NATURAL GAS TRANSMISSION

Duke Energy Gas Transmission transported 1,566 TBtu to Mid-Atlantic and New England markets in 1999, an annual increase of 7 percent. In December, Maritimes & Northeast Pipeline was placed in service and received the first delivery of natural gas from the Sable Offshore Energy Project. Duke Energy owns 37.5 percent of the pipeline, which has a design capacity of 530 million cubic feet per day (MMcf/d) in Canada and 400 MMcf/d in the U. S.

Earnings growth potential will be driven by gas-fired power generation, as new plants are brought on line to serve growing demand and to replace older plants with cleaner, more efficient technology. Duke Energy Gas Transmission is pursuing a number of projects to meet this growth, including: (1) Hubline and Cross Bay, which will move incremental supply into Boston and New York, respectively; (2) a proposed pipeline that will be built to serve the high-growth Florida market; and (3) Spectrum, designed to move natural gas from the Midwest to the Northeast.

New earnings opportunities arise with the proposed purchase in 2000 of East Tennessee Natural Gas Company. This system's core market is growing above the national average, and it will further enhance revenues by providing access to a new market for Texas Eastern Transmission Corporation's capacity.

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