News Release
September 17, 2003

DUKE ENERGY TRADING AND MARKETING ANNOUNCES CFTC SETTLEMENT

Houston — Duke Energy Trading and Marketing (DETM), a joint venture in which Duke Energy Corporation has a 60 percent interest, and the Commodity Futures Trading Commission (CFTC) have reached a settlement on a matter related to previous reporting of natural gas trading information to publications that compile and report index prices.

The CFTC today filed and simultaneously approved an order settling an administrative action against DETM. DETM agreed to pay a civil penalty of $28 million without admitting or denying the commission’s findings. Duke Energy Corporation recorded a $17 million charge, net of minority interest, in the third quarter of 2003 to reflect the settlement.

DETM made changes to its reporting process in 2002, as soon as industrywide natural gas reporting problems were identified. DETM now requires that all data provided to indices be validated and conveyed by risk management staff reporting to the corporation's chief risk officer, rather than by trading personnel. The Federal Energy Regulatory Commission (FERC) has endorsed DETM’s approach, citing it as an appropriate way to fix the process across the industry.

The previous practices in question were isolated in one area of DETM, its natural gas trading operation in the Eastern market, based in Houston. DETM's internal reviews of its Western trading operations confirmed appropriate price reporting practices for both electricity and natural gas. In Houston, DETM found no problems with electricity price reporting.

DETM has terminated or otherwise disciplined certain Houston-based natural gas traders and continues to assess whether further discipline is needed. 

DETM is not aware of any evidence that the previous practices in question affected any published index price.

DETM markets natural gas, electricity and other energy-related products to a wide range of customers. Duke Energy owns a 60 percent interest in DETM’s natural gas and electric power trading operations.

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
e-mail: pvsheffield@duke-energy.com