Climate Challenge Participation Letter

DOE's Energy Partnerships for a Strong Economy

This Participation Accord describes the commitments that Duke Power Company (Duke Power) and the U.S. Department of Energy (DOE) have made to participate in the Climate Challenge Program in pursuit of the President's goals for reducing greenhouse gas emissions. The Climate Challenge Program is a joint, voluntary effort of DOE and the electric utility industry to reduce, avoid or sequester greenhouse gas emissions. The framework of the Climate Challenge Program was established in the Climate Challenge Program memorandum of Understanding and exhibits thereto dated April 20, 1994 (the Climate Challenge Program MOU) (see Attachment A to this Participation Accord).

I. Duke Power Commitments

A.
Consistent with paragraph II.B.1..a and f of the Climate Challenge Program MOU, Duke Power will, for the time period 1991 through 2000 (unless specified otherwise):
• Contribute $5000 in 1994 to participate in phase I of the Utility Forest Carbon Management Program and consider participation in future years depending on projects presented.

• Contribute $50,000 in 1995 to participate in the National Earth Comfort Program to promote geothermal heat pumps with plans to contribute an additional $250,000 over 5 years.

• Improve the capacity factor for our 7157MW (gross) of nuclear generation.

• Realize improvements in hydro capacity as a consequence of our hydroelectric modernization program, thereby displacing fossil generation.

• Increase the utilization of our combustion ash over 1990 levels.

• Investigate and implement transmission and distribution system upgrades to reduce system losses.

• Conduct a program which includes competition among facilities, to increase the efficiency of our fossil stations.

• Purchase three electric vehicles (EVs) in 1994, each from a different vendor to evaluate which product is best suited for use in our corporate fleet. As appropriate, we will increase the number of EVs in our fleet and work aggressively with others in our service area to do so also.

We have ranked first in the nation in coal-fired heat rate for 19 of the past 20 years and will strive to maintain that position.

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• Implement a special rate for recharging EVs as an incentive for others to purchase them.

• Set and meet challenging goals for the corporate recycling of paper, cardboard, aluminum, glass, and other products, resulting in reduced energy requirements for meeting our nation's need for products based on these resources.

• Perform energy efficiency audits beginning in 1994 at company facilities and implement measures that make economic sense.

• Participate in an 18kw photovoltaic, (PV) research project (PV DSM) with EPA and EPRI. The PV array will be installed in 1995 on one of our commercial-type facilities. Its suitability for providing cost-effective electrical power to a commercial facility will be evaluated.

In addition to these commitments and in recognition that any serious attempt to reduce emissions on a meaningful scale while still meeting the energy needs of our nation requires maximizing use of our hydro electric resources and moving forward with the application of nuclear technologies, Utility also pledges to the following long-term activities which, if successful, will deliver cost-effective greenhouse gas benefits beyond the year 2000.
• Aggressively pursue available avenues to maintain, if not enhance, existing hydro-electric resources, which are under increasing pressure from an increasing number of competing interests and unlikely to meet their designed potential in the current relicensing process.

• Aggressively promote efforts to resolve the issues surrounding the reprocessing and permanent disposal of nuclear wastes.

• Aggressively promote the final development of the advanced light water reactor.

B.
Duke Power will report annually on activities and achievements under the Climate Challenge Program. Results achieved during each year shall be reported in a clear and understandable manner that is consistent with the guidelines adopted pursuant to subsection 1605(b) Energy Policy Act and the Climate Challenge accounting protocols in Exhibit B of the Climate Challenge Program MOU. The first such report may include a description of the activities and achievements of Duke Power prior to its becoming a participant in the Program, expressed on an annual basis to the extent possible.

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C.
Duke Power will confer with DOE on or before June 1, 1997 to evaluate jointly the progress of Duke Power in achieving its Climate Challenge Program goals and to discuss. possible adjustments to its voluntary commitments.

D.

The Climate Challenge Program representatives fpr Duke Power will be Roy E. Hamme, 13339 Hagers Ferry Road, Huntersville, NC 28078 ; Internet reh7150@dukepower.com.

Duke Power agrees to notify DOE prior to, or, in any event, no later than 30 days after any change, in the contact.

II. DOE Commitments

A.
DOE's commitments to Duke Power are those set out in section III of the Climate Challenge Program MOU, which are hereby incorporated in this Participation Accord by reference.

B.

DOE will consider Duke Power requests to intervene in regulatory proceedings of federal, state and local commissions and boards on issues pertinent to the Climate Challenge Program. Before DOE intervenes in regulatory and other proceedings pertaining to Duke Power for purposes of addressing Climate Challenge Program issues, it will provide notice to Duke Power.

C.

DOE will provide an annual report to Duke Power describing the actions that it has taken to fulfill its commitments under section III and Exhibit C of the Climate Challenge Program MOU and the results of those actions.

D.

The Climate Challenge Program representative for DOE, who will serve as liaison to Duke Power, will be Larry Mansueti, Director, Climate Challenge Program, Department of Energy, Room 6B-128 (EE-10) 1000 Independence Avenue, SW, Washington, DC 20585; phone (202) 586-2533. DOE agrees to notify Duke Power prior to or, in any event, no later than 30 days after any change in liaison responsibilities or personnel.

III. General Provisions

A.
Use of DOE-developed materials by Duke Power will be governed by the provisions of section IV of the Climate Challenge Program MOU, which are hereby incorporated in this Participation Accord by reference.

B.

In addition to the foregoing provisions, DOE and Duke Power agree to act in accordance with the principles set out in section I of the Climate Challenge Program MOU and the general provisions set out in subsections V.A-V.D, V.F and V.G of the Climate Challenge Program MOU, which are hereby incorporated by reference.

C.
Either party may withdraw from this Participation Accord or any of its activities under the Climate Challenge Program without penalty and without being subject to remedies at law or equity.

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Secretary of Energy or designee
U.S. Department of Energy
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Attachment

Attachment A Climate Challenge program MOU exhibits

Please send comments to:
Lawrence.Mansueti@hq.doe.gov