News Release
December 13, 2004

DUKE ENERGY: FERC APPROVES SETTLEMENT TO RESOLVE REFUND AND WESTERN ENERGY CRISIS ISSUES

CHARLOTTE, N.C. – The Federal Energy Regulatory Commission (FERC) has approved a previously announced settlement between Duke Energy and the states of California, Washington and Oregon; FERC staff; California’s three largest investor-owned utilities; and other parties, the company said today.

The settlement, announced in July, resolves refund proceedings and other significant litigation related to the western energy markets during 2000-2001. The private litigation components of the settlement agreement are subject to court approval.

“We have made excellent progress in 2004 addressing and closing out regulatory and legal issues,” said Fred Fowler, Duke Energy president and chief operating officer. “FERC's approval of the Western Markets Settlement is a major milestone in resolving these issues. Duke Energy can now fully focus on its core business of meeting current and future energy needs in the western United States and elsewhere.”

As part of the settlement, Duke Energy will provide $207.5 million in cash and credits. In exchange, the parties will forego all claims relating to refunds or other monetary damages for sales of electricity during the settlement period, and claims alleging Duke Energy received unjust or unreasonable rates for the sale of electricity during the settlement period, January 2000 through June 2001. 

Duke Energy recorded a $105 million pre-tax charge in the second quarter of 2004 to reflect the settlement agreement.

Specifically the settlement resolves:

  • All western refund proceedings pending before FERC
  • Market price investigations by attorneys general in California, Washington and Oregon
  • Private electricity-related class action suits filed on behalf of California, Washington, Oregon, Idaho and Utah ratepayers
  • Natural gas price issues raised by the California attorney general, Pacific Gas and Electric Company, Southern California Edison and San Diego Gas & Electric Company.

Financial Effect of CaliforniaSettlement (in millions)

Cash

$85

Write-off of receivables and credits due to Duke Energy

$123

Settlement total

$208

Reserves and offsets

($103)

Second Quarter 2004 pre-tax earnings impact

$105

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. In 2004, the company celebrates a century of service with the 100th anniversary of its electric utility Duke Power. 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: http://www.duke-energy.com.

 

Contact: Peter Sheffield
Phone: 980/373-4503
24-Hour Phone: 704/382-8333
e-mail: pvsheffield@duke-energy.com