Duke Energy Accepts Merger Order from North Carolina Regulators; Duke Energy/Cinergy Merger to Close on April 1 - Duke Energy

News Release
March 27, 2006

Duke Energy Accepts Merger Order from North Carolina Regulators; Duke Energy/Cinergy Merger to Close on April 1

CHARLOTTE, N.C. – Duke Energy today accepted an Order from the North Carolina Utilities Commission (NCUC) approving Duke Energy’s planned merger with Cinergy.

In an Order issued Friday, March 24, the NCUC substantially accepted, and modified in part, an agreement previously reached between Duke Energy and the N.C. Public Staff to resolve all relevant issues related to the Commission’s merger review.

Having accepted the NCUC Order, Duke Energy and Cinergy plan to close the merger on Saturday, April 1, 2006. Duke Energy will hold a meeting with analysts on Monday, April 3, in New York City.

"With the merger action in North Carolina, we have cleared the last hurdle in the regulatory approval process,” said Paul M. Anderson, chairman of the board and chief executive officer of Duke Energy. “With all requisite approvals in hand, we intend to close on April 1, less than 11 months from our merger announcement.”

“The Commission’s Order strikes an appropriate balance to ensure that both Duke Energy shareholders and Duke Power customers will benefit from the merger’s efficiencies and cost savings,” added Ellen Ruff, group vice president of planning and external relations at Duke Power. “By combining with Cinergy, we are building a stronger company with the size and strength to continue delivering reliable electric service to our customers at a cost well below the national average.”

Key aspects of the agreement approved by the NCUC include:

  • $117.5 million in merger savings to North Carolina customers. The agreement calls for $117.5 million in merger savings to be shared with Duke Power customers in North Carolina. These savings will be shared through a reduction of retail base rates to all of Duke Power's North Carolina customers, including those in the Nantahala area. The rate reduction will flow through a rate credit rider to existing base rates for a one-year period following the close of the merger.
  • $12 million to various low income, environmental, economic development and educationally beneficial programs. Of these funds, $6 million will be distributed through Duke Power’s Share the Warmth, Cooling Assistance and Fan-Heat Relief Programs; another $2 million is earmarked for conservation or energy efficiency programs; $2 million to the Community College Grant Fund; and $2 million will be distributed to the North Carolina Green Power Program.            
  • Protections for customers. The NCUC Order also approves a set of regulatory conditions intended to preserve the commission's jurisdiction and to protect North Carolina customers.

The Duke Energy/Cinergy merger, announced May 9, 2005, was approved by both companies’ shareholders March 10, 2006, and has been approved by state regulators in Ohio, Kentucky, South Carolina and Indiana, as well as North Carolina; by the Federal Energy Regulatory Commission; and the Nuclear Regulatory Commission. The companies also have satisfied Federal Trade Commission and U.S. Department of Justice review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. 

Upon closing, the companies’ existing electric and gas utilities – Duke Power in North Carolina and South Carolina; PSI Energy in Indiana; Cincinnati Gas & Electric in Ohio; and Union Light, Heat and Power in Kentucky – will all do business using the Duke Energy name.  Anderson will become chairman of the board of the new Duke Energy.  James E. Rogers, currently chairman and chief executive officer of Cinergy, will be president and chief executive officer.  Ruff will be president of Duke Energy Carolinas.

Analysts Webcast
Anderson, Rogers, and David Hauser, who will continue as group executive and chief financial officer of Duke Energy following the merger, will discuss the closing during a luncheon with analysts Monday, April 3, at noon ET, at the Ritz Carlton at Battery Park in New York City. The discussion will be webcast and can be accessed via the Investor’s Section of Duke Energy's Web site:  www.duke- energy.com/investors. A replay and transcript also will be available by accessing the Investor's Section of the company's Web site. You also may call in to the discussion by dialing 800/967-7135 in the United States or 719/457-2626 outside the United States. The confirmation code is 5129647. Replay numbers are 888/203-1112 in the United States and 719/457-0820 outside the United States with a replay code of 5129647.

Company Profiles
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. 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: http://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 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.

Forward-Looking Statements
This document includes statements that do not directly or exclusively relate to historical facts. Such statements are “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. These forward-looking statements include statements regarding benefits of the proposed mergers and restructuring transactions, integration plans and expected synergies, anticipated future financial operating performance and results, including estimates of growth. These statements are based on the current expectations of management of Duke Energy and Cinergy. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this document. For example, (1) conditions to the closing of the transaction may not be satisfied; (2) problems may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected; (3) the combined company may be unable to achieve cost-cutting synergies or it may take longer than expected to achieve those synergies; (4) the transaction may involve unexpected costs or unexpected liabilities, or the effects of purchase accounting may be different from the companies’ expectations; (5) the credit ratings of the combined company or its subsidiaries may be different from what the companies expect; (6) the businesses of the companies may suffer as a result of uncertainty surrounding the transaction; (7) the industry may be subject to future regulatory or legislative actions that could adversely affect the companies; and (8) the companies may be adversely affected by other economic, business, and/or competitive factors. Additional factors that may affect the future results of Duke Energy and Cinergy are set forth in their respective filings with the Securities and Exchange Commission ("SEC"), which are available at www.duke-energy.com/investors and www.cinergy.com/investors, respectively.  Duke Energy and Cinergy undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact: Media Contact: Peter Sheffield
Phone: 980/373-4503
24-Hour Phone: 704/382-8333
e-mail: pvsheffield@duke-energy.com
Contact: Analyst Contact: Julie Dill
Phone: 980/373-4332
24-Hour Phone: n/a
e-mail: jadill@duke-energy.com