Duke Energy Completes Sale of Wholesale Generation Assets to LS Power - Duke Energy

News Release
May 4, 2006

Duke Energy Completes Sale of Wholesale Generation Assets to LS Power

CHARLOTTE, N.C. – Duke Energy has completed the sale of Duke Energy North America’s (DENA) fleet of wholesale power generation assets outside the Midwest to a subsidiary of LS Power Equity Partners (LS Power) for approximately $1.6 billion, which includes a 100 percent interest in the Bridgeport Energy facility.

The sale, announced in January, includes approximately 6,300 megawatts of power generation, located in the western and northeast United States. Proceeds from the LS Power transaction, and the previously announced acquisition by Barclays Capital of substantially all of DENA’s commercial portfolio of derivatives contracts, along with efforts to exit remaining DENA contracts, are expected to yield net cash to Duke Energy of at least $700 million, excluding the return of collateral.

“Closing this transaction with LS Power represents a significant milestone as we continue our exit of the DENA business outside the Midwest,” said James E. Rogers, president and chief executive officer. “We’re pleased with the progress our team is making and expect to complete the disposition of DENA’s remaining contracts ahead of schedule.

“The DENA exit fits with management’s focus on lowering the company’s risk profile and is consistent with our ongoing strategic portfolio review,” Rogers added.

To date, Duke Energy has transferred to Barclays Capital approximately 95 percent of the natural gas and power derivatives contracts acquired by the firm. Additionally, Duke Energy has disposed of more than 98 percent of DENA’s natural gas transportation, storage, structured power and other commodity contracts. The company anticipates completing the DENA exit by September 2006.

The wholesale power generation assets sold to LS Power include:

  • Arlington Valley (Maricopa County, Ariz.) – 570 megawatts, natural gas-fired, combined-cycle facility
  • Griffith Energy Facility (Mohave County, Ariz.) – 300 megawatts (reflects Duke Energy’s 50 percent ownership), natural gas-fired, combined-cycle facility
  • South Bay (Chula Vista, Calif.) – 700 megawatts, conventional steam facility (10 year lease)
  • Morro Bay (Morro Bay, Calif.) – 1,002 megawatts, conventional steam facility
  • Moss Landing (Moss Landing, Calif.) – 2,511 megawatts, conventional steam and natural gas-fired, combined-cycle facility
  • Oakland Power Plant (Oakland, Calif.) – 165 megawatts, simple-cycle, fuel-oil facility
  • Maine Independence (Veazie, Maine) – 520 megawatts, combined-cycle facility
  • Bridgeport Energy (Bridgeport, Conn.) – 490 megawatts, combined-cycle facility.

LS Power Equity Partners is a member of the LS Power Group. Founded in 1990, the LS Power Group is a fully integrated investor, developer and management team focused exclusively on the power sector.

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 may be considered "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. You can typically identify forward-looking statements by the use of forward-looking words, such as “may,” “will,” “could,” “project,” “believe,” “anticipate,” “expect,” “estimate,” “continue,” “potential,” “plan,” “forecast” and other similar words. The forward-looking statements reflect management’s intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from the forward-looking statements included in this document. These risks and uncertainties include, among other things, state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rate structures, and affect the speed at and degree to which competition enters the electric and natural gas industries; the outcomes of litigation and regulatory investigations, proceedings or inquiries; 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, including any potential effects arising from terrorist attacks and any consequential hostilities or other hostilities; 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 effect of accounting pronouncements issued periodically by accounting standard-setting bodies; the amount of collateral required to be posted from time to time in Duke Energy’s transactions; competition and regulatory limitations affecting the success of Duke Energy’s divestiture plans, including the prices at which Duke Energy is able to sell its assets; the performance of electric generation, pipeline and natural gas processing facilities; the extent of success in connecting natural gas supplies to gathering and processing systems and in connecting and expanding natural gas and electric markets; conditions of the capital markets and equity markets during the periods covered by the forward-looking statements; and opportunities for Duke Energy’s business units, including the timing and success of efforts to develop domestic and international power, pipeline, gathering, liquefied natural gas, processing and other infrastructure projects. Additional factors that may affect the future results of Duke Energy are set forth in the Duke Power Company LLC and Cinergy Corp. filings with the Securities and Exchange Commission ("SEC"), which are available at  www.duke-energy.com/investors/. Duke Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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