8-KMaterial Agreements

Duke Energy CORP 8-K Report, Material Agreement (Jul 18, 2007)

Filed July 18, 2007For Securities:DUKDUKBDUK-PA

Summary

Duke Energy Corporation, through its subsidiary Duke Energy Carolinas, LLC, has entered into a significant agreement with Stone & Webster National Engineering, P.C. (an affiliate of The Shaw Group Inc.) for the construction of a new 800MW supercritical pulverized coal unit, designated Unit 6, at its Cliffside Generating Station in North Carolina. This project, valued at approximately $1.29 billion, is a substantial investment aimed at enhancing base-load power generation capacity for the Carolinas region, with a planned commercial operation date by summer 2012. In addition to the new Unit 6, the agreement also includes the integration and construction of a previously approved flue gas desulfurization (FGD) system for the existing Unit 5 at the same station, scheduled for completion by mid-2010. This dual-project undertaking signifies Duke Energy's commitment to expanding its power generation capabilities while also addressing environmental controls on existing infrastructure. Investors should note the substantial capital expenditure and the long-term nature of this project, which is critical for meeting future energy demand.

Key Highlights

  • 1Duke Energy Carolinas, LLC entered into a material definitive agreement for the construction of an 800MW supercritical pulverized coal unit (Unit 6) at the Cliffside Generating Station.
  • 2The total contract value for the construction of Unit 6 and a flue gas desulfurization (FGD) system for Unit 5 is approximately $1.29 billion.
  • 3Unit 6 is planned to commence commercial operation by the summer of 2012, providing crucial base-load capacity.
  • 4The agreement includes the integration and construction of a flue gas desulfurization (FGD) system for the existing Unit 5, with an expected in-service date by mid-2010.
  • 5The construction services are being provided by Stone & Webster National Engineering, P.C. (SWNE), an affiliate of The Shaw Group Inc.
  • 6Duke Energy Carolinas has the right to terminate the agreement for convenience, subject to customary cancellation charges.

Frequently Asked Questions

The primary purpose of the agreement is to construct a new 800MW supercritical pulverized coal unit, Unit 6, at Duke Energy Carolinas' Cliffside Generating Station. This project aims to increase base-load power generation capacity for the Carolinas system and also includes the installation of a flue gas desulfurization (FGD) system for the existing Unit 5.

The total contract value with Stone & Webster National Engineering, P.C. for the combined work on Unit 6 and the Unit 5 FGD system is approximately $1.29 billion.

Unit 6 is planned to begin commercial operation by the summer of 2012. The FGD system for Unit 5 is scheduled to be in service by mid-2010.

Unit 6 will feature a supercritical pulverized coal boiler with a Selective Catalytic NOx Reduction (SCR) system, dry flue gas desulfurization (DFGD), and a wet flue gas desulfurization (WFGD) system, indicating a focus on reducing emissions.