Powering the Carolinas

1. Powering the Carolinas March 19, 2009 Artistic Rendering–Cliffside Modernization “Sustainable Energy Alternatives and their Impact on Low Income Community”

2. Overview • Company Information/Diverse Energy Mix • Project Overview • Construction Status • Questions

3. Duke Energy • Fortune 500 Company • Operates in NC, SC, Indiana, Ohio, Kentucky • 4 million customers; 36,000 megawatts • ~18,000 employees • 2.3 million customers in Carolinas; 19,900 megawatts • Diverse energy mix: nuclear, coal, gas/oil fired, hydro

4. Diverse Energy Mix and Path Forward • Renewable (solar, wind, biomass) to meet NC Renewable Energy Portfolio requirement • Save-A-Watt -- Innovative approach to help meet growing customer demand • New natural gas combined cycle generation at Buck and Dan River Stations - Two 2x1 plants (620MW) • Lee Nuclear Station - Two Westinghouse AP-1000 units (2,234 MW) • Cliffside – Bridge to less carbon intensive future

5. Existing Cliffside Steam Station • Capacity: 760 megawatts • Location: Cleveland and Rutherford counties, North Carolina • Units 1-4 on line in 1940s (200 MW total) • Electrostatic precipitator (particulate) • Unit 5 on line in early 1970s (560 MW) • Electrostatic precipitator (particulate) • 2002 – Selective Catalytic Reduction (80% removal of nitrogen oxides) • 2010 – Wet flue gas desulfurization (99% removal of sulfur dioxide) and coincident removal of mercury

6. Cliffside Modernization Project • Retire Units 1-4 (200 MW), add scrubber to Unit 5 • Unit 6 – 800 MW supercritical pulverized coal with innovative arrangement of proven technologies • Unit 6 awarded U.S. Department of Energy advanced clean coal tax credit of $125 million • $1.8 billion estimated cost for Unit 6 • First US coal unit to accept permit condition to be carbon neutral – requires Duke to retire additional 800 MW by 2018 and take other measures as needed

7. Hitachi “Super-Critical” Boiler Wall-fired, spiral wound boiler w/ 3700 psi steam pressure. Heat rate: 8900 Btu/KWH. Stack Visible emissions: white cloud of water vapor. CEMS for SO2, NOx, Opacity, Hg Selective Catalytic Reduction Reduce NOx by 90% Cooling Towers Reduce withdrawal, eliminates thermal discharge Fabric Filter Baghouse Reduces flyash emissions 99.9% and captures SO3, Hg, HCl, HF Sulfur Dioxide “Scrubber” Removes 99% SO2 & 90% Hg. Gypsum as byproduct. Toshiba Turbine / Generator Most efficient on Duke System Spray Dryer Absorber Ties up SO3, Hg, HCl, HF Unit 6 Design Schematic

8. Permitting/Environmental • DENR issued water discharge (NPDES) permit 8/13/07 • DENR issued Unit 6 air permit 1/29/08. • Duke submitted landfill construction application 12/18/08 • DENR issued revised air permit 3/13/09 acknowledging Unit 6 will emit less than threshold limits of hazardous air pollutants (1 of 2 utility coal units in US) • Compared with existing Units 1-5 and assuming expected operating conditions, Units 5-6 will emit 80% less SO2, 50% less NOx and Hg while generating over twice the electricity

9. Cliffside Modernization Project - Construction Status • Cost: $1.8 B ($2,250/kw) • Peak 1,600 construction jobs over 4-year construction period • Construction began 1/30/08; unit expected on line 2012 • 20-30 permanent jobs once the unit comes online • Shaw Group is the engineering, procurement and construction contractor

11. Questions