Item 2. Properties.

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FRANCHISED ELECTRIC

As of December 31, 2002, Franchised Electric operated three nuclear generating stations with a combined net capacity of 5,020 MW (including a 12.5% ownership in the Catawba Nuclear Station), eight coal-fired stations with a combined capacity of 7,699 MW, 31 hydroelectric stations with a combined capacity of 2,806 MW and seven combustion turbine stations with a combined capacity of 2,135 MW. All of the stations are located in North Carolina or South Carolina.

In addition, Franchised Electric owned, as of December 31, 2002, approximately 13,300 conductor miles of electric transmission lines, including 600 miles of 525 kilovolts, 2,600 miles of 230 kilovolts, 6,700 miles of 100 to 161 kilovolts, and 3,400 miles of 13 to 66 kilovolts. Franchised Electric also owned approximately 94,000 conductor miles of electric distribution lines, including 62,800 miles of rural overhead lines, 15,700 miles of urban overhead lines, 8,400 miles of rural underground lines and 7,100 miles of urban underground lines. As of December 31, 2002, the electric transmission and distribution systems had approximately 1,600 substations.

Substantially all of Franchised Electric’s electric plant in service is mortgaged under the indenture relating to Duke Energy’s various series of First and Refunding Mortgage Bonds.

NATURAL GAS TRANSMISSION

Texas Eastern’s gas transmission system extends approximately 1,700 miles from producing fields in the Gulf Coast region of Texas and Louisiana to Ohio, Pennsylvania, New Jersey and New York. It consists of two parallel systems, one with three large-diameter parallel pipelines and the other with one to three large-diameter pipelines. Texas Eastern’s system consists of approximately 8,600 miles of pipeline and 73 compressor stations.

Texas Eastern also owns and operates two offshore Louisiana pipeline systems, which extend over 100 miles into the Gulf of Mexico and include approximately 470 miles of Texas Eastern’s pipelines.

Algonquin’s transmission system connects with Texas Eastern’s facilities in New Jersey, and extends approximately 250 miles through New Jersey, New York, Connecticut, Rhode Island and Massachusetts. The system consists of approximately 1,070 miles of pipeline with seven compressor stations.

ETNG’s transmission system crosses Texas Eastern’s system at two points in Tennessee and consists of two mainline systems totaling approximately 1,185 miles of pipeline in Tennessee and Virginia, with 18 compressor stations.

M&N Pipeline’s transmission system extends approximately 800 miles from producing fields in Nova Scotia through New Brunswick, Maine, New Hampshire and Massachusetts. It has two compressor stations on the system.

The British Columbia Pipeline System (BC Pipeline) consists of the field services division, with more than 1,840 miles of gathering pipelines in British Columbia, Alberta, the Yukon Territory and the Northwest Territories, as well as 22 field compressor stations; four gas processing plants located in British Columbia at Fort Nelson, Taylor, Pine River and in the Sikanni area northwest of Fort St. John, with a total contractible capacity of approximately 1.8 Bcf of residue gas per day; and three elemental sulphur recovery plants located at Fort Nelson, Taylor and Pine River. The pipeline division has approximately 1,740 miles of transmission pipelines in British Columbia and Alberta, as well as 18 mainline compressor stations.

Union Gas owns and operates natural gas transmission, distribution and storage facilities in Ontario. Union Gas distributes natural gas to customers in northern, southwestern and eastern Ontario and provides storage, transportation and related services to utilities and other industry participants in the gas markets of Ontario, Quebec and the Central and Eastern U.S. Union Gas’ underground natural gas storage facilities have a working capacity of approximately 150 Bcf in 20 underground facilities located in depleted gas fields. Its transmission system consists of approximately 3,000 miles of pipeline and six mainline compressor stations. Union Gas’ distribution service area encompasses approximately 400 communities. Its distribution system consists of approximately 20,000 miles of distribution lines serving approximately 1.17 million residential, commercial, and industrial customers.

PNG is a gas transmission and distribution utility which serves customers in west-central and northeastern British Columbia of which Duke Energy owns 40% of the non-voting participating stock and 100% of the voting participating stock. PNG’s transmission system connects with the BC Pipeline system near Summit Lake, British Columbia and extends approximately 370 miles to the West Coast of British Columbia. In addition, PNG owns and operates distribution facilities in various communities located throughout its service area.

MHP owns and operates two natural gas storage facilities: Moss Bluff and Egan. The Moss Bluff facility consists of three storage caverns located in Liberty and Chambers counties near Houston, Texas and has access to five pipelines. The Egan facility consists of three storage caverns located in Acadia Parish in the south central part of Louisiana and has access to seven pipeline facilities.

(For a map showing natural gas transmission and storage properties and additional information on Natural Gas Transmission’s properties, see “Business, Natural Gas Transmission.”)

FIELD SERVICES

(For information and a map showing Field Services’ properties, see “Business, Field Services” earlier in this section.)

DUKE ENERGY NORTH AMERICA

As of December 31, 2002, DENA’s generation portfolio in operation included:

		Name		Gross MW			Net MW			Fuel			Location			Ownership Interest (percentage)
		Moss Landing (a)		2,538			2,538			Natural gas			CA			100	%
		Morro Bay (a)		1,002			1,002			Natural gas			CA			100
		Murray (a)		1,240			1,240			Natural gas			GA			100
		South Bay (a)		700			700			Natural gas			CA			100
		Vermillion (b)		648			648			Natural gas			IN			100
		Lee (b)		640			640			Natural gas			IL			100
		Enterprise Energy (b)		640			640			Natural gas			MS			100
		Southhaven (b)		640			640			Natural gas			MS			100
		Sandersville (b)		640			640			Natural gas			GA			100
		Marshall County (b)		640			640			Natural gas			KY			100
		Hot Spring (a)		620			620			Natural gas			AR			100
		Washington (a)		610			610			Natural gas			OH			100
		Griffith Energy (a)		600			300			Natural gas			AZ			50
		Arlington Valley (a)		570			570			Natural gas			AZ			100
		Hinds (a)		520			520			Natural gas			MS			100
		Maine    Independence (a)		520			520			Natural gas			ME			100
		Bridgeport (a)		500			333			Natural gas			CT			67
		St. Francis (a)		494			248			Natural gas			MO			50
		New Albany    Energy (b)		385			385			Natural gas			MS			100
		American Ref-Fuel (c)		380			190			Waste-to-energy			CT, MA, NJ, NY, PA			50
		Bayside (a)		265			199			Natural gas			NB			75
		Oakland (b)		165			165			Oil			CA			100
		McMahon (d)		117			59			Natural gas			BC			50
		Ft. Frances (d)		110			110			Natural gas			ON			100
		Total		15,184			14,157

DENA had approximately 1,860 net MW under construction for completion to meet summer 2003 peak demands. In addition to facilities in operation or under construction, in September 2002, DENA deferred construction on approximately 2,450 net MW of projects, including its Moapa, Grays Harbor and Luna plants.

(For additional information and a map showing DENA’s properties, see “Business, Duke Energy North America.”)

INTERNATIONAL ENERGY

As of December 31, 2002, International Energy’s generation portfolio in operation included:

		Name		Gross MW			Net MW			Fuel			Location			Approximate Ownership Interest (percentage)
		Paranapanema		2,307			2,185			Hydro			Brazil			95	%
		Hidroelectrica    Cerros Colorados		576			523			Hydro/Natural gas			Argentina			91
		Egenor		529			528			Hydro/Diesel/HFO			Peru			100
		Puncakjaya Power		385			330			Coal/Diesel			Indonesia			86
		Acajutla		293			265			HFO/Diesel			El Salvador			90
		Western Australia    Power		250			247			Natural Gas/Diesel			Australia			100
		Electroquil		180			125			Diesel			Ecuador			69
		DEI Guatemala    y Cia		168			168			HFO/Diesel			Guatemala			100
		Aquaytia		160			61			Natural Gas			Peru			38
		Empressa Electrica    Corani		126			63			Hydro			Bolivia			50
		Glenbrook Power    Station		112			108			Natural Gas/Kiln Gases			New Zealand			100
		Compagnie    Thermique    du Rouvray		103			103			Natural Gas			France			100
		Bairnsdale		86			86			Natural Gas			Australia			100
		Total		5,275			4,792

As of December 31, 2002, DEI had approximately 165 net MW under construction in Latin America and owned approximately 1,340 miles of pipeline systems in Australia. Additionally, DEI had an 11.84% ownership interest in 855 miles of pipeline systems in Australia and a 37.83% ownership interest in 190 miles of pipeline systems in Peru. Also, as of December 31, 2002, DEI had a 25% indirect interest in National Methanol Company, which owns and operates a methanol and MTBE (methyl tertiary butyl ether) business in Jubail, Saudi Arabia. In addition, DEI had a 50% non-controlling ownership interest in the Campeche project, a natural gas compression facility in Mexico and a 30% indirect interest in the Cantarell project, a large nitrogen extraction facility in Mexico.

(For additional information and a map showing International Energy’s properties, see “Business, International Energy.”)

DUKE VENTURES

(For information regarding Duke Ventures’ properties, see “Business, Duke Ventures” earlier in this section.)

OTHER

None of the properties used in Duke Energy’s other business activities are considered material to Duke Energy’s operations as a whole.