sale that have terms commencing June 1, 2006, and June 1, 2007, respectively with a duration of seven years each. This will supplement Wabash’s ability to serve its customers’ peak-load requirements in the region.

"DENA continues its efforts to provide solutions in the marketplace that are customer-driven,” said Greg Harper, senior vice president of energy marketing for DENA. “Our ongoing strategy is to maximize our marketing capabilities to consistently meet our customers’ strategic requirements while optimizing the value of our generation assets. This agreement will provide near-term, positive cash flow for the company together with subsequent value as a result of serving a long-term strategic customer.”

Duke Energy North America is Duke Energy’s North American merchant energy business. Duke Energy North America’s generation portfolio currently includes approximately 15,000 megawatts in operation.

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.

This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although Duke Energy believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include legislative and regulatory developments; the outcomes of litigation and regulatory proceedings or inquiries; general economic conditions, including any potential effects arising from terrorist attacks and any consequential hostilities or other hostilities; the effectiveness of the company's risk management and internal controls systems; the timing and extent of changes in commodity prices for oil, natural gas, coal, electricity and interest rates; the extent of success in connecting natural gas supplies to gathering and processing systems and in connecting and expanding natural gas and electric markets; the performance of electric generation, pipeline and natural gas processing facilities; the timing and success of efforts to develop domestic and international power, pipeline, gathering, processing and other infrastructure projects; conditions of the capital markets and equity markets during the periods covered by the forward-looking statements; and other factors discussed in Duke Energy's filings with the Securities and Exchange Commission.

Contact: Kate Perez, Duke Energy North America
Phone: 713/627-6527; cell phone: 713/822-8418
24-Hour Phone: 704/382-8333
e-mail: kcperez@duke-energy.com