The rate impact will be phased in between now and2013

Duke Energy wouldlike to explore capturing and storing carbon dioxide permanently inunderground geologic formations. Carbon dioxide is a greenhouse gas associatedwith global warming.Duke Energy (NYSE: DUK) filed its $365 million cost increase request withstate regulators in May. International demand for materials and rising laborcosts were the main drivers for the cost increase. The rate impact will be phased in between now and2013.The Edwardsport project is the first major new coal-fired power plant tobe constructed in Indiana in more than 20 years.

The Indiana State UtilityForecasting Group predicts that Indiana will need new power generation equalto five projects the size of this plant by 2012.The approximately 630-megawatt plant will use advanced integratedgasification combined cycle technology. The new plant will produce 10 times asmuch power as the existing plant at Edwardsport, yet it will emit less sulfurdioxide, nitrogen oxide and mercury than the plant it replaces. Due to theplant's superior efficiency, it also will emit 45 percent less carbon dioxideper megawatt-hour than the existing facility.Duke Energy selected an existing power plant site in Edwardsport, Ind.,for the project. The company will retire the existing plant - with coal andoil units built between 1944 and 1951 - prior to startup of the new facility.Construction began early last year and is scheduled to be completed in 2012."When it's completed, this will be one of the cleanest, most efficientcoal-fired plants in the world," said Duke Energy Indiana President JimStanley. "In the Midwest, coal is plentiful and relatively low-cost, andfinding ways to burn it cleanly is fundamental to meeting our customers'demand for power. If greenhouse gases are going to be regulated, and webelieve they will be, then coal gasification plants with carbon capture andsequestration technology hold tremendous promise to reduce carbon dioxideemissions and help address global climate change."Integrated gasification combined cycle technology uses a coal gasificationsystem to convert coal into a synthesis gas (syngas).

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The syngas is processedto remove sulfur, mercury and ash before being sent to a traditional combinedcycle power plant, using two combustion turbines and a steam turbine toefficiently produce electricity.Duke Energy also is meeting increased Indiana power demands through greenpower sources such as wind energy.

Last year, the company began purchasingpower from a Benton County, Ind., wind farm.Duke Energy's Indiana operations provide approximately 7,300 net megawattsof electricity to approximately 775,000 electric customers, making it thestate's largest electric supplier.Duke Energy, one of the largest electric power companies in the UnitedStates, supplies and delivers electricity to approximately 4 million U.S.customers and natural gas service to approximately 520,000 customers in itsregulated jurisdictions. The company has approximately 35,000 net megawatts ofelectric generating capacity in the Midwest and the Carolinas, and natural gasdistribution services in Ohio and Kentucky. In addition, Duke Energy has morethan 4,000 net megawatts of electric generation in Latin America, and is ajoint-venture partner in a U.S. real estate company.Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 companytraded on the New York Stock Exchange under the symbol DUK.