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Duke Energy Files Motion to Dismiss in Federal Lawsuit March 21, 2008

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CINCINNATI, OH -

In response to unfounded allegations in a lawsuit in federal court that Duke Energy affected decisions of the Public Utilities Commission of Ohio by entering into contracts with large volume customers, the company today filed a response asking the court to dismiss the entire matter because there is no basis for any claim under federal or state law.

The complaint before Judge Edmund A. Sargus, Jr., a federal district court judge in Columbus, Ohio, claims that PUCO-approved rates for other customers were somehow affected because an unregulated competitive affiliate of Duke Energy Ohio had entered into option contracts with several large volume customers allowing the affiliate to serve them under certain market conditions. 

“This matter has already been reviewed by regulators and the Ohio Supreme Court and our rates have been upheld,” said Marc Manly, Duke Energy Group Executive and Chief Legal Officer.  “Our motion to the federal court demonstrates that there is no basis for the lawsuit and it should be dismissed at the outset.”

The response shows that any contention that Duke Energy affected any decision of the PUCO by entering into the contracts is not true, as the commission made an
independent and fully-informed decision in approving Duke Energy Ohio’s rate stabilization plan.  Additionally, Duke argues that jurisdiction for any claim related to rates is exclusively with the state regulatory commission.

In its filing, the company said “a variety of federal and state law doctrines mandate dismissal of the suit.” Duke Energy pointed out that PUCO reviewed the full contracts and decided to reexamine in detail Duke Energy Ohio’s rates, which were initially set upon the commission’s rejection of settlement agreements reached with several intervening parties, including some with contracts.  It then upheld the rates with minor modifications and determined that the contracts in question did not affect the rates it approved. 

The PUCO’s decision in this matter is now on appeal to the Ohio Supreme Court for the second time. The contracts are common practice in the utility industry, and Duke Energy continues to vigorously dispute the claims that the contracts were unlawful.
 
Duke Energy’s Ohio operations deliver safe, reliable and competitively priced electricity to more than 680,000 electric customers and natural gas service to approximately 420,000 customers.

Duke Energy, one of the largest electric power companies in the United States, supplies and delivers energy to approximately 4 million U.S. customers. The company has approximately 36,000 megawatts of electric generating capacity in the Midwest and the Carolinas, and natural gas distribution services in Ohio and Kentucky. In addition, Duke Energy has more than 4,000 megawatts of electric generation in Latin America, and is a joint-venture partner in a U.S. real estate company. 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: www.duke-energy.com.


Contact: Steve Brash
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