News Release

Duke Energy Partners with Cisco to Fast-Track Development of Utility's 'Smart Grid'

CHARLOTTE, N.C. - June 9, 2009 - Duke Energy today announced
Jun 09, 2009

CHARLOTTE, N.C. - June 9, 2009 - Duke Energy today announced it will join forces with Cisco Systems, Inc., the world's largest network communications company, to fast-track development of Duke Energy's state-of-the-art electric "smart grid."

"Our goal is to rapidly transform the way electricity is delivered to, and used by, the 11 million people we serve in five states," said Todd Arnold, senior vice president for smart grid and customer systems at Duke Energy, America's third-largest electric utility.

The three-year partnership is the latest development in Duke Energy's effort to rapidly convert its existing electricity delivery infrastructure into an advanced smart grid that uses two-way digital communication to reduce energy usage, improve efficiency, bolster system reliability, detect power outages, and integrate solar and other renewable energy sources into the electric grid.

Cisco, working closely with Duke Energy, will develop a highly refined, end-to-end, smart grid communications architecture – one that both companies believe will be among the most comprehensive and interoperable in the electric utility industry.

The newly created architecture will be based on what the industry calls "internet protocol-based open standards" – an approach that permits easy accommodation of new and emerging communications technology as it becomes available in future years.

"Internet protocol-based open standards"are key to creating"a smart, highly-secure backbone for"the nation's modern electrical grid," said Marthin De Beer, senior vice president and general manager of Cisco's Emerging Technologies Group.

The two companies will jointly evaluate a variety of smart grid communications hardware and software, and oversee installation and testing of selected equipment and software throughout Duke Energy's electric grid.

In addition, Cisco will work with Duke Energy to develop and install home energy management devices to help customers control and reduce their electricity consumption.

The two companies also will test a new generation of durable, weather-proof communications equipment designed for use at Duke Energy's electric substations.

"Replacing our analog electric grid with advanced digital technology to create a 21st century electricity delivery system largely involves data, networks and communications
– all of it Cisco's expertise," Arnold said.

"Partnering with Cisco is central to Duke Energy's plan to build an 'energy internet' that will improve electricity delivery, strengthen grid security, lessen our company's environmental impact, and help customers reduce their electricity usage," he said.

In Ohio, Duke Energy later this year will launch a five-year mass deployment of smart grid technology, including more than 700,000 electric smart meters and 450,000 natural gas smart meters.

In Indiana, Duke Energy is seeking approval from the Indiana Utility Regulatory Commission to install extensive smart grid technology, including approximately 800,000 smart meters.

Duke Energy yesterday announced it had reached a settlement agreement with the Indiana Office of Utility Consumer Counselor and key consumer and business groups regarding the company's Indiana smart grid proposal.

In addition to smart meters, Duke Energy plans to install a large amount of distribution automation – both hardware and software – to improve system efficiency and reliability on its electric grid in both Indiana and Ohio.

The company also is laying the groundwork to bring large-scale smart grid technology to three other states it serves – North Carolina, South Carolina and Kentucky.

"Working with innovative industry leaders like Duke Energy, Cisco will deliver"an end-to-end"network infrastructure"from power plant to customer in order to"manage electricity supply and consumption both efficiently and in an environmentally responsible manner," said Cisco's De Beer.