Duke Energy Carolinas Quarterly Stakeholder Meeting Independent Entity Services Thursday, May 19, :00 to 4:00 p.m. EDT 2 nd Quarter 2011

Agenda  Action Items from December 2, 2010 and March 17, 2011  Transition to AFC Methodology  NAESB Update - Wholesale Electric Quadrant  Open Access Transmission Tariff Filings  676-E & 729 OASIS Project  Wrap-up

Action Items December 2, 2010  Duke was asked to host a meeting between December 2 nd and April 1 st to address the Flowbased Methodology. Meeting was held on March 17 th Presentation posted on the OASIS Homepage Documents > Stakeholder Meetings > Stakeholder Presentation held on 03/17/2011 March 17, 2011  Update to the implementation of Orders 676E/729 regarding NAESB & NERC Presentation added to today's Agenda

Action Items Customer/Stakeholder Questions submitted by  Expand on 10 year Forecast of PTP transmission rates under the new formula rate. Will be addressed during the Tariff Filings discussion today  More discussion of the NAESB plan for capturing full path on an OASIS request. Service Across Multiple Transmission Systems (SAMTS) will be addressed during today’s NAESB update  Please discuss, if any, plans Duke has to increase transfer capability with SOCO and/or TVA. North Carolina Transmission Planning Collaborative

Transition to AFC Methodology Transitioned on March 30 th, Originally scheduled for March 29 th, 2011 Delayed transition due to vendor issues being resolved - Effective date of the NERC Standards on AFC - April 1 st, 2011 Independent Entity perspective – transition went well - What were your experiences like?

Transition to AFC Methodology For more detailed information on AFC Methodology View the following documents posted on OASIS: Attachment C ATCID TRMID CBMID Postback Methodology Questions on the calculation of ATC Call:

NAESB Update Wholesale Electric Quadrant Service Across Multiple Transmission Systems (SAMTS) (OASIS Subcommittee)OASIS Subcommittee  Some key aspects Permits combination of requests and reservations over a time period to be coordinated Only monthly and longer requests may be included (no restriction on reservations) Requests must be submitted pre-confirmed If one request is not accepted in full, customer may reduce or withdraw any and all requests in the group If all requests are accepted at requested capacity, all requests must be confirmed Time zone mismatch is permitted

NAESB Update Wholesale Electric Quadrant Service Across Multiple Transmission Systems (SAMTS) – cont. ( OASIS Subcommittee) OASIS Subcommittee  Recommendation sent to EC for approval Formal comment period ends June 10, linklink Technical conference on 5/20/2011 WEQ Executive Committee to review & vote on 6/30/2011 WEQ Review SessionWEQ EC Meeting for Consideration and Vote Friday, May 20, 2011, from 10:00 am to 5:00 pm C Conference number: Access code: Security code: 1022 Web Cast: (please use same codes) Recommendation: Thursday, June 30, 2011, from 10:00 am to 5:00 pm C Conference number: Access code: Security code: 1022 Web Cast: (please use same codes) Recommendation:

NAESB Update Wholesale Electric Quadrant Network Service on OASIS (NITS) (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  Target for EC completion in 3 rd quarter 2011 NITS work delayed while completing Service Across Multiple Transmission Systems (SAMTS) OASIS subcommittee plans to send out draft version for informal comments early June Next steps are dependent upon magnitude of comments received

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 solution on 10/26/2010 (approved recommendation)approved recommendation  The BPS is working on a permanent solution – Options include: Hybrid Option 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 based on 2-day ahead, 1-day ahead and hour-ahead projected use  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

NAESB Update Wholesale Electric Quadrant Electric Industry Registry (EIR)  Transfers TSIN Registry from NERC to NAESB  OATI will administer for NAESB  Functional Specs are completed  Should be in production 1 st qtr 2012 (with training and parallel operations 4 th quarter 2011)  Data will need to be registered again – not moving TSIN data to EIR  Annual registration fee will be required

Open Access Transmission Tariff Filings In 2011 Duke Energy Carolinas filed an amended OATT to request FERC approval of a new formula rate for Transmission Service  The requested effective date was for June 1, 2011  There was an intervention in favor of the filing  Radial transmission lines will be excluded from the transmission rate based on a going forward basis  The transmission system peak calculation has changed and will change again on June 1, 2011 June, new rates will go into effect e-Tariff Public Viewer 

FERC Order 676-E & 729 OASIS Project FERC 676-E & 729 Ordered on November 24, 2009 Both orders support the NAESB standards and NERC Requirements and required an implementation date of April 1, 2011 Re-bid of Partial Service WEQ through 4.12 Rebid Price – Complete Rebid MW – Complete Priorities for Competing Requests WEQ through 4.16 NAESB Table 4-3 revised - Complete Preconfirmed Priority Duke Business Practice 3.F. Revised to coincide with Table 4-3 OASIS Home Page General Posting Standards WEQ / MOD-001, 004 & 008 Links, Order and Naming Convention - Complete ATC Information Link - ATCID, CBMID, TRMID Documents posted – Complete `

FERC Order 676-E & 729 OASIS Project ATC Narratives and Questions WEQ , 15 & 16 Zero ATC Narratives & Change Narrative – Complete On OASIS > Go to > Select Narrative Attribute & Filters as desired filters ATC or AFC Methodology Questions ATC Contact Person posted on OASIS homepage – Complete 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 Postbacks WEQ Requires a Postback Methodology document be posted on OASIS under the ATC Information Link – Complete `

FERC Order 676-E & 729 OASIS Project 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 – Complete Duke does not have grandfathered agreements Rollover Rights WEQ Duke Business Practice 3.J has been modified to reference the 5yr/1yr requirement 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

FERC Order 676-E & 729 OASIS Project 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 During defined periods CCO service is moved to Transmission Product code = 6-CF Management and accounting templates and processes – Complete Use of CBM WEQ / MOD-004 Requires Posting, Tracking, Ability to query, View and Audit the use of CBM on OASIS Must be Identified in the TP’s CBMID – Complete Duke Energy Carolinas does not currently allocate Capacity Benefit Margins (CBM) on its ATC Paths

FERC Order 729 NERC Requirements 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

Wrap-up Proposed Next Quarterly Stakeholder Meeting – Thursday, September 15, 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