DUKE ENERGY CEO SAYS COMPANY HAS WORKED HARD TO REWARD SHAREHOLDER LOYALTY AND REGAIN TRUST - Duke Energy

News Release
May 12, 2005

DUKE ENERGY CEO SAYS COMPANY HAS WORKED HARD TO REWARD SHAREHOLDER LOYALTY AND REGAIN TRUST

CHARLOTTE, N.C. – Duke Energy Chairman of the Board and Chief Executive Officer Paul Anderson today said the company is back on sound financial footing and has spent the past 12 months delivering value to shareholders.

“We made a lot of promises last year, and I hope you agree we’ve delivered,” said Anderson before 300 shareholders at the company’s annual meeting in Charlotte. “In a very real sense, we’ve regained control of our financial destiny.”

In 2004, Duke Energy delivered a total shareholder return of 30 percent and reduced debt by selling non-core assets. Anderson reminded shareholders of the company’s May 9 announcement that the board intends to increase the annual dividend 12.7 percent to $1.24 per common share when it meets in June. The increase will be effective with the September dividend payment.

The company announced the dividend increase at the same time as its merger announcement with Cincinnati-based Cinergy Corp, which is expected to close in mid-2006.

“You’ll soon see the dividend increase, but just as important, the merger transaction will be accretive to Duke Energy earnings in the first full year of operation,” Anderson said.

Another positive aspect would be the merged merchant operations of both companies. Duke Energy President and Chief Operating Officer Fred Fowler said that the proposed merger would strengthen Duke Energy’s unregulated business unit Duke Energy North America (DENA), which has suffered through three years of disappointing results.

“We have talked about getting DENA back to being cash positive and profitable,” said Fowler. “This combination of DENA’s and Cinergy’s unregulated assets will do just that.”

Anderson added that a long-term benefit of the new company would be that the combined gas and electric operations would have scope and scale to be stand-alone companies. He said that would give the company the opportunity to explore the option of separating the gas and electric businesses.

During the meeting, Anderson said he would extend his tenure at Duke Energy at least one year beyond the close of the merger. Upon closing of the merger, Cinergy Chairman and Chief Executive Officer Jim Rogers would be president and CEO of Duke Energy. Anderson would continue to be the company’s chairman.

During the meeting, shareholders approved a resolution to declassify the board of directors and move to an annual election of directors beginning with the 2006 annual meeting. Currently, Duke Energy has three classes of directors with staggered three-year terms.

Shareholders also elected four board members:  Roger Agnelli, Alex Bernhardt, Dennis Hendrix and Max Lennon; and shareholders ratified the appointment of Deloitte & Touche LLP as the company’s auditors for 2005.

Three directors stepped down from the Duke Energy board at the meeting:  Bob Brown, who has served since 1994; George Dean Johnson, who has served since 1986; and Leo Linbeck, who also has served since 1986.

DUKE ENERGY ANNUAL MEETING VOTING RESULTS

Proposal 1– Election of Directors
All nominees elected

Proposal 2– Declassify board; annual election of directors
Approved

Proposal 3– Approval of Auditors
Approved

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.

This document contains forward looking information which is subject to risks and uncertainties that could cause actual results to be different than those contemplated, including, but not limited to, changes in state, federal or international regulatory environments; commercial, industrial and residential growth in the Company’s service territory; the weather and other natural phenomena; the timing and extent of changes in commodity prices, interest rates, and foreign currency exchange rates; general economic conditions; changes in environmental and other laws and regulations to which Duke Energy and its subsidiaries are subject or other external factors over which Duke Energy has no control; the results of financing efforts; the effect of accounting pronouncements; growth in opportunities for Duke Energy’s business units, and other risks described in the Company’s 2004 10-K filed with the Securities and Exchange Commission and other SEC filings.

Contact: Randy Wheeless
Phone: 704/382-8379
24-Hour Phone: 704/382-8333
e-mail: crwheele@duke-energy.com