DUKE ENERGY TO RESOLVE FERC REFUND AND WESTERN ENERGY CRISIS ISSUES
As part of the agreement, Duke Energy will provide $207.5 million in cash and credits. In exchange, the parties to the agreement 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.
The settlement resolves:
Duke Energy will record an estimated $104.9 million pre-tax charge in the second quarter of 2004 to reflect the settlement agreement.
FERC’s refund proceedings stem from the commission’s effort to correct market prices it considered unreasonable during the western energy crisis of 2000-2001. As part of these proceedings, all participants in the western electricity markets – including Duke Energy -- have refund obligations, even though Duke Energy acted appropriately and within the market rules.
“Today’s announcement brings welcome closure to these protracted proceedings, removing the associated risks and burdens of regulatory and legal uncertainty,” said Fred Fowler, Duke Energy president and chief operating officer. “It also eliminates the time and costs necessary to litigate these issues.
“Settlement is in the best interest of our shareholders, our company and western energy consumers as we resolve these issues and focus on meeting the current and future energy needs of
FINANCIAL EFFECT OF SETTLEMENT
The parties to the settlement agreement include FERC staff, the state of
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
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 are discussed in Duke Energy’s filings with the Securities and Exchange Commission.