News Release
April 13, 2004

DUKE ENERGY AND EPA MOVE TO DISMISS NSR TRIAL PROCEEDINGS

CHARLOTTE, N.C. -- Duke Energy and the U.S. Environmental Protection Agency (EPA) today filed a Joint Motion calling on U.S. Middle District Court of North Carolina trial Judge Frank Bullock to rule in favor of Duke Energy in the government’s Clean Air Act “New Source Review” (NSR) enforcement litigation brought against the company.

The Joint Motion for Entry of Final Judgment – signed by Duke Energy and the plaintiffs including EPA, the U.S. Justice Department and Plaintiff-Intervenors: Environmental Defense, North Carolina Sierra Club and North Carolina Public Interest Research Group -- notifies Judge Bullock that the parties agree the plaintiffs cannot prove their case against Duke Energy at trial.

If accepted by the Court, the Joint Motion will result in a Final Order from Judge Bullock in favor of Duke Energy, effectively ruling the company did not violate the Clean Air Act. The Final Order will also close, without a trial, the enforcement litigation before Judge Bullock. A trial date is currently set for July 6, 2004.

The Joint Motion provides the government an option to appeal elements of the litigation to the U.S. Fourth Circuit Court of Appeals.

“With the filing of this Joint Motion, we’re moving a big step closer to resolving this matter in a way that is favorable to Duke Energy,” said Fred Fowler, president and chief operating officer of Duke Energy.

“Prevailing at the federal trial court level validates Duke Energy’s position that we have operated in compliance with the Clean Air Act’s NSR rules.”

In December 2000, EPA filed suit against Duke Energy, alleging numerous violations of the Clean Air Act’s NSR rules. At issue was routine maintenance, repair and replacement work performed at eight coal-fired power plants between 1988 and 2000.   The plants are operated by Duke Power, Duke Energy’s franchised electric utility.

In August 2003, Judge Bullock issued an opinion on the case after both parties had filed various motions for summary judgment.  While the judge denied requests for summary judgment, he defined the legal standards for applying NSR rules to maintenance, repair or replacement projects. Judge Bullock’s findings were consistent with Duke Energy’s understanding of the NSR program.  

Duke Energy continues to reduce emissions from its coal-fired plants. In 2003, the company embarked on a $1.5 billion program to reduce nitrogen oxide and sulfur dioxide emissions far below current federal limits by 2013. Through this effort the company will comply with North Carolina’s Clean Smokestacks Act which was signed into law in June 2002 with the company’s full support.

In March, EPA recognized Duke Power and other supporters of the legislation with its 2004 National Clean Air Excellence Award.

“Our commitment to the environment has never been stronger at Duke Energy,” Fowler said. “Our current program to reduce emissions has been a win-win situation for our region and our customers.”  

Duke Power, a business unit of Duke Energy, is one of the nation’s largest electric utilities and provides safe, reliable, competitively priced electricity and value-added products and services to more than 2 million customers in North Carolina and South Carolina. In 2004, Duke Power celebrates 100 years of service. The company operates three nuclear generating stations, eight coal-fired stations, 31 hydroelectric stations and numerous combustion turbine units. Total system generating capability is approximately 19,900 megawatts. More information about Duke Power is available on the Internet at: www.dukepower.com.

Duke Energy is a diversified energy company with a portfolio of natural gas and electric businesses, both regulated and unregulated, and an affiliated real estate company. Duke Energy supplies, delivers and processes energy for customers in North America and selected international markets. Headquartered in Charlotte, N.C., Duke Energy 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