DUKE ENERGY MERCHANTS

DEM achieved strong growth in volumes marketed of both natural gas and power. For 1999 gas volumes increased 31 percent, to 10.5 trillion Btu (TBtu). Power volumes increased 11 percent, to 109,634 gigawatt-hours (GWh). DEM expanded services in 1999 and now encompasses gas sales, power sales, natural gas storage, natural gas transmission, gas supply, controlled generation and power transmission. DEM began to shape a North American commodity market for coal when it reached a throughput agreement with Arch Coal. Through Arch's Catlettsburg, Kentucky, coal terminal DEM will buy, store, blend and market coal.

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