Exhibit
10.1


Duke
Energy Ohio


Electric
Security Plan (ESP) Settlement Overview


 


Background – Ohio
Electric Market (Past and Present)


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


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


 


Settlement and PUCO Order


·                  Settlement agreement filed on October 27,
2008


·                  PUCO Order issued December 17,
2008


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


 


·                  Pricing and Customer Impacts


·                  Pricing Impacts


 


	
   

  	
   

  	
  2009

  	
   

  	
  2010

  	
   

  	
  2011

  	
   

  
	
  ($ in millions)

  	
   

  	
  Revenue

  	
   

  	
  Revenue

  	
   

  	
  Revenue

  	
   

  
	
  Base Price
  Increase

  	
   

  	
  $

  	
  83

  	
   

  	
  $

  	
  121

  	
   

  	
  $

  	
  219

  	
   

  
	
  RTC Termination
  (Note)

  	
   

  	
  $

  	
  (47

  	
  )

  	
  $

  	
  (47

  	
  )

  	
  $

  	
  (121

  	
  )

  
	
  Net Revenue
  Increase

  	
   

  	
  $

  	
  36

  	
   

  	
  $

  	
  74

  	
   

  	
  $

  	
  98

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Original
  Proposal

  	
   

  	
  $

  	
  110

  	
   

  	
  $

  	
  130

  	
   

  	
  $

  	
  75

  	
   

  



 


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


 


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


 


	
  ($ in millions)

  	
   

  	
  2009

  	
   

  	
  2010

  	
   

  	
  2011

  	
   

  
	
  Planned 2009
  Beckjord O&M

  	
   

  	
  $

  	
  50

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Amortization
  Expense

  	
   

  	
  $

  	
  (17

  	
  )

  	
  $

  	
  (17

  	
  )

  	
  $

  	
  (16

  	
  )

  
	
  Deferred Beckjord
  O&M Balance

  	
   

  	
  $

  	
  33

  	
   

  	
  $

  	
  16

  	
   

  	
  $

  	
  0

  	
   

  



 


·                  Customer Impacts
(as % of total bill)


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


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


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


·                  Commercial and Industrial = 2% in
each year


 


·                  Cost-Based Trackers


·                  Retain existing trackers for:


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


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


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


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


·                  New unavoidable trackers for:


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


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


 


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


 


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


 


	
   

  	
   

  	
  2009

  	
   

  	
  2010

  	
   

  	
  2011

  	
   

  
	
  Base Generation
  (PTC-BG)

  	
   

  	
  $

  	
  29.20

  	
   

  	
  $

  	
  31.10

  	
   

  	
  $

  	
  36.00

  	
   

  
	
  Fuel and
  Purchased Power (Rider PTC-FPP)

  	
   

  	
  $

  	
  23.80

  	
   

  	
  $

  	
  27.10

  	
   

  	
  $

  	
  30.10

  	
   

  
	
  Environmental
  (Rider PTC-AAC)

  	
   

  	
  $

  	
  5.70

  	
   

  	
  $

  	
  5.50

  	
   

  	
  $

  	
  5.00

  	
   

  
	
  Total
  Price-to-Compare (PTC)

  	
   

  	
  $

  	
  58.70

  	
   

  	
  $

  	
  63.70

  	
   

  	
  $

  	
  71.10

  	
   

  
	
  PTC in
  Original ESP Filing

  	
   

  	
  $

  	
  62.50

  	
   

  	
  $

  	
  67.30

  	
   

  	
  $

  	
  71.50

  	
   

  



 


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


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


 


·                  Earnings Test


·                  ROE threshold = 15%


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


 

















 


Duke
Energy Ohio


 


Price
Structure Transition From RSP to ESP