1. Duke Energy Carolinas Quarterly Stakeholder Meeting Independent Entity Services Thursday, February 25, 2010 2:00 to 3:00 p.m. EST

2. 2 22 Agenda  Follow-up Action Items from November 5th, 2009  Return to Daylight Saving Time  Resales & Transfers  Duke OASIS Business Practices  Supplemental e-Mail Notification  FERC Orders 676E and 729  NAESB Update - Wholesale Electric Quadrant  Open Access Transmission Tariff Filing  Duke – Progress Energy Non-Firm ATC Agreement  Wrap-up

3. 3 Action Items Follow-up from November 5, 2009 Daylight Saving Time Transition to Standard –Reported Problem & Follow-up –Evaluated e-Tag and OASIS Reservation –PJM rejected e-Tag for lack of transmission –PJM OASIS reservation did not match e-Tag timing Tag was for 2hrs Reservation was for 1hr –e-Tag and OASIS reservation for Duke were valid Spring forward will be addressed in later slides

4. 4 Return to Daylight Saving Time Prepare for Transition –Spring Forward March 14, 2010 – (Eliminate HE 02:00 EST) –Adjust time zone display settings on OASIS & e-Tag OATI User Guides for changing Time Zone Settings –OASIS – HELP – Table of Contents – DST Cutover Document –ETS – HELP – User Guide – Contents – General ETS Options –Fall back will be on November 7, 2010 OATI OASIS –Entering A TSR across the change (Eliminate HE 02:00 EST) OATI E-Tag –Tagging across the time change

5. 5 Overview of Resales & Transfers Business Practices have not changed Resales –Resale is a request to convey scheduling rights of a PTP reservation from a Reseller to an Assignee –Price is negotiated between Reseller and Assignee ($/MW – Hour reserved) –Negotiations On OASIS Off OASIS Transfers –Transfer is a request to convey all rights and obligations associated with a reservation for PTP from a Reseller to an Assignee –Price is same as original reservation –Conveyance Full Transfer Partial Transfer Transmission Service Agreement

6. 6 OATI webOASIS and Resales NAESB Business Practice Standards WEQ 001-11.5 & WEQ 013-2.6.7 Not required to use OASIS to make arrangements for sale or reassignment of transmission rights Reseller is required to post the information on OASIS On OASIS Off OASIS Post for Resale (RESALE) TransAssign (Secondary Market RESALE) * Reseller* Reseller Creates a Resale PostingOASIS TSR Click Transmission Resale Offerings * Assignee Creates the Resale Transmission Service Request Details for RESALE user entry can be found on OATI webOASIS on the menu bar click

7. 7 OATI webOASIS and Transfers NAESB Business Practice WEQ 001-12.5 Negotiations may be conducted off OASIS Transfers must be posted and approved on OASIS Full Transfer –On OASIS from the TSR click The amount (MW’s) of the full Transfer will include capacity which is not available for scheduling due to curtailment or other reductions –The Original Reservation and all encumbrances are transferred to the Assignee Partial Transfer –On OASIS from the TSR click OASIS will Limit the Partial Transfer to the granted capacity of the Parent Reservation less any reductions to the capacity available for scheduling –Only the capacity available for scheduling can be Transferred (Part_Transfer)

8. 8 Transmission Service Agreement ( Resales, Transfers and Reassignments) Assignee must execute Attachment A-1 of OATT with Duke Energy Carolinas Executed no later than 24hrs prior to the commencement of the reassigned service If the service agreement is not executed on time the Resale will be annulled Process time for execution of the service agreement is dependent on Assignee’s credit requirements with Duke Attachment A-1must be transmitted to: Duke Energy Carolinas, LLC 526 South Church Street Mail Code:EC02A Charlotte, NC 28202 Attn: Charlotte Glassman Transmission Contracts Manager Phone:704 382-3621 Fax:704 382-0850 charlotte.glassman@duke-energy.com

9. 9 99 Duke OASIS Business Practices Duke Business Practices (BP) Structure and Content change –Alignment with NAESB –NAESB BP Standards are copyrighted Duke will show references to NAESB Standards and eliminate redundant/conflicting text NAESB permission has been requested to continue to duplicate certain Practices and Standards –Request Timing Requirements Table –Priorities for Competing Reservation Requests Table »Preemption and Competition

10. 10 Supplemental E-Mail Notification Duke Energy Carolinas has discontinued the Supplemental Electronic Communications program on February 15 –Announcement was posted in OASIS Business Practices Duke has a new program called Supplemental E-Mail Notification –Link to details of program (posted on Duke OASIS home page)Link –E-mail notification will be sent directly from our OASIS vendor, OATI –Only e-mail notification is available (fax notification was discontinued) –Subscribers will receive all notices –As in the past, no notification will be provided for changes to linked material e.g., Duke provides a link to the NAESB Home Page but there will not be any notification when NAESB changes material on the NAESB Home Page

11. 11 Supplemental E-Mail Notification (continued) Notification will be provided for new or modified web pages on the Duke OASIS Home Page in the following categories: +Performance Metrics+ Generator Interconnection + Business Practices, Waivers + Transmission Service Studies and Exemptions+ Designated Network Resources + ATC Information+ Transmission Planning + Contact Information+ Provider Information + Transmission Tariff+ Independent Entity + Transmission Rates+ Stakeholder Meetings

12. 12 FERC Orders 676-E and 729 NAESB Business Practice Standards (RM05-013) –Final Order 676-E issued 11/24/09 –Published 12/3/09 in Federal Register (74 FR 63288) –Effective date April 1, 2011 (subject to FERC clarification in rehearing) NERC ATC Standards (Docket Nos. RM08-19-000, RM08-19-001, RM09-5-000, RM06-16-005) –Final Order 729 issued 11/24/09 –Published 12/8/09 in Federal Register (74 FR 64884) –Effective date April 1, 2011 (subject to FERC clarification in rehearing)

13. 13 NAESB Update Wholesale Electric Quadrant WEQ Executive Committee meeting (02/02/2010) –NAESB WEQ Glossary The EC adopted the recommendation and sent it out for ratification by the NAESB membership –Network Service on OASIS The timeline for completion of the recommendation was extended to the end of the second quarter 2010 –Coordination of Transmission Requests Across Transmission Providers A team was established to develop the scope of this project prior to the subcommittee’s initiating work. James Manning (NCEMC), Jim Eckelkamp (Progress Energy) and Alan Pritchard (Duke) were among the people named to the team. Also, the timeline for completion of the recommendation was extended to the end of the 4th quarter 2010. –Electric Industry Registry Confidentiality Agreement The EC decided not to adopt the recommended standard

14. 14 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 Intend to have discussions with our Network Customers prior to filing the new rate with FERC

15. 15 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

16. 16 Wrap-up Proposed Next Quarterly Stakeholder Meeting –Thursday, May 13, 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