SMARTGRID Duke Energy

1. SMARTGRIDDuke Energy David Mohler Chief Technology Officer Duke Energy November 10, 2008

2. Fortune 500 - Top-tier electric utility $50 billion in assets 3.9 million customers 150+ years of service Dow Jones Sustainability Index Traded on NYSE as DUK Stock dividends for 80+ years Facts About Duke Energy • 5 states: North Carolina, South Carolina, Indiana, Ohio and Kentucky • 47,000 square miles of service area • 28,000 MW of regulated generating capacity

3. Duke Energy Vision of SmartGrid We Are Building for Future Needs Deployments are designed in part to solve existing operational problems, but with an emphasis on preparing Duke for future technology development and customer requirements • Smart Grid • Energy Management Services • Residential • Commercial • Home area network gateway • PLC (i.e. LONWORKS • RF (Bluetooth) • Web-based applications • Demand response • Prepayment • Load control • Revenue protection • Web move in/out • Distribution • Load profiling/engineering • Phase balancing • Transformer optimization • Energy forecasting • Outage and GIS • Work force management • Asset management • Enable improved operations and increased operating efficiencies • Extend energy efficiency to the end of the wire • Support and integrate with behind the meter applications • Create a platform for new program and service offerings • Support increased distributed generation and PHEV penetration • Increase reliability and reduce system losses • Minimize potential for stranded costs • Smart Meters • Solid-state platform • Integrated communications • Integrated disconnect switch • > Remotely disconnect • > Remotely connect • Power quality data • > Voltage readings • > Current readings • > Power Factor • > Frequency • > Detailed power outage data • Remote programmable • Remotely upgradeable • Internal expansion port • > Future functionality • Advanced Metering • Infrastructure (AMI) • On-demand reads • Programmable loadintervals • Bi-directional and net • metering • TOU, RTP, CPP pricing • options • Demand response • Automatic Meter • Reading (AMR) • One-way or two-way • Monthly kWh reads • Interval data • Basic theft detection • Outage/Restoration Detection • Manual meter reading • Monthly kWh reads

4. South Charlotte 5000 intelligent electric meters with PLC / target 14,700 900 comms boxes / target 3500 Private network on public cellular for backhaul Upstate South Carolina 2250 intelligent electric meters with PLC / target additional 5000 with RF 1000 comms boxes Private network on public cellular for backhaul Cincinnati 30,000 intelligent electric meters installed with PLC / target 50,000 by end of year 12,000 intelligent gas meters installed with RF / target 42,000 by end of year 9000 comms boxes Private network on public cellular for backhaul Other 36 energy management, storage and control units installed Behind-the-meter pilots in progress Street lighting pilot Variety of sensors deployed along the network Envision Center in Cincinnati/Northern Kentucky Indiana Filed petition in May 2008 Testimony (‘Case in Chief’) filed September 2008 Hearing scheduled for late February 2009 Approval could then be mid-2009 Ohio Filed August 2008 Hearing November 2008 Approval could then be April 2009 South Carolina Cost/Benefit Analysis to be completed 1st Quarter 2009 Timing of filing – To Be Determined North Carolina and Kentucky 2010 timeframe Overview of implementation status FIELD DEPLOYMENTS REGULATORY PROCESS

5. In 2007, deployed 5,000 intelligent meters and communication networks in South Charlotte, 2,500 in Upstate S.C. May 23, 2008 – Indiana regulatory filing June 2008, deliver architecture for continued deployment End of 2008, deploy 55,000 intelligent electric meters and 42,000 intelligent gas meters in Cincinnati End of 2009, over a quarter of a million end points Summer 2008, begin opening public demonstration centers in N.C., S.C. and Ohio Timeline – on track to deliver results Objectives of Initial Deployment / Pilot Areas: • Test & evaluate technologies • Quantify actual costs and actual benefits • Develop processes and IT solutions necessary to leverage technology deployed • Determine operational support and appropriate workforce & skill set to operate and maintain system • Recommend a deployment strategy to enable Save-a-Watt • Develop a deployment plan along with regulatory support model for each jurisdiction

6. Looking ahead: continue learning from pilots Ohio Overview • Cost of initial deployments:$20-25 million • Number of endpoints: 50,000 el. 42,000 gas • Timeline: Communication equipment and distribution devices will be installed and connected in 2008. Meters and in-home devices will be installed beginning April of 2008 NC Overview • Cost of initial deployments:$4 to $4.5 million • Number of endpoints:approximately 15,000 • Timeline: Deployment of communication technology began in October ’07 with endpoints connected January – September ’08. • 5,000 endpoints currently installed. SC Overview • Cost of initial deployments: $2.5 - $3.0 M • Number of endpoints: ~7,500 • Timeline: 2008 – first half of 2009 • Communication technology deployed connecting existing and new distribution assets. • New line sensors deployed • Meters and other endpoints will be installed

7. Continue Deployments 146,000 additional intelligent electric meters and 48,000 additional intelligent gas meters in Cincinnati in 2009 Will ramp up to ~10,000 meters per day installation in late ’09 early 2010 pending regulatory outcomes 4 “green circuits” Microgrid project in South Charlotte Incorporate DG & Renewables Energy storage and management / small residential solar pilot underway Duke Energy Solar Village PPA for 16 MW solar project in Davidson, NC to be operational in late 2010 – 2011 PPA for 100 MW of wind in IN, operational today Filed in NC for recovery of $100M investment in small-scale solar Included provisions in smart grid filing in IN for recovery of $10M investment in solar hot water, small scale wind and solar PV 2009 & Beyond

8. Educate Stakeholders with “Hands On” Experience • Duke Energy’s Smart Energy Center, Cincinnati, OH (physical center 7-10,000 sq ft) • Smart Energy Center, Raleigh, NC - Advanced Energy Company partnership (physical center 4-5,000 sq ft) • Duke Energy’s Customer Resource Center, Charlotte, NC (physical center, primarily non-residential demonstrations) • Duke Energy Village Furman University, Greenville, SC (Cliffs Cottage, physical home) Duke Energy’s Envision Center, Cincinnati OH USA

9. Envision Center – Self Healing

10. Discussion/Questions?