News Release
March 20, 2003

DUKE ENERGY FILES FACT-BASED REBUTTAL TO CALIFORNIA PARTIES

CHARLOTTE, N.C. Duke Energy is filing today with the Federal Energy Regulatory Commission (FERC) a detailed, fact-by-fact rebuttal of each of the accusations directed at the company in the California parties’ March 3 pleading to FERC.

 

In today’s filing, the company, relying on an extensive review of evidence, analysis and scores of documents including the California parties’ own data, definitively demonstrates that Duke Energy operated in compliance with applicable market rules during the state’s energy crisis. 

 

The record clearly reflects that Duke Energy operated appropriately in California and in compliance with applicable market rules, the company said in its filing.

 

Regrettably, throughout this proceeding, the California parties simply have not done the hard and exacting work of investigating the facts.

 

The facts are that Duke Energy’s generating units performed at unprecedented levels, making exemplary contributions to the reliability of the California grid.

 

Duke Energy helped "keep the lights on" in California, even during the months when it had little expectation of being paid for the energy it provided.

 

Duke Energy’s outstanding record of operations, as extracted from the California parties’ data, maintains:

·         Duke Energy’s forced outage rate was lower than the benchmark used by the California parties’ expert;

·         Duke Energy’s capacity factors were higher than the benchmark used by the California parties’ expert;

·         Duke Energy provided virtually every megawatt of power that was economic to generate; and,

·         Duke Energy bid its energy in an openly competitive manner and in full compliance with applicable tariffs and market rules.

 

The company’s filing provides a fact-based rejection of each of the accusations the California parties have made against Duke Energy.

 

What is clear is that these repackaged accusations fail to examine transaction-specific information, rely on erroneous data, make computational mistakes and use faulty assumptions, the filing said. For example, at different points, the California parties use incorrect capacity figures or carelessly rely on expert analysis that includes Sundays, Christmas, New Year's Day and the Fourth of July as days with “on-peak hours.” Fundamental errors in fact do not become “fact” simply because they are repeated over and over. They remain errors of fact.

 

The California parties cannot shift accountability for a flawed market design and political inaction to a company such as Duke Energy which operated within the rules and performed at record levels to respond to the state's energy needs, all the while offering constructive solutions.

 

Duke Energy participated in the complex California markets as it found them, having been designed and advocated by these very same California parties. Duke Energy was not responsible for, nor may it be held retroactively liable for, marketwide prices that resulted under the market design. Duke Energy deserves to be judged by its own actions.

 

Throughout this proceeding, FERC has been studious and careful that all parties be heard, going as far as extending the discovery period by 100 days. However, FERC has made public its intention to address the California parties’ pleading as early as next week. There is no question that the prolonged fallout from California’s energy crisis has damaged all parties involved and threatened energy markets globally. Closure is critically important for rebuilding to begin, but any meaningful finality can only come through due process. Duke Energy urges FERC to take deliberate action, based on a complete and thorough review of all the facts from all the parties. It is particularly important that FERC not adopt findings of fact or modify remedies based solely on the insubstantial evidence presented by the California parties, the filing said.

 

An executive summary of today’s FERC filing is available on the Internet at: www.duke-energy.com. Much of Duke Energy’s filing is subject to FERC's protective order, and the full document will be unavailable until the commission makes it public. 

 

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: Peter Sheffield
Phone: 704/373-4503
24 Hour Phone: 704/382-8333
Email: pvsheffield@duke-energy.com
Contact: Pat Mullen
Phone: 805/595-5597
24 Hour Phone: 704/382-8333
Email: pwmullen@duke-energy.com