Duke Energy Carolinas Quarterly Stakeholder Meeting Independent Entity Services Thursday, December 2, :00 to 3:00 p.m. EDT

2 22 Agenda  Follow-up Action Items from August 26, 2010  Return to Standard Time – How did it go?  NAESB Update - Wholesale Electric Quadrant  Open Access Transmission Tariff Filings  676-E & 729 OASIS Project Update  Duke – Progress Energy Non-Firm ATC Agreement  Wrap-up

3 Action Items Follow-up from August 26, 2010 There were no items that required a follow up.

4 Daylight Saving Time Transition  Back to Eastern Standard Time. Fall back happened on November 7, 2010  Any issues?  Prepare for next year Spring ahead (return to Daylight Saving) will be on March 13, 2011 Fall back will be on November 6, 2011 OATI Guides for Daylight Saving Boundary OASIS under Help ETS/Help/Forms/Documentation/User Guides/Requirements/

5 55 NAESB Update Wholesale Electric Quadrant Network Service on OASIS (OASIS Subcommittee)OASIS Subcommittee  Significant changes New templates – Network reservations will need to move to the new system New Network Customers will need to fill out an on-line application on OASIS Existing Network Customers will not have to make a new application on OASIS  NAESB expects completion by OASIS subcommittee 4 th quarter 2010 Delays in technical implementation details (S&CP) have been addressed – OATI to lead technical team Coordination of Transmission Requests Across Transmission Providers ( OASIS Subcommittee ) OASIS Subcommittee  Scope Recommendation adopted by Executive Committee & sent to OASIS subcommittee Scope Recommendation Task Force is preparing a recommendation on whether to adopt a new reservation state called “Provisionally Denied” Work starts upon completion of Network Service on OASIS

6 66 NAESB Update Wholesale Electric Quadrant Parallel Flow Visualization for Eastern Interconnect (Business Practices Subcommittee)Business Practices Subcommittee  The WEQ Executive Committee approved the recommendation for the interim service with a few changes (approved recommendation)approved recommendation Removal of the sunset date Removal of prohibition of filing with FERC  The BPS subcommittee is working on a permanent solution – Options include: Tag all Non-Firm transactions within a BA Require upload of firmness of transmission service for each running generator every 15 minutes (Generator Prioritization) Flowgate Allocation  BPS is considering a two-tiered firm curtailment process (first-to-cut / last-to-cut) Investigating whether this is a policy change (NAESB by-laws prevent subcommittee to recommend policy changes unless directed to do so by the Board) May require coordination agreements for one BA’s loop flows to be granted first-to- cut priority in another BA

7 77 NAESB Update Wholesale Electric Quadrant Electric Industry Registry (EIR)  Transfers TSIN Registry from NERC to NAESB  OATI will administer for NAESB  Should be in production mid-2011 (with training and parallel operations before production release)

8 88 Open Access Transmission Tariff Filings In 2010 Duke Energy Carolinas will request FERC approval of a new rate for the Transmission Service under our Open Access Transmission Tariff (OATT)  Current rate was approved in 1996 and was based on 1994 data  Propose to move from a stated (fixed) rate to a formula rate to be updated annually  Hoping to have new rates in effect prior to the end of 2010  Holding discussions with our Network Customers prior to filing the new rate with FERC  We believe to be very close to agreement with our customers, however there are a few remaining issues Attachment C Filing  Methodology to Assess Available Transfer Capability  Driven by FERC Order 729  December 20, 2010 target for filing e-Tariff Public Viewer 

9 99 FERC Order 676-E & 729 OASIS Project Update FERC 676-E & 729 Ordered on November 24, 2009 Implementation for both orders require a completion date of April 1, 2011  Re-bid of Partial Service WEQ through 4.12 Rebid Price – Complete Rebid MW – on or before  Actual & Forecasted Load WEQ Forecasted & Actual Daily Sys-wide (includes Native Load) and Daily Native Peak Load – Complete On OASIS > Go to > Select > Select filters as desired  ATC Narratives and Questions WEQ , 15 & 16 Zero ATC Narratives & Change Narrative (TTC/ATC changes are 10% or more ) – Templates Complete On OASIS > - on or before ATC or AFC Methodology Questions ATC Contact Person posted on OASIS homepage - Complete  Priorities for Competing Requests WEQ through 4.16 NAESB Table 4-3 revised - Complete Duke Business Practices Revised to incorporate Preconfirmed Priority

10 FERC Order 676-E & 729 OASIS Project Update  Rollover Rights WEQ Duke Business Practice 3.J has been modified to reference the 5yr/1yr requirement Service agreements with rollover rights queued prior to are subject to the 5yr/1yr requirement on the first rollover date after 04/01/09 webTrans Rollover functionality – Complete webOASIS Rollover functionality – Complete  Rollover on Redirects WEQ FERC did not incorporate with reference to Renewal Rights on Redirects Once adopted by FERC webOASIS and webTrans will be upgraded to meet the requirement  Conditional Curtailment Option WEQ CCO applies to requests for Long-term Firm Point-to-Point Transmission Service Upon request of the Transmission Customer Duke will accommodate CCO CCO service is treated as firm in calculation of ATC in the full amount reserved Tag NERC Priority 6 or Transmission Product code 6-CF during defined periods Management, posting and notification processes done manually now - Complete

11 FERC Order 676-E & 729 OASIS Project Update  OASIS Home Page General Posting Standards WEQ / MOD-001, 004 & 008 Links, Order and Naming Convention- Complete ATC Information Link - When ATCID, CBMID, TRMID are completed - On or before  Postbacks WEQ Requires a Postback Methodology document be posted on OASIS under the ATC Information Link – On or before  Grandfathered Agreements WEQ GFA MW value is required to be queried on OASIS systemdata template – Template Complete Must be identified in the TP’s ATCID – On or before Duke does not have grandfathered agreements  Use of CBM WEQ / MOD-004 Requires Posting, Tracking, Ability to query, View and Audit the use of CBM on OASIS TRM/CBM page on OASIS Must be Identified in the TP’s CBMID – On or before Duke Energy Carolinas does not currently allocate Capacity Benefit Margins (CBM) on its ATC Paths

12 FERC Order 729 NERC Standards pertaining to ATC transparency  Available Transmission System Capability - MOD-001-1a  Capacity Benefit Margin - MOD  Transmission Reliability Margin Calculation Methodology - MOD  Area Interchange Methodology - MOD  Rated System Path Methodology - MOD  Flowgate Methodology - MOD

13 Duke - Progress Energy Non-Firm ATC Agreement On October 27, 2010, Duke and Progress filed an amended Non-Firm Parallel Flow Agreement  Reflects Duke Energy's intention to move to a flowgate-based methodology  Targeting April 1, 2011 as the new effective date, consistent with the effective date of the new MOD (Specifically MOD-30) Standards

14 Wrap-up Proposed Next Quarterly Stakeholder Meeting –Thursday, March 17, 2011 – 2 p.m. to 3 p.m. ET Customer Suggested Topics? –This is the forum for discussing emergent topics (Upcoming changes, stakeholder input) Questions and Comments