Schedule
QuickLinks-- Click here to rapidly navigate through this documentUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14A-101)
Information Required In Proxy Statement

(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF
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the Securities Exchange Act of 1934 (AMENDMENT NO.(Amendment No. )

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Duke Energy Corporation
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[LOGO] Duke Energy
(R)

Proxy
Statement

and notice of
2002 Annual Meeting

[LOGO] Duke Energy (R)

526 South Church Street
Charlotte, NC 28202-1802

Proxy
Statement

and notice of
2005 Annual Meeting
526 South Church Street
Charlotte, NC 28202-1802
March 27, 2002

31, 2005
Dear Shareholder:
I am pleased to invite you to our annual meeting to be held on April 25, 2002May 12, 2005, in the O. J. Miller Auditorium located in our Charlotte headquarters building. We will discuss our 20012004 performance and our goals for 2002,2005 and respond to any questions you may have. Enclosed with this proxy statement are your proxy card, voting instructions, Duke Energy's 2004 Summary Annual Report and Duke Energy's 2001 annual report.

Within the proxy statement you will see that the Board of Directors has
proposed for your approval certain amendments to our Articles of Incorporation.
These proposed changes are designed to modernize this important document and
bring it in line with those of many of our peer companies. On behalf of the
Board of Directors, I urge your support for these important proposals.

2004 Form 10-K.
As in the past, we are offering you the opportunity to cast your vote by telephone or online via the Internet. Whether you choose to vote by proxy card, telephone or Internet, it would help if you would vote as soon as possible.
I look forward to seeing you at the annual meeting.
Sincerely,
/s/ R.B. Priory
R.B. PRIORY
Paul M. Anderson
Chairman of the Board President

and Chief Executive Officer

[LOGO] Duke Energy (R)

526 South Church
Street
Charlotte, NC
28202-1802

526 South Church Street
Charlotte, NC 28202-1802
Notice of Annual Meeting of Shareholders
April 25, 2002

March 27, 2002

May 12, 2005
March 31, 2005

We will hold the annual meeting of shareholders of Duke Energy Corporation on Thursday, May 12, 2005, at 10:00 a.m. in the O. J. Miller Auditorium in the Energy Center located at 526 South Church Street in Charlotte, North Carolina.

The purpose of the annual meeting is to consider and take action on the following:

Election of three nominees as Class II directors and one nominee as Class III director.
2. Approval of amendments to Duke Energy's Restated Articles of Incorporation to eliminate classification of Duke Energy's Board of Directors.
3. Ratification of Deloitte & Touche LLP as Duke Energy's independent auditor for 2005.

Shareholders of record as of March 14, 2005, can vote at the annual meeting. This proxy statement, proxy card and voting instructions, along with our 2004 Summary Annual Report and 2004 Form 10-K, are being distributed on or about March 31, 2005.

Your vote is very important. If voting by mail, please sign, date and return the enclosed proxy card in the enclosed prepaid envelope and allow sufficient time for the postal service to deliver your proxy before the meeting. If voting by telephone or on the Internet, please follow the instructions on your proxy card.

By order of the Board of Directors.

B. Keith Trent
Acting Group Vice President, General Counsel and
Secretary
Table of Contents
Commonly Asked Questions and Answers About the Annual Meeting 1

Proposals to be Voted Upon

Proposal 1:

Election of Directors

Proposal 2:

Approval of Amendments to Duke Energy's Restated Articles of Incorporation to Eliminate Classification of Duke Energy's Board of Directors

Proposal 3:

Ratification of Deloitte & Touche LLP as Duke Energy's Independent Auditor for 2005

The Board of Directors

Beneficial Ownership

Information on the Board of Directors

Report of the Audit Committee

Report of the Compensation Committee

Performance Graph

Executive Compensation

Summary Compensation Table

Option/SAR Grants in 2004

Option Exercises and Year-End Values

Long-Term Incentive Plan—Awards in Last Fiscal Year

Employment Contracts and Termination of Employment and Change-in-Control Arrangements

Retirement Plan Information

Other Information

Appendix A —

Declassification Amendment to the Restated Articles of Incorporation of Duke Energy Corporation

A-1

Appendix B —

Charter of the Audit Committee

B-1
Commonly Asked
Questions and
Answers About the annual meeting of shareholders of Duke Energy Corporation on
Thursday,
April 25, 2002, at 10:00 a.m. in the O. J. Miller Auditorium in the Energy
Center located at
526 South Church Street in Charlotte, North Carolina.

The purpose of the annual meeting is to consider and take action on the
following:

1.
Annual Meeting
Q:
What am I voting on?

A:
•
Election of four directors: the nominees asare Roger Agnelli, G. Alex Bernhardt, Sr., and Dennis R. Hendrix for Class II directors and one nominee as aA. Max Lennon for Class I director.
2. III;
•
Approval of amendments to Duke Energy's Restated Articles of Incorporation to eliminate classification of Duke Energy's Board of Directors; and
•
Ratification of Deloitte & Touche LLP as Duke Energy's independent auditorsauditor for 2002.

Amendment to the Articles of Incorporation to:

3A. Update the corporate purpose clause.
3B. Authorize serial preferred stock.
3C. Increase the shareholder vote required to change the By-Laws.
3D. Decrease the permissible range of size of the Board of Directors.

4. A shareholder proposal relating to investments in alternative energy
sources, if properly presented at the annual meeting.
5. A shareholder proposal relating to the role of the Board of Directors in
long-term strategic planning, if properly presented at the annual meeting.
6. A shareholder proposal relating to the appointment of independent auditors
who only render audit services, if properly presented at the annual meeting.
7. A shareholder proposal relating to a study of the risk and responsibility
for public harm due to Duke Energy's nuclear program, if properly presented
at the annual meeting.

Shareholders of record as of February 28, 2002 can vote at the annual meeting.
This proxy statement, proxy card and voting instructions, along with our 2001
annual report to shareholders, are being distributed on or about March 27, 2002.

Your vote is very important. If voting by mail, please sign, date and return
the enclosed proxy card in the enclosed prepaid envelope, and allow sufficient
time for the postal service to deliver your proxy before the meeting. If voting
by telephone or on the Internet, please follow the instructions on your proxy
card.

By order of the Board of Directors
/s/ Richard W. Blackburn
Richard W. Blackburn
Executive Vice President,
General Counsel and Secretary

Table of Contents
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Commonly Asked Questions and Answers About the Annual Meeting......................... 1

Proposals to be Voted Upon

Proposal 1: Election of Directors................................................ 3

Proposal 2: Ratification of Deloitte & Touche LLP as
Duke Energy's Independent Auditors for 2002............................. 3

Amendment to the Articles of Incorporation to:

Proposal 3A: Update the Corporate Purpose Clause................................. 3

Proposal 3B: Authorize Serial Preferred Stock.................................... 4

Proposal 3C: Increase the Shareholder Vote Required to Change the By-Laws........ 6

Proposal 3D: Decrease the Permissible Range of Size of the Board of Directors.... 7

Shareholder Proposals:

Proposal 4: Investments in Alternative Energy Sources............................ 7

Proposal 5: Role of the Board of Directors in Long-Term Strategic Planning....... 8

Proposal 6: Appointment of Independent Auditors Who Only Render Audit Services... 9

Proposal 7: Study of the Risk and Responsibility for Public Harm Due to Duke
Energy's Nuclear Program................................................ 11

The Board of Directors................................................................ 13

Beneficial Ownership.................................................................. 17

Information on the Board of Directors................................................. 18

Report of the Audit Committee......................................................... 20

Report of the Compensation Committee.................................................. 21

Performance Graph..................................................................... 24

Compensation

Summary Compensation Table........................................................ 25

Option Grants in 2001............................................................. 27

Option Exercises and Year-End Values.............................................. 28

Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.................................................................... 29

Retirement Plan Information....................................................... 30

Other Information..................................................................... 31

Exhibit A - Extract from the Articles of Incorporation of Duke Energy Corporation
showing proposed amendments to Article IV.............................. A-1

Exhibit B - Extract from the Articles of Incorporation of Duke Energy Corporation
showing proposed amendment to Article VII.............................. B-1

Commonly Asked Questions and Answers About the Annual Meeting
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2005.

Q: What am I voting on?

A: . Election of five directors: the nominees are G. Alex Bernhardt, Sr.,
William A. Coley, Max Lennon, Leo E. Linbeck, Jr. and James T. Rhodes;
. Ratification of Deloitte & Touche LLP as Duke Energy's independent
auditors for 2002;
. Amendment to the Articles of Incorporation to:
. Update the corporate purpose clause;
. Authorize serial preferred stock;
. Increase the shareholder vote required to change the By-Laws;

. Decrease the permissible range of size of the Board of Directors;

. Shareholder proposals, if properly presented at the annual meeting,
relating to:
. Investments in alternative energy sources;

. The role of the Board of Directors in long-term strategic planning;

. The appointment of independent auditors who only render audit services;
and
. A study of the risk and responsibility for public harm due to Duke
Energy's nuclear program.

Q:
Who can vote?

A: Common shareholders
Holders of Duke Energy Common Stock as of the close of business on the record date, February 28, 2002,March 14, 2005, can vote at the annual meeting, either in person or by proxy. Each share of Duke Energy Common Stock has one vote.

Q:
How do I vote?

A:
Sign and date each proxy card that you receive and return it in the prepaid envelope or vote by telephone or on the Internet. If we receive your signed proxy card (or properly transmitted telephone or Internet proxy) before the annual meeting, we will vote your shares as you direct. You can specify when submitting your proxy whether your shares should be voted for all, some or none of the nominees for director. You can also specify whether you approve, disapprove or abstain from voting on the other 9two proposals.

If you use the proxy card and simply sign, date and return it without making any selections, your proxy will be voted in accordance with the recommendations of the Board of Directors:
.

•
infavor of the election of the nominees for director named in Proposal 1;
.
•
infavor of Proposals 2, 3A, 3B, 3CProposal 2; and 3D; and
. against Proposals 4, 5, 6 and 7.

•
infavor of Proposal 3.

Q:
May I change my vote?

A:
You may change your vote or revoke your proxy by:

. •
casting another vote either in person at the meeting or by one of the other methods discussed above; or
.
•
notifying the Corporate Secretary, in care of the Investor Relations Department, at Post Office Box 1005, Charlotte, NC 28201-1005.

28201-1005 prior to the close of business on May 11, 2005.

Q:
Can I vote my shares by telephone or on the Internet?

A: If you hold your shares in your own name, you
Yes. You may vote by telephone or on the Internet, by following the instructions included on your proxy card. Your deadline for voting by telephone or on the Internet is 11:59 p.m., April 23, 2002.

If your shares are held in "street name" (in a brokerage account, for
example), you will need to contact your broker or other nominee holder to
find out whether you will be able to vote by telephone or on the Internet.

May 10, 2005.

Q:
Will my shares be voted if I do not provide my proxy?

A: No.
It depends on whether you hold your shares in your own name or in the name of a brokerage firm. If you hold your shares directly in your own name, they will not be voted if you do not provide a proxy unless you vote in person at the meeting. Brokerage firms generally have the authority to vote customers' unvoted shares on certain "routine" matters. If your shares are held in the name of a brokerage firm, the brokerage firm can vote your shares for the election of directors and for Proposals 2 3A and 3D (but not the other
proposals)3 if you do not timely provide your proxy because these matters are considered "routine" under the applicable rules.

Q:
As a participant in the Duke Energy employee,Retirement Savings Plan, how do I vote shares held in my account in the
Duke Energy Retirement Savings Plan?

plan account?

A:
If you are a participant in the Duke Energy Retirement Savings Plan, you have the right to directprovide voting directions to the Planplan trustee, in the voting ofby submitting your proxy card, for those shares of Duke Energy Common Stock that are held by the Planplan and allocated to your Planplan account on any issues presented at the annual meeting. Plan participant proxies will be treated confidentially.
If you elect not to vote by proxy,provide voting directions to the plan trustee, shares allocated to your Planplan account willare to be voted by the Planplan trustee in the same proportion as those shares held by the Planplan for which the Planplan trustee has received directionvoting directions from Planplan participants. 1

Commonly Asked QuestionsThe plan trustee will follow participants' voting directions, and Answers About the Annual Meeting
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plan procedure for voting in the absence of voting directions, unless it determines that to do so would be contrary to its fiduciary responsibility.
Q:
What constitutes a quorum?

A:
As of the record date, February 28, 2002, 778,199,474March 14, 2005, 957,948,926 shares of Duke Energy Common Stock were issued and outstanding and entitled to vote at the

Commonly Asked
Questions and
Answers About the
Annual Meeting

meeting. In order to conduct the annual meeting, a majority of the shares entitled to vote must be present in person or by proxy. This is referred to as a "quorum." If you submit a properly executed proxy card or vote by telephone or on the Internet, you will be considered part of the quorum. Abstentions and broker "non-votes" will be counted as present and entitled to vote for purposes of determining a quorum. A broker "non-vote" occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner.

Q:
What vote is needed for these proposals to be adopted?

A:
Directors are elected by a plurality of the votes cast at the meeting. "Plurality" means that the nominees receiving the largest number of votes cast are elected as directors up to the maximum number of directors to be chosen at the meeting. In order for Proposal 2 to take effect, it must be approved by holders of at least 80% of the voting power of outstanding Duke Energy Common Stock. A majority of the votes cast at the meeting is required to approve the other proposals, except that 80% of the Common Stock
outstanding on February 28, 2002 is required to approve Proposal 3D.3. For the election of directors, abstentions and broker "non-votes" will not be counted. For the other proposals,Proposals 2 and 3, abstentions and broker "non-votes" will not be counted as votes cast.

Q:
Who conducts the proxy solicitation and how much will it cost?

A:
Duke Energy is asking for your proxy for the annual meeting and will pay all the costs of asking for shareholder proxies. We have hired Georgeson Shareholder Communications, Inc. to help us send out the proxy materials and ask for proxies. Georgeson's fee for these services is $22,500,$17,500 plus out-of-pocket expenses. We can ask for proxies through the mail or personally by telephone, telegram, fax or other means. We can use directors, officers and regular employees of Duke Energy to ask for proxies. These people do not receive additional compensation for these services. We will reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding solicitation material to the beneficial owners of Duke Energy Common Stock.

Q:
How does a shareholder nominate someone to be a director of Duke Energy or bring business before the annual meeting?

A:
Nominations for director may be made only by the Board of Directors or by a shareholder who has given the proper notice, as provided in the By-Laws, as amended, of such shareholder's intention to appear in person at the annual meeting and nominate a candidate for director. Pursuant to the By-Laws, as amended, such notice must be given between 90 and 120 days prior to the first anniversary of the previous year's annual meeting. For the 20032006 annual meeting, we must receive this notice on or after December 26, 2002,January 12, 2006, and on or before January 25, 2003.

February 11, 2006.

Such notice and nomination should be submitted in writing to the Corporate Secretary, Duke Energy Corporation, P. O. Box 1006, Charlotte, NC 28201-1006 within the specified time limits and should include the information required for shareholder nominations as set forth under the caption "Corporate Governance Committee and Nomination of Directors" under "Information on the Board of Directors" below in this proxy statement. Nominations properly made by shareholders are also considered by the Corporate Governance Committee for possible recommendation to the Board of Directors, which determines which nominees to recommend for election by the shareholders.

Other business may be brought before an annual meeting by a shareholder who has delivered notice (containing certain information specified in the By-Laws) within the time limits described above for delivering notice of a nomination for the election of a director. These requirements apply to any matter that a shareholder wishes to raise at an annual meeting other than through the SEC'sSecurities and Exchange Commission's shareholder proposal procedures. If you intend to use the SECSecurities and Exchange Commission procedures and wish to have your proposal included in next year's proxy statement, you must deliver the proposal in writing to our Corporate Secretary by November 27, 2002.

December 1, 2005.

A copy of the full text of the By-Law advance notice provisions discussed above may be obtained by writing to the Office of the Corporate Secretary, Post Office Box 1006, Charlotte, North Carolina 28201-1006.

Proposals to be
Voted Upon
- --------------------------------------------------------------------------------

PROPOSAL 1:
Election of Directors
The Board of Directors recommends a vote FOR each nominee.
The Board of Directors of Duke Energy currently consists of 12 members,13 members. Two directors, Robert J. Brown and Leo E. Linbeck, Jr., will be retiring at the 2005 annual meeting pursuant to Duke Energy's Board of Directors retirement policy, and one director, George Dean Johnson, Jr., has notified Duke Energy that he will be resigning at the 2005 annual meeting. These three directors have served Duke Energy for many years, and Duke Energy thanks them for their years of service. Following the 2005 annual meeting, the Board will consist of 10 members. However, as discussed below under the caption "Corporate Governance Committee and Nomination of Directors" under "Information on the Board of Directors," the Corporate Governance Committee has recently recommended to the Board of Directors the appointment of James H. Hance, Jr., the recently retired vice chairman of Bank of America Corporation, as a director upon the receipt of a required regulatory approval, which is not expected prior to the 2005 annual meeting. The Board of Directors will consider the appointment of Mr. Hance only after the regulatory approval is obtained, and thus Mr. Hance's nomination is not being submitted to the shareholders for election at the 2005 annual meeting. If appointed, Mr. Hance will stand for election by the shareholders at the 2006 annual meeting.
The Board of Directors is divided into three classes. The three-year terms of the classes are staggered so that the term of one class expires at each annual meeting. The terms of the four Class II directors will expire at the 20022005 annual meeting. In addition, James T.
Rhodes,meeting, including Roger Agnelli, who was appointed as a Class III director by the Board of Directors on October 30, 2001, will stand for election atAugust 24, 2004, and effective November 19, 2004, and Dennis R. Hendrix, who was appointed as a Class II director by the 2002 annual meeting. If
elected, his term will expire atBoard of Directors on December 16, 2004. Mr. Agnelli and Mr. Hendrix were recommended to the 2004 annual meeting.

Corporate Governance Committee by Duke Energy's Chief Executive Officer and by nonmanagement directors, respectively.
The Board of Directors has nominated the following Class II directors for election:
Roger Agnelli, G. Alex Bernhardt, Sr., Williamand Dennis R. Hendrix, as Class II directors; and A. Coley, Max Lennon and Leo E.
Linbeck, Jr. It has nominated James T. Rhodes for election as a Class IIII director.
The terms of the Class II directors elected at the 2005 annual meeting will expire in 2008. The term of the Class III director elected at the 2005 annual meeting will expire in 2006.
If any director is unable to stand for election, the Board of Directors may reduce the number of directors or designate a substitute. In that case, shares represented by proxies may be voted for a substitute director. We do not expect that any nominee will be unavailable or unable to serve.

As part
PROPOSAL 2:
Approval of our agreementAmendments to acquire Westcoast Energy Inc.,Duke Energy's Restated Articles of Incorporation to Eliminate Classification of Duke Energy's Board of Directors.
The Board of Directors recommends a vote FOR this proposal.
The Board of Directors has unanimously approved, and recommends that the shareholders approve, amendments to Duke Energy's Restated Articles of Incorporation to declassify the Board of Directors agreedand to appoint Michael E.J. Phelps, Westcoast's Chief Executive
Officer, as a directorprovide for annual election of Duke Energy following consummationdirectors.
Article VIII of the transaction. Since such consummation did not occur in sufficient time to permitRestated Articles of Incorporation currently provides for the Board of Directors to nominate Mr. Phelps and have him includedbe divided into three classes, as nearly equal in this
proxy statementnumber as a nominee for election to the Board of Directors, he will be
appointed as a director in Class I at the next regular meetingpossible, with each class serving staggered three-year terms. The classification of the Board of Directors was adopted by amendment to the Restated Articles of Incorporation in 1991 following the consummationapproval of the Westcoast acquisition.amendment by holders of over 80% of the then-outstanding Duke Energy Common Stock. Classification is intended to preserve the continuity and experience of Board members and to allow Duke Energy a level of protection against unfair treatment in takeover situations by eliminating the threat of abrupt removal and making it more difficult and time consuming to take control of the Board of Directors.
Some shareholder groups believe that classified boards reduce accountability and responsiveness of the Board of Directors by eliminating the ability to evaluate and elect all directors each year. A shareholder proposal seeking declassification of the Board of Directors was presented to shareholders at Duke Energy's 2004 annual meeting, and a majority of shareholders who voted on the proposal voted in favor of it.

Proposals to be
Voted Upon
Proposal 2 Continued
After careful consideration of the issue, and in light of the shareholders' approval of last year's declassification proposal, the Board of Directors has determined that it would be in the best interests of Duke Energy to eliminate classification of the Board. While the Board of Directors believes that the benefits of a classified board are important, the Board is committed to ensuring maximum accountability by the Board and by management to Duke Energy's shareholders, and annual elections of directors would provide shareholders with a means of evaluating each director each year.
In connection with declassification of the Board, the Board of Directors has also approved, and recommends that shareholders approve, an amendment to the Restated Articles of Incorporation that conforms the provision for the filling of vacancies to the declassification of the Board. The Board of Directors intendshas also approved conforming amendments to nominate Mr. PhelpsDuke Energy's By-Laws that would automatically take affect upon shareholder approval of Proposal 2. A copy of the proposed amendments to the Restated Articles of Incorporation is attached to this proxy statement as Appendix A.
If the shareholders approve Proposal 2, all directors, including those elected at this 2005 annual meeting of shareholders, would continue to serve the remainder of their terms, such that approximately one-third of the directors will stand for election toin 2006, approximately two-thirds of the directors will stand for election in 2007 and all directors will stand for election in 2008, with their successors being elected for one-year terms that expire at the next annual meeting. However, the Board of Directors has unanimously adopted a resolution that, if shareholders approve Proposal 2, encourages all directors whose terms continue past the 2006 annual meeting of shareholders to resign effective with the 2006 annual meeting, so that all directors would stand for election in 2006.
Approval of the amendments to the Articles of Incorporation requires the affirmative vote of holders of at least 80% of the 2003 annual meeting.

voting power of outstanding Duke Energy Common Stock.
PROPOSAL 2:
3:
Ratification of Deloitte & Touche LLP as Duke Energy's Independent AuditorsAuditor for 2002

2005
The Board of Directors recommends a vote FOR this proposal.
The Board of Directors upon recommendation ofconcurs with the reappointment, subject to shareholder ratification, by the Audit Committee has
reappointed, subject to shareholder ratification,of the firm of Deloitte & Touche LLP, certifieda registered public accountants,accounting firm, as independent auditors to examine Duke Energy's accounts for the year 2002.2005. If the shareholders do not ratify this appointment, the Board of DirectorsAudit Committee will consider other certifiedregistered public accountants upon recommendation of the Audit Committee.

accounting firms.
A representative of Deloitte & Touche LLP will as in prior years, attend the annual meeting and will have the opportunity to make a statement and be available to respond to appropriate questions.

PROPOSALS 3A through 3D:
Amendments to the Articles of Incorporation

While our Articles of Incorporation have been amended many times over the years
as the need arose, until recently no attempt has been made to determine whether
this document as a whole reflects modern corporate practices. As a result of a
recent analysis, the Board of Directors has determined that a number of
provisions contained in the Articles of Incorporation are either outmoded or no
longer necessary and recommends that the shareholders approve the adoption of
proposed amendments to those provisions as discussed below.

PROPOSAL 3A:
Updating of the Corporate Purpose Clause

The Board of
Directors recommends a vote FOR this proposal.

State law allows a corporation to state in its Articles of Incorporation the
purpose or purposes for which it is organized. The corporate purpose clause
currently set forth in Article III of our Articles of Incorporation was adopted
in 1917 and, consistent with the practice at that time, is very specific. While
augmented in later years and now of considerable length, it does not reflect
Duke Energy's current operations. The Board of Directors believes it would be
advisable to replace this outdated provision with a modern Article which states
that Duke Energy may engage in any lawful act or activity for which
corporations may be organized under the business corporation statute of North
Carolina, as amended from time to time. The proposed amendment is not intended
to change or otherwise affect Duke Energy's current business strategy. Rather,
it is standard language frequently used by North Carolina corporations and is a
desirable part of the set of proposals designed to modernize Duke Energy's
Articles of Incorporation.

Proposals to be Voted Upon
- --------------------------------------------------------------------------------

PROPOSAL 3B:
Authorization of Serial Preferred Stock

The Board of Directors recommends a vote FOR this proposal.

Under Article IV of the Articles of Incorporation, Duke Energy is currently
authorized to issue 2,000,000,000 shares of Common Stock, without par value,
12,500,000 shares of Preferred Stock, $100 par value per share, 10,000,000
shares of Preferred Stock A, $25 par value per share, and 1,500,000 shares of
Preference Stock, $100 par value per share. As of February 28, 2002, there were
outstanding 778,199,474 shares of Common Stock, five series of Preferred Stock
without sinking fund requirements having an aggregate par value of
$178,000,000, two series of Preferred Stock with sinking fund requirements
having an aggregate par value of $38,000,000 and one series of Preferred Stock
A without sinking fund requirements having a par value of $31,000,000. There
were no shares of Preference Stock outstanding as of that date.

Reasons for the Proposed Amendment

The basic structure of Article IV relating to the issuance of the Preferred
Stock and the Preferred Stock A (Preferred Stocks) by series was adopted during
the 1950's based upon statutory authorization enacted many years earlier, and
has a number of features prevalent at that time that are no longer desirable.
These include a two-thirds class vote of the Preferred Stocks for issuances
exceeding 250,000 shares in the case of Preferred Stock or 1,000,000 shares in
the case of Preferred Stock A unless certain earnings and assets tests are met,
and for the approval of certain mergers and consolidations involving Duke
Energy regardless of size and whether or not Duke Energy is the surviving
corporation. Article IV also does not permit the Board of Directors to issue
series of the Preferred Stocks having general voting power.

The Board of Directors believes that it would be advisable to amend Article IV
to authorize a new class of Preferred Stock, to be known as "Serial Preferred
Stock," consisting of 20,000,000 shares issuable in series, which would provide
the flexibility needed to meet current requirements of the securities market or
the exigencies of negotiations for the acquisition of other corporations or
properties. The proposed Serial Preferred Stock would not be set aside for any
specific purpose, but would be subject to issuance in the discretion of the
Board of Directors from time to time for any proper corporate purpose without
further action by the shareholders. The terms of any new series will be
dependent largely on conditions existing at the time of issuance and therefore
cannot be indicated at the present time.

The Board of Directors has no immediate intention to enter into any
negotiations, agreements or understandings with respect to the proposed Serial
Preferred Stock, but considers it advisable and in the best interests of Duke
Energy to have such shares authorized and available for issuance to meet future
requirements if and when the need arises. Requiring the shareholders to meet
and approve each separate issuance of a series would be time-consuming and
costly, particularly in those instances where the number of shares to be issued
may be small in relation to the total capital of Duke Energy. Moreover, if
shareholder approval of such securities were postponed until a specific need
arose, the delay could, in some instances, deprive Duke Energy of opportunities
otherwise available.

If the shareholders approve the proposed amendment to Article IV, Duke Energy
will no longer issue any shares of Preferred Stock or Preferred Stock A and
anticipates that over time it will redeem or otherwise retire the outstanding
series of those classes of stock when it is deemed cost-efficient to do so and
otherwise advantageous under the circumstances. One of the outstanding series
of Preferred Stock with sinking fund requirements must be redeemed by Duke
Energy in December of this year, and the other outstanding series is
mandatorily redeemable in installments commencing in June 2003. By that time,
all outstanding series of Preferred Stock without sinking fund requirements
will be subject to redemption at the option of Duke Energy. The outstanding
series of Preferred Stock A without sinking fund requirements will be subject
to redemption at the option of Duke Energy commencing in December 2003.

The proposal of the Board of Directors contemplates that when all series of
Preferred Stock and Preferred Stock A are redeemed or otherwise retired, the
Articles of Incorporation will be amended, without further shareholder
authorization, to delete all references to the Preferred Stock and the
Preferred Stock A in Article IV of the Articles of Incorporation. At such time,
the Serial Preferred Stock, if and when issued, will become the senior equity
securities of Duke Energy.

Proposals to be Voted Upon
- --------------------------------------------------------------------------------

Proposal 3B continued

Proposed Serial Preferred Stock

The Serial Preferred Stock will rank junior to the Preferred Stock and the
Preferred Stock A and senior to the Preference Stock and the Common Stock with
respect to dividends and distribution of assets upon liquidation, dissolution
or winding up of Duke Energy.

The Board of Directors will be authorized to determine at the time of creating
each series the designations, preferences, limitations and relative rights of
the series permitted to be fixed by the Board of Directors pursuant to proposed
Article IV, including, but not limited to, the distinctive designation of and
the number of shares in the series, the terms of any dividend payable thereon,
the terms, if any, on which shares of the series may be redeemed, the terms of
any applicable sinking fund, any conversion or voting rights of the series and
the amount payable upon liquidation, dissolution or winding up of Duke Energy.
All shares of Serial Preferred Stock of the same series will be identical in
all respects and, except for the permitted variances and differences between
series expressly provided for in the resolutions creating the series as
contemplated by the proposed Article IV, all shares of Serial Preferred Stock
of all series will be identical in all respects.

Subject to the prior rights of the Preferred Stocks, each series of Serial
Preferred Stock with dividend rights will be entitled to receive, if declared
by the Board of Directors, and before any dividends are paid on the Preference
Stock or the Common Stock, dividends upon such terms as may be fixed by the
Board of Directors for such series.

Duke Energy will be permitted to redeem, pursuant to the provisions of any
applicable sinking fund or otherwise, any series of Serial Preferred Stock, or
any part thereof, upon such terms as the Board of Directors may fix at the time
it creates such series.

If so provided by the Board of Directors at the time of creation of the series,
the shares of a series of Serial Preferred Stock may be convertible or
exchangeable into shares of Common Stock or other securities of Duke Energy or
of any other corporation or other entity, upon terms fixed at the time of
creation of the series.

In the event of any voluntary or involuntary liquidation, dissolution or
winding up of Duke Energy, the holders of each series of Serial Preferred Stock
will be entitled to receive, subject to the prior payment in full of the
amounts payable in such event to the holders of the Preferred Stocks and before
any distribution is made to the holders of the Preference Stock or the Common
Stock, the distributive amount fixed by the Board of Directors at the time such
series was created.

The holders of the Serial Preferred Stock will have such voting rights as a
series or otherwise with respect to the election of directors or otherwise as
may be fixed by the Board of Directors at the time of the creation of the
series, in addition to any voting rights provided by law.

If so provided by the Board of Directors at the time of creation of the series,
the shares of a series of Serial Preferred Stock may be subject to restrictions
and conditions upon the issuance of any additional Serial Preferred Stock
ranking on a parity with or prior to such shares as to dividends or upon
dissolution.

The holders of the Serial Preferred Stock will have no preemptive rights. The
Serial Preferred Stock, when issued, will be fully paid and nonassessable.

The full text of the proposed Article IV of the Articles of Incorporation,
which includes the provisions for the proposed Serial Preferred Stock, is set
forth in Exhibit A to this proxy statement. The foregoing description of the
proposed Serial Preferred Stock is qualified in its entirety by reference to
such provisions.

Anti-Takeover Aspects

The Board of Directors has undertaken not to issue the Serial Preferred Stock
for the principal purpose of acting as an anti-takeover device and to seek
shareholder approval prior to authorizing the issuance of any Serial Preferred
Stock for that purpose.

Serial Preferred Stock can be, and has been, used by corporations specifically
for anti-takeover purposes. For example, shares of Serial Preferred Stock can
be privately placed with purchasers who support a board of directors in
opposing a tender offer or other hostile takeover bid, or can be issued to
dilute the stock ownership and voting power of a third party seeking a merger
or other extraordinary corporate transaction. Under these and similar
circumstances, the Serial Preferred Stock can serve to perpetuate incumbent
management and can adversely affect shareholders who may want to participate in
the tender offer or other transaction.

The Board of Directors is sensitive to these issues, particularly because Duke
Energy's Articles of Incorporation and By-Laws already contain provisions that
may have an anti-takeover effect. These provisions require, among other things,
(i) a classified Board of Directors, (ii) a vote of at least

Proposals to be Voted Upon
- --------------------------------------------------------------------------------

Proposal 3B continued

80% of Duke Energy's voting power to amend certain provisions of its Articles
of Incorporation, and (iii) advance notice procedures with respect to
shareholder proposals and nominations of directors. Duke Energy also has a
shareholder rights plan, the effect of which may be to discourage attempts to
gain control of Duke Energy without the approval of the Board of Directors. The
shareholder rights plan would not be affected by the proposed authorization of
shares of Serial Preferred Stock.

The proposal to amend Article IV is not part of a plan to adopt a series of
anti-takeover measures, and Duke Energy has no present intent to propose other
anti-takeover measures in future proxy solicitations. To emphasize this point,
the Board of Directors has adopted resolutions that state that the Serial
Preferred Stock authorized by the proposed amendment of Article IV:

a) not be used for the principal purpose of acting as an anti-takeover device
without shareholder approval; and

b) not be given supermajority voting rights except possibly with respect to
proposed amendments to the Articles of Incorporation altering materially
existing provisions of the Serial Preferred Stock or creating, or increasing
the authorized amount of, any class of stock ranking, as to dividend or
assets, prior to the Serial Preferred Stock.

--------
Unless required by North Carolina law, no further authorization for the
issuance of the Serial Preferred Stock would be necessary, but any such
issuance would be subject to the approval of the North Carolina Utilities
Commission and The Public Service Commission of South Carolina.

Financial Statements

A copy of the annual report to shareholders was mailed on or about March 27,
2002 to each shareholder of record on February 28, 2002. Reference is made to
the consolidated financial statements of Duke Energy, selected quarterly data
and management's discussion and analysis of results of operations and financial
condition, all appearing in such report, which are incorporated herein by this
reference. The consolidated financial statements of Duke Energy incorporated
herein have been examined by Deloitte & Touche LLP, independent auditors, to
the extent and for the periods indicated in their report thereon.

PROPOSAL 3C:
Requiring a Majority Vote of Holders of Outstanding Shares to Adopt, Amend or
Repeal the By-Laws

The Board of Directors recommends a vote FOR this proposal.

North Carolina law currently permits the shareholders to adopt, amend or repeal
the by-laws of a corporation at a meeting of the shareholders at which a
majority of the shares entitled to vote on the matter is present in person or
by proxy if the votes cast at the meeting favoring the action exceed the votes
cast at the meeting opposing the action. This could allow a minority (and in
certain circumstances a small minority) of the shareholders, without any
involvement by the board of directors of the corporation in the process, to
effect significant changes in a corporation's by-laws.

The Board of Directors believes that the By-Laws of Duke Energy, which,
together with its Articles of Incorporation, constitute its fundamental
governing documents, should be changed by the shareholders only when holders of
a majority of the outstanding shares entitled to vote on the matter favor such
change. Accordingly, the Board of Directors proposes to add a new Article VII
to the Articles of Incorporation, which would, as permitted by North Carolina
law, require the affirmative vote of the holders of at least a majority of the
combined voting power of the then outstanding shares of stock of all classes
entitled to vote generally in the election of directors, voting together as a
single class, for the shareholders to adopt, amend or repeal any provisions in
the By-Laws. This voting requirement would also apply to any amendment or
repeal of new Article VII of the Articles of Incorporation or the adoption of
any provision inconsistent with the new Article.

The full text of the proposed Article VII of the Articles of Incorporation,
which would replace current Article VII which is no longer required to be
included as part of the Articles of Incorporation, is set forth in Exhibit B to
this proxy statement.

Proposals to be Voted Upon
- --------------------------------------------------------------------------------

PROPOSAL 3D:

Decrease the Permissible Range of Size of the Board of Directors

The Board of Directors recommends a vote FOR this proposal.

The By-Laws of Duke Energy have provided since 1986 that the number of
directors constituting the Board of Directors will be not less than twelve nor
more than twenty-four as fixed from time to time within those limits by the
Board of Directors. In that year the number of directors was fixed at twenty.
This By-Law provision was carried forward into the Articles of Incorporation of
Duke Energy in 1991 when certain amendments were made to that document. At that
time the number of directors was fixed at nineteen.

Consistent with modern governance principles, the Board of Directors has tended
in recent years to favor a smaller board as being more effective and has fixed
the number of directors at twelve, commencing with the date of the 2002 annual
meeting. The Board of Directors believes that the number of directors
constituting the Board of Directors should be not less than nine nor more than
eighteen, with the actual number of directors within that range continuing to
be fixed by the Board of Directors, and deems advisable a proposed amendment to
clause (a) of Article VIII of the Articles of Incorporation effecting this
change. The Board of Directors has made a corresponding change in the By-Laws,
subject to shareholder approval of the proposed amendment, to take effect on
the date of such approval.

SHAREHOLDER PROPOSALS

The following four proposals have been submitted by shareholders for inclusion
in this proxy statement. Upon oral or written request, we will promptly furnish
the names and addresses of the shareholders submitting the proposals, as well
as the number of shares they held at the time the proposals were submitted.

PROPOSAL 4:
Investments in Alternative Energy Sources

The Board of Directors recommends a vote AGAINST this shareholder proposal.

Invest in Clean Energy (I.C.E.) Proposal

Be it resolved that Duke Energy shall invest sufficient resources to build new
electrical generation from solar and wind power sources to replace
approximately one percent (1%) of system capacity yearly for the next twenty
years with the goal of having the company producing twenty percent (20%) of
generation capacity from clean renewable sources in 20 years.

Supporting Statement

Utility deregulation demands the company present a good public image, and the
public is demanding progress towards clean energy.
Efforts must be made to slow down changes in global climate so that we can
continue to survive on planet earth.

The proposal allows flexibility in schedule for the Board of Directors to
implement this proposal. The 20% figure is just a reasonable and conservative
goal to aim for.

A one percent yearly addition to generation capacity allows for small pilot
plants to be built and tried as the program advances.

The company should look to building facilities that are made to last a long
time.

Solar power towers, wind farms, solar photovoltaic arrays and parabolic solar
thermal collectors already exist in other places in this range of power
production, proving that Duke could realistically build such facilities in the
Carolinas and elsewhere.

Opposing Statement of the Board of Directors

A proposal identical to this proposal was submitted at last year's annual
meeting by one of the two shareholders making this proposal and was opposed by
over 95% of the shareholders voting at the meeting. The Board of Directors
believes that this proposal is contrary to the best interests of Duke Energy
and the shareholders.

Duke Energy considers the development of clean, renewable energy sources to be
a matter of importance. It also supports research in the development and
commercial deployment of such technologies and closely monitors technological
developments in this sector. Duke Energy has developed several different
commercial projects utilizing these kinds of technologies and participates in
commercial developments that are consistent with its business strategy and
capital investment requirements. As with other generation technologies deployed
by Duke Energy, renewable energy generation technologies must be economically
attractive in addition to their having technological feasibility.

The proponents would have shareholders require Duke Energy to pursue certain
renewable energy sources without reference to any economic, scientific or
technical data on which to evaluate such actions. If adopted, the proposal
would require Duke Energy to replace its electric generating system capacity
with solar and wind power sources by approximately 1% per year, regardless of
whether 1% replacements are practical and regardless of cost, and to commit to
that timetable for the next 20 years.

Proposals to be Voted Upon
- --------------------------------------------------------------------------------

Proposal 4 continued

The proposal generally requires Duke Energy to replace portions of its electric
generation system in artificial, predetermined percentage amounts according to
an artificial, predetermined timetable. Changes in the composition of electric
generation systems, however, do not occur in successive increments of
approximately 1% and are not implemented on the basis of the sort of timetable
that the proposal specifies. Moreover, the proposal could require Duke Energy
to dismantle system capacity that might be highly productive in order to
replace it with solar and wind power technologies, replacements that would
involve very substantial costs with respect to construction and maintenance.
Based on data provided by the World Energy Assessment conducted by the United
Nations Development Programme, the technologies included in the proposal
presently are 3 times to 40 times as expensive as current conventional
generation technologies.

The timing and advisability of entering into any new business, such as
renewables, including research and marketing decisions relating to it, require
the judgment of experienced management. Duke Energy has experience in renewable
energy. It has participated in past research and development and commercial
ventures involving renewable energy, including biomass and solar energy.
However, the long-term commitment and scale of investment required by the
proposal would not, in the Board's opinion, be in the best interests of
shareholders or customers.

The Board of Directors opposes this proposal because it requires Duke Energy to
adopt a highly restrictive and costly plan with respect to Duke Energy's future
electric operations. Duke Energy remains committed through research, technology
and innovation to meet consumers' demands for new products and services. Duke
Power, a Duke Energy company, is participating in a collaborative effort to
develop a voluntary green power program for North Carolina electric consumers.

The Board of Directors believes, however, that the requirement in the proposal
that Duke Energy should actively pursue a business activity such as renewable
energy sources, irrespective of consumers' demands, technical data and economic
factors, is unwarranted and not in the best interests of shareholders.

The Board of Directors recommends a vote AGAINST this proposal for the reasons
set forth above.

PROPOSAL 5:
Role of the Board of Directors in Long-Term Strategic Planning

The Board of Directors recommends a vote AGAINST this shareholder proposal.

Resolved, that the shareowners of Duke Energy Corporation ("Company") hereby
urge that the Board of Directors prepare a description of the Board's role in
the development and monitoring of the Company's long-term strategic plan.
Specifically, the disclosure should include the following: (1) A description of
the Company's corporate strategy development process, including timelines; (2)
an outline of the specific tasks performed by the Board in the strategy
development and the compliance monitoring processes, and (3) a description of
the mechanisms in place to ensure director access to pertinent information for
informed director participation in the strategy development and monitoring
processes. This disclosure of the Board's role in the strategy development
process should be disseminated to shareowners through appropriate means,
whether it be posted on the Company's website or sent via a written
communication to shareowners.

Statement of Support

The development of a well-conceived corporate strategy is critical to the
long-term success of a corporation. While senior management of our Company is
primarily responsible for development of the Company's strategic plans, in
today's fast-changing environment it is more important than ever that the Board
engage actively and continuously in strategic planning and the ongoing
assessment of business opportunities and risks. It is vitally important that
the individual members of the Board, and the Board as an entity, participate
directly and meaningfully in the development and continued assessment of our
Company's strategic plan.

A recent report by PricewaterhouseCoopers entitled "Corporate Governance and
the Board - What Works Best" examined the issue of director involvement in
corporate strategy development. The Corporate Governance Report found that
chief executives consistently rank strategy as one of their top issues, while a
poll of directors showed that board contributions to the strategic planning
process are lacking. It states: "Indeed, it is the area most needing
improvement. Effective boards play a critical role in the development process,
by both ensuring a sound strategic planning process and scrutinizing the plan
itself with the rigor required to determine whether it deserves endorsement."

Proposals to be Voted Upon
- --------------------------------------------------------------------------------

Proposal 5 continued

The Company's proxy statement, and corporate proxy statements generally,
provides biographical and professional background information on each director,
indicates his or her compensation, term of office, and board committee
responsibilities. While this information is helpful in assessing the general
capabilities of individual directors, it provides shareholders no insight into
how the directors, individually and as a team, participate in the critically
important task of developing the Company's operating strategy. And while there
is no one best process for board involvement in the strategy development and
monitoring processes, shareholder disclosure on the Board's role in strategy
development would provide shareholders information with which to better assess
the performance of the board in formulating corporate strategy. Further, it
would help to promote "best practices" in the area of meaningful board of
director involvement in strategy development.

We urge your support for this important corporate governance reform.

Opposing Statement of the Board of Directors

The Board of Directors believes that this proposal is contrary to the best
interests of Duke Energy and the shareholders.

The Board of Directors annually reviews management's long-term strategic plan
and reviews strategic updates. It also reviews management's specific goals at
the beginning of the year and actual performance periodically. These duties are
consistent with Duke Energy's board governance principles, and the Board of
Directors fully recognizes the importance of these obligations. The Corporate
Performance Review Committee of the Board of Directors is responsible for
assessing the implementation of strategy by business unit or function.

The Board of Directors believes that no useful purpose would be served by
providing the shareholders with a detailed description of the role of the Board
of Directors in the development and monitoring of Duke Energy's long-term
strategic plan, as requested by the proposal.

A detailed description of the role of the Board of Directors in the strategy
development process would soon become obsolete in many respects. The
opportunities that appear to be available for a given future time period when a
strategic plan is designed are often very different from the opportunities that
actually materialize. Further, variances from a strategic plan typically
develop as performances are realized. For these reasons, the Board of Directors
evaluates Duke Energy's strategic plan and management's actual performance in
achieving Duke Energy's goals by using a dynamic process that analyzes numerous
factors and peer comparisons. Of necessity, this process changes over time.

The detailed description of Duke Energy's corporate strategy development
process, including timelines, as envisioned by the proposal, could compromise
sensitive corporate information. It thus could put Duke Energy at a competitive
disadvantage without in any way aiding the oversight function of the Board of
Directors.

Approval of the proposal would not in itself result in disclosure of the role
of the Board of Directors in the development and monitoring of Duke Energy's
long-term strategic plan. Approval by the shareholders would only serve to urge
the Board of Directors to provide the requested information. Disclosure would
actually occur only after the Board of Directors exercises its collective
business judgment in determining that making the disclosure would be in the
best interests of Duke Energy and the shareholders.

The Board of Directors recommends a vote AGAINST this proposal for the reasons
set forth above.

PROPOSAL 6:
Appointment of Independent Auditors Who Only Render Audit Services

The Board of Directors recommends a vote AGAINST this shareholder proposal.

RESOLVED: That the shareholders of Duke Energy request that the Board of
Directors adopt a policy that in the future the firm that is appointed to be
the Company's independent accountants will only provide audit services to the
Company and not provide any other services.

Supporting Statement

The Securities and Exchange Commission passed new proxy statement rules that
took effect February 5, 2001, which require companies to disclose how much they
pay their accounting firms for audit services and non-audit services.

The results have been startling. According to a Wall Street Journal article of
April 10, 2001: "The nation's biggest companies last year paid far more money
than previously estimated to their independent accounting firms for services
other than auditing, newly disclosed figures show, renewing questions about
whether such fees create conflicts of interest for auditing firms... At issue:
How objective can an accounting firm be in an audit when it is also making
millions of dollars providing the client with other services."

Proposals to be Voted Upon
- --------------------------------------------------------------------------------

Proposal 6 continued

That Wall Street Journal article reported that of the 307 S&P 500 companies it
had surveyed, the average fees for non-audit services were nearly three times
as big as the audit fees. The Company's 2001 proxy statement revealed that it
had paid its independent auditor $3.3 million for its audit work and $11.7
million for other work.

When the SEC was seeking comments on its accountant disclosure rules,
substantial institutional investors urged that auditors should not accept
non-audit fees from companies. The California Public Employees' Retirement
System's General Counsel, Kayla J. Gillan, wrote: "The SEC should consider
simplifying its Proposal and drawing a bright-line test: no non-audit services
to an audit client." TIAA-CREF's Chairman/CEO John H. Biggs wrote:
"...independent public audit firms should not be the auditors of any company
for which they simultaneously provide other services. It's that simple."

It is respectfully submitted that it would be in the best interests of the
Company's shareholders if the Board of Directors adopts a policy that in the
future any firm appointed to be the Company's independent accountants shall
only provide audit services to the Company and not provide any other services.

Opposing Statement of the Board of Directors

The Board of Directors believes that adoption of this proposal would not be in
the best interests of Duke Energy or its shareholders.

Duke Energy is closely monitoring developments and public concerns in the area
of auditor independence and will readily comply with evolving legal and
regulatory requirements. As Deloitte & Touche LLP has announced its intention
to split its management consulting business from its audit services business,
the Board of Directors believes that this proposal is unnecessary.

As noted in the discussion under "Fees Paid to Independent Auditors" under
"Other Information" below in this proxy statement, Duke Energy has retained
Deloitte & Touche LLP to advise it on a number of matters in addition to its
core auditing functions. As set forth in that section, Duke Energy engaged
Deloitte & Touche LLP to perform various "nonaudit" services in 2001 for which
that firm billed approximately $27.6 million. This amount included $21.9
million for tax services and $5.7 million primarily for advice related to
acquisitions and divestitures and for the issuance of consents and comfort
letters in connection with SEC filings and financing transactions. These
nonaudit services are compatible with maintaining auditor independence. Indeed,
the SEC stated in its release promulgating the auditor independence rules that
"[a]ccountants will continue to be able to provide a wide variety of non-audit
services to their audit clients."

Decisions to engage a particular accounting firm are made by Duke Energy only
when two conditions are met. The first is a determination that the accounting
firm's particular expertise, coupled with its knowledge of Duke Energy and
management and financial systems, provides substantial assurance of
high-quality and timely results with tangible cost savings. The second is a
determination that the engagement is consistent with the maintenance of auditor
independence as required by the auditor independence rules of the SEC. These
determinations are reviewed regularly with the Audit Committee, as noted in the
Report of the Audit Committee.

Discretion in determining the best allocation of tasks among accounting (and
other) firms is an essential component of the ability of the Board of Directors
and the Audit Committee to discharge their responsibilities to Duke Energy and
its shareholders. The Board of Directors believes that the retention of this
discretion is entirely consistent with Duke Energy's ability to monitor and
ensure the independence of its auditors. In the area of tax services, Duke
Energy uses a number of different firms and does not rely on any firm
exclusively.

The Executive Vice President and Chief Financial Officer, the Corporate
Controller and the Audit Committee monitor and evaluate the performance of
Deloitte & Touche LLP in both its auditing services and its nonaudit services,
the magnitude of the fees paid for such services and the compatibility of the
nonaudit services with the maintenance of the firm's independence. Moreover, in
late 2000, Duke Energy adopted restrictions beyond the requirements of the
auditor independence rules of the SEC by prohibiting Deloitte & Touche LLP from
providing internal auditing services or financial information systems design
and implementation services. Duke Energy will adopt further prohibitions on
various nonaudit services as warranted by the circumstances.

In addition to these internal procedures, Duke Energy annually seeks
shareholder ratification of its selection of independent auditors. Duke Energy
also provides to its shareholders information relating to fees paid to its
auditors as well as disclosure of the Audit Committee's consideration of
whether the provision of nonaudit services is compatible with maintaining their
independence, all as required by the rules of the SEC.

Proposals to be Voted Upon
- --------------------------------------------------------------------------------

Proposal 6 continued

Given the recent announcement of Deloitte & Touche LLP about its consulting
business, the protective measures already in place and the disclosures required
when independent auditors are selected for nonaudit work, the Board of
Directors believes there is little chance for abuse and no benefit to Duke
Energy or its shareholders from an arbitrary limitation on the power of
management and the Board of Directors to exercise business judgment in the
selection of auditors.

The Board of Directors recommends a vote AGAINST this proposal for the reasons
set forth above.

PROPOSAL 7:
Study of the Risk and Responsibility for Public Harm Due to Duke Energy's
Nuclear Program

The Board of Directors recommends a vote AGAINST this shareholder proposal.

Nuclear Risk and Responsibility

The shareholders request the Board of Directors to conduct an open
comprehensive study, utilizing independent public resources, oversight, and
participation (but excluding proprietary and confidential information),
defining Duke Energy's risk of, and potential responsibility for, causing
public harm due to the company's continued participation in nuclear energy
programs, and to prepare, at reasonable expense, a report for the next annual
shareholders' meeting in 2003.

Supporting Statement

Duke Energy's Environmental, Health & Safety Policy states:

Duke Energy highly values the health and safety of our employees, customers
and communities.

Duke Energy will engage in partnerships that enhance public environmental,
health & safety awareness and address common environmental, health & safety
issues.

Duke Energy will foster open dialogue and informed decision making through
meaningful and regular communication of environmental, health and safety
information with management, employees and the public.

Additional Supporting Statement

The last Nuclear Regulatory Commission study of reactor accident consequences
was done by the Sandia National Laboratory in 1981.

Duke Energy has made application to the Nuclear Regulatory Commission to renew
the operating licenses for the McGuire and Catawba nuclear plants for an
additional 20 years and, if approved, will have authorization to operate these
plants until the years 2041-2046. License approval by the Nuclear Regulatory
Commission, and subsequent operation of the reactors, would extend by 20 years
the risks associated with plant aging and the threats associated with terrorism.

The Nuclear Regulatory Commission acknowledges the threat of terrorism attacks
on nuclear facilities. While ongoing analysis at the federal level is
essential, when such questions are raised at the local level, they are often
considered generic and not within the scope of the license renewal process.

Opposing Statement of the Board of Directors

The Board of Directors believes that this proposal is contrary to the best
interests of Duke Energy and the shareholders.

Duke Energy takes very seriously its responsibility to operate its nuclear
facilities safely, and it has an outstanding record in discharging its
responsibility in this regard. Duke Energy continues to be one of the top
performers in the U.S. nuclear industry in terms of regulatory safety as
indicated by reviews of the Nuclear Regulatory Commission (NRC) and the
Institute of Nuclear Power Operations.

Duke Energy conducts probabilistic risk assessments for its nuclear facilities,
which are reactor safety studies that consider the likelihood of various
accident sequences and the likely results. These studies use the most current
risk assessment methodology and the most current reliability information. Duke
Energy uses these studies to identify changes that would enable it to continue
to operate its nuclear facilities in a safe manner. These studies are shared
with various federal regulatory agencies as appropriate and are updated as
necessary.

The proposal asks that an open comprehensive study utilizing independent public
resources be undertaken and implies that a meaningful study of this kind can be
conducted and a report thereon can be issued. In fact, a meaningful study of
the sort requested by the proposal would likely be impossible to conduct and
the report that is requested by the proposal may run counter to national
security interests. This is because a substantial amount of information that is
used to develop probabilistic risk assessments for Duke Energy's nuclear
facilities is not, and never has been, available to the public. Due to
restrictions placed on the public availability of information by the NRC
following the terrorist attacks of September 11, 2001, certain information that
previously was available to the public

Proposals to be Voted Upon
- --------------------------------------------------------------------------------

Proposal 7 continued

has since been restricted. To the extent that the proposal requests an analysis
of vulnerabilities to terrorist attack, that analysis would require the
consideration of security-sensitive information which has never been publicly
available. Disclosure of this kind of information could raise substantial
homeland security concerns.

Duke Energy also has in place effective aging management programs for its
nuclear facilities which have been approved by the NRC. Duke Energy is
committed to implementing additional aging management programs in the context
of license renewals for those facilities as necessary to mitigate the effects
of aging during any extended periods of operation.

The Board of Directors believes that a meaningful study and report of the kind
the proposal requests, using the sources the proposal requires and conducted in
the manner the proposal specifies, cannot be generated. Such a study would also
be unnecessary since Duke Energy's analyses and assessments already address the
kinds of risks that the proposal could legitimately have the new study address.
The Board of Directors thus believes that adoption of the proposal is not in
the best interests of Duke Energy and its shareholders.

The Board of Directors recommends a vote AGAINST this proposal for the reasons
set forth above.

The Board of Directors
- --------------------------------------------------------------------------------

Nominees for election at the annual meeting are marked with an asterisk (*).

[PHOTO] G. Alex Bernhardt, Sr.

G. Alex Bernhardt, Sr. *
Director since 1991
Chairman and CEO, Bernhardt Furniture Company, furniture manufacturer
Age 58

Mr. Bernhardt has been associated with Bernhardt Furniture Company of Lenoir,
North Carolina, since 1965. He was named President and a director in 1976 and
became Chairman and CEO in 1996.

[PHOTO] Robert J. Brown

Robert J. Brown
Director since 1994
Chairman and CEO, B&C Associates, Inc., marketing research and public relations
firm
Age 67

Mr. Brown founded B&C Associates, Inc., High Point, North Carolina, in 1960,
served as its President from 1960 until 1968 and has been its Chairman and CEO
since 1973. He is a director of Wachovia Corporation, Sonoco Products Company
and AutoNation, Inc. He is a Class III director with a term expiring in 2003.

[PHOTO] William A. Coley

William A. Coley *

Director since 1990
Group President, Duke Power, franchised electric operations of Duke Energy
Age 58

Mr. Coley joined Duke Energy in 1966. He was named President of Duke Energy's
Associated Enterprises Group in 1994 and was appointed to his present position
in June 1997. He is a director of CT Communications, Inc. and SouthTrust
Corporation.

Roger Agnelli*
Director since 2004
President and Chief Executive Officer
Companhia Vale do Rio Doce (CVRD), Brazil,
global mining company and the world's largest
producer of iron ore
Age 45

Mr. Agnelli was elected President and CEO of CVRD in 2001. He served in various positions at Bradesco, a Brazilian financial conglomerate, from 1981 to 2001 and was President and CEO of Bradespar S.A. from March, 2000, to July, 2001. He is a director of Asea Brown Boveri (ABB. Ltd).

Paul M. Anderson
Director since 2003
Chairman of the Board and CEO, Duke Energy Corporation
Age 59

Mr. Anderson became Chairman of the Board and CEO in November 2003. He served as Managing Director and CEO of BHP Billiton LTD and BHP Billiton PLC from 1998 to his retirement in 2002, was President and Chief Operating Officer of Duke Energy from 1997 to 1998 and President and Chief Executive Officer of PanEnergy Corp from 1995 to 1997, prior to the 1997 merger of PanEnergy Corp and Duke Energy. He is a director of Qantas Airways Limited. He is also a Global Counselor for The Conference Board Inc. He is a Class I director with a term expiring in 2007.

G. Alex Bernhardt, Sr.*
Director since 1991
Chairman and CEO, Bernhardt Furniture Company,
furniture manufacturer
Age 62

Mr. Bernhardt has been associated with Bernhardt Furniture Company of Lenoir, North Carolina, since 1965. He was named President and a director in 1976 and became Chairman and CEO in 1996.

The Board of Directors
- --------------------------------------------------------------------------------

[PHOTO] William T. Esry

William T. Esrey
Director since 1985
Chairman and CEO, Sprint Corporation,
a diversified telecommunications holding company
Age 62

Mr. Esrey has served as Chairman of Sprint Corporation since 1990 and as its
CEO since 1985. He was President of Sprint Corporation from 1985 to 1996. Mr.
Esrey is a director of Sprint Corporation, General Mills, Inc., and Exxon Mobil
Corporation and had been a director of PanEnergy Corp since 1985. He is a Class
III director with a term expiring in 2003.

[PHOTO] Ann Maynard Gray

Ann Maynard Gray
Director since 1994
Former Vice President, ABC, Inc. and Former President, Diversified Publishing
Group of ABC, Inc., television, radio and publishing
Age 56

Ms. Gray was President, Diversified Publishing Group of ABC, Inc. from 1991
until 1997, and was a Corporate Vice President of ABC, Inc. and its
predecessors from 1979 to 1998. She is a director of JP Morgan Funds, Elan
Corporation, plc, and The Phoenix Companies, Inc. and had been a director of
PanEnergy Corp since 1994. Ms. Gray is a Class I director with a term expiring
in 2004.

[PHOTO] Dennis R. Hendrix

Dennis R. Hendrix
Director since 1990
Retired Chairman of the Board, PanEnergy Corp
Age 62

Mr. Hendrix was Chairman of the Board of PanEnergy Corp from 1990 to 1997, CEO
from 1990 to 1995, and President from 1990 to 1993. He served as a director of
Texas Eastern Transmission Corporation (now Texas Eastern Transmission, LP)
from 1990 to 1997 and as its President and CEO from 1990 to 1994. Mr. Hendrix
is a director of Allied Waste Industries, Inc., International Power, PLC and
Newfield Exploration Company. He is a Class I director with a term expiring in
2004.

William T. Esrey
Director since 1985
Chairman Emeritus, Sprint Corporation,
a diversified telecommunications holding company
Age 65

Mr. Esrey, Chairman Emeritus of Sprint Corporation, served as its CEO from 1985 to 2003, and as its Chairman from 1990 to 2003. He also served as Chairman of Japan Telecom from 2003 to 2004. Mr. Esrey is a director of General Mills, Inc., and served as a director of PanEnergy Corp since 1985. He is a Class III director with a term expiring in 2006.

Ann Maynard Gray
Director since 1994
Former Vice President, ABC, Inc. and Former President,
Diversified Publishing Group of ABC, Inc.,
television, radio and publishing
Age 59

Ms. Gray was President, Diversified Publishing Group of ABC, Inc. from 1991 until 1997, and was a Corporate Vice President of ABC, Inc. and its predecessors from 1979 to 1998. She is a director of Elan Corporation, plc, and The Phoenix Companies, Inc. and served as a director of PanEnergy Corp since 1994. She is a Class I director with a term expiring in 2007.

Dennis R. Hendrix*
Director since 2004
Retired Chairman of the Board, PanEnergy Corp
Age 65

Mr. Hendrix rejoined the Board of Directors in December 2004, having previously served from 1997 to 2002. He was Chairman of the Board of PanEnergy Corp from 1990 to 1997, CEO from 1990 to 1995 and President from 1990 to 1993. Mr. Hendrix is a director of Allied Waste Industries Inc., Grant Prideco, Inc. and Newfield Exploration Company.

The Board of Directors
- --------------------------------------------------------------------------------

[PHOTO] George Dean Johnson, Jr.

George Dean Johnson, Jr.
Director since 1986
CEO, Extended Stay America,
development, ownership and management of extended-stay lodging facilities
Age 59

Mr. Johnson was a co-founder of Extended Stay America and has served as its CEO
since 1995. He is a director of Extended Stay America, Boca Resorts, Inc. and
AutoNation, Inc. Mr. Johnson is a Class III director with a term expiring in
2003.

[PHOTO] Max Lennon

Max Lennon *
Director since 1988
Retired President, Mars Hill College, Mars Hill, NC
Age 61

Dr. Lennon served as President of Mars Hill College from 1996 until 2002. He
served as President of Eastern Foods, Inc. from 1994 through 1995. He was
previously involved in higher education from 1966 to 1994, his last tenure
being at Clemson University where he served as President for eight years. Dr.
Lennon is a director of Delta Woodside Industries, Inc. and Delta Apparel.

[PHOTO] Leo E. Linbeck, Jr.

Leo E. Linbeck, Jr. *
Director since 1986
Chairman, President and CEO, Linbeck Corporation,
holding company of four construction-related firms
Age 67

Mr. Linbeck assumed his present position in 1990 after serving as Chairman,
President and CEO of Linbeck Construction Corporation from 1975 to 1990. He
served as a director of PanEnergy Corp from 1986.

A. Max Lennon, Ph.D.*
Director since 1988
President, Education and Research Services,
nonprofit economic development organization
Age 64

Dr. Lennon was appointed to his present position in 2003. He was President of Mars Hill College from 1996 until 2002. He served as President of Eastern Foods, Inc. from 1994 through 1995. Dr. Lennon was previously involved in higher education from 1966 to 1994, his last tenure being at Clemson University where he served as President for eight years. He is a director of Delta Woodside Industries, Inc. and Delta Apparel.

James G. Martin, Ph.D.
Director since 1994
Corporate Vice President, Carolinas HealthCare
System, largest healthcare system in the Carolinas
Age 69

Dr. Martin was named to his present position in 1995. He served as Governor of the State of North Carolina from 1985 to 1993 and was a member of the United States House of Representatives, representing the Ninth District of North Carolina, from 1973 to 1984. Dr. Martin is a director of Palomar Medical Technologies, Inc., aaiPharma Inc. and Family Dollar Stores, Inc. He is a Class III director with a term expiring in 2006.

The Board of
Directors
- --------------------------------------------------------------------------------

[PHOTO] James G. Martin

James G. Martin, Ph.D.
Director since 1994
Vice President, Carolinas HealthCare System
Age 66

Dr. Martin was named to his present position in 1995. He served as Governor of
the State of North Carolina from 1985 to 1993 and was a member of the United
States House of Representatives, representing the Ninth District of North
Carolina, from 1973 to 1984. Dr. Martin is a director of Palomar Medical
Technologies, Inc., aaiPharma Inc. and Family Dollar Stores, Inc. He is a Class
III director with a term expiring in 2003.

[PHOTO] Richard B. Priory

Richard B. Priory
Director since 1990
Chairman of the Board, President and CEO, Duke Energy Corporation
Age 55

Mr. Priory became Chairman of the Board and CEO in June 1997 upon the merger of
Duke Energy and PanEnergy Corp and became President in November 1998. He had
served as President and Chief Operating Officer of Duke Energy from 1994 until
June 1997. He is a director of Dana Corporation and US Airways Group, Inc. and
serves on the boards of the Edison Electric Institute and the Institute of
Nuclear Power Operations. Mr. Priory is also a member of the National Academy
of Engineering. He is a Class III director with a term expiring in 2003.

[PHOTO] James T. Rhodes

James T. Rhodes *
Retired Chairman, President and CEO, Institute of Nuclear Power Operations
Age 60

Dr. Rhodes was appointed a director of Duke Energy Corporation in October 2001.
He was Chairman and CEO of the Institute of Nuclear Power Operations from 1998
to 2001 and Chairman, President and CEO from 1999 until 2001. He served as
President and CEO of Virginia Electric & Power Company, a subsidiary of
Dominion Resources, Inc., from 1989 until 1997.

Michael E.J. Phelps
Director since 2002
Chairman, Dornoch Capital Inc., investment company
Chairman, Duke Energy Canadian Advisory Council
Age 57

Mr. Phelps was named Chairman, Dornoch Capital Inc. in 2003 and Chairman, Duke Energy Canadian Advisory Council in 2002. He served as Chairman and CEO of Westcoast Energy Inc. from 1992 to 2002. He is a director of Canfor Corporation, Canadian Pacific Railway Company and Fairborne Energy Ltd. He is a Class I director with a term expiring in 2007.

James T. Rhodes, Ph.D.
Director since 2001
Retired Chairman, President and CEO, Institute of Nuclear Power Operations, a nonprofit
corporation promoting safety, reliability and excellence in nuclear plant operation
Age 63

Dr. Rhodes was Chairman and CEO of the Institute of Nuclear Power Operations from 1998 to 1999 and Chairman, President and CEO from 1999 until 2001. He served as President and CEO of Virginia Electric & Power Company, a subsidiary of Dominion Resources, Inc., from 1989 until 1997. Dr. Rhodes is a member of the Advisory Council for the Electric Power Research Institute. He is a Class I director with a term expiring in 2007.

Beneficial
Ownership
- --------------------------------------------------------------------------------

This
The following table indicates how much Duke Energy Common Stock was beneficially owned by the current directors, the executive officers listed in the Summary Compensation Table under "Compensation""Executive Compensation" below ("(referred to as the Named Executive Officers")Officers), and by all current directors and executive officers as a group as of February 28,
2002.

. 15, 2005.
•
The shares listed as "Beneficially Owned" include shares held as of February 28, 200215, 2005, in ourDuke Energy's employee benefit plans and in trust for the current
directors under their compensation plan.

. plans.

•
Beneficial ownership of shares by current directors and executive officers as a group represents beneficial ownership of less than 1% of the outstanding shares of Duke Energy Common Stock.

Shares of Common Stock

Name or Identity of Group Beneficially

Total Owned Shares
Beneficially Owned /2/
¹

R. Agnelli 62
P.M. Anderson 801,421
G.A. Bernhardt, Sr. 21,618 26,718
R.P. Brace/1/ 20,559 132,359
24,355
R.J. Brown 12,043 17,143
W.A. Coley/1/ 45,235 407,785
39,870
W.T. Esrey 49,962 55,062
79,554
F.J. Fowler/1/ 104,723 648,172
Fowler 1,115,244
A.M. Gray 33,571 38,671
61,282
D.L. Hauser 195,336
D.R. Hendrix 420,763 425,863
H.S. Hook 42,504 47,604
300,993 ²
G.D. Johnson, Jr. 27,047 32,147
M. 823,309 ³
A.M. Lennon 21,802 26,902
22,237
L.E. Linbeck, Jr. 45,011 50,111
74,284
J.G. Martin 12,170 14,670
R.J. Osborne/1/ 19,050 144,050
H.J. Padewer/1/ 21,939 238,789
R.B. Priory/1/ 32,354 809,154
22,103
J.W. Mogg 448,002
M.E.J. Phelps 46,536
J.T. Rhodes 4,380 4,380
15,503
R.G. Shaw 559,654
Directors and executive officers
as a group (21) 990,543 3,894,642
(22) 5,683,008

/1/ Also own Common Stock equivalents under Duke Energy executive compensation
and benefits arrangements as of February 28, 2002 in
¹
Includes the following amounts: R.B. Priory, 383,281; R.P. Brace, 13,107; F.J. Fowler, 82,511;
H.J. Padewer, 111,533; W.A. Coley, 162,677; R.J. Osborne, 82,409.

/2/ Includesnumber of shares that may be acquired within 60 days after February 28,
2002.

This table shows how many units of limited partnership interests in TEPPCO
Partners, L.P. were beneficially owned on February 28, 2002 bywith respect to which directors of
Duke Energy,and Named Executive Officers have the right to acquire beneficial ownership within sixty days of February 15, 2005, including conversion of vested stock equivalents and byexercise of vested options (including options that are not in-the-money) upon voluntary termination: P.M. Anderson, 631,667; G.A. Bernhardt, Sr., 20,753; R.J. Brown, 31,886; W.T. Esrey, 39,783; F.J. Fowler, 989,309; A.M. Gray, 41,781; D.L. Hauser, 172,330; D.R. Hendrix, 11,760; G.D. Johnson, Jr., 16,900; A.M. Lennon, 20,875; L.E. Linbeck, Jr., 37,818; J.G. Martin, 16,256; J.W. Mogg, 374,552; M.E.J. Phelps, 46,536; J.T. Rhodes, 5,524; R.G. Shaw, 546,075; directors and executive officers as a group (22), 3,943,456. Number of shares that directors have a right to acquire based on conversion of phantom stock is based on the closing price of Duke Energy as a group. TEPPCO Partners, L.P. is a publicly traded master
limited partnership,Common Stock on February 15, 2005. See "Aggregated Option/SAR Exercises in Last Fiscal Year and Texas Eastern Products Pipeline Company, an indirect
subsidiaryFiscal Year-End Option/SAR Values" for information about in-the-money options.

²
Mr. Hendrix disclaims beneficial ownership of 20,895 shares.

³
Mr. Johnson disclaims beneficial ownership of 200,000 shares.

Beneficial
Ownership
The following table indicates how much and what percentage of Duke Energy Common Stock was beneficially owned as of December 31, 2004, by each person known to Duke Energy to be the beneficial owner of five percent (5%) or more of Duke Energy's Common Stock based on information provided in Schedule 13G/A filed with the Securities and Exchange Commission (SEC) by Capital Research and Management Company on February 11, 2005, and Schedule 13G filed with the SEC by Dodge & Cox on February 10, 2005.

Shares of Common Stock

Name and Address of Beneficial Owner
Beneficially
Owned
Percentage

Capital Research and Management Company
333 South Hope Street
Los Angeles, CA 90071 52,574,690 ¹ 5.6%
Dodge & Cox
555 California Street, 40th Floor
San Francisco, California 94104 52,888,566 ² 5.6%
¹
According to its Schedule 13G, Capital Research and Management Company is its general partner. Asbeneficial owner as a result of February 28, 2002,acting as investment adviser to various investment companies, and has no voting power and sole dispositive power with respect to these shares.

²
According to the number of unitsSchedule 13G filed by Dodge & Cox, these shares are beneficially owned by directorsits clients, and executive officers of Duke
Energy as a group was less than 1% of the outstanding units. None ofDodge & Cox has sole voting power with respect to 49,615,836 shares, shared voting power with respect to 735,200 shares, and sole dispositive power with respect to all these persons had the right to acquire units within 60 days after February 28, 2002.

Number of Units
Name or Identity of Group Beneficially Owned

R.J. Brown 1,500
F.J. Fowler 3,100
D.R. Hendrix 7,400
H.S. Hook 4,000
R.J. Osborne 1,000
Directors and executive officers as a group 18,100

shares.

Information on
the Board of
Directors

- --------------------------------------------------------------------------------

Board Meetings and Attendance
The Board of Directors had ten12 meetings during 2001.2004. No director attended less than 75% of the total of the boardBoard meetings and the meetings of the committees upon which he or she served. The average overall attendance percentage for meetings of the Board of Directors in 2004 was 94% and for meetings of Board committees was 94%. Ann M. Gray was appointed as lead director on May 12, 2004. The lead director is responsible for presiding at Board meetings when the Chairman/Chief Executive Officer is not present, presiding at executive sessions of the nonmanagement directors, assisting in developing the Board agenda in collaboration with the Chairman/Chief Executive Officer, calling special meetings of the Board of Directors, and serving as a liaison between the independent directors and the Chairman/Chief Executive Officer. Directors are encouraged to attend the annual meeting of shareholders. Ten directors attended the 2004 annual meeting of shareholders.
Independence of Directors
The Board of Directors may determine a director to be independent if the Board has affirmatively determined that the director has no material relationship with Duke Energy or its subsidiaries (references in this proxy statement to Duke Energy's subsidiaries shall mean its consolidated subsidiaries), either directly or as a shareholder, director, officer or employee of an organization that has a relationship with Duke Energy or its subsidiaries. Independence determinations will be made on an annual basis at the time the Board of Directors approves director nominees for inclusion in the annual proxy statement and, if a director joins the Board between annual meetings, at such time.
The Board of Directors has determined that the following directors are independent under the listing standards of the New York Stock Exchange: R. Agnelli, G.A. Bernhardt, Sr., R.J. Brown, W.T. Esrey, A.M. Gray, D.R. Hendrix, A.M. Lennon, L.E. Linbeck, Jr., J.G. Martin, M.E.J. Phelps and J.T. Rhodes. In reaching this conclusion, the Board of Directors considered all transactions and relationships between each director or any member of his or her immediate family and Duke Energy and its subsidiaries.
To assist in this determination, the Board of Directors adopted the following categorical standards for relationships that are deemed not to impair a director's independence:

Relationship
Requirements for Immateriality of Relationship
Personal Relationships

The director or immediate family member resides within a service area of, and is provided with utility service by, Duke Energy or its subsidiaries.

Utility service must be provided in the ordinary course of the provider's business and at rates or charges fixed in conformity with law or governmental authority, or if the service is unregulated, on arm's-length terms.

The director or immediate family member holds securities issued publicly by Duke Energy or its subsidiaries.

The director or immediate family member can receive no extra benefit not shared on a pro rata basis.

The director or immediate family member receives pension or other forms of deferred compensation for prior service, or other

•
The compensation cannot be contingent in any way on continued service, and
compensation unrelated to director or meeting fees, from Duke Energy or its subsidiaries. • the director has not been employed by Duke Energy or any company that was a subsidiary of Duke Energy at the time of such employment for at least three years, or the immediate family member has not been an executive officer of Duke Energy for at least three years and any such compensation that is not pension or other forms of deferred compensation for prior service cannot exceed $10,000 per year.

Information on
the Board of
Directors

Relationship
Requirements for Immateriality of Relationship
Business Relationships

Payments for property or services are made between Duke Energy or its subsidiaries and a company associated* with the director or

•
Payment amounts must not exceed the greater of $1,000,000 or 2% of the associated company's revenues in any of its last three fiscal years, and
immediate family member who is an executive officer of the associated company. • Relationship must be in the ordinary course of Duke Energy's or its subsidiary's business and on arm's-length terms.

Indebtedness is outstanding between Duke Energy or its subsidiaries and a company associated* with the director or immediate

•
Indebtedness amounts must not exceed 5% of the associated company's assets in any of its last three fiscal years, and
family member. • Relationship must be in the ordinary course of Duke Energy's or its subsidiary's business and on arm's-length terms.

The director or immediate family member is a nonmanagement director of a company that does business with Duke Energy or its subsidiaries or in which Duke Energy or its subsidiaries have an equity interest.

The business must be done in the ordinary course of Duke Energy's or its subsidiary's business and on arm's-length terms.

An immediate family member is an employee (other than an executive officer) of a company that does business with Duke Energy or its subsidiaries or in which Duke Energy or its subsidiaries have an equity interest.

If the immediate family member lives in the director's home, the business must be done in the ordinary course of Duke Energy's or its subsidiary's business and on arm's-length terms.

The director and his or her immediate family members together own 5% or less of a company that does business with Duke Energy or its subsidiaries or in which Duke Energy or its subsidiaries have an equity interest.

None
Charitable Relationships

Charitable donations or pledges are made by Duke Energy or its subsidiaries to a charity associated* with the director or immediate family member.

Donations and pledges must not result in payments exceeding the greater of $100,000 and 2% of the charity's revenues in any of its last three fiscal years.

A charity associated* with the director or immediate family member is located within a service area of, and is provided with utility service by, Duke Energy or its subsidiaries.

Payments for property or services are made between Duke Energy or its subsidiaries and a charity associated* with the director or immediate family member.

Relationships must be in the ordinary course of Duke Energy's or its subsidiary's business and on arm's-length terms or subject to competitive bidding.
*An "associated" company is one (a) for which the director or immediate family member is a general partner, principal or employee, or (b) of which the director and his or her immediate family members together own more than 5%. An "associated" charity is one for which the director or immediate family member serves as an officer, director, advisory board member or trustee.
For purposes of these standards, immediate family members include a director's spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers-and sisters-in-law, and anyone (other than domestic employees) who shares the director's home. For purposes of the contribution relationship described under "Charitable Relationships" above, payments exclude amounts contributed or pledged to match employee contributions or pledges.
Board Committees
The Board of Directors has the five standing committees described below:

.
•
TheAudit Committee recommends to the Board of Directors the engagement of appoints Duke Energy's independent auditors;auditor; provides independent oversight with
respect tofor financial reporting and internal controls, the internal audit function and the independent auditors;auditor; determines whether the independent
auditors are independentindependence of auditors; and makes recommendations on audit matters and internal controls to the Board of Directors.

Information on
the Board of
Directors
•
TheCompensation Committee sets the salaries and other compensation of all executive officers of Duke Energy except the Chairman of the Board and Chief
Executive Officer.Energy. This Committee makes recommendations to the Board of
Directors regarding the salary and other compensation of the Chairman of the
Board and Chief Executive Officer for consideration and action by the Board
of Directors, without the presence or participation of the Chairman of the
Board and Chief Executive Officer. The Committeecommittee also makes recommendations to the Board of Directors on compensation for outside directors. . The Compensation Committee established, effective February 22, 2005, a subcommittee that sets performance-based compensation for executive officers for purposes of Section 162(m) of the Internal Revenue Code.

•
TheCorporate Governance Committee considers matters related to corporate governance and formulates and periodically revises principles for board
governance principles. It recommends to the Board of Directors the size and composition of the Board of Directors, within the limits set forth inof the Restated Articles of Incorporation and By-Laws, as amended, and recommends potential successors to the Chief Executive Officer. This Committeecommittee also considers nominees recommended by shareholders for the Board of Directors recommended by shareholders.

. Directors. This committee may engage an external search firm or third party to identify or evaluate or to assist in identifying or evaluating a potential nominee.

•
The Corporate Performance Review Committee assesses the level of operational
risk and monitors and makes recommendations for improving Duke Energy's
overall operational performance. It also determines whether current
operating practices provide sufficient support for Duke Energy's emphasis on
continuous improvement.

. The Finance and Risk Management Committee reviews Duke Energy's financial and fiscal affairs and makes recommendations to the Board of Directors regarding dividend,dividends, financing and fiscal policies. It reviews the financial exposure of Duke Energy, together withas well as mitigating strategies, and determines whether actions taken by management with respect to financial matters are consistent with Duke Energy's internal controls approvedcontrols.

•
TheNuclear Oversight Committee provides oversight of the nuclear safety, operational and financial performance, and long-term plans and strategies of Duke Energy's nuclear power program. The oversight role is one of review, observation and comment and in no way alters management authority, responsibility or accountability.
Each committee operates under a written charter adopted by the Audit Committee.

Board of Directors. The charters are posted on Duke Energy's Internet Web site:http://www.duke-energy.com/investors/corporate.htm and are available in print to any shareholder upon request.
Board Committee Membership Roster

Corporate Finance and
Corporate Performance Risk
Name Audit Compensation Governance Review Management

G.A. Bernhardt, Sr. X* X
R.J. Brown X X
W.T. Esrey X X
A.M. Gray X X
D.R. Hendrix X X
H.S. Hook X X
G.D. Johnson, Jr. X X*
M. Lennon X* X
L.E. Linbeck, Jr. X X*
J.G. Martin X X*
R.B. Priory X X
J.T. Rhodes X X
Number of
meetings in 2001 7 6 5 6 6
-------------------------------------------------------------------------
(as of March 31, 2005)

Name
Audit
Compensation
Corporate
Governance
Finance and Risk
Management
Nuclear
Oversight

R. Agnelli X X
P.M. Anderson
G.A. Bernhardt, Sr. X X
R.J. Brown ** X X
W.T. Esrey X *
A.M. Gray X X * X
D.R. Hendrix X X
G.D. Johnson, Jr.** X
A.M. Lennon X
L.E. Linbeck, Jr.** X X
J.G. Martin X * X X
M.E.J. Phelps X X *
J.T. Rhodes X X *
Number of meetings in 2004 17 6 6 8 5
* Chair

** Retiring or resigning from Board of Directors at 2005 annual meeting

Information on
the Board of
Directors
Audit Committee and Audit Committee Financial Expert
All the members of the Audit Committee have been affirmatively determined to be independent within the meaning of the listing standards of the New York Stock Exchange and Duke Energy's categorical standards of independence. In addition, each Audit Committee member meets the independence and expertise requirements for audit committee membership under existing New York Stock Exchange rules as well as the rules and regulations of the SEC.
The Audit Committee charter is attached hereto as Appendix B. The Board of Directors has determined that the Audit Committee has two "audit committee financial experts," within the meaning of the regulations of the SEC: William T. Esrey and James T. Rhodes.
Compensation Committee
All the members of the Compensation Committee have been affirmatively determined to be independent within the meaning of the listing standards of the New York Stock Exchange and Duke Energy's categorical standards of independence.
Corporate Governance Committee and Nomination of Directors
All the members of the Corporate Governance Committee have been affirmatively determined to be independent within the meaning of the listing standards of the New York Stock Exchange and Duke Energy's categorical standards of independence.
The Corporate Governance Committee recommends nominees to the Board of Directors, - --------------------------------------------------------------------------------

within the limits of the Restated Articles of Incorporation and By-Laws, as amended. The Corporate Governance Committee believes that each nominee for election to the Board of Directors should:
•
Possess fundamental qualities of intelligence, perceptiveness, good judgment, maturity, high ethics and standards, integrity and fairness.

•
Have a genuine interest in Duke Energy and a recognition that, as a member of the Board, one is accountable to the shareholders of Duke Energy, not to any particular interest group.

•
Have, as a general rule, a background that includes broad business experience or demonstrates an understanding of business and financial affairs and the complexities of a large, multifaceted, global business organization.

•
Be the present or former chief executive officer, chief operating officer, or substantially equivalent level executive officer of a highly complex organization such as a corporation, university or major unit of government, or a professional who regularly advises such organizations.

•
Have no conflict of interest or legal impediment which would interfere with the duty of loyalty owed to Duke Energy and its shareholders.

•
Have the ability and be willing to spend the time required to function effectively as a director.

•
Be compatible and able to work well with other directors and executives in a team effort with a view to a long-term relationship with Duke Energy as a director.

•
Have independent opinions and be willing to state them in a constructive manner.

•
Be a shareholder of Duke Energy (within a reasonable time of election to the Board).
Any shareholder who desires to nominate or recommend an individual as a nominee to the Board of Directors should submit the recommendation in writing to the Corporate Secretary, Duke Energy Corporation, P. O. Box 1006, Charlotte, NC 28201-1006 with the proper notice, as provided in the By-Laws, as amended, between 90 and 120 days prior to the first anniversary of the previous year's annual meeting (for the 2006 annual meeting, the Corporate Secretary must receive this notice on or after January 12, 2006, and on or before February 11, 2006), and should include the following information:
•
the name and address of the recommending shareholder(s), and the class and number of shares of capital stock of Duke Energy that are beneficially owned by the recommending shareholder(s);

•
the name, age, business address and principal occupation and employment of the recommended nominee;

•
any information relevant to a determination of whether the recommended nominee meets the criteria for Board of Directors membership established by the Board of Directors and/or the Corporate Governance Committee;

Information on
the Board of
Directors
•
any information regarding the recommended nominee relevant to a determination of whether the recommended nominee would be considered independent under the applicable New York Stock Exchange rules, all other information relating to the recommended nominee that is required to be disclosed in solicitations for proxies in an election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, including, without limitation, information regarding (1) the recommended nominee's business experience over the past five years, (2) the class and number of shares of capital stock of Duke Energy, if any, that are beneficially owned by the recommended nominee and (3) material relationships or transactions, if any, between the recommended nominee and Duke Energy or Duke Energy's management;

•
a description of any business or personal relationships between the recommended nominee and the recommending shareholder(s);

•
a statement, signed by the recommended nominee, (1) verifying the accuracy of the biographical and other information about the nominee that is submitted with the recommendation and (2) affirming the recommended nominee's willingness to be a director; and

•
if the recommending shareholder(s) has beneficially owned more than 5% of Duke Energy's voting stock for at least one year as of the date the recommendation is made, evidence of such beneficial ownership as specified in the rules and regulations of the SEC.
The Corporate Governance Committee considers individuals recommended by shareholders in the same manner and to the same extent as it considers director nominees identified by other means. The Chairman of the Corporate Governance Committee will make exploratory contacts with those nominees whose skills, experiences, qualifications and personal attributes satisfy those that the Corporate Governance Committee has identified as essential for a nominee to possess, as described above. Then, an opportunity will be arranged for the members of the Corporate Governance Committee or as many members as can do so to meet the potential nominees. The Corporate Governance Committee will then select a nominee to recommend to the Board of Directors for consideration and appointment. Board members appointed in this manner will serve, absent unusual circumstances, until their election by Duke Energy's shareholders at the next annual meeting of shareholders.
The Corporate Governance Committee has retained Spencer Stuart & Associates, a global executive search firm, to identify and evaluate potential candidates for the Board of Directors.
The Corporate Governance Committee has recently recommended to the Board of Directors the appointment of James H. Hance, Jr., the recently retired vice chairman of Bank of America Corporation, as a director. Duke Energy is in the process of submitting an application to the Federal Energy Regulatory Commission (FERC) for a waiver of its regulation concerning interlocking directorates. Once that waiver has been obtained, the Board of Directors will consider the appointment of Mr. Hance as a director. Since the FERC waiver is not expected to be received until after the 2005 annual meeting, Mr. Hance is not being submitted as a nominee for election as director at the 2005 annual meeting. If appointed, Mr. Hance will stand for election at the 2006 annual meeting.
Resignation and Retirement Policies

We have a policy stating that members
Members of the Board of Directors are required to submit their resignations when they change employment or have another significant change in their professional roles and responsibilities. The normal retirement of those individuals who were members of the Board of Directors when the policy was adopted in 1998 is not considered a change for this purpose. The Corporate Governance Committee will determine whether any such resignation will be accepted. Any resignation that is accepted will likely be effective as ofIn 2004, the end of the term of the director tendering the resignation.

OurCorporate Governance Committee considered, and declined to accept, resignations tendered by two directors upon a change in their employment. Duke Energy's Board of Directors retirement policy states that normal retirement for each director will occur at the annual shareholders meeting following his or her seventieth birthday.
Robert J. Brown and Leo E. Linbeck, Jr., will be retiring at the 2005 annual meeting. George Dean Johnson, Jr., has tendered, and the Corporate Governance Committee has accepted, his resignation effective the 2005 annual meeting.

Information on
the Board of
Directors
Compensation of Directors
Annual Retainer and Fees. We payIn 2004, compensation for each outside directorsdirector was comprised of the following:
•
An annual cash retainer of $40,000, which was increased to $45,000 effective May 1, 2004.

•
An annual stock retainer of $50,000, which was paid in 2004 in the form of two awards of phantom stock units under the Duke Energy 1998 Long-Term Incentive Plan. One award for 1,500 phantom stock units was approved on February 24, 2004. Following approval of changes to directors' compensation in May, which included an annual stock retainer with an explicit target value of $50,000, a second award for 900 phantom stock units was granted on May 13, 2004, to make up for the difference between the annual target value and the value of the award made in February.

•
An annual lead director retainer of $40,000. We also pay an outside director serving as Chairman$20,000, effective May 1, 2004, concurrent with establishment of a lead director.

•
An annual committee chair retainer of $4,000 for the Audit,chairs of the Compensation, Corporate Governance, Corporate Performance Review or Finance and Risk Management Committee an additional $4,000 per year. Outside directors also
receive aand Nuclear Oversight Committees, and $8,000 for the chair of the Audit Committee. Annual committee chair retainers were increased effective May 1, 2004 to $7,500 for the chairs of the Compensation, Corporate Governance, Finance and Risk Management and Nuclear Oversight Committees, and $20,000 for the chair of the Audit Committee.

•
An attendance fee of $1,000, which was increased to $1,500 effective May 1, 2004, for attendance at each meeting of the Board of Directors each committee meeting and other functions requiring their presence,
togetherpresence. For meetings of committees other than the Audit Committee, the attendance fee for meetings held in conjunction with expensesa particular Board of attendance.

ADirectors meeting was $1,000, increased to $1,500 effective May 1, 2004; and, effective May 1, 2004, is $2,500 for special, in-person meetings not held in conjunction with a particular Board of Directors meeting. The attendance fee for directors serving on the Audit Committee was $2,000 for attendance at each meeting until May 1, 2004, at which time the attendance fee was increased to $3,000 for in-person attendance at meetings held in conjunction with a particular Board of Directors meeting, with the fee for telephonic meetings, or telephonic participation in meetings held in conjunction with a particular Board of Directors meeting remaining at $2,000. Fees for attendance at committee meetings are not limited for attendance at different committee meetings held on the same day, but are limited for attendance at multiple meetings of the same committee when held in association with a particular Board of Directors meeting.

•
Expenses related to attendance at Board of Directors and committee meetings.
Effective May 1, 2004, an outside director may elect to receive all or a portion of annual compensation, consisting of retainers (other than in the form of stock awards) and attendance fees, in cash on a current basis, or defer all or a portion of such compensation. Up to 50% of such annual compensation may also be received on a current basis as Duke Energy Common Stock. Any amounts deferred go into an unfunded account for the director's benefit, the balance of which is adjusted for the performance of phantom investment options, including the Duke Energy Common Stock phantom investment option, that the director elects. The outside director will receive, generally following termination of his or her service from the Board of Directors, deferred retainer and attendance fees in shares of Duke Energy Common Stock equal in market price to the portion of his or her account balance then "invested" in the Duke Energy Common Stock phantom investment option, with any remaining balance received in cash, on the basis of the distribution schedule that he or she has chosen.
Prior to May 1, 2004, an outside director was able to elect either to receive up to 50% of his or her retainer and attendance fees in the form of Duke Energy Common Stock or may defer that portion by having it
held in trust for the director's benefit and invested in Duke Energy Common
Stock at market price. The director may elect to receive the remaining 50% of
such compensation in cash or may elect to defer, until termination of his or her service on the Board of Directors, that portion and investto an unfunded account for the deferred
amounts among severaldirector's benefit, the balance of which is adjusted for the performance of a phantom investment option that is based on Duke Energy Common Stock or for the performance of such other phantom investment option to which the director subsequently elects to transfer all or a portion of the balance. Similarly, a director was able to elect either to receive the remaining 50% of such compensation in cash or to defer, until after termination of his or her service on the Board of Directors, that portion to an unfunded account for the director's benefit, the balance of which is adjusted for the performance of

Information on
the Board of
Directors
those phantom investment options, including the Duke Energy Common Stock.

Stock Options and Stock Awards. Inphantom investment option, that the director elected.
Prior to May 1, 2004, each outside director was credited, in January and July of each year, each outside
director is credited with 200 phantom stock units, represented by an amount equal to the market price of a like number of shares of Duke Energy Common Stock, to be held in trust. Dividends paid on this stock are reinvested inan unfunded account for the director's benefit. The account balance is adjusted for the performance of the Duke Energy Common Stock.
AnStock phantom investment option or for the performance of such other phantom investment option to which the director subsequently elects to transfer all or a portion of the balance. The outside director will receive, generally uponfollowing termination of his or her service from the Board of Directors, the shares heldof Duke Energy Common Stock equal in trust formarket price to his or her account balance then "invested" in the Duke Energy Common Stock phantom investment option, with any remaining balance received in cash, on the basis of the distribution schedule that he or she has chosen. Outside directors receive annual non-qualifiedFollowing the January 2004 credit, this portion of outside directors' compensation was prospectively eliminated. Prior credits will be administered and distributed in accordance with the terms of this arrangement as in effect prior to elimination of this portion of outside directors' compensation.
Annual Stock Retainer for 2005. The 2005 stock option grants under the
Duke Energy 1998 Long-Term Incentive Plan. Eachretainer, consisting of 1,820 phantom stock units to each outside director, iswas granted an
option for 4,000 shareson February 28, 2005, at the same time executive officers receive annualas the 2005 grant of long-term incentive awards. The grant for 2002 was made on December 19, 2001,
consistent with the grant date for 2002 awards to executive officers.
Arrangement with Outgoing Westcoast Chief Executive Officer. Pursuant to an arrangement made in connection with Duke Energy's acquisition of Westcoast Energy, director Michael E.J. Phelps, the former Chairman and Chief Executive Officer of Westcoast Energy, entered into a noncompete agreement with Duke Energy that expired on March 14, 2004, under which he received approximately Canadian (C) $41,000 monthly. Pursuant to the agreement, Mr. Phelps received a lump-sum payment in the amount of C$2,000,000 upon expiration of the agreement. In 2004, Duke Energy reimbursed Mr. Phelps C$1,086 for expenses related to his membership on the Duke Energy Canadian Advisory Council, which was established in connection with the acquisition of Westcoast Energy and which provides advice on strategic, social, commercial, national and local issues facing Duke Energy's Canadian businesses.
Charitable Giving Program. After ten years on the Board of Directors, eligible directors participate in the Directors' Charitable Giving Program. Under this program, Duke Energy will make, upon the director's death, donations of up to $1,000,000 to charitable organizations selected by the director. A director may request that Duke Energy make donations under this program during the director's lifetime, in which case the maximum donation will be reduced on aan actuarially-determined net present value basis. We maintainIn 2004, donations of $473,500 were made by Duke Energy to charitable organizations at the request of James G. Martin, exhausting the donations available to Dr. Martin under this program. Duke Energy maintains life insurance policies upon eligible directors to fund donations under the program. Eligible directors include only those who were members of the Board of Directors on February 18, 1998, and certain former directors who previously qualified for this benefit. The last three remaining directors who could become eligible for this program became eligible during 2004.
Reimbursement of Certain Expenses; Gifts. In August 2004, in connection with a Board of Directors meeting held in New York City, spouses of certain outside directors attended lunch and dinner events paid for by Duke Energy. In connection with this Board meeting Duke Energy also paid for a social event for spouses, tickets for a sporting event for an outside director, and round-trip transportation for the spouses of certain directors. The total cost of the foregoing was approximately $17,000. Duke Energy also presented a Christmas gift to each outside director in 2004, at a total cost of approximately $1,200.
Stock Ownership Guidelines. Outside directors are subject to stock ownership guidelines which establish a target level of ownership of Duke Energy Common Stock (or Common Stock equivalents) of 4,000 shares. Each outside director is
expected to attain this ownership level within five years from January 1, 1997,
the implementation date of the guidelines, or from the beginning of his or her
service on the Board of Directors, if after that date. The targeted ownership level has been met by all directors whose stock ownership guideline date was
January 1, 2002.

Report of the Audit Committee
- --------------------------------------------------------------------------------

The Audit Committee ofbut one director who, having joined the Board of Directors is composed entirelyin 2004, has until 2009 to meet the target level.

Report of nonemployee directors, all of whom are independent. The Audit Committee's
responsibilities are described under the caption "Board Committees" under
"Information on the Board of Directors" above in this proxy statement. The
Board of Directors readopted a written charter for the
Audit Committee in 2002.
The Audit Committee held seven meetings during 2001.

The financial statements of Duke Energy are prepared by management, which is responsible for their objectivity and integrity. With respect to the financial statements for the calendar year ended December 31, 2001,2004, the Audit Committee reviewed and discussed the audited financial statements and the quality of financial reporting with management and the independent auditors.auditor. It also discussed with the independent auditorsauditor the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees) and received and discussed with the independent auditorsauditor the matters in the written disclosures required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees). The Audit Committee has discussed with the independent auditor the independent auditor's independence and has also considered the compatibility of nonaudit services with the auditors'auditor's independence.
Based upon the reviews and discussions referred to above, the Audit Committee
recommendedand pursuant to delegation of authority by the Board of Directors, and the Board of DirectorsAudit Committee authorized the inclusion of the audited financial statements in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2001,2004, for filing with the SEC.Securities and Exchange Commission. The Audit Committee also recommended to the Board,appointed, subject to shareholder ratification, the selection of Duke Energy's independent auditors.

auditor for 2005.
This report has been provided by the Audit Committee.
William T. Esrey, Chairman
G. Alex Bernhardt, Sr.
Robert J. Brown
A. Max Lennon Chairman
Ann M. Gray
Harold S. Hook
Leo E. Linbeck, Jr.

James T. Rhodes

Report of the
Compensation
Committee
- --------------------------------------------------------------------------------

The Committee's Responsibilities
The Compensation Committee of the Board of Directors is composed entirely of nonemployee directors.directors, all of whom are independent under the currently applicable standards of the New York Stock Exchange. The Compensation Committee is responsible for setting and administering policies which govern Duke Energy's executive compensation programs. The purpose of this report is to summarize the compensation philosophy and policies that the Compensation Committee applied in making executive compensation decisions in 2001.

2004.
Compensation Philosophy
The Compensation Committee has approved compensation programs intended to:

.
•
Attract and retain talented executive officers and key employees by providing total compensation competitive with that of other executives and key employees employed by companies of similar size, complexity and lines of business;

•
Motivate executives and key employees to achieve strong financial and operational performance;

•
Emphasize performance-based compensation, which balances rewards for short-term and long-term results;

•
Reward individual performance;

•
Link the interests of executives with shareholders by providing a significant portion of total pay in the form of stock-based incentives and requiring target levels of stock ownership; and

•
Encourage long-term commitment to Duke Energy.
Stock Ownership Guidelines
To underscore the importance of linking executive and shareholder interests, the Board of Directors has adopted stock ownership guidelines for executive officers and other members of senior management.all key employees who are eligible to receive long-term incentive awards. The target level of ownership of Duke Energy Common Stock (or Common Stock equivalents) is established as a fixed number of shares. The target level for the Chairman of the Board President and Chief Executive Officer is 100,000 shares. The target level for the remaining members of the Policy Committee,President and Chief Operating Officer is 50,000 shares. The target level for certain other executive officers, including Messrs. Padewer,
Brace, FowlerMogg and Osborne,Hauser and Dr. Shaw, and heads of major business units is 28,000 shares. The Policy Committee consists of
eight senior executive officers and is responsibletarget level for strategic planning and
setting policy and management principles forall other employees subject to the entire Duke Energy enterprise.guidelines ranges from 2,000 to 14,000 shares. Each employee subject to the guidelines is expected to achieve the ownership target within five years from the date on which the employee became subject to the guidelines, with January 1, 2002 being the first of such dates.guidelines. All executive officers and other employees whose stock ownership guideline target date was on or before January 1, 2002,2005, have met the ownership target. Common Stock beneficially held for an executive'sexecutive under the Duke Energy Retirement Savings Plan, account, Common Stock equivalents earned through non-qualifiednonqualified deferred compensation programs, phantom stock units and certain performance shares awarded as long-term incentives and any other beneficially owned Common Stock arecan be included by executives in determiningdemonstrating compliance with the guidelines. Shares that executives have the right to acquire through the exercise of stock options are not included in the calculation of stock ownership for guideline purposes.
To reinforce the importance of stock ownership, the Compensation Committee implemented in 2004 a policy whereby employees subject to the guidelines who do not achieve their ownership target by their target ownership date may elect to deposit any annual cash payouts under short-term incentive plans into an account and apply such deposits to purchase shares of Duke Energy Common Stock until their target ownership level is achieved. Those employees who make such election but do not retain the purchased shares, and those who do not make such election, become ineligible for future long-term incentive awards until they demonstrate that they have otherwise achieved and maintained their target ownership level. Employees who fail to maintain their ownership target following initial achievement become ineligible for future long-term incentive awards until such time as they again meet the ownership target.
Compensation Methodology
Each year the Compensation Committee reviews data from market surveys, proxy statements and independent consultants to assess Duke Energy's competitive position with respect to the following three components of executive compensation:

.
•
base salary;
.

•
annual incentives; and
.

•
long-term incentives.

incentive compensation.

Report of the
Compensation
Committee
The Compensation Committee also considers individual performance, level of responsibility, and skills and experience, internal comparisons and other existing compensation awards or arrangements in making compensation decisions for each executive. Decisions regarding adjustments to each of the above three components of executive compensation are made simultaneously in December, concurrent with initial assessments of the executives' performance for the current year. Adjustments become effective January 1 of the following year. The Chief Executive Officer's performance and compensation is discussed in "Compensation of the Chief Executive Officer" below.
In making compensation decisions, the Compensation Committee reviews a variety of market surveys for each executive position, where available, in order to ensure that its compensation actions are appropriate and reasonable and consistent with its philosophy, considering the various markets in which Duke Energy competes for talent. The market surveys reviewed by the Compensation Committee consist of energy services industry data, which includes many of the companies included in the Dow Jones utility index used in the "Performance Graph" below, and general industry data, which includes companies similar in size to Duke Energy across a variety of industries. Additionally, the Compensation Committee reviews special market surveys for certain operations positions for which data is not found in energy services or general industry surveys. In accordance with its compensation philosophy, the Compensation Committee believes that executives' interests are better aligned with shareholders when significant portions of total pay are provided in the form of long-term incentives. Accordingly, the proportion of the 2004 total annual pay opportunity for Messrs. Fowler, Mogg and Hauser and Dr. Shaw provided in the form of stock-based long-term incentives was approximately 60%, which is generally in alignment with general industry survey benchmarks, as compared to lower proportions in the energy services industry.
Components of Compensation

.
•
Base Salary: Base salaries for executives are determined based upon job responsibilities, level of experience, individual performance, comparisons to the salaries of executives in similar positions obtained from market surveys, internal comparisons, and competitive data obtained from consultants and staff research. The goal for the base paysalary component is to compensate executives at a level whichthat approximates the median salaries of individuals in comparable positions and markets. The Compensation Committee approves all salary increases for executive officers. Base paysalary increases were approved, effective January 1, 2001,2004, for Messrs. Padewer, Brace, Fowler and Osborne.Hauser, and effective March 1, 2004 for Messrs. Mogg and Hauser. Mr. Priory'sMogg's increase was approved following completion of a management reorganization and an associated review of internal compensation comparisons. Mr. Hauser's second increase was coincident with his appointment to Group Vice President and Chief Financial Officer. Dr. Shaw did not receive a base salary increase was approved effective February 1, 2001.

. in 2004. Mr. Anderson does not receive a base salary.

•
Annual Incentives: Annual cash incentives are provided to executives to promote the achievement of performance objectives of Duke Energy and thean executive's particular business unit. In 2001,2004, the Compensation Committee administered two annual incentive plans that permittedthe Duke Energy Corporation Executive Short-Term Incentive Plan, which provides for the award of annual cash incentives to 21

Report of the Compensation Committee
- --------------------------------------------------------------------------------

executive officers. Policy Committee members,officers, including the Named Executive Officers set forth in the Summary Compensation Table under "Compensation"
below, earned incentive compensation under the Duke Energy Policy Committee
Short-Term Incentive Plan, while executive officers not on the Policy
Committee earned incentive compensation under the Duke Energy Corporation
Annual Incentive Plan, under which certain Duke Energy employees receive a
short-term incentive opportunity."Executive Compensation" below. Target incentive opportunities for executives under both plansthe plan are established as a percentage of base salary, using survey data for individuals in comparable positions and markets.markets and internal comparisons. Incentive amounts are intended to provide competitive incentive amountstotal cash compensation at the market median for individuals in comparable positions and markets when target performance is achieved. Incentive amounts may equal up to 200% of targetachieved and above the market median when outstanding financial and operational results are achieved. Awards under Duke Energy's PolicyTarget incentive opportunities for 2004 as a percentage of base salary for Messrs. Fowler, Mogg and Hauser and Dr. Shaw were 90%, 69%, 69% and 70%, respectively.

During the first quarter of 2004, the Compensation Committee Short-Term Incentive Planestablished threshold, target and maximum performance for Named Executive Officers associated with financial measures and individual objectives, which consisted of a combination of strategic and operational measures. Depending on performance, Named Executive Officers could receive up to 190% of their short-term incentive targets. The financial measures were
calculated based upon Duke Energy's earnings per share (EPS) results. , return on capital employed (ROCE) and cash from operations less capital expenditures, plus or minus the change in

Report of the
Compensation
Committee

outgoing letters of credit (Cash Flow). In addition, Dr. Shaw had financial measures associated with Duke Power's earnings before interest and taxes (EBIT) and ROCE. The financial goals were established consistent with the 2004 financial plan but excluded certain potential transactions contemplated in the financial plan that the Compensation Committee did not consider to be representative of ongoing operations. Performance goals for each Named Executive Officer were weighted as follows:

Incentive Goals

Messrs. Fowler,
Mogg and
Hauser
Dr. Shaw

Duke Energy EPS 32% 16%
Duke Energy ROCE 32% 16%
Duke Energy Cash Flow 16% 8%
Duke Power EBIT — 20%
Duke Power ROCE — 20%
Individual Objectives 20% 20%

The Compensation Committee established minimum, target and maximum performance
levels priorstructured 2004 short-term incentives to the beginning of 2001, and participants could receive up to
200% of their short-term incentive targets. EPS performance for 2001 resulted
in payments of 200% of bonus targets to the Policy Committee members,provide that certain executives, including the Named Executive Officers.

AwardsOfficers, would receive no short-term incentive payment if the EPS threshold goal was not achieved. In addition, all other executives would receive no payment associated with Duke Energy ROCE and Cash Flow, and certain payout caps were to be applied to business unit financial and individual objectives, if the EPS threshold goal was not achieved.

Following evaluation of 2004 performance, the Compensation Committee approved payments to Messrs. Fowler, Mogg and Hauser and Dr. Shaw, representing 161%, 166%, 167% and 153% of their respective target awards. In determining the bonuses for Named Executive Officers, and in consideration of overall 2004 performance, the Compensation Committee exercised its discretion under the Duke Energy Corporation AnnualExecutive Short-Term Incentive Plan to reduce award payments calculated in whichaccordance with the 2004 short-term incentive plan formula. Such reductions were in recognition of certain 2004 transactions that were not contemplated in the financial plan and that the Committee did not consider to be representative of ongoing operations. Results for an individual objective established for each of Messrs. Fowler and Hauser and Dr. Shaw and representing 2%, 4% and 0.66% of their total target bonus opportunities, respectively, were not known at the time this proxy statement was filed. Mr. Anderson does not have an annual cash incentive opportunity.

Awards under the Executive Short-Term Incentive Plan to executive officers, other than members of the Policy Committee participate,Named Executive Officers, were determined on the basis of a combination of:of goals based on the following: (1) EPS, measures, (2) earnings before interest and income taxes (EBIT) measures and, in some
instances, otherROCE, (3) Cash Flow, (4) EBIT equivalent measures unique to individual business groups, (3) return on
capital employed (ROCE) measures,such as interest savings, and (4)(5) individual objectives. Payments ranged from 122% to 168% of target awards. EPS, measures, the combination ofROCE, Cash Flow, EBIT (and individual business group measures,equivalent goals, if applicable) and ROCE measures,applicable, and individual objectives determined, on average, 67%31%, 25%32%, 18%, 3% and 8%16%, respectively, of each executive officer's bonus.

•
Long-Term Incentive Compensation: The Compensation Committee has structured 2004 long-term incentive compensation to provide for an appropriate balance
between rewarding performancewith the objectives of increasing stock ownership, providing a focus on long-term value creation and encouraging employee retention, and to
provide a degreeenhancing executive retention. Fifty percent (50%) of flexibility to executivesthe value of the target 2004 long-term incentive opportunity of each executive officer, including Named Executive Officers, was awarded in selecting the form in which
compensation is received.

For 2001, executives could elect to receive up to 20% of the annualized value
of their long-term incentive compensationperformance shares and 50% was awarded in the form of phantom stock withunits. All awards of performance shares and phantom stock were granted under the remainder being provided in the form of stock options. For 2002,
executives could elect to receive up to 30% of such value in the form of
phantom stock. Duke Energy 1998 Long-Term Incentive Plan.

The purpose of stock optionssuch performance shares and phantom stock units is to align compensation directly with increases in shareholder value. The number of optionsperformance shares granted in 2004 is the number of shares that may vest based upon achievement of the performance goal at the maximum level. The number of shares granted was determined by reviewing survey data to determine the
annualized value of long-term incentive compensation made to other executives
and management employees in comparable positions and markets (target value)
and thenfirst dividing the portion of target long-term incentive value electedawarded to be received by the
executiveexecutives in the form of stock optionsperformance shares by an expected presentthe fair market value of a share of Duke Energy Common Stock on the option, as determineddate of grant (target shares), then by usingmultiplying the Black-Scholes option pricing model.target shares by 125%. The number of phantom stock units granted isin 2004 was determined by dividing the portion of target long-term incentive value electedawarded to be received by the executiveexecutives in the form of phantom stock units by the fair market value of a share of Duke Energy Common Stock on the date of grant. In determiningThe grant of the numberperformance shares is reported in "Long-Term Incentive Plan—Awards in Last Fiscal Year" below, whereas the grant of options and phantom stock units to be awarded,is reported in the Summary Compensation Table under "Executive

Report of the
Compensation
Committee

Compensation" below. Mr. Anderson did not receive any long-term incentive compensation in 2004.

Target long-term incentive opportunities for executives are established as a percentage of base salary using survey data for individuals in comparable positions and markets and internal comparisons. In determining target long-term incentive opportunities, the Compensation Committee, or, in some cases, its designee, also considers the grant recipient's qualitative and quantitative performance, the size of stock option and other stock-based awards in the past, and expectations of the grant recipient's future performance.
Compensation of the Chief Executive Officer
The Compensation Committee, based upon input from the Corporate Governance Committee regarding the Chief Executive Officer's performance, reviews and approves annually the compensation of the Chief Executive Officer and informs the Board of Directors of any adjustments or actions. The annual review of the Chief Executive Officer's performance and compensation is conducted in February of each year to assure thorough consideration of year-end results. In late 2001, as2004, the Corporate Governance Committee used an independent consultant to conduct a componentreview of 2002 compensation,the Chairman and Chief Executive Officer's performance, in part for purposes of the Compensation Committee
approved awardsCommittee's determination of non-qualified stock optionsthe number of shares, if any, that should vest as of December 31, 2004, under Mr. Anderson's performance share award, as described below.
The employment agreement between Duke Energy and Mr. Anderson (as described in "Employment Contracts and Termination of Employment and Change-in-Control Arrangements" under "Option
Grants"Executive Compensation" below) establishes that Mr. Anderson's compensation will be provided in 2001" below)the form of stock-based compensation in lieu of base salary, annual cash incentives and certain employee benefits. The purpose of the structure of this compensation package is to directly align Mr. Anderson's compensation with shareholders by making his compensation contingent upon stock price, Duke Energy performance and dividend yield. In accordance with his employment agreement, upon commencement of his employment in November 2003, Mr. Anderson received a nonqualified stock option award with respect to 1,100,000 shares, a performance share award for 360,000 shares and a phantom stock (asaward for 285,000 units, as described in the Summary Compensation Table under "Compensation" below) to members of the Policy
Committee with the exception of Mr. Priory. Messrs. Padewer, Brace, Fowler
and Osborne each elected to receive 30% of the annualized value of their 2002
long-term incentive compensation in the form of phantom stock. In late 2001,
as a component of 2002 compensation, the Compensation Committee also approved
the award of non-qualified stock options and phantom stock to executive
officers who were not members of the Policy Committee."Executive Compensation" below. All of the stock
option and phantom stock awards to Mr. Anderson were granted under the Duke Energy 1998 Long-Term Incentive Plan.

Executives may also elect
Mr. Anderson had the opportunity to receive stock optionsvest in lieu of up to 50%120,000 of their annual cash bonus under the Short-Term Incentive Exchange Program.
Under this program, participants receive a non-qualified stock option whose

Report ofperformance shares based upon 2004 performance associated with goals established by the Compensation Committee - --------------------------------------------------------------------------------

present valuein February 2004. Mr. Anderson's 2004 performance goals were based on EPS, ROCE, Cash Flow and individual objectives. These goals were weighted 32%, 32%, 16% and 20%, respectively. Mr. Anderson's individual objectives related to strategy development and execution, improvements in operating systems, safety, diversity, employee development, succession planning and performance management, and maintaining and improving credibility and trust of stakeholders. In February 2005 the Compensation Committee determined that the goals were exceeded as a result of above-target achievement on each of the EPS, ROCE and Cash Flow goals and aggregate achievement of individual objectives above target, resulting in 120,000 of Mr. Anderson's performance shares vesting as of December 31, 2004.
In 2004, Mr. Anderson earned $9,030,283, based on the grant date is two times the amount of cash bonus
exchanged. The exercise price is equal to the fair market value of stock-based award vestings and dividend equivalent payments associated with his phantom stock and performance shares as detailed below.
Performance Shares^1,2 $ 3,195,600
Phantom Stock Units^1,2 $ 2,235,850
Stock Options^1,2 $ 2,889,333
Dividend Equivalent Payments $ 709,500
Total $ 9,030,283
¹
As described in "Employment Contracts and Termination of Employment and Change-in-Control Arrangements" under "Executive Compensation" below, Mr. Anderson does not receive payment of his vested performance shares and phantom stock units, nor are his vested stock options exercisable, until his employment with Duke Energy Common Stockterminates.

²
Amounts shown for performance shares and phantom stock units represent the values on the grant date. Because executives elect to forego
cash compensation to receive options under the program, the options vest 100%
at grant.

Awards under this program for incentives earnedvesting dates, as defined in 2001 were made in early
2002 (as described in the Summary Compensation Table under "Compensation"
below) to Messrs. Brace, Fowler and Osborne, who elected to exchange 50%,
30%, and 20%, respectively, of their annual incentives for a stock option.
Awards of non-qualified stock options under this program to executive
officers who were not members of the Policy Committee were also made in early
2002. All of the stock option awards were granted under the Duke Energy 1998 Long-Term Incentive Plan. Amount shown for stock options represents the in-the-money value as of December 31, 2004 of options which vested during 2004 and is based on the closing price of a share of Duke Energy Common Stock as reported on the New York Stock Exchange Composite Transactions Tape on such date, which was $25.33.

Report of the
Compensation
Committee
The Committee believes the value of compensation earned by Mr. Anderson during 2004 is appropriate and reasonable considering Duke Energy's outstanding 2004 financial performance.
Mr. Anderson's 2005 performance goals for his opportunity to vest in up to 120,000 performance shares will be based on EPS, ROCE and individual objectives weighted 50%, 30% and 20%, respectively.
Compliance with Section 162(m) of the Internal Revenue Code
Under Section 162(m) of the Internal Revenue Code, Duke Energy generally may not deduct for federal income tax purposes annual compensation in excess of $1 million paid to certain employees, generally its ChiefNamed Executive OfficerOfficers. Certain performance-based compensation paid pursuant to the Duke Energy 1998 Long-Term Incentive Plan and its four other most highly
compensated executive officers, unless that compensation qualifies as
performance-based compensation.the Executive Short-Term Incentive Plan is not subject to the deduction limit. While the Compensation Committee generally intends to structure performance-related awards in a wayand administer executive compensation plans and arrangements so that they will preservenot be subject to the maximum
deductibility of compensation awards,deduction limit, the Compensation Committee may from time to time approve awards which would vest uponpayments that cannot be deducted in order to maintain flexibility in structuring appropriate compensation programs in the passageinterest of time or other
compensation which would not result in qualification of those awards as
performance-based compensation. It is not anticipated that compensation
realized by any executive officer under Duke Energy plans and programs now in
effect will result in a material loss of tax deductions.

Compensation of the Chief Executive Officer

The Compensation Committee reviews annually the compensation of the Chief
Executive Officer and recommends any adjustmentsshareholders. Payments subject to the Board of Directors for
approval. In 2001,deduction limit include those associated with the Compensation Committee retained the consulting firm of
Frederic W. Cook and Co. to conduct a review of the compensation of the Chief
Executive Officer. The Chief Executive Officer participates in the same
programs and receives compensation based upon the same criteria as Duke
Energy's other executive officers. However, the Chief Executive Officer's
compensation reflects the greater policy- and decision-making authority that
the Chief Executive Officer holds and the higher level of responsibility he has
with respect to the strategic direction of Duke Energy and its financial and
operating results. The components of Mr. Priory's 2001 compensation were:

. Base Salary: After considering Duke Energy's overall performance and
competitive practices, the Compensation Committee recommended, and the Board
of Directors approved, a 14.3% increase in Mr. Priory's base salary, to
$1,100,000, effective February 1, 2001.

. Annual Incentives: Annual incentive compensation for Mr. Priory is based
solely upon EPS results. Based on 2001 EPS performance, Mr. Priory received
a payment of $2,177,088, representing 200% of his target incentive
opportunity.

. Long-Term Incentives: In February 2001, Mr. Priory received a stock option
award for 400,000 shares of Duke Energy Common Stock with an exercise price
at fair market value on the date of grant, and an award for 24,240 phantom
stock units. The stock option has a ten-year term, and both the stock option
and2004 phantom stock awards will vest 25% on eachdescribed in "Components of the first four
anniversaries of the grant date.

The Compensation Committee conducts its annual review of Chief Executive
Officer performance and compensation in February of each year, to assure
thorough consideration of year-end results. Actions taken by the Board of
Directors in February 2002 with respect to Mr. Priory's 2002 compensation will
be reflected in the proxy statement for the 2003 annual meeting, which will
include, among other things, an award to Mr. Priory of non-qualified stock
options with respect to 408,400 shares and a phantom stock award for 48,810
phantom stock units.

It is the Compensation Committee's intention that, when taken together, the
components of Mr. Priory's pay, including base salary, annual incentives and
long-term incentives, will result in compensation which approximates the 50th
percentile of the market when incentive plan performance expectations are met
and in compensation as high as the 75th percentile of the market when incentive
plan performance expectations are exceeded.

Compensation—Long-Term Incentive Compensation" above.
This report has been provided by the Compensation Committee.

Committee, as constituted on February 22, 2005.
James G. Martin, Chairman
Roger Agnelli
Ann M. Gray
Leo E. Linbeck, Jr., Chairman
William T. Esrey
George Dean Johnson, Jr.
Max Lennon
James G. Martin

Performance
Graph
- --------------------------------------------------------------------------------

Comparison of Five-Year Cumulative Total Return Among theDuke Energy Corporation,
S&P 500 Index S&P Utilities Index, and DJ Utilities

[CHART]

Assumes $100 invested on

Executive
Compensation
Summary Compensation Table
The following table sets forth information regarding compensation paid to the Chief Executive Officer and the other four most highly compensated executive officers of Duke Energy who were serving as executive officers at the end of 2004, for services to Duke Energy and its subsidiaries for the years ended December 31, 1996, in Duke
Energy Common Stock, S&P 500 Index, S&P Utilities
Index,2004, 2003, and DJ Utilities. Assumes reinvestment of
dividends.

Duke Energy S&P 500 Index S&P
Utilities DJ Utilities
1996 100 100 100
100
1997 124 133 124
122
1998 149 171 141
145
1999 122 206 129
137
2000 212 188 205
205
2001 201 166 143
152

Compensation
- --------------------------------------------------------------------------------

Summary Compensation Table

2002.

Annual Compensation

Long-Term Compensation
-------------------------------------------- --------------------------------------------

Awards
-------------------------------------------- ------------------------------- -----------
Restricted Securities
Other Annual Stock Underlying LTIP
Salary ($) Bonus ($)/2/ Compensation ($) Award(s) ($)/4/ Options/SARS (#)

Payouts ($)

Name and Principal Position
Year ---------- ----------- ---------------- -------------- ---------------- -----------
- ----------------------------------------------------------------------------------------------------------------------------

R.B. Priory 2001 1,088,544 2,177,088 319,150 996,991 400,000

Salary ($)
Bonus ($)⁴
Other Annual
Compensation ($)
Restricted
Stock
Award(s) ($)^6,7
Securities
Underlying
Options/SARS (#)
LTIP
Payouts ($)⁸
All Other
Compensation ($)⁹

Paul M. Anderson¹
Chairman of the Board President 2000 954,164 1,908,328 300,384 400,000
and Chief Executive Officer 1999 895,420 997,140 109,708
H.J. Padewer 2001 600,000 900,000 98,267 742,673 164,700
2004
2003 0
0 0
0 365,296
0 ⁵
0
11,255,250 0
1,100,000 0
0 0
0
Fred J. Fowler
President and Chief
Operating Officer 2004
2003
2002 729,996
670,009
559,996 1,055,939
603,000
0 67,282
46,237
63,866 1,204,413
878,113
0 0
201,000
42,100 0
0
532,600 84,882
44,102
77,068
Jimmy W. Mogg²
Group Vice President, 2000 500,004 750,006 91,111 450,388 173,600
Energy Services 1999 400,008 311,814 7,921 375,938/5/ 693,800
R.P. Brace/ 1/ 2001 550,000 715,000 1,126,722/3/ 1,330,759/6/ 406,200
ExecutiveChief Development Officer 2004
2003
2002 491,667
450,000
450,000 580,183
365,985
40,095 53,356
27,314
36,300 562,458
393,134
0 0
93,000
7,500 0
0
319,560 71,084
50,554
69,355
David L. Hauser³
Group Vice President and Chief Financial Officer
F.J. Fowler 2001 500,004 750,006 79,305 535,810 119,000
Group 2004
2003
2002 491,667
285,000
285,000 562,710
270,875
73,644 22,299
18,253
22,966 450,052
149,405
0 0
39,600
4,700 0
0
159,780 56,171
33,469
38,218
Ruth G. Shaw
President 2000 450,000 585,000 70,940 270,575 104,000
Energy Transmission 1999 385,830 257,796 32,495 157,000
R.J. Osborne 2001 500,004 750,006 70,960 486,072 107,800
Executive Vice President 2000 399,996 520,195 66,867 270,575 104,000
and Chief Risk Officer 1999 366,250 244,714 19,827 124,000

All Other
Compensation ($)/ 7/
Name and Principal Position -------------------
- -----------------------------------------------------

R.B. Priory 224,202
Chairman of the Board, President 156,596 and Chief Executive Officer, 148,501
H.J. Padewer 83,622
Group President 51,331
Energy Services 94,112
R.P. Brace/ 1/ 26,498
Executive Vice President
and Chief Financial Officer
F.J. Fowler 209,961
Group President 139,812/8/
Energy Transmission 163,101/8/
R.J. Osborne 69,194
Executive Vice President 45,363
and Chief Risk Officer 42,751
Duke Power Company 2004
2003
2002 500,004
500,004
500,004 534,254
223,152
0 23,533
25,294
38,282 625,073
480,573
0 0
110,000
0 0
0
248,547 51,640
35,249
70,861

/1/ ¹
Mr. Brace joinedAnderson does not receive a base salary, annual cash incentives or certain employee benefits, as more fully described in "Employment Contracts and Termination of Employment and Change-in-Control Arrangements" below.

²
Mr. Mogg was appointed Group Vice President, Chief Development Officer effective January 1, 2004. He previously served as President and Chief Executive Officer of Duke Energy onField Services, LLC, a consolidated subsidiary of Duke Energy, since December 1994, and additionally served as Chairman of the Board of Duke Energy Field Services, LLC since 1999. Mr. Mogg resigned from these positions as of December 31, 2003.

³
Mr. Hauser was appointed Group Vice President effective January 1, 2001.

/2/2004, and Chief Financial Officer effective March 1, 2004, having served as Chief Financial Officer in an acting capacity since November 21, 2003. Mr. Hauser previously served as Senior Vice President and Treasurer since 1998.

⁴
Amounts shown for Messrs. Brace, Fowler and Osborne electedHauser and Dr. Shaw for 2004 do not include any amount that may be payable on account of an individual objective performance goal, which amount, if any, could not yet be determined at the time this proxy statement was filed. The bonus opportunities for this goal represent 2%, 4% and 0.66% of the total target bonus opportunities for Messrs. Fowler and Hauser and Dr. Shaw, respectively.

⁵
Includes $159,363 associated with the relocation of Mr. Anderson's principal residence to forego a portionCharlotte, North Carolina, including reimbursement of their
2001 cash bonusthe related tax liability. Also includes $134,507 associated with the incremental cost to Duke Energy for stock options under the Short-Term Incentive Exchange
Programpersonal use of company aircraft by Mr. Anderson and his wife. In accordance with his employment agreement described in the Report"Employment Contracts and Termination of Employment and Change-in-Control Arrangements" below, Mr. Anderson is permitted to use Duke Energy aircraft for personal travel. During 2004, an independent security study for Mr. Anderson, commissioned by the Compensation Committee, above as
follows:was completed. The report included a recommendation that Mr. Brace, $357,500Anderson and his wife travel by corporate jet (chartered or company-owned) whenever possible for 66,800 option shares; personal travel.

Executive
Compensation
⁶
Mr. Fowler,
$225,002 for 42,100 option shares; Mr. Osborne, $150,001 for 28,000 option
shares. The awards wereAnderson received an award of performance shares granted under the Duke Energy 1998 Long-Term Incentive Plan upon his employment with Duke Energy in 2003. Performance shares are represented by units denominated in shares of Duke Energy Common Stock. Each performance share represents the right to receive, upon vesting, one share of Duke Energy Common Stock. One hundred twenty thousand (120,000) shares vested as of December 31, 2004, based upon achievement of 2004 performance goals, as described in the "Report of the Compensation Committee" above. Up to one hundred twenty thousand (120,000) shares will vest on January 17, 2002each of December 31, 2005, and December 31, 2006, subject to achievement of performance goals established for calendar year 2005 and to be established for 2006, respectively. Any shares subject to vesting in calendar years 2005 and 2006 that do not vest upon achievement of goals associated with those years will be forfeited. Payment of any vested performance shares will be made in shares of Duke Energy Common Stock to Mr. Anderson following termination of his employment with Duke Energy. The performance share award also grants an equal number of dividend equivalents, which represent the right to receive cash payments, equivalent to the cash dividends paid on the number of shares of Duke Energy Common Stock represented by vested and unvested performance shares, while the award remains outstanding but unpaid. Mr. Anderson's aggregate performance share holdings (both vested and unvested) at the fair marketDecember 31, 2004, were 360,000 shares, with a value on that date of $38.33, as provided under$9,118,800, based on the Plan. The number of option shares awarded
is calculated by dividing the foregone bonus amount by 50% of the present
valueclosing price that day of a share of Duke Energy Common Stock as reported on the dateNew York Stock Exchange Composite Transaction Tape, which was $25.33. Other payment conditions with respect to Mr. Anderson's performance share award are described in more detail in "Employment Contracts and Termination of grant. The
optionsEmployment and Change-in-Control Arrangements" below.

Awards made in 2003 to Messrs. Fowler, Mogg and Hauser and Dr. Shaw were 100% vested at grant. These stock options will be reported in
the proxy statement for the 2003 annual meeting.

/3/ Includes a one-time payment of $983,608, including partial reimbursement
of the related tax liability, in connection with Mr. Brace's relocation
from the United Kingdom to North Carolina.

/4/ Messrs. Priory, Padewer, Brace, Fowler and Osborne elected to receive a
portion of the value of the long-term incentive component of their 2002
and 2001 compensation in the form of phantom stock. The awards wereperformance shares granted under the Duke Energy 1998 Long-Term Incentive Plan. The 2002 and
2001 awards for Messrs. Padewer, Brace, Fowler and OsborneSuch performance shares are represented by units denominated in shares of Duke Energy Common Stock. Each performance share represented the right to receive, upon vesting, one share of Duke Energy Common Stock. Vesting of the performance shares was based upon achievement of Duke Energy 2003 EPS within a specified range. As a result of not meeting the 2003 EPS threshold goal, the performance shares in each award were made on
December 19, 2001 and December 20, 2000, respectively. forfeited.

⁷
Mr. Priory's 2001Anderson received an award was made on February 27, 2001.of phantom stock granted under the Duke Energy 1998 Long-Term Incentive Plan upon commencement of his employment with Duke Energy in 2003. Phantom stock is represented by units denominated in shares of Duke Energy Common Stock. Each phantom stock unit represents the right to receive, upon vesting, one share of Duke Energy Common Stock. One quarterForty-five thousand (45,000) units of eachthe phantom stock award veststo Mr. Anderson vested on January 1, 2004. An additional twenty thousand (20,000) units vested on each of April 1, 2004, July 1, 2004, October 1, 2004 and January 1, 2005. The remaining 160,000 units will vest 20,000 units each on the first four
anniversariesday of the grant date provided the recipient continues toeach quarter beginning April 1, 2005, and ending on January 1, 2007. Payment of vested phantom stock units will be employed by Duke Energy or his or her employment terminates on account

Compensation
- --------------------------------------------------------------------------------

of retirement. The awards fully vestmade in the event of the recipient's death
or disability or a change in controlshares of Duke Energy as specifiedCommon Stock to Mr. Anderson following termination of his employment with Duke Energy. The phantom stock award also grants an equal number of dividend equivalents, which represent the right to receive cash payments, equivalent to the cash dividends paid on the number of shares of Duke Energy Common Stock represented by vested and unvested phantom units, while the award remains outstanding but unpaid. Other payment conditions with respect to Mr. Anderson's phantom stock award are described in more detail in "Employment Contracts and Termination of Employment and Change-in-Control Arrangements" below.

Messrs. Fowler, Mogg and Hauser and Dr. Shaw received one-half the value of the long-term incentive component of their 2004 compensation in the form of phantom stock; the other half was received as performance shares as described in "Long-Term Incentive Plan—Awards in Last Fiscal Year" below. Also, Messrs. Fowler and Mogg and Dr. Shaw each elected to receive 30%, and Mr. Hauser elected to receive 20%, of the value of the long-term incentive component of their 2002 compensation in the form of phantom stock. All awards were granted under the Duke Energy 1998 Long-Term Incentive Plan. IfThe 2004 awards were approved by the recipient's employment terminates other thanCompensation Committee on accountFebruary 24, 2004, and made on March 4, 2004, and the 2002 awards were made on December 19, 2001. Phantom stock is represented by units denominated in shares of retirement, death or disability, any unvested shares remaining onDuke Energy Common Stock. Each phantom

Executive
Compensation

stock unit that vests represents the termination date are forfeited.right to receive one share of Duke Energy Common Stock. The phantom stock awards also grant an equal number of dividend equivalents, which represent the right to receive cash payments, equivalent to the cash dividends paid on the number of shares of Duke Energy Common Stock represented by unvested phantom units, while the phantom stock units awarded,
untilaward remains unvested.
2004 Award. One fifth of the related phantom stock units vest or are forfeited. Mr. Priory's2004 phantom stock award vests on each of the first five anniversaries of the approval date provided the recipient continues to be employed by Duke Energy or his or her employment terminates on account of retirement. There is an accelerated vesting opportunity in early 2007, for units not previously vested on the anniversaries of the approval date, based on achievement of target total shareholder return (TSR) relative to the S&P 500 for the calendar-year period 2004-2006. The target TSR goal is consistent with respectthe target TSR goal for the 2004 performance shares described in "Long-Term Incentive Plan—Awards in Last Fiscal Year" below. If retirement occurs during the 2004-2006 performance period and the TSR goal is subsequently determined to 2002 compensation was awarded on
February 26, 2002, and, accordingly, will be reportedhave been achieved, units in the proxy statement
foraward are adjusted to reflect actual 2004-2006 service and are immediately vested, to the 2003 annual meeting.

extent not previously vested on the anniversaries of the approval date. If the recipient's employment terminates as a result of death, disability, or by Duke Energy without cause or as a result of a divestiture, units in the award are reduced to reflect actual service during the installment vesting period and are immediately vested, and any remaining unvested units are forfeited. In the event of a "change in control" of Duke Energy, as defined in the plan, all outstanding unvested units will vest.
2002 Award. One quarter of the 2002 phantom stock award vests on each of the first four anniversaries of the grant date provided the recipient continues to be employed by Duke Energy or his or her employment terminates on account of retirement. The awards fully vest in the event of the recipient's death or disability or a "change in control" of Duke Energy as defined in the plan. If the recipient's employment terminates other than on account of retirement, death or disability, any unvested shares remaining on the termination date are forfeited.

The aggregate number of phantom stock units held by Messrs. Priory, Padewer,
Brace,Anderson, Fowler, Mogg and OsborneHauser and Dr. Shaw at December 31, 20012004, and their fair market values on that date (based on the closing price of a share of Duke Energy Common Stock as reported on the New York Stock Exchange Composite Transactions Tape on such date, which was $25.33) are as follows:
Number of Value At
Phantom Stock Units December 31, 2001

R.B. Priory 24,240 $ 951,662
H.J. Padewer 27,600 1,083,576
R.P. Brace 12,690 498,209
F.J. Fowler 18,960 744,370
R.J. Osborne 17,640 692,546

/5/

Number of
Phantom Stock Units
Value At
December 31, 2004
Paul M. Anderson 285,000 $ 7,219,050
Fred J. Fowler 59,915 1,517,647
Jimmy W. Mogg 21,625 547,761
David L. Hauser 28,563 723,501
Ruth G. Shaw 31,988 810,256

The phantom stock unit holdings for Messrs. Fowler, Mogg and Hauser and Dr. Shaw include grants made in 2004, as reflected in the Summary Compensation Table above, and in 2001. Mr. Padewer received anAnderson's phantom stock unit holdings were granted in 2003 as reflected in the Summary Compensation Table above.

⁸
Amounts shown represent the dollar value of Duke Energy Common Stock paid in 2002 based on achievement in 2000 of a target total shareholder return goal. Pursuant to the terms of the performance share awards granted in 1999, no payments under the award could occur prior to the third anniversary of restricted stock upon his employment with
Duke Energy. Mr. Padewer's aggregate restricted stock holdings at December
31, 2001 were 7,500 shares, with a value on thatthe date of $294,450.
Dividends are paid on such shares. One quarterthe award. Mr. Fowler and Mr. Hauser elected to defer receipt of their payment in the restrictedform of stock award to Mr. Padewer (3,750 shares) vested on each of January 3, 2000,
January 2, 2001 and January 2, 2002. The remaining 3,750 shares will vest
on January 2, 2003.

/6/ Mr. Brace received an award of restricted stock upon his employment withunits held in accounts in the Duke Energy. Mr. Brace's aggregate restricted stock holdings at December
31, 2001 were 20,000 shares, with a value on that date of $785,200.
Dividends are paid on such shares. The shares will vest on January 1, 2004.

/7/ Energy Corporation Executive Savings Plan.

Executive
Compensation
⁹
All Other Compensation column includes the following for 2001:

a. Matching2004:

Paul M.
Anderson
Fred J.
Fowler

Jimmy W.
Mogg

David L.
Hauser

Ruth G.
Shaw

Matching Contributions Under the Duke Energy Retirement Savings Plan — $ 12,300 $ 12,300 $ 12,300 $ 12,300
Make-Whole Matching Contribution Credits Under the Duke Energy Corporation Executive Savings Plan — 67,680 17,200 30,452 31,089
Above-Market Interest Earned on Account Balances in the Duke Energy Corporation Executive Savings Plan Supplemental Account — — — 9,181 2,606
Economic Value of Life Insurance Coverage Provided Under Life Insurance Plans — 4,902 4,985 4,238 5,645
Supplemental Credit to the Duke Energy Corporation Executive Savings Plan¹ — — 36,599 — —

Total
—
$
84,882
$
71,084
$
56,171
$
51,640
¹
Credit for company match contributions forfeited on Mr. Mogg's short-term incentive bonus earned in 2003 but paid in 2004 under the Duke Energy Field Services 401(k) and Retirement Savings Plan as
follows: R.B. Priory, $10,200; H.J. Padewer, $10,200; R.P. Brace,
$10,200; F.J. Fowler, $10,200; R.J. Osborne, $9,792.

b. Make-whole matching contribution credits underand the Duke Energy Field Services Executive Savings Plan as follows: R.B. Priory, $169,612; H.J. Padewer, $70,800;
R.P. Brace, $14,550; F.J. Fowler, $54,900; R.J. Osborne, $51,408.

c. Above-market interest earned on account balances inDeferred Compensation Plan. Such forfeiture resulted from Mr. Mogg's short-term incentive bonus becoming ineligible for benefits under the referenced plans upon his termination of employment at Duke Energy Executive Savings Plan, Supplemental Account as follows: R.B. Priory,
$11,635; H.J. Padewer, $0; R.P. Brace, $0; F.J. Fowler, $0; R.J. Osborne,
$6,016.

d. Economic value of life insurance coverage provided under life insurance
plans as follows:
R.B. Priory, $18,844; H.J. Padewer, $2,622; R.P. Brace, $1,748; F.J.
Fowler, $4,902; R.J. Osborne, $1,978.

e. The costField Services, LLC effective January 1, 2004, to Duke Energy of supplemental life insurance coverage under the
Duke Energy Supplemental Insurance Plan as follows: R.B. Priory, $13,108;
H.J. Padewer, $0; R.P. Brace, $0; F.J. Fowler, $0; R.J. Osborne, $0.

f. The economic benefit of split-dollar life insurance coverage pursuant to
the Duke Energy Estate Conservation Plan as follows: R.B. Priory, $803;
H.J. Padewer, $0; R.P. Brace, $0; F.J. Fowler, $0; R.J. Osborne, $0.

/8/ Adjusted to reflect EPS unit credits earned by Mr. Fowler during 1999 and
2000 as a result of earnings per share exceeding a pre-defined base amount
in those years. The credits were granted in tandem with certain stock
option awards and may be applied towards the exercise price of those stock
options.

Compensation
- --------------------------------------------------------------------------------

Option Grants in 2001

This table shows options granted to the Named Executive Officers during 2001,
along with the present value of the options on the date they were granted,
calculated as described in footnote 2 to the table. Grants shown in the table
with an expiration date of December 19, 2011 were awarded on December 19, 2001
and relate to compensation for 2002. The grant shown with an expiration date of
February 1, 2011 was awarded to R.P. Brace on February 1, 2001, followingaccept his employmentcurrent position with Duke Energy on January 1, 2001. The grant to R.B. Priory having
an expiration date of February 27, 2011 was awarded on February 27, 2001 as a
component of 2001 compensation. R.B. Priory's option grant with respect to 2002
compensation was awarded on February 26, 2002 and, accordingly, will be
reported in the proxy statement for the 2003 annual meeting.

Energy.
Option/SAR Grants in Last Fiscal Year

Grant Date
Individual Grants Value
Number
of Shares % of Total Exercise
Underlying Options/SARS or Base Grant Date
Options/SARS Granted to Price Expiration Present
Name Granted/ 1/ (#) Employees ($/Sh) Date Value/ 2/ ($)

R.B. Priory 400,000 5.2% 41.5000 2/27/2011 4,025,500
H.J. Padewer 164,700 2.1% 37.6800 12/19/2011 1,732,644
R.P. Brace 180,000 2.3% 36.7700 2/01/2011 1,605,011
120,000 1.6% 36.7700 2/01/2011 1,070,007
106,200 1.4% 37.6800 12/19/2011 1,117,224
F.J. Fowler 119,000 1.5% 37.6800 12/19/2011 1,251,880
R.J. Osborne 107,800 1.4% 37.6800 12/19/2011 1,134,056

/1/ 2004
Duke Energy hasdid not grantedgrant any SARsstock options or stock appreciation rights (SARs) in 2004 to the Named Executive Officers or any other persons.

/2/ Based on the Black-Scholes option valuation model. The following table
lists key input variables used in valuing the options:

400,000 Share Option
Grant to R.B. Priory
and 180,000 and
120,000 Share Option
Input Variable Grants to R.P. Brace All Other Option Grants

Risk-free Interest Rate 5.45% 5.23%
Dividend Yield 3.70% 3.37%
Stock Price Volatility 25.88% 29.71%
Option Term 10 years 10 years

With respect to Mr. Priory's 400,000 share option grant and Mr. Brace's
180,000 and 120,000 share option grants, the volatility variable reflected
weekly historical stock price trading data with respect to Duke Energy Common
Stock from November 30, 1997 through November 30, 2000. With respect to all
other option grants listed in the table, the volatility variable reflected
historical monthly stock price trading data from November 30, 1998 through
November 30, 2001. An adjustment was made with respect to each valuation for
risk of forfeiture during the vesting period. The actual value, if any, that
a grantee may realize will depend on the excess of the stock price over the
exercise price on the date the option is exercised, so that there is no
assurance the value realized will be at or near the value estimated based
upon the Black-Scholes model.

Compensation
- --------------------------------------------------------------------------------

Option Exercises and Year-End Values
This table shows aggregate exercises of options during 20012004 by the Named Executive Officers and the aggregate year-end value of the unexercised options held by them. The value assigned to each unexercised "in-the-money" stock option is based on the positive spread between the exercise price of the stock option and the split-adjusted fair market value of Duke Energy Common Stock on
December 31, 2001, which was $39.65. The fair market value is the average of
the high and low pricesclosing price of a share of Duke Energy Common Stock on that date as reported on the New York Stock Exchange Composite Transactions Tape.Tape on December 31, 2004, which was $25.33. The ultimate value of a stock option will depend on the market value of the underlying shares on a future date.

at the time of exercise.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR Values
Number of Securities
Underlying Value of Unexercised
Unexercised In-the-Money
Options/SARS at Options/SARS at
FY-End* (#) FY-End ($)
Shares
Acquired on Exercisable/ Exercisable/
Name Exercise (#) Value Realized ($) Unexercisable Unexercisable

R.B. Priory 250,000 4,162,400 376,800 / 1,100,000 4,251,906 / 8,373,730
H.J. Padewer 298,450 2,988,269 91,850 / 641,800 715,849 / 3,598,332
R.P. Brace -- -- -- / 406,200 -- / 1,073,214
F.J. Fowler 12,436 345,354 429,022 / 435,500 5,744,608 / 3,023,260
R.J. Osborne 71,000 815,723 57,000 / 327,800 458,025 / 1,942,912

Number of Securities
Underlying Unexercised
Options/SARS at
FY-End¹ (#)

Value of Unexercised
In-the-Money
Options/SARS at
FY-End¹ ($)

Shares
Acquired on
Exercise (#)
Name

Value Realized ($)
Exercisable/
Unexercisable
Exercisable/
Unexercisable
Paul M. Anderson — — — / 1,100,000 — / 8,668,000
Fred J. Fowler 17,106 258,749 888,552 / 180,500 1,018,308 / 1,742,670
Jimmy W. Mogg — — 346,788 / 86,200 343,578 / 780,300
David L. Hauser — — 162,425 / 33,775 160,479 / 296,514
Ruth G. Shaw — — 512,725 / 105,375 360,215 / 953,700
¹
Duke Energy has not granted any SARs to the Named Executive Officers or any other persons.

Executive
Compensation
Long-Term Incentive Plan—Awards in Last Fiscal Year
As explained above in note 7 to the Summary Compensation - --------------------------------------------------------------------------------

Table, Messrs. Fowler, Mogg and Hauser and Dr. Shaw received one-half the value of the long-term incentive component of their 2004 compensation in the form of performance shares. The following table provides information concerning those performance share awards, which were made under the Duke Energy 1998 Long-Term Incentive Plan. Additional information in regard to these awards is set out following the table.
Estimated Future Payouts Under Non-Stock-Price-Based Plans
Name Number of
Performance
Shares¹ Performance
or Other Period Threshold
(#) Target
(#) Maximum
(#)
Paul M. Anderson — — — — —
Fred J. Fowler 70,450 3 years 28,180 56,360 70,450
Jimmy W. Mogg 32,900 3 years 13,160 26,320 32,900
David L. Hauser 26,330 3 years 10,530 21,060 26,330
Ruth G. Shaw 36,560 3 years 14,625 29,250 36,560
¹
The number of shares awarded represents the number of shares of Duke Energy Common Stock payable upon achievement of the TSR goal at the maximum performance level (i.e. 125% of target award shares).

The determination of the actual number of performance shares earned is based on Duke Energy's TSR over the three-year performance period from January 1, 2004, to December 31, 2006, as compared to the TSR of the S&P 500 for that period. The actual number of performance shares that can be earned ranges from 0% to 125% of target award shares. To achieve the threshold, target and maximum payments indicated above, Duke Energy's TSR ranking must be at the 55^th percentile, 70^th percentile and 80^th percentile, respectively. Performance shares earned are interpolated for TSR performance between these percentiles. The threshold and maximum payments represent 50% and 125%, respectively, of the target number of shares. For each performance share earned, participants receive one share of Duke Energy Common Stock. Payment of any shares earned will be made following the determination in early 2007 of the extent to which the performance goal has been achieved, unless an election (to the extent permitted by applicable law) is made by the executive to defer payment of the performance shares until termination of employment. Any shares not earned are forfeited. In addition, following determination that the performance goal has been achieved, participants will receive a cash payment equal to the amount of cash dividends paid on one share of Duke Energy Common Stock during the performance period multiplied by the number of performance shares earned, unless an election (to the extent permitted under applicable law) is made by the executive to defer payment of the performance shares and tandem dividend equivalents until termination of employment. If the recipient's employment terminates during the performance period as a result of retirement, death, disability, or by Duke Energy without cause or as a result of a divestiture, following determination that the TSR goal has been achieved the number of shares earned will be adjusted to reflect actual service during the performance period. If the recipient's employment terminates during the performance period for any other reason, all shares in the award will be forfeited. In the event of a "change in control" (as defined in the Duke Energy 1998 Long-Term Incentive Plan) prior to determination that the TSR goal has been achieved, target TSR performance is assumed and the number of shares earned are adjusted to reflect actual service during the performance period prior to the change in control.

Executive
Compensation
Employment Contracts and Termination of Employment and Change-in-Control Arrangements
Duke Energy entered into a severancean employment agreement and a change-in-control
agreement("Agreement") with H.J. Padewer,Mr. Anderson which became effective November 1, 2003, ("Effective Time") upon his election as Chairman of the Board and Chief Executive Officer and which will remain in effect until December 31, 2006 ("Agreement Term"). Mr. Anderson's employment may be terminated earlier as a result of his resignation, with ninety days' notice to Duke Energy, or by Duke Energy (1) due to disability that prevents Mr. Anderson from the full time performance of his duties; (2) for "cause" (as defined in the Agreement); or (3) for any reason other than death, disability or for cause, upon ninety days' notice to Mr. Anderson. The Agreement provides that Mr. Anderson was to be awarded a nonqualified stock option grant with respect to 1,100,000 shares, a performance share grant for 360,000 shares and a phantom stock grant for 285,000 units (collectively, "Equity Awards"), with Equity Awards made under the Duke Energy 1998 Long-Term Incentive Plan. The Agreement further provides that Mr. Anderson's compensation will be provided primarily through these Equity Awards and that Mr. Anderson will not be paid a base salary and will not participate in the Duke Energy Corporation Executive Short-Term Incentive Plan or any other annual cash bonus program. The Equity Awards were granted on November 17, 2003, concurrent with the execution of the Agreement.
Pursuant to the Agreement, the stock options have a term of ten years and will vest one-third each on the first three anniversaries of the grant date. The vested stock options will become exercisable on January 1, 2007, or earlier upon termination of Mr. Anderson's employment with Duke Energy. Forty-five thousand (45,000) units of the phantom stock award vested on January 1, 2004. An additional twenty thousand (20,000) units vested on each of April 18, 20011, 2004, July 1, 2004, October 1, 2004 and January 1, 2000, respectively.2005. The change-in-control agreement replacedremaining 160,000 units will vest 20,000 units each on the first day of each quarter beginning April 1, 2005, and ending on January 1, 2007. One hundred twenty thousand (120,000) of the performance shares vested as of December 31, 2004, based upon achievement of 2004 performance goals, as described in the "Report of the Compensation Committee" above. Up to 120,000 performance shares will vest on each of December 31, 2005 and December 31, 2006, but only if the performance goals established by the Compensation Committee with respect to calendar year 2005 and to be established for 2006, respectively, are achieved. As specified in the Agreement, the Compensation Committee may establish goals for each calendar year consisting of a combination of financial objectives and strategic objectives. Performance shares will be forfeited and will cease to be outstanding to the extent performance goals are not achieved for any calendar year. Vested performance shares and phantom stock units will be paid to Mr. Padewer'sAnderson in shares of Duke Energy Common Stock following termination of his Duke Energy employment. Dividend equivalents granted to Mr. Anderson with respect to the performance share and phantom stock awards provide for payment of dividend equivalents in cash on vested and unvested performance shares and phantom stock units while the awards remain outstanding but unpaid, at the time that cash dividends are paid on the outstanding shares of Duke Energy Common Stock. Upon termination of Mr. Anderson's employment with Duke Energy, all unvested Equity Awards at the time of termination will be forfeited. However, if Mr. Anderson's employment with Duke Energy is terminated as a result of his death, disability or by Duke Energy without "cause" as defined in the Agreement, two events will occur as follows: (1) a portion of each unvested Equity Award will vest immediately, with such portion vesting equal to the number of full calendar months elapsed between the Effective Time and the time of termination, divided by thirty-eight; and (2) all vested stock options will become immediately exercisable. All outstanding Equity Awards will vest immediately upon occurrence of a "change in control" (as defined in the Duke Energy 1998 Long-Term Incentive Plan).
Mr. Anderson is not entitled to any retirement, health or welfare benefits, or perquisites, or to participate in any such plan or program, except for the following: (1) vacation; (2) medical and dental health care to the extent available generally to senior executives of Duke Energy and their eligible dependents; (3) participation in the Duke Energy Retirement Cash Balance Plan for purposes of determining his eligibility to qualify for early or normal retirement, but not for any other purpose, including eligibility for pay credits or other benefits; (4) reimbursement by Duke Energy for the reasonable cost of financial and tax planning and advisory services incurred through December 31, 2005,

Executive
Compensation
including payment of a tax gross-up (such that Mr. Anderson effectively is not taxed on the value of such reimbursement); (5) reimbursement by Duke Energy for certain identified costs associated with the relocation of Mr. Anderson's principal residence to Charlotte, including payment of a tax-gross up (such that Mr. Anderson effectively is not taxed on the value of such reimbursement) where applicable and consistent with Duke Energy's standard relocation policy; and (6) reimbursement by Duke Energy for any North Carolina income taxes on income realized by Mr. Anderson during the Agreement Term from certain identified sources that would otherwise not have been subject to such taxes but for his relocation to Charlotte.
The benefits to which Mr. Anderson became entitled under various plans and agreements from his previous employment with Duke Energy or its predecessor entities are unaffected by the Agreement. Likewise, Mr. Anderson's employment under the Agreement will not be deemed or counted as service with Duke Energy or a predecessor entity for any purpose, including the determination of retirement dates under such plans and agreements. For security reasons, Mr. Anderson is required by Duke Energy to use Duke Energy aircraft for his business travel. Mr. Anderson is also permitted to use Duke Energy aircraft for his personal travel within North America. Mr. Anderson is responsible for any income taxes resulting from such aircraft usage, including income taxes on personal travel by Mrs. Anderson. However, to the extent Mr. Anderson incurs expenses associated with Mrs. Anderson accompanying him on business travel, Mr. Anderson receives reimbursement for those expenses from Duke Energy, including payment of a tax-gross up (such that Mr. Anderson effectively is not taxed on the value of any such reimbursement). The Agreement contains restrictive covenants related to confidentiality that continue following the Agreement Term.
Duke Energy does not have any form of employment agreement with certain exceptions.Messrs. Fowler, Mogg and Hauser and Dr. Shaw, either written or oral, that guarantees salaries, salary increases, bonuses or benefits, other than the supplemental compensation agreement with Dr. Shaw and the benefits agreement with Mr. Mogg described below. Salaries and bonuses for Messrs. Fowler, Mogg and Hauser and Dr. Shaw are determined as described in the "Report of the Compensation Committee" above. Duke Energy had entered into severance agreements with Mr. Fowler and Dr. Shaw and change-in-control agreements with Messrs. Fowler, Mogg and Osborne,Hauser and Dr. Shaw, all which became effective on August 18, 1999, and with Mr. Priory,
which became effective on August 19, 1999, in each case upon expiration of the
executive's employment agreement. Duke Energy entered into a change-in-control
agreement with Mr. Brace which became effective on January 1, 2001.1999. The severance agreements for Mr. Fowler and Dr. Shaw and the change-in-control agreements for Messrs. Fowler, Mogg and Hauser and Dr. Shaw currently remain in effect foron a two-year period from the effective time specified above (in each case, the
"Effective Time")month-to-month basis or for such longer period as may be mutually agreed upon by the parties (the "Employment Period").parties. The principal terms and conditions of the severance agreements and change-in-control agreements are described below.
The severance agreements for Messrs. Priory, Padewer,Mr. Fowler and OsborneDr. Shaw provide for severance payments and benefits to the executive in the event of termination of employment other than upon death or disability or for "cause" (as defined in the severance agreements) by Duke Energy as follows: (1) a lump-sum payment equal to two times the sum of the executive's then-current base salary and target bonus, plus a pro rata amount of the executive's target bonus for the year in which the termination occurs; (2) a lump-sum payment equal to the present value of the amount Duke Energy would have contributed or credited to the executive's pension and savings accounts during the two years following the termination date; (3) continued medical, dental and basic life insurance coverage for a two-year period following the termination date or retiree medical benefits, if the executive would have become eligible for such benefits within two years following the termination date, from the date of eligibility; and (4) continued vesting of long-term incentive awards, including stock options or restricted stock but excluding certain performance share awards, held but not vested or exercisable on the termination date, in accordance with their terms for two years following the termination date, with any options or similar rights thereafter remaining exercisable for 90 days, if their term has not expired. If Messrs. Priory, Padewer,Mr. Fowler and OsborneDr. Shaw receive a payment under their severance agreements, no payment will be made under the performance share award. The severance agreements contain restrictive covenants which prohibit Messrs. Priory, Padewer,Mr. Fowler and OsborneDr. Shaw from competing with Duke Energy or soliciting Duke Energy's employees or customers of Duke Energy for one year following termination, and from disclosing certain confidential information.
The change-in-control agreements for Messrs. Priory, Padewer, Brace,Mr. Fowler and OsborneDr. Shaw provide for payments and benefits to the executive in the event of

Executive
Compensation
termination of employment for "good reason" by the executive or other than for "cause" by Duke Energy within a two-year period following a "change-in-control" (each such term as defined in the change-in-control agreements) as follows: (1) a lump-sum payment equal to the sum of the executive's then-current base salary and target bonus for each year of the three-year period after termination, including a pro rata amount for any partial years in such period, plus a pro rata amount of the executive's target bonus for the year in which the termination occurs; (2) a lump-sum payment equal to the present value of the amount Duke Energy would have contributed or credited to the executive's pension and savings accounts during the three years following the termination date; (3) continued medical, dental and basic life insurance coverage for a three-year period following the termination, or retiree medical benefits, if the executive would have become eligible for such benefits within two years following the termination date, from the date of eligibility; and (4) continued vesting of long-term incentive awards, including stock options or restricted stock but excluding certain performance share awards, held but not vested or exercisable on the termination date, in accordance with their terms for three years following the termination date, with any options or similar rights thereafter remaining exercisable for 90 days, if their term hasterms have not expired. If the executive becomeswould have become eligible for normal retirement at age sixty-five within the three-year period following termination, the three-year period mentioned above will be reduced to the period from the termination date to the eligible executive's normal retirement date. In the event that any of the payments or benefits provided for in the change-in-control agreement would constitute a "parachute payment" (as defined in sectionSection 280G(b)(2) of the Internal Revenue Code), the executive is entitled to receive an additional payment such that, after the payment of all income and excise taxes, he or she will be in the same after-tax position as if no excise tax under sectionSection 4999 of the Internal Revenue Code had been imposed.

A provision continuing
The change-in-control agreements for Messrs. Mogg and Hauser provide for payments and benefits to the executive in the event of termination of employment for "good reason" by the executive or other than for "cause" by Duke Energy within a two-year period following a "change-in-control" (each such term as defined in the change-in-control agreements) in accordance with provisions identical to the terms of the change-in-control agreements for Mr. Fowler and Dr. Shaw described listed above, except that amounts paid or benefits received that are determined on the basis of a period of time are determined for a two-year period (rather than three-year period) following the termination date.
Duke Energy granted a performance share award to Mr. Mogg on August 18, 1999, which contains restrictive covenants which prohibit him from competing with Duke Energy or soliciting employees or customers of Duke Energy for two years following termination of employment.
Duke Energy had entered into a benefits agreement with Mr. Padewer's prior employmentMogg effective May 25, 1995, as an inducement to accept a transfer to Denver, Colorado to Duke Energy Field Services, LLC. Upon assuming the position, Mr. Mogg ceased to participate in benefit plans of Duke Energy. The agreement was replaced by a new agreement effective August 4, 2001, following Duke Energy's conversion from a final average pay to a cash balance pension plan, and was subsequently clarified on March 29, 2004, following Mr. Mogg's relocation to Charlotte to assume his current role. The agreement requires Mr. Mogg, in the event of his decision to retire from Duke Energy, to provide Duke Energy with no less than 30 days notice in advance of his effective date of retirement. In addition, the agreement provides that Duke Energy would contribute $315,000Mr. Mogg will receive, following termination of employment as a result of retirement, a supplemental credit to Mr. Padewer's opening balance in
the Duke Energyhis Executive Cash Balance Plan (ECBP) account, or a cash payment in lieu of the supplemental credit to his ECBP account if such plan is not then active. The amount of the credit, or payment, will be equal to the positive difference, if any, between the following: (1) the present value at such time of the aggregate benefits to which Mr. Mogg would have been entitled under the Duke Energy Retirement Cash Balance Plan (RCBP) and the ECBP upon termination of employment with vestingDuke Energy if his employment since June 29, 1995, had been with Texas Eastern Transmission Corporation, and (2) the present value at such time of the aggregate benefits to occur onwhich Mr. Mogg is entitled under the third
anniversaryRCBP and the ECBP, and under any similar program(s) provided by Duke Energy Field Services, LLC, upon the termination of his employment or upon his disability, death, or terminationwith Duke Energy, but adjusted to negate the effect of employmentany prior distributions. The RCBP and ECBP are described more fully below under "Retirement Plan Information." Upon Duke Energy's conversion from a final

Executive
Compensation
average pay to a cash balance pension plan for 29

Compensation
- --------------------------------------------------------------------------------

reasons other than for cause, if any of such events occur before the third
anniversary of his employment. This amount vested oncertain employees effective January 1, 2002,1999, Mr. Mogg received a supplemental credit to his ECBP account of $404,536, representing the third
anniversaryprojected difference in the benefits described above attributable to service earned from the period from May 25, 1995, to December 31, 1998. Assuming Mr. Mogg had retired effective January 1, 2005, the additional amount which would have been credited to his ECBP account for the difference in the benefits described above from January 1, 1999, to December 31, 2004, is estimated to be $3,750.
Duke Energy had entered into a supplemental compensation agreement with Dr. Shaw effective September 1, 1992, to induce her to accept employment with Duke Energy. The agreement was replaced by a new agreement effective January 1, 1997, following Duke Energy's conversion from a final average pay to a cash balance pension plan, to ensure Dr. Shaw's benefits under the agreement were treated consistently with the conversion of Mr. Padewer's employment.benefits of other similarly situated employees, while recognizing the provisions of the previous agreement. The January 1, 1997, agreement provided for the addition of $50,000 to Dr. Shaw's supplemental account in the ECBP effective January 1, 1997. In addition, if Dr. Shaw's employment is terminated by Duke Energy without cause prior to her reaching age sixty-two, upon attaining age sixty-two, Dr. Shaw will be paid a retirement supplement lump sum cash payment equal to $2,475,000, less the sum of her account balances as of her termination date in the RCBP and ECBP, with such sum increased at a rate of 7% per year from the date of her termination to age sixty-two. If Dr. Shaw becomes disabled or dies after terminating employment with Duke Energy but before reaching age sixty-two, Dr. Shaw, or in the event of her death Dr. Shaw's designated beneficiary, will be paid a lump-sum cash payment equal to the present value of the age sixty-two retirement supplement discounted at a rate of 7% per year to the date of her disability. If Dr. Shaw dies while employed at Duke Energy, Dr. Shaw's designated beneficiary will be paid an amount equal to 1.5 times Dr. Shaw's annual base pay at the time of her death. An additional continuing provision providesprovided that Mr. Padewer will beDr. Shaw was credited for twelvetwenty years of service for the purpose of determining vacation benefits.
Retirement Plan Information
Executive officers and other eligible employees of Duke Energy and its affiliated companies participate in the Duke Energy Retirement Cash Balance Plan,RCBP, which is a noncontributory, qualified, defined benefit retirement plan.plan that is intended to satisfy the requirements for qualification under Section 401(a) of the Internal Revenue Code. In addition, selected managers are eligible to participate in the Duke Energy Executive Cash Balance Plan,ECBP, which is a noncontributory, nonqualified, defined benefit retirement plan. A portionplan that is not intended to satisfy such requirements. In response to the enactment of Section 409A of the Internal Revenue Code, which imposes new requirements for the successful deferral of compensation, the ECBP was divided into two parts, one of which includes only benefits earned and vested before January 1, 2005, to which the new requirements do not apply, and the other of which includes benefits to which the new requirements do apply and which is intended to satisfy those requirements. Benefits earned in the Executive Cash Balance Plan isECBP are attributable toto: compensation in excess of the Internal Revenue Service annual compensation limit ($170,000205,000 for 2001) and2004) under the Internal Revenue Code that applies to the determination of pay credits under the RCBP; certain deferred compensation as well as reductions
causedthat is not recognized by the RCBP; restoration of benefits in excess of a defined benefit plan maximum annual benefit limitations that apply to qualified plans from the
benefits that would otherwise be providedlimit ($165,000 for 2004) under the Retirement Cash Balance
Plan. Internal Revenue Code that applies to the RCBP; and supplemental benefits granted to a particular participant.
The Retirement Benefit Equalization Plan is designedbenefit accrual formula used to restore benefit
reductions caused by the maximum benefit limitations that apply to qualified
plans from benefits that would otherwise be provideddetermine pay credits under the Retirement Cash
Balance Plan for eligible employees of Duke Energy who do not participate in
the Executive Cash Balance Plan. Benefits under the Retirement Cash Balance
Plan, the Executive Cash Balance PlanRCBP and the Retirement Benefit Equalization
Plan areECBP is based onupon eligible pay, generally consisting of base pay, overtime, short-term incentives and lump-sum merit increases. The Retirement Cash Balance Plan andRCBP excludes eligible pay in excess of the Retirement Benefit Equalization Plan excludeannual compensation limit under the Internal Revenue Code, while the ECBP excludes eligible pay up to such limit. The RCBP excludes deferred compensation other than deferrals pursuant to Sections 401(k) andor 125 of the Internal Revenue Code. Under the RCBP and ECBP benefit accrual formula, used to determine benefits under the
Retirement Cash Balance Plan, an eligiblea participating employee's plan account receives a pay credit at the end of each month in which the employee remains eligible for the respective plan and receives eligible pay for services. The monthly pay credit is equal to a percentage of the employee's monthly eligible pay. For most eligible employees,
theThe percentage depends

Executive
Compensation
on age and completed years of service at the beginning of the year, as shown below:
Age and Service
Monthly Pay
Credit Percentage
34 or less 4%
35 to 49 5%
50 to 64 6%
65 or more 7%
In addition, the employee receivesthere is an additional 4% pay credit for any portion of eligible pay above the Social Security taxable wage base ($80,40087,900 for 2001)2004). However,
for certain eligible employees, the total percentage is a flat 3% of eligible
pay. EmployeeParticipant accounts also receive monthly interest credits on their balances. The rate of the interest credit is adjusted quarterly and equals the yield on 30-year U.S. Treasury Bonds during the third week of the last month of the previous quarter, subject to a minimum rate of 4% per year and a maximum rate of 9% per year.
Assuming that the Named Executive Officers continue in their present positions at their present salaries and target bonus opportunities until retirement at age 65, their estimated annual pensions in a single life annuity form under the applicable plansRCBP and ECBP attributable to such salaries and bonuses would be: R.B. Priory, $765,817; H.J. Padewer, $211,932; R.P.
Brace, $144,221; F.J.Fred J. Fowler, $284,528;$311,014; Jimmy W. Mogg, $268,642; David L. Hauser, $253,882; and R.J. Osborne, $336,670.Ruth G. Shaw, $254,248. These estimates are calculated assuming interest credits at an annual rate of 4% and using a future2004 Social Security taxable wage base equal to $80,400.

$87,900, increasing 4.5% annually. Paul M. Anderson participates in the RCBP only for purposes of determining his eligibility to qualify for early or normal retirement; he does not participate in the ECBP.

Other
Information
- --------------------------------------------------------------------------------

Discretionary Voting Authority
As of the date this proxy statement went to press, weDuke Energy did not anticipate that any matter other than the proposals set out in this proxy statement would be raised at the annual meeting. If any other matters are properly presented at the annual meeting, the persons named as proxies will have discretion to vote on those matters according to their best judgment.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on information furnished to us and contained in reports filed with the SEC, as well as any written representations that no other reports were required, we believeDuke Energy believes that during 20012004 all SEC filings of ourits directors and executive officers complied with the requirements of Section 16 of the Securities Exchange Act except that F.J. Fowler did not timely report an
exercisefor the following, all of options inwhich were filed late as a result of clerical errors by Duke Energy: a Form 4 for William T. Esrey and Form 4 for George Dean Johnson, Jr., both dated June 28, 2004, and both of which reported the June 22, 2004, acquisition of Duke Energy Common Stock through the Duke Energy dividend reinvestment plan; a Form 4 for Richard J. Osborne, dated February 2001, and J.G. Martin did not timely report an
exercise3, 2005, which reported the December 19, 2004, vesting of options inphantom stock; a Form 4 for Jimmy W. Mogg, dated February and3, 2005, which reported a one-time credit to Mr. Mogg's ECBP made on May 200128, 2004; and a sale of 20Form 4 for Martha B. Wyrsch, dated March 10, 2005, which reported shares in May
2001. The failure to timely report such option exercises was due to
administrative oversight on the part of Duke Energy.

Energy Common Stock withheld by Duke Energy to pay taxes on a vesting of restricted stock on October 1, 2004.
Fees Paid to Independent Auditors

Auditor
The following table presents fees for professional audit services rendered by Deloitte & Touche LLP, and the member firms of Deloitte Touche Tohmatsu and their respective affiliates (collectively, "Deloitte") for Duke Energy and its subsidiaries for 2004 and 2003:

Type of Fees

FY 2004

FY 2003

(In millions)

Audit Fees (a) $ 10.7 $ 11.6 (f)
Sarbanes-Oxley 404 Fees (b) 14.7 0
Total Audit Fees $ 25.4 $ 11.6
Audit-Related Fees (c) 1.9 1.6
Tax Fees (d) 8.2 10.8
All Other Fees (e) 0.1 0.3
Total Fees: $ 35.6 $ 24.3
(a)
Audit Fees are fees billed or expected to be billed by Deloitte for professional services for the audit of Duke Energy's annualconsolidated financial statements for 2001, and fees billed for other services
rendered by Deloitte for fiscal 2001:

(In millions)

Audit fees (a) $ 5.6
Financial information systems design
and implementation (b) 0
All other fees:
Tax matters (c) 21.9
Other (d) 5.7
-----
Total all other fees $27.6

- --------
(a) Audit fees include review of the financial statements set forthincluded in Duke Energy's Quarterly Reportsannual report on Form 10-K and review of financial statements included in Duke Energy's quarterly reports on Form 10-Q, for 2001.

(b) Duke Energy internal policy prohibits the engagement of the independent
auditors for financial information systems designservices that are normally provided by Deloitte in connection with statutory, regulatory or other filings or engagements or any other service performed by Deloitte to comply with generally accepted auditing standards and implementation
services.

(c) Tax-related services comprise tax compliance (including U.S. federalinclude comfort and international returns), tax examination assistance and tax planning.

(d) Primarily consists of fees for advice related to acquisitions and
divestitures and for the issuance of consents and comfortconsent letters in connection with SEC filings and financing transactions.

(b)
Sarbanes-Oxley 404 fees are fees billed or expected to be billed by Deloitte for professional services for the audit of Duke Energy's internal controls under the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and related regulations.

(c)
Audit-Related Fees are fees billed by Deloitte for assurance and related services that are reasonably related to the performance of an audit or review of Duke Energy's financial statements, including assistance with acquisitions and divestitures, internal control reviews, employee benefit plan audits and general assistance with the implementation of the SEC rules pursuant to the Sarbanes-Oxley Act.

(d)
Tax Fees are fees billed by Deloitte for tax return assistance and preparation, tax examination assistance, and professional services related to tax planning and tax strategy. In 2004, after the SEC issued a statement clarifying what constitutes a contingent fee arrangement for tax services, Duke Energy and Deloitte amended four previously existing fee

Other
Information

arrangements into non-refundable fixed fees. Tax Fees for 2004 includes $4.8 million of such fees, and $4.8 million more will be due and paid in the first quarter of 2005.

(e)
All Other Fees are fees billed by Deloitte for any services not included in the first three categories, primarily translation of audited financials into foreign languages, accounting training and conferences.

(f)
The Duke Energy proxy statement filed on March 31, 2004, stated that Audit Fees for fiscal 2003 were $9.7 million. That number did not include $1.9 million of Audit Fees that had not been billed and were not anticipated at the time that the 2004 proxy statement was filed.

To safeguard the continued independence of the independent auditor, the Audit Committee adopted a policy that prevents Duke Energy's independent auditor from providing services to Duke Energy and its subsidiaries that are prohibited under Section 10A(g) of the Securities Exchange Act of 1934, as amended. This policy also provides that independent auditors are only permitted to provide services to Duke Energy and its subsidiaries that have been pre-approved by the Audit Committee. Pursuant to the policy, all audit services require advance approval by the Audit Committee. All other services by the independent auditor that fall within certain designated dollar thresholds, both per engagement as well as annual aggregate, have been pre-approved under the policy. Different dollar thresholds apply to the three categories of pre-approved services specified in the policy (Audit-Related services, Tax services and Other services). All services that exceed the dollar thresholds must be approved in advance by the Audit Committee. Pursuant to applicable provisions of the Securities Exchange Act of 1934, as amended, the Audit Committee has considereddelegated approval authority to the compatibilityChairman of nonauditthe Audit Committee. The Chairman has presented all approval decisions to the full Audit Committee. All services performed by the independent auditor in 2004 were approved by the Audit Committee pursuant to its pre-approval policy, except that services comprising 1% of Tax Fees and 14% of Other Fees were approved pursuant to thede minimus exception to the rules and regulations of the SEC on pre-approval.
Shareholder Communication with Board of Directors
All correspondence addressed to the Board of Directors or to one or more members of the Board of Directors should be sent to the Corporate Secretary at the following address:
Corporate Secretary
Duke Energy Corporation
P. O. Box 1006
Charlotte, NC 28201-1006
All correspondence received by the Corporate Secretary will be promptly acknowledged and reviewed by the Corporate Secretary, who will determine whether the correspondence should be forwarded immediately to the Board of Directors or any member of the Board of Directors or whether the correspondence should be presented to the Board of Directors at its next regular meeting. The Corporate Secretary will consult with the auditors' independence.

Online Accesslead director if there is a question concerning the need for immediate review by the Board of Directors or by any member of the Board of Directors.
Correspondence to the lead director may be sent to the following address:
Lead Director
Duke Energy Corporation
c/o Corporate Secretary
P. O. Box 1006
Charlotte, NC 28201-1006
The Corporate Secretary will forward any such correspondence, unopened, to the lead director.
Code of Ethics and Corporate Governance Principles
Duke Energy has adopted a code of ethics entitled "Code of Business Ethics" that applies to all officers (including the principal executive officers, principal financial officer and controller) and all other employees of Duke Energy and Duke Energy's subsidiaries. The "Code of Business Ethics" is posted on Duke Energy's Internet Web site: http://www.duke-energy.com/investors/corporate/ethics.htm and is available in print to any shareholder who requests it. In satisfaction of the disclosure requirements of Item 5.05 of Form 8-K, Duke Energy will disclose on this website any amendments to, or waivers to, provisions of the "Code of Business Ethics" that apply to its principal executive officers, principal financial officer and controller and that relate to any element of this code enumerated in Item 406(b) of Regulation S-K.

Other
Information
Directors are held to the same high standards of business conduct as employees. Duke Energy's Board of Directors has approved and Duke Energy has adopted a "Code of Business Conduct and Ethics for Members of the Board of Directors of Duke Energy Corporation," applicable to all members of Duke Energy's Board of Directors, that set forth standards of conduct for directors. This code includes those standards from the employees' code which directly apply to the roles and responsibilities of a director. The directors' code is posted on Duke Energy's Internet Web site:http://www.duke-energy.com/investors/corporate.htm and is available in print to any shareholder who requests it.
Duke Energy also has adopted its "Principles of Corporate Governance," which addresses, among other things, director and board committee responsibilities. These guidelines are posted on Duke Energy's Internet Web site: http://www.duke-energy.com/investors/corporate.htm and are available in print to any shareholder who requests it.
Electronic Delivery of the 2005 Annual ReportsReport and Proxy Statements

Save Duke Energy future postage and printing expense by consenting to view
future annual reports and proxy statements online on the Internet.

Most shareholders can elect to view future proxy statements and annual reports
over the Internet instead of receiving paper copies in the mail. Those
shareholders will be given the opportunity to consent to future Internet
delivery when they vote their proxy. For some shareholders, this option is only
available if you vote on the Internet.

Materials
If you are not given an opportunity to consent to Internetreceived a paper version of this year's proxy materials, please consider signing up for electronic delivery when you
vote your proxy, contact the bank, broker or other holder of record through
which you hold your shares and inquire about the availability of such an option
for you.

If you consent, your account will be so noted and, whennext year's materials. Electronic delivery reduces Duke Energy's annual
report for 2002printing and proxy statement for the 2003 annual meeting become
available, youpostage costs associated with paper publications. You will be notified on how to access them on the Internet.
Shareholders of record may indicate their consent on this year's proxy card,
and will receive a paper proxy card forimmediately by e-mail when next year's annual meeting inreport and proxy materials are available. E-delivery makes it more convenient for shareholders to cast their votes on issues that affect Duke Energy.
In order to enroll for electronic delivery, go towww.icsdelivery.com/duk and follow the mail.

instructions. You will need to enter a valid email address along with your social security number.
If you elect to receive your Duke Energy materials via the Internet, you can still request paper copies by contacting Investor Relations at (800) 488-3853 or by e-mail at InvestDUK@duke-energy.com.

Exhibit A

ExtractInvestDUK@duke-energy.com.
Householding Information
Duke Energy has adopted a procedure called "householding", which has been approved by the SEC, for shareholders of record on February 1, 2003. Under this procedure, a single copy of the annual report and proxy statement is sent to any household at which two or more shareholders reside, unless one of the shareholders at that address notifies us that they wish to receive individual copies. This procedure reduces our printing costs and fees. Each shareholder will continue to receive separate proxy cards, and householding will not affect dividend check mailings, or InvestorDirect Choice Plan statement mailings, in any way.
This year, we are seeking consent to householding from shareholders who became shareholders of record after February 1, 2003, and from shareholders who have previously revoked their consent but wish to now participate in householding. If you provide your consent this year or have already consented to householding, householding will continue until you are notified otherwise or until you notify Investor Relations by telephone at (800) 488-3853, by e-mail atInvestDUK@duke-energy.com, or by mail at P.O. Box 1005, Charlotte, NC 28201-1005, that you wish to continue to receive separate annual reports and proxy statements. You will be removed from the householding program within 30 days of receipt of your notice. If you received a householded mailing this year and you would like to have additional copies of our annual report and proxy statement mailed to you, please submit your request to Investor Relations at the number or address above. We will promptly send additional copies of the annual report and proxy statement upon receipt of such request.
A number of brokerage firms have instituted householding. If you hold your shares in "street name," please contact your bank, broker or other holder of record to request information about householding.

Appendix A
DECLASSIFICATION AMENDMENT TO THE
RESTATED ARTICLES OF INCORPORATION OF
DUKE ENERGY CORPORATION
Article VIII of the Restated Articles of Incorporation of Duke Energy Corporation
showing proposed amendments to Article IV. Italics indicate additions and
brackets indicate deletions.

Article IV

The total number of authorized shares of thisthe Corporation is 2,044,000,000
shares, divided into 12,500,000 sharesamended as follows:
(b) Termination of Preferred StockClassification. The directors, other than those who may be elected by the holders of the par valueany class of $100 each (hereafter called Preferred Stock), 10,000,000 shares of Preferred
Stock A ofstock having a preference over the par value of $25 each (hereafter called Preferred Stock A),
20,000,000 shares of Serial Preferred Stock without par value (hereafter called
Serial Preferred Stock), 1,500,000 shares of Preference Stock of the par value
of $100 each (hereafter called Preference Stock), and 2,000,000,000 shares of Common Stock without [nominal or] par value (hereafter called Common Stock).

The Preferred Stock andas to dividends or upon liquidation to elect directors under specified circumstances, shall be classifieduntil the Preferred Stock A (sometimes collectively referredannual meeting of shareholders to as the Preferred Stocks) shall rank equally with no preference or priority
of the Preferred Stock over the Preferred Stock A or of the Preferred Stock A
over the Preferred Stockbe held in 2006, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, as shall be provided in the manner specified in the By-Laws of the Corporation, one class (Class I) to be originally elected for a term expiring at the annual meeting of shareholders to be held in 1992, another class (Class II) to be originally elected for a term expiring at the annual meeting of shareholders to be held in 1993, and another class (Class III) to be originally elected for a term expiring at the annual meeting of shareholders to be held in 1994, with each class to hold office until its successor is elected and qualified. At each annual meeting of the shareholders of the Corporation,until the annual meeting of shareholders to be held in 2006, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of shareholders held in the third year following the year of their election.The terms of office of all directors who are in office immediately prior to the closing of the polls for the election of directors at the 2006 annual meeting of shareholders of the Corporation shall expire at such time. At each annual meeting of shareholders beginning with the 2006 annual meeting of shareholders of the Corporation, the directors shall not be classified, and the directors, other than those who may be elected by the holders of any class or series of stock having preference over the Common Stock as to dividends and distribution of assetsor upon liquidation dissolution to elect directors under specified circumstances, shall be elected by the holders of voting stock and shall hold office until the next annual meeting of shareholders and until their respective successors shall have been duly elected and qualified, subject, however, to prior death, resignation, retirement, disqualification or winding up of the Corporation. The Serial
Preferred Stock shall rank junior to the Preferred Stocks and senior to the
Preference Stock with respect to dividends and distribution of assets upon
liquidation, dissolutionremoval from office.
(d) Newly created directorships; vacancies. Except as may be otherwise provided for or winding up of the Corporation.

(a) Preferred Stock and Preferred Stock A

(1)The Board of Directors is hereby empowered, subjectfixed by or pursuant to the provisions of paragraph (9)these Articles of this section (a) of Article IV, to cause the authorized
and unissued shares of the Preferred Stock and of the Preferred Stock A
to be issued in one or more seriesIncorporation, as amended from time to time, upon such
consideration (not less than the par value thereof), upon such terms,
and in such manner, and with such variations as to (i) the rates of
dividend payable thereon, (ii) the periods of time during which
dividends shall accrue and the dates on which dividends shall become
payable on the shares of such series, (iii) the terms on which the same
may be redeemed, (iv) the terms or amount of any sinking fund provided
for the purpose of redemption thereof, and (v) the terms upon which the
holders thereof may convert the same into stock of any other class or
classes, or into one or more series of the same class, or of another
class or classes, as may be determined by the Board of Directors at the
time of the creation of each series, but the amount at which said stock
may be redeemed shall in no case be less than the par value thereof.

(2)The shares of each series of the Preferred Stock and of the Preferred
Stock A shall entitle the holders thereof to receive out of the retained
earnings of the Corporation or net profits earned during the current or
preceding accounting period (each said period to be not less than six
months or more than one year in duration) or, if retained earnings and
net profits are not available, out of capital surplus, a dividend at the
annual rate fixed for the particular series, but not exceeding such
rate, cumulative from and after the date of issuance thereof, payable
quarterly on the 16th day of March, June, September and December of each
year (or, if any such day shall not be a business day, on the next
succeeding business day) or at such intervals and on such dates as
otherwise are expressly set forth in the resolution of the Board of
Directors creating such series or, if such intervals and dividend
payment dates shall vary from time to time for such series, the method
by which such intervals and dates shall be determined, before any
dividend shall be set apart for or paid on the Serial Preferred Stock,
the Preference Stock or the Common Stock. Any dividends declared or paid
on the Preferred Stock or the Preferred Stock A in an amount less than
full cumulative dividends payable at such time upon all shares of the
Preferred Stock or the Preferred Stock A outstanding shall, if more than
one series be outstanding, be divided among the different series in
proportion to the aggregate amounts that would be distributable to the
Preferred Stock simultaneously declared and paid thereon at such time
without regard to the applicable dividend payment dates.

(3)All series of the Preferred Stock shall rank equally and be alike in all
respects except for the variations and differences between series herein
expressly provided for, and all series of the Preferred Stock A shall
rank equally and be alike in all respects except for the variations and
differences between series herein expressly provided for.

(4)In case of liquidation or dissolution or distribution of the assets of
the Corporation, there shall be paid (a) to the holders of the Preferred
Stock (i) in case such liquidation, dissolution or distribution shall be
voluntary, $105 per share, and (ii) in case such liquidation,
dissolution or distribution shall be involuntary, $100 per share, and
(b) to the holders of the Preferred Stock A (i) in case such
liquidation, dissolution or distribution shall be voluntary, $26.25 per
share, and (ii) in case such liquidation, dissolution or distribution
shall be involuntary, $25 per share, plus in each case the amount of
dividends (if any) accumulated and unpaid thereon, before any amount
shall be payable to the holders of the Serial Preferred Stock, the
Preference Stock or the Common Stock; the balance of the assets of the
Corporation, subjectrelating to the rights of the holders of any class of stock having a preference over the Serial
PreferredCommon Stock as to dividends or upon liquidation to elect directors under specified circumstances, newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled only by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors. Any director elected in accordance with the preceding sentence shall hold office until thenext succeeding annual meeting of shareholders and until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

Appendix B
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF DUKE ENERGY CORPORATION
(February 22, 2005)
I. General Focus
The Audit Committee (the "Committee") shall:
A.
Provide assistance to the Board of Directors ("Board") in fulfilling its responsibilities with respect to its oversight of:

(i)
The quality and integrity of the Corporation's financial statements;

(ii)
The Corporation's compliance with legal and regulatory requirements;

(iii)
The independent auditor's qualifications and independence; and

(iv)
The performance of the Corporation's internal audit function and independent auditor.

B.
Review and approve the Committee's report that the Securities and Exchange Commission ("SEC") rules require be included in the Corporation's annual proxy statement.
II. Structure and Operations
The Committee shall be comprised of three or more members of the Board, each of whom is determined by the Board to be "independent" under the rules of the New York Stock Exchange, Inc. ("NYSE") and the holdersrules promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
All members of the Preference Stock,Committee shall be
distributed ratably among the holders of the Common Stock.

(5)Holders of the Preferred Stockhave a working familiarity with basic finance and of the Preferred Stock Aaccounting practices (or acquire such familiarity within a reasonable period after his or her appointment) and at least one member shall not be
entitled to any payment by way of dividends or otherwise, or have any
rights in the property of the Corporation or in the distribution
thereof, other than specifically provided in the preceding paragraphs.

A-1

(6)The Preferred Stock or the Preferred Stock A may be called for
redemption in whole or in part on any dividend date at the optionjudgment of the Board of Directors have accounting or related financial management expertise as required by mailing noticethe rules of the NYSE. Committee members may enhance their familiarity with finance and accounting by participating in educational programs conducted by the Corporation or by an outside consultant.
The members of the Committee shall be appointed by the Board and shall serve until such member's successor is duly elected and qualified or until such member's earlier resignation or removal. The members of the Committee may be removed, with or without cause, by majority vote of the Board.
The full Board shall elect the Chair of the Committee. The Chair shall be entitled to cast an additional vote to resolve any ties. The Chair will chair all regular sessions of the Committee and set the agendas for Committee meetings.
III. Meetings
The Committee shall meet at least quarterly or more frequently as circumstances dictate. As part of its goal to foster open communication, the Committee shall periodically meet separately with each of management, the vice president of internal audit and the independent auditor to discuss any matters that the Committee or each of these groups believe should be discussed privately. The Committee may meet privately with the general counsel and the vice president with responsibility for the compliance program, as necessary. In addition, the Committee shall meet with the independent auditor and management quarterly to review the Corporation's financial statements in a manner consistent with that outlined in Section IV of this Charter.
All non-management directors that are not members of the Committee may attend meetings of the Committee but may not vote. Additionally, the Committee may invite to its meetings any director, management of the Corporation and such other persons as it deems appropriate in order to carry out its responsibilities. The Committee may also exclude from its meetings any persons it deems appropriate in order to carry out its responsibilities.
A majority of the members, but not less than two, will constitute a quorum. A majority of the members present at any meeting at which a quorum is present may act on behalf of the Committee. The Committee may meet by telephone or videoconference and may take action by unanimous written consent with respect to matters that may be acted upon without a formal meeting.
The Chair shall designate a person who need not be a member thereof to act as secretary and minutes of its proceedings shall be kept in minute books provided for that purpose. The agenda of each meeting will be prepared by the holders of recordsecretary and, whenever reasonably practicable, circulated to each member prior to each meeting.

IV. Responsibilities and Duties
The following functions shall be the common recurring activities of the shares to be redeemed at least thirty (30) days prior toCommittee in carrying out its responsibilities outlined in Section I of this Charter. These functions should serve as a guide with the date
fixed for redemption,understanding that the Committee may carry out additional functions and such sharesadopt additional policies and procedures as may be then redeemed by paying for
each share so called all accruedappropriate in light of changing business, legislative, regulatory, legal or other conditions. The Committee shall also carry out any other responsibilities and unpaid dividends thereonduties delegated to the
date fixed for such redemption and such additional sum as shall have
been fixedit by the Board of Directors asfrom time to time related to the redemption price of stockpurposes of the seriesCommittee outlined in Section I of this Charter.
The Committee, in discharging its oversight role, is empowered to study or investigate any matter of interest or concern that the Committee deems appropriate. In this regard, the Committee shall have the authority to retain outside legal, accounting or other advisors for this purpose, including the authority to approve the fees payable to such advisors and any other terms of retention.
The Committee shall be given full access to the Corporation's internal audit group, Board, corporate executives and independent accountants, as necessary, to carry out these responsibilities. While acting within the scope of its stated purpose, the Committee shall have all the authority of the Board.
Notwithstanding the foregoing, the Committee is not responsible for certifying the Corporation's financial statements or guaranteeing the independent auditor's report. The fundamental responsibility for the Corporation's financial statements and disclosures rests with management and the independent auditor.
Documents/Reports Review
1.
Meet with management and the independent auditor to review and discuss, prior to public dissemination, the Corporation's annual audited financial statements and quarterly financial statements, including the Corporation's specific disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and discuss with the independent auditor the matters required to be discussed by Statement of Auditing Standards No. 61 and the matters in the written disclosures required by Independence Standards Board Standard No. 1.

2.
Review and discuss with management and the independent auditor the Corporation's earnings press releases (paying particular attention to the use of any "pro forma" or "adjusted" non-GAAP information) as well as financial information and earnings guidance provided to analysts and rating agencies. The Committee's discussion in this regard may be general in nature (i.e., discussion of the types of information to be disclosed and the type of presentation to be made) and need not take place in advance of each earnings release or each instance in which the stock soCorporation may provide earnings guidance.

3.
Review and discuss with management and the independent auditor financial information and earnings guidance provided to analysts and rating agencies. The Committee's discussion in this regard may be general in nature (i.e., discussion of the types of information to be redeemed is a part. Whenever less
than alldisclosed and the type of presentation to be made) and need not take place in advance of each instance in which the Corporation may provide earnings guidance.

4.
Perform any functions required to be performed by it or otherwise appropriate under applicable law, rules or regulations, the Corporation's By-laws and the resolutions or other directives of the outstanding sharesBoard, including review of any certification required to be reviewed in accordance with applicable regulations of the Preferred StockSEC.
Independent Auditor
5.
The Committee shall have the direct responsibility and authority to appoint, retain, compensate, evaluate, oversee and, where appropriate, replace the independent auditor. The Committee shall inform the independent auditor that such firm shall report directly to the Committee. The Committee shall resolve disagreements between management and the independent auditor regarding financial reporting.

6.
Review the independent auditor's audit plan and areas of audit focus. Review the fees and other significant compensation to be paid to the independent auditors.

7.
Approve in advance any audit or nonaudit engagement or relationship that are entered into on or after May 6, 2003 between the Corporation and any independent auditor engaged to prepare or issue an audit report or perform other audit, review or attest services, other than prohibited nonauditing services, as specified in Section 10A(g) of the Preferred Stock AExchange Act and the rules and regulations of the SEC or any rules of the Public Company Accounting Oversight Board promulgated thereunder. The Committee shall not approve any "prohibited nonauditing services" without obtaining a prior exemption from the Public Company Accounting Oversight Board. Audit and nonaudit engagements must be approved either (a) explicitly in advance or (b) pursuant to a pre-approval policy established by the Committee that is detailed as to the services that may be pre-approved, do not permit delegation of approval authority to the Corporation's management, and require management to inform the Committee of each service approved and performed under the policy. Approval for minor nonaudit services is subject to Rule 2-01(c)(7) of Regulation S-X.

The Committee may delegate to one or more members of the Committee the authority to grant such pre-approvals. The delegatee's decisions regarding approval of services shall be reported by such delegatee to the full Committee at each regular Committee meeting.

8.
Review and assess, at least annually, the qualifications, performance and independence of the independent auditors, including a review and evaluation of the lead partner. In conducting its review and evaluation, the Committee should:
(a) Review the written report of the independent auditor that delineates all relationships between the independent auditor and the Corporation that the auditors believe may impact their independence and objectivity, which report should be submitted to the Committee at least annually, and discuss with the independent auditor and management the scope of any series aresuch disclosed relationship and their actual or potential impact on the independent auditor's independence and objectivity;
(b) Obtain and review a report by the Corporation's independent auditor describing: (i) the auditor's internal quality-control procedures; and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the auditor or by any inquiry or investigation by governmental or professional authorities within the preceding five years, respecting one or more independent audits carried out by the auditor, and any steps taken to deal with any such issues;
(c) Confirm the rotation of the audit partners (as defined in Rule 2-01 of Regulation S-X) to ensure that the independent auditor remains independent under Rule 2-01 of Regulation S-X, and consider whether there should be regular rotation of the audit firm itself; and
(d) Take into account the opinions of management and the Corporation's internal auditors (or personnel responsible for the internal audit function).
Internal Auditors
9.
Review the internal audit plan and significant changes in planned activities; review significant findings resulting from audits and managements' responsiveness to the findings.

10.
Review the internal auditors' assessment of the effectiveness of, or weaknesses in, internal control systems.

11.
Evaluate the performance and independence of the internal auditors.

12.
Review and discuss with the independent auditor the responsibilities, budget and staffing of the Corporation's internal audit function.
Financial Reporting Process
13.
In consultation with the independent auditors, management and the internal auditors, review the integrity of the Corporation's financial reporting processes, both internal and external. In that connection, the Committee should obtain and discuss with management and the independent auditor reports from management and the independent auditor regarding: (i) all critical accounting policies and practices to be redeemed, eitherused by the Corporation; (ii) analyses prepared by management and/or the independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including all alternative treatments of financial information within generally accepted accounting principles that have been discussed with the Corporation's management, the ramifications of the use of the alternative disclosures and treatments and the treatment preferred by the independent auditor; (iii) effects of changes in accounting standards that may materially affect the Corporation's financial reporting practices; (iv) major issues regarding accounting principles and financial statement presentations, including any significant changes in the Corporation's selection or application of accounting principles; (v) the integrity of the Corporation's financial reporting practices and the adequacy and effectiveness of internal controls, including a review of significant findings identified by the independent auditors and internal audit, management's responsiveness to such recommendations and any specific audit steps adopted in light of material control deficiencies and (vi) any other material written communications between the independent auditor and the Corporation's management.

14.
Review periodically the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Corporation.

15.
Review with the independent auditor (i) any audit problems or other difficulties encountered by the sharesauditor in the course of the audit process, including any restrictions on the scope of the independent auditor's activities or on access to requested information and any significant disagreements with management and (ii) management's responses to such seriesmatters. Without excluding other possibilities, the Committee may wish to review with the independent auditor (i) any accounting adjustments that were noted or proposed by the auditor but were "passed" (as immaterial or otherwise), (ii) any communications between the audit team and the audit firm's national office respecting auditing or accounting issues presented by the

engagement and (iii) any "management" or "internal control" letter issued or proposed to be redeemed shall be selected by lot in such
manner as may be prescribedissued by the Boardindependent auditor to the Corporation.
Legal Compliance/General
16.
Review periodically, with the Corporation's general counsel, any legal matter that could have a significant impact on the Corporation's financial statements and any material inquiries or reports received from regulatory or governmental agencies.

17.
Review annually the Corporation's compliance program and Code of Directors, or (ii)Business Ethics compliance.

18.
Discuss with management and the redemption shall be made inindependent auditors at least annually the Corporation's guidelines and policies with respect to risk assessment and risk management. The Committee should discuss the Corporation's major financial risk exposures and the overall steps management has taken to monitor and control such manner that each holderexposures; however, the Committee is not responsible for detailed review of financial risk exposure and management, which responsibility has been delegated to another committee of the Preferred Stock orBoard.

19.
Immediately following the annual meeting of shareholders and at any time when the composition of the Preferred Stock ACommittee changes, verify that management submits to the NYSE its "Written Affirmation Form" confirming the composition of the series to be redeemed
shall participate therein inCommittee and this Charter satisfies NYSE requirements.

20.
Set, and review annually, clear hiring policies for employees or former employees of the proportionindependent auditors. At a minimum, these policies should provide that the number of shares of
such series to be redeemed bearsany independent auditor may not provide audit services to the whole numberCorporation if a former partner, principal, shareholder or employee of shares of stock
of that series then outstanding, provided that there shall be no
obligation to redeem less than a whole share. From and after the date of
redemption, unless default be madeauditor is employed by the Corporation as its chief executive officer, controller, chief financial officer, vice president of internal audit or in paymentany other financial reporting oversight role unless such employment would not impair the auditor's independence under Rule 2-01 of Regulation S-X.

21.
Establish, and review annually, procedures for: (i) the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters and (ii) the confidential, anonymous submission by employees of the redemption price pursuant to such notice, all dividends onCorporation of concerns regarding questionable accounting or auditing matters.
Reports
22.
Review and approve the shares
called for redemption shall cease to accrue, and all rights of the
holders thereof in respect of such stock, except the right to receive
the redemption price plus accrued and unpaid dividends to the date fixed
for such redemption, shall cease and determine.

(7)No holder of any of the Preferred Stock or of the Preferred Stock A
shall be entitled to vote at any election of directors or, except as
otherwise required by statute and except as provided in paragraphs (8),
(9), (10) and (11) of this section (a) of Article IV, on any other
matter submitted to the shareholders, provided that if and whenever
dividends on any part of the Preferred Stock or of the Preferred Stock A
shall be in arrears in an amount equivalent to the aggregate dividendsCommittee's report required to be paid on such Preferred Stock or such Preferred Stock Aincluded in any period of twelve (12) calendar months the holdersCorporation's annual proxy statement, pursuant to and in accordance with applicable rules and regulations of the Preferred
Stock as a class shall thereafter at all elections of directors haveSEC.

23.
Report to the exclusive right to elect such number of directors of the Corporation as
shall constitute a majority of the authorized number of directors, the
holders of the Preferred Stock A as a class shall thereafter at all
elections of directors have the exclusive right to elect two directors,Board whether, based on its discussions with management and the holders ofindependent auditor, it recommends to the Common Stock ofBoard that the Corporation [as a class] andmost recent year's audited financial statements be included in the holders of such series ofCorporation's annual report on Form 10-K to be filed with the Serial Preferred Stock as are entitledSEC.

24.
Report regularly to vote generallythe full Board including:

(i)
with respect to any issues that arise with respect to the election of directors, voting
together, shall have the exclusive right, subject to the right, if any,
of holdersquality or integrity of the Serial Preferred Stock to elect directors,Corporation's financial statements, the Corporation's compliance with legal or regulatory requirements, the performance and the
rightindependence of the holdersCorporation's independent auditors or the performance of the Preference Stock as a class to elect two
directors, under certain circumstances, to elect the remaining number of
directorsinternal audit function;

(ii)
following all meetings of the Corporation which right of the holders of the Preferred
Stocks, however, shall cease when all accruedCommittee; and unpaid dividends on
the Preferred Stocks shall have been paid in full. The terms of office
of all persons who may be directors of the Corporation at the time when
the right to elect directors shall accrue to the holders of the
Preferred Stocks, as herein provided, shall terminate upon the election
of their successors at the next annual meeting of the shareholders or at
an earlier special meeting of the shareholders held as hereinafter
provided. Such special meeting shall be held at any time after the
accrual of such voting power, upon notice similar to that provided in
the By-Laws for an annual meeting, which notice shall be given at the
request in writing of the holders of not less than ten (10%) percent of
the number of shares of the then outstanding Preferred Stocks, addressed
to the Secretary of the Corporation at its principal business office.
Upon the termination of such right of the holders of the Preferred
Stocks to elect directors of the Corporation, the terms of office of all
the directors of the Corporation shall terminate upon the election of
their successors at the next annual meeting of the shareholders or at an
earlier special meeting of the shareholders held as hereinafter
provided. Such special meeting shall be held at any time after the
termination of such right of the holders of the Preferred Stocks to
elect directors, upon notice similar to that provided in the By-Laws for
an annual meeting, which notice shall be given at the request in writing
of the holders of not less than ten (10%) percent of the number of the
[shares of] then outstanding [Common Stock] shares of stock of all
classes of the Corporation entitled to vote generally

(iii)
with respect to the election of directors, addressedsuch other matters as are relevant to the SecretaryCommittee's discharge of its responsibilities.

The Committee shall provide such recommendations as the Corporation
at its principal business office.

(8)(i)So long as any of the Preferred Stock remains outstanding, the
authorization of the holders of at least two-thirds (2/3) of the
Preferred Stock then outstanding, voting as a class regardless of
series (given at a meeting called for that purpose), shall be
necessary for effecting or validating the amendment, alteration,
change or repeal of any of the express terms of the Preferred Stock,
or any series thereof, then outstanding, in a manner prejudicialCommittee may deem appropriate. The report to the holders thereof; provided that if any such amendment, alteration,
change or repeal would be prejudicial toBoard may take the holdersform of an oral report by the shares of
one or more, but not all, of the series of the Preferred Stock at the
time outstanding, such authorization shall be required only of the
holders of at least two-thirds (2/3) of the total number of
outstanding shares of all series so affected.

(ii)So long as any of the Preferred Stock A remains outstanding, the
authorization of the holders of at least two-thirds (2/3) of the
Preferred Stock A then outstanding, voting as a class regardless of
series (given at a meeting called for that purpose), shall be
necessary for effecting or validating the amendment, alteration,
change or repeal of any of the express terms of the Preferred Stock
A, or any series thereof, then outstanding, in a manner prejudicial
to the holders thereof; provided that if any such amendment,
alteration, change or repeal would be prejudicial to the holders of
the shares of one or more, but not all, of the series of the
Preferred Stock A at the time outstanding, such authorization shall
be required only of the holders of at least two-thirds (2/3) of the
total number of outstanding shares of all series so affected.

(9)So long as any of the Preferred Stock or of the Preferred Stock A
remains outstanding, the affirmative vote of the holders of at least
two-thirds (2/3) of the Preferred Stock then outstanding, voting as a
class regardless of series, and the affirmative vote of the holders of
at least two-thirds (2/3) of the Preferred Stock A then outstanding,
voting as a class regardless of series, shall be necessary to enable the
Corporation to issue shares of Preferred Stock in excess of 250,000
shares or shares of Preferred Stock A in excess of 1,000,000 shares,

A-2

Chair or any other class of stock having rights in the distributionmember of the earningsCommittee designated by the Committee to make such report.

25.
Maintain minutes or assetsother records of meetings and activities of the Corporation prior to or on a parity with those
of the Preferred Stock or of the Preferred Stock A, or any obligations
convertible into or evidencing the right to purchase any of such shares
of stock, unless both

(i)the net earnings ofCommittee.

26.
The Committee shall receive appropriate funding from the Corporation available for dividends on the Preferred Stock and on the Preferred Stock A, determined in
accordance with generally accepted accounting practices, for any
twelve (12) consecutive calendar months within the fifteen (15)
calendar months preceding the month within which the additional
shares shall be issued, shall have been at least twice the dividend
requirements for a twelve (12) months' period upon the entire amountpayment of the Preferred Stock and of the Preferred Stock A and all such
other stock ranking prior to or on a parity with the Preferred Stock
and the Preferred Stock A as to dividends or other distributions to
be outstanding immediately after the proposed issue of shares of the
Preferred Stock or of the Preferred Stock A or such other stock, and

(ii)the total net assets of the Corporation at a date not more than
ninety (90) days priorcompensation to the date on which the proposed stock isindependent auditors and to be issued shall equal at least twice the aggregate amount payable,
upon the involuntary liquidation of the Corporation, to the holders
of the Preferred Stock and of the Preferred Stock A and such other
stock to be outstanding immediately after the proposed issue of such
additional shares.

(10)So long as any of the Preferred Stock or of the Preferred Stock A
remains outstanding, the affirmative vote of the holders of at least
two-thirds (2/3) of the Preferred Stock then outstanding, voting as a
class regardless of series, and the affirmative vote of the holders of
at least two-thirds (2/3) of the Preferred Stock A then outstanding,
voting as a class regardless of series, shall be necessary to authorize
the creation of, or an increase in the authorized number of shares of,
any stock having preferential rights in the distribution of earnings or
assets of the Corporation prior to or on a parity with those of the
outstanding Preferred Stock or of the outstanding Preferred Stock A.

(11)So long as any of the Preferred Stock or of the Preferred Stock A
remains outstanding, the consent or authorization of the holders of at
least two-thirds (2/3) of the Preferred Stock then outstanding, voting
as a class regardless of series (given at a meeting called for that
purpose), and the consent or authorization of the holders of at least
two-thirds (2/3) of the Preferred Stock A then outstanding, voting as a
class regardless of series (given at a meeting called for that purpose),
shall be necessary for effecting or validating (i) the sale or exchange
of all, or substantially all, of the property and assets of the
Corporation, or (ii) the merger or consolidation of the Corporation with
any other corporation or corporations (other than subsidiaries of the
Corporation); provided that the provisions of this paragraph shall not
apply to the purchase or other acquisitionadvisors retained by the Corporation of
franchises or other assets of another corporation, or to any merger or
consolidation ordered or authorized by the Federal Power Commission or
by any succeeding regulatory authority of the United States having
jurisdiction in the premises.

(12)At any meeting at which the holders of the Preferred Stock or of the
Preferred Stock A shall have the right to vote as a class, the presence
in person or by proxy of the holders of a majority of the outstanding
shares of the Preferred Stock or of the Preferred Stock A shall be
required to constitute a quorum of such class. Whenever the holders of
the outstanding Preferred Stock or of the outstanding Preferred Stock A
shall have the right to vote, each holder thereof shall be entitled to
one vote for each share standing in his name.

(b)Serial Preferred Stock

(1)The Serial Preferred Stock may be issued from time to time as herein
provided in one or more series. The Board of Directors is hereby
expressly granted authority, subjectCommittee pursuant to the provisions of this Article
IV, to issue from time to time Serial Preferred Stock in one or more
series outCharter.
V. Annual Performance Evaluation
The Committee shall perform a review and evaluation, at least annually, of the then authorizedperformance of the Committee and unissued sharesits members, including a review of Serial
Preferred Stockthe compliance of the Committee with this Charter. In addition, the Committee shall review and with respectreassess, at least annually, the adequacy of this Charter and recommend to each series to fix, by resolution or
resolutions providing for the issuance of such series, such
designations, preferences, limitations and relative rights of such
series as may be permitted to be fixed by the Board of Directors by the
laws of the State of North Carolina as in effect at the time the
particular series is authorized, including, without limitation,
authority soany improvements to fix any one or more of the following:

(i)the designation of such series;

(ii)the number of shares of the series

(iii)the dividend rate or rates, if any, thereof (or method of determining
such dividends), the conditions and dates upon which such dividends
shall be payable, the preference or relation of such dividends,
subject to the provisions of this Article IV, to dividends payable on
any other class or classes of capital stock of the Corporation, and
whether such dividends shall be cumulative or noncumulative;

(iv)whether the shares of such series shall be subject to redemption by
the Corporation, and, if made subject to such redemption, the times,
prices, rates, adjustments and other terms and conditions of such
redemption;

(v)the terms and amount of any sinking or similar fund provided for the
purchase or redemption of the shares of such series;

A-3

(vi)providingCharter that the shares ofCommittee considers necessary or valuable. The Committee shall conduct such series may be convertible into or
exchangeable for shares of Common Stock or other securities of the
Corporation or of any other corporation or other entityevaluations and the
times, prices, rates, adjustments and other terms and conditions of
such conversion or exchange;

(vii)the extent, if any, to which the holders of the shares of such series
shall be entitled to vote as a series or otherwise, subject to the
provisions of this Article IV and as otherwise may be provided by
law, with respect to the election of directors or otherwise;

(viii)the restrictions and conditions, if any, upon the issue of any
additional Serial Preferred Stock ranking on a parity with or prior
to such shares as to dividends or upon dissolution;

(ix)the rights of the holders of the shares of such series upon the
liquidation, dissolution or distribution of the assets of the
Corporation, which rights may be different in case such liquidation,
dissolution or distribution shall be voluntary or involuntary; and

(x)any other preferences, limitations or relative rights of shares of
such series consistent with this Article IV and applicable law.

All shares of the Serial Preferred Stock of the same series shall be identical
in all respects. All shares of the Serial Preferred Stock, irrespective of
series, shall constitute one and the same class of stock, shall be of equal
rank and shall be identical in all respects except that to the extent not
otherwise limited in this Article IV any series may differ from any other
series with respect to any one or more of the designations, preferences,
limitations and relative rights described or referred to in subparagraphs (i)
to (x), inclusive above.

(1)The Preference Stock may be issued from time to time as herein provided
in one or more series. The Board of Directors of the Corporation is
hereby expressly granted authority, subject to the provisions of this
Article IV, to issue from time to time Preference Stock in one or more
series out of the then authorized and unissued shares of Preference
Stock and with respect to each series to fix, by resolution or
resolutions providing for the issuance of such series, such
designations, preferences, limitations and relative rights of such
series as may be permitted to be fixed by the Board of Directors by the
laws of the State of North Carolina as in effect at the time the
particular series is authorized by the Board of Directors, including,
without limitation, authority so to fix any one or more of the following:

(i)the distinctive designation of such series and the number of shares
which shall constitute such series;

(ii)the annual dividend rate for the shares of such series;

(iii)the terms on which shares of such series may be redeemed, including,
without limitation, the redemption price or prices for such series,
which may consist of a redemption price or scale of redemption prices
applicable only to redemption in connection with a sinking fund and
the same or a different redemption price or scale of redemption
prices applicable to any other redemption;

(iv)the terms and amount of any sinking fund provided for the purchase or
redemption of shares of such series;

(v)the amount per share payable on the shares of such series upon the
voluntary and involuntary liquidation, dissolution or winding up of
the Corporation, which amount may vary depending upon whether such
liquidation, dissolution or winding up is voluntary or involuntary;
and

(vi)the terms and conditions, if any, upon which holders of shares of
such series may convert the same into, or exchange the same for,
Common Stock, as well as provisions for adjustment of the conversion
rate in such events as the Board of Directors shall determine.

All shares of Preference Stock of the same series shall be identical in
all respects. All shares of Preference Stock, irrespective of series,
shall constitute one and the same class of stock, shall be of equal rank
and shall be identical in all respects except that to the extent not
otherwise limited in this Article IV any series may differ from any
other series with respect to any one or more of the designations,
preferences, limitations and relative rights described or referred to in
subparagraphs (i) to (vi), inclusive above.

(2)Subject to full dividends accrued on all outstanding shares of Preferred
Stocks and Serial Preferred Stock for all past dividend periods and for
the then current dividend period having been paid or declared and set
apart for payment, holders of the Preference Stock shall be entitled to
receive, but only when and as declared by the Board of Directors out of
funds legally available for the declaration and payment of dividends,
cumulative dividends in cash at the annual dividend rate per share fixed
for the particular series, and no more, payable in respect of each
quarterly dividend period, commencing on the date specified for the
first dividend payment to shareholders of record on the respective dates
fixed in advance for the purpose by the Board of Directors prior to the
payment of each such dividend, which record date for each dividend shall
be the same for all series.

A-4

Dividends on shares of each series of the Preference Stock shall be
cumulative:

(i)on shares of any series issued prior to the first dividend payment
date for such series, from the date of issuance of such shares; and

(ii)on shares of any series issued on or after such first dividend
payment date, from the quarterly dividend payment date next preceding
the date of issuance of such shares or from the date of issuance if
that be a dividend payment date.

No dividend shall be declared on any series of the Preference Stock for
any quarterly dividend period unless there shall have been paid or
declared and set apart for payment like proportionate dividends,
ratably, in proportion to the annual dividend rates fixed therefor, on
all shares at the time outstanding of all series of the Preference
Stock, in respect of the same quarterly dividend period to the extent
that such shares are entitled to receive dividends for such quarterly
dividend period.

The expression "dividends accrued," as used in this paragraph (2) and in
any resolutions providing for the issuance of series of the Preference
Stock, shall mean the sum of amounts in respect of shares of the
particular class or series then outstanding which, as to each share,
shall be an amount computed at the dividend rate per annum fixed for the
particular share from the date from which dividends on such share became
cumulative to the date with reference to which the expression is used,
irrespective of whether such amount or any part thereof shall have been
declared as dividends or there shall have existed any funds legally
available for the declaration and payment thereof, less the aggregate of
all dividends paid on such share.

No dividend shall be declared or paid or set aside for payment or other
distribution declared or made upon the Common Stock, nor shall any
Common Stock be purchased or otherwise acquired for any consideration by
the Corporation or any subsidiary, while any of the Preference Stock is
outstanding, unless, in each case:

(a)full dividends accrued on all outstanding shares of the Preference
Stock for all past dividend periods shall have been paid or declared
and set apart for payment; and

(b)the Corporation shall have made, or set aside for payment, all
payments, if any, then or theretofore due under the requirements of
any sinking fund for the purchase or redemption of shares of any
series of the Preference Stock.

(3)Except as otherwise provided by law, the holders of the Preference Stock
shall not have any right to vote for the election of directors or for
any other purpose except as set forth below:

(i)In the event that at any time, or from time to time:

(a)six (6) or more quarterly dividends, whether consecutive or not,
on any series of the Preference Stock shall be in arrears and
unpaid, whether or not earned or declared; or

(b)the Corporation shall not have made, or set aside for payment,
all payments, if any, then or theretofore due under the
requirements of any sinking fund for the purchase or redemption
of shares of any series of the Preference Stock;

the holders of the Preference Stock of all series then outstanding,
voting as a class without regard to series, shall have, subject to
the rights of the holders of the Preferred Stocks and the rights, if
any, of holders of the Serial Preferred Stock to elect directors
under certain circumstances, the exclusive right to elect two
directors at the next annual meeting of shareholders. In any such
event, subject to the voting rights of the Preferred Stocks and the
voting rights, if any, of the Serial Preferred Stock to elect
directors under certain circumstances, the holders of the Common
Stock and the holders of such series of the Serial Preferred Stock as
are entitled to vote generally with respect to the election of
directors, to the exclusion of the holders of the Preference Stock
entitled to elect two members of the Board pursuant to this paragraph
(3), voting together, shall be entitled to elect the balance of the
Board of Directors.

The voting rights of the holders of the Preference Stock to elect two
directors shall continue until:

(x)all dividends on the Preference Stock in arrears shall have been
paid in full and dividends on the Preference Stock for the
current dividend period shall have been paid or declared and set
aside for payment; and

(y)all payments, if any, then or theretofore due under the
requirements of any sinking fund for the purchase or redemption
of shares of any series of the Preference Stock shall have been
made or set aside for payment;

in which event the voting rights of the holders of the Preference
Stock to elect two directors shall terminate, subject to revival as
aforesaid, upon the occurrence of any of the events specified in (a)
or (b) of this clause (i) of this paragraph (3), and in the event of
the termination of such voting right, the directors who have been
elected by the holders of the Preference Stock shall continue in
office until the next annual meeting of shareholders.

A-5

(ii)The affirmative approval of the holders of at least two-thirds (2/3)
of the Preference Stock at the time outstanding, voting as a class
without regard to series, shall be required for any amendment of the
Articles of Incorporation altering materially any existing provision
of the Preference Stock or for the creation, or an increase in the
authorized amount, of any class of stock ranking, as to dividends or
assets, prior to the Preference Stock, and the affirmative approval
of the holders of at least a majority of the Preference Stock at the
time outstanding, voting as a class without regard to series, shall
be required for an increase in the authorized amount of the
Preference Stock or for the creation, or an increase in the
authorized amount, of any class of stock ranking, as to dividends or
assets, on a parity with the Preference Stock; provided, however,
that if any amendment of the Articles of Incorporation shall affect
adversely the rights or preferences of one or more, but not all, of
the series of Preference Stock at the time outstanding or shall
unequally adversely affect the rights or preferences of different
series of Preference Stock at the time outstanding, the affirmative
approval of the holders of at least two-thirds (2/3) of such shares
of each such series so adversely or unequally adversely affected
shall be required in lieu of or (if such affirmative approval is
required by law) in addition to the affirmative approval of the
holders of at least two-thirds (2/3) of the outstanding shares of
Preference Stock as a class.

At any meeting at which the holders of the Preference Stock shall
have the right to vote as a class, the presence in person or by proxy
of the holders of a majority of the outstanding shares of Preference
Stock shall be required to constitute a quorum of such class. Each
holder of Preference Stock entitled to vote at any particular time
shall have one vote for each share of stock held of record by him.

(4)The Preference Stock shall rank junior to the Preferred Stocks and the
Serial Preferred Stock with respect to the distribution of assets of the
Corporation. After the payment to the holders of the Preferred Stocks
and the Serial Preferred Stock of all amounts payable to them in the
event of any liquidation or dissolution or distribution of the assets
(whether voluntary or involuntary) of the Corporation, in the event of
any liquidation, dissolution or winding up (whether voluntary or
involuntary) of the Corporation, the holders of each series of the
Preference Stock at the time outstanding shall be entitled to be paid in
cash the distributive amount fixed for the particular series, which
shall include dividends accrued thereon to the date fixed for payment of
such distributive amounts, and no more, before any such distribution or
payment shall be made to the holders of Common Stock. Neither the
consolidation nor merger of the Corporation with or into any other
corporation or corporations, nor the sale or transfer by the Corporation
of all or any part of its assets, shall be deemed a liquidation,
dissolution or winding up of the Corporation.

In the event of any liquidation, dissolution or winding up (whether
voluntary or involuntary) of the Corporation, no payment shall be made
to the holders of any series of the Preference Stock unless there shall
likewise be paid at the same time to the holders of all shares at the
time outstanding of each series of the Preference Stock like
proportionate distributive payments, ratably, in proportion to the full
distributive payments to which they are respectively entitled.

(5)The Corporation, at the option of the Board of Directors, may redeem at
any time or times, and from time to time, all or any part of any one or
more series of Preference Stock outstanding upon notice duly given as
hereinafter specified, by paying for each share the then applicable
redemption price fixed by the Board of Directors as provided herein,
plus an amount equal to dividends accrued thereon to the date fixed for
redemption; provided, however, that a notice specifying the shares to be
redeemed and the time and place of redemption shall be mailed, addressed
to the holders of record of the Preference Stock to be redeemed at their
respective addresses as the same shall appear upon the books of the
Corporation, not less than thirty (30) days prior to the date fixed for
redemption. If less than the whole amount of any outstanding series of
Preference Stock is to be redeemed, the shares of such series to be
redeemed shall be selected by lot or pro rata in any manner determined
by resolution of the Board of Directors to be fair and proper. From and
after the date fixed in any such notice as the date of redemption
(unless default shall be made by the Corporation in providing moneys at
the time and place of redemption for the payment of the redemption
price) all dividends upon the Preference Stock so called for redemption
shall cease to accrue, and all rights of the holders of said Preference
Stock as shareholders in the Corporation, except the right to receive
the redemption price upon surrender of the certificate representing the
Preference Stock so called for redemption, duly endorsed for transfer,
if required, shall cease and determine. With respect to any shares of
Preference Stock so called for redemption, if, before the redemption
date, the Corporation shall deposit with a bank or trust company in the
Borough of Manhattan, City of New York, having a capital and surplus of
at least $5,000,000, funds necessary for such redemption, in trust, to
be applied to the redemption of the shares of Preference Stock so called
for redemption, then from and after the date of such deposit, all rights
of the holders of such shares of Preference Stock, so called for
redemption, shall cease and determine, except the right to receive, on
and after the redemption date, the redemption price upon surrender of
the certificates representing such shares of Preference Stock, so called
for redemption, duly endorsed for transfer, if required. Any interest
accrued on such funds shall be paid to the Corporation from time to
time. Any funds so deposited and unclaimed at the end of six (6) years
from such redemption date shall be released or repaid to the
Corporation, after which the holders of such shares of Preference Stock
so called for redemption shall look only to the Corporation for payment
of the redemption price.

If at any time the Corporation shall have failed to declare and pay or
set apart for payment dividends in full upon the Preference Stock of all
series for all past dividend periods, or shall not have made, or set
aside for payment, all payments, if any, then or theretofore due under
the requirements of any sinking fund for the purchase or redemption of
shares of any series of the Preference Stock, thereafter and until all
such dividends shall have been paid in full or declared and set apart
for payment and all sinking fund payments shall have

A-6

been made, or set aside for payment, the Corporation shall not redeem or
purchase, or permit any subsidiary to purchase, for any purpose, any
shares of Preference Stock of any series, unless all shares of
Preference Stock of all series then outstanding shall be redeemed or
purchased.

(d)Common Stock

(1)The Corporation may, from time to time, issue and sell any of its
authorized and unissued shares of Common Stock for such consideration,
upon such terms andreviews in such manner as may from time to time be fixed and
determined by the Boardit deems appropriate.

Directions to
Annual Meeting of Shareholders
Duke Energy
Energy Center
526 South Church Street
Charlotte, NC 28202

From 1-77 North:

Take the Morehead Street exit - 10A
Turn Left onto Morehead Street
Turn Left onto Mint Street
Mint Street Parking Deck located adjacent to Bank of America Stadium

From 1-77 South:

Take the 1-277/John Belk Freeway/US-74/Wilkinson Blvd. exit - 9B
Merge onto 1-277 N/US-74 E.
Take the Carson Blvd. exit - 1 D
Stay straight to Carson Blvd.
Turn Left onto Mint Street
Mint Street Parking Deck located adjacent to Bank of America Stadium

Free parking available in the Mint Street Parking Deck.

1 - Energy Center
2 - Mint St. Parking Deck
3 - Bank of America Stadium
DUKE ENERGY CORPORATION
Annual Meeting of Directors, and any and all such shares so
issued, the full consideration for which shall have been paid, shall be
conclusively deemed to be fully paid and nonassessable.

(2)Whenever the full dividends on the Preferred Stocks, on the Serial
Preferred Stock and on the Preference Stock at the time outstanding for
all past dividend periods and for the then current dividend period shall
have been paid, or declared and a sum sufficient for the payment thereof
set apart, then, and then only, such dividends (payable in cash, stock
or otherwise) as may be determined by the Board of Directors, may be
declared and paid on the Common Stock, from time to time, out of the
remaining retained earnings or net profits of the Corporation, and the
Preferred Stocks, the Serial Preferred Stock or the Preference Stock
shall not be entitled to participate in any such dividends, whether
payable in cash, stock or otherwise.

(3)In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, after payment in full has
been made to the holders of the Preferred Stocks, to the holders of the
Serial Preferred Stock and to the holders of the Preference Stock of the
amounts to which they are respectively entitled or sufficient sums have
been set apart for the payment thereof, the holders of the Common Stock
shall be entitled to receive ratably any and all assets remaining to be
paid or distributed, and neither the holders of the Preferred Stocks,
the holders of the Serial Preferred Stock nor the holders of the
Preference Stock shall be entitled to share therein.

(4)Holders of the Common Stock shall be entitled to one (1) vote for each
share of such stock held at any and all meetings of the shareholders of
the Corporation, and, except as otherwise stated in this Article IV or
as otherwise provided by law or by the resolution or resolutions fixing
the designations, preferences, limitations and relative rights of any
series of Serial Preferred Stock, the exclusive voting power for all
purposes shall be vested in the holders of the Common Stock.

A-7

Exhibit B

Extract from the Articles of Incorporation of Duke Energy Corporation showing
the proposed amendment. Italics indicate the addition.

Article VII

In addition to any requirements of the By-Laws and the North Carolina Business
Corporation Act as in effect from time to time (and notwithstanding the fact
that a lesser vote may be specified by the By-Laws or the North Carolina
Business Corporation Act), the affirmative vote of the holders of at least a
majority of the combined voting power of the then outstanding shares of stock
of all classes of the Corporation entitled to vote generally in the election of
directors, voting together as a single class, shall be required for the
shareholders of the Corporation to adopt, amend, alter, change or repeal any
provisions contained in the By-Laws of the Corporation. The provisions of this
Article VII may not be altered, amended or repealed in any respect, nor may any
provision inconsistent therewith be adopted, unless such alteration, amendment,
repeal or adoption is approved by the affirmative vote of the holders of at
least a majority of the combined voting power of the then outstanding shares of
stock of all classes of the Corporation entitled to vote generally in the
election of directors, voting together as a single class.

B-1

[LOGO] Duke Energy
(R)

Duke Energy will conduct its annual shareholders meeting on April 25, 2002Shareholders
May 12, 2005 at 10:00 a.m. in the O.J. Miller Auditorium, located in the Energy Center at 526
South Church Street in Charlotte, North Carolina.

DIRECTORS
1. Class II Directors: 01- G. Alex Bernhardt, Sr. 02- William A. Coley
03- Max Lennon 04- Leo E. Linbeck, Jr.
Class I Director: 05- James T. Rhodes

Directors Recommend
For ALL -

PROPOSALS

2. Ratification of appointment of auditors. For -

Amendment of articles of incorporation to:

3A. update corporate purpose clause. For -

3B. authorize serial preferred stock. For -

3C. increase shareholder vote required to change by-laws. For -

3D. decrease permissible range of size of board of directors. For -

4. Shareholder proposal regarding investments in alternative
energy sources. Against -

5. Shareholder proposal regarding role of board of directors
in long-term strategic planning. Against -

6. Shareholder proposal regarding appointment of independent
auditors who only render audit services. Against -

7. Shareholder proposal regarding study of risk and
responsibility for public harm due to nuclear program. Against -

Account As of February 28, 2002 [LOGO]

To vote, mark an "X" in the appropriate box.

1. For ALL Nominees For ALL EXCEPT the following:
(Write number[s] of nominee[s] below)

Withhold Authority
For Against Abstain

The Board of Directors recommends a
2. vote "FOR" each of the nominees
listed at left, "FOR" Proposals 2,
3A, 3B, 3C, 3D and "AGAINST"
For Against Abstain Proposals 4, 5, 6 and 7.

3A.
For Against Abstain

3B.
For Against Abstain Mark this box if, in the
future, you would prefer
3C. to view the annual report
and proxy statement via
For Against Abstain the Duke Energy website
(www.duke-energy.com).
3D. You will still receive this
For Against Abstain voting form by U.S.Mail
if you mark the box.
4.
For Against Abstain
---------------
5. See reverse for
For Against Abstain telephone and
Internet voting
6. instructions.
For Against Abstain ---------------

If you are voting by mail, sign here as name(s) appear(s) above.

- ----------------------------------------------------------------
Date ,2002
- ----------------------------------------------------------------

If you are voting by mail, please sign and date this proxy and return it
promptly whether or not you plan to attend the meeting. If signing for a
corporation or partnership or as agent, attorney or fiduciary, indicate the
capacity in which you are signing. Each joint owner should sign. If you do
attend the meeting and decide to vote by ballot, such vote will supersede this
proxy.

DUKE ENERGY CORPORATION
Annual Meeting of Shareholders
April 25, 2002 at 10:00 a.m.

Energy Center - O.J. Miller Auditorium
526 South Church Street
Charlotte, North Carolina
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints R.B. Priory, R.P.
BraceP.M. Anderson and R.W. Blackburn,D.L. Hauser, and each of them, proxies, with the powers the undersigned would possess if personally present, and with full power of substitution, to vote all shares of Common Stock of Duke Energy Corporation of the undersigned at the annual meeting of shareholders to be held in the Energy Center, 526 South Church Street, Charlotte, North Carolina, on April 25, 2002,May 12, 2005 and at any adjournment thereof, upon all subjects that may come before the meeting, including the matters described in the proxy statement furnished herewith, subject to any directions indicated on the reverse side of this card.If no directions are given, the individuals designated above will vote for the election of all director nominees, in accord with the directors' recommendations on the other subjects listed on the reverse of this card and at their discretion on any other matter that may come before the meeting.
Your vote for the election of directors may be indicated on the reverse. Nominees areare: Roger Agnelli, G. Alex Bernhardt, Sr., WilliamDennis R. Hendrix, A. Coley, Max Lennon, Leo E. Linbeck, Jr. and James T. Rhodes.

Lennon.
Comments:
(If you are voting by mail,noted any Comments above, please signmark corresponding box on the reverse and return promptly in the enclosed return
envelope. To vote by telephone or Internet, see
instructions to the right.

Investor Relations Department
526 South Church Street
PO Box 1005
Charlotte, NC 28201-1005
(704) 382-3853 Charlotte
(800) 488-3853 Toll-Free
(704) 382-3814 Fax

VOTE BY TELEPHONE OR INTERNET
q u i c k o e a s y o i m m e d i a t e

Your telephone or Internet vote authorizes the named right of this form.
proxies to vote your shares in the same manner as if you marked, signed and
returned your proxy card.

VOTE BY PHONE:

You will be asked to enter a control number located in the box in the lower
right of this form

Option A: To vote as the Board of Directors recommends for all nominees and on
all proposals: Press 1

Option B: If you choose to vote on each item separately, press 0. You will hear
these instructions:

Directors: To vote FOR ALL nominees, press 1;
To WITHHOLD FOR ALL nominees, press 9;
To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and
listen to the instructions.

Proposals: To vote FOR, press 1;
To vote AGAINST, press 9;
To ABSTAIN, press 0.

The instructions are the same for all proposals to be voted.

When asked, you must confirm your vote by pressing 1.

VOTE BY INTERNET:

The Website address is www.proxyvoting.com/dukeenergy

You will be asked to enter the control number located in the box in the
lower right of this form. Then follow the instructions on the screen.side.)

C/O PROXY SERVICES
P.O. BOX 9112
FARMINGDALE, NY 11735 VOTE BY INTERNET-www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time, May 10, 2005. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

VOTE BY PHONE -1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time, May 10, 2005. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Duke Energy Corporation, c/o ADP, 51 Mercedes Way, Edgewood, NY 11717.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: DUKE01 KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
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DUKE ENERGY CORPORATION
The Board of Directors recommends a vote "For
All" Director nominees. For
All Withhold
All For All
Except To withhold authority to vote, mark "For All Except" and write each withheld nominee's number on the line below.

Election of three nominees as Class II directors and one nominee as Class III director.

01) Roger Agnelli, 02) G. Alex Bernhardt, Sr.,
03) Dennis R. Hendrix, 04) A. Max Lennon (Class III)

The Board of Directors recommends a vote "For"
Proposals 2 and 3.

For Against Abstain

Approval of amendments to Duke Energy's Restated Articles of Incorporation to eliminate classification of Duke Energy's Board of Directors.

Ratification of Deloitte & Touche LLP as Duke Energy's independent auditors for 2005.

I have provided written comments on the back of this card.

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Appendix A —		Declassification Amendment to the Restated Articles of Incorporation of Duke Energy Corporation		A-1
Appendix B —		Charter of the Audit Committee		B-1

~~Shares of Common Stock~~

Name or Identity of Group ~~Beneficially~~	Total ~~Owned~~ Shares Beneficially Owned ~~/2/~~ ¹

R. Agnelli	62
P.M. Anderson	801,421
G.A. Bernhardt, Sr. ~~21,618 26,718 R.P. Brace/1/ 20,559 132,359~~	24,355
R.J. Brown ~~12,043 17,143 W.A. Coley/1/ 45,235 407,785~~	39,870
W.T. Esrey ~~49,962 55,062~~	79,554
F.J. ~~Fowler/1/ 104,723 648,172~~ Fowler	1,115,244
A.M. Gray ~~33,571 38,671~~	61,282
D.L. Hauser	195,336
D.R. Hendrix ~~420,763 425,863 H.S. Hook 42,504 47,604~~	300,993	²
G.D. Johnson, Jr. ~~27,047 32,147 M.~~	823,309	³
A.M. Lennon ~~21,802 26,902~~	22,237
L.E. Linbeck, Jr. ~~45,011 50,111~~	74,284
J.G. Martin 12,170 14,670 R.J. Osborne/1/ 19,050 144,050 H.J. Padewer/1/ 21,939 238,789 R.B. Priory/1/ 32,354 809,154	22,103
J.W. Mogg	448,002
M.E.J. Phelps	46,536
J.T. Rhodes ~~4,380 4,380~~	15,503
R.G. Shaw	559,654
Directors and executive officers as a group ~~(21) 990,543 3,894,642~~ (22)	5,683,008


	Shares of Common Stock
Name and Address of Beneficial Owner	Beneficially Owned		Percentage

Capital Research and Management Company 333 South Hope Street Los Angeles, CA 90071	52,574,690	¹	5.6%
Dodge & Cox 555 California Street, 40th Floor San Francisco, California 94104	52,888,566	²	5.6%


Relationship	Requirements for Immateriality of Relationship

Personal Relationships

The director or immediate family member resides within a service area of, and is provided with utility service by, Duke Energy or its subsidiaries.	Utility service must be provided in the ordinary course of the provider's business and at rates or charges fixed in conformity with law or governmental authority, or if the service is unregulated, on arm's-length terms.
The director or immediate family member holds securities issued publicly by Duke Energy or its subsidiaries.	The director or immediate family member can receive no extra benefit not shared on a pro rata basis.
The director or immediate family member receives pension or other forms of deferred compensation for prior service, or other	•	The compensation cannot be contingent in any way on continued service, and
compensation unrelated to director or meeting fees, from Duke Energy or its subsidiaries.	•	the director has not been employed by Duke Energy or any company that was a subsidiary of Duke Energy at the time of such employment for at least three years, or the immediate family member has not been an executive officer of Duke Energy for at least three years and any such compensation that is not pension or other forms of deferred compensation for prior service cannot exceed $10,000 per year.


Relationship	Requirements for Immateriality of Relationship

Business Relationships

Payments for property or services are made between Duke Energy or its subsidiaries and a company associated* with the director or	•	Payment amounts must not exceed the greater of $1,000,000 or 2% of the associated company's revenues in any of its last three fiscal years, and
immediate family member who is an executive officer of the associated company.	•	Relationship must be in the ordinary course of Duke Energy's or its subsidiary's business and on arm's-length terms.
Indebtedness is outstanding between Duke Energy or its subsidiaries and a company associated* with the director or immediate	•	Indebtedness amounts must not exceed 5% of the associated company's assets in any of its last three fiscal years, and
family member.	•	Relationship must be in the ordinary course of Duke Energy's or its subsidiary's business and on arm's-length terms.
The director or immediate family member is a nonmanagement director of a company that does business with Duke Energy or its subsidiaries or in which Duke Energy or its subsidiaries have an equity interest.	The business must be done in the ordinary course of Duke Energy's or its subsidiary's business and on arm's-length terms.
An immediate family member is an employee (other than an executive officer) of a company that does business with Duke Energy or its subsidiaries or in which Duke Energy or its subsidiaries have an equity interest.	If the immediate family member lives in the director's home, the business must be done in the ordinary course of Duke Energy's or its subsidiary's business and on arm's-length terms.
The director and his or her immediate family members together own 5% or less of a company that does business with Duke Energy or its subsidiaries or in which Duke Energy or its subsidiaries have an equity interest.	None

Charitable Relationships

Charitable donations or pledges are made by Duke Energy or its subsidiaries to a charity associated* with the director or immediate family member.	Donations and pledges must not result in payments exceeding the greater of $100,000 and 2% of the charity's revenues in any of its last three fiscal years.
A charity associated* with the director or immediate family member is located within a service area of, and is provided with utility service by, Duke Energy or its subsidiaries.	Utility service must be provided in the ordinary course of the provider's business and at rates or charges fixed in conformity with law or governmental authority, or if the service is unregulated, on arm's-length terms.
Payments for property or services are made between Duke Energy or its subsidiaries and a charity associated* with the director or immediate family member.	Relationships must be in the ordinary course of Duke Energy's or its subsidiary's business and on arm's-length terms or subject to competitive bidding.


Incentive Goals	Messrs. Fowler, Mogg and Hauser	Dr. Shaw

Duke Energy EPS	32%	16%

Duke Energy ROCE	32%	16%

Duke Energy Cash Flow	16%	8%

Duke Power EBIT	—	20%

Duke Power ROCE	—	20%

Individual Objectives	20%	20%

~~All Other Compensation ($)/ 7/ Name and Principal Position ------------------- - -----------------------------------------------------~~ ~~R.B. Priory 224,202 Chairman of the Board, President 156,596~~ and Chief Executive Officer, 148,501 H.J. Padewer 83,622 Group President 51,331 Energy Services 94,112 R.P. Brace/ 1/ 26,498 Executive Vice President and Chief Financial Officer F.J. Fowler 209,961 Group President 139,812/8/ Energy Transmission 163,101/8/ R.J. Osborne 69,194 Executive Vice President 45,363 and Chief Risk Officer 42,751 Duke Power Company
	2004 2003 2002		500,004 500,004 500,004		534,254 223,152 0		23,533 25,294 38,282		625,073 480,573 0		0 110,000 0		0 0 248,547		51,640 35,249 70,861

	Number of Phantom Stock Units	Value At December 31, 2004
Paul M. Anderson	285,000	$	7,219,050
Fred J. Fowler	59,915		1,517,647
Jimmy W. Mogg	21,625		547,761
David L. Hauser	28,563		723,501
Ruth G. Shaw	31,988		810,256


					Number of Securities Underlying Unexercised Options/SARS at FY-End¹ (#)		Value of Unexercised In-the-Money Options/SARS at FY-End¹ ($)
	Shares Acquired on Exercise (#)
Name		Value Realized ($)		Exercisable/ Unexercisable		Exercisable/ Unexercisable

Paul M. Anderson	—		—		— / 1,100,000		— / 8,668,000
Fred J. Fowler	17,106		258,749		888,552 / 180,500		1,018,308 / 1,742,670
Jimmy W. Mogg	—		—		346,788 / 86,200		343,578 / 780,300
David L. Hauser	—		—		162,425 / 33,775		160,479 / 296,514
Ruth G. Shaw	—		—		512,725 / 105,375		360,215 / 953,700

*Age and Service*		Monthly Pay Credit Percentage
34 or less		4%
35 to 49		5%
50 to 64		6%
65 or more		7%

THE RESTATED ARTICLES OF INCORPORATION OF DUKE ENERGY CORPORATION
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF DUKE ENERGY CORPORATION (February 22, 2005)

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	March 31, 2005
	We will hold the annual meeting of shareholders of Duke Energy Corporation on Thursday, May 12, 2005, at 10:00 a.m. in the O. J. Miller Auditorium in the Energy Center located at 526 South Church Street in Charlotte, North Carolina.
	The purpose of the annual meeting is to consider and take action on the following:
	1.		Election of three nominees as Class II directors and one nominee as Class III director.
	2.		Approval of amendments to Duke Energy's Restated Articles of Incorporation to eliminate classification of Duke Energy's Board of Directors.
	3.		Ratification of Deloitte & Touche LLP as Duke Energy's independent auditor for 2005.
	Shareholders of record as of March 14, 2005, can vote at the annual meeting. This proxy statement, proxy card and voting instructions, along with our 2004 Summary Annual Report and 2004 Form 10-K, are being distributed on or about March 31, 2005.
	Your vote is very important. If voting by mail, please sign, date and return the enclosed proxy card in the enclosed prepaid envelope and allow sufficient time for the postal service to deliver your proxy before the meeting. If voting by telephone or on the Internet, please follow the instructions on your proxy card.
	By order of the Board of Directors.

	B. Keith Trent Acting Group Vice President, General Counsel and Secretary


		*Roger Agnelli** Director since 2004 President and Chief Executive Officer Companhia Vale do Rio Doce (CVRD), Brazil, global mining company and the world's largest producer of iron ore Age 45 Mr. Agnelli was elected President and CEO of CVRD in 2001. He served in various positions at Bradesco, a Brazilian financial conglomerate, from 1981 to 2001 and was President and CEO of Bradespar S.A. from March, 2000, to July, 2001. He is a director of Asea Brown Boveri (ABB. Ltd).

		*Paul M. Anderson* Director since 2003 Chairman of the Board and CEO, Duke Energy Corporation Age 59 Mr. Anderson became Chairman of the Board and CEO in November 2003. He served as Managing Director and CEO of BHP Billiton LTD and BHP Billiton PLC from 1998 to his retirement in 2002, was President and Chief Operating Officer of Duke Energy from 1997 to 1998 and President and Chief Executive Officer of PanEnergy Corp from 1995 to 1997, prior to the 1997 merger of PanEnergy Corp and Duke Energy. He is a director of Qantas Airways Limited. He is also a Global Counselor for The Conference Board Inc. He is a Class I director with a term expiring in 2007.

		*G. Alex Bernhardt, Sr.** Director since 1991 Chairman and CEO, Bernhardt Furniture Company, furniture manufacturer Age 62 Mr. Bernhardt has been associated with Bernhardt Furniture Company of Lenoir, North Carolina, since 1965. He was named President and a director in 1976 and became Chairman and CEO in 1996.

		*William T. Esrey* Director since 1985 Chairman Emeritus, Sprint Corporation, a diversified telecommunications holding company Age 65 Mr. Esrey, Chairman Emeritus of Sprint Corporation, served as its CEO from 1985 to 2003, and as its Chairman from 1990 to 2003. He also served as Chairman of Japan Telecom from 2003 to 2004. Mr. Esrey is a director of General Mills, Inc., and served as a director of PanEnergy Corp since 1985. He is a Class III director with a term expiring in 2006.

		*Ann Maynard Gray* Director since 1994 Former Vice President, ABC, Inc. and Former President, Diversified Publishing Group of ABC, Inc., television, radio and publishing Age 59 Ms. Gray was President, Diversified Publishing Group of ABC, Inc. from 1991 until 1997, and was a Corporate Vice President of ABC, Inc. and its predecessors from 1979 to 1998. She is a director of Elan Corporation, plc, and The Phoenix Companies, Inc. and served as a director of PanEnergy Corp since 1994. She is a Class I director with a term expiring in 2007.

		*Dennis R. Hendrix** Director since 2004 Retired Chairman of the Board, PanEnergy Corp Age 65 Mr. Hendrix rejoined the Board of Directors in December 2004, having previously served from 1997 to 2002. He was Chairman of the Board of PanEnergy Corp from 1990 to 1997, CEO from 1990 to 1995 and President from 1990 to 1993. Mr. Hendrix is a director of Allied Waste Industries Inc., Grant Prideco, Inc. and Newfield Exploration Company.

		*A. Max Lennon, Ph.D.** Director since 1988 President, Education and Research Services, nonprofit economic development organization Age 64 Dr. Lennon was appointed to his present position in 2003. He was President of Mars Hill College from 1996 until 2002. He served as President of Eastern Foods, Inc. from 1994 through 1995. Dr. Lennon was previously involved in higher education from 1966 to 1994, his last tenure being at Clemson University where he served as President for eight years. He is a director of Delta Woodside Industries, Inc. and Delta Apparel.

		*James G. Martin, Ph.D.* Director since 1994 Corporate Vice President, Carolinas HealthCare System, largest healthcare system in the Carolinas Age 69 Dr. Martin was named to his present position in 1995. He served as Governor of the State of North Carolina from 1985 to 1993 and was a member of the United States House of Representatives, representing the Ninth District of North Carolina, from 1973 to 1984. Dr. Martin is a director of Palomar Medical Technologies, Inc., aaiPharma Inc. and Family Dollar Stores, Inc. He is a Class III director with a term expiring in 2006.

		*Michael E.J. Phelps* Director since 2002 Chairman, Dornoch Capital Inc., investment company Chairman, Duke Energy Canadian Advisory Council Age 57 Mr. Phelps was named Chairman, Dornoch Capital Inc. in 2003 and Chairman, Duke Energy Canadian Advisory Council in 2002. He served as Chairman and CEO of Westcoast Energy Inc. from 1992 to 2002. He is a director of Canfor Corporation, Canadian Pacific Railway Company and Fairborne Energy Ltd. He is a Class I director with a term expiring in 2007.

		*James T. Rhodes, Ph.D.* Director since 2001 Retired Chairman, President and CEO, Institute of Nuclear Power Operations, a nonprofit corporation promoting safety, reliability and excellence in nuclear plant operation Age 63 Dr. Rhodes was Chairman and CEO of the Institute of Nuclear Power Operations from 1998 to 1999 and Chairman, President and CEO from 1999 until 2001. He served as President and CEO of Virginia Electric & Power Company, a subsidiary of Dominion Resources, Inc., from 1989 until 1997. Dr. Rhodes is a member of the Advisory Council for the Electric Power Research Institute. He is a Class I director with a term expiring in 2007.


Name	Audit	Compensation	Corporate Governance	Finance and Risk Management	Nuclear Oversight

R. Agnelli		X		X
P.M. Anderson
G.A. Bernhardt, Sr.	X				X
R.J. Brown **	X		X
W.T. Esrey	X *
A.M. Gray		X	X *	X
D.R. Hendrix		X		X
G.D. Johnson, Jr.**				X
A.M. Lennon	X
L.E. Linbeck, Jr.**		X		X
J.G. Martin		X *	X		X
M.E.J. Phelps			X	X *
J.T. Rhodes	X				X *
Number of meetings in 2004	17	6	6	8	5


Performance Shares^1,2	$	3,195,600

Phantom Stock Units^1,2	$	2,235,850

Stock Options^1,2	$	2,889,333

Dividend Equivalent Payments	$	709,500

Total	$	9,030,283


		Annual Compensation					Long-Term Compensation ~~-------------------------------------------- --------------------------------------------~~
						Awards -------------------------------------------- ------------------------------- ----------- Restricted Securities Other Annual Stock Underlying LTIP Salary ($) Bonus ($)/2/ Compensation ($) Award(s) ($)/4/ Options/SARS (#)		Payouts ~~($)~~
Name and Principal Position	Year ---------- ----------- ---------------- -------------- ---------------- ----------- - ---------------------------------------------------------------------------------------------------------------------------- ~~R.B. Priory 2001 1,088,544 2,177,088 319,150 996,991 400,000~~	Salary ($)	Bonus ($)⁴	Other Annual Compensation ($)		Restricted Stock Award(s) ($)^6,7	Securities Underlying Options/SARS (#)	LTIP Payouts ($)⁸	All Other Compensation ($)⁹

Paul M. Anderson¹ Chairman of the Board ~~President 2000 954,164 1,908,328 300,384 400,000~~ and Chief Executive Officer ~~1999 895,420 997,140 109,708 H.J. Padewer 2001 600,000 900,000 98,267 742,673 164,700~~	2004 2003	0 0	0 0	365,296 0	⁵	0 11,255,250	0 1,100,000	0 0	0 0
Fred J. Fowler President and Chief Operating Officer	2004 2003 2002	729,996 670,009 559,996	1,055,939 603,000 0	67,282 46,237 63,866		1,204,413 878,113 0	0 201,000 42,100	0 0 532,600	84,882 44,102 77,068
Jimmy W. Mogg² Group Vice President, 2000 500,004 750,006 91,111 450,388 173,600 Energy Services 1999 400,008 311,814 7,921 375,938/5/ 693,800 R.P. Brace/ 1/ 2001 550,000 715,000 1,126,722/3/ 1,330,759/6/ 406,200 ExecutiveChief Development Officer	2004 2003 2002	491,667 450,000 450,000	580,183 365,985 40,095	53,356 27,314 36,300		562,458 393,134 0	0 93,000 7,500	0 0 319,560	71,084 50,554 69,355
David L. Hauser³ Group Vice President and Chief Financial Officer ~~F.J. Fowler 2001 500,004 750,006 79,305 535,810 119,000 Group~~	2004 2003 2002	491,667 285,000 285,000	562,710 270,875 73,644	22,299 18,253 22,966		450,052 149,405 0	0 39,600 4,700	0 0 159,780	56,171 33,469 38,218
Ruth G. Shaw President 2000 450,000 585,000 70,940 270,575 104,000 Energy Transmission 1999 385,830 257,796 32,495 157,000 R.J. Osborne 2001 500,004 750,006 70,960 486,072 107,800 Executive Vice President 2000 399,996 520,195 66,867 270,575 104,000 and Chief Risk Officer 1999 366,250 244,714 19,827 124,000

	Paul M. Anderson	Fred J. Fowler		Jimmy W. Mogg		David L. Hauser		Ruth G. Shaw
Matching Contributions Under the Duke Energy Retirement Savings Plan	—	$	12,300	$	12,300	$	12,300	$	12,300
Make-Whole Matching Contribution Credits Under the Duke Energy Corporation Executive Savings Plan	—		67,680		17,200		30,452		31,089
Above-Market Interest Earned on Account Balances in the Duke Energy Corporation Executive Savings Plan Supplemental Account	—		—		—		9,181		2,606
Economic Value of Life Insurance Coverage Provided Under Life Insurance Plans	—		4,902		4,985		4,238		5,645
Supplemental Credit to the Duke Energy Corporation Executive Savings Plan¹	—		—		36,599		—		—
Total	—	$	84,882	$	71,084	$	56,171	$	51,640


			Estimated Future Payouts Under Non-Stock-Price-Based Plans

Name	Number of Performance Shares¹	Performance or Other Period	Threshold (#)	Target (#)	Maximum (#)

Paul M. Anderson	—	—	—	—	—

Fred J. Fowler	70,450	3 years	28,180	56,360	70,450

Jimmy W. Mogg	32,900	3 years	13,160	26,320	32,900

David L. Hauser	26,330	3 years	10,530	21,060	26,330

Ruth G. Shaw	36,560	3 years	14,625	29,250	36,560


Type of Fees	FY 2004				FY 2003
	(In millions)

Audit Fees (a)	$	10.7			$	11.6	(f)
Sarbanes-Oxley 404 Fees (b)		14.7				0

Total Audit Fees			$	25.4				$	11.6

Audit-Related Fees (c)				1.9					1.6

Tax Fees (d)				8.2					10.8

All Other Fees (e)				0.1					0.3


Total Fees:			$	35.6				$	24.3


Signature [PLEASE SIGN WITHIN BOX]		Date		Signature (Joint Owners)		Date