New Nuclear Generation Ellen Ruff President, Duke Energy Carolinas

2 Overview  Why Nuclear?  NRC Approval Process  Significant Capital Investment  Investment Challenges

3  Growing customer energy demand  Greenhouse gas emissions-free generation source  Reduces dependence on foreign fuels  Natural gas price volatility Why New Nuclear?

4 Cherokee County, S.C. Site (COL) William States Lee III Nuclear Station (artist rendering)

5 Construction Acceptance Criteria * * Public Comment Opportunity Energy Policy Act of 1992 New NRC Licensing Process Operation Construction Early Site Permit * Combined License * Design Certification *

6 U.S. Energy Policy Act  Signed August 2005  Financial Incentives: Production Tax Credit ($18/MW-hr) Government Loan Guarantees Standby Support to cover delay costs caused by regulator or public

7  Passed in North and South Carolina in 2007  Upfront Commission review of nuclear development costs  Ongoing commission review during construction  Ability to recover financing costs during construction  Provisions if project is abandoned Customers and Shareholders benefit. Energy Policy Legislation

8 Next Steps  A framework to take advantage of federal loan guarantees  Opportunities to share project risk  Support for a ROI tied to the degree of project risk

Questions? Ellen Ruff President, Duke Energy Carolinas