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Duke Energy to Continue New Source Review Case in Lower Courts Following U.S. Supreme Court Ruling April 2, 2007

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Duke Energy will continue to defend itself in the New Source Review or “NSR” case in the lower courts following the U.S. Supreme Court ruling today. In its opinion in Environmental Defense v. Duke Energy Corporation, the Supreme Court vacated an earlier decision by the United States Court of Appeals for the 4th Circuit in Duke’s favor. The case is expected to continue in the lower courts.

The Supreme Court’s opinion overturned rulings rendered unanimously by the U.S. District Court and the 4th Circuit Court of Appeals that found an hourly emissions standard is appropriate when applying NSR standards. The lower courts ruled that work commonly done to maintain and increase the efficiency at Duke Energy’s Carolinas coal plants from 1988 to 1999 did not increase the plant’s hourly emissions – and therefore should not be subject to NSR review.

The U.S. Supreme Court considered only whether an hourly emissions standard was appropriate to use when triggering NSR – and did not review what constitutes routine repair and replacement activities under NSR.

“We are disappointed the Supreme Court overturned the lower court rulings in our favor on this matter,” said Marc Manly, Duke Energy group executive and chief legal officer. “We continue to believe we have solid defenses against the government’s claims and will show in the lower courts that our power plant projects were not subject to NSR.”

Regardless of this litigation, Duke Energy’s emissions have been substantially reduced through other Clean Air Act requirements and state clean air laws. The company has invested more than $1.5 billion to reduce nitrogen oxide emissions since 1998 and is investing nearly $3.5 billion more to further reduce nitrogen oxide and sulfur dioxide by 2010. The net result of these investments is reduction of sulfur dioxide and nitrogen oxide emissions by approximately 70 percent across Duke Energy’s five-state service area by 2010.

The Supreme Court case stems from an effort that began in 1999, when the EPA filed a number of enforcement actions across the industry and re-interpreted NSR rules to eliminate the well-established trigger as to what constitutes a “major modification” at a power plant. The EPA contended that NSR can be triggered by common projects that maintain a facility’s operating capabilities but which do not increase the facility’s emission rate.

Duke Energy Corporation
Duke Energy Corp., one of the largest electric power companies in the United States, supplies and delivers energy to approximately 3.9 million U.S. customers. The company has nearly 37,000 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:

Contact: Tom Williams
Phone: 704-373-4743
24-Hour Phone: 704-382-8333

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