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PUCO Approves Settlement in Duke Energy Ohio Gas Rate Application May 28, 2008

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CINCINNATI -

Duke Energy Ohio announced today that the Public Utilities Commission of Ohio has approved a settlement agreement with the Staff of the PUCO and all intervening parties for an increase of $18.2 million, or 3 percent, in natural gas base rates.

The settlement approved by the PUCO permits continued recovery of costs for Duke Energy Ohio’s accelerated main replacement program, which will continue to improve the reliability and safety of the natural gas delivery system by replacing cast iron and bare steel mains, some of which were installed more than 120 years ago. It also allows for recovery of costs to comply with a statewide safety program to replace certain types of risers that connect the gas service line to the gas meter.

“We are very pleased that the PUCO and all parties to the case recognize the importance of our efforts to improve the reliability and safety of our gas distribution system,” said Sandra Meyer, president of Duke Energy Ohio. “The order allows us to improve service quality at a reasonable cost to customers.”

The PUCO decided the single remaining issue not resolved in the settlement by moving more of the fixed charges of providing gas service, such as capital investment in pipes and regulating equipment, billing and meter reading, to a monthly charge of $15 this summer, increasing to $20.25 in October, rather than including them in the per unit charges. The fixed charge will increase to $25.33 a year from now. This design helps lower costs associated with usage and will minimize bills during times of extreme weather.

For a residential customer using 6,700 cubic feet of natural gas, today’s decision results in a monthly bill of $107.74, compared with the current bill of $104.39, which includes the current cost of gas. In the second year, the monthly bill will increase to $108.42 based on current gas costs. Natural gas costs are billed to customers at the company’s cost or at the customer’s agreed upon price with an alternative supplier, in either case without profit to Duke Energy Ohio. (Note to editors and reporters: We are now starting to use a revised typical use number, adjusting it downward to 6,700 cubic feet per month on average from the 10,800 cubic feet which was established about 20 years ago. Customer conservation, improved gas appliance efficiency and new building standards have resulted in the reduction in typical natural gas usage.)

“We understand the impact of higher rates on our customers and provide programs to help them manage their energy bills,” said Meyer. “For our low-income customers, we are increasing our weatherization program funding by 50 percent, from $2 million to $3 million annually.”

Other efficiency programs include rebates on high-efficiency gas furnaces, energy audits, conservation tips and payment assistance programs.  More information is available on these programs at www.duke-energy.com.

The PUCO also approved the development of a pilot program that will provide a $4 credit against the monthly fixed charge for low-income customers at or below 175 percent of the federal poverty guideline who do not participate in the Percentage of Income Payment Plan. For most of these customers, the total current bill will actually decrease due to this credit. The pilot will be limited to the first 10,000 income-qualified customers to enroll.

Another benefit to customers under the settlement is that Duke Energy Ohio will take over responsibility for the individual service line from approximately the property line to the meter. Previously, customers were responsible for the costs of repairing any leaks or damage that occurred to the curb-to-meter service line. With this new approach, Duke Energy Ohio, rather than customers, will handle such repairs.

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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