Duke Energy Carolinas Stakeholder Meeting

1. Duke Energy CarolinasStakeholder Meeting Independent Entity Services September 12, 2008

2. Agenda • Customer Survey Results • Customer Recommendations • Budget • Future of Independent Entity Services • Appendix • Survey Questions and Results 2

3. Attachment K – IE Responsibilities • Evaluation and approval of all transmission service requests • Calculation of Total Transfer Capability (TTC) and ATC • Operation and administration of Duke Energy Carolinas’ OASIS • Evaluation, processing and approval of all generation interconnection requests, and performance of related interconnection studies • Coordination of transmission planning

4. Survey Objectives • Seek continuous improvement of services provided while ensuring the highest value of service • Confirm the collaborative efforts showed a seamless transition of tariff administration services to customers • Gauge general confidence of customers

5. Summary of Survey Questions • Customer Satisfaction • View of Performance • Customer Expectations • Customer Experiences • Consistency of Service • Suggested Improvements • Expected Impact of Survey • Expected follow-up Survey conducted by: Practical Approaches

6. Customer Satisfaction • Overall Midwest ISO Service Performance Reflects Customer Satisfaction (23 Respondents) 6

7. Customer Expectations • Timeliness • Accuracy • Availability • Consistency • Compliance with Tariff and Business Practices • Communication 7

8. Customer Experiences • Customers have: • Seen increased improvement in Independent Entity services since start-up • Indicated Midwest ISO is more knowledgeable now of the Duke Energy –Carolinas system • Seen that Midwest ISO has good understanding of upcoming regulatory changes 8

9. Customer Observations • Independent Entity Staffing – customers seem to be comfortable with: • Quality of the personnel • Number of dedicated staff • Current staffing levels for after-hours coverage • Execution of FERC requirements • NERC and NAESB standards 9

10. How IE services are provided? • Customers would like to see the IE improve current services by: • More personalized service • Follow up on suggested business practice changes • Increased understanding of the geographic intricacies of the Duke system • No delays in study schedules (Generation Interconnection) • Know when to contact Midwest ISO versus Duke Energy – Carolinas 10

11. How the Tariff is Administered? • Customer feedback noted two suggestions: • Review the minimum (Daily Firm) and maximum (Hourly Non-firm) lead time for requesting transmission service reservations to further align adjacent markets • Make it easier to do business during Daylight Savings Time change • Make it easier to do business across regions in different time zones 11

12. Proposed Plan • The NC Planning Collaborative meets the requirement of FERC Order 890 to provide transparency for transmission planning • Independent oversight is no longer needed from the Midwest ISO • Continue to use Midwest ISO for the remainder of the Independent Entity functions in order to efficiently implement substantial pending changes in tariff requirements • Continue to use Potomac Economics as the Independent Market Monitor 12

13. Budget Initial IE contract specified $2.2 Million Midwest ISO Services delivered under budget with a reduced scope “scaling back” after hours coverage while performing additional work due to changes in FERC requirements 13

14. IE Proposed Next Steps • Quarterly Stakeholder Meeting • This is the forum for discussing customer survey topics and emergent topics (Upcoming changes, stakeholder input) • Tuesday, October 21, 2008 – 2 p.m. to 3 p.m. ET 14

15. Questions / Feedback? 15

16. Appendix • The following slides are the nine questions asked of the survey participants 16

17. Survey Question 1: As you think about the service (s) you receive from Midwest ISO on behalf of Duke Energy Carolinas’, would you say the services you receive: Participant Response 17

18. Survey Question 2: Describe what the 2-3 key expectations are that you have of this group Participant Response is found on slide 7 of this presentation 18

19. Survey Question 3: As you think about the service (s) you receive, would you say that over the past year, things are: Participant Response 19

20. Survey Question 4: If you could change ONE THING in the way the services/relationship works today, what would that be? Participant Response is found on slide 7 of this presentation 20

21. Survey Question 5: Comparing the Tariff Administration Service(s) you receive from Midwest ISO to the Tariff Administration Services(s) you received from Duke Energy-Carolinas, would you say Midwest ISO is: Much better Better About the same Worse Participant Response 21

22. Survey Question 6: Comparing the Tariff Administration Service(s) you receive from Midwest ISO on behalf of Duke, to the Tariff Administration Services(s) you received from other providers, would you say Midwest ISO/ Duke Independent Entity is: Much better Better About the same Worse Than the services you received elsewhere. Participant Response 22

23. Survey Question 7-9 Survey Question 7: Is there any issue currently unresolved that we should bring to their attention? Participant Response corresponds to the information on slides 8, 9,10, 11 & 14 Survey Question 8: What should we have asked you about that we didn’t? Participant Response corresponds to the information on slides 8, 9,10, 11 & 14 Survey Question 9: Do you think Midwest ISO will take your input seriously and act on it? Why or why not? Participant Response corresponds to the information on slides 11 & 14 23