DUKE ENERGY ANNOUNCES RESULTS OF MORRO BAY CAPACITY OFFER - Duke Energy

News Release
February 23, 2005

DUKE ENERGY ANNOUNCES RESULTS OF MORRO BAY CAPACITY OFFER

Charlotte, N.C. – Duke Energy announced today that it has signed a contract with Pacific Gas and Electric Company (PG&E) for 650 megawatts of capacity from the Morro Bay Power Plant, located in the City of Morro Bay, Calif. 

The contract is a result of Duke Energy’s Request for Offers (RFO) announcement in October 2004, requesting offers for up to 325 megawatts of capacity each from Morro Bay unit 3 and unit 4.

This contract provides Duke Energy the ability to keep the facility available to help supply adequate electric resources to meet the growing needs of California consumers. Without the contract, the plant faced potential retirement as current market conditions have not reflected the reliability the Morro Bay plant provides, even though during times of peak demand the plant can provide enough power for approximately 650,000 California homes and businesses.

“This agreement helps to ensure adequate electric resources are available to meet the needs of California consumers,” said Bobby Evans, president and chief executive officer of Duke Energy Americas. “Maintaining the ability to call on facilities like the Morro Bay Power Plant can help avoid outages and provide adequate reserves for the state’s electric grid.”

The contract will commence following regulatory approval by the California Public Utilities Commission (CPUC) and will extend through the end of 2007.

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 the Americas. 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: Pat Mullen
Phone: 805/595-5597
24-Hour Phone: 704/382-8333
e-mail: pwmullen@duke-energy.com