From: steven.kean@enron.com
To: richard.shapiro@enron.com
Date: 2000-08-01 18:56:00+00:00
Subject: Duke release and news conference

---------------------- Forwarded by Steven J Kean/HOU/EES on 08/01/2000 06:56 
PM ---------------------------


Peggy Mahoney
08/01/2000 01:48 PM
To: Karen L Williams/HOU/EES@EES, Mark Palmer/Corp/Enron@ENRON, Steven J 
Kean/HOU/EES@EES, James D Steffes/HOU/EES@EES, Jeff Dasovich/SFO/EES@EES
cc:  
Subject: Duke release and news conference

Duke is holding a news conference at 3pm Central Time.  Call in number is 
below. 


Duke Energy Offers Governor Davis Solutions to California's Power Supply 
Shortfall 

     Committing to Deliver 3,000 Megawatts of New Supply to California
               And a Five-Year Fixed Price Supply Contract

    HOUSTON AND MOSS LANDING, Calif., July 31 /PRNewswire/ -- Duke Energy
North America (DENA) today offered to California Governor Gray Davis specific
solutions to address the state's electricity supply shortage proposing to
deliver 3,000 megawatts of new supply through the construction of generation
facilities.  In addition, DENA proposed a five-year, fixed-price supply
contract to incumbent utilities to address the immediate concern with volatile
electricity prices.
    "California's high electricity prices during peak-demand periods result
from insufficient supply to meet the demand," said Jim Donnell, president and
chief executive officer of DENA.  "In the past ten years, no significant new
power generation facilities have been built in California.  During the same
period, peak demand has risen more than 10,000 megawatts.  This combination
has caused the state's reserve margin to fall to less than 2 percent, which
necessarily results in higher prices and abnormal volatility."
    Under current procedures, it takes in excess of four years to deliver new
power generation in California.  To add substantial incremental generating
capacity to California, DENA proposed Governor Davis use his existing
authority under the California Emergency Services Act to streamline the
permitting process to facilitate the rapid construction of environmentally
friendly generation by 2001.  DENA also asked the governor to use his current
authority to allow California utilities to enter into bilateral contracts with
energy providers, so they could better manage their exposure to high energy
prices.
    To help solve the state's supply shortfall, DENA said it remained
committed to adding substantial generation in California.  Within two months
and upon receiving final regulatory approvals, the company will begin
construction on 1,000 megawatts at its Moss Landing facility.  The expansion
of the current 1,478-megawatt facility will be in commercial operation by
summer 2002.  And, with an expedited permitting process, DENA could deploy its
available resources to construct an additional 500 megawatts for commercial
operation in 2001 and 1,500 megawatts for 2002.
    To address the concern associated with the high energy prices experienced
this year, DENA offered to provide up to 2,000 megawatts of electricity to the
incumbent utilities at $50 per megawatt-hour for a five-year period beginning
Sept. 1, 2000.  This would mitigate the exposure to price spikes, for a
reasonable time period during which additional generation resources can be
built.
    "DENA is committed to help bring electricity price stability for the
citizens of California through these proposals," Donnell said.  "We are
confident that our expertise in building and operating power generation
facilities can help resolve the supply crisis."
    Duke Energy North America (DENA), is a leading wholesale energy services
company.  DENA, and its affiliates, including Duke Energy Trading and
Marketing, provides natural gas and power supply and services, and risk
management products to wholesale energy producers and users.  DENA also
develops, owns and manages a portfolio of merchant generation facilities.
DENA is a wholly owned subsidiary of Duke Energy.
    Duke Energy (NYSE: DUK), a diversified multinational energy company,
creates value for customers and shareholders through an integrated network of
energy assets and expertise.  Duke Energy manages a dynamic portfolio of
natural gas and electric supply, delivery and trading businesses -- generating
revenues of nearly $22 billion in 1999.  Duke Energy, headquartered in
Charlotte, N.C., is a Fortune 100 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 .

SOURCE  Duke Energy Corporation





 
Web site:  http://www.duke-energy.com 
 

 
Company News On-Call:  http://www.prnewswire.com/comp/257451.html
or fax, 800-758-5804, ext. 257451
 

 
CONTACT: Tom Williams, California, 805-595-4270, or pager,
877-364-5170, or Bryant Kinney, 704-382-2208, both of Duke Energy
Corporation
 

 
EDITOR'S ADVISORY: Duke Energy North America will hold an
audioconference today at 1 p.m. Pacific time.  Jim Donnell,
president and chief executive officer, will discuss DENA's
position and proposed solutions for California's power supply
crisis.  Media representatives should dial 800/289-0437 and
provide access code 744661 to participate in the call.  The call
will be replayed later this afternoon.  Dial 888/203-1112 for the
replay and use the same access code above.