Duke Energy Corporation'is a leading energy company located in the Americas with
an affiliated real estate operation. Duke Energy operates the following business
units: Franchised Electric, Natural Gas Transmission, Field Services, Duke Energy
North America (DENA), International Energy and Other Operations. Duke Energy's
chief operating decision maker regularly reviews financial information about each
of these business units in deciding how to allocate resources and evaluate performance.
FRANCHISED ELECTRIC
Franchised Electric generates, transmits, distributes and sells electricity.
It conducts operations primarily through Duke Power. Its service area covers
about 22,000 square miles with an estimated population of 5.9 million in central
and western North Carolina and western South Carolina. Franchised Electric supplies
electric service to approximately 2.2 million residential, commercial and industrial
customers over 92,000 miles of distribution lines and a 13,000 mile transmission
system. Electricity is sold wholesale to incorporated municipalities and to
public and private utilities. In addition, municipal and cooperative customers
who purchased portions of the Catawba Nuclear Station buy power through contractual
agreements.
NATURAL GAS TRANSMISSION
Natural Gas Transmission provides transportation and storage of natural gas
for customers throughout the East Coast and Southern U.S., the Pacific Northwest,
and in Canada. Natural Gas Transmission also provides natural gas sales and
distribution service to retail customers in Ontario, and gas transportation
and processing services to customers in Western Canada. Natural Gas Transmission
does business primarily through Duke Energy Gas Transmission Corporation.
FIELD SERVICES
Field Services gathers, compresses, treats, processes, transports, trades and
markets, and stores natural gas; and produces, transports, trades and markets,
and stores NGLs. It conducts operations primarily through DEFS, which is approximately
30% owned by ConocoPhillips and approximately 70% owned by Duke Energy. Field
Services gathers natural gas from production wellheads in Western Canada and
ten states in the U.S. Those systems serve major gas-producing regions in the
Western Canadian Sedimentary Basin, Rocky Mountain, Permian Basin, Mid-Continent
and East Texas-Austin Chalk-North Louisiana areas, as well as onshore and offshore
Gulf Coast areas. Field Services owns and operates approximately 58,000 miles
of natural gas gathering systems with approximately 34,000 active receipt points.
DUKE ENERGY NORTH AMERICA
DENA operates and manages merchant power generation facilities and engages
in commodity sales and services related to natural gas and electric power around
its generation and contractual positions. DENA conducts business throughout
the U.S. and Canada through Duke Energy North America and DETM. DETM is 40%
owned by Exxon Mobil Corporation and 60% owned by Duke Energy.
INTERNATIONAL ENERGY
International Energy develops, operates and manages power generation facilities,
and engages in sales and marketing of electric power and natural gas outside
the U.S. and Canada. It conducts operations primarily through DEI and its activities
target power generation in Latin America.
OTHER OPERATIONS
Beginning in 2003, the business segments formerly known as Other Energy Services
and Duke Ventures were combined and have been presented as Other Operations.
Other Operations is composed of diverse businesses, operating primarily through
Crescent, DukeNet, DCP, DEM, D/FD and EDS.
Field Services competes with major integrated oil companies, major interstate
and intrastate pipelines, national and local natural gas gatherers, and brokers,
marketers and distributors for natural gas supplies, in gathering and processing
natural gas and in marketing and transporting natural gas and NGLs. Competition
for natural gas supplies is based primarily on the reputation, efficiency and
reliability of operations, the availability of gathering and transportation
to high-demand markets, the pricing arrangement offered by the gatherer/processor
and the ability of the gatherer/processor to obtain a satisfactory price for
the producer's residue gas and extracted NGLs; whereas, competition for sales
to customers is based primarily upon reliability, services offered, and price
of delivered natural gas and NGLs.
DENA's competitors include utilities, other merchant electric generation companies
in North America, certain financial institutions engaged in commodity trading,
major integrated oil companies, major interstate pipelines and their marketing
affiliates, brokers, marketers and distributors, and other domestic and international
electric power and natural gas marketers. The price of commodities and services
delivered, along with the quality and reliability of services provided, drive
competition in the energy marketing business.
International Energy's sales and marketing of electric power and natural gas
competes directly with other generators and marketers serving its market areas.
Competitors are country and region-specific but include government owned electric
generating companies, LDC's with self-generation capability and other privately
owned electric generating companies. The principal elements of competition are
price and availability, terms of service, flexibility and reliability of service.
DEM competes for other energy-related commodities. Competitors include major
integrated oil companies, major interstate pipelines and their marketing affiliates,
brokers and distributors. D/FD competes with major companies who provide engineering,
procurement, construction, start-up and maintenance services for fossil fueled
power generation facilities.