Duke Energy Carolinas Stakeholder Meeting Independent Entity Services September 12, 2008

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

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

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

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

Customer Satisfaction Overall Midwest ISO Service Performance Reflects Customer Satisfaction (23 Respondents) Rating Percentage Midwest ISO Exceeds Expectations 26% Midwest ISO Meets Expectations 74% Midwest ISO Fails to Meet Expectations 0% 6

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

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

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

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

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

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

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

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

Questions / Feedback? 15

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

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 Rating Percentage Midwest ISO Exceeds Expectations 26% Midwest ISO Meets Expectations 74% Midwest ISO Fails to Meet Expectations 0% 17 17

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 18

Survey Question 3: As you think about the service (s) you receive, would you say that over the past year, things are: Participant Response Rating Percentage Worse 5% The Same 57% Better 38% 19

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 20

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 Rating Percentage Much Better 10% Better 25% About the Same 65% Worse 0% 21 21

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 Rating Percentage Much Better 21% Better 58% About the Same 16% Worse 5% 22

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? 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 23