Exhibit 10.1

Duke Energy Ohio

Electric Security Plan (ESP) Settlement Overview

 

Background – Ohio Electric Market (Past and Present)

·                  Ohio Amended Substitute Senate Bill No. 221 (SB221) signed
May 1, 2008 (effective July 31, 2008)

·                  Duke Energy Ohio filed its ESP on July 31, 2008

 

Settlement and PUCO Order

·                  Settlement agreement filed on October 27, 2008

·                  PUCO Order issued December 17, 2008

·                  3-year Plan:  January 1, 2009 — December 31, 2011

 

·                  Pricing and Customer Impacts

·                  Pricing Impacts

 

 

 

2009

 

2010

 

2011

 

($ in millions)

 

Revenue

 

Revenue

 

Revenue

 

Base Price Increase

 

$

83

 

$

121

 

$

219

 

RTC Termination (Note)

 

$

(47

)

$

(47

)

$

(121

)

Net Revenue Increase

 

$

36

 

$

74

 

$

98

 

 

 

 

 

 

 

 

 

Original Proposal

 

$

110

 

$

130

 

$

75

 

 

Note:       Residential and non-residential RTC revenue and equivalent
amortization expense terminates 12/31/08 and 12/31/10, respectively.

 

·                  Deferral of up to $50MM Beckjord Station O&M, amortized over
3 years (no revenue impact — only amortization expense)

 

($ in millions)

 

2009

 

2010

 

2011

 

Planned 2009 Beckjord O&M

 

$

50

 

 

 

 

 

Amortization Expense

 

$

(17

)

$

(17

)

$

(16

)

Deferred Beckjord O&M Balance

 

$

33

 

$

16

 

$

0

 

 

·                  Customer Impacts (as % of total bill)

·                  Overall annual average increase = 2% in 2009 and 2010, and
1.2% in 2011

·                  Average impact by customer class(excluding distribution rate
case impacts):

·                  Residential = 2% in 2009 and 2010, and 0% in 2011

·                  Commercial and Industrial = 2% in each year

 

·                  Cost-Based Trackers

·                  Retain existing trackers for:

·                  Fuel, purchased power and emission allowances (currently FPP,
new name PTC-FPP)

·                  Environmental, homeland security & change in tax law
(currently AAC, new name PTC-AAC)

·                  Capacity purchases (currently SRT, new name SRA-SRT)

·                  Replaces DSM tracker with new energy efficiency tracker
(Save-A-Watt) (Rider DR-SAW)

·                  New unavoidable trackers for:

·                  Infrastructure modernization (SmartGrid) (Rider DR-IM) - 
Provides for deferral of costs and accumulation of carrying charges between
point of expenditure and inclusion of such costs in the rider;

·                  Economic competitiveness (customer incentives approved by
PUCO) (Rider DR-ECF)

 

·                  Settlement withdrew the proposed inflation adjustment rider
and the unavoidable newly dedicated capacity rider

 

·                  Projected Average Price-to-Compare ($/MWh)

 

 

 

2009

 

2010

 

2011

 

Base Generation (PTC-BG)

 

$

29.20

 

$

31.10

 

$

36.00

 

Fuel and Purchased Power (Rider PTC-FPP)

 

$

23.80

 

$

27.10

 

$

30.10

 

Environmental (Rider PTC-AAC)

 

$

5.70

 

$

5.50

 

$

5.00

 

Total Price-to-Compare (PTC)

 

$

58.70

 

$

63.70

 

$

71.10

 

PTC in Original ESP Filing

 

$

62.50

 

$

67.30

 

$

71.50

 

 

·                  Settlement allows the gas generation assets to be sold or
transferred to an affiliated GenCo

·                  Existing dedicated assets to continue serving Duke Energy
Ohio customers during the 3-year term of the ESP

 

·                  Earnings Test

·                  ROE threshold = 15%

·                  ROE excludes purchase accounting & goodwill, mark-to-market
accounting, and material non-recurring gains and losses

 

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Duke Energy Ohio

 

Price Structure Transition From RSP to ESP

 

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