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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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|  |                                                                                        
|- | ---------------------------------------------------------------------------------------
|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 
|  |                                                                                        
|  | For the Quarterly Period Ended June 30, 2003                                           
|  |                                                                                        
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
|  |                                                                                        
|  | For the Transition Period From ____________ to ____________                            



Commission File Number


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1-956




Duquesne Light Company


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(Exact name of registrant as specified in its charter)




|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Pennsylvania                                                   |  | 25-0451600                          
|                                                               |  |                                     
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

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(Address of principal executive offices)(Zip Code)


Registrants telephone number, including area code: (412) 393-6000

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Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.

Yesx     Noo

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yesx     Noo

Indicate the number of shares outstanding of each of
the issuers classes of common stock as of the latest practicable date:

All 10 shares of Duquesne Light Company Common Stock outstanding as of July 31, 2003 are owned by DQE, Inc.

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PART I.     FINANCIAL INFORMATION

Item
1.       Financial Statements.

Duquesne Light Condensed Consolidated Statements of Income (Unaudited)


|                                                                                    |                             |  |                           |       |      |   |       |  |   |       |  |   |      
|----------------------------------------------------------------------------------- | --------------------------- |  | ------------------------- | ----- | ---- | - | ----- |  | - | ----- |  | - | -----
|                                                                                   
|(All amounts in millions)                                                           | Three Months Ended June 30, |  | Six Months Ended June 30,
|                                                                                    | 2003                        |  | 2002                      |       | 2003 |   | 2002 
|                                                                                   
|Operating Revenues:                                                                 |                             |  |                           |       |      |   |       |  |   |       |  |   |      
|Retail sales of electricity                                                         |                             |  | $                         | 184.8 |      | $ | 226.7 |  | $ | 378.2 |  | $ | 470.9
|Other                                                                               |                             |  |                           | 8.4   |      |   | 6.3   |  |   | 14.3  |  |   | 11.5 
|                                                                                   
|Total Operating Revenues                                                            |                             |  |                           | 193.2 |      |   | 233.0 |  |   | 392.5 |  |   | 482.4
|                                                                                   
|Operating Expenses:                                                                 |                             |  |                           |       |      |   |       |  |   |       |  |   |      
|Purchased power                                                                     |                             |  |                           | 93.3  |      |   | 104.0 |  |   | 189.7 |  |   | 202.9
|Other operating and maintenance                                                     |                             |  |                           | 30.1  |      |   | 31.3  |  |   | 59.5  |  |   | 56.8 
|Depreciation and amortization                                                       |                             |  |                           | 19.3  |      |   | 44.9  |  |   | 40.8  |  |   | 119.2
|Taxes other than income taxes                                                       |                             |  |                           | 12.2  |      |   | 16.8  |  |   | 25.7  |  |   | 32.7 
|Income taxes                                                                        |                             |  |                           | 9.3   |      |   | 6.0   |  |   | 18.8  |  |   | 12.6 
|                                                                                   
|Total Operating Expenses                                                            |                             |  |                           | 164.2 |      |   | 203.0 |  |   | 334.5 |  |   | 424.2
|                                                                                   
|Operating Income                                                                    |                             |  |                           | 29.0  |      |   | 30.0  |  |   | 58.0  |  |   | 58.2 
|Other Income - Net                                                                  |                             |  |                           | 3.0   |      |   | 4.3   |  |   | 6.4   |  |   | 11.9 
|                                                                                   
|Income Before Interest and Other Charges                                            |                             |  |                           | 32.0  |      |   | 34.3  |  |   | 64.4  |  |   | 70.1 
|Interest Charges                                                                    |                             |  |                           | 12.6  |      |   | 16.1  |  |   | 25.2  |  |   | 31.0 
|Company Obligated Mandatorily Redeemable Preferred Securities Dividend Requirements |                             |  |                           | 3.2   |      |   | 3.2   |  |   | 6.3   |  |   | 6.3  
|                                                                                   
|Net Income                                                                          |                             |  |                           | 16.2  |      |   | 15.0  |  |   | 32.9  |  |   | 32.8 
|Dividends on Preferred and Preference Stock                                         |                             |  |                           | 0.8   |      |   | 0.8   |  |   | 1.6   |  |   | 1.6  
|                                                                                   
|Earnings Available for Common Stock                                                 |                             |  | $                         | 15.4  |      | $ | 14.2  |  | $ | 31.3  |  | $ | 31.2 
|                                                                                   

See notes to condensed consolidated financial statements.

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Duquesne Light Condensed Consolidated Balance Sheets (Unaudited)


|                                                                                  |                       |  |   |              |   |   |                   |  
|--------------------------------------------------------------------------------- | --------------------- |  | - | ------------ | - | - | ----------------- | -
|                                                                                  |                      
|                                                                                  | (Millions of Dollars) | 
|ASSETS                                                                            |                       |  |   | June 30,2003 |   |   | December 31, 2002 |  
|                                                                                  |                      
|Property, Plant and Equipment:                                                    |                       |  |   |              |   |   |                   |  
|Property, plant and equipment                                                     |                       |  | $ | 2,043.5      |   | $ | 2,018.9           |  
|Less: Accumulated depreciation and amortization                                   |                       |  |   | (676.4       | ) |   | (654.0            | )
|                                                                                  |                      
|Total Property, Plant and Equipment  Net                                         |                       |  |   | 1,367.1      |   |   | 1,364.9           |  
|                                                                                  |                      
|Long-Term Investments                                                             |                       |  |   | 22.7         |   |   | 23.7              |  
|                                                                                  |                      
|Current Assets:                                                                   |                       |  |   |              |   |   |                   |  
|Investment in DQE Capital cash pool                                               |                       |  |   | 330.4        |   |   | 345.9             |  
|Receivables  net                                                                 |                       |  |   | 355.9        |   |   | 377.7             |  
|Other                                                                             |                       |  |   | 37.1         |   |   | 25.5              |  
|                                                                                  |                      
|Total Current Assets                                                              |                       |  |   | 723.4        |   |   | 749.1             |  
|                                                                                  |                      
|Other Non-Current Assets:                                                         |                       |  |   |              |   |   |                   |  
|Regulatory assets                                                                 |                       |  |   | 279.5        |   |   | 280.3             |  
|Transition costs                                                                  |                       |  |   | 13.4         |   |   | 24.1              |  
|Other                                                                             |                       |  |   | 30.1         |   |   | 31.1              |  
|                                                                                  |                      
|Total Other Non-Current Assets                                                    |                       |  |   | 323.0        |   |   | 335.5             |  
|                                                                                  |                      
|Total Assets                                                                      |                       |  | $ | 2,436.2      |   | $ | 2,473.2           |  
|                                                                                  |                      
|CAPITALIZATION AND LIABILITIES                                                    |                       |  |   |              |   |   |                   |  
|                                                                                  |                      
|Capitalization:                                                                   |                       |  |   |              |   |   |                   |  
|Common Shareholders Equity:                                                      |                       |  |   |              |   |   |                   |  
|Common stock (authorized - 90,000,000 shares, issued and outstanding - 10 shares) |                       |  | $ |             |   | $ |                  |  
|Capital surplus                                                                   |                       |  |   | 483.3        |   |   | 483.3             |  
|Retained earnings                                                                 |                       |  |   | 45.7         |   |   | 41.4              |  
|Accumulated other comprehensive loss                                              |                       |  |   | (3.8         | ) |   | (3.7              | )
|                                                                                  |                      
|Total Common Shareholders Equity                                                 |                       |  |   | 525.2        |   |   | 521.0             |  
|                                                                                  |                      
|Company obligated mandatorily redeemable preferred securities (Note A)            |                       |  |   | 150.0        |   |   | 150.0             |  
|Preferred and preference stock                                                    |                       |  |   | 69.8         |   |   | 69.8              |  
|Long-term debt                                                                    |                       |  |   | 856.7        |   |   | 959.5             |  
|                                                                                  |                      
|Total Capitalization                                                              |                       |  |   | 1,601.7      |   |   | 1,700.3           |  
|                                                                                  |                      
|Current Liabilities:                                                              |                       |  |   |              |   |   |                   |  
|Current debt maturities (Note D)                                                  |                       |  |   | 100.0        |   |   |                  |  
|Accounts payable                                                                  |                       |  |   | 90.2         |   |   | 88.6              |  
|Payable to affiliates                                                             |                       |  |   | 87.3         |   |   | 107.4             |  
|Other                                                                             |                       |  |   | 56.1         |   |   | 65.4              |  
|                                                                                  |                      
|Total Current Liabilities                                                         |                       |  |   | 333.6        |   |   | 261.4             |  
|                                                                                  |                      
|Non-Current Liabilities:                                                          |                       |  |   |              |   |   |                   |  
|Deferred income taxes  net                                                       |                       |  |   | 368.8        |   |   | 374.9             |  
|Warwick mine liability                                                            |                       |  |   | 28.4         |   |   | 30.0              |  
|Other                                                                             |                       |  |   | 103.7        |   |   | 106.6             |  
|                                                                                  |                      
|Total Non-Current Liabilities                                                     |                       |  |   | 500.9        |   |   | 511.5             |  
|                                                                                  |                      
|Commitments and contingencies (Note F)                                            |                       |  |   |              |   |   |                   |  
|                                                                                  |                      
|Total Liabilities and Capitalization                                              |                       |  | $ | 2,436.2      |   | $ | 2,473.2           |  
|                                                                                  |                      

See notes to condensed consolidated financial statements.

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|                                                           |                            |      |   |       |   |   |        |  
|---------------------------------------------------------- | -------------------------- | ---- | - | ----- | - | - | ------ | -
|                                                           | (Millions of Dollars)      |      |  
|                                                           | Six Months Ended  June 30, |      |  
|                                                           | 2003                       | 2002 |  
|Cash Flows from Operating Activities:                      |                            |      |   |       |   |   |        |  
|Operations                                                 |                            |      | $ | 82.3  |   | $ | 147.3  |  
|Investment in DQE Capital Cash Pool                        |                            |      |   | 15.5  |   |   | (98.8  | )
|Changes in working capital other than cash                 |                            |      |   | (22.0 | ) |   | 22.1   |  
|Other                                                      |                            |      |   | (6.6  | ) |   | (5.9   | )
|                                                           |                            |      |  
|Net Cash Provided by Operating Activities                  |                            |      |   | 69.2  |   |   | 64.7   |  
|                                                           |                            |      |  
|Cash Flows from Investing Activities:                      |                            |      |   |       |   |   |        |  
|Capital expenditures                                       |                            |      |   | (32.5 | ) |   | (34.9  | )
|Proceeds from disposition of investments                   |                            |      |   |      |   |   | 2.6    |  
|Other                                                      |                            |      |   | 1.0   |   |   | (2.0   | )
|                                                           |                            |      |  
|Net Cash Used in Investing Activities                      |                            |      |   | (31.5 | ) |   | (34.3  | )
|                                                           |                            |      |  
|Cash Flows from Financing Activities:                      |                            |      |   |       |   |   |        |  
|Issuance of debt                                           |                            |      |   |      |   |   | 300.0  |  
|Reduction of long-term obligations (Note D)                |                            |      |   | (2.8  | ) |   | (293.0 | )
|Commercial paper borrowings                                |                            |      |   |      |   |   | 35.0   |  
|Loan to DQE                                                |                            |      |   |      |   |   | (35.0  | )
|Dividends on capital stock                                 |                            |      |   | (34.9 | ) |   | (26.7  | )
|Other                                                      |                            |      |   |      |   |   | (10.7  | )
|                                                           |                            |      |  
|Net Cash Used in Financing Activities                      |                            |      |   | (37.7 | ) |   | (30.4  | )
|                                                           |                            |      |  
|Net increase in cash and temporary cash investments        |                            |      |   |      |   |   |       |  
|Cash and temporary cash investments at beginning of period |                            |      |   |      |   |   |       |  
|                                                           |                            |      |  
|Cash and Temporary Cash Investments at End of Period       |                            |      | $ |      |   | $ |       |  
|                                                           |                            |     

See notes to condensed consolidated financial statements.

Duquesne Light Condensed Consolidated Statements of Comprehensive Income (Unaudited)


|                                                                                                     |                             |                           |      |      |  |   |      |   |   |      |   |   |      |  
|---------------------------------------------------------------------------------------------------- | --------------------------- | ------------------------- | ---- | ---- |  | - | ---- | - | - | ---- | - | - | ---- | -
|                                                                                                     | (Millions of Dollars)       |                          
|                                                                                                     | Three Months Ended June 30, | Six Months Ended June 30, |      |     
|                                                                                                     | 2003                        | 2002                      | 2003 | 2002 | 
|Net income                                                                                           |                             |                           | $    | 16.2 |  | $ | 15.0 |   | $ | 32.9 |   | $ | 32.8 |  
|Other comprehensive income:                                                                          |                             |                           |      |      |  |   |      |   |   |      |   |   |      |  
|Unrealized holding gains (losses) arising during the year, net of tax of $1.5, $(3.8), $0 and $(2.5) |                             |                           |      | 2.1  |  |   | (5.4 | ) |   | (0.1 | ) |   | (3.6 | )
|                                                                                                     |                             |                           |      |      | 
|Comprehensive Income                                                                                 |                             |                           | $    | 18.3 |  | $ | 9.6  |   | $ | 32.8 |   | $ | 29.2 |  
|                                                                                                     |                             |                           |      |      | 

See notes to condensed consolidated financial statements.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

A.         CONSOLIDATION AND ACCOUNTING POLICIES

Duquesne Light Company is a wholly owned subsidiary of DQE, Inc. We are engaged in the supply (as provider of last resort), transmission and distribution of electric
energy.

Our subsidiaries are primarily involved in operating our automated meter reading technology and providing financing to certain
affiliates.

The consolidated financial statements include the accounts of Duquesne Light and our wholly owned subsidiaries. All material intercompany
balances and transactions have been eliminated in the consolidation.

Basis of Accounting

We are
subject to the accounting and reporting requirements of the Securities and Exchange Commission (SEC). Our electricity delivery business is also subject to regulation by the Pennsylvania Public Utility Commission (PUC) and the Federal Energy
Regulatory Commission (FERC) with respect to rates for delivery of electric power, accounting and other matters.

As a result of our PUC-approved
restructuring plan in 1998, the electricity supply segment does not meet the criteria of Statement of Financial Accounting Standards (SFAS) No. 71, Accounting for the Effects of Certain Types of Regulation. Pursuant to the
PUCs final restructuring order, and as provided in the Pennsylvania Electricity Generation Customer Choice and Competition Act (Customer Choice Act), generation-related transition costs are being recovered through a competitive transition
charge (CTC) collected in connection with providing transmission and distribution services, and these assets have been reclassified accordingly. The electricity delivery business segment continues to meet SFAS No. 71 criteria, and accordingly
reflects regulatory assets and liabilities consistent with cost-based ratemaking regulations. The regulatory assets represent probable future revenue, because provisions for these costs are currently included, or are expected to be included, in
charges to electric utility customers through the ratemaking process. (See Note B.) These assets are currently being recovered over a period of approximately 28 years and are not earning a rate of return.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and
assumptions with respect to values and conditions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements. The reported amounts of revenues and expenses
during the reporting period also may be affected by the estimates and assumptions we are required to make. We evaluate these estimates on an ongoing basis, using historical experience, consultation with experts and other methods we consider
reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from our estimates.

The interim financial information
for the three and six month periods ended June 30, 2003, is unaudited and has been prepared on the same basis as the audited financial statements. In the opinion of management, such unaudited information includes all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation of the interim information. This information does not include all footnotes which would be required for complete annual financial statements in accordance with accounting principles
generally accepted in the United States of America.

These statements should be read with the financial statements and notes included in our Annual
Report on Form 10-K for the year ended December 31, 2002, filed with the SEC. The results of operations for the three and six month periods ended June 30, 2003, are not necessarily indicative of the results that may be expected for the full
year.

Stock-Based Compensation

In December 2002, the Financial Accounting Standards Board (FASB)
issued SFAS No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure, an amendment of FASB Statement No. 123, which provides alternative methods of transition for companies that voluntarily adopt the fair value
based method of accounting for stock-based employee compensation. This standard also amends the disclosure requirements of SFAS No. 123, Accounting for Stock-Based Compensation, by requiring prominent disclosures in both annual and
interim financial statements about the method of accounting for stock-based employee compensation and prescribing a specific tabular format to show the effect of the method used on reported results.

We continue to account for our stock-based employee compensation using the intrinsic value

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method under the recognition and measurement principles of Accounting Principles Board No. 25, Accounting for Stock Issued to Employees, and related
Interpretations.

Prior to December 2001, no compensation expense was recorded on certain option grants because the option terms were fixed and the
exercise price equaled the market price of the DQE common stock on the date of grant. However, some option grants have stock appreciation rights (SARs) and/or dividend equivalent accounts (DEAs) attached to the option. We recognize compensation
expense for the SARs and DEAs, as appropriate. Compensation expense for the SARs is based upon the quoted market price of DQE common stock at month end.

The 1,561,800 option grants made in December 2001 and December 2002 are performance-based option awards that become exercisable, subject to an 18-month vesting provision,
only if the average of the DQE common stock price over 30 consecutive trading days exceeds certain target prices. We recognize compensation expense for these options when the performance criteria have been met, spreading the expense over the vesting
period, as applicable.

The following table illustrates the effect on reported income if we had applied the fair value recognition provisions of SFAS No.
123.

|                                                                                                       |      |      |                                                 |      |   |   |      |  
|------------------------------------------------------------------------------------------------------ | ---- | ---- | ----------------------------------------------- | ---- | - | - | ---- | -
|                                                                                                       |      |      | (Millions of Dollars)Three Months EndedJune 30, |     
|                                                                                                       | 2003 | 2002 |                                                
|Reported net income                                                                                    |      |      | $                                               | 16.2 |   | $ | 15.0 |  
|Add:                                                                                                   |      |      |                                                 |      |   |   |      |  
|Stock-based compensation determined under the intrinsic value method for all option awards, net of tax |      |      |                                                 | 0.1  |   |   | 0.2  |  
|Deduct:                                                                                                |      |      |                                                 |      |   |   |      |  
|Stock-based compensation determined under the fair value method for all option awards, net of tax      |      |      |                                                 | (0.4 | ) |   | (0.3 | )
|                                                                                                       |      |     
|Proforma net income                                                                                    |      |      | $                                               | 15.9 |   | $ | 14.9 |  
|                                                                                                       |      |     

|                                                                                                       |      |      |                                               |      |   |   |      |  
|------------------------------------------------------------------------------------------------------ | ---- | ---- | --------------------------------------------- | ---- | - | - | ---- | -
|                                                                                                       |      |      | (Millions of Dollars)Six Months EndedJune 30, |     
|                                                                                                       | 2003 | 2002 |                                              
|Reported net income                                                                                    |      |      | $                                             | 32.9 |   | $ | 32.8 |  
|Add:                                                                                                   |      |      |                                               |      |   |   |      |  
|Stock-based compensation determined under the intrinsic value method for all option awards, net of
tax |      |      |                                               | 0.2  |   |   | 0.4  |  
|Deduct:                                                                                                |      |      |                                               |      |   |   |      |  
|Stock-based compensation determined under the fair value method for all option awards, net of tax      |      |      |                                               | (0.9 | ) |   | (0.6 | )
|                                                                                                       |      |     
|Proforma net income                                                                                    |      |      | $                                             | 32.2 |   | $ | 32.6 |  
|                                                                                                       |      |     

Recent Accounting Pronouncements

On January 1, 2003, we adopted SFAS No. 143, Accounting for Asset Retirement Obligations and SFAS No. 146, Accounting for Costs Associated with Exit or
Disposal Activities, which had no impact on our financial position, results of operations or cash flows.

In January 2003, the FASB issued
Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46), which addresses the consolidation of variable interest entities (VIEs) by business enterprises that are the primary beneficiaries. A VIE is an entity that does
not have sufficient equity investment at risk to permit it to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest. The primary beneficiary
of a VIE is the enterprise with the majority of the risks or rewards associated with the VIE. FIN 46 applies immediately to VIEs created after January 31, 2003 and to VIEs in which an enterprise obtains an interest after January 31, 2003. For VIEs
created earlier, the consolidation requirements apply in the first fiscal year or interim period beginning after June 15, 2003.

Prior to January 31,
2003, we made a $1.5 million investment, as the general partner, in Duquesne Capital, L.P., a special-purpose limited partnership. Duquesne Capital has outstanding $150.0 million principal amount of 8.375% Monthly Income Preferred Securities, Series
A (MIPS). Duquesne Capital applied the proceeds of the sale of the MIPS, together with other funds, to the purchase from Duquesne Light of $151.5 million principal amount of

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Duquesne Lights 8.375% Subordinated Deferrable Interest Debentures, Series A. Currently these securities ($150.0 million of MIPS) are shown as components of capitalization, other
than debt, under the caption of company obligated mandatorily redeemable preferred securities.

Upon adoption of FIN 46, Duquesne Capital will be
considered a VIE. We will not be considered the primary beneficiary and, accordingly, effective July 1, 2003, we will cease consolidating this entity and report an investment of $1.5 million in an unconsolidated subsidiary and a note payable of
$151.5 million to the subsidiary. The investment will be classified as a long-term investment and the note payable will be classified as debt on the condensed consolidated balance sheets.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This standard
requires that an issuer classify a financial instrument that falls within its scope as a liability, or as an asset in some circumstances. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period beginning after June 15, 2003. Management does not believe the adoption of SFAS No. 150 will have an impact on our financial position, results of operations or cash flows.

The 2002 condensed consolidated financial statements have been reclassified to conform with the 2003
presentation.

B.         RATE MATTERS

Competitive Transition Charge

Under Customer Choice, customers must choose to receive their electric energy from an alternative generation supplier or through our provider-of-last-resort (POLR)
arrangements: POLR I, which applies so long as a rate class CTC is still being collected, and POLR II, which applies from full CTC collection for a rate class through December 31, 2004. Customers who select an alternative generation
supplier pay for generation charges set competitively by that supplier, and pay us transmission and distribution charges and the CTC (unless the CTC has already been collected for a customers rate class).

We have completed the CTC collection from most of our customers. As of June 30, 2003, the CTC balance has been fully collected for approximately 99% of customers,
representing approximately 91% of the megawatt-hour (MWh) sales for the first six months of 2003. The transition costs, as reflected on the condensed consolidated balance sheets, are being amortized over the same period that the CTC revenues are
being recognized. We are allowed to earn an 11.0% pre-tax return on the net of tax CTC balance.

Provider of Last Resort

Orion Power Midwest (a subsidiary of Reliant Resources, Inc.) is our POLR supplier. POLR II permits us a margin per MWh supplied. This margin fluctuates based on the mix of
rate classes and number of customers participating in POLR II. Except for this margin, POLR I and POLR II effectively transfer to Orion the financial risks and rewards associated with our POLR obligations. As of June 30, 2003, approximately 71%
of our customers measured on a MWh basis received electricity through POLR I or POLR II. The number of POLR customers will fluctuate depending on market prices and the number of alternative generation suppliers in the retail supply
business.

There are certain safeguards in POLR I and POLR II designed to mitigate losses in the event that Orion defaults on its performance under the
arrangement. Contractually, we have various credit enhancements to address market exposure if Orion failed to deliver the required POLR supply. We hold an irrevocable $10 million letter of credit (that can be increased based on Orions
investment ratings and net worth). We also remit the POLR customer payments 35 days after billing the customer. We have the right not to remit these payments in the event of an Orion default.

If Orion were to fail to deliver, we would be required to procure our POLR supply requirements in the energy markets. If market prices for energy were higher than the POLR
rate at the time of default, we could potentially be acquiring energy for sale to POLR customers at a loss. If that were to happen and the contractual provisions with Orion were not sufficient to cover any loss, we would seek regulatory recovery of
any additional loss. While the Customer Choice Act provides generally for POLR supply costs to be borne by customers, recent litigation suggests that it may not be clear whether we could pass any costs in excess of the existing PUC-approved POLR
prices on to our customers.

We retain the risk that customers will not pay for the POLR generation supply. However, a component of our delivery rate is
designed to cover the cost of a normal level of uncollectible accounts.

7



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PUC Proceedings

On October 25, 2002, we petitioned the PUC to issue
a declaratory order regarding a provision in our retail tariff that affected our largest industrial customer. We and Orion had interpreted the tariff differently. On February 6, 2003 the PUC issued an order, to be effective prospectively, affirming
Orions interpretation. The effect of this order could increase the customers annual billings significantly. The ultimate impact will be influenced by operational changes the customer may make to reduce its energy costs. We are
responsible for paying Orion the amount billed, and retain the risk of recovering any increased billings from the customer. This risk is not included in the normal level of uncollectible accounts described above.

On February 21, 2003, the customer petitioned the PUC to reconsider its ruling, which the PUC denied, leaving the original February 6, 2003 order in effect. The customer
has appealed the ruling to the Commonwealth Court of Pennsylvania. A decision is not expected until the end of 2003. We started billing the customer the higher amount in March 2003 and have been receiving payment in full for these bills.

C.          RECEIVABLES

The components of
receivables for the periods indicated are as follows:

|                                           |                       |                  |   |       |   |   |       |  
|------------------------------------------ | --------------------- | ---------------- | - | ----- | - | - | ----- | -
|                                           |                       |                 
|                                           | (Millions of Dollars) |                 
|                                           | June 30,2003          | December 31,2002 |  
|Electric customers                         |                       |                  | $ | 65.5  |   | $ | 80.4  |  
|Unbilled electric customers                |                       |                  |   | 31.2  |   |   | 31.9  |  
|Loan to DQE                                |                       |                  |   | 250.0 |   |   | 250.0 |  
|Affiliate receivables                      |                       |                  |   | 3.1   |   |   | 13.1  |  
|Other receivables                          |                       |                  |   | 13.9  |   |   | 10.0  |  
|Less: Allowance for uncollectible accounts |                       |                  |   | (7.8  | ) |   | (7.7  | )
|                                          
|Total Receivables                          |                       |                  | $ | 355.9 |   | $ | 377.7 |  
|                                          

D.          DEBT

In June
2003, our board authorized the redemption at par of $100 million principal amount of our 7 3/8% first mortgage bonds due 2038, with redemption to occur August 1, 2003. As a result, we classified $100 million of debt as current maturities on the
condensed consolidated balance sheet as of June 30, 2003.

In May 2003, we redeemed the $2.8 million outstanding balance of 5% Sinking Fund Debentures
(due March 1, 2010) at a redemption price of 100.95% of the principal amount thereof.

In September 2002, we converted approximately $98 million of
variable rate debt to fixed rate with maturities in 2011 and 2013, resulting in a weighted average interest rate of 4.20%.

In August 2002, we redeemed
the following: (i) $10 million aggregate principal amount of 8.20% first mortgage bonds due 2022 at a redemption price of 104.51% of the principal amount thereof, and (ii) $100 million aggregate principal amount of 7 5/8% first mortgage bonds due
2023 at a redemption price of 103.9458% of the principal amount thereof.

In April 2002, we issued $200 million of 6.7% first mortgage bonds due 2012,
and $100 million of 6.7% first mortgage bonds due 2032. In each case we used the proceeds to call and refund existing debt, including debt scheduled to mature in 2003 and 2004.

In January 2002, we issued $125 million of commercial paper and loaned the proceeds to DQE, who repaid $90 million during the first six months of 2002, and the remainder by
the end of 2002.

E.          RESTRUCTURING

During the fourth quarter of 2001, we recorded a pre-tax restructuring charge of $10.8 million related to (1) the consolidation and reduction of certain administrative and
back-office functions through an involuntary termination plan; (2) the abandonment of certain office facilities; and (3) other lease costs related to abandoned office facilities. Approximately 96 employees were terminated in connection with this
restructuring.

During the fourth quarter of 2002, we recorded a pre-tax restructuring charge of $3.7 million related to further consolidation and
centralization of certain administrative functions. The 2002 restructuring charge primarily included severance costs for 14 executive, management, professional and administrative personnel, all of whom were terminated by March 31, 2003.

The following table summarizes the restructuring activities for both the 2001 and 2002 restructuring plans for the six months ended June 30, 2003.

8



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|                          |                               |             |   |       |   |   |      |   |   |      |  
|------------------------- | ----------------------------- | ----------- | - | ----- | - | - | ---- | - | - | ---- | -
|                          |                               |             |   |      
|Restructuring Liability   |                               |             |   |      
|                          | (Millions of Dollars)         |            
|                          | Employee Termination Benefits | Lease Costs |   | Total |  
|Balance, December 31,2002 |                               |             | $ | 4.9   |   | $ | 1.9  |   | $ | 6.8  |  
|Payments on 2001          |                               |             |   | (0.5  | ) |   | (0.2 | ) |   | (0.7 | )
|Payments on 2002          |                               |             |   | (1.9  | ) |   |     |   |   | (1.9 | )
|                         
|Balance, June 30, 2003    |                               |             | $ | 2.5   |   | $ | 1.7  |   | $ | 4.2  |  
|                         

The $4.2 million combined remaining restructuring liability as of June 30, 2003 is included in other liabilities on the condensed
consolidated balance sheets. We believe that the remaining provision is adequate to complete the restructuring plan. We expect that the remaining restructuring liability will be paid on a monthly basis throughout 2006.

F.          COMMITMENTS AND CONTINGENCIES

Construction

In the first two quarters of 2003, we spent approximately $32.5 million for electric utility construction.

Employees

We are a party to a labor contract with the International Brotherhood of Electrical Workers, which represents
971 of our 1,336 employees. This contract expires September 30, 2003. Contract discussions with the union began in July 2003.

Pension Plans

We have an obligation to contribute approximately $32.1 million to our pension plans over future years, resulting from the PUC-approved recovery of costs associated with
our 1999 early retirement program.

Income Taxes

We file as part of the DQE consolidated
federal income tax return. These consolidated federal returns are under audit by the Internal Revenue Service (IRS) for the years 1995 through 1997. All years subsequent to 1997 are still open for review. Tax years through 1993 have been audited and
the statute of limitations is closed for those years. The 1994 tax year was audited and the IRS assessed an additional $22 million in tax, penalties and interest. This adjustment was related to an investment in a structured lease transaction made by
a DQE subsidiary that is unrelated to us. DQE has paid the deficiency and filed a protest with the appeals division of the IRS. This appeal remains unresolved.

The IRS has indicated that it intends to make similar adjustments in the 1995 through 1997 audit period related to the structured lease investment referenced above and
other like investments made in that audit period. If the IRS were to assert adjustments similar to the adjustments for 1994 for the periods 1995 through 2002, and the adjustments were sustained, the total additional tax would be approximately $175
million, exclusive of penalties and interest. In addition, a subsidiary of DQE has also invested in another type of structured lease between 1995 and 1997 for which the IRS has issued specific guidance in both 1999 and 2002 that opposes various
deductions related to these transactions.

In July 2003, DQE was accepted into the IRS Fast Track Settlement Program. This is a new program developed by
the IRS to help accelerate resolution of disputes with taxpayers, generally within 120 days. Participation in the program is voluntary. If DQE is not satisfied with the results obtained through this program, it remains entitled to any and all appeal
rights that would have otherwise been available.

If DQE is unable to resolve their tax disputes within the time frame set forth above, it plans to
deposit approximately $80 million with the IRS to help mitigate interest charges on the ultimate settlement of these issues. As of December 31, 2002 DQE had federal income tax credits and capital loss carryovers of $63.4 million and $32.8 million
available to help offset any potential IRS assessment.

The Pennsylvania Department of Revenue has audited our 1999 and 2000 state tax returns and
assessed additional tax mostly in relation to an out of state subsidiary which they believe is taxable in Pennsylvania. Should the same assertion be applied to 2001 and 2002, the total exposure for the four-year period would be approximately $85
million (net of federal benefit) exclusive of penalties and interest. We do not agree with the States findings and have exercised our appeal rights concerning these matters.

At this time it is not possible to predict to what extent the adjustments proposed for the periods from 1994 through 2002 by the various taxing bodies will be sustained. We
do not believe that the ultimate resolution of our tax issues and DQEs tax issues will have a material adverse effect on our financial position or results of operation. However, the

9



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resolution of these tax issues, depending on the extent and timing thereof, could have a material adverse effect on our cash flows for the periods in which they are paid.

G.             BUSINESS SEGMENTS AND RELATED INFORMATION

We report the following business segments: (1) transmission and distribution of electricity (electricity delivery business segment), (2) supply of electricity (electricity
supply business segment), and (3) collection of transition costs (CTC business segment).

10



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Business Segments for the Three Months Ended:

|                                      |                       |                   |     |              |  |   |       |  |   |      |  |   |         | 
|------------------------------------- | --------------------- | ----------------- | --- | ------------ |  | - | ----- |  | - | ---- |  | - | ------- | 
|                                      |                       |                   |     |             
|                                      | (Millions of Dollars) |                  
|                                      | ElectricityDelivery   | ElectricitySupply | CTC | Consolidated
|June 30, 2003                         |                       |                   |     |             
|Operating revenues                    |                       |                   | $   | 80.7         |  | $ | 107.8 |  | $ | 4.7  |  | $ | 193.2   | 
|Operating expenses                    |                       |                   |     | 41.1         |  |   | 103.5 |  |   | 0.3  |  |   | 144.9   | 
|Depreciation and amortization expense |                       |                   |     | 15.1         |  |   |      |  |   | 4.2  |  |   | 19.3    | 
|                                     
|Operating income                      |                       |                   |     | 24.5         |  |   | 4.3   |  |   | 0.2  |  |   | 29.0    | 
|Other income - net                    |                       |                   |     | 3.0          |  |   |      |  |   |     |  |   | 3.0     | 
|Interest and other charges            |                       |                   |     | 16.6         |  |   |      |  |   |     |  |   | 16.6    | 
|                                     
|Earnings for common stock             |                       |                   | $   | 10.9         |  | $ | 4.3   |  | $ | 0.2  |  | $ | 15.4    | 
|                                     
|                                      |                       |                   |     |              |  |   |       |  |   |      |  |   |         | 
|Assets                                |                       |                   | $   | 2,422.8      |  | $ |      |  | $ | 13.4 |  | $ | 2,436.2 | 
|                                     
|                                      |                       |                   |     |              |  |   |       |  |   |      |  |   |         | 
|Capital expenditures                  |                       |                   | $   | 18.5         |  | $ |      |  | $ |     |  | $ | 18.5    | 
|                                     

Business Segments for the Three Months Ended:

|                                      |                       |                   |     |              |  |   |       |  |   |      |  |   |         | 
|------------------------------------- | --------------------- | ----------------- | --- | ------------ |  | - | ----- |  | - | ---- |  | - | ------- | 
|                                      |                       |                   |     |             
|                                      | (Millions of Dollars)
|                                      | ElectricityDelivery   | ElectricitySupply | CTC | Consolidated
|June 30, 2002                         |                       |                   |     |             
|Operating revenues                    |                       |                   | $   | 85.5         |  | $ | 113.9 |  | $ | 33.6 |  | $ | 233.0   | 
|Operating expenses                    |                       |                   |     | 45.2         |  |   | 111.0 |  |   | 1.9  |  |   | 158.1   | 
|Depreciation and amortization expense |                       |                   |     | 14.0         |  |   |      |  |   | 30.9 |  |   | 44.9    | 
|                                     
|Operating income                      |                       |                   |     | 26.3         |  |   | 2.9   |  |   | 0.8  |  |   | 30.0    | 
|Other income - net                    |                       |                   |     | 4.3          |  |   |      |  |   |     |  |   | 4.3     | 
|Interest and other charges            |                       |                   |     | 20.1         |  |   |      |  |   |     |  |   | 20.1    | 
|                                      |                       |                   |     |             
|Earnings for common stock             |                       |                   | $   | 10.5         |  | $ | 2.9   |  | $ | 0.8  |  | $ | 14.2    | 
|                                     
|Assets (a)                            |                       |                   | $   | 2,449.1      |  | $ |      |  | $ | 24.1 |  | $ | 2,473.2 | 
|                                     
|Capital expenditures                  |                       |                   | $   | 21.0         |  | $ |      |  | $ |     |  | $ | 21.0    | 
|                                     

(a) Relates to assets as of December 31, 2002.

11



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Business Segments for the Six Months Ended:

|                                      |                       |                    |     |              |  |   |       |  |   |      |  |   |      
|------------------------------------- | --------------------- | ------------------ | --- | ------------ |  | - | ----- |  | - | ---- |  | - | -----
|                                      |                      
|                                      | (Millions of Dollars) |                   
|                                      | Electricity Delivery  | Electricity Supply | CTC | Consolidated
|June 30, 2003                         |                      
|Operating revenues                    |                       |                    | $   | 163.2        |  | $ | 217.6 |  | $ | 11.7 |  | $ | 392.5
|Operating expenses                    |                       |                    |     | 84.8         |  |   | 208.2 |  |   | 0.7  |  |   | 293.7
|Depreciation and amortization expense |                       |                    |     | 30.1         |  |   |      |  |   | 10.7 |  |   | 40.8 
|                                      |                       |                    |     |             
|Operating income                      |                       |                    |     | 48.3         |  |   | 9.4   |  |   | 0.3  |  |   | 58.0 
|Other income  net                    |                       |                    |     | 6.4          |  |   |      |  |   |     |  |   | 6.4  
|Interest and other charges            |                       |                    |     | 33.1         |  |   |      |  |   |     |  |   | 33.1 
|                                      |                       |                    |     |             
|Earnings for common stock             |                       |                    | $   | 21.6         |  | $ | 9.4   |  | $ | 0.3  |  | $ | 31.3 
|                                      |                       |                    |     |             
|Capital expenditures                  |                       |                    | $   | 32.5         |  | $ |      |  | $ |     |  | $ | 32.5 
|                                      |                       |                    |     |             

Business Segments for the Six Months Ended:

|                                      |                       |                    |     |              |  |   |       |  |   |      |  |   |      
|------------------------------------- | --------------------- | ------------------ | --- | ------------ |  | - | ----- |  | - | ---- |  | - | -----
|                                      | (Millions of Dollars) |                   
|                                      | Electricity Delivery  | Electricity Supply | CTC | Consolidated
|June 30, 2002                         |                      
|Operating revenues                    |                       |                    | $   | 165.7        |  | $ | 218.1 |  | $ | 98.6 |  | $ | 482.4
|Operating expenses                    |                       |                    |     | 84.8         |  |   | 214.7 |  |   | 5.5  |  |   | 305.0
|Depreciation and amortization expense |                       |                    |     | 28.2         |  |   |      |  |   | 91.0 |  |   | 119.2
|                                      |                       |                    |     |             
|Operating income                      |                       |                    |     | 52.7         |  |   | 3.4   |  |   | 2.1  |  |   | 58.2 
|Other income  net                    |                       |                    |     | 11.9         |  |   |      |  |   |     |  |   | 11.9 
|Interest and other charges            |                       |                    |     | 38.9         |  |   |      |  |   |     |  |   | 38.9 
|                                      |                       |                    |     |             
|Earnings for common stock             |                       |                    | $   | 25.7         |  | $ | 3.4   |  | $ | 2.1  |  | $ | 31.2 
|                                      |                       |                    |     |             
|Capital expenditures                  |                       |                    | $   | 34.9         |  | $ |      |  | $ |     |  | $ | 34.9 
|                                      |                       |                    |     |             

Item 2.     Managements Discussion and
Analysis of Financial Condition and Results of Operations.

Part I, Item 2 of this Quarterly Report on Form 10-Q should be read in conjunction
with our Annual Report on Form 10-K for the year ended December 31, 2002 filed with the Securities and Exchange Commission (SEC), and the condensed consolidated financial statements, which are set forth in Part I, Item 1 of this
Report.

Duquesne Light was formed in 1912 by the consolidation and merger of three constituent companies. We are engaged in the supply (through our
provider-of-last-resort service (POLR)), transmission and distribution of electric energy. We have been a wholly owned subsidiary of DQE, Inc. since its formation in 1989.

Our subsidiaries are primarily involved in operating our automated meter reading technology and providing financing to certain affiliates.

Service Area Our operations provide service to approximately 587,000 direct customers in southwestern Pennsylvania (including
in the City of Pittsburgh), a territory of approximately 800 square miles.

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Regulation We are subject to the accounting and reporting requirements
of the Securities and Exchange Commission (SEC). Our electric delivery business is also subject to regulation by the Pennsylvania Public Utility Commission (PUC) and the Federal Energy Regulatory Commission (FERC) with respect to rates for delivery
of electric power, accounting and other matters.

Business Segments This information is set
forth under Results of Operations below and in Note G to our condensed consolidated financial statements.

Forward-looking Statements We use forward-looking statements in this report. Statements that are not historical facts are forward-looking statements, and are based on beliefs and assumptions of our
management, and on information currently available to management. Forward-looking statements include statements preceded by, followed by or using such words as believe, expect, anticipate, plan,
estimate or similar expressions. Such statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Actual results may materially differ
from those implied by forward-looking statements due to known and unknown risks and uncertainties, some of which are discussed below.

| |   |                                                                                                                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Our earnings will be affected by the number of customers who choose to receive electric generation through POLR II (our current arrangement with Reliant), by final PUC approval of POLR III (our plan, currently under
preparation, for POLR supply beginning in 2005) and by the continued performance of the generation supplier.
| |  | Demand for and pricing of electricity, changing market conditions and weather conditions could affect earnings levels.                                                                                                                                                                                                              
| |  | DQEs cash flows, earnings, earnings growth, and board policy, as well as the effectiveness of its divestiture of non-core businesses and assets, could affect our earnings, financial position and cash
flows.                                                                                                                     
| |  | The ultimate structure of POLR III will be subject to PUC review and approval, and may depend on our ability to obtain a generation asset and/or our ability to contract with suitable third-party suppliers and the
terms we negotiate with such suppliers.                                                                        
| |  | Any debt reductions will depend on the availability of cash flows, including proceeds from the DQE divestiture of other subsidiaries assets.                                                                                                                                                                                       
| |  | The final resolution of proposed adjustments regarding income tax liabilities (which will depend on negotiations with the appropriate tax authorities) could affect financial position, earnings and cash
flows.                                                                                                                    
| |  | The credit ratings we receive from the rating agencies could affect our cost of borrowing, our access to capital markets and liquidity.                                                                                                                                                                                             
| |  | Overall performance could be affected by economic, competitive, regulatory, governmental and technological factors affecting operations, markets, products, services and prices, as well as the factors discussed in
our SEC filings made to date.                                                                                  

Recent Accounting Pronouncements See Note
A for a discussion of recent accounting pronouncements.

Critical Accounting Policies As of
June 30, 2003, there have been no significant changes with regard to the critical accounting policies disclosed in Managements Discussion and Analysis in our Annual Report on Form 10-K for the Year ended December 31, 2002. The policies
disclosed included the accounting for: the effects of regulation, unbilled energy revenues, pension and other postretirement benefit plan assumptions, income taxes and contingent liabilities.

RESULTS OF OPERATIONS

Overall Performance

Three months
ended June 30, 2003. Our earnings available for common stock were $15.4 million in the second quarter of 2003, compared to $14.2 million in the second quarter of 2002, an increase of $1.2 million, or 8.5%. The increase is primarily the result of
increased earnings in the energy supply segment as all of the significant rate classes were subject to POLR II in the second quarter of 2003. Only two significant rate classes were subject to POLR II in the second quarter of 2002. This was partially
offset by a decrease in earnings from the CTC business segment as we completed collection of the CTC balance from additional customer rate classes.

Six months ended June 30, 2003. Our earnings available for common stock were $31.3 million in the first six months of 2003, compared to earnings of $31.2 million in
the first six months of 2002, an increase of $0.1 million, or 0.3%. The increase is

13



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primarily the result of increased earnings in the energy supply segment as all of the significant rate classes were subject to POLR II in the first six months of 2003. This was
partially offset by a decrease in earnings from the electricity delivery business due to lower revenue and other income and from the CTC business segment as we completed collection of the CTC balance from additional customer rate classes.

Results of Operations by Business Segment

We report the following business segments:
(1) transmission and distribution of electricity (electricity delivery business segment), (2) supply of electricity (electricity supply business segment), and (3) collection of transition costs (CTC business segment).

Note G shows the financial results of each principal business segment in tabular form. Following is a discussion of these results.

Electricity Delivery Business Segment.

Three months ended June 30, 2003. The electricity
delivery business segment reported $10.9 million of earnings in the second quarter of 2003, compared to $10.5 million in the second quarter of 2002, an increase of $0.4 million, or 3.8%, primarily as a result of lower operating expenses as well as
lower interest and other charges during the second quarter of 2003. These decreased expenses were partially offset by a decrease in operating revenues and lower other income in the second quarter of 2003.

Operating revenues for this business segment are primarily derived from the delivery of electricity, including related excise taxes. Sales to residential and commercial
customers are primarily influenced by weather conditions. Warmer summer and colder winter seasons lead to increased customer use of electricity for cooling and heating. Commercial sales also are affected by regional development. Sales to industrial
customers are influenced by national and global economic conditions.

Operating revenues decreased by $4.8 million, or 5.6%, compared to the
second quarter of 2002. The decrease can be primarily attributed to the 6.2% decrease in MWh sales to customers from the second quarter of 2002, as described below.

As compared to 2002, Pittsburghs warmer weather in April 2003 reduced heating demands, while the cooler weather in both May and June 2003 reduced air conditioning
demands. These factors resulted in residential and commercial sales decreasing by 9.8% and 3.2%, compared to the second quarter of 2002. Industrial sales, which are less sensitive to the weather, decreased by 8.2% primarily due to lower sales to the
durable goods manufacturing sector during the second quarter of 2003. Sales to this sector constitute approximately 75% of our industrial sales.

The following table sets forth MWh delivered to electric utility customers.

|                                    |                |  |       |  |        |  
|----------------------------------- | -------------- |  | ----- |  | ------ | -
|                                    |                | 
|                                    | MWh Delivered  |  |      
|                                    | (In Thousands) |  |      
|Second Quarter                      | 2003           |  | 2002  |  | Change |  
|                                    |                |  |       |  |        |  
|Residential                         | 781            |  | 866   |  | (9.8)  | %
|Commercial                          | 1,555          |  | 1,606 |  | (3.2)  | %
|Industrial                          | 774            |  | 843   |  | (8.2)  | %
|                                    |                |  |       | 
|Sales to Electric Utility Customers | 3,110          |  | 3,315 |  | (6.2)  | %
|                                    |                |  |       | 

Operating expenses for the electricity delivery business segment consist primarily of costs to operate and maintain
the transmission and distribution system; meter reading, billing and collection costs; customer service; administrative expenses; non-income taxes, such as gross receipts, property and payroll taxes; and income taxes. Operating expenses decreased by
$4.1 million, or 9.1 %, compared to the second quarter of 2002, due in part to the reversal of $2.5 million of accrued costs related to a billing dispute with a customer that we no longer believe will be incurred. During the second quarter of 2003,
we incurred lower storm-related expenses as compared to the second quarter of 2002, due to severe storms in May 2002 that caused extensive damage to our system and caused us to incur significant overtime and vegetation management expenses in
conjunction with the restoration of service. Overtime and vegetation management expenses were approximately $1.3 million higher in the second quarter of 2002. In addition, gross receipts tax expense in 2003 decreased as a result of the overall
decreased retail revenue. Other income consists primarily of interest income from a loan receivable and our cash pool investment with DQE. Gains or losses
resulting from the disposition of certain assets are also included here. Other income decreased $1.3 million, or 30.2%, compared to the second quarter of 2002, due primarily to a reduction in interest earnings resulting from lower affiliate loan
balances and lower interest earnings on invested cash. Other income was also higher during the second quarter of 2002, due to a $0.3 million after-tax gain recognized on the sale of a building. Interest and other charges include interest on long-term debt, other interest and preferred stock

14



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dividends. Interest and other charges decreased $3.5 million, or 17.4%, compared to the second quarter of 2002 due to $110.0 million of debt retirements during August 2002, which
reduced interest expense by $2.1 million, and to more favorable interest rates on the variable rate, tax-exempt debt in the second quarter of 2003.

Six months ended June 30, 2003.The electricity delivery business segment reported $21.6 million of earnings in the first six months of 2003, compared to $25.7
million in the first six months of 2002, a decrease of $4.1 million, or 16.0%, primarily as a result of lower revenue and lower other income in 2003. Operating revenues decreased by $2.5 million, or 1.5%, compared to the first six months of 2002. The decrease can be primarily attributed to the 1.3% decrease in MWh sales
to customers from the first six months of 2002, as described below. Sales to residential and commercial customers were only 0.1% higher than the first six
months of 2002 as the effect of Pittsburghs colder winter weather in the first three months of 2003 was effectively offset by the cooler spring/summer weather in the second quarter of 2003. Industrial sales decreased by 5.3% as compared to the
first six months of 2002 as a result of lower MWh sales to the durable goods manufacturing sector. The following table sets forth the MWh delivered to
electric utility customers.

|                                    |                |  |      |       |        |  |       |  |  |       |  
|----------------------------------- | -------------- |  | ---- | ----- | ------ |  | ----- |  |  | ----- | -
|                                    |                | 
|                                    | MWh Delivered  |  |     
|                                    | (In Thousands) |  |     
|First Six Months                    | 2003           |  | 2002 |       | Change | 
|                                    |               
|Residential                         |                |  |      | 1,760 |        |  | 1,758 |  |  | 0.1   | %
|Commercial                          |                |  |      | 3,121 |        |  | 3,119 |  |  | 0.1   | %
|Industrial                          |                |  |      | 1,575 |        |  | 1,663 |  |  | (5.3) | %
|                                    |                |  |     
|Sales to Electric Utility Customers |                |  |      | 6,456 |        |  | 6,540 |  |  | (1.3) | %
|                                    |                |  |      |      

Other income decreased $5.5 million, or 46.2%, compared to the first six months of 2002, due primarily to a reduction
in interest earnings of $4.3 million resulting from lower affiliate loan balances and lower interest earnings on invested cash. Other income was also higher during the first six months of 2002, due to a $1.1 million after-tax gain recognized from
the sale of securities and a building. Interest and other charges decreased $5.8 million, or 14.9%, compared to the first six months of 2002 due to $110.0
million of debt retirements in August 2002, which reduced interest expense by $4.2 million, and to favorable interest rates on the variable rate, tax-exempt debt.

Electricity Supply Business
Segment.

Three months ended June 30, 2003. The electricity supply business segment reported earnings of $4.3 million in the second quarter of
2003 compared with earnings of $2.9 million in the second quarter of 2002, an increase of $1.4 million, or 48.3%. During the first quarter of 2002, we began operating under POLR II, which extends the provider of last resort service (and the
PUC-approved rates for the supply of electricity) beyond the final CTC collection through December 31, 2004. POLR II also permits us, following CTC collection for each rate class, a margin per MWh supplied. Earnings increased because all significant
rate classes were subject to the POLR II arrangement during the second quarter of 2003. Only two significant rate classes were subject to the POLR II arrangement during the second quarter of 2002. Prior to the start of the POLR II arrangement, our
initial POLR arrangement (POLR I) was designed to be income neutral. Operating revenues for this business segment are derived primarily from the supply of
electricity for delivery to retail customers and, to a much lesser extent, the supply of electricity to wholesale customers. Retail energy requirements fluctuate as the number of customers participating in customer choice changes. Energy
requirements for residential and commercial customers are also influenced by weather conditions; temperature extremes lead to increased customer use of electricity for cooling and heating. Commercial energy requirements are also affected by regional
development. Energy requirements of industrial customers are primarily influenced by national and global economic conditions. Short-term sales to other
utilities are made at market rates. Fluctuations result primarily from excess daily energy deliveries to our electricity delivery system. Operating
revenues decreased $6.1 million, or 5.4%, compared to the second quarter of 2002 due to the 13.4% decline in the POLR MWh. The POLR decline resulted from unfavorable weather conditions in the Pittsburgh area and from a higher percentage of the total
MWh sales being supplied by alterative generation suppliers during the second quarter of 2003. These factors more than offset the higher average generation rates that existed during the second quarter of 2003. The average generation rates increase
as rate classes become subject to the POLR II arrangement.

The following table sets forth MWh supplied for POLR customers.

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|                       |                |  |         |     |       |  |       |  |  |       |  
|---------------------- | -------------- |  | ------- | --- | ----- |  | ----- |  |  | ----- | -
|                       |                | 
|                       | MWh Supplied   |  |        
|                       | (In Thousands) |  |        
|Second Quarter         | 2003           |  |        
|                       | POLR I         |  | POLR II |     | Total | 
|                       |               
|Residential            |                |  |         |    |       |  | 558   |  |  | 558   |  
|Commercial             |                |  |         | 66  |       |  | 979   |  |  | 1,045 |  
|Industrial             |                |  |         | 394 |       |  | 228   |  |  | 622   |  
|                       |                |  |         |    
|MWh Supplied           |                |  |         | 460 |       |  | 1,765 |  |  | 2,225 |  
|                       |                |  |         |    
|POLR Share (MWh basis) |                |  |         |     |       |  |       |  |  | 72    | %
|                       |                |  |         |    

|                       |                |         |       |       |  |  |     |  |  |       |  
|---------------------- | -------------- | ------- | ----- | ----- |  |  | --- |  |  | ----- | -
|                       |                |        
|                       | MWh Supplied   |         |      
|                       | (In Thousands) |         |      
|Second Quarter         | 2002           |         |      
|                       | POLR I         | POLR II | Total |      
|                       |               
|Residential            |                |         |       | 59    |  |  | 530 |  |  | 589   |  
|Commercial             |                |         |       | 813   |  |  | 387 |  |  | 1,200 |  
|Industrial             |                |         |       | 727   |  |  | 54  |  |  | 781   |  
|                       |                |         |       |      
|MWh Supplied           |                |         |       | 1,599 |  |  | 971 |  |  | 2,570 |  
|                       |                |         |       |      
|POLR Share (MWh basis) |                |         |       |       |  |  |     |  |  | 78    | %
|                       |                |         |       |      

Operating expenses for the electricity supply business segment consist of costs to obtain energy for our POLR service,
gross receipts tax and income taxes. Operating expenses decreased $7.5 million, or 6.8%, compared to the second quarter of 2002, due to the decrease in purchased power expense caused by the decline in the total MWh supplied to customers, for the
reasons outlined above.

Six months ended June 30, 2003. The electricity supply business segment reported earnings of $9.4 million in the first
six months of 2003, compared to earnings of $3.4 million in the first six months of 2002, an increase of $6.0 million. During the first quarter of 2002, we began operating under the POLR II arrangement.

Operating revenues decreased $0.5 million, or 0.2%, compared to the first six months of 2002 due to the 8.1% decline in total MWh supplied from the first six months of
2002, which more than offset the higher average generation rates that existed during the first six months of 2003.

The following tables sets forth the
MWh supplied for POLR customers.

|                       |                |         |       |       |  |  |       |  |  |       |  
|---------------------- | -------------- | ------- | ----- | ----- |  |  | ----- |  |  | ----- | -
|                       |                |        
|                       | MWh Supplied   |         |      
|                       | (In Thousands) |         |      
|First Six Months       | 2003           |         |      
|                       | POLR I         | POLR II | Total |      
|                       |               
|Residential            |                |         |       | 57    |  |  | 1,225 |  |  | 1,282 |  
|Commercial             |                |         |       | 174   |  |  | 1,954 |  |  | 2,128 |  
|Industrial             |                |         |       | 821   |  |  | 454   |  |  | 1,275 |  
|                       |                |         |       |      
|MWh Supplied           |                |         |       | 1,052 |  |  | 3,633 |  |  | 4,685 |  
|                       |                |         |       |      
|POLR Share (MWh basis) |                |         |       |       |  |  |       |  |  | 73    | %
|                       |                |         |       |      

|                       |                |  |         |       |       |  |       |  |  |       |  
|---------------------- | -------------- |  | ------- | ----- | ----- |  | ----- |  |  | ----- | -
|                       |                | 
|                       | MWh Supplied   |  |        
|                       | (In Thousands) |  |        
|First Six Months       | 2002           |  |        
|                       | POLR I         |  | POLR II |       | Total | 
|                       |               
|Residential            |                |  |         | 550   |       |  | 682   |  |  | 1,232 |  
|Commercial             |                |  |         | 1,946 |       |  | 388   |  |  | 2,334 |  
|Industrial             |                |  |         | 1,475 |       |  | 55    |  |  | 1,530 |  
|                       |                |  |         |      
|MWh Supplied           |                |  |         | 3,971 |       |  | 1,125 |  |  | 5,096 |  
|                       |                |  |         |      
|POLR Share (MWh basis) |                |  |         |       |       |  |       |  |  | 78    | %
|                       |                |  |         |      

Operating expenses decreased $6.5 million, or 3.0%, compared to the first six months of 2002, due to the decrease in
purchased power expense caused by the decline in the total MWh supplied to customers, for the reasons outlined above.

CTC Business Segment.

Three months ended June 30, 2003. For the CTC business segment, operating revenues are derived by billing electric delivery customers for generation-related
transition costs. We are allowed to earn an 11% pre-tax return on the net of tax CTC balance. As revenues are billed to customers on a monthly basis, we amortize the CTC balance. The resulting decrease in the CTC balance causes a decline in the
return we earn.

In the second quarter of 2003, the CTC business segment reported earnings of $0.2 million compared to $0.8 million during the second
quarter of 2002, a decrease of $0.6 million or 75.0%.

Operating revenues decreased $28.9 million, or 86.0%, due to the full collection of the allocated
CTC balance as of June 30, 2003 for over 99% of our customers, whose usage represents 91% of the MWh sales for the second quarter of 2003.

Operating
expenses consist of gross receipts tax, which fluctuates in direct relation to operating revenues, and income taxes, which fluctuate in direct relation to pre-tax income. Operating expenses

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decreased $1.6 million or 84.2% compared to the second quarter of 2002 due to the decrease in operating revenues and pre-tax income.

Depreciation and amortization expense consists of the amortization of transition costs. There was a decrease of $26.7 million, or 86.4%, compared to the second quarter of
2002, primarily due to the full collection of the allocated CTC balance for most customers, as described above.

Six months ended June 30,
2003.  In the first six months of 2003, the CTC business segment reported earnings of $0.3 million compared to $2.1 million during the first six months of 2002, a decrease of $1.8 million, or 85.7%.

Operating revenues decreased $86.9 million, or 88.1%, due to the full collection of the allocated CTC balance as of June 30, 2003 for over 99% of our customers, whose usage
represents 91% of the MWh sales for the first six months of 2003.

Operating expenses decreased $4.8 million, or 87.3%, compared to the first six months
of 2002 due to the decrease in operating revenue and pre-tax income.

Depreciation and amortization expense decreased $80.3 million, or 88.2%, compared
to the first six months of 2002, primarily due to the full collection of the allocated CTC balance for most customers, as described above.

LIQUIDITY AND CAPITAL RESOURCES

Capital Expenditures

In the first six months of 2003, we spent approximately $32.5 million for electric
utility construction. We estimate that during 2003 we will spend approximately $70 million for electric utility construction.

Financing

In August 2003, we redeemed at par $100 million principal amount of our 7 3/8% first mortgage bonds due 2038.

In May 2003, we redeemed the $2.8 million outstanding balance of our 5% Sinking Fund Debentures (due March 1, 2010) at a redemption price of 100.95% of the principal amount
thereof.

In September 2002, we converted approximately $98 million of variable rate debt to fixed rate with maturities in 2011 and 2013, resulting in a
weighted average interest rate of 4.20%.

In August 2002, we redeemed the following: (i) $10 million aggregate principal amount of 8.20% first
mortgage bonds due 2022 at a redemption price of 104.51% of the principal amount thereof, and (ii) $100 million aggregate principal amount of 7 5/8% first mortgage bonds due 2023 at a redemption price of 103.9458% of the principal amount
thereof.

In April 2002, we issued $200 million of 6.7% first mortgage bonds due 2012, and $100 million of 6.7% first mortgage bonds due 2032. In each
case we used the proceeds to call and refund existing debt, including debt scheduled to mature in 2003 and 2004.

In January 2002, we issued $125 million
of commercial paper and loaned the proceeds to DQE, who repaid $90 million during the first six months of 2002, and the remainder by the end of 2002.

Liquidity

We maintain a $150 million, 364-day revolving credit agreement, which expires in October 2003. At June 30, 2003, no borrowings were outstanding; however, we had $8.9
million in standby letters of credit, leaving $141.1 million available.

Decreases in our credit ratings could result in an inverse change in the fees
and interest rates charged under the facilities. The revolving credit agreement is subject to cross-default if we default on any payment due under any indebtedness exceeding $50 million.

Under our credit facility, we are required to maintain a maximum debt-to-capitalization ratio of 65.0%. At June 30, 2003, we were in compliance with this
covenant.

None of our long-term debt is scheduled to mature before 2008.

In the first quarter of 2003, Standard & Poors reduced our short-term corporate credit and commercial paper ratings by one level, thereby restricting our access
to the commercial paper market. This ratings downgrade does not limit our ability to access our revolving credit facility; it could, however, impact the cost of maintaining the credit facility and the cost of any new debt. This rating is not a
recommendation to buy, sell or hold any securities of DQE, Duquesne Light or our affiliates, may be subject to revisions or withdrawal by the agencies at any time, and should be evaluated independently of each other and any other rating that may be
assigned to our securities.

During the first six months of 2003, we had no bank loans or commercial paper borrowings outstanding.

RATE MATTERS

Competitive Transition Charge

Under Customer Choice, customers must choose to receive their electric energy from an

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alternative generation supplier or through our POLR arrangements. Customers who select an alternative generation supplier pay for generation charges set competitively by that supplier,
and pay us transmission and distribution charges and the CTC (unless the CTC has already been collected for a customers rate class).

We have
completed the CTC collection from most of our customers. As of June 30, 2003, the CTC balance has been fully collected for approximately 99% of customers, representing approximately 91% of the MWh sales for the first six months of 2003. The
transition costs, as reflected on the condensed consolidated balance sheets, are being amortized over the same period that the CTC revenues are being recognized. We are allowed to earn an 11.0% pre-tax return on the net of tax CTC
balance.

Provider of Last Resort

Orion Power Midwest (a subsidiary of Reliant Resources,
Inc.) is our supplier under POLR I and POLR II. As discussed in Results of Operations above, POLR II extends through December 31, 2004 and permits us a margin per MWh supplied. This margin fluctuates based on the mix of rate classes and
number of customers participating in POLR II. Except for this margin, POLR I and POLR II effectively transfer to Orion the financial risks and rewards associated with our provider of last resort obligations. As of June 30, 2003, approximately 71% of
our customers measured on a MWh basis received electricity through POLR I or POLR II. The number of POLR customers will fluctuate depending on market prices and the number of alternative generation suppliers in the retail supply business.

There are certain safeguards in POLR I and POLR II designed to mitigate losses in the event that Orion defaults on its performance under the arrangement.
Contractually, we have various credit enhancements to address market exposure if Orion failed to deliver the required POLR supply. We hold an irrevocable $10 million letter of credit (that can be increased based on Orions investment ratings
and net worth). We also remit the POLR customer payments 35 days after billing the customer. We have the right not to remit these payments in the event of an Orion default.

If Orion were to fail to deliver, we would be required to procure our POLR supply requirements in the energy markets. If market prices for energy were higher than the POLR
rate at the time of default, we could potentially be acquiring energy for sale to POLR customers at a loss. If that were to happen and the contractual provisions with Orion were not sufficient to cover any loss, we would seek regulatory recovery of
any additional loss. While the Customer Choice Act provides generally for POLR supply costs to be borne by customers, recent litigation suggests that it may not be clear whether we could pass any costs in excess of the existing PUC-approved POLR
prices on to our customers.

We retain the risk that customers will not pay for the POLR generation supply. However, a component of our delivery rate is
designed to cover the cost of a normal level of uncollectible accounts. Our goal is to mitigate such risks associated with POLR III and to enhance shareholder value through a continuing earnings stream from the core electric business.

We are preparing POLR III, a rate plan and related generation supply plan intended to cover the period beginning in 2005. For our larger commercial and industrial
customers (fewer than 1,000 customers but approximately 50% of the electricity consumption), we will be proposing an initial 17-month pilot program that gives customers three basic supply options:

| |   |                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------
| |  | a fixed price default service for the period based upon the results of a competitive wholesale auction;

| |   |                                                                                          
| | - | -----------------------------------------------------------------------------------------
| |  | an hourly price service that passes through real-time spot market electricity prices; and

| |   |                                                                                      
| | - | -------------------------------------------------------------------------------------
| |  | an electric generation service offered by a competitive supplier in our service area.

For the first
and second options, we would include in the price a $5 per MWh margin designed to recover associated costs and to encourage retail competition. Following this pilot program, we envision a similar annual process.

For residential and small business customers, we plan to propose a fixed-price POLR service for the years 2005 through 2010. We expect rates to be comparable to current
price levels, as adjusted to reflect additional costs relating to our anticipated membership in the PJM RTO (discussed below). As we explore supply options to meet the needs of these small customers, we are focusing on a portfolio strategy
rather than a full requirements contract as under POLR II. Under such a strategy, we would assemble blocks of traditional wholesale contracts with multiple suppliers, thus diversifying credit risk and increasing long-term flexibility. In addition,
if the potential for acquiring a small generating asset at an attractive price presents itself, it may help to diversify risk under this portfolio strategy.

We are confident that with 17 months remaining until the implementation date, an attractive supply strategy will be formulated and approved  one that will provide an
expanded margin as well as adequate credit protection measures. We plan to file the POLR III plan with the PUC by the end of October

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2003. We would expect the regulatory approval process to last approximately six months.

Regional Transmission
Organization

FERC Order No. 2000, as amended, calls on transmission-owning utilities such as Duquesne Light to join regional transmission
organizations (RTOs) by September 2004. We are committed to ensuring a stable, plentiful supply of electricity for our customers. Toward that end, we anticipate joining the Pennsylvania-New Jersey-Maryland (PJM) RTO as part of our pending POLR III
proposal.

PUC Proceedings

On October 25, 2002, we petitioned the PUC to issue a
declaratory order regarding a provision in our retail tariff that affected our largest industrial customer. We and Orion had interpreted the tariff differently. On February 6, 2003 the PUC issued an order, to be effective prospectively, affirming
Orions interpretation. The effect of this order could increase the customers annual billings significantly. The ultimate impact will be influenced by operational changes the customer may make to reduce its energy costs. We are
responsible for paying Orion the amount billed, and retain the risk of recovering any increased billings from the customer. This risk is not included in the normal level of uncollectible accounts described above.

On February 21, 2003, the customer petitioned the PUC to reconsider its ruling, which the PUC denied, leaving the original February 6, 2003 order in effect. The customer
has appealed the ruling to the Commonwealth Court of Pennsylvania. A decision is not expected until the end of 2003. We started billing the customer the higher amount in March 2003 and have been receiving payment in full for these bills.

Item 3.     Quantitative and Qualitative Disclosures About Market Risk.

Market risk represents the risk of financial loss that may impact our consolidated financial position, results of operations or cash flows due to adverse changes in market
prices and rates.

We manage our interest rate risk by balancing our exposure between fixed and variable rates, while attempting to minimize our interest
costs. Currently, our variable interest rate debt is approximately $320.1 million or 37.4% of long-term debt. This variable rate debt is low-cost, tax-exempt debt. We also manage our interest rate risk by retiring and issuing debt from time to time
and by maintaining a balance of short-term, medium-term and long-term debt. A 10% increase in interest rates would have affected our variable rate debt obligations by increasing interest expense by approximately $0.3 million for the six months ended
June 30, 2003 and $0.3 million for the three months ended June 30, 2002. A 10% reduction in interest rates would have increased the market value of our fixed-rate debt by approximately $36.7 million as of June 30, 2003. Such changes would not have
had a significant near-term effect on our future earnings or cash flows.

Item 4.     Controls and Procedures.

Management, with the participation of the Chief Executive Officer and the Chief Financial Officer, has evaluated our disclosure controls and procedures (as defined in Rule
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report and the Chief Executive Officer and the Chief Financial Officer have concluded that these controls and other procedures
are effective to provide reasonable assurance that the information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in
the rules and forms of the SEC.

There has been no change in our internal control over financial reporting that occurred during the period covered by
this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

---

PART II.      OTHER INFORMATION.

Item 6.          Exhibits and Reports on Form
8-K.

|   |                                                                   | 
|-- | ----------------------------------------------------------------- | 
|a. | Exhibits:                                                        
|   |                                                                   | 
|   | EXHIBIT 12.1 - Calculation of Ratio of Earnings to Fixed Charges.

| |                                                                                      | 
| | ------------------------------------------------------------------------------------ | 
| |                                                                                      | 
| | EXHIBIT 31.1 - CEO Certification Pursuant to Section 302 of the Sarbanes- Oxley Act.

| |                                                                                     | 
| | ----------------------------------------------------------------------------------- | 
| |                                                                                     | 
| | EXHIBIT 31.2 - CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act.

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|   |                                                                                  | 
|-- | -------------------------------------------------------------------------------- | 
|   |                                                                                  | 
|   | EXHIBIT 32.1 - Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act.
|   |                                                                                 
|b. | We did not file any reports on Form 8-K in the second quarter.                  



20



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SIGNATURES

Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant identified below has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|     |                 |  |                                                                                           
|---- | --------------- |  | ------------------------------------------------------------------------------------------
|     |                 |  | DUQUESNE LIGHT COMPANY                                                                    
|     |                 |  |                                                                                           
|     |                 |  | (Registrant)                                                                              
|     |                 |  |                                                                                           
|Date | August 14, 2003 |  | /s/ STEVAN R. SCHOTT                                                                      
|     |                 |  |                                                                                           
|     |                 |  | (Signature)                                                                               
|     |                 |  | Stevan R. SchottSenior Vice President and Chief Financial Officer(Duly Authorized Officer)
|     |                 |  |                                                                                           
|Date | August 14, 2003 |  | /s/ SUSAN S. MULLINS                                                                      
|     |                 |  |                                                                                           
|     |                 |  | (Signature)Susan S. MullinsController(Principal Accounting Officer)                       

21