Duke Energy Carolinas Quarterly Stakeholder Meeting Independent Entity Services Thursday, May 13th, :00 to 3:00 p.m. EDT

2 22 Agenda  Follow-up Action Items from February 25th, 2010  Daylight Saving Time Change – How did it go?  Duke OASIS Business Practices  FERC Order 729-A  NAESB Update - Wholesale Electric Quadrant  Open Access Transmission Tariff Filing  Duke – Progress Energy Non-Firm ATC Agreement  Wrap-up

3 Action Items Follow-up from February 25, 2010 There were no items that required follow up

4 Daylight Saving Time Change How did it go? Spring Forward - March 14, 2010 –Non-event for Duke Tariff Administration –Any customer events? Prepare to Fall Back – November 7, 2010 –Return to Eastern Standard Time OATI User Guides –webOASIS - HELP – Table of Contents – DST Cutover Document –webTag - HELP – User Guide – Contents – General ETS Options

5 55 Duke OASIS Business Practices Update - Structure and Content Changes Alignment with NAESB Eliminate redundant/conflicting text Duke will show references to NAESB Standards Full Alignment upon implementation of 676-E NAESB BP Standards are copyrighted NAESB permission has been granted –Allows Duke to duplicate certain Practices and Standards Request Timing Requirements Table Duke BP Section 3.D includes Timing for Non-Designated Network Priorities for Competing Reservation Requests Table Duke BP Section 3.F includes Tier 1 Service - Recallable Long Term Firm

6 66 FERC Order 729-A FERC Order 729-A ( Docket No. RM ) –Issued May 5, 2010 –Clarified the implementation timeline for the ATC Reliability Standards as well as certain directed modifications Standards become effective in US on 1/1/2011 Clarified that auditing calculations of capacity benefit margin and transfer reliability margin is performed under Requirement R3.1 of MOD Clarified position on benchmarking of models Clarified its requirement for modeling of designated network resources in base case models Clarified position on updates to dispatch model following material changes Clarified position on managing the use of Capacity Benefit Margins

7 77 NAESB Update Wholesale Electric Quadrant NAESB WEQ Glossary –The Glossary was adopted and is being incorporated into standards by NAESB staff Network Service on OASIS –The timeline for completion of the recommendation was extended to the third quarter 2010 Coordination of Transmission Requests Across Transmission Providers –EC Task Force Scoping Team – Mid-June target for scope

8 88 NAESB Update Wholesale Electric Quadrant Electric Industry Registry –No EIR specific confidentiality agreement will be developed –RFP for EIR administrator closes May 21 E-Tag version went into production on March 30, 2010 TLR and Parallel Flow Visualization –NAESB working on finding a method to correlate the firmness of transmission service with generator output for intra-BA service

9 99 Open Access Transmission Tariff Filing In 2010 Duke Energy Carolinas will request FERC approval of a new rate for the Transmission Service under our Open Access Transmission Tariff (OATT). Current rate was approved in 1996 and was based on 1994 data Costs to provide reliable transmission service have increased however, it is too early in process to quantify rate impacts Propose to move from a stated (fixed) rate to a formula rate to be updated annually Propose to have new rates in effect prior to the end of 2010 Holding discussions with our Network Customers prior to filing the new rate with FERC

10 Duke - Progress Energy Non-Firm ATC Agreement Duke Energy Carolinas and Progress Energy Carolinas have negotiated an agreement addressing Non-Firm parallel flows across the PJM interface Implementation details and timeline are to be determined Combined Non-Firm ATC with PJM will be calculated and posted on Duke and PEC OASIS sites Customers will still reserve transmission service with either PEC or Duke

11 Wrap-up Proposed Next Quarterly Stakeholder Meeting –Thursday, August 26, 2010 – 2 p.m. to 3 p.m. ET Customer Suggested Topics? –This is the forum for discussing emergent topics (Upcoming changes, stakeholder input) Questions and Comments