Duke Energy Ohio to Seek Increase in Natural Gas Base Rates

CINCINNATI - Duke Energy Ohio announced today it will file an application with the Public Utilities Commission of Ohio seeking an increase of $34 million, or 5.8 percent overall, in natural gas rates. The increase would be effective in the early- to mid-2008 and is the first general rate filing since 2001.

Over the last six years, Duke Energy Ohio has invested more than $460 million to expand its natural gas delivery system to meet customer growth and make other safety, reliability and efficiency improvements. It has also experienced increases in operating costs for delivery service consistent with inflation. Delivery service rates cover the cost of building, operating and maintaining the natural gas system that delivers gas to customers’ homes and businesses.

“We have made significant investments in our natural gas system to meet customer growth and improve safety and reliability,” said Sandra Meyer, president of Duke Energy Ohio. “These investments have enhanced service and reduced maintenance expenses, helping to minimize the requested increase.”

Duke Energy Ohio will seek to implement the increase for residential customers over a three-year period to gradually establish rates for all customers that reflect the actual cost of providing service. For a typical residential customer using 10,800 cubic feet of natural gas, the requested increase would result in a total monthly bill of $154.20 in the first year, compared with the current bill of $146.03. In the third year, the typical bill would increase to $158.48. The actual amount of the bill will depend on the cost of natural gas at the time the increases take effect and the level of increase authorized by PUCO. Natural gas costs are billed to customers at the company’s cost or at the customer’s agreed upon price with an alternative supplier, in either case without profit to Duke Energy Ohio.

Duke Energy Ohio is planning to increase its funding for low-income weatherization by 50 percent to assist customers in managing their energy usage. Other programs offered by the company to assist customers are budget billing, conservation information and energy usage information which are available on its web site, www.duke-energy.com.

The company also will request authority to continue annual rate updates for its accelerated main replacement program under a tracking mechanism approved by PUCO in 2002. This program is designed to improve the reliability and safety of the natural gas system and is expected to be completed in 2015. So far, the company has replaced approximately 560 miles of cast iron and bare steel pipe in Ohio, or about 47 percent of the old mains in its system, and approximately 45,000 service lines. This work has reduced the number of natural gas leaks on the system by 21 percent.

Duke Energy Ohio also is planning a new, innovative metering system to save operating costs and facilitate the company’s and customers’ access to metering data. The filing will seek approval to make annual rate updates to recover the cost of the new equipment.

Duke Energy Corp., one of the largest electric power companies in the United States, supplies and delivers energy to approximately 3.9 million U.S. customers. The company has nearly 37,000 megawatts of electric generating capacity in the Midwest and the Carolinas, and natural gas distribution services in Ohio and Kentucky. In addition, Duke Energy has more than 4,000 megawatts of electric generation in Latin America, and is a joint-venture partner in a U.S. real estate company.

Duke Energy’s Ohio operations deliver safe, reliable and competitively priced electricity to more than 680,000 electric customers and natural gas service to 420,000 customers.