Indiana Utility Regulators Approve Updated Costs, Carbon Capture Study for Clean Coal Gasification Plant

January 7, 2009

PLAINFIELD, Ind., Jan. 7 /PRNewswire-FirstCall/ — The Indiana Utility
Regulatory Commission today approved Duke Energy’s revised cost estimate of
$2.35 billion for its clean coal gasification power plant under construction
in southwest Indiana.

(Logo: http://www.newscom.com/cgi-bin/prnh/20040414/DUKEENERGYLOGO )

The commission also approved the company’s $17 million request to study
capturing a portion of the plant’s carbon dioxide emissions. Duke Energy would
like to explore capturing and storing carbon dioxide permanently in
underground geologic formations. Carbon dioxide is a greenhouse gas associated
with global warming.

Duke Energy (NYSE: DUK) filed its $365 million cost increase request with
state regulators in May. International demand for materials and rising labor
costs were the main drivers for the cost increase. The company has now
negotiated contracts with major suppliers and can better forecast project

The plant is expected to have a total estimated average customer rate
impact of about 18 percent. The rate impact will be phased in between now and

The Edwardsport project is the first major new coal-fired power plant to
be constructed in Indiana in more than 20 years. The Indiana State Utility
Forecasting Group predicts that Indiana will need new power generation equal
to five projects the size of this plant by 2012.

The approximately 630-megawatt plant will use advanced integrated
gasification combined cycle technology. The new plant will produce 10 times as
much power as the existing plant at Edwardsport, yet it will emit less sulfur
dioxide, nitrogen oxide and mercury than the plant it replaces. Due to the
plant’s superior efficiency, it also will emit 45 percent less carbon dioxide
per 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 and
oil 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 efficient
coal-fired plants in the world,” said Duke Energy Indiana President Jim
. “In the Midwest, coal is plentiful and relatively low-cost, and
finding ways to burn it cleanly is fundamental to meeting our customers’
demand for power. If greenhouse gases are going to be regulated, and we
believe they will be, then coal gasification plants with carbon capture and
sequestration technology hold tremendous promise to reduce carbon dioxide
emissions and help address global climate change.”

Integrated gasification combined cycle technology uses a coal gasification
system to convert coal into a synthesis gas (syngas). The syngas is processed
to remove sulfur, mercury and ash before being sent to a traditional combined
cycle power plant, using two combustion turbines and a steam turbine to
efficiently produce electricity.

Duke Energy also is meeting increased Indiana power demands through green
power sources such as wind energy. Last year, the company began purchasing
power from a Benton County, Ind., wind farm.

Duke Energy’s Indiana operations provide approximately 7,300 net megawatts
of electricity to approximately 775,000 electric customers, making it the
state’s largest electric supplier.

Duke Energy, one of the largest electric power companies in the United
, supplies and delivers electricity to approximately 4 million U.S.
customers and natural gas service to approximately 520,000 customers in its
regulated jurisdictions. The company has approximately 35,000 net 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 net megawatts of electric generation in Latin America, and is a
joint-venture partner in a U.S. real estate company.

Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company
traded on the New York Stock Exchange under the symbol DUK. More information
about the company is available on the Internet at: www.duke-energy.com.

    CONTACT:             Angeline Protogere
    Phone:               317-838-1338
    Pager:               317-367-3306

    ANALYST CONTACT      Sean Trauschke
    Phone:               980-373-7905

SOURCE Duke Energy

Source: newswire

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