Duke Energy Announces Sale of DENA Power Generation Assets to LS Power

- LS Power to purchase entire DENA fleet outside Midwest for approximately

$1.54 billion

- Estimated one-time, pre-tax gain on sale of approximately $330 million

- Duke Energy expects net cash proceeds from complete DENA exit to exceed

$500 million

Jan 09, 2006, 00:00 ET from Duke Energy

    CHARLOTTE, N.C., Jan. 9 /PRNewswire-FirstCall/ -- Duke Energy (NYSE:   DUK)
 today announced it has signed an agreement with a subsidiary of LS Power
 Equity Partners (LS Power) to purchase Duke Energy North America's (DENA)
 entire fleet of power generation assets outside the Midwest for approximately
 $1.54 billion, assuming certain performance measures are met, and no less than
 approximately $1.48 billion.
     (Logo:  http://www.newscom.com/cgi-bin/prnh/20040414/DUKEENERGYLOGO )
     Based on the minimum purchase price, Duke Energy anticipates a one-time,
 pre-tax gain on the sale of approximately $330 million which reflects a write-
 up of the assets.  The transaction will have no impact to ongoing earnings as
 the assets to be purchased by LS Power are currently classified as
 discontinued operations. The company anticipates any cash tax impact from this
 transaction would be minimal.
     The assets include approximately 6,200 megawatts of power generation,
 located in the western and northeast United States. The transaction is subject
 to Federal Energy Regulatory Commission and Hart-Scott-Rodino approvals and is
 expected to close before June 2006.
     On Sept. 13, 2005, Duke Energy announced plans to pursue the sale or other
 disposition of substantially all of DENA's physical and commercial assets
 outside the midwestern United States. On Nov. 18, 2005, Duke announced it
 would transfer substantially all of DENA's commercial portfolio of derivatives
 contracts to Barclays Capital, the investment banking division of Barclays
 Bank PLC.
     Proceeds from the LS Power transaction and Barclays Capital's acquisition
 of the DENA book, combined with ongoing efforts to exit the remaining DENA
 contracts, are expected to yield net cash to Duke Energy in excess of $500
     "Completing the exit from DENA's business is a major objective for 2006,"
 said Paul Anderson, chairman of the board and chief executive officer. "This
 agreement to sell DENA's entire fleet outside the Midwest puts us well on our
 way only nine days into the year.  Additionally, we continue to expect net
 cash proceeds from the DENA exit to exceed $500 million.
     "To date, we have unwound more than 80 percent of the DENA contracts not
 included in the Barclays deal and we are confident we'll be in a position to
 complete the DENA exit by midyear, allowing our management team to focus fully
 on the Cinergy merger and Duke Energy's future," Anderson continued.
     DENA's physical generation assets to be sold to LS Power include:
     *  Arlington Valley (Maricopa County, Ariz.) -- 570 megawatts, natural
        gas-fired, combined-cycle facility
     *  Griffith Energy Facility (Mohave County, Ariz.) -- 300 megawatts
        (reflects Duke Energy's 50 percent ownership), natural gas-fired,
        combined-cycle facility
     *  South Bay (Chula Vista, Calif.) -- 700 megawatts, conventional steam
        facility (10 year lease)
     *  Morro Bay (Morro Bay, Calif.) -- 1,002 megawatts, conventional steam
     *  Moss Landing (Moss Landing, Calif.) -- 2,538 megawatts, conventional
        steam and natural gas-fired, combined-cycle facility
     *  Oakland Power Plant (Oakland, Calif.) -- 165 megawatts, simple-cycle,
        fuel-oil facility
     *  Maine Independence (Veazie, Maine) -- 520 megawatts, combined-cycle
     *  Bridgeport Energy (Bridgeport, Conn.) -- 326 megawatts (reflects Duke
        Energy's 67 percent ownership), combined-cycle facility.
     LS Power Equity Partners is a member of the LS Power Group. Founded in
 1990, the LS Power Group is a fully integrated investor, developer and
 management team focused exclusively on the power sector. Please contact Darpan
 Kapadia, managing director at the LS Power Group, for more information at
     Duke Energy is a diversified energy company with a portfolio of natural
 gas and electric businesses, both regulated and unregulated, and an affiliated
 real estate company. Duke Energy supplies, delivers and processes energy for
 customers in the Americas. Headquartered in Charlotte, N.C., Duke Energy is a
 Fortune 500 company traded on the New York Stock Exchange under the symbol
 DUK. More information about the company is available on the Internet at:
     This release includes statements that do not directly or exclusively
 relate to historical facts. Such statements are "forward-looking statements"
 within the meaning of Section 27A of the Securities Act of 1933 and Section
 21E of the Securities Exchange Act of 1934. Those statements represent Duke
 Energy's intentions, plans, expectations, assumptions and beliefs about future
 events and are subject to risks, uncertainties and other factors, many of
 which are outside Duke Energy's control and could cause actual results to
 differ materially from the results expressed or implied by those forward-
 looking statements. Those factors include:  state, federal and foreign
 legislative and regulatory initiatives that affect cost and investment
 recovery, have an impact on rate structures, and affect the speed at and
 degree to which competition enters the electric and natural gas industries;
 the outcomes of litigation and regulatory investigations, proceedings or
 inquiries; the weather and other natural phenomena; the timing and extent of
 changes in commodity prices, interest rates and foreign currency exchange
 rates; general economic conditions, including any potential effects arising
 from terrorist attacks and any consequential hostilities or other hostilities;
 changes in environmental and other laws and regulations to which Duke Energy
 and its subsidiaries are subject or other external factors over which Duke
 Energy has no control; the effect of accounting pronouncements issued
 periodically by accounting standard-setting bodies; the amount of collateral
 required to be posted from time to time in Duke Energy's transactions;
 competition and regulatory limitations affecting the success of Duke Energy's
 divestiture plans, including the prices at which Duke Energy is able to sell
 its assets; the performance of electric generation, pipeline and gas
 processing facilities; the extent of success in connecting natural gas
 supplies to gathering and processing systems and in connecting and expanding
 gas and electric markets; conditions of the capital markets and equity markets
 during the periods covered by the forward-looking statements; and
 opportunities for Duke Energy's business units, including the timing and
 success of efforts to develop domestic and international power, pipeline,
 gathering, liquefied natural gas, processing and other infrastructure
     In light of these risks, uncertainties and assumptions, the events
 described in the forward-looking statements might not occur or might occur to
 a different extent or at a different time than Duke Energy has described. Duke
 Energy undertakes no obligation to publicly update or revise any forward-
 looking statements, whether as a result of new information, future events or
     MEDIA CONTACT:    Peter Sheffield
     Phone:            980/373-4503
     24-Hour:          704/382-8333
     ANALYST CONTACT:  Julie Dill
     Phone:            980/373-4332

SOURCE Duke Energy