Legacy Progress Director's Production of Documents (Part 3 ... - NCUC

OFFICIAL COPT ^ 7 ^ / i ( 7raises the possibility that there:could be additional; executive changes follpwing Duke's-$32 billionmerger with Progress Energy Inc., which closed Monday.Francois Broquin, a research;associate with Berstein Research who spoke With the Duke investorrelationsteam Tuesday afternoon, says JohnsorVs resignation could makeithe merger integrationmore difficult."There are risks of exits in management positions," he says. "No one expected.this."The new puke board decided Moriday night to have Duke Energy CEp Jim Rogers remain in thatpost after Johnson resigned. Rogers spent some of Monday night and Tuesday morning talking withmore than 70 of the top managers.at the merged company to keep the merger on track. But he didhot rule but the possibility of further changes in the management lineup;Employee meetingsIn an interview Tuesday with the Charlotte Business Journal; Rogers said he will go to Raieigh nextweek for an "all-hands meeting" for Duke employees —with company operations in Charlotte,Cincinnati, Houston and Plainfield, Ind., participating by video:— to:"talk about the way forward andrespond to their questions" about the merger,"Importantly,.! am going to have to.spehd time with emplpyees throughput the company —visitingplants, visiting facilities, getting 1 to.develop greater relationships with^peopje at every level of Progress— and that's what I am going to do;"'he says.The plan in some ways shows some of the ground that has to be made up following the surpriseresignation of Johnson.Johnson became CEO of Dukeôn the.Closing of the merger, under.ihe conditions of the.mergeragfeement the companies signed in January,201.1..He had'spent much "of his time in the last 18months introducing himself to Duke employees. Rogers has certainly made some rounds to meetProgress workers as well, but he how is going-to fTave.tb devote more time to that than would havebeen needed ih the original role planned for him.asêxecutive chairma with few operational duties.Focus on integrationRogers says he will focus, on making the merger work and integrating the two companies. "VVe have adeep bench of very capable people," he says. "Having done merger ihtegrations; I've learned not tothink about people as former Progress workers or former Duke workers:"He says he talked Monday night to the.five top executives from Progression the executive team to tellthem what happened arid talk about the plans going forward. On Tuesday, he had a call with the 67members of the management team below the top level."I reached out to them individually and asked them to step up as leaders to stand up as leaders.andhelp uswork our waythrough this transition," he says."Our focus.has gotto be on bring ing. thesecompanies tpgether and executing ouf iritegratipn p|an.Asked if.the response was positive; he says siriiply'i "We had. gbod'-cprive'rsatiohs- abbutwfiat.we have;todo:"LEGPGNDIR001143

He.did not respond directly;t6 whether additional changes are possible in the top leadership tier."My goal is to work.hard to get this together," he says.No answersAnalyst Broquin says;after meeting with Duke representatives for an hour Tuesday, Bernstein has noclearer idea why Johnson.left.than it did after theâhhbuncement early Tuesday morning. Theinvestor-relations people told Bernstein the company does not feel it has to.disclose additionalinformation about the reasons'for the departure ih a required filing with the v Securities.and ExchangeCommission. He says that;ihdicates;the departure did not involve a matter thatis.material to thecompany'sperformance;Analyst Andy Bischoff of Morningstar Inc. says Johnson's departure does raise some questions forthe merger. But he says the decision to keep Rogers as CEO is good for the company."I think Rogers staying on (as GEO), is a positive for Duke," he.says. Tthink it's easy to lose sight ofthat fact in all this. He is one of the best operators in the busiriess;"Diike Energy CEO Plan Falls ApartWall Street Journal, 7-5-12By Rebecca Smith and Joann S. LublinIn January 2011, when the $26 billion merger plan between Duke Energy Corp. and Progress EnergyInc. was announced, Jim Rogers,.Duke's chairman and chief executive, reassured skeptical analyststhat he would be content to let Bill Johnson. the GEO of Progress, run the combined company."I would simply say that Bill is going to be the CEO and he is going to be making the calls," he'said ina conference call at the time. He himself would be executive chairman.But on Tuesday, as the.merger was.completed, Mr. Johnson abruptly resigned, and the 64-year-oldMr. Rogers, assumed top duties at the combined compariy, called Duke Energy.There have been questions from the : :very beginning:;about:how the men would share power; Alongtime acquaintance of both executives said he doubted'from the outset they would both remain'.."Jim loves to work," he said of Mr. Rogers, and doesnlt want to retire.The companies declined Tuesday tp explain,the executive changes other than tb say Mr. Johnson,58, resigned "by mutual agreement with the-board."Mr. Johnson didn't respond to a request for comment.Mr. Johnson, on that January 2011 conference call, said he and: Mr. Rogers knew each other well. "Idon't think this is going to be a problem," he said. "We;are going.to work

During the 2011 ''conference call; Mr. Rogers.h'ad identified a fairly large role for himself, saying thatthe two men would decide "a range of items includihg the strategy, as we look out five : and 10 years."Analysts said they don't know whether business issues or personal issues were behind Mr. Johnson's:departure. Both companies brought significant baggage to the deal, including troubled power projects.The executives also have contrasting, personal styles; Mr. Rogers, is widely known as an affable andeasy public speaker,; while. Mr. Johnson is regarded as serious and: plainrspoken.Paul Patterson, an analyst at Glenrock Associates; said Mr. Johnson's resignation was: a surprise, butadded it is often difficult for strong-willed individuals, like Mr. Bogers, : ,t6 satisfy themselves with alesser role in a larger company:It is the third time that Mr. Rogers has become chief.executive of a utility cpmpahy after completing amerger; although in the two previous cases he had been in chargeof the smaller ofthe mergerpartners.Mike Haggartyi an analyst at Moody's Investors Service, said i Mr. Riogers's assumption of top dutiesraises a question about who will succeed the CEO,.who turns 65 in.September.The merger of Progress and Duke creates one of the largest utility compariies iri the U.S., withoperations in six states.After striking.the merger deal in early 2011, the cpmpanies added,prpvisipns to provide someprotection to shareholders from "potential liabilities related to projects facing regulatory scrutiny.Duke continues to face questions: related[ to its costly Edwards port clean-coal power plant; nearingcompletion in, Indiana,, amid allegations it tried to exercise undue influence: over the regulatoryprocess in that state to build the $3 billion plant.- Mr. Rogers/accepted the resignation ofthecompany's No. 2 executive in late 2010. But the company hasn't admitted any wrongdoing;Progress is trying to decide whether to repair or retire its disabled Crystal River nuclear plant inFloridan.Johnson to get $10.3 million severance from Duke EnergyCharlotte Business Journal,,7-3.-12'By John DowneyBill Johnson will get a cash severance of more than to :$10.3 million following his resignation as CEOof Duke Energy,, according to a regulatory filing the company made Tuesday.The filing with the Securities and Exchange Commission says Johnson, 58, resigned effective 12:01a.m. Tuesday after succeeding to.the position when the merger closed just after 4 p:m.. Monday.The board, the filing says, accepted his resignation on Monday and voted that evening to appoint JimRogers, Duke's CEO before the merger, to his former position. Johnson had been CEO of ProgressEnergy, which Duke purchased : in;a $32;biliioadeal.The filing says'Johnson, and the.company made a separation agreementfdr hisresignatibh. Johnsonagreed to;release of any claims he might make Duke; he conserited to cooperate in the transition.andhe agreed not to compete against puke ordisparage the.company. In return the ; company agreed hewould.be paid severance under his : Duke ; employment.agreementias:if he had "good cause' v to resign:5LEGPGNDIR001145

The filing does not say what cause Johnson had to resign. Duke'investor relations people have toldanalysts during the day that the company did hot have to file a reason, which indicates that whateverthe reason was, it is not material to the company's operations.The filing says he will receive a payment of more than $7.4 mil I ion, representing three-times theannual salary and bonus.specified.in his Duke.employment contract;He will get almost $1.4 million, which would have been aÔIS bonus-payment and a lump paymentof up to. $1.5 million in addition to that.He also gets "continued health ; and ; welfare.benefits i reimbursement for relocation expenses andaccelerated vesting of ajl his equity, compensation awards." But'the filling does not specjfy the valueof those items.S&P places Duke on CreditWatch negative after CEO shake-upSNL Energy, 7-3-12By Amy PoszywakStandard & Poor's Ratings Services late oh July-S placed Duke Energy Corp.'s ratings onCreditWatch with negative implications following the company's announcement that Bill Johnson hadresigned from the companyi which had just finalized its merger with Progress Energy Inc.The rating agency said the action is in response to the abrupt change in executive leadership.Johnson, 58, who had been president and CEO of Progress Energy; will be replaced by Jim Rogers,64, Duke's previous president and CEO, who had; planned on becoming chairman of the board ofdirectors ofthe combined company.S&P also revised the CreditWatch implications on its BBB+ corporate credit rating on ProgressEnergy and its subsidiaries, •_and:.6n the companies';issue;"ratings, to. deyelo'pihg frompositive."The sudden shift in management raises concerns-about'effective corporate governance, successfulhandling of the anticipated merger integration,'and the ongoing effective management of pendingchallenges that face the combined:entity," Standard &>Poor's creditanalystDimitri Nikas said in anews releaise.The rating agency expects to resolve.the CreditWatch listing jn the near term, after a closer reviewand assessment ofthe implications of the change in leadership and itsJmpact on the combined entity.Earlier in the day, Moody's affirmed the ratings and stable outlooks on Duke and Progress. Moody'salso assigned a Baa2 senior unsecured rating to: Duke's unsecured bank revolving credit facility,which is in place arid has been ; increased to $6 billion frbm $4 billi6ri through a previously agreedupon arrangement with the banks to accommodate the merger.The'falloutIn the roughly 18 months that followed Duke and Progress' initial merger announcement that.lead upto the closure of the'utilities'.$32 billion deal, it can be argued that the last-minute CEO shake-up stolethe show.The company saidlh a-calLwith.analysts July 3 thatit would : not be commentirig on the:board's'LEGPGNDIR001146

discussions with Johnson that.preceded his resignation. However, UBS;Investment Research analystJim von Riesemann managed to squeeze out some commentary during the Q&A-portion of the call, byasking how Progress' management team was expected to react to the change."There were a lot of people at Progress who were loyal to.BiHi"'the:analysf.said; "How do you.expectto retain, or how do you pian on retaining, the Prpgress team that ypu need in order to get thesynergies to support those earnings targets?"Rogers responded: "Let me just respond by saying 1 reached out last night to all of the [seniormanagement committee] members and talked through where we are going .in the future, and how Wehave to pull together," Rogers said. "My expectation is that aii will lead in making this a greatsuccess."News reports throughout the day indicated that Johnson was not planning to resign as late as July 2;The Charlotte (N.C!) Business Journal reported in its Power City blog that on July 2, Prpgress hadbeen planning to have Johnson availabie to speak to the.media once.the-merger was closed but thatthose plans were canceled .Julyc3. The Charlotte Observer said John son recently told the newspaperthat he was house shopping in Charlotte and intended to be in his new office July 2;:at that point,Duke and Progress were aiming to close the deal by July 1.States surprised by resignationRegulators in North and South Carolina, along with their respective,public staffs, who recentlyapproved the combination of the companjes, 'appeared surprised at the news July 3.Robert Gruber, executive director of the North Carolina Utilities Commission's public staff, whichreached a settlement agreement with Duke and Progress on the merger prior to NCUC approval,; said.July 3 that the public staff had no prior indication that the change-up would occur and was surprisedby the early morn ing. announcement."It was a complete surprise;to the public staff," Gruber said. "We had ho idea this was brewing."Gruber said Rbgers calied'him this morning to assure him that the company will operate essentiallyas it would have if Johnson had riot resigned, and that Duke will keep the commitments made toNorth Carolina during the state's review— and eventual approval — of the merger,Gruber also spoke with Brett Carter, president of Duke's utility operations in. North Carplina; whofollowed up on the call with.Rogers."I've also.been told that the resignation of Johnson is not going to. have any domirioreffectfor thosewho serve,below. Johrison, that the jritent is to leave those key personnel in place," he said. "The-onlychange the board voted on was to accept Johnson's resignation."If the cpmpanies had anripuhcedlhe CEOxhange:^pripr to the NCUG issuing its decision on thecompanies' merger application jt could have delayed the deafeven longer, though considering whatwould/happen, in that scenario wou Id, be speculative, Gruber said."I can't figure out a sequence of events that would have caused that, that they would have suddenly,after presenting a merger like they did and'laying!it put with'a succession team that they had; thatthey would have just come hra day ortwo before and said. 'Oh, everything has flip-flopped;"' Gruber7LEGPGNDIR001147

said. "We wbuld have had to undertake a whole new inyestigatioh, arid that wbulci haveidelayed themerger considerably and might have caused the July 8 [termination] date to kickîn."Gruber said he had not heard from the. commission whether it would investigate the change.NCUC Chairman Ed Finley said in a July 3 statement following Duke's anhouncement.that while hewas surprised ..by Johnson's'announcement, the : commission^ focus will be.on.ensuring that thebenefits the company promised to the state arid to ratepayers wijl Materialize as expected."My understanding based oh Duke and Progress,representatioris in our hearing was that Johrisonwould be GEO of the combined company," Finley said. "His departure ori the same day the.merger isclosed and three days after our order may raise questions in the minds of some as to the timing ofthedecision by those involved in it" 1More important'than management structure arid'succession,.Finley contiriued, is the follow-throughon the promises each company made during the state's merger approval process."The last 18 months or so. have been a time of stress arid .uncertainty for the rrianagement andemployees of both companies,, and we hope with the closing of the merger, with a clearer pathforward, that those resporisible with providing service will hayeTewer distractions," he said. "That isstill our hope. There is significant management talent within the two companies and we hope the bestlineup will fall quickly into place:"The South Carolina Public Service Commission's Office of Regulatory Staff, which supported thecompanies, in the NCUC's review of the deal, a|so was .surprised by the decision but did: not feel thatthe change materially affects the mergerrationale, according to Dukes Scott; who heads the ORS."We've worked with Bill Johnson for several years now, and we've vybrked with Jim Rogers for severalyears now, and we have great respect for both of these gentlemen," Scott said July 3: "Obviously wewere fine with the prospect .of Mr Johnson, but we'd be fine w[th Mr. Rogers as well, ;as far as the,ORS is concerned."Duke's $43B merger doneCincinnati Enquirer, 7.-4-12Duke Energy Corp. and Progress Energy Inc. said Tuesday that they had completed their mergernow valued at $32 billion to form the nation's largest electric company.Little change is expected iri Greater Cincinnati and Northern Kentucky, where Duke has more than1.2 miilion electric and gas customers;and^3,700 employees and 3:300 retired,workers."There's no overiap - Progress is in:the Carolinas and Fiorida:- so there will be no impact to ouroperatioris in Ohio arid, Kentucky," Blair Schroeder, a Duke spokesman in Ciricinnati, said Tuesday.But thei normally routine.deal closing ; did come.-with a twistBiil Johnson, who was tapped "to lead the combined company as president and chief executive; hasdecided to leave by "mutual agreement," the companies said.Duke CEO Jini Rogers, who.was ekpected to be executive chairman, : has instead been named GEO.Rogers was .CEO:and chairman of "Cinergy Corp.. in Cinciririati untii 2006, when thatcorhpany mergedwith Duke.8LEGPGNDIR001148

Executives declined to answer questions about the Duke-Progress CEO 1 switch.Duke'won feder^l approvaj for the merger announced in January 2011 on June 8 and wrapped updetails this week.The combined company will-serve more than 7;million.customers in North Carolina, Kentucky; Ohio,Indiana, Florida and South Carplina; Duke Energy'sjrfore than $100 billion in assets include power-,generation assets in Latin America and a growing portfolio of reriewabie-energy projects in the U.S:The combined cbmpany wiil be khowri as Duke Energy and will-keep its headquarters in Chariotte.Experts said the hew company will be able tb;borrpw money more cheaply, and it will use fewer coalburningpower plants in.favor of ones;that use.natural gas: It's also expectedto keep power pricesstable.Regulators saw the deal as the best possible in an environment of energy industry consolidation.Rogers said in a conference call with analysts that his.top focus will be.reaiizing the promised savingsfrom the merger, followed by coping with the costs of a shutdown* af Progress Energy's Crystal Rivernuclear plant in Florida.Crystal River has been down for repairs since 2009 and isn't:expected to operate again until 2014.Progress Energy had proposed building two new nuclear power reactors at the site;Progress Energy finalizes deat to merge with N.C.-based Duke EnergyTampa Bay Tirries, 7-4-12;By Ivan PennDuke and Progress finally merged pn Tuesday, but the main tapped months ago to run the massiveenergy company won't be along for the ride.Surprising analysts and investors, Progress-Energy president and GEO Bill Johnson resigned at theeleventh hour^ giving no reason for the^move.Duke CEO Jim Rogers will lead the combined company. which will be.called Duke.Energy and beheadquartered in Charlotte, N:C':The merger, valued at as much_as:$3T billion, formed the largest utility in the nation with 7.1 millioncustomers across six states:The Rogers for Johnson swap could mean a more drastic shift in corporate culture, for Progress'employees and a different perspective on .how to generate power for its i .6 million Florida customers.Arnie Gunderson, a nuclear engineer and 'consultant on utility issues,, said puke is tough manageriallyand politically. He expects Duke executives to be running much of Progress 1 'operations-in the future."Duke is better than Progress," he said. "They fired the captain (Johnson) but they kept the anchor(Progress)."Susan Glickman, a lobbyist for the environmental group Southern, Alliance for.Clean Energy.jsaid9LEG PGNDI RO01149

Rogers taking the helm was ''great news for Florida.""He has been more forward-thinking about clean technologies and efficiency," shersaid.Opponents of the merger took a more'ominous view."Creation ofthe nation's largest electric utility will require enhanced vigilance ... to protect oureconomy, our environmentand'.our,democracy:from a giant corporatiomweli-known for its use ofpolitical muscle to pursue;profits;ahd.expaiisioh," said Jim Warren, executive director of the watchdoggroup N.C. WARN.At the top of Duke's to-do listis a decision about the Crystal River nuclear plant in Citrus County,which broke on Johnson's watch during a botched maintenance and upgrade project. The 42-inchthickconcrete reactor containment building cracked during the project; arid subsequent repairattempts resulted in more cracks.The projecteci cpst for repairs and the purchase of replacement power while the plant sits idleexceeds $2,biiiion. The growing pribe tag and concern that the troubles atCrystal River were worsethan Progress portrayed could be.part of the reasori that Johnson did not get the top job at themerged company, analysts and experts said."It could be the recognition that the cost of the Crystal Riyer plant could be a larger concern thanperhaps! Duke had.realized'wheri they first had undertaken" the merger, said Peter Schwarz,'aneconomic professor at the University of North Carolina at Charlotte.Duke will have to decide whether to repair the 36-year-old Crystal River plant, which Johnson wantedto do, or decommission it. The company is.scheduled to give a status update on the project to theFlorida Public Service Commission ori Aug! 13.J.R. Kelly, the state public counsel who; advocates for consumers, said,;that without Crystal River,Duke would need to develop an alternative source of energy; Erivironrnentalists would like to focus onefficiency measures, but Kelly said the company would likely build a natural gas plant -- whichcustomers would pay for.Duke.also wilfhave to make a. decision on .whether to move forward with a $24 billion project to buildtwoWestinghouse AP1000 nudear reactors in Levy County.Customers already are paying $1,1 billion for the project that expe'rts believe will never get builtbecause of the high cost and the current low price of natural gas.Mark Cooper, senior fellow for ecpriomic analysis at the Institute for Energy and the-Environment atVermontLaw School, put it-this way: "The Levy piant is notgo'ing to:happen:"Duke officiais would not comment about its plans for the Crystal RiVer and Levy County plants.Duke also has its owri troubles.Before the merger, Duke had constructed ari advanced coal-fired plant.in Indjaria. The prbjecf rah $1billion over budget. A top'Duke executive and Indiana's utility regulator lost their jobs after an emailexchange about it.Managing the challenges rests on Rogers, who was named one of Newsweek's "50 Most PowerfulibLEGPGNDIR001150

People in the;World" in 2009.After Progress and Duke announced the merger 18 months ago, 30.lenders promised $6 billion ihcredit when the deal closed. Rogers could tap those credit lines to help buiid new power plants,."The new Duke Energy will be better able to serve pur 7.1 million customers' energy needs in : a safe,reliable, affordable and increasinglyxlean manner," Rogers said.The merger is expected to result in more than i .SOO.job cuts; many df which have already takenplace. More than 1,100 come from voluntary severahce, ; 368fr6nri vacahciesiand about 350 throughcuts, including some potentiallyJn Florida.Combining the operations of the two companies .is likely to take years to complete. For now, theFlorida arm will remain headquartered in St. Petersburg and still be called : Progress Energy Florida.Customers will pay their billsiand access customer service in the same way they were before themerger:James Rogers staying on to lead Duke Energy after buyout of Progress EnergyIndianapolis Star, 7-3-12By John RussellJames Rogers.isn't going anywhere after all.The chairman and chief executive of Duke Energy Corp., who was slated to step down as CEO afterclosing an $18 billion buyouf df Progress Energy this week, is going to stick around and lead.thecombined cornpanies.In a.surprise annpuhcemeht, Duke Energy said Tuesday that Prpgfess GEO Bill Johnson hadresigned and would not.be taking on the CEO duties at the combined operations, as previouslyplanned.Rogers, 64, wilt become CEO of the combined companies, which will continue to be called DukeEnergy. He also Will remain chairman.The deal closed Monday, creating the nation's largest power company with/morethan j miliipncustomers in six states, including more than 700,000 in Indiana.Duke Energy, based in Charlotte, N.C, did notsay why Jphnson had quit, other than describing it asa "mutual agreement."that's an abrupt shiftfrom 18?months ago,:when the deal was-announced. Under the original pian,Rogers would haye given up much pf his power after the deal,, ke'epihgôhly the title of "executivechairman" of the combined companies. He would have acted as puke's spokesman on energy pplicyand advised Johnson, who had.been tapped to lead the combined companies;Now Rogers will stay firmly in charge — continuing a long career pattern of holding onto power,despite the;odds.Rogers has made a career outof building a utility powerhouse, one merger at a-time, startihg J 24years ago as theVnew GEO oif a small, nearly insblvenf Jhdiana utility called PSI Energy.LEGPGNDIR001151

Over the decades, he ehgiheere'd.sevefa! big mergers .often' with bigger partners,,first with CincinnatiGas & Electric, then with Duke Energy and finally with Progress Energy.Now it appears he has survived another merger with his power intact.In the past two years, Rogers has spent a vast amount of time trying to put .out fires in Indiana as agrowing ethics scandal at the company threatened to derailthe completion ofa huge new power plantin Edwardsport. In May, Duke reached"a settlement with leading critics over who should pay for morethan $1 L3?billion in cost overruns at the plant.If Indiana regulators approve the settlement this month, Duke's; biggest problems in Indiana could bebehind it.Utilities' merger of benefit to ATCMilwaukee Journal Sentinel, 7-3-12By Thomas ContentDuke Energy Corp.'s acquisitioh pf Progress; Energy Inc: ppsitiohs Pewaukee-based AmericanTransmission Co. to work with the nation's largest utiiity to develop more than $4 billion of power lineprojects across the cpuritry.,Duke completed its purchase of Progress this week after the;$32 billion merger won approval fromfederal and state regulators. The combined company surpassed Chicago-based Exelon Corp. tobecome the'biggesf U:S. utility company.ATC, which counts two former Duke executives:on its top management team, last year announced apartnership with Duke to collaborate on.a series of high-voltage power lines around the country. Thepartnership fulfills the goal of ATC President John Procarip to find ways for ATC to take its experiencein building power lines in Wisconsin and Michigan and expand outside its region."We're very happy that they were able to get the approvals that they needed," said Anne Spaltholz,ATC spokeswoman. "It means a good;future for Duke ATC because th£ new. Duke supports theefforts and the goals pf DATGi"Federal energy regulators voted last month to give the Duke-ATC joint venture a conditidnal approvalfor a suite of seven high-voltage transmission lines stretching 1,800 miles across 1 the'Midwest; Theseven lines would be built over 10 years : in Wisconsin, Illinois; Indiana, Iowa;and Ohio:The approval gives the venture-the ability to collect a more than 12.36% return on its;investment inthe projects, the Federal Energy Regulatory Commission said, if the ; projects;are endorsed by theMidwest independent transmission System.Operator.Investment analysts have been expecting FERC to move to trim the returns it was authorizing forutility power, line;projects, but Duke ATC ended up.receiving a higher return than the 12.2% profitATC has been earning on projects in Wisconsin and Michigan's Upper Peninsula."It's a good indication that these projects are important and trahsmissidn deyelop'meht remainsimportant," Spaltholz said.Profits from building power lines would flow to ATCs owners, primarily theutilities •serving, easternWisconsin, lead owners are IntegrysÊnergy droup, Chicago r 34%; ,Milwaukee-based Wisconsin12LEGPGNDIR001152

Energy CpipM.'26%;.ahc|:vyisconsin.Ppweôwns less than 4%:Go. of Madison,, 16%. MGE Energy of MadisonIn a recent presentation to s investors, Wisconsin Energy said the company expects to begin earningprofit from the Duke-ATC venture inÔliS:Duke completed the Progress acquisition hours after South Carolina gave final approval^ the deal.The combined Duke has more than 7 million customers.In a last-minute switch that the.company declined to explain, William D. Johnsoh, whb : was thechairman, president and chief executive of Progress, was not named president and chief executive ofthe merged entity but instead was leaving "by mutual agreement."James Rogers, Duke's chairman and chief executive, who was going to be executive chairman, willnow be the chief executive as well.In an interview, Rogers said the two companies had immediately integrated their generating systems,one of three steps designed to save 5% to 7% of. non-fuet operating expenses.Duke has a pumped.storage ,system that.can be: used tp.store.energy for peak peribds but often didnot make full use of it, he said. Now in the mprnings, power will flow from Progress' territory in theEast to Duke's storage.system in the West, to pump water uphill, and at afternoon peak, the water willgenerate electricity,,which will flow in the opposite direction.The company, still called Duke.Energy and still with headquarters in Charlotte, N.C, expects othersavings from elimination bf duplicate functions and improvements in'processes. It will reduce its headcount of nearly 30,000 through a voluntary severance plan, exbcutives sîd.The New York Times contributed to this reportWhat will happen to Duke Energy's corporate giving after merger?Triangle Business Journal, 7-3-12By Chris BagleyPeople involved ih Raleigh-area corporatephilahthropy said they tentatively expect Duke: EriergyCorporation to maintain the high profile of Progress Energy, whose-acquisition Duke completedTuesday morning.Progress reported $10.2 miilibn in Triangle-area.charitable giving between; 2007 and 2010, accordingto inforrriatipri,found in Triangle Business Journars anriual Book of Lists. Progress ranked secpnd prthird i n each of those fou r yea rs.Recipients in recent years haye included arts and economic development organizations, and WakeCounty, which maintains at least one large park on land provided by the utility:Paul Coble, the:chair of the Wake County Board of Commissioners, is one of the local, leaderskeeping a close eye on what vyill happen with ; Duke ! s corporate philanthropy iri the area. "I would hateto see us fall back and lose that presence," he says;Amber Smith, president of the charitable facilitator Activate Good, says Duke's and Progress'philanthropic priorities have largely mirrored one another's over the years, and therefore are likely to13LEGPGNDIR001153

continue with little change."! don't think it will suffer a lot;" she sajd. "In the first few years, I cpuld even envision (Duke) givingmore money to get their name out;"A,lot of 'itwill depend on the new leadership," she cautioned.In a surprising move, B i I IJ o h nson, who was ex pected. to become GEO of Duke after its acqujsitidh-bfRaleigh-based Progress Energy Inc., abruptly resigned on Tuesday. Jim Rogers'will lead thecombined company:Greater Raleigh Chamber of Commerce CEO Harvey Schmitt said he, too, could foresee "a period ofovercompensation" as Duke expands its presence; in the Triangle. The.utility has long providedelectricity between Durham and points westbut began serving Wake County, and most of easternNorth Carolina oh Tuesday..Progress Energy Carolinas remains as an operating utility under the Duke corporate umbrella.Editorial: That's Progress?Raleigh News &; Observer, 7-5-12Right up to the last moment, the merger of North Carolina's two big r multistate electric utilities - amerger that creates; in an expanded Duke Energy, the nation's largest utility - vyas relatively routine,despite some slowdowns along the path to final approval, then came that last moment.Bill Johnson, surprising1y,,-was out, his resignation announced earjy tuesday. with no explanation.Contrary to announced plans.and all expectations, the CEO of Progress Energy would not be chiefexecutive of the combined company after all (Charlotte-based Duke\essentjally bought Raleigh-basedProgress),Instead, the new Duke Energy announced thaf its own GEO, Jim Rogers; will run the show. The plan,up to Tuesday, had been that Johnson, 58,.'would'be CEO and that Rogers, 64, would be executivechairman.Was there a rift? A change of heart? Some, unrevealed: business reason? Whatever its cause,Johnson's departure fuels doubts about the merger, particularly in Raleigh.and in Eastern NorthCarolina, hpme;to the bulk of Prog ress Energy's em ployees ^ a nd customers.Raleigh impact?In particular, how will Progress empioyees, those who haven't lost their jobs due to merger-related"efficiencies/' fare under.the new setup? With Johnson at the helm, at least the remainihg Progress,employees could feel .that they had-an ally .in Charlotte, where Johnson, as recently as last month,was looking for a new home. Now he's out. (Johnson subsequently urged Progress employees tohelp make the merger work.)Similarly/will the hew Duke fulfill its stated intention.to maintain a sizable presence in downtownRaleigh, even as Progress turns overMts newer office tower here fb a new tenant, the software makerRed Hat? With the mergef, Raleigh 'knew it.was losing the headquarters, of a Fortune 500 corporation,but it's been expecting a substantial part of the company to stick around - as it should, the better toserve its 3-1 million customers, many of them in Eastern North Carolina.14LEG PG N Dl RO01154

Those customers, for the most part,. didn ; t loudly object to.the merger, which was announced inJahuary 2011 and which finally closed at 4 p.m. Monday.. Neithef did^the governor object, nor thelegislature. The general feeling was-that if Progress Energy was a likely takeover target for somelarger utility - as it supposedly was:— it was better that the buyer be basediin: North Carolina. Thatcould only be Duke.Second thoughtsThe.fact that the nation's.No: 1 utility would be CharIotte-based ; cdhtribUted to ah atmosphere at theN.C. Utilities Commission, whose OK was needed; that.allowed the deal to be done, and largely onthe utilities' preferred timetable. (The speed^ bumps along the way came mainly from the.FederalEnergy Regulatory Commission, infespohse to complaints that the.merger would lead to a lack ofwholesale power competition for New Bern and Rocky Mount.):It was certainly a factor, as well, that the head of Progress, not Duke;,would be CEO of the combihecTcompany. Notably, Roberf Gruber, the state's consumer advocate in utility matters (he heads theUtilities Commission's Public Staff) supported the mergef during the state's-approval process. With,news of Johnson's departure; however, he allowed that "If the Commission had known about thisprior to the rnerger, if might have been a different result. The Public Staff has a lot of respectfor Mr vJohnson and confidence in;him: We're not sure how th'js;will;work-without him. wEdward Finley Jr.,;Utilities Commission chairman, made a similarly blunt assessment.Duke's Jim Rogers, sensibly enough, quickly made calls to reassure employees and regulators. Butwith even a hint of.mystery iri the air," the new'leader among the nation's electric utilities has apowerful lot of explaining;tb do, in addition.to the long-run:task ofprovingithatthis merger is reallygood for North Carolina...Duke Energy Acquires Bankrupt Chile Campanario Power Plant - ReportDow Jones,.7-3-12Duke Energy Corp.'s (DUK) Latin American subsidiary Duke;Energy International acquired bankruptChilean Campanario power plant from private-equity fund Southern Cross Group for $86.2 miliipn, ElPulso newspaper reported Tuesday.;With the purchase of the 240-megawatt plant; Duke Energy entered^the Chilean electricity marketafter a failed attempt in 1999,The Chilean acquisition will raise Duke Energy International's total.capacity.in the region io nearly5,000 MW, the firm said.in a statement.The power holding cbmpany 'aIready has•pperations in Argentina,,Brazil, Ecuador, Ej Salvador,Guatemala and Peru and will mariagevCampanario from its Buenos Aires office;Campanario filed fbf bankruptcy prptection last year as higher energy costs forced the,powergenerator to cover the difference,versus;its.contrac'ted price,, resulting in unpaid.biHs.Campanario, which feeds the central SIC grid, saw its financial problems rise from a 2009 to 2023energy-supply contract with holding company Compania ;General de Electficidad SA's (CGE.SN,CGI.MC) distributjoh unit and-with distribution company Sociedad Austral de Electricidad SA, orSaesa.^LEGPGNDIR001155

Duke's Coal Gasification Plant Slanimed for High Costs'EnergyBiz, 7-4-12Barry GassellConsumer and environmental groups recently filed testimony at the Indiana Utility RegulatoryCommission (IURC) opposing the proposed'settlement between Duke Energy (NYSE: DUK), the:Indiana Office of Utility Consumer.Counselor, Nucor Steel and the Duke.Energy Indiana IndustrialGroup regarding the Edwardsport' integrated gasification combiried-cycle. (IGGC) power plant.The proposed settlement claims to pfotecf the captive ratepayers of Duke by placing a $2.595bn"hard cap" on the construction costs that could be passed onto ratepayers, said the groups in a July 2public statement. However/the expert testimony of both David Schlissel, President of SchlisselTechnicalConsulting, and Ralph Smith, Senior Regulatory Cprisu Ita nt at Larkin & Associates PLLC,provides evidence thatthe $2.595bn:"cap: , -is nothing more ; than:;a 'firm flooP' that offers consumers 1iittle protection, they added 1 .Also, the proposed settlement ensures that captive ratepayers will in fact pay a minimum total of$3.25bn for the coal-fueled, in : cphsfructioh.|GCG project whethef or not if in fact ever comes online."The settlement also rewards Duke Energy for its gross mismanagement and ordinary •mismanagement of the project.by giving the Company significantly more than the original $1.985:billion estimate," the groups said."The proposed Settiement Agreement offers no protection for ratepayers" against the likelihood thatthe Edwardsport project will not operate; at or near the annual 84% avaiiability, and approximateannual 82-83% capacity, factors, which; Duke has claimed since 2007 that if would achieve; Schlisselstated in prerfiled testimony.^Smith's testimohy discusses the t fact that the $2:595bn is not aH that customers will pay to completethe construction ofthe project.shouid.the^terms/initheproposed' settlement be accepted by the IURC',given that Construction Work in Progress (CWIP) finance related.costs that Duke already collectedfrom ratepayers is not inciuded inithe settiement.inor are.'future&WiP finance related charges.Additional testimony was also filed at the : IURC by Nachy Kahfer, Deputy Director for the CentralRegion of the Sierra Club: Beyond Coal to Clean Energy Campaign. Kanfer points out the claimedfailure of Duke Energy to propose any plan to mitigate carbbh emissions.Hearings on the proposed settlement are scheduled to. begin on July 16.In a May SO filing at the: commission, Duke sakithat within a subdocket; the settling parties are askingthe.commission to:;- approve a new cost estimate for the IGCC project, .equivalent to the hard cost cap of $2.595bn (plusadditional allowance for funds used during construction);- find that there'has been no imprudence and/or fraud, concealment or gross mismahagement whichexceeds the value.of the.impairment:buke:Energy lndiana,has^âgreed to in-the settlement-(almost$700-million) (plus the "value of. other settlement provisions); and- appfoye'otherprovisiofis of the settlemeht agreement, like.the agreed-upon proposed changes indepreciation rates and a partially corresponding change rn'retail e jectric rates,. a nd the agreedruponproposed change in calculation of CWIP return based on;the treatment of deferred taxes."16LEGPGNDIR001156

Cassell is chief of coal generation fot' Generation> Hub; an Energy Central company.Duke Energy will buy. eiectricity from countyWilkes (N.C.) Journai-Patriot 7-4-12By Jule HubbardThe Wilkes County Landfill Gas Project is expected tp start putting electricity on the grid throughDuke Energy next week; said County Planning Director Eddie Barnes.Under an agreement between Duke Energy and Wilkes County gpyernment, .Duke will buy allelectricity generated by the. methane gas project at the:old county landfill off Germantown Road inMoravian Falls. County commissioners unanimously appfbyed the agreemerit on June 25,Barnes said that based on the .cbht'ract 1 ,which stipulates that.Duke Energy will purchase the system's:maximum capacity of 85 kilowatts of electricjjy per hour i; the-Appalachiari State University EnergyOffice estimated that Duke Energy will pay the county about $26,000 annually. This is based on about5 cents per kilowatt.hour.Deteriorating garbage at the bid landfill, covered by tbns.bf dirt and si synthetic liner at the old landfill,,produces methane gas. It is pumped from four 6-inch PVC pipes installed about 40 feet into theground to ease pressure from gas after the landfill was closed in 1993.Duke Energy spent $30,917 on .interconnect equipment installed toitransfer electricity from themethane gas collection system tpjhe grid. Barries said the company will be.reimbursed through anN.C. Energy Office grant of $358,635, awarded to Wilkes County last.year totund the methanecollection systerri and related county experises at the old landfill.A Duke Energy engineer was. at the old landfill on Thursday for a trial run of the system. "Except for afew kinks, it synced well. After.those things are worked out, it should be ready to start putting poweron the grid," he said;Duke Energy is required to purchase the electricity under state legisjatibn mandating that utilitycompanies utilize certain amounts.of energy from renewable^sources.Barnes said county.government could also earn as much as $5,000 in renewable energy credits forthe electricity generated from .nrietharie gas at the old landfill.County commissioners recently approved a contractwith:a Utah-based company planning to sellcarbon credits, which are based bn tons of carbon dioxide kept out of the air by the methanecollection system at the old landfiif,Companies buy carbon credits to offsetgreenhouse gases theyrelease to avoid having:to install emissions;cpritrol,equipment:The state grant, prpvided through the American Recovery and Reinvestment Act, also fundedcppstructibh of a ,30-foo.t-by-i 00-fopt greerihouse at the bid landfill.The greenhouse is fueled with methane gas from the old landfill and is leased to .the Giviri'g Table, alimited liability corporation affiliated with the United Methodist Church as a subsidiary of Rural FaithDevelopment(RFD) Community Develppmerit Corporation.The Rev. Dr. Alan Rice, senior pastor of Crossfire and RFD executive. director, said the Givirig table17LEGPGNDIR001157

was started to help farmers; low income consumers and others by making locallyTpfbduced healthyfood available locally.Rice said the possibility of partnering with Heifer Internationafa nonprofit based in LittleRock, Ark.,on sustainable food system initiatives'in the Wilkes ,County area-is also being-explored.This newsletterwas brought to you by the C6rpprate t Media Relations team. To opt outof thisnewsletter or to provide feedback regarding the content of this.newsletter^please coniact Tom ShieL18LEGPGNDIR001158

From: Jim Hyler | Redacted - Personal Info. |Sent:To:Subject:Thursday, July 05, 2012 9:17 AMMcKee.- Marie;, ttieresa M. Stbhe'; Harris DeLoach; 'Carlos A; Saladrigas'|"" ~ Redacted - Personal Info. "|Raleigh ArticleAll,Attached is a link to the lead article.ih.yesterday's News.arid Observer (Raleigh paper),jimhttp://www.newsobserver.com720l2/07/03/2176266/i6hrison-steps-d6wn-as

From:Sent:To:Subject:Harris DelloachThursday, July 05; 2012 10:35 AMJim Hyle'rRE: Raleigh ArticleJim,Hope.you had a good holiday.If youi have a chahceigiye me;^ a"' call today-I will be inland"'out all davlRedacted-personai infofrr you can giveme a time, and: number ;i'f : more convenient .HarrisFrom: Jim Hyler | Redacted - Personal Info. |Sent: Thursday, July 65, 2ei2.9:16.AMTo: McKee, Marie;. 'Theresa M. Stone'; Harris DeLoach;; 'Garlos A. Saiadrigas';:Redacted - Personal Info.Subject.: Raleigh ArticleAll,Attached is a link to the :lead article in yesterday's News; and: Observeir (Raleigh; paper) .Jimhttp://www. newsobserver.com/2812/07/03/2176266/iohnSonTSteps-dbwn-as'-ceo.-as'-duke.htmlLEGPGNDIR001160

From: McKee, Marie | Redacted - Personal Info. ISent:To:Cc:Thursday, July 05, 2012 2:17 PMHarris DeLoach;,James 8. Hyler Jr.; Theresa M. Stohe; Carlds.A. Saladrigas; John BakerMcKee, Marie"Subject:REfPhoneCali - Friday July GÔI 2 —8am CallHi all.Call, in number for-tomorrow's call at 8:'06am is the same as before:888-862-0358Access Code: 6591081Possible- Agenda :-Quick Check' in with everyone-Discussion about a call or meeting with Ann GrayWhenPhone or In PersonTHANKS,MarieSent.from my iPadLEGPGNDIROOHei

From:Sent:To:Subject:Attachments:Jim HyierQ Redacted - Personal Info.Thursday, July 05, 2012 6:45 PMMarie McKee; Theresa M; Stone'; Harris^DeLdach; -'Carlos A..Saladrigas'Fwd; Conference call hosted by Rob Jones'July 5:docx;'ATTOOOOi .htm'Please see below and attachment.Look forward to our call tpniorrpw moming.JimBegin forwarded message:From: "Jones. Robert"batei.JulyS^Cil^^T^S/PMEDTRedacted - Personal Info.Redacted • Personal Info.Cc:Redacted - Personal Info.Subject: Fw: Conference call hosted by Rob JonesThought you would be interested in this letter John Mullin is sending to-the WSJ...note he is acting oh hisown as our group will not get together until, tomorrow aftRobert Jones - Vice ChairmanRedacted - Personal Info.From: John Mullin jRedacted - Personal Info.Sent: Thursday,,July 05,. 2012 02:12 PMto: Jones, Robert (IBD)Redacted - Personal Info.Subject: Re: conrerence call hosted by Rob JonesAttached below is the letter I sent to.the Editor of the WSJ. Best, JohnGh Jul 5; 2012, at 10:20 AM, Jones, Robert wfofe:.When: Rriday.July 06, 2012 2;00'PMt3:00 PM'XGMTÔSiOOJ.Eastern,Time (US & Canada).Where: Dial In:' 1-877-777^8895 - Participant Code: 171372LEGPGNDIR001162

HostCode': 257184NOTICE Morgan[Stanlay, Is rial acting ^s.a munlclpal advisbr and tlio opinions or views contained tieraln are not Intaridod to bei and do noiconslimte;advice wilhin tlia meaning of SBCtidn t 975 oF ttw Dodd-Fianli Wall Slroel Reform and Consumer Protection Act- If you havereceived'this communicalion iiverrorvp!easa'dofi[ra/- : nirelecyo'tilc and.paper copies snd notify: Ihe sarttter imniedjatflV; Mlstransniisiion isnot intended to waive.cdriWeniialify'or/pivilege: MorbanStiiniEy reserves the^riflht.'to^lha bxtent^mitted'uiiêleclronic communicaiions. Ttiis'rn'essafle is subject to terms avaiiable at the fbllo'wihn link;' h'ttD://wftvw,mQro'ah6lap|eY,pft i ni/disdaimere.- tf yoiicannot access these links, piease noiify iis by reply rries&ase and we will send the contents to ypu^By messafllng with Morgan Slantey youconsent to the foregoing.NOTICE: Morgan Stanley is hot acting as a municipal advisor and the opinions or views contained herein are not Intended to be;-and do notconstitute, advice within the meaning of Sectfon^TS of the' Dodd-Frahk Wall Street Refomi arid GonsiiniefProtection Act. If you havereceived this communication.ih arrof. plaasa destroy all eiedmiiic and paper copies and notifr ihe sender immediately. MIstransmission ishoHntended to waive conItdentialiiyfor privileflBi.MorBan'Stanly reserves ttia right, tb the extent pehriitted iirider'applicable law, to monitor.elGctfonic communications This message tSBubjed lo'term'savailableat the following link": l1iip:V^wv:moreanst3^l6lV,co^l/^îs'clail^ê^s. Ifyou:cannot access these links, please notify lis by reply message and we wMI send the contbhis.to you. By messaging with Morgan Staniey.youconsent to the fciregoing.LEGPGNDIR001163

July 5, 2012The EditorThe Wall Street Journal12:11 Avenue of the AmericasNew York. NY 10036Sir:As the former Lead Director of Progress Energy, I feci compelled to speak out on behalfof the former shareholders, employees, custpmersând communitiesiser\'ed :by Progresswho are now all part of or are served by the "new" Duke Energy.In negotiations with Duke leading.to the merger oiir Board voted fq accept a "semimergerof:equals"'transactibn with the explicit agreement that the Progress CEO, BillJohnson, would become ihe CEO of-the conibined company upqh.c.oiisiimmation of themerger. This was a critical element in:the:merger deliberations of our Board .because wehad contldencc .that Biir vvould successfully lead the combined companies lo achieve thepotential syhergistic'benefits of the conibinatioh- J do hot believe ;that a;sihgle;director ofProgress wouldihave voted ifdr:this transaction as structured witli the knowledge that the:CEO of Duke, JinvRogersf would remain as-the CEO of tKe,combined company.After a long gestation period, the merger finally closed on July 2 nd ..As stipulated in theMerger Agreeiiieht; Bill Johnson became the President and CEO of the newly combinedcompanies ~ for approximately 20 mimites!Following a short organizational meetirig, ::the-newly.constituted board: which contains amajority of ••old Duke" directors, went into executive session and voted to request the.resighation of Bill Johhsbii and the retention of Jim Rogers as the CEO of the newlycombined company. In my .opinion this can.only. be described asraivincrcdibleiact of.badfaith witlvregard to the undertakings of the.Merger Agreemen t- I think it was a clearlypremeditated contravention of one ofthe most cenlral tenets.of bitr Agreement;In riiy opinion this is the^mbst blatant example of cbrpbrate'deceif that)during a long career on Wall Street and as a direcior .of ten publicly traded-companies.and[as a fpriper.Trustce.'offiinds.As a npn-continuirig director pfahe conibihed'company f albiig with similarlysituated former directofs bfPrbgress.. findmyself without a cbnstituericy arid without-anability to^mount a challenge to what I belieyc'is one ofthe greatest: corporate hijackings,iii US:business history.LEGPGNDIR001164

Cbrisequently. this lettef .is; being written in hopes that what I believe tp be a deceitful andpre-meditated contfavention'of good faith riegotiations will riot go un-rioticed'in the"court ofpublic opinipiv'.Sinccrely }John H. Mullin. IllRedacted - Personal Info.LEGPGND1R001165

From:Shiel, Tom Jr [Tom.Shiel@duke-energy.com]Sent:Friday, July 06, 2012 7:36 AMTo:News in ReviewSubject: Duke Energy News in Review 7-6-12NEWS IN REVIEWDue to a technical issue, News in Review has not been posted to the Portal. Stories will beposted as soon as the issue is resolved.Outrage, questions fly after CEO Bill Johnson's departure from new Duke EnergyCharlotte Observer/Raleigh News & Observer, 7-6-12Pressure is building on Duke Energy to explain why it ousted Bill Johnson as CEO this week, asformer Progress Energy board members break their silence and express outrage at what they term acalculated deception.Duke Energy's CEO switch prompts big questionsCharlotte Business Journal, 7-6-12Bill Johnson's abrupt departure from Duke Energy Corp. this week leaves the company with noobvious successor to Jim Rogers, the company's 64-year-old chiefexecutive. It also puts the stabilityof its management team in doubt and its bond rating in question.Behind Duke's CEO-For-A-DayWall Street Journal, 7-6-12Duke Energy Corp. signed a contract June 27 with Bill Johnson that would make him its next chiefexecutive. Five days later, hours after Mr. Johnson took his job, the company's board decided it justwasn't working out.Progress CEO Johnson May Get as Much as $44.7 Million after ExitBloomberg, 7-5-12Progress Energy Inc. Chief Executive Officer Bill Johnson, who unexpectedly resigned after DukeEnergy Corp. completed its takeover ofthe company, may collect as much as $44.7 million after hisexit.U.S. Midwest ISO real-time power prices over $1,OOO/MWhReuters, 7-5-12Real-time power prices in the Midwest Independent Transmission System Operator (MISO) in theU.S. Midwest were over $1,000 per megawatt-hour for at least an hour Thursday afternoon during abrutal heat wave, the grid operator said on its website.Commission Calls Fukushima Nuclear Crisis a Man-Made DisasterNew York Times, 7-5-12The nuclear accident at Fukushima was a preventable disaster rooted in government-industrycollusion and the worst conformist conventions of Japanese culture, a parliamentary inquiryconcluded on Thursday.GE Halts Construction on Solar Plant as Prices PlungeBloomberg, 7-3-121LEGPGNDIR001167

General Electric Co. (GE) is suspending construction of a Colorado thin-film solar factory, slated to bethe biggest in the U.S., as prices for the panels tumble amid a manufacturing-capacity glut.NC solar projects aided by lower costs for constructionCharlotte Business Journal, 7-6-12It appears that the price for building utility-scale solar projects in North Carolina continues to drop,despite tariffs imposed earlier this year on low-cost Chinese solar panels.Outrage, questions fly after CEO Bill Johnson's departure from new Duke EnergyCharlotte Observer/Raleigh News & Observer, 7-6-12By John Murawski and David RaniiPressure is building on Duke Energy to explain why it ousted Bill Johnson as CEO this week, asformer Progress Energy board members break their silence and express outrage at what they term acalculated deception.At the same time, the N.C. Utilities Commission - which last week approved the merger betweenCharlotte-based Duke and Raleigh-based Progress with the understanding that Johnson would beDuke's CEO - is internally deliberating whether to investigate whether Duke officials lied about theirintentions.Meanwhile, a leading Wall Street credit rating firm put Duke on a watch list for a potential creditdowngrade in the wake of Johnson's exit. Johnson's abrupt resignation, announced Tuesday, raisesquestions about Duke's internal stability, planning and management, Standard & Poor's FinancialServices said Wednesday. Many former Progress executives were recruited by Johnson, with anumber moving to Charlotte this week for their new jobs.But it was the former Progress Energy board members who were the most vocal in their outrage."Frankly, I felt misled," said Alfred Tollison Jr., who lives in Georgia and served on the Progress boarduntil the completion ofthe merger. "Just from circumstantial evidence you would have to think it didn'thappen overnight, that there was a lot of forethought given to it."Another former Progress board member, John Mullin III of Virginia, sent a letter to the Wall StreetJournal Thursday, stating: "I do not believe that a single director of Progress would have voted for thistransaction as structured with the knowledge that the CEO of Duke, Jim Rogers, would remain as theCEO ofthe combined company."In the letter, which he shared with The (Raleigh) News & Observer, Mullin wrote: "In my opinion this isthe most blatant example of corporate deceit that I have witnessed during a long career on WallStreet and as a director of ten publicly traded companies and as a former Trustee of Putnam'snumerous mutual funds."The recent, rapid developments pose new challenges to Duke's leadership as the company movesforward with its merger with Progress, a deal that created the nation's largest electric utility.Duke spokesman Tom Williams said, "We will be working with S&P in the coming weeks to resolvetheir 'credit watch' listing as expeditiously as possible."Credit ratings are critical to utilities, which depend on capital markets to finance power plants andother infrastructure projects that can cost billions of dollars. Lowered credit ratings could result inhigher interest rates and millions in added costs.Moody's Investor Services, however, affirmed its ratings and "stable outlooks" for Duke and Progress,citing their strong financial profiles and merger benefits.2LEGPGNDIR001168

But Johnson's departure, Moody's added, creates uncertainty over the company's long-termleadership "and could also lead to some additional turnover in the newly-constituted company's seniormanagement team."CEO for about 20 minutesNew details emerged Thursday revealing that Johnson was asked to resign Monday afternoon,shortly after the merger closed that day at 4:02 p.m., suggesting to some that his ouster waschoreographed in advance. The merger had received final approval from South Carolina regulatorsearlier on Monday.Johnson signed his employment contract with Duke on June 27, days before the merger closed. Hewas CEO of the combined company for about 20 minutes, Mullin said. After the merger closed,Duke's board went into executive session and voted to request Johnson's resignation, Mullin wrote.When informed ofthe board's surprise decision, but before he took any action, Johnson called Mullinon the phone, making Mullin one ofthe first outsiders to learn that something was amiss, Mullin saidin an interview Thursday.Mullin added that there is no question that Johnson was asked to leave.By resigning as opposed to getting fired, Johnson was entitled to collect a $10.3 million severance.According to an 8K filing Duke made with the Securities and Exchange Commission on Tuesday,Johnson is entitled to severance benefits if he resigns for "good reason." The filing provides thedefinitions of "good reason" as any breach of contract by Duke, or if Duke were to unilaterally stripJohnson of his "title, authority, duties or responsibilities."Company executives were notified Monday evening and the bombshell spread quickly into the night.The next day, Tuesday, before stock markets opened for trading, Duke announced Johnson resignedby mutual agreement.N.C. Utilities Commission's roleThe N.C. Utilities Commission, which had approved the deal last week, began trying to determine if ithad any options. Commissioner Bryan Beatty on Thursday said the commission has the authority toreview its decision, and that one option would be to convene a public hearing, call Duke officials totestify and question them about the move."I think it's important to make sure there wasn't any intent to mislead or to withhold information fromthe commission that perhaps we should have been made aware of," Beatty said.Beatty said it's unclear what actions the commission could take if it concludes that deception tookplace.The financial world also continued to have questions on Thursday. Wells Fargo Securities reiteratedits "market perform" rating for Duke but did not let the moment pass without commentary."Frankly, we don't know quite what to make ofthe upper-management shakeup other than to perhapssuggest that it's not the ideal way to begin the marriage," analyst Neil Kalton wrote in a research note."Will this translate into cultural issues that will make it more challenging to achieve projected costsavings and synergies?"Johnson will leave with up to $44.7 millionFormer CEO Bill Johnson will leave Duke Energy with up to $44.7 million in severance, pension, andother benefits, according to securities filings and Duke.Johnson, 58, will get up to $10.3 million in severance and related payments.LEGPGNDIR001169

In addition, he'll receive about $12.7 million in accrued pension benefits and deferred compensation,according to a Progress Energy filing June 29. Duke calculates $14.3 million more in stock awards,based on accelerated vesting included in his separation agreements.Duke could also pay $7.4 million in excise taxes if the payments are treated as excess goldenparachutepayments under the federal tax code.Duke Energy's CEO switch prompts big questionsCharlotte Business Journal, 7-6-12By John DowneyBill Johnson's abrupt departure from Duke Energy Corp. this week leaves the company with noobvious successor to Jim Rogers, the company's 64-year-old chief executive.It also puts the stability of its management team in doubt and its bond rating in question.Still, the $32 billion deal merging Progress Energy Inc. into Duke is a major accomplishment. Thecombined company will have 7.1 million customers in six states and a market capitalization of $49billion.And Johnson's departure does nothing to lessen the merger's importance for Charlotte, which is nowhome to the nation's largest regulated utility.But his unexplained resignation casts a cloud over the start of what could now prove a more arduousintegration. And it will require more of Rogers and his new management team to prove to investors,regulators and their own employees that the deal was worth the cost.Rogers says it is."We've created the largest utility in the country," he notes. "We have a deep bench of very capablepeople from both companies. I believe the long-term value proposition ofthis combination hasn'tchanged."Others question that.On Tuesday, Standard & Poor's credit analyst Dimitri Nikas placed Duke's A- credit rating on"corporate debt under review" to determine whether the rating should be reduced."The sudden shift in management raises concerns about effective corporate governance, successfulhandling ofthe anticipated merger integration, and the ongoing effective management of pendingchallenges that face the combined entity," he said in a prepared statement.Fasf change in plansHow quickly did things change? Jim Hance, head ofthe old Duke board's compensation committee,signed an employment agreement with Johnson, who was then Progress' CEO, on June 27. Six dayslater, the board was using the terms of that agreement to calculate Johnson's severance package.That package totals more than $10.3 million, according to a filing Duke made Tuesday with theSecurities and Exchange Commission.Johnson was appointed CEO of Duke when the merger closed at 4:02 p.m. Monday. He thenresigned that position and his seat on the 18-member Duke board. The board accepted hisresignation and appointed Rogers to succeed him. Johnson's resignation and Rogers' appointmenttook effect at 12:01 a.m. Tuesday.Ann Mavnard Gray. Duke's lead independent director, told analysts on a conference Tuesdaymorning that Duke would not discuss the resignation further. Johnson declined to comment in aphone call to his home..4LEGPGNDIR001170

"This was a clear surprise, and many questions will be asked," says Nathan Judge, who follows Dukefor Atlantic Equities. "We will have to see now if there are any further changes to the merger team."Who will replace Rogers?One looming question is what Duke will do about a succession plan. After the company's 2006merger with Cinergy Corp. settled in, Jim Turner, the chief operating officer for Duke's regulatedutilities, was seen as the natural next CEO. That plan crashed when Turner resigned in 2010 overimpolitic emails that raised questions about the chummy relationship between Duke and utilityregulators in Ohio.Rogers and Johnson both denied that succession was a key factor in the decision to merge Duke andProgress. But investors were relieved to see the succession question settled. Johnson, 58, is morethan six years younger than Rogers. And he enjoyed a solid reputation in the industry."His coming on board was one ofthe elements ofthe merger investors really liked," says FrancoisBroguin, a senior research associate at Bernstein Research.Now, Broquin says, it will be important for the company to quickly develop a new succession plan.Andy Bischoff, who follows Duke for Morningstar Inc., says the post-merger Duke has a strongexecutive team. But as for the next CEO, "there is not an obvious one at this point."Judge expects investors and analysts will initially focus their attention on Mark Mulhern, Duke's chiefadministrative officer. He was Progress' chief financial officer, and he's well regarded in the financialcommunity. Investors in particular are comfortable with him, Judge says.But Judge thinks Duke may want someone with an operations background. Johnson's great strength,he says, was his reputation as a hands-on, operational CEO."The other individual I think was probably going to be in high profile is Dhiaa Jamil." Duke's longtimechief nuclear officer, Judge says. "Without the operations expertise of Jim Turner and Bill Johnson,investors will want to know who will actually be running the business in the future."Jamil would probably be a popular candidate among old-line Duke personnel. He's the only executiveteam member who grew up in Charlotte-based predecessor Duke Power Co. The others (includingRogers) all came to Duke through acquisitions or more recent hires from outside the company.Jeff Lvash. Duke's executive vice president for energy supply, could also be a possibility, Judge says.He held the same position at Progress. All the non-nuclear generating plants, fuel operations,construction management and environmental projects are in his division. But Judge thinks he is lesswell-known to investors and the financial community.Broquin says Duke CFO Lynn Good could be a candidate as well.Rogers acknowledges that planning for succession is important."As a board we take succession planning seriously," he says. "We will continue to review successionplanning, as we always have."He downplays any sense of urgency. Rogers' current contract runs through the end of 2013. And hecould continue as CEO beyond that. "I serve at the pleasure of the board and will stay as long as theywant me to."More fallout?But one issue that could prove more immediate is the possibility of some top managers opting toleave Duke in the wake ofthe CEO switch.LEGPGNDIR001171

Analyst Hugh Wynne at Bernstein Research writes that Johnson's unexpected exit "clouds theoutlook for integration of Progress Energy's senior management team, some of whom may see theircareer prospects diminished by Johnson's departure."Rogers is aware of the issue, and he says he is taking steps to reach out to the new Duke employeesfrom ProgressRogers savs he called the 10 top executives Monday night to tell them of Johnson's resignation. Fiveof them came from Progress with the understanding that Johnson would take over Duke, under themerger agreement the companies signed 18 months earlier.That does not look good to Dave Parker, an analyst at Robert Baird & Co."If I'm calling people (that) night, announcing the change in leadership, obviously they were not awareof it," he says.On Tuesday, Rogers spoke with the 65 or so members of the management team below the top level.Twenty-seven of them have come over from Progress."I reached out to them individually and asked them to step up as leaders to stand up as leaders andhelp us work our way through this transition," Rogers says. "Our focus has got to be on bringing thesecompanies together and executing our integration plan."But he is circumspect in describing the reaction he got. Asked if the response was positive, he sayssimply, "We had good conversations about what we have to do."Rogers will go to Raleigh next week for an "all-hands meeting" for Duke employees — with companyoperations in Charlotte, Cincinnati, Houston, and Plainfield, Ind., participating by video — to "talkabout the way forward and field their questions" about the merger. He also plans trips soon tooperations Duke added in the merger, such as Progress sites in Florida."I am going to have to spend time with employees throughout the company — visiting plants, visitingfacilities, getting to develop greater relationships with people at every level of Progress — and that'swhat I am going to do," he says.Morningstar's Bischoff says, overall, investors and the public at large may pay too much attention toJohnson's surprise departure. He says they are losing sight ofthe fact that Duke starts this mergerwith a nationally known CEO who has a great reputation and deep merger experience."I think Rogers staying on (as CEO) is a positive for Duke," he says. "He is one of the best operatorsin the business."Behind Duke's CEO-For-A-DayWall Street Journal, 7-6-12By Joann S. Lublin, Dan Fitzpatrick and Rebecca SmithDuke Energy Corp. signed a contract June 27 with Bill Johnson that would make him its next chiefexecutive. Five days later, hours after Mr. Johnson took his job, the company's board decided it justwasn't working out.The rapid change of heart, related by people familiar with the matter, has little precedent in U.S.corporate history, and new details ofthe timing raise fresh questions about the utility giant's handlingof the change in its corner office.Mr. Johnson had been announced as Duke's next CEO 18 months ago, when Duke unveiled a $26billion merger with his old company, Progress Energy Inc. In fact, it was written into the mergeragreement that he would take the CEO job, which Mr. Johnson had held at Progress.6LEGPGNDIR001172

According to securities filings, Mr. Johnson signed his employment contract on June 27, just ahead ofthe merger's July 2 close. He resigned his post at 12:01 a.m. on July 3. People familiar with thematter said the board decided he wasn't right for the job and instead gave it to Jim Rogers, who ranDuke before the deal.Duke spokesman Tom Williams said Mr. Johnson, 58, left by "mutual agreement." Mr. Johnsoncouldn't be reached for comment. Duke declined to make 64-year-old Mr. Rogers, who is alsochairman, available.Outsiders considered the turn of events highly unusual.It "is very odd" for a CEO to exit days after taking command, said David Schmidt, a consultant atJames F. Reda & Associates, a compensation consulting firm in New York that wasn't involved witheither company. "I have never seen that before.""One consequence ofthe way the change was handled is Mr. Johnson's exit will cost Duke up to $1.5million more than he would have received under the contract he had as Progress CEO.There had been questions from the beginning about whether Mr. Rogers would be comfortable notholding the CEO's post.The new board -- about two-thirds of which was made up by premerger Duke directors -- had its firstmeeting Monday afternoon, the people familiar with the matter said.Messrs. Johnson and Rogers attended the meeting, but then left when the board went into executivesession - the portion of the meeting without management. There, directors deliberated changing thetwo executives' roles. The board decided the initial arrangement wasn't going to work.Mr. Rogers's advocates viewed him as a consensus builder whose style was better suited to the taskof bringing two firms together, one person said. He also had run the larger company. The boardinformed both men of its decision after the meeting and came to an agreement that Mr. Johnsonwould step down, people familiar with the matter said.While the meeting was the first time the board discussed the CEO issue, it had become clear to someover the months leading tb the deal's close that the original arrangement wouldn't work, a personfamiliar with the matter said. "Different personalities, different cultures," the person said.The Duke spokesman wouldn't comment on the deliberations or when directors first started to wonderif Mr. Johnson was right for the top job at the Charlotte, N.C, based company.Mr. Johnson was surprised by the outcome, one person familiar with the matter said.Mr. Johnson will receive exit payments worth as much as $44.4 million, according to Duke. Thatincludes $7.4 million in severance, a nearly $1.4 million cash bonus, a special lump-sum paymentworth up to $1.5 million and accelerated vesting of his stock awards.Progress CEO Johnson May Get as Much as $44.7 Million after ExitBloomberg, 7-5-12By Mark ChediakProgress Energy Inc. Chief Executive Officer Bill Johnson, who unexpectedly resigned after DukeEnergy Corp. completed its takeover ofthe company, may collect as much as $44,7 million after hisexit.The total includes $12.7 million for pension benefits and deferred compensation, $14.3 million forvested stock awards, a possible $7.4 million payment for taxes and as much as $10.3 million forseverance, bonus and lump sum payments, according to regulatory filings and Tom Williams, aspokesman for Duke Energy.t7LEGPGNDIR001173

Johnson, who the companies had said would take over as CEO, will get as much as $10.3 million inseverance, bonus and non- disparagement payments, according to a July 3 filing by Duke Energywith the U.S. Securities and Exchange Commission.Johnson, 58, was already or eventually entitled to some of the total compensation, Williams said.Johnson will get $12.7 million for his accrued and unpaid benefits under Progress Energy's retirementand deferred compensation plans, the amounts of which were disclosed in a Progress proxy filingwith the SEC on June 29.Johnson, who has been the chairman and CEO of Raleigh, North Carolina-based Progress since2007, will receive as much as $14.3 million in accelerated vesting of his restricted and performancestock awards, according to regulatory filings.Johnson may be eligible for a $7.4 million payment for excise and gross-up taxes although that hasyet to be determined, said Williams.On July 3, Duke said James Rogers will continue as chairman and chief executive officer of thecombined companies. Rogers, 64, had agreed to become executive chairman when the deal wasannounced 18 months ago.The plan for Johnson to take over as president and CEO was scrapped under a "mutual agreement"between Johnson and Duke, according to a statement by Duke, which is based in Charlotte, NorthCarolina. The deal created the largest U.S. utility owner.U.S. Midwest ISO real-time power prices over $1,OOO/MWhReuters, 7-5-12By Scott DiSavinoReal-time power prices in the Midwest Independent Transmission System Operator (MISO) in theU.S. Midwest were over $1,000 per megawatt-hour for at least an hour Thursday afternoon during abrutal heat wave, the grid operator said on its website.On-peak power prices in the MISO usually average about $60 per MWh at this time of year.But with temperatures expected to reach the triple digits in several of the largest metropolitan areas inthe grid, and with some unexpected power plant outages, the MISO put out a maximum generationemergency warning on Thursday.The warning, issued at about 2 p.m. Eastern time, called on generators outside the MISO territorywho had previously agreed to sell power into the MISO market to schedule those resources.The biggest power grids surrounding the MISO include PJM to the East, Ontario to the North, theSouthwest Power Pool (SPP) to the West and Southwest, and TVA to the Southeast.Demand for power in the MISO was expected to reach about 94,700 megawatts (MW) on Thursdayand 91,500 MW on Friday, still well below the grid's all-time record of 98,526 MW set during a brutalheat wave on July 20, 2011, according to the MISO.Temperatures in Chicago, the biggest metropolitan area in the Midwest, were expected to reach thetriple digits for a second day in row with a high of 102 degrees Fahrenheit (39 Celsius) forecast forThursday and 100 for Friday before dropping to the low 80s by Sunday, according toAccuWeather.com.The normal high for this time of year in Chicago is about 84 degrees.Power traders could not say which power plants may have shut but did note that generation fromwind resources went from about 3,000 MW late on July 4 to just 700 MW by midday on Thursday.LEGPGNDIR001174

By about 3:30 p.m. Eastern time, the problem seemed to be over as real-time prices in the MISOdropped to more-normal levels in the $30s per MWh.The biggest utilities in the MISO include units of Duke Energy, Xcel Energy, Ameren Corp, BerkshireHathaway's MidAmerican Energy, DTE Energy and CMS Energy.Commission Calls Fukushima Nuclear Crisis a Man-Made DisasterNew York Times, 7-5-12By Hiroko TabuchiTOKYO — The nuclear accident at Fukushima was a preventable disaster rooted in governmentindustrycollusion and the worst conformist conventions of Japanese culture, a parliamentary inquiryconcluded on Thursday.The report, released by the Fukushima Nuclear Accident Independent Investigation Commission, alsowarned thatthe plant may have been damaged by the earthquake on March 11, 2011, even beforethe arrival of a tsunami — a worrying assertion as the quake-prone country starts to bring its reactorfleet back online.The commission challenged some ofthe main story lines that the government and the operator oftheFukushima Daiichi Nuclear Power Pfant have put forward to explain what went wrong in the earlydays of the crisis.Despite assigning widespread blame, the report also avoids calling for censure of specific executivesor officials. Some citizens' groups have demanded that Tepco executives be investigated on chargesof criminal negligence — a move Kiyoshi Kurokawa, the commission's chairman, said Thursday wasout of its purview. But criminal prosecution "is a matter for others to pursue," Mr. Kurokawa said at anews conference after the report's release."It was a profoundly man-made disaster that could and should have been foreseen and prevented.And its effects could have been mitigated by a more effective human response," Mr. Kurokawa, amedical doctor and an academic fellow at the National Graduate Institute for Policy Studies, said inthe report's introduction.The 641-page report criticized the plant's operator — the Tokyo Electric Power Company, or Tepco— as being too quick to dismiss earthquake damage as a cause of the fuel meltdowns at three of theplant's six reactors, which overheated when the site lost power. Tepco has asserted that the plantwithstood the earthquake that rocked eastern Japan, instead blaming the disaster on what someexperts have called a "once-in-a-millennium" tsunami that ensued. Such a rare calamity was beyondthe scope of contingency planning, Tepco executives have suggested, and was unlikely to pose athreat to Japan's other nuclear reactors in the foreseeable future.But by suggesting that the plant may have sustained extensive damage from the earthquake — a farmore frequent occurrence in Japan — the report in effect casts doubts on the safety of Japan's entirefleet of nuclear plants. The report came just as a nuclear reactor in western Japan came back onlineThursday, the first to restart since the Fukushima crisis.The parliamentary report, based on more than 900 hours of hearings and interviews with 1,167people, suggests that reactor No. 1, in particular, may have suffered earthquake damage — includingthe possibility that pipes burst from the shaking, leading to a loss of cooling even before the tsunamihit the plant about 30 minutes after the initial earthquake. It emphasized that a full assessment wouldrequire better access to the inner workings of the reactors, which could take years."However, it is impossible to limit the direct cause of the accident to the tsunami without substantiveevidence. The commission believes that this is an attempt to avoid responsibility by putting all theblame on the unexpected (the tsunami)," the report said, "and not on the more foreseeable quake."9LEGPGNDIR001175

The report, submitted to the Japanese Parliament on Thursday, also contradicted accounts putforward by previous investigations that described the prime minister at the time, Naoto Kan, as adecisive leader who ordered Tepco not to abandon the plant as it spiraled out of control. There is noevidence that the operator planned to withdraw all its employees from the plant, the report said, andmeddling from Mr. Kan — including his visit to the plant a day after the accident — confused the initialresponse.Instead, the report by the commission — which heard testimony from Mr. Kan and a former Tepcopresident, Masataka Shimizu — described a breakdown in communications between the primeminister's office and Tepco, blaming both sides for vague and ineffective information-sharing."The prime minister made his way to the site to direct the workers who were dealing with thedamaged core," the report said, an action that "diverted the attention and time ofthe on-siteoperational staff and confused the line of command."The report blasted Mr. Shimizu, on the other hand, for his "inability to clearly report to the Kantei," orprime minister's office, "the intentions ofthe operators," which exacerbated the government'smisunderstanding and mistrust of Tepco's response.The commission also charged that the government, Tepco and nuclear regulators failed to implementbasic safety measures despite being aware of risks posed by earthquakes, tsunamis and otherevents that might cut off power systems and put nuclear plants at risk. Even though the governmentappointedNuclear Safety Commission revised earthquake resistance standards in 2006 and orderednuclear operators around the country to inspect their reactors, for example, Tepco did not carry outany checks, and regulators did not follow up, the report said.The report blamed the tepid response on collusion between the company, the government, andregulators — all of which had "betrayed the nation's right to safety from nuclear accidents." Tepco"manipulated its cozy relationship with regulators to take the teeth out of regulations," the report said."There were many opportunities for taking preventive measures before March 11. The accidentoccurred because Tepco did not take these measures," and regulators went along, the report said.For Tepco, new regulations would have made running its plants more expensive and cumbersome,and weakened their standing in potential lawsuits brought about by anti-nuclear groups, the reportsaid."That was enough motivation for Tepco to aggressively oppose new safety regulations and draw outnegotiations with regulators," it said.Meanwhile the report also faults the government as failing to develop evacuation plans for the publicand was slow to alert local residents to the disaster. The report found that many residents within theplant's radius of 10 kilometers, or about six miles, had been oblivious ofthe unfolding crisis for morethan 12 hours.The report reserved its most damning language for its criticism of a culture in Japan that suppressesdissent and outside opinion, which might have prompted changes to the country's lax nuclearcontrols."What must be admitted, very painfully, is that this was a disaster 'Made in Japan,'" Mr. Kurokawasaid. "Its fundamental causes are to be found in the ingrained conventions of Japanese culture: ourreflexive obedience; our reluctance to question authority; our devotion to 'sticking with the program;'ourgroupism; and our insularity."Shuya Nomura, a committee member and a professor ofthe Chuo Law School, said the report hadtried to "shed light on Japan's wider structural problems, on the pus that pervades Japanese society."He added, "This report contains hints on how Japanese society needs to change."10LEGPGNDIR001176

GE Halts Construction on Solar Plant as Prices PlungeBloomberg, 7-3-12By Tim CattsGeneral Electric Co. (GE) is suspending construction ofa Colorado thin-film solar factory, slated to bethe biggest in the U.S., as prices for the panels tumble amid a manufacturing-capacity glut.Work will be halted for at least 18 months, Danielle Merfeld, the general manager of solartechnologies, said in a telephone interview.GE, which draws about 30 percent of sales from energy businesses including wind and solar, will usethe delay to modify the plant's design and focus on boosting the efficiency of its solar modules. TheFairfield, Connecticut-based company announced the $300 million plant in October, with plans to hire350 workers and begin shipments to customers in 2013."Over the past six months, the industry has shifted pretty rapidly," Merfeld said. "We've seen about a50 percent price drop for modules over this period and there's a lot of unabated overcapacity outthere."GE had said the plant, located east of Denver, would make enough panels annually to powerapproximately 80,000 U.S. homes, or about 400 megawatts.NC solar projects aided by lower costs for constructionCharlotte Business Journal, 7-6-12By John DowneyIt appears that the price for building utility-scale solar projects in North Carolina continues to drop,despite tariffs imposed earlier this year on low-cost Chinese solar panels.Take the case of the state's busiest solar developer in recent months, Strata Solar in Chapel Hill. Itregistered plans with state regulators in February and March to build more than half a dozen 5-megawatt solar farms. The estimated cost on each of those projects was $22.5 million.From the end of May to early June, Strata registered eight more proposed projects. The estimatedcosts on those were $20 million.That's a drop of more than 10%. Strata spokesman Blair Schoof says the difference represents thelower cost for construction, not factors such as variable expenses for leasing the land.But the savings aren't always in the photovoltaic panels themselves, he adds. Costs for racking andother equipment continue to go down, and construction processes are growing more efficient.Companies vie for nuclear grantWhen the U.S, Department of Energy announces the award next month of two grants to assist inlicensing small modular nuclear reactors, four companies with major operations here will be crossingtheir fingers.The Shaw Group Inc., whose main nuclear-power operations are in Charlotte, and Areva NorthAmerica, the largest employer of engineers in Charlotte, have formed an alliance with HoltecInternational of New Jersey to develop its small reactor, the 160-megawatt SMR-160.The team is among four vying for one of two grants, which total $452 million, intended to fosterdevelopment ofthe new reactors.The Babcock & Wilcox Co., based in Charlotte, is part of another team, with its 125-megawattmPower reactor. Westinghouse Electric Co., which also has nuclear operations in Charlotte, isworking on a team to promote its 200-megawatt reactor.11LEGPGND1R001177

The two winning companies are to be announced in August. Payments under the grants, divided overfive years, are expected to start in December.Tom ShielCommunications ManagerCorporate Communications704-382-2355Tom.Shiel@Duke-Energy.Com12LEGPGNDIR001178

From:Sent:To-Subject:'Harris DeLoachFridaVrJul'y de". 2012 7:43 AMJamil.-Dhiaa.M!RE: INPO mtg-RobinsonThank you very much for the note r ahd theunexpected hies sage. I look .forward to meetirig; youand wo rki hg with* you^RegarciSyHarris.;From:' ja'mi-l, phiaa'M' [ DH i a a V 3 a mi l@d u ke - e n e rgy. c om ]Sent:' Friday'/ 3uly 06-, 2012 ;7:08^'To: Harris DeLoach,Cc: Rhodes, Jim - yahoo; Rogers^ DimSubject: Fw": INPO mtg- Robin sonMr DeLoach;I am the-Chief Nuclear Officer for Duke. I /understand you will be joining the.NuclearOversight Committee of ithe buke BOD., I am "fprwanding-a note ,1 sent last nigh't-to. the previousNOC committee members; relative to ameeting; at Robinson.I" will, add you to !the NOC distribufipni list.Please let me know.if you/have:any questions.Dhiaa !3amil.From: Jamil, Dhiaa HSent:. Thursday, July '05, 2012 09:53 : >MTo: Rhodes, jim - yahooj lim- Reinsch ["Redacted - Personal Info. BarnetB,'W f aoi; Philip-SharpCc: Rogers lim (3im.RoRers0duke-enerev.com)• Subject: INPO intg- RobinsonRedacted - Personal Info.]; Alex Bernhardt.Redacted - Personal Info.LEGPGNDIR001179LEG PGNDI R-R EPLACE000004

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From: Jim Hylerl Redacted • Personal Info. |Sent:To:Friday, July 06, 2012 7:52 AMMckee- Marie:! 'Theresa M, Stone': Harris DeLoach; 'Garlos A Sa!adrigas'| Redacted - Personal Info. [Subject:This'morning's'articlehttp://wwwxharlotteobserver'x6'm/2012/^LEGPGNDIR001181

From: McKee, Mariel Redacted-Personal Info. ISent:to:Subject:Friday, July 06, 2012 10:38,AMJohn Bakeh'Hafris ; beLqach; James B. Hyler Jf;';; Carlos; -fc Saladrigas; Theresa; M. Stone.Next Conference GaH-Hi.All,Our next;conference call will be.on Tuesday July 16 at. 4:30pm.The call ih information remains the same.:888-862-0358Access Code 6591081Thanks,MarieSent from my iPadUEGPGNDIR001182

From:Sent:To:Cc:Subject:Jim Hyler [_ Redacted - Personal Info.Friday, July 06, 2012 12:38 PMMcKee, MarieBaker, jb'Hn b.;;Hams~ DeLoach; Carlos A. Saladrigas; Theresa M. StoneRe: Next Conference Call 'Works for me..JimOn Jul 6, 2612, at 12:24 PM, "McKee, Marie" Could everyone do a 7:30 am call oh Tuesday?> It.seemed the best time was late or very early.> Let me know.> Thanks>, Marie>> E. Marie McKee> Redaaed - Personal Info.>>>>>•>:>' On Jul, 6, :2012- i: at 12:20 PM, "Baker, John D." •'Wrote:>>> Any chance we-could do it earlier-?That' will be 11:30 Pni in Bptswaria.If we; dp to it then,however,no problem>>>> Sent from my iPad>>>> On Jul 6, 2012, at 6:38 PM, "Mckeei Marie-' wrote:>>>>> Hi Ail,>>>>>> Our next;conference call will be oh Tuesday July 10 : at 4:30pm.>•>>>> The call in informatipn remains the same.>>>>>>, 888-862-0358>>> Access Code 6591081>>>>.>> Thanks,>>> Marie>>>>>> Sent from my iPadLEGPGNDIR001183

From: Carlos Saladrigas f Redaaed - Personal info. R pn behalf of Carlos A.- Saladrigas.f Redaaed - Personal Info. |Sent:Friday, July 06, 2012 12:39 PMTo:McKee,; MarieCc:Baker, john p.; Harris DeLoach; James B. Hyler Jr.; Theresa M.. StorieSubject:Re: Next Corifererice CallI will, but John owes me one!CarlosOn Jul 6 32012, at 12:24 m, McKee, MarieAvrote:Could everyone do a 7:30 am call on Tuesday?It seemed the best tinie was late or.very.early.Let, me knovy.ThanksMarieE. Marie McK.eeRedaaed - Personal Info.On Jul 6 ;2012, at 12:20 PM,."Baker, John D,"

Access Code 6591081Thank's,MarieSent from my iPadCarlos A. SaladrigasRedacted - Personal Info.LEGPGNDIR001185

From: McKee, Mariel Redacted-Personal Info. ]Sent:Friday, July 06. 2012 12:43 PMfo:CaHos A. SaladrigasCc:Baker, John D.;;Harris DeLpach; James B. Hyler Jr.; Theresa M. StoneSubject:Rei:- Next'Conference Call:'Harris is in the:air.MWe Will see if he can do 7:30am.Sent.from my iPadOh Jul 6, 2012, at 12:38 PH, "Carlos'A. Saladrigas"I will, but John, owes me one!CarlosRedacted - Personal Info. \ Wrote:On Jul 6; 2012,- at 12:24- PM, McKee,. Marie wrote:Couid everyone, do a ;7:30 am call on Tuesday?Tt seemed the best'time was late or very early.Let nie know.ThanksMarieE. Marie McKeeRedacted - Personal Info.Sent from my iPhoneOn Jul 6, 2012, at 12:20 PM, "Baker, John D."Redacted - Personal Info.wrote:Any. chance we could do it earlierPThat will be 11:30. Pm in^ Botswana.If we do to. it then,however,no problemSent'from my. iPadOn Jul 6, 2012, at, 6: 38 pM,: "McKee, Marie"Redacted - Personal Info.wrote:Hi All,.Our next conferencecall, will be on Tuesday July 10 at 4:30pm.The call' in linformation remains the same.888-862-0358Access Code 6591081LEGPGNDIR001186

Thanks,.MarieSent/from my iPadRedacted - Personal Info.Redacted - Personal Info.LEGPGNDIR001i87

From:Sent:To:Subject:Attachments:Nelson, SarahRedacted - Personal Info.Friday, July 06 2012 12:53 PMHarris DeLoachExit Form 4 FilingDocument.pdf"Hi Mr. DeLoach.Attached foryour records is ah exit Form 4 (foryour PGN holdings) that was filed with" the.SEC ori July 5.Please feel free to contact me if you need additional information.Sarah C. NelsonRedacted - Personal Info.LEGPGNDIR001188

fx]Chf ck Ihis box if no longer.subjcct.toSeetionJfi. Form 4'or'Form 5.obiiEatioiis:mny.continue,-Sec lustruclinn 1(b).UNITED STATES SECURitlES ANb EXCHANCE COMMISSION'Washington, D.C. 20549STATEMENT OF CHANGES IW BENEFICIAL OWNERSHIP OF SECURITIESf-ilcd puRuwt lb Section 16(a) of die. Sccurities'E17(a) of ihe'Public UlilityHolding Company-Act ofJ935 or Seciion'30(hj ofthe. Investment Company Act of 1940OMB APPROVAL_^ o?OMB'Number; 3235-028*-Expires: January 31; 20QSiEstimated 'average burdmJioursper response; :—_zc,1';;Nanie andÂddress of Reporting f^rson?Harris E. DeLoach, Jr.Ohc North Second StreetH^vilIcSC.2955i)2. Issuer, Name iand nicker, orTrnding SymbolProgress Energy. Inc. (PGN)3. Date of Earlicsi Transaction Required to be'Reponed(Momh/bay/Ycar)07/02/2012"'4. If omendmciit. Date Original Filed (MonWDayfYca;)•S. Relnlianship of Reporting Peraon(s) to luucr (check all applicable) —J_X_ Director. ' 10% OwnerOfficer (give title below)Other (specify below)6.. Individuol.or Joini/Grpup Filing (Check Applicable Line)_X_ Form filed by;Ohe Reporting PereonForm filed hv'Mbrc Than One Reporlins PentonTabic I - NoD-D^rivative Securities Acquired, Disposed of, or Beneficially Owned(.Title of Security(Imtr. 3)2.Transaction2A, Deemed.Execution3. TransactionCode4. Securities Acquired (A) or Disposed of (D)(lnsir.3,4, AS)5. Ajnount ofSeciiritia.fOwnershipDaleDate, ifany (Inslr.S)BcneiieiailyForm:(mm/dd/yy) (mm/dd/yy)Owned Following Direa (D)Amounl(A) PriceReportedor Indirect (1)Codeor(D)Transscliohts)(Inflr. 3. & A)(Inslh4)Common Stock 07/02/2012 5.000 D IiiD7. Nature of Indirect BeneficialOwnership(Instr. 4)Reminder: Rcport'ori a separate line for each class of securities beneficially owned directly or indirectly.? If the fonn is filed by more than one reporting person, see instruction 4(b)(v).Persons who fespdhd to the'collection of informauon contained in this form arc not required lo respond unless tlie':form displays a currcmlv valid OMB control number..P; ii of:4.5(iP.V

Fom 4 (coni:)- Narnc.nnd Address of Reporting Pereon• Hnnis E, Delîach,-JrÔne North Second Slreei,HiirtsviHc SC 29550 "IssuCT-Name and Ticker orTradihg Svmbol'Progress Energy, inc. IPGS)Period Of Report07/02^012Oo1. Title ofDerivaiive•Securiry(lnsir.3)Units bKcdon value ofCommonUnits basedon value ofComrnonStock (3)2,.Convcreionor.; Exercise;Price of'DerivativeSecurily3. TransaaionDate;(mm/dd/yy);Table II-Derivative Securities Acquired, Disposed of, or Beneficially Owned3A. Deemed'ExecutionDate, ifany(mm/dd/yy)^.TransactionCode(Instr. 8)5. No.'of Derivative.Securities Acquired (A) or ,Disposed of (D):(lnstr.3.4.&5).Code v (D)6. Date Hxercisahlc nndExpiration Date(mm/dd/yy)'Dale ExercisableExpiniiionDate07/02^012 D .17.852; (4) CommonStock(5) 07/02/2012 D 9,363' (5) (5) CommonStock'7:.-Titlc and Amount ofUnderlying Securities.(lns'tr.-3&4)TillsAmount orNumber ofShares8. Priee ofberivaliyc.Security(Insu. 5)9. No..ofDerivativeSecurities;Rcncficially'OwnedFollowi ng>.Reported;.TraflSaciioh(s).(lnsu.'3-&41;10;OwnershipForm ofDerivativeSccuritiK:Direct (D);or Indirect (1)(Insir.4')17.852 (4) ;0 D9,363 ( 5 > DoCL•U.'' ; N*"UJI ;ofllidinxl .Beneficial •Ownership(Instr. 4) ;c o n v ^ S S S Spriorto thccffeciive date of the Mcrgw.ofmw'tas adjasted to redcet Duke's i-for-3 revmc stock split) per share and a cash payment b^m^cforany^to^djar^.B o a n l(2) - Under the Prdgfcss Non-EmploVct Director Deferred Compensation Plan; non^cmployee directoR.of the Progress Board of Directors.Uhe "Board") could ekct to defer a portton of thctrannual retainer and Boan)anendance fees until afterthe terminwion of iheir service on the Board. AnyWened; fees w-cre deeincd to beinvestediri a number ofumts ofcommon slocitorProgrcss.^ - W o f Proiicstf'^^h^-Empl^Director Del^ Com^^.87083 corresponding units of^Duke; subjeci.to the same terms and conditions; - -- . iU„;,^ inVv^hnnm- fnr X7(1R1 cmTMnondinfl(5) - Each Ndn^pfeDi^ convenible at ante ofliunit for Isharcof Progress eomrnon stock: wlhout par value-was deposed of pursuant to ihcMergcr.m exchange for .87083 coirespcndmg/uniLs of Duke: sutijccUo the same temts and conditions:Byt.Harris E-beLoach.ir.-byfiolly H; Wengerpuisuant to POA••Signature of Reporting Pereon7/5/2012Date• •Intentional niisstatcmcnis or omissions of facts constitute Federal Criminaf Violations,Sco 18 U.S.C. 1001 and.15 U.S.C. 78n\a).Note; File three copies ofthis Form, oneof which must be manually signed. If space is msuffiaenU Sec In$tructton 6 for procedure.,F:2of;-

From:Sent:to:Cc:Subject:McKee, Marie |Redacted - Personal Info.Friday, July 06, 2012 1:17 PMBak8i\ John D;Harris DieLoach; James B. Hyler Jr.; Carios A; Saladrigas: Theresa M. StoneRe: Next Conference Call new time.Hi all.Call changed to 7:30am on Tuesday July 19.ThanksMarieE. Marie McKee.Redacted - Personal Info.Sent from my iPhoneOn Jul 6; 2612, at 12:29 PM, "Baker, John 0." wrote:> Any chance we cpuld dp. it earlier?That, will be: it: 30 Pm in Botswana . If > we do- to it theri-,however,no problem>> Sent from my.iPad>> On Jul 6, 2012,;-at 6:38 PM, "McKee, Marie">:» Hi All,>>Redacted - Personal Info.>> Our next conference call will be on: Tuesday July 10 at 4:'30pm.»>> The call in informatipn remains the-same.>>>> 888-862-0358>> Access Code 6591081>>» Thanks,>>•; Marie>>.>> Sent froni my iPadwroteLEGPGNDIR00119i

From;Sent:To:Subject:McKee,. Marie |Redacted - Personal InfaFriday, July 06, 2012 1:17 PMHarris DeLoachRe: Next Coriference CallGreat.ThanksMarieE. Marie McKeeRedacted - Personal Info.Sent from my iPhoneOn Jul6- 2012,, at 1:06 PM, "Harris DeLoach" wrote:>. Ms. McKee,> 7:30 a.m. will work for Harris->•> Thanks>•>; Original Message-r--:-^> Frbm: McKee, Marie [Redacted - Personal Info.> Sent:. Friday, July 06, 2012 12:43 PM,> to: Carlos A. Saladrigas,>. Cc: Baker, John 0.; Harris DeLoach; .James B. Hyler Jr.; Theresa M. Stone>. Subject: Re: Next Conference Call>> Harris is, in the air. We will see if he can. do 7:30am.> H>Sent from my iPad>> Oh Jul 6, 2012, at 12:38. PM, "Carlosj A. Saladrigas"wrote:Redacted - Personal Info.> I will, but :John owes me-one!>> Carlos>> On Jul. 6 ; , 2012, at 12:24 PM, McKee, : Marie wrote:>> Could eveiryone. do' .-a 7:30 am call oh Tuesday.?> it. seemed the best' time was late or very early'.> Let me know.> Thanks> Marie>> E. Marie : ;McKee ;> I Redacted - Personal Info.•>1LEG PG N Dl RO01192

' : >, 1Redacted - Persona! Info.>>> Sent from my iPhone:>•Redacted - Personal Info.wrote:>. Any chance we could do;it earlier?That; will be 11:30 Pm in Botswana.If we do to it then,however/no: problem.On Dul 6, 2012, at: 12:20; PM, "Baker, John D.">> Sent from my iPad:,> On Dul6", .2012,. at 6:38 PM, "McKee,: Marie"f wrote:Redacted - Personal Info.>> Hi,All,>>. Our next;conference call will be on tuesday Duly 10 at, 4:30pm.>> The call ih information remains the same.>> 888-862-0358> Access Code 659l'081>> Thaiiks,V Marie>> Sent from my iPad•>;> Carlos A. SaladrigasRedacted - Personal Info.Redacted - Personal Info.>>>>>>> This e-mail message and all documents which accompany it' are intended only for the use ofthe individual or entity to which addressed, and may contain privileged qr confidentialinformation. Any unauthorized disclosure: or distribui:ion ; of this e-mail message is .prohibited, ifyou. have received this e-mail, message in .error, please notify the* sender anddelete this from :all computers.>LEGPGNDIR001193

From: "Jim Hyler | Redacted - Personal Info. ISent:To:Subject:Friday,, July 06, 2012 1:35:PMMcKee, Marie; Theresa M. Stone'; Harris DeLoach; 'Garlos A: Saladrigas'FW: : .WSJ DEALS ALERT: Former Progress Eriergy Director Blasts; Duke CEO SwitchFYI.-Original Message---From: WS3.COm Editorsj Redacted - Personal Info. \Sent: Friday, July 06, 2012 11:00 AM.Jp'. | Redacted - Personal Info. ~|Subject: WSJ DEALS'ALERT:: Former Progress Energy Director Blasts- puke CEO SwitchDeals Alertfrom The Wall Street JournalThe former top director at-Progress Energy inc.. blasted merger par.tner Duke Energy Corp.'squick change of CEOs' after the deal closed, calling it "an: incredible act "of bad faith."The comments, in a letter sent to the editorial page; of The Wall. Street Journal, came afterDuke's bpard removed former Progress Chief• Executive-Bill Johnson from his post atop thercombined company just hours after he started the job. The board then replaced him with JimRogers, who was 'Duke's? CEO befbre "the mergervhttp://online.wsi.com/artkle/s'Bi000142405'2702394i412045ÊALS'Read the earlier Journal story, LBehind Duke'-s CEO-fpr-a-Day,:http://online.wsj.com/article/SB1000^1424052702303684004577509223109488332.html?mod=diemalertDEALSSUBSCRIPTION INFORMATION,TO UNSUBSCRIBE DIRECTLY from Jhis listy, go; to:http://setup.wsi.com/EmailSubMgrYour request will take:effect within 48 hours.TO VIEW OR CHANGE any of .your e-mail settings, go to. the ;E-Mail Setup Center:http://ohline.wsi•com/emailYpu are currently subscribed as iimhvlenS)gmail;cdmFOR FURTHER ASSISTANCE,, please; contact' Customer Service at, 1-800-JOURNAL. (1-800-568-7625)between the hours of 7 am .- :10 :pm Monday - Friday ET arid 8: am -. 3 pm Saturday. ET or e-mailonllneiournal@wst.cbm.Copyright-2012 Dow 3pnes.fi Company, inc. All. Rights Reserved..iLEGPGNDIR0Q1194

LEGPGNDIR001195

From:Sent:To:Rogers, Jim [Jim.Rogers@duke-ehergy.co'm]Friday, July 06, 2012 1:55 PMBernhardt,. Alex - bernhardt;Redacted - Personal Info.Cc:Subject:Follow Up Flag:Flag Status:Manly, Marc.E-Update on post-ciose media and other eventsFollow upFlaggedI am. confident that you have; been reading stories about our tuesday announcement over thepast 4,days.We have been consistently stressing that we are not goirig to comment on .the board'sdeliberations.The tone of the stories changed today as a consequence of several former Progress directprs.Who did hot join.the Duke'board, talking to the media.Also, I am executing pn plans to urge the .5 named executives' from Progress to be leaders inthe combined company. I have expressed my strong; desire .to have them commit to, the. new Duke.We will send you-a more detaHed email, later today. If you, have any questions, please don'thesitate tb give me .a •Call . | Redacted - Personal Info. |LEGPGNDIR001196

From:Sent:To:Subject:Harris DeLoachFriday,.Jul/ 06, 2012 3:47 PM •Harnngtoh; ; Sue GRE: DUK Common StockSue/my wife and I both owned Duke stock ipripr to-the. mergepjhowever,I am riot certain of thenumber of shares.I. will return, home on, Sun.from holiday arid will get : 'the info.to ybu earlynext:weekRegardSj.Harris.From: Harrington, Sue C [Sue.HarHrigtdn@duke-ener'gy.cpm]Sent:. Friday, 3uly 86, 2012 16:18 AMTo: John Baker f| Redacted - Personal Info. D; Harris DeLoach; James Hyler | Redacted - PersonallnfaMarie McKee j Redacted - Personal Info. ( Redacted - Personal Info. ); Theresa ;StOne|~ Redacted-Personal InfoSubject: DUK Common StockIn order to file certairil neflUired infprmation with the SEC and. NYSE regarding our newdirectors, please let me know if 1ypu' : held any shares: of DUK .common stock prior to thecompletion of the merger on July 2,' 2012. If so, please disclose .the number of shares(before taking into account -the reverse 'Stock split) that you held.I would appreciate your ; fl'ui'ck'"response*because these filings will need to be completed early*next.week.Thank you.SueSue C. HarringtonAssistant Corporate SecretaryDuke Energy Corporation550 South Tryon .St/DEC45AP.O. Box 1321 (28201)'Charlotte, NC 28502Phone: 704-382-8144Fax: 980-373-8535Sue.Harrington0duke-eriergv.comLEGPGNDIR001197

From;Sent:To:Subject:Harrington, Sue C [Sue.Hafringtbn@duke-energy.cpm]Friday, Juiy 06, 2012 3:49 PMHams DeLoachRE: DUK Common StockThat' sounds great!Have^ a?•wonderful, trip!Sue--r--Original MessageFrom: Harris DeLoachSent: Friday, Duly 66, 2012 3:47'PMTo: Harrington, Sue CSubject: RE: DUK Common StockRedacted - Personal Info.Sue,my wife arid I both owned Duke stock prior to the merger,howeveril am not certain of thenumber of shares.I. will return, home on; Sun. from holiday arid will, get; t'he i rifp. to you earlynext, weekRegards,Harris:From: Harrington, Sue C [Sue.Harrington@duke-energy.com]Sent: Friday, ,3uly 06, 2012 16:18 AMRedacted - Personal Info.to : Dohn Baker f~ Redacted - Personal info. 1; Harris .DeLpach; Dames , HylerRedacted - Personal Info.Redacted - Personal Info. Theresa Stonel Redacted - Personal Info.Marie McKeeSubject: Duk Common StockIn order to file.certain required information with the SEC and NYSE regardirig our newdirectors, please let me know if ypu held any shares of DUK common stock prior to thecompletion of the merger on Duly> 2, 2012.. If so,, please disclose .the number of shares(before taking-, into account the reverse stock split)* that ,you held..I would appreciate your quick response because these filings will need to be completed earlynext-week.Thank you.SueSue C. HarringtonAssistant Corporate .SecretaryDuke Eriergy Corporation550 South" Trypn St/DEC45AP.O. Box 1321 (28201)Charlotte, NC 28202Phone: 704-382-8144Fax: 980-373.8535;Sue.Harringtori(Sduke-erierEV;ComThis' e-mail message arid all ddcumerits which accompany it are'; intended drily for the' use: of theindividual or entity to which addressed, and may contain privileged br~confidential"informatiori. Any unauthorized disclosure or distribution of this e-mail message isLEGPG NDIR001198

prohibited.. If you have •.received, this e-mail, message- iri •error--, please notify.' the sender ;ariddelete-this froni all computers.LEGPGNDIR001199

From:Shiel, Tom Jr [Tom.Shiel@duke-energy.com]Sent:Friday, July 06, 2012 4:08 PMSubject: Most recent merger-related media coverage -3 p.m. ET 7/6/12Attachments:DUK. 07.06.12 News {3.00PM Update) (00470144).DOCHere is the 3 p.m. collection of merger-related stories. I will be sending you the 1 p.m. collection next.NATIONAL PRESSWall Street JournalFormer Progress Energy Director Blasts Duke CEO SwitchBy Joann S. Lublin and Rebecca Smith6 July 2012The former top director at Progress Energy Inc. blasted merger partner Duke Energy Corp.'s quickchange of CEOs after the deal closed, calling it "an incredible act of bad faith."The comments, in a letter sent to the editorial page of The Wall Street Journal, came after Duke'sboard removed former Progress Chief Executive Bill Johnson from his post atop the combinedcompany just hours after he started the job. The board then replaced him with Jim Rogers, who wasDuke's CEO before the merger.Mr. Johnson, 58 years old, had been slated to be CEO ofthe combined company since January2011, when Duke and Progress announced their $26 billion merger. In fact, it was written into themerger agreement that he would take the top job."This was a critical element in the merger deliberations of our Board," John Mullin, former leaddirector of Progress, said in the letter. "I do not believe that a single director of Progress would havevoted for this transaction as structured with the knowledge that the CEO of Duke, Jim Rogers, wouldremain as the CEO ofthe combined company."Duke has said Mr. Johnson left by mutual agreement with the board.In an interview Friday. Mr. Mullin accused former Duke directors who dominate the newly mergedboard of reneging on their commitment to make Mr. Johnson CEO ofthe combined enterprise."Being the CEO for a very short period of time and then being asked to resign so the former CEOcould become CEO, that was not our understanding of what it meant for Bill to be CEO ofthecombined companv." he said.As reported in The Wall Street Journal, Mr. Johnson signed his employment contract on June 27, andit went into effect on July 2 when the deal closed. That afternoon, the new board, about two-thirds ofwhich was made up by former Duke directors, met and decided Mr. Johnson needed to be removedfrom the top job, people familiar with the matter said.Mr. Rogers, 64, was then named CEO.LEGPGNDIR001200

Outsiders considered the turn of events highly unusual. New chief executives almost never quit daysafter accepting an employment contract, executive-compensation consultants said.It "is very odd" for a CEO to exit days after taking command, said David Schmidt, a consultant atJames F. Reda & Associates, a compensation consulting firm in New York that wasn't involved witheither company. "I have never seen that before."Stuart Zimmer, a New York hedge-fund manager whose firm, Zimmer Lucas Partners LLC, is aninvestor in Duke and once was an investor in Progress, said he was surprised when Mr. Rogers waswilling to step aside as he has known Mr. Rogers for around 20 years and found him a "very smart"manager."He has one of the best track records," Mr. Zimmer said of Mr. Rogers. Though he was also surprisedbv this week's switch, he wasn't worried bv it, adding "It's an incredibly well run companv and it'sprobably a bit of a buying opportunity right now."One consequence ofthe way the change was handled is Mr. Johnson's exit will cost Duke up to $1.5million more than he would have received under the contract he had as Progress CEO.There had been questions from the beginning about whether Mr. Rogers would be comfortable notholding the CEO's post. But the two men agreed to their new jobs in 2011, a new senior team was putin place and then they waited 18 months for the deal to close, one person familiar with the mattersaid.The merger of Progress and Duke creates one ofthe largest utility companies in the U.S., withoperations in six states. After striking the deal, the companies added provisions to provide someprotection to shareholders from potential liabilities related to projects facing regulatory scrutiny.LEGPGNDIR001201

Wall Street JournalAt Work: When the Office Plots Against YouBy Melissa Korn6 July 2012Plots to overthrow the king are mainstays of literature and history, the stuff of Shakespeare, JuliusCaesar and "Game of Thrones".In executive suites — the sites of modern-day palace intrigue — such plots aren't as rare as youmight think. The Journal is reporting on the unusual C-suite drama at Duke Energy Corp., where CEOBill Johnson was ousted after company board of directors had a change of heart-mere hours after hetook the job. Johnson's replacement, Jim Rogers, is Duke's former CEO and the company'sexecutive chairman.Johnson isn't the only executive to fall amid a palace coup. While Pfizer CEO Jeff Kindler lasted alittle longer atthe helm, he also faced a mutiny of sorts in late 2010. (See this gripping 2011 Fortunepiece for details of his downfall.)While it's harmful to assume everyone from your assistant to your VP is plotting your downfall,sometimes it's wise to heed your nagging conspiracy theories. While it's unclear exactly how Johnsoncame to lose his CEO perch, it's clear someone within the company was unhappy with his ascension.Here are some signs that a coworker may be plotting against you, from Roy Cohen, a New Yorkbasedexecutive coach and author of The Wall Street Professional's Survival Guide.-You're left off the invite list for a big meeting. Overt exclusion actually happens pretty regularly,Cohen says, and it should be a major red flag. The good news is, even if you're not terribly observantor even a little dense ("I thought it was a birthday party!"), you'll get ample opportunity to pick up onthe clues. "It usually takes a while for people to scheme," Cohen says. "You have some time to readthe tea leaves."-You're the latest in a rapid-fire string of people to hold the same job. If no one else has succeeded inthat role, chances are you won't, either.-The board sets an impossibly ambitious agenda. This can happen when a bitter runner-up for yourjob holds a grudge, or a board member who voted against you is eager to prove they were right.-Your subordinates start jumping ship. Employees who think their boss is headed out the door willalign themselves with whomever they think will come out on top, to ensure their own jobs are safe.Keep an eye out for staffers who openly challenge your authority in front of other leaders. Cohen saysit's a possible attempt to distance themselves from you and diminish your standing.When his executive clients are headed into high-profile positions, Cohen advises them to preparefrom the worst, right from the start. Negotiating an aggressive separation package will give you peaceof mind if the relationship should turn sour, he says. What's more, it may motivate others to play fairso they can avoid making a costly payout.LEGPGNDIR001202

NEWSWIRESReutersEx-Progress director slams Duke Energy CEO shuffleBy Ernest Scheyder and Michael Erman6 July 2012Duke Energy Corp acted in "bad faith" when it replaced former Progress Energy Chief Executive BillJohnson with Duke's Jim Rogers, just a day after a deal to combine the two companies closed,Progress' former lead director said in an open letter.Duke (DUK.N) completed its $18 billion buyout of Progress on Monday, and on Tuesday the Dukeboard announced that Johnson, who had been slated to run the combined company, was leaving by"mutual agreement."The decision came as a surprise to many Duke shareholders, Wall Street analysts, and utilitycommissions that had approved the deal.Replacing Johnson "can only be described as an incredible act of bad faith with regard to theundertakings ofthe merger agreement," John Mullin, former lead director at Progress, said in thepublic letter dated July 5. "I think it was a clearly premeditated contravention of one of the mostcentral tenets of our agreement."The decision by the 18-person Duke board, with 11 legacy Duke directors and seven Progressdirectors, to install Rogers as CEO was "the most blatant example of corporate deceit that I havewitnessed," Mullin wrote.Duke declined to comment on Friday. Earlier in the week, the company and its lead director, AnnMaynard Gray, declined to give any further details about Johnson's resignation.Under a non-disparage clause in the separation agreement, Johnson and Duke are not allowed tomake statements that cast the other "in a critical or unfavorable light."The deal, announced in January 2011, created the largest U.S. power company, with 57,000megawatts of generating capacity and 7.1 million electricity customers in North Carolina, SouthCarolina, Florida, Indiana, Kentucky and Ohio.It also became the second largest U.S. operator of nuclear power plants.The original plan had been for Rogers to serve as executive chairman ofthe combined company, withJohnson as president and CEO.Johnson was on the board when the decision was made, along with Rogers. It is not clear if eitherman voted on the CEO change, though Johnson has now left the Duke board, reducing its size to 17.Duke shares have dropped 4.4 percent since the announcement on Tuesday morning. Bycomparison, Standard & Poor's' utilities index .GSPU is down about 1.4 percent over the sameperiod.In Friday afternoon trading, Duke shares were down 2.8 percent to $66.64 amid a broad market slide.(4LEGPGNDIR001203

Despite the controversy, corporate governance expert and University of Delaware professor CharlesElson said he was untroubled by the move."Until the two companies come together, you never know who will be the best," Elson said. "Theboard's job is to pick who is the most effective leader, period. Sometimes before a merger, oneperson appears better and after a merger someone else appears better."NO WORRY FROM REGULATORThe controversy did not appear to concern some state regulators."We have great respect for Bill Johnson, but we also have great respect for Jim Rogers," said DukesScott, executive director ofthe South Carolina Office of Regulatory Staff, which participated in themerger deliberations in North Carolina to protect the interests of utility customers in South Carolina."I don't think the result would have been any different as far as the position we took in North Carolinaon the merger... had we known Jim Rogers was the CEO rather than Bill Johnson," Scott said.Johnson's departure from Duke did cost him a leadership position at the Nuclear Energy Institute, thenuclear industry's Washington-based trade group.Johnson, elected in May to a second one-year term as chairman ofthe organization, was no longereligible to lead NEI once he resigned, an NEI spokesman said in an email.Johnson's resignation is not without precedent among large companies that have combined.John Thain was forced to quit as head of Bank of America Corp's (BAC.N) investment banking andwealth management business just three weeks after he sold Merrill Lynch to the bank, after the scopeof losses from mortgages and toxic debt on Merrill's books came to light.And Citigroup Inc's (C.N) plan to have Sandy Weill and John Reed serve as co-chairmen and co-CEOs after Citicorp merged with Travelers in 1998 lasted about a year and a half. Reed steppeddown in 2000.LEGPGNDIR001204

Reuters BreakingViewsElectric ShockBy Christopher Swann6 July 2012Leadership is supposed to have its privileges. So naming the chief executive was a prize electric firmProgress Energy demanded when selling itself to larger rival Duke Energy. In return they accepted atiny premium. That Progress' man Bill Johnson lasted only hours in his job is a reminder to investorsnever to sacrifice value for the prestige of getting the top job.When Jim Rogers, Duke Energy's veteran chief executive, consummated his takeover of Progress inJanuary 2010 he joked with analysts about arm-wrestling his successor as leader ofthe combinedcompany. He noted that Johnson, a powerfully built former Penn State football player, was likely towin any such battle of strength. When it came to the power struggle, however, Rogers lost no time inslamming his rival.This was an unequal match. After the merger Duke, whose shareholders owned 63 percent of thenew firm, controlled 11 ofthe board's 18 board seats. Former Progress directors understandably feelaggrieved at this unexpected act of aggression. One, John Mullin, described it as "one ofthe greatestcorporate hijackings in U.S. business history." At the time the Progress board accepted a tiny 4percent takeover premium, modest even by the standards of the electric sector.The ousting of Johnson is hard to explain in anything other than Machiavellian terms. True, one ofProgress Energy's nuclear reactors in Florida is having some costly technical problems. Still, suchmishaps are not unheard of and should not disqualify Johnson from leading the combined group.Rather it seems that Rogers and his entourage were unwilling to play second fiddle.Nobody comes out ofthis looking good. Anyone negotiating with Rogers in the future is likely to beextra cautious. Those who handled Progress' side ofthe deal end up seeming hopelessly naive.To be sure, there is no clear financial loser here. Johnson walks away with close to $45 million andshares in the combined company are up about 30 percent since the deal, slightly more than rivals.Still, the lesson for investors is clear. Compromising on a premium in exchange for leadership is amug's game.LEGPG NDI RO01205

REGIONAL PRESSLos Angeles TimesCEO-for-a-day parachutes out of Duke Energy with $44 millionBy Tiffany Hsu6 July 2012For one day's work, $44 million is a pretty sizable paycheck.For a few hours this week, William D. Johnson served as chiefexecutive of Duke Energy Corp.before resigning. His departure package could include $7.4 million in severance, relocation expensesand more, according to a securities filing.Johnson, formerly CEO of Progress Energy Inc., signed a contract on June 27 to head up Duke forthree years. He assumed the position on July 2, when a long-planned, multibillion-dollar mergerbetween Progress and Duke, an electric utility focused in the Southeast, went into effect.The buyout made Charlotte, N.C.-based Duke the largest power company in the country.By the next day, through "mutual agreement," he was out ofthe C-suite, replaced by Duke's formerchief James Rogers. On a conference call, Duke executives declined to discuss the rationale forJohnson's departure.One of the conditions for the exit deal was that Johnson not badmouth his former employer. Heprobably won't get the chance: Plenty of others are doing it for him.John H. Mullin III, former lead director of Progress, wrote an open letter to several news organizationsdecrying the ouster, calling it "the most blatant example of corporate deceit that I have witnessedduring a long career on Wall Street.Mullin, who will not join the board of the combined company, called the switcheroo "one of thegreatest corporate hijackings in U.S. business history" and "an incredible act of bad faith."The executive contortions also rubbed many investors the wrong way. In afternoon trading in NewYork, Duke stock was down 2.7%, or $1.87, to $66.70 a share. That's a nearly 5% slide from thestock price before the executive lineup was announced.Standard & Poor's has threatened to slash Duke's ratings.LEGPGNDIR001206

NBC 17Utilities Commission may investigate ouster of Progress Energy CEOBy Dane Huffman6 July 2012The general counsel forthe North Carolina Utilities Commission said the commission is evaluatingwhat to do now that Duke Energy has taken over Progress Energy and removed CEO Bill Johnson."We are considering what steps to take," Watson told NBC-17.The commission could decide to demand documents and have testimony into what drove Johnson'sdeparture. The Utilities Commission approved the merger last week.Johnson had been CEO of Progress Energy and was to be CEO ofthe merged companies. Butimmediately after the deal, Johnson was pushed out in what was termed a "mutual agreement." DukePower CEO James Rogers of Charlotte will be chairman and CEO.Bloomberg News has reported that Johnson's total compensation will be $44 million.The announcement was a continued blow for Raleigh, which loses the headquarters of a Fortune 500company and sees job cuts in the market. Progress Energy has been a driving economic force in themarket, contributing money, for example, to arts and cultural events.Rogers told Bloomberg the company expects to shed about 1,800 workers and about 1,200 alreadyhave accepted severance packages.Johnson's quick ouster stunned some company leaders. Former Progress board member John MullinIII wrote the Wall Street Journal on Thursday, stating: "I do not believe that a single director ofProgress would have voted for this transaction as structured with the knowledge that the CEO ofDuke, Jim Rogers, would remain as the CEO ofthe combined company."Progress board member Jim Hyler of Raleigh would not comment when reached by NBC-17 Friday.Hyler referred comments to Duke, which promised a comment later Friday.LEGPGNDIR001207

TRADE/BUSINESS PUBLICATIONSForbesJohnson Rakes In $44 Million After One-Day Gig As Duke Energy CEOBy Steve Schaefer6 July 2012When two companies merge, it is not unprecedented for two CEOs to jointly rule the combined entity,often as chairman and chiefexecutive.Such was the plan at Duke Energy, following the utility's $26 billion tie-up with Progress Energy thatclosed Tuesday.Something odd happened before the deal formally closed though, as the press release announcingthe deal's wrap-up included the surprising news that former Progress chief Bill Johnson, set to run thecompany moving forward would resign. Duke boss Jim Rogers, who had been tabbed as executivechairman, assumed the CEO post, but not without criticism.John Mullin, who had been lead director ofthe Progress Energy board, slammed the move as "anincredible act of bad faith," calling it "corporate deceit," according to a letter sent to both the WallStreet Journal and DealBook.It wasn't all bad for Johnson. As the.Los Angeles Times reports, his one-day tenure could bring himup to a $44 million post-exit payday, which includes $10.3 million in severance, bonus and otherbenefits given his "agreement to non-competition, non-solicitation, non-disparagement andconfidentiality covenants," according to an SEC filing. Not bad for one day on the job, but while thingsmay not turned out so terribly for Johnson, they certainly drew Mullin's ire."I do not believe that a single director of Progress would have voted for this transaction as structuredwith the knowledge that the CEO of Duke, Jim Rogers, would remain as the CEO of the combinedcompany," Mullin wrote.To read Mullin's description, the move was nothing less than a bait-and-switch on Progress Energyinvestors and former directors, who expected the result of a merged company run by Johnson only tosee the rug pulled out in a boardroom coup just as the transaction closed.According to Deaibook the board, largely led by former directors of Duke:voted to request Mr. Johnson's resignation and retain Mr. Rogers as chiefexecutive ofthe mergedbusinesses.Mr. Johnson complied with the board's request, which was made directly to him by Duke's leaddirector, Ann Maynard Gray. He was shocked by the board's action, according to a friend, andsubmitted his resignation on July 3, just hours before Duke announced that Mr. Rogers would takeover.via Uproar Over C.E.O.'s Ouster at Merged Energy Giant - NYTimes.com.In Tuesday's press release touting the close ofthe Duke-Progress merger, Maynard Gray saidRogers "is well-suited to lead the integration effort and to drive our combined businesses forward,"given his 23 years at the helm of Duke and predecessor companies. "Bill Johnson has been9LEGPGNDIR001208

instrumental in helping us close the merger with Progress Energy, and we wish him well in his futureendeavors."A Duke spokesman said the company does not comment on the deliberations of its board.One analyst who covers the company says that while he was not privy to the board's thinking, itseems that Rogers "was not quite ready to move on" and that the majority Duke board was morecomfortable keeping him in place. One wrinkle worth considering is whether the change impacts thecompany's relationship with regulators, a critical one for any utility, given that the leadershiparrangement explicitly described in the merger plan is no more.Standard & Poor's expressed concerns with the move earlier this week, putting Duke's A- rating onnegative CreditWatch. "The sudden shift in management raises concerns about effective corporategovernance, successful handling ofthe anticipated merger integration and the ongoing effectivemanagement of pending challenges that face the combined entity," said S&P's Dimitri Nikas.Shares of Duke Energy fell 2.8% to $66.64 Friday.10LEGPGNDIR001209

JOBLB FRANK, WILKINSON BRIMMER KATCHBBDuke EnergyMedia CoverageTAHLE OF CONTENTSFriday; July 06, 2012-3:00PM ET UpdaleNational Press• Wall Street Journal: At Work: When the Office Plots Against You• Wall Street Journal: Former Progress Energy Director Blasts Duke CEO SwitchNewswires• Reuters BreakingViews: Electric Shock• Reuters: Ex-Progress director slams Duke Energy CEO shuffleRegional Press• Los Angeles Times: CEO-for-a-day parachutes out of Duke Energy with $44 million• NBC 17: Utilities Commission may investigate ouster of Progress Energy CEOTrade/Business Publications• Forbes: Johnson Rakes In $44 Million After One-Day Gig As Duke Energy CEOLEGPGNDIR001210

DUK: Media Coverage7/6/12 - 3:00PM ET UpdalePage 2 of 11NATIONAL PRESSWallStreet JournalFormer Progress Energy Director Blasts Duke CEO SwitchBy Joann S. Lublin and Rebecca Smith6 July 2012The fonner top director at Progress Energy Inc. blasted merger partner Duke Energy Corp.'s quick changeof CEOs after the deal closed, calling it "an incredible act of bad faith."The comments, in a letter sent to the editorial page of The Wall Street Journal, came after Duke's boardremoved former Progress Chief Executive Bill Johnson from his post atop the combined company justhours after he started thejob. The board then replaced him with Jim Rogers, who was Duke's CEO beforethe merger.Mr. Johnson, 58 years old, had been slated to be CEO of the combined company since January 2011,when Duke and Progress announced their $26 billion merger. In fact, it was written into the mergeragreement that he would take the top job."This was a critical element in the merger deliberations of our Board," John Mullin, former lead directorof Progress, said in the letter. "I do not believe that a single director of Progress would have voted for thistransaction as structured with the knowledge that the CEO of Duke, Jim Rogers, would remain as theCEO of the combined company."Duke has said Mr. Johnson left by mutual agreement with the board.In an interview Friday, Mr. Mullin accused former Duke directors who dominate the newly merged boardof reneging on their commitment to make Mr. Johnson CEO ofthe combined enterprise."Being the CEO for a very short period of time and then being asked to resign so the former CEO couldbecome CEO, that was not our understanding of what it meant for Biil to be CEO of the combinedcompany." he said.As reported in The Wall Street Journal, Mr. Johnson signed his employment contract on June 27, and itwent into effect on July 2 when the deal closed. That afternoon, the new board, about two-thirds of whichwas made up by former Duke directors, met and decided Mr. Johnson needed to be removed from the topjob, people familiar with the matter said.Mr. Rogers, 64, was then named CEO.Outsiders considered the turn of events highly unusual. New chief executives almost never quit days afteraccepting an employment contract, executive-compensation consultants said.It "is very odd" for a CEO to exit days after taking command, said David Schmidt, a consultant at JamesF. Reda & Associates, a compensation consulting firm in New York that wasn't involved with eithercompany. "I have never seen that before."Stuart Zimmer, a New York hedge-fund manager whose firm, Zimmer Lucas Partners LLC, is an investorin Duke and once was an investor in Progress, said he was surprised when Mr. Rogers was willing to stepaside as he has known Mr. Rogers for around 20 vears and found him a "very smart" manager.LEGPGNDIR001211

DUK: Media Coverage7/6/12 - 3:00PM ET UpdatePage 3 of 11"He has one of the best track records," Mr. Zimmer said of Mr. Rogers. Though he was also surprised bythis week's switch, he wasn't worried by it, adding "It's an incredibly well run companv and ifs probably abit of a buying opportunity right now."One consequence of the way the change was handled is Mr. Johnson's exit will cost Duke up to $1.5million more than he would have received under the contract he had as Progress CEO.There had been questions from the beginning about whether Mr. Rogers would be comfortable notholding the CEO's post. But the two men agreed to their new jobs in 2011, a new senior team was put inplace and then they waited 18 months for the deal to close, one person familiar with the matter said.The merger of Progress and Duke creates one of the largest utility companies in the U.S., with operationsin six states. After striking the deal, the companies added provisions to provide some protection toshareholders from potential liabilities related to projects facing regulatory scrutiny.LEGPGND1R001212

DUK: Media Coverage7/6/12 - 3:00PM ET UpdatePage 4 of 11Wall Street JournalAt Work: When the Office Plots Against YouBy Melissa Korn6 July 2012Plots to overthrow the king are mainstays of literature and history, the stuff of Shakespeare, Julius Caesarand "Game of Thrones".In executive suites — the sites of modern-day palace intrigue — such plots aren't as rare as you mightthink. The Journal is reporting on the unusual C-suite drama at Duke Energy Corp., where CEO BillJohnson was ousted after company board of directors had a change of heart-mere hours after he took thejob. Johnson's replacement, Jim Rogers, is Duke's former CEO and the company's executive chairman.Johnson isn't the only executive to fall amid a palace coup. While Pfizer CEO JefFKindler lasted a littlelonger at the helm, he also faced a mutiny of sorts in late 2010. (See this gripping 2011 Fortune piece fordetails of his downfall.)While it's harmful to assume everyone from your assistant to your VP is plotting your downfall,sometimes it's wise to heed your nagging conspiracy theories. While it's unclear exactly how Johnsoncame to lose his CEO perch, it's clear someone within the company was unhappy with his ascension.Here are some signs that a coworker may be plotting against you, from Roy Cohen, a New York-basedexecutive coach and author of The Wall Street Professional's Survival Guide.-You're left off the invite list for a big meeting. Overt exclusion actually happens pretty regularly, Cohensays, and it should be a major red flag. The good news is, even if you're not terribly observant or even alittle dense ("I thought it was a birthday party!"), you'll get ample opportunity to pick up on the clues. "Itusually takes a while for people to scheme," Cohen says. "You have some time to read the tea leaves."-You're the latest in a rapid-fire string of people to hold the same job. If no one else has succeeded in thatrole, chances are you won't, either.-The board sets an impossibly ambitious agenda. This can happen when a bitter runner-up for your jobholds a grudge, or a board member who voted against you is eager to prove they were right.-Your subordinates start jumping ship. Employees who think their boss is headed out the door will alignthemselves with whomever they think will come out on top, to ensure their own jobs are safe. Keep aneye out for staffers who openly challenge your authority in front of other leaders. Cohen says it's apossible attempt to distance themselves from you and diminish your standing.When his executive clients are headed into high-profile positions, Cohen advises them to prepare from theworst, right from the start. Negotiating an aggressive separation package will give you peace of mind ifthe relationship should turn sour, he says. What's more, it may motivate others to play fair so they canavoid making a costly payout.LEGPGNDIR001213

DUK: Media Coverage7/6/12 - 3:00PM ET UpdatePage 5 of 11NEWSWIRESReutersEx-Progress director slams Duke Energy CEO shuffleBy Ernest Scheyder and Michael Erman6 July 2012Duke Energy Corp acted in "bad faith" when it replaced former Progress Energy Chief Executive BillJohnson with Duke's Jim Rogers, just a day after a deal to combine the two companies closed, Progress'former lead director said in an open letter.Duke (DUK.N) completed its $18 billion buyout of Progress on Monday, and on Tuesday the Duke boardannounced that Johnson, who had been slated to run the combined company, was leaving by "mutualagreement."The decision came as a surprise to many Duke shareholders, Wall Street analysts, and utility commissionsthat had approved the deal.Replacing Johnson "can only be described as an incredible act of bad faith with regard to the undertakingsof the merger agreement," John Mullin, former lead director at Progress, said in the public letter datedJuly 5. "I think ft was a clearly premeditated contravention of one of the most central tenets of ouragreement."The decision by the 18-person Duke board, with 11 legacy Duke directors and seven Progress directors, toinstall Rogers as CEO was "the most blatant example of corporate deceit that I have witnessed," Mullinwrote.Duke declined to comment on Friday. Earlier in the week, the company and its lead director, AnnMaynard Gray, declined to give any further details about Johnson's resignation.Under a non-disparage clause in the separation agreement, Johnson and Duke are not allowed to makestatements that cast the other "in a critical or unfavorable light."The deal, announced in January 2011, created the largest U.S. power company, with 57,000 megawatts ofgenerating capacity and 7.1 million electricity customers in North Carolina, South Carolina, Florida,Indiana, Kentucky and Ohio.It also became the second largest U.S. operator of nuclear power plants.The original plan had been for Rogers to serve as executive chairman of the combined company, withJohnson as president and CEO.Johnson was on the board when the decision was made, along with Rogers. It is not clear if either manvoted on the CEO change, though Johnson has now left the Duke board, reducing its size to 17.Duke shares have dropped 4.4 percent since the announcement on Tuesday moming. By comparison,Standard & Poor's' utilities index .GSPU is down about 1.4 percent over the same period.In Friday afternoon trading, Duke shares were down 2.8 percent to $66.64 amid a broad market slide.Despite the controversy, corporate governance expert and University of Delaware professor Charles ElsonLEGPGNDIR001214

DUK; Media Coverage7/6/12 - 3:00PM ET UpdatePage 6 of 11said he was untroubled by the move."Until the two companies come together, you never know who will be the best," Elson said. "The board'sjob is to pick who is the most efFective leader, period. Sometimes before a merger, one person appearsbetter and after a merger someone else appears better."NO WORRY FROM REGULATORThe controversy did not appear to concern some state regulators."We have great respect for Bill Johnson, but we also have great respect for Jim Rogers," said DukesScott, executive director of the South Carolina Office of Regulatory Staff, which participated in themerger deliberations in North Carolina to protect the interests of utility customers in South Carolina."I don't think the result would have been any different as far as the position we took in North Carolina onthe merger ... had we known Jim Rogers was the CEO rather than Bill Johnson," Scott said.Johnson's departure from Duke did cost him a leadership position at the Nuclear Energy Institute, thenuclear industry's Washington-based trade group.Johnson, elected in May to a second one-year term as chairman of the organization, was no longer eligibleto lead NEI once he resigned, an NEI spokesman said in an email.Johnson's resignation is not without precedent among large companies that have combined.John Thain was forced to quit as head of Bank of America Corp's (BAC.N) investment banking andwealth management business just three weeks after he sold Merrill Lynch to the bank, after the scope oflosses from mortgages and toxic debt on Merrill's books came to light.And Citigroup Inc's (C.N) plan to have Sandy Weill and John Reed serve as co-chairmen and co-CEOsafter Citicorp merged with Travelers in 1998 lasted about a year and a half. Reed stepped down in 2000.LEGPGNDIR001215

DUK: Media Coverage7/6/12 - 3:00PM ET UpdatePage 7 of 11Reuters BreakingViewsElectric ShockBy Christopher Swann6 July 2012Leadership is supposed to have its privileges. So naming the chief executive was a prize electric firmProgress Energy demanded when selling itself to larger rival Duke Energy. Fn return they accepted a tinypremium. That Progress' man Bill Johnson lasted only hours in his job is a reminder to investors never tosacrifice value for the prestige of getting the top job.When Jim Rogers, Duke Energy's veteran chief executive, consummated his takeover of Progress inJanuary 2010 he joked with analysts about arm-wrestling his successor as leader of the combinedcompany. He noted that Johnson, a powerfully built former Perm State football player, was likely to winany such battle of strength. When it came to the power struggle, however, Rogers lost no time inslamming his rival.This was an unequal match. After the merger Duke, whose shareholders owned 63 percent ofthe newfirm, controlled 11 of the board's 18 board seats. Former Progress directors understandably feel aggrievedat this unexpected act of aggression. One, John Mullin, described it as "one of the greatest corporatehijackings in U.S. business history." At the time the Progress board accepted a tiny 4 percent takeoverpremium, modest even by the standards ofthe electric sector.The ousting of Johnson is hard to explain in anything other than Machiavellian terms. True, one ofProgress Energy's nuclear reactors in Florida is having some costly technical problems. Still, suchmishaps are not unheard of and should not disqualify Johnson from leading the combined group. Rather itseems that Rogers and his entourage were unwilling to play second fiddle.Nobody comes out ofthis looking good. Anyone negotiating with Rogers in the future is likely to be extracautious. Those who handled Progress' side of the deal end up seeming hopelessly naive.To be sure, there is no clear financialloser here. Johnson walks away with close to $45 million and sharesin the combined company are up about 30 percent since the deal, slightly more than rivals. Still, thelesson for investors is clear. Compromising on a premium in exchange for leadership is a mug's game.LEGPGNDIR001216

DUK: Media Coverage7/6/12 - 3:00PM ET UpdatePage 8 of 11REGIONAL PRESSLos Angeles TimesCEO-for-a-day parachutes out of Duke Energy with S44 millionBy Tiffany Hsu6 July 2012For one day's work, $44 million is a pretty sizable paycheck.For a few hours this week, William D. Johnson served as chief executive of Duke Energy Corp. beforeresigning. His departure package could include $7.4 million in severance, relocation expenses and more,according to a securities filing.Johnson, formerly CEO of Progress Energy Inc., signed a contract on June 27 to head up Duke for threeyears. He assumed the position on July 2, when a long-planned, multibillion-dollar merger betweenProgress and Duke, an electric utility focused in the Southeast, went into effect.The buyout made Charlotte, N.C.-based Duke the largest power company in the country.By the next day, through "mutual agreement," he was out of the C-suite, replaced by Duke's former chiefJames Rogers. On a conference call, Duke executives declined to discuss the rationale for Johnson'sdeparture.One of the conditions for the exit deal was that Johnson not badmouth his former employer. He probablywon't get the chance: Plenty of others are doing it for him.John H. Mullin III, former lead director of Progress, wrote an open letter to several news organizationsdecrying the ouster, calling it "the most blatant example of corporate deceit that I have witnessed during along career on Wall Street.Mullin, who will notjoin the board of the combined company, called the switcheroo "one of the greatestcorporate hijackings in U.S. business history" and "an incredible act of bad faith."The executive contortions also rubbed many investors the wrong way. In afternoon trading in New York,Duke stock was down 2.7%, or $1.87, to $66.70 a share. That's a nearly 5% slide from the stock pricebefore the executive lineup was announced.Standard & Poor's has threatened to slash Duke's ratings.LEGPGNDIR001217

DUK: Media Coverage7/6/12 - 3:00PM ET UpdatePage 9 of 11NBC 17Utilities Commission may investigate ouster of Progress Energy CEOBy Dane Huffman6 July 2012The general counsel for the North Carolina Utilities Commission said the commission is evaluating whatto do now that Duke Energy has taken over Progress Energy and removed CEO Bill Johnson."We are considering what steps to take," Watson told NBC-l 7.The commission could decide to demand documents and have testimony into what drove Johnson'sdeparture. The Utilities Commission approved the merger last week.Johnson had been CEO of Progress Energy and was to be CEO ofthe merged companies. Butimmediately after the deal, Johnson was pushed out in what was termed a "mutual agreement." DukePower CEO James Rogers of Charlotte will be chairman and CEO.Bloomberg News has reported that Johnson's total compensation will be $44 million.The announcement was a continued blow for Raleigh, which loses the headquarters of a Fortune 500company and sees job cuts in the market. Progress Energy has been a driving economic force in themarket, contributing money, for example, to arts and cultural events.Rogers told Bloomberg the company expects to shed about 1,800 workers and about 1,200 already haveaccepted severance packages.Johnson's quick ouster stunned some company leaders. Former Progress board member John Mullin IIIwrote the Wall Street Journal on Thursday, stating: "I do not believe that a single director of Progresswould have voted for this transaction as structured with the knowledge that the CEO of Duke, JimRogers, would remain as the CEO of the combined company."Progress board member Jim Hyler of Raleigh would not comment when reached by NBC-17 Friday.Hyler referred comments to Duke, which promised a comment later Friday.LEGPGNDIR001218

DUK: Media Coverage7/6/12 - 3:00PM ET UpdatePage 10 of 11TRADE/BUSINESS PUBLICATIONSForbesJohnson Rakes In $44 Million After One-Day Gig As Duke Energy CEOBy Steve Schaefer6 July 2012When two companies merge, it is not unprecedented for two CEOs to jointly rule the combined entity,often as chairman and chief executive.Such was the plan at Duke Energy, following the utility's $26 billion tie-up with Progress Energy thatclosed Tuesday.Something odd happened before the deal formally closed though, as the press release announcing thedeal's wrap-up included the surprising news that former Progress chief Bill Johnson, set to run thecompany moving forward would resign. Duke boss Jim Rogers, who had been tabbed as executivechairman, assumed the CEO post, but not without criticism.John Mullin, who had been lead director ofthe Progress Energy board, slammed the move as "anincredible act of bad faith," calling it "corporate deceit," according to a letter sent to both the Wall StreetJournal and DealBook.It wasn't all bad for Johnson. As the Los Angeles Times reports, his one-day tenure could bring him up toa $44 million post-exit payday, which includes $10.3 million in severance, bonus and other benefits givenhis "agreement to non-competition, non-solicitation, non-disparagement and confidentiality covenants,"according to an SEC filing. Not bad for one day on thejob, but while things may not turned out so terriblyfor Johnson, they certainly drew Mullin's ire."I do not believe that a single director of Progress would have voted for this transaction as structured withthe knowledge that the CEO of Duke, Jim Rogers, would remain as the CEO of the combined company,"Mullin wrote.To read Mullin's description, the move was nothing less than a bait-and-switch on Progress Energyinvestors and former directors, who expected the result of a merged company run by Johnson only to seethe rug pulled out in a boardroom coup just as the transaction closed.According to Deaibook the board, largely led by former directors of Duke:voted to request Mr. Johnson's resignation and retain Mr. Rogers as chief executive of the mergedbusinesses.Mr. Johnson complied with the board's request, which was made directly to him by Duke's lead director,Ann Maynard Gray. He was shocked by the board's action, according to a friend, and submitted hisresignation on July 3, just hours before Duke announced that Mr. Rogers would take over.via Uproar Over C.E.O.'s Ouster at Merged Energy Giant - NYTimes.com.In Tuesday's press release touting the close of the Duke-Progress merger, Maynard Gray said Rogers "iswell-suited to lead the integration effort and to drive our combined businesses forward," given his 23years at the helm of Duke and predecessor companies. "Bill Johnson has been instrumental in helping usclose the merger with Progress Energy, and we wish him well in his future endeavors."LEGPGNDIR001219

DUK: Media Coverage7/6/12 - 3:00PM ET UpdatePage 11 of 11A Duke spokesman said the company does not comment on the deliberations of its board.One analyst who covers the company says that while he was not privy to the board's thinking, it seemsthat Rogers "was not quite ready to move on" and that the majority Duke board was more comfortablekeeping him in place. One wrinkle worth considering is whether the change impacts the company'srelationship with regulators, a critical one for any utility, given that the leadership arrangement explicitlydescribed in the merger plan is no more.Standard & Poor's expressed concerns with the move earlier this week, putting Duke's A- rating onnegative CreditWatch. "The sudden shift in management raises concerns about effective corporategovernance, successful handling of the anticipated merger integration and the ongoing effectivemanagement of pending challenges that face the combined entity," said S&P's Dimitri Nikas.Shares of Duke Energy fell 2.8% to $66.64 Friday.LEGPGNDIR001220

From:Shiel, Tom Jr [Tom.ShieI@duke-energy.com]Sent:Friday, July 06, 2012 4:10 PMSubject: Most recent merger-related media coverage -1 p.m. ET 7/6/12Attachments:DUK News 7 5 12 (1 OOpm ET) (00470091 ).DOCHere is the 1 p.m. collection of merger-related storiesNATIONAL PRESSNew York TimesMorning Take-OutBy William AldenJuly 6, 2012Uproar Over C.E.O;'s Ouster at Merged Energy Giant | A former director involved in the merger thatformed the nation's largest electric utility is lashing out at an abrupt leadership change at thecombined company."This is the most blatant example of corporate deceit that I have witnessed during a long career onWall Street," said John H. Mullin lil, the former lead director of Progress Energy, which completed itsmerger with Duke Energy this week.Duke said Tuesday that it had closed its merger with rival Progress, a $32 billion deal originally strucka year-and-a-half ago. As dictated in the merger agreement, William D. Johnson, the head ofProgress, was to become chiefexecutive ofthe combined company.But in a news release announcing the deal's completion, the company's newly formed board namedJames Rogers, the chiefexecutive at Duke, head ofthe merged business and said that Mr. Johnsonwas leaving the company "by mutual agreement."The news of Mr. Johnson's ouster — and its unusual circumstances — sent Shockwaves through theutility industry. On Thursday, several people connected to the deal expressed disapproval with thelast-minute move, including Mr. Mullin, who did notjoin the merged companies' board.LEGPGNDIR001221

NEWSWIRESAssociated PressEx-Progress Energy directors upset with CEO changeJulyS, 2012Former board members of Progress Energy are upset the chief executive of their company, BillJohnson, was ousted as head of Duke Energy just hours after the companies merged.Former board member Alfred Tollison Jr. says he felt he was misled about the plans for ProgressEnergy's chief to head the newly combined company.Duke's Jim Rogers is now CEO ofthe company. Duke announced the change Tuesday morning. Themerger had been completed Monday afternoon.The North Carolina Utilities Commission is now considering whether to investigate the change inleadership.Standard & Poor's Financial Services said Wednesday it has put Duke on a watch list for a potentialcredit downgrade because Johnson was removed.Duke spokesman Tom Williams says the utility looks forward to resolving those concerns soon.LEGPGNDIR001222

Associated PressProgress Energy CEO ousted after Duke mergerJuly 6, 2012Former board members of Progress Energy are upset the chiefexecutive ofthe Raleigh-basedcompany, Bill Johnson, was ousted as head of Duke Energy just minutes after the companies mergedthis week.Former board member Alfred Tollison Jr. says he felt he was misled about the plans for ProgressEnergy's chief to head the newly combined company, forming the nation's largest electric utility."Just from circumstantial evidence you would have to think it didn't happen overnight, that there was alot of forethought given to it." said Tollison, who was on the Progress board until the merger wascompleted.Duke announced Tuesday that the Charlotte-based company's Jim Rogers was the new CEO, sayingJohnson had resigned by mutual agreement. The merger had been completed Monday afternoon.Duke Energy and Progress Energy said Tuesday they had completed their merger now valued atabout $32 billion to form the nation's largest electric company.The North Carolina Utilities Commission, which had approved the merger last week based on theplans for Johnson to lead the combined companies, is considering whether to investigate the changein leadership.The commission could use its subpoena powers to demand documents and witness testimony if itchose to hold hearings into the surprising switch in the corporate suite."We are still considering what next step to take," the commission's general counsel, Sam Watson,said Friday.Another former Progress board member, John Mullin III, wrote The Wall Street Journal on Thursday,stating: "I do not believe that a single director of Progress would have voted for this transaction asstructured with the knowledge that the CEO of Duke, Jim Rogers, would remain as the CEO of thecombined company."Standard & Poor's Financial Services has put Duke on a watch list for a potential credit downgradebecause Johnson was removed. The Wall Street credit rating service said the leadership changeraises questions about Duke's internal stability, planning and management.Duke spokesman Tom Williams says the utility looks forward to resolving those concerns soon.Another Wall Street service, Moody's Investor Services, kept its ratings and its "stable outlooks" forDuke and Progress, citing the merger benefits. But Moody's did say Johnson's departure does createuncertainty over long-term leadership and could lead to additional turnover in senior management.A number of former Progress executives recruited by Johnson were moving to Charlotte to take theirnew jobs.Johnson several weeks ago said he was planning to move. He had signed his new contract June 27.By resigning, Johnson is entitled to a $10.3 million severance.3LEGPGNDIR001223

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ReutersEx-Progress director slams Duke Energy CEO shuffleJulyS, 2012* Ex-Progress CEO says Duke board acted in "bad faith"* Says "blatant example of corporate deceit"* Governance expert defends Duke board* Duke shares down 4.4 percent since announcementDuke Energy Corp acted in "bad faith" when it replaced former Progress Energy CEO Bill Johnsonwith Duke's Jim Rogers, the former lead director of Progress said in an open letter.Duke closed on its $18 billion buyout of Progress on Monday, and on Tuesday the Duke boardannounced that Johnson, who had been slated to run the combined company, was leaving by "mutualagreement."The decision came as a surprise to many Duke shareholders, Wall Street analysts, and utilitycommissions that had approved the deal.Replacing Johnson "can only be described as an incredible act of bad faith with regard to theundertakings ofthe merger agreement," John Mullin, former lead director at Progress, said in a publicletter. "I think it was a clearly premeditated contravention of one of the most central tenets of ouragreement."The decision by the 18-person Duke board, with 11 legacy Duke directors and seven Progressdirectors, to install Rogers as chief executive officer was "the most blatant example of corporatedeceit that I have witnessed," Mullin wrote.Johnson was on the board when the decision was made, along with Rogers. It is not clear if eitherman voted on the CEO change, though Johnson has now left the Duke board, making its current size17.Duke shares have dropped 4.4 percent since the announcement on Tuesday morning. As acomparison, Standard & Poors' utilities index is down around 1.4 percent over the same period.Despite the controversy, corporate governance expert and University of Delaware professor CharlesElson said he was untroubled by the move."Until the two companies come together, you never know who will be the best," Elson said. "Theboard's job is to pick who is the most effective leader, period. Sometimes before a merger, oneperson appears better and after a merger someone else appears better."Robert Gruber, the chief public advocate at the North Carolina Utilities Commission, told the NewYork Times on Friday he might not have voted to approve the buyout had he known about themanagement change.The deal, which was announced in January 2011, creates the largest U.S. power company, with57,000 megawatts of generating capacity and 7.1 million electricity customers in North Carolina,LEGPGNDIR001225

South Carolina, Florida, Indiana, Kentucky and Ohio. It also becomes the second largest U.S.operator of nuclear power plants.The original plan had been for Rogers to serve as executive chairman ofthe combined company,while Johnson would have been president and CEO.When the deal was announced, Rogers joked that the two executives would settle arguments by armwrestling.LEGPGNDIR001226

REGIONAL PRESSCharlotte ObserverJim Rogers has explaining to do on Duke's shakeupJuly 5, 2012Right up to the last moment, the merger of North Carolina's two big, multistate electric utilities - amerger that creates, in an expanded Duke Energy, the nation's largest utility - was relatively routine,despite some slowdowns along the path to final approval. Then came that last moment.Bill Johnson, surprisingly, was out, his resignation announced early Tuesday with no explanation.Contrary to announced plans and all expectations, the CEO of Progress Energy would not be chiefexecutive of the combined company after all.Instead, the new Duke Energy announced that its own CEO, Jim Rogers, will run the show. The plan,up to Tuesday, had been that Johnson, 58, would be CEO and that Rogers, 64, would be executivechairman.Was there a rift? A change of heart? Some unrevealed business reason? Whatever its cause,Johnson's departure fuels doubts about the merger, particularly in Raleigh and in Eastern NorthCarolina, home to the bulk of Progress Energy's employees and customers.In particular, how will Progress employees fare under the new setup? With Johnson at the helm,Progress employees could at least feel that they had an ally in Charlotte, where Johnson, as recentlyas last month, was looking for a new home.The fact that the nation's No. 1 utility would be Charlotte-based contributed to an atmosphere at theN.C. Utilities Commission that allowed the deal to be done. (The speed bumps along the way camemainly from the Federal Energy Regulatory Commission.)It was certainly a factor, as well, thatthe head of Progress, not Duke, would be CEO ofthe combinedcompany. Notably, Robert Gruber, the state's consumer advocate in utility matters, supported themerger. With news of Johnson's .departure, however, he allowed that "If the Commission had knownabout this prior to the merger, it might have been a different result. The Public Staff has a lot ofrespect for Mr. Johnson and confidence in him. We're not sure how this will work without him."Edward Finley Jr., Utilities Commission chairman, also made a blunt assessment.Duke's Jim Rogers, sensibly enough, quickly made calls to reassure employees and regulators. Butwith even a hint of mystery in the air, the new leader among the nation's electric utilities has apowerful lot of explaining to do, in addition to the long-run task of proving that this merger is reallygood for North Carolina.LEGPGNDIR001227

Charlotte News ObserverBill Johnson's exit threatens Duke Energy's credit ratingBy John MurawskiJuly 5, 2012One of the leading Wall Street credit firms placed Charlotte-based Duke Energy on a watch list for apotential downgrade in the wake of the sudden departure of Bill Johnson, who was slated to be CEOofthe company after it merged with Raleigh-based Progress Energy.Standard & Poor's Financial Services made its "CreditWatch Negative" announcement on July 4when the stock markets were closed. S&P cited "negative implications in response to the abruptchange in executive leadership" made right after the merger closed on Monday afternoon.S&P will next make a decision whether to downgrade Duke from A- to BBB+ or keep the currentrating unchanged. A downgrade would potentially increase the interest rates at which Duke borrowsmoney."The sudden shift in management raises concerns about effective corporate governance, successfulhandling ofthe anticipated merger integration, and the ongoing effective management of pendingchallenges that face the combined entity," said S&P credit analyst Dimitri Nikas in the statement.Translation: Johnson's abrupt departure threatens the status of formerly Progress executives whohave suddenly lost their patron and protector.Corporate mergers are known to trigger power struggles and turf battles among executive ranksfueled by outsized ambitions for power and money. Analysts are concerned that Johnson's departurecould cause internal turmoil and distractions from the company's mission.Duke said Tuesday morning that Johnson left the company by mutual agreement. Johnson had beenCEO of Progress for five years and was to be CEO at Duke after the merger, creating the nation'slargest electric utility. His departure shocked employees and dismayed state regulators who hadapproved the merger on the understanding that Johnson would head the combined company.To many Johnson's exit increasingly looks like a palace coup in which other ex-Progress executivescould depart or be pushed out. However, Duke has offered assurances that all the ex-Progressexecutives have safe jobs if they want them.S&P also put Duke's subsidiaries, including Progress Energy, on CreditWatch with negativeimplications.LEGPGNDIR001228

Charlotte Business JournalDuke Energy quiet on Progress CEO departureJuly 5, 2012The lead director for Duke Energy Corp.'s board says the company will not have any further commenton Bill Johnson's departure as chiefexecutive ofthe company following its merger with ProgressEnergy Inc. Duke says his exit was a mutually agreed decision, according to the Charlotte BusinessJournal.Johnson, who had been chiefexecutive of Raleigh-based Progress, was to become CEO ofthecombined company under the terms of their merger agreement. He submitted his resignation after thedeal was complete.Duke has customers in the Dayton region in Butler and Warren counties, as well as a small part ofMontgomery County and throughout Southwest Ohio.LEGPGNDIR001229

Charlotte Business JournalReport: New Duke Energy board pushed Johnson outBy John DowneyJuly 6, 2012The Wall Street Journal reports that former Progress Energy Chief Executive Bill Johnson waspushed out as Duke Energy CEO by the Duke board, which concluded he was the wrong man for thejob.The report cites unnamed "people familiar with the matter" as saying the board decided theagreement to put Johnson in charge, included in the merger contract signed 18 months ago, "wasn'tgoing to work."Instead the board appointed Jim Rogers, the executive chairman who had been Duke's CEO goinginto the deal, as CEO. Johnson, who actually became CEO of Duke briefly under the terms of thatmerger contract, was surprised by the decision, the paper says.The Journal reports:Mr. Rogers's advocates viewed him as a consensus builder whose style was better suited tothe task of bringing two firms together, one person said. He also had run the larger company.The board informed both men of its decision after the meeting and came to an agreement thatMr. Johnson would step down, people familiar with the matter said.The article does not cite any specific reason for the dissatisfaction with Johnson. And it does not saywhether the board was divided on the decision. With Rogers and Johnson out of the room, the votingmembers would have been 10 directors from the old Duke board and six from Progress.When the $32 billion merger closed Monday at 4:02 p.m., both Johnson and Rogers were on the new,18-member board. The board met after the merger closed, the paper says, but neither Johnson norRogers were in that meeting.Johnson resigned as CEO and as a board member effective Tuesday at 12:01 a.m. He will receive aseverance package worth more than $10.3 million. He has not been replaced on the Duke board.Rogers retains his title of board chairman.The Charlotte Business Journal has a story in its Friday print edition on additional fallout from theswitch at the top position.10LEGPGNDIR001230

WRAL.comEx-Progress CEO may get $44.7 million from DukeJuly 6, 2012Former Progress Energy Inc. Chief Executive Officer Bill Johnson, who unexpectedly resigned afterDuke Energy Corp. completed its takeover ofthe company on Monday, may collect as much as $44.7million after his exit.The total compensation is four times what was reported initially about Johnson's severance filingbased on a Securities and Exchange Commission filing Duke Energy made after Johnson's departurewas disclosed Tuesday morning.In further analysis ofthe filing and based on information from Tom Williams, a spokesman for DukeEnergy, Bloomberg news breaks down Johnson's compensation as:• $12.7 million for pension benefits and deferred compensation• $14.3 million for vested stock awards• a possible $7.4 million payment for taxes and• as much as $10.3 million for severance, bonus and lump-sum paymentsMeanwhile, speculation continues to swirl about why Johnson left after only a brief time in the role asCEO ofthe combined Duke Energy-Progress Energy. He was replaced by James Rogers, chairmanand chief executive of Duke, who had been scheduled to become chairman of the combined utility.The Wall Street Journal, citing unnamed sources, said the decision to replace Johnson as CEO cameshortly afterthe merger closed Monday and its new 18-member board met. Eleven Duke appointeesand seven from Progress, including Johnson, comprised the board."Messrs. Johnson and Rogers attended the meeting, but then left when the board went into executivesession - the portion ofthe meeting without management. There, directors deliberated changing thetwo executives' roles. The board decided the initial arrangement wasn't going to work," the Journalsaid."Mr. Rogers' advocates viewed him as a consensus builder whose style was better suited to the taskof bringing two firms together, one person said. He also had run the larger company. The boardinformed both men of its decision after the meeting and came to an agreement that Mr. Johnsonwould step down, people familiar with the matter said."Duke's $17.8 billion takeover of Progress, announced in January 2011, created the largest U.S. utilityowner by market value.Duke announced Johnson's resignation as being a "mutual agreement."Standard & Poor's Rating Services said July 3 it was placing Duke on negative credit watch after "theabrupt change in executive leadership."Johnson, 58, has been the chairman and CEO of Raleigh-based Progress since 2007. Under terms ofthe takeover, Johnson was supposed to become president and CEO ofthe combined companies.Johnson was entitled to some of the money under his retirement plan and other portions of it weretied to achievement of the company's performance goals, Williams said in a phone interview today.LEGPGNDIR001231

Johnson will get $12.7 million for his accrued and unpaid benefits under Progress Energy's retirementand deferred compensation plans, according to a June 29 filing with the U.S. Securities andExchange Commission.He will receive as much as $14.3 million in accelerated vesting of his restricted and performancestock awards, according to regulatory filings. In addition, he may be eligible for a $7.4 million paymentfor excise and gross-up taxes, said Williams.12LEGPGNDIR001232

NBC 17Utilities Commission may investigate ouster of Progress Energy CEOBy Dane HuffmanJuly 6, 2012The general counsel for the North Carolina Utilities Commission said the commission is evaluatingwhat to do now that Duke Energy has taken over Progress Energy and removed CEO Bill Johnson."We are considering what steps to take," Watson told NBC-17.The commission could decide to demand documents and have testimony into what drove Johnson'sdeparture. The Utilities Commission approved the merger last week.Johnson had been CEO of Progress Energy and was to be CEO of the merged companies. Butimmediately after the deal, Johnson was pushed out in what was termed a "mutual agreement." DukePower CEO James Rogers of Charlotte will be chairman and CEO.Bloomberg News has reported that Johnson's total compensation will be $44 million.The announcement was a continued blow for Raleigh, which loses the headquarters of a Fortune 500company and sees job cuts in the market. Progress Energy has been a driving economic force in themarket, contributing money, for example, to arts and cultural events.Rogers told Bloomberg the company expects to shed about 1,800 workers and about 1,200 alreadyhave accepted severance packages.Johnson's quick ouster stunned some company leaders. Former Progress board member John MullinIII wrote the Wall Street Journal on Thursday, stating: "I do not believe that a single director ofProgress would have voted for this transaction as structured with the knowledge that the CEO ofDuke, Jim Rogers, would remain as the CEO of the combined company."Progress board member Jim Hyler of Raleigh would not comment when reached by NBC-17 Friday.Hyler referred comments to Duke, which promised a comment later Friday.13LEGPGNDIR001233

Triangle Business JournalJohnson might get $44.7M after leaving Duke EnergyBy Chris BaysdenJuly 6, 2012The fallout from Bill Johnson's resignation as CEO at Duke Energy Corp. just keeps getting moreinteresting.Earlier this week we told you that Johnson was slated to receive a cash severance of more than$10.3 million after his unexpected exit from the company, which only hours earlier had completed itsacquisition of Progress Energy . But that cash won't be all Johnson walks away with, according toBloomberg, which reports that Johnson may get as much as $44.7 million when stock, pensionbenefits and the like are taken into account.Duke Energy (NYSE: DUK) is based in Charlotte, while Progress was Raleigh's largest publiccompany.LEGPGNDIR001234

TRADE/BUSINESS PUBLICATIONSMergers & Acquisitions WeekBanking and Finance; Fitch Affirms Progress Energy and Subs' RatingsJuly 11, 2012Fitch Ratings has affirmed the Issuer Default Ratings (IDR) and individual security ratings of ProgressEnergy, Inc. (PGN) and its operating subsidiaries Carolina Power & Light Co. (d/b/a Progress EnergyCarolinas, Inc., [PEC]) and Florida Power Corp. (d/b/a Progress Energy Florida [PEF]). Fitch alsoaffirmed the preferred stock rating of FPC capital I and downgraded PEC's short-term IDR andcommercial paper rating to Tl* from 'FV. The Rating Outlook is Stable for PGN and PEC andNegative for PEF. A full list of the ratings appears at the end of this release.Key rating DriversDuke merger: The rating affirmations incorporate the pending merger with Duke Energy Corp.(DUK), which Fitch considers credit neutral. PGN will be structured as a subsidiary of DUK. The twocompanies have similar credit and risk profiles and there is no incremental debt associated with theplanned stock for stock merger. Longer-term, economies of scale of the merged entity and thegeographic proximity ofthe service territories should create synergy opportunities.High parent debt: PGN's significant parent level debt is supported by dividends from its two verticallyintegrated utilities operating primarily in Florida and North Carolina. Both utilities operate inconstructive regulatory jurisdictions with attractive service territories and provide a predictable sourceof earnings and cash flow to PGN.Rate settlement: The Florida Public Service Commission's (FPSC) recent approval of acomprehensive settlement agreement for PEF, resolves the treatment of all Crystal River 3 (CR3)nuclear unit replacement power costs. The settlement requires a $288 million refund of CR3replacement power costs, primarily in 2013 and 2014 but importantly allows recovery of all other CR3replacement power costs not covered by insurance proceeds.Credit metrics: As expected, PGN's credit metrics weakened in 2011 and will remain under pressureuntil higher rates are implemented in 2013. Fitch estimates consolidated EBITDA/interest anddebt/EBITDA will approximate 3.5x and 4.8x, respectively, in 2012, moderately better than theadjusted (excluding non-recurring items) 2011 results. Ratios should trend upward in 2013, reflectingthe approved tariff increase in Florida and Fitch's expectation of higher rates in North Carolina.Rating ConcernsThe primary credit concerns for PGN are the sizable layer of parent level debt and continueduncertainty surrounding CR3.Parent debt of roughly $4 billion accounts for approximately 30% of consolidated debt and is not likelyto be meaningfully reduced any time soon. The associated interest and common dividendrequirements increase cash flow pressure on the regulated utilities.With respect to CR3, the recovery of repair costs remains uncertain. The treatment of any CR3 repaircosts not recovered from the Nuclear Electric Insurance Limited (NEIL) will be subject to adetermination by the Florida Public Service Commission (FPSC). The amount ofthe repairs and15LEGPGNDIR001235

potential insurance proceeds are unknown. The latest repair cost estimate ranged between $900million and $1.3 billion.LiquidityPGN's has adequate liquidity. Currently, the combined revolving credit agreements of PGN and itssubsidiaries total 1.978 billion. On February 15, 2012, PGN extended the expiration of its $478 millionrevolving credit agreement from May 3, 2012 to May 3, 2013 as a bridge until the merger with Duke iscomplete. Post-merger, PEC and PEF will each have a $750 million borrowing sub-limit in Duke's $6billion credit facility maturing in 2016.Progress Energy CarolinasKey rating DriversSolid financial metrics: Credit metrics are strong, despite some weakening in recent periods. Fitchexpects interest and FFO coverage measures to be well in excess of 6x over the next several yearsand debt to EBITDA to range between 3.0 - 3.25x. Over the past 15 months these measures havebeen adversely affected by unfavorable weather, higher nuclear expenses, merger related integrationcosts and higher debt balances.Rate Support: The ratings and forecasted credit metrics assume a base rate increase in 2013 torecover investments in PEC's fleet modernization plan and other cost of service items. Managementindicated it plans to file a rate case in North Carolina later this year with new rates to be effective mid-2013. The company has not raised base rates since 1988. The above average sales and customergrowth which allowed PEC to avoid base rate filings over the past 24-years has subsided due to theeconomic downturn.Constructive regulatory environment: Fitch considers regulation in North Carolina, PEC's primaryregulatory jurisdiction, to be constructive. North Carolina state regulation permits annual tariffadjustments to recover fuel, demand side management, energy efficiency and certain renewablecosts.Large capital expenditure program: PEC is engaged in a multi-year capex program that will requiredebt financing in each of the next several years and rate support to maintain its current financialposition. The spending program is designed to replace coal-fired generating facilities that do not havesufficient pollution controls to meet existing and pending environmental regulations with new naturalgas- fired generating facilities. Current projects include replacing the coal fired Lee and Sutton plantswith natural gas-fueled combined cycle units. The new natural gas facilities, expected to enter servicein January and December 2013, respectively, have an aggregate generating capacity of 1,545MWcompared to 957MWfor the retiring coal units.Parent leverage: PEC's ratings also consider the upstream dividend payments to PGN, needed tohelp support the substantial holding company debt and its common dividend to shareholders.Progress Energy FloridaThe Negative Outlook reflects the on-going uncertainty related to CR3 and the recent downtrend incredit metrics that is likely to continue through 2012.Key rating Drivers16LEGPGNDIR001236

Rate Settlement: The FPSC's recent approval of a comprehensive settlement agreement resolvesthe treatment of CR3 replacement power costs, but the ultimate amount and recovery of repair costsremains uncertain. Moreover, required rate refunds in 2013 and 2014 will continue to adversely affectcash flow.Credit Metrics: As expected, PEF's credit metrics weakened in 2011, and will remain under pressureuntil higher rates are implemented in 2013. Fitch estimates consolidated EBITDA/interest anddebt/EBITDA will approximate 4.5x and 4.Ox, respectively, in 2012. Ratios should trend upward in2013, reflecting the approved tariff increase in Florida.Constructive regulatory environment: Fitch considers regulation in Florida to be constructive. TheFPSC employs several tariff adjustment mechanisms that benefit cash flow. In addition to a fueladjustment clause, energy conservation expenses, specified environmental compliance costs andqualified nuclear costs are recoverable outside of base rate cases.LEGPGNDIR001237

BLOGSThe Daily BeastDuke CEO Lasts One DayJuly 6, 2012Bill Johnson was slated to become Duke Energy Corp.'s new chief executive ever since Dukeannounced a $26 billion merger with Johnson's former company, Progress Energy Inc. That was 18months ago. On July 2, the merger and his new position went into effect, and on July 3 (at 12:01a.m.) Johnson resigned. Apparently, it only took a few hours on the job to realize that Johnson wasn'tthe right fit for the position. The abrupt change of plans has been called "very odd," but there hadbeen speculation that former chief executive Jim Rogers might not be comfortable relinquishingcontrol over the company. The new board's first meeting on Monday reportedly dissolved quickly intoa discussion of management, ending in the decision that Johnson would not stay on as CEO. Theone-day chief exec will receive up to $44.4 million in exit payments.18LEGPGNDIR001238

Daily PoliticalUBS AG Gives Buy Rating to Duke Energy (DUK)By Trevor KearingJuly 5, 2012Duke Energy (NYSE: DUK)'s stock had its "buy" rating restated by analysts at UBS AG in a researchreport issued to clients and investors on Thursday.A number of other firms have also recently commented on DUK. Analysts at Credit Suisse upgradedshares of Duke Energy from a "neutral" rating to an "outperform" rating in a research note to investorson Monday, June 11th. They now have a $25.50 price target on the stock. Separately, analysts atCitigroup raised their price target on shares of Duke Energy to $23.00 in a research note to investorson Monday, June 4th. Finally, analysts at Macquarie upgraded shares of Duke Energy from a"neutral" rating to an "outperform" rating in a research note to investors on Thursday, May 17th.Duke Energy traded down 0.17% on Thursday, hitting $68.57. Duke Energy has a 52-week low of$50.61 and a 52-week high of $71.13.Duke Energy last posted its quarterly earnings results on Friday, May 4th. The company reported$0.38 EPS for the quarter, beating the Thomson Reuters consensus estimate of $0.37 by $0.01.Analysts expect that Duke Energy will post $4.27 EPS for the current fiscal year.Duke Energy Corporation (Duke Energy) is an energy company that provides its services throughthree business segments.19LEGPGNDIR001239

The HillNews bites: Anger follows big utility mergerBy Ben GemanJulyS, 2012The Charlotte Observer looks at the aftermath of the merger of Duke Energy and Progress Energy."Pressure is building on Duke Energy to explain why it ousted Bill Johnson as CEO this week, asformer Progress Energy board members break their silence and express outrage at what they term acalculated deception," the paper reports.Platts has the latest on the oil workers' strike in Norway. From its piece:The Norwegian government is expected to step in promptly to stop an industry lockout of offshoreworkers that would have caused a complete shutdown of oil and gas production next week as early,union leaders, analysts and company executives said Friday.The Associated Press reports that five people have died in protests against a major mining project inPeru.Reuters reports that U.S. ethanol production dropped to its lowest level in 10 months last week "asdwindling pre-harvest corn stocks crushed profit margins, while a deepening drought in the Midwestthreatens to extend the pain into next year."Reuters also looks at the U.S. Navy's controversial biofuels program.20LEGPGNDIR001240

Business SpectatorDuke, Progress complete their mergerJulyS, 2012Duke Energy Corp and Progress Energy Inc say they have completed their merger now valued atabout $US32 billion ($A31.22 billion) to form the largest electricity company in the US.But the normally routine event came with a twist.Bill Johnson, who was tapped to lead the combined company as president and chiefexecutive, hasdecided to leave by "mutual agreement," the companies said.Duke chiefexecutive officer Jim Rogers, who was expected to be executive chairman, has insteadbeen named chief executive officer ofthe new company."This is day one and we're all one group of employees," Mr Rogers said in an interview."They see what I see which is a belief in the long-term proposition ofthis combination. We puttogether the largest utility in this country. We see tremendous opportunities. We have a deep benchof capable people that can deliver."Whether it was Mr Johnson or the company's board that had a last-minute change of heart is unclear.But as late as Monday, Duke staffers were describing Johnson as the pending chief executive officerand scheduling post-merger interviews for him as the top manager.The company declined to answer questions about the switch."We are not going to address any questions with regard to the board's deliberations. Bill resigned bymutual agreement with the board," Ann Maynard Gray, lead director of Charlotte-based DukeEnergy's board of directors, said in an interview.Mr Rogers said he spoke with about 60 ofthe combined company's top executives to keep them onboard with the new leadership on Tuesday. It is likely that some executives coming over fromProgress Energy had developed links to Mr Johnson and may have expected that relationship to helpthem advance in the new company."It is very strange. We were not expecting that, so I don't know what to say," Bernstein Researchanalyst Francois Broquin said."No one had any answer on what were the circumstances behind the change."Mr Broquin said the company leaders indicated in discussions on Tuesday that Mr Johnson'sdeparture was not related to the material performance of Progress Energy, but offered no otherdetails.Mr Johnson did not explain his reasons for leaving in an email to Progress.Mr Rogers has twice before been the chief executive officer leading his company through a merger,first when PSI Energy became part of Ohio-based Cinergy in 1988 and again when Cinergy mergedwith Duke Energy in 2006.21LEGPGNDIR001241

Duke won federal approval for the merger announced in January 2011 on June 8. The North CarolinaUtilities Commission voted in favour of the deal last week. South Carolina's Public ServiceCommission approved an agreement on Monday.The combined company will serve more than seven million customers in North Carolina, Kentucky,Ohio, Indiana, Florida and South ; Carolina.Duke Energy's more than $US100 billion in assets include power plants in Central America and SouthAmerica and a growing portfolio of wind and solar renewable energy projects in the US.Experts said the new company would be able to borrow money more cheaply, and it will use fewercoal-burning power plants in favour of ones that use natural gas. It's also expected to keep powerprices stable.Regulators saw the deal as the best possible in an environment of energy industry consolidation.Rogers said bn a conference call with analysts that his top focus would be realising the promisedsavings from the merger, followed by coping with the costs ofa shutdown at Progress Energy'sCrystal River nuclear plant in Florida.Crystal River has been down for repairs since 2009 and isn't expected to operate again until 2014.Among the benefits Rogers stressed was that adding Progress Energy's regulated markets in theCarolinas and Florida increases the new company's percentage of revenues from regulated electricitysales, a business in which profits are controlled by state regulators but largely assured.About 85 to 90 per cent ofthe combined company's revenues will come from its regulated business,compared to about 75 per cent for Duke Energy before the merger, a spokesman said.Duke Energy said it continued to project 2012 earnings at between $US4.20 and $US4.35 per shareafter accounting for a reverse stock split giving shareholders one share in the expanded company forevery three shares they now own.The price for each share tripled after the reverse split and the combined company's stock closed onTuesday at $US68.69 per share.22LEGPGNDIR001242

UraJOBLB FBANK, WILKINSON BRIMMER KATCHBBDuke EnergyMedia CoverageTABLE OF CONTENTSFriday, July 06, 2012 •National Press• New York Times: Morning Take-OutNewswires• Associated Press: Ex-Progress Energy directors upset with CEO change• Associated Press: Progress Energy CEO ousted after Duke merger• Reuters: Ex-Progress director slams Duke Energy CEO shuffleRegional Press• Charlotte Observer: Jim Rogers has explaining to do on Duke's shakeup• Charlotte Observer: Bill Johnson's exit threatens Duke Energy's credit rating• Charlotte Business Journal: Duke Energy quiet on Progress CEO departure• Charlotte Business Journal: Report: New Duke Energy board pushed Johnson out• WRAL.com: Ex-Progress CEO may get $44.7 million from Duke• NBC 17: Utilities Commission may investigate ouster of Progress Energy CEO• Triangle Business Journal: Johnson might get $44.7M after leaving Duke EnergyTrade/Business Publications• Mergers & Acquisitions Week: Banking and Finance; Fitch Affirms Progress Energy and Subs' RatingsBlogs• The Daily Beast: Duke CEO Lasts One Day• Daily Political: UBS AG Gives Buy Rating to Duke Energy (DUK)• The Hill: News bites: Anger follows big utility merger• Business Spectator: Duke, Progress complete their mergerLEG PGNDI RO01243

DUK: Media Coverage 07.06.12Page 2 of 22NATIONAL PRESSNew York TimesMorning Take-OutBy William AldenJuly 6, 2012Uproar Over C.E.O.'s Ouster at Merged Energy Giant | A former director involved in the merger thatformed the nation's largest electric utility is lashing out at an abrupt leadership change at the combinedcompany."This is the most blatant example of corporate deceit that 1 have witnessed during a long career on WallStreet," said John H. Mullin III, the former lead director of Progress Energy, which completed its mergerwith Duke Energy this week.Duke said Tuesday that it had closed its merger with rival Progress, a $32 billion deal originally struck ayear-and-a-half ago. As dictated in the merger agreement, William D. Johnson, the head of Progress, wasto become chief executive ofthe combined company.But in a news release announcing the deal's completion, the company's newly formed board namedJames Rogers, the chief executive at Duke, head of the merged business and said that Mr. Johnson wasleaving the company "by mutual agreement."The news of Mr. Johnson's ouster — and its unusual circumstances — sent Shockwaves through theutility industry. On Thursday, several people connected to the deal expressed disapproval with the lastminutemove, including Mr. Mullin, who did notjoin the merged companies' board.LEGPGNDIR001244

DUK: Media Coverage 07.06.12Page 3 of22NEWSWIRESAssociated PressEx-Progress Energy directors upset with CEO changeJuly 6,2012Former board members of Progress Energy are upset the chief executive of their company, Bill Johnson,was ousted as head of Duke Energy just hours after the companies merged.Former board member Alfred Tollison Jr. says he felt he was misled about the plans for Progress Energy'schief to head the newly combined company.Duke's Jim Rogers is now CEO of the company. Duke announced the change Tuesday morning. Themerger had been completed Monday afternoon.The North Carolina Utilities Commission is now considering whether to investigate the change inleadership.Standard & Poor's Financial Services said Wednesday it has put Duke on a watch list for a potential creditdowngrade because Johnson was removed.Duke spokesman Tom Williams says the utility looks forward to resolving those concerns soon.LEGPGNDIR001245

DUK: Media Coverage 07.06.12Page 4 of22Associated PressProgress Energy CEO ousted after Duke mergerJuly 6, 2012Former board members of Progress Energy are upset the chief executive of the Raleigh-based company,Bill Johnson, was ousted as head of Duke Energy just minutes after the companies merged this week.Former board member Alfred Tollison Jr. says he felt he was misled about the plans for Progress Energy'schief to head the newly combined company, forming the nation's largest electric utility."Just from circumstantial evidence you would have to think it didn't happen overnight, that there was a lotof forethought given to it." said Tollison, who was on the Progress board until the merger was completed.Duke announced Tuesday that the Charlotte-based company's Jim Rogers was the new CEO, sayingJohnson had resigned by mutual agreement. The merger had been completed Monday afternoon.Duke Energy and Progress Energy said Tuesday they had completed their merger now valued at about$32 billion to form the nation's largest electric company.The North Carolina Utilities Commission, which had approved the merger last week based on the plansfor Johnson to lead the combined companies, is considering whether to investigate the change inleadership.The commission could use its subpoena powers to demand documents and witness testimony if it chose tohold hearings into the surprising switch in the corporate suite."We are still considering what next step to take," the commission's general counsel, Sam Watson, saidFriday.Another former Progress board member, John Mullin III, wrote The Wall Street Journal on Thursday,stating: "I do not believe that a single director of Progress would have voted for this transaction asstructured with the knowledge that the CEO of Duke, Jim Rogers, would remain as the CEO ofthecombined company."Standard & Poor's Financial Services has put Duke on a watch list for a potential credit downgradebecause Johnson was removed. The Wall Street credit rating service said the leadership change raisesquestions about Duke's internal stability, planning and management.Duke spokesman Tom Williams says the utility looks forward to resolving those concerns soon.Another Wall Street service, Moody's Investor Services, kept its ratings and its "stable outlooks" for Dukeand Progress, citing the merger benefits. But Moody's did say Johnson's departure does create uncertaintyover long-term leadership and could lead to additional turnover in senior management.A number of former Progress executives recruited by Johnson were moving to Charlotte to take their newjobs.Johnson several weeks ago said he was planning to move. He had signed his new contract June 27. Byresigning, Johnson is entitled to a $10.3 million severance.LEGPGNDIR001246

DUK: Media Coverage 07.06.12Page 5 of22ReutersEx-Progress director slams Duke Energy CEO shuffleJuly 6, 2012* Ex-Progress CEO says Duke board acted in "bad faith"* Says "blatant example of corporate deceit"* Governance expert defends Duke board* Duke shares down 4.4 percent since announcementDuke Energy Corp acted in "bad faith" when it replaced former Progress Energy CEO Bill Johnson withDuke's Jim Rogers, the former lead director of Progress said in an open letter.Duke closed on its $18 billion buyout of Progress on Monday, and on Tuesday the Duke board announcedthat Johnson, who had been slated to run the combined company, was leaving by "mutual agreement."The decision came as a surprise to many Duke shareholders, Wall Street analysts, and utility commissionsthat had approved the deal.Replacing Johnson "can only be described as an incredible act of bad faith with regard to the undertakingsof the merger agreement," John Mullin, former lead director at Progress, said in a public letter. "I think itwas a clearly premeditated contravention of one ofthe most central tenets of our agreement."The decision by the 18-person Duke board, with 11 legacy Duke directors and seven Progress directors, toinstall Rogers as chief executive officer was "the most blatant example of corporate deceit that I havewitnessed," Mullin wrote.Johnson was on the board when the decision was made, along with Rogers. It is not clear if either manvoted on the CEO change, though Johnson has now left the Duke board, making its current size 17.Duke shares have dropped 4.4 percent since the announcement on Tuesday morning. As a comparison,Standard & Poors' utilities index is down around 1.4 percent over the same period.Despite the controversy, corporate governance expert and University of Delaware professor Charles Elsonsaid he was untroubled by the move."Until the two companies come together, you never know who will be the best," Elson said. "The board'sjob is to pick who is the most effective leader, period. Sometimes before a merger, one person appearsbetter and after a merger someone else appears better."Robert Gruber, the chief public advocate at the North Carolina Utilities Commission, told the New YorkTimes on Friday he might not have voted to approve the buyout had he known about the managementchange.Tlie deal, which was announced in January 2011, creates the largest U.S. power company, with 57,000megawatts of generating capacity and 7.1 million electricity customers in North Carolina, South Carolina,Florida, Indiana, Kentucky and Ohio. It also becomes the second largest U.S. operator of nuclear powerplants.LEGPGNDIR001247

DUK: Media Coverage 07.06.12Page 6 of22The original plan had been for Rogers to serve as executive chairman of the combined company, whileJohnson would have been president and CEO.When the deal was announced, Rogers joked that the two executives would settle arguments by armwrestling.LEGPGNDIR001248

DUK: Media Coverage 07.06.12Page 7 of 22REGIONAL PRESSCharlotte ObserverJim Rogers has explaining to do on Duke's shakeupJuly 5,2012Right up to the last moment, the merger ofNorth Carolina's two big, multistate electric utilities - amerger that creates, in an expanded Duke Energy, the nation's largest utility - was relatively routine,despite some slowdowns along the path to final approval. Then came that last moment.Bill Johnson, surprisingly, was out, his resignation announced early Tuesday with no explanation.Contrary to announced plans and all expectations, the CEO of Progress Energy would not be chiefexecutive of the combined company after all.Instead, the new Duke Energy announced that its own CEO, Jim Rogers, will run the show. The plan, upto Tuesday, had been that Johnson, 58, would be CEO and that Rogers, 64, would be executive chairman.Was there a rift? A change of heart? Some unrevealed business reason? Whatever its cause, Johnson'sdeparture fuels doubts about the merger, particularly in Raleigh and in Eastern North Carolina, home tothe bulk of Progress Energy's employees and customers.In particular, how will Progress employees fare under the new setup? With Johnson at the helm, Progressemployees could at least feel that they had an ally in Charlotte, where Johnson, as recently as last month,was looking for a new home.The fact that the nation's No. 1 utility would be Charlotte-based contributed to an atmosphere at the N.C.Utilities Commission that allowed the deal to be done. (The speed bumps along the way came mainlyfrom the Federal Energy Regulatory Commission.)It was certainly a factor, as well, that the head of Progress, not Duke, would be CEO of the combinedcompany. Notably, Robert Gruber, the state's consumer advocate in utility matters, supported the merger.With news of Johnson's departure, however, he allowed that "If the Commission had known about thisprior to the merger, it might have been a different result. The Public Staff has a lot of respect for Mr.Johnson and confidence in him. We're not sure how this will work without him." Edward Finley Jr.,Utilities Commission chairman, also made a blunt assessment.Duke's Jim Rogers, sensibly enough, quickly made calls to reassure employees and regulators. But witheven a hint of mystery in the air, the new leader among the nation's electric utilities has a powerful lot ofexplaining to do, in addition to the long-run task of proving that this merger is really good for NorthCarolina.LEGPGNDIR001249

DUK: Media Coverage 07.06.12Page 8 of22Charlotte News ObserverBill Johnson's exit threatens Duke Energy's credit ratingBy John MurawskiJuly 5,2012One of the leading Wall Street credit firms placed Charlotte-based Duke Energy on a watch list for apotential downgrade in the wake of the sudden departure of Bill Johnson, who was slated to be CEO ofthe company after it merged with Raleigh-based Progress Energy.Standard & Poor's Financial Services made its "CreditWatch Negative" announcement on July 4 when thestock markets were closed. S&P cited "negative implications in response to the abrupt change inexecutive leadership" made right after the merger closed on Monday afternoon.S&P will next make a decision whether to downgrade Duke from A- to BBB+ or keep the current ratingunchanged. A downgrade would potentially increase the interest rates at which Duke borrows money."The sudden shift in management raises concerns about effective corporate governance, successfulhandling of the anticipated merger integration, and the ongoing effective management of pendingchallenges that face the combined entity," said S&P credit analyst Dimitri Nikas in the statement.Translation: Johnson's abrupt departure threatens the status of formerly Progress executives who havesuddenly lost their patron and protector.Corporate mergers are known to trigger power struggles and turf battles among executive ranks fueled byoutsized ambitions for power and money. Analysts are concerned that Johnson's departure could causeinternal turmoil and distractions from the company's mission.Duke said Tuesday morning that Johnson left the company by mutual agreement. Johnson had been CEOof Progress for five years and was to be CEO at Duke after the merger, creating the nation's largestelectric utility. His departure shocked employees and dismayed state regulators who had approved themerger on the understanding that Johnson would head the combined company.To many Johnson's exit increasingly looks like a palace coup in which other ex-Progress executives coulddepart or be pushed out. However, Duke has offered assurances that all the ex-Progress executives havesafe jobs if they want them.S&P also put Duke's subsidiaries, including Progress Energy, on CreditWatch with negative implications.LEGPGNDIR001250

DUK: Media Coverage 07.06.12Page 9 of22Charlotte Business JournalDuke Energy quiet on Progress CEO departureJuly 5,2012The lead director for Duke Energy Corp.'s board says the company will not have any further comment onBill Johnson's departure as chief executive of the company following its merger with Progress EnergyTnc. Duke says his exit was a mutually agreed decision, according to the Charlotte Business Journal.Johnson, who had been chief executive of Raleigh-based Progress, was to become CEO of the combinedcompany under the terms of their merger agreement. He submitted his resignation after the deal wascomplete.Duke has customers in the Dayton region in Butler and Warren counties, as well as a small part ofMontgomery County and throughout Southwest Ohio.LEGPGNDIR001251

DUK: Media Coverage 07.06.12Page 10 of 22Charlotte Business JournalReport: New Duke Energy board pushed Johnson outBy John DowneyJuly 6, 2012The Wall Street Journal reports that former Progress Energy Chief Executive Bill Johnson was pushed outas Duke Energy CEO by the Duke board, which concluded he was the wrong man for thejob.The report cites unnamed "people familiar with the matter" as saying the board decided the agreement toput Johnson in charge, included in the merger contract signed 18 months ago, "wasn't going to work."Instead the board appointed Jim Rogers, the executive chairman who had been Duke's CEO going intothe deal, as CEO. Johnson, who actually became CEO of Duke briefly under the terms of that mergercontract, was surprised by the decision, the paper says.The Journal reports:Mr. Rogers's advocates viewed him as a consensus builder whose style was better suited to thetask of bringing two firms together, one person said. He also had run the larger company. Theboard informed bolh men of its decision after the meeting and came to an agreement that Mr.Johnson would step down, people familiar with the matter said.The article does not cite any specific reason for the dissatisfaction with Johnson. And it does not saywhether the board was divided on the decision. With Rogers and Johnson out ofthe room, the votingmembers would have been 10 directors from the old Duke board and six from Progress.When the $32 billion merger closed Monday at 4:02 p.m., both Johnson and Rogers were on the new, 18-member board. The board met after the merger closed, the paper says, but neither Johnson nor Rogerswere in that meeting.Johnson resigned as CEO and as a board member effective Tuesday at 12:01 a.m. He will receive aseverance package worth more than $10.3 million. He has not been replaced on the Duke board. Rogersretains his title of board chairman.The Charlotte Business Journal has a story in its Friday print edition on additional fallout from the switchat the top position.LEGPGNDIR001252

DUK: Media Coverage 07.06.12Page 11 of22WRAL.comEx-Progress CEO may get S44.7 million from DukeJuly 6, 2012Former Progress Energy Inc. Chief Executive Officer Bill Johnson, who unexpectedly resigned afterDuke Energy Corp. completed its takeover of the company on Monday, may collect as much as $44.7million after his exit.The total compensation is four times what was reported initially about Johnson's severance filing based ona Securities and Exchange Commission filing Duke Energy made after Johnson's departure was disclosedTuesday morning.In further analysis of the filing and based on information from Tom Williams, a spokesman for DukeEnergy, Bloomberg news breaks down Johnson's compensation as:• $12.7 million for pension benefits and deferred compensation• $14.3 million for vested stock awards• a possible $7.4 million payment for taxes and• as much as $10.3 million for severance, bonus and lump-sum paymentsMeanwhile, speculation continues to swirl about why Johnson left after only a brief time in the role asCEO of the combined Duke Energy-Progress Energy. He was replaced by James Rogers, chairman andchiefexecutive of Duke, who had been scheduled to become chairman of the combined utility.The Wall Street Journal, citing unnamed sources, said the decision to replace Johnson as CEO cameshortly after the merger closed Monday and its new 18-member board met. Eleven Duke appointees andseven from Progress, including Johnson, comprised the board."Messrs. Johnson and Rogers attended the meeting, but then left when the board went into executivesession - the portion of the meeting without management. There, directors deliberated changing the twoexecutives' roles. The board decided the initial arrangement wasn't going to work," the Journal said."Mr. Rogers' advocates viewed him as a consensus builder whose style was better suited to the task ofbringing two firmstogether, one person said. He also had run the larger company. The board informedboth men of its decision after the meeting and came to an agreement that Mr. Johnson would step down,people familiar with the matter said."Duke's $17.8 billion takeover of Progress, announced in January 2011, created the largest U.S. utilityowner by market value.Duke announced Johnson's resignation as being a "mutual agreement."Standard & Poor's Rating Services said July 3 it was placing Duke on negative credit watch after "theabrupt change in executive leadership."Johnson, 58, has been the chairman and CEO of Raleigh-based Progress since 2007. Under terms of thetakeover, Johnson was supposed to become president and CEO of the combined companies.Johnson was entitled to some of the money under his retirement plan and other portions of it were tied toachievement of the company's performance goals, Williams said in a phone interview today.LEGPGNDIR001253

DUK: Media Coverage 07.06.12Page 12 of22Johnson will get $12.7 million for his accrued and unpaid benefits under Progress Energy's retirementand deferred compensation plans, according to a June 29 filing with the U.S. Securities and ExchangeCommission.He will receive as much as $14.3 million in accelerated vesting of his restricted and performance stockawards, according to regulatory filings. In addition, he may be eligible for a $7.4 million payment forexcise.and gross-up taxes, said Williams.LEGPGNDIR001254

DUK: Media Coverage 07.06.12Page 13 of 22NBC 17Utilities Commission may investigate ouster of Progress Energy CEOBy Dane HuffmanJuly 6,2012The general counsel for the North Carolina Utilities Commission said the commission is evaluating whatto do now that Duke Energy has taken over Progress Energy and removed CEO Bill Johnson."We are considering what steps to take," Watson told NBC-17.The commission could decide to demand documents and have testimony into what drove Johnson'sdeparture. The Utilities Commission approved the merger last week.Johnson had been CEO of Progress Energy and was to be CEO of the merged companies. Butimmediately after the deal, Johnson was pushed out in what was termed a "mutual agreement." DukePower CEO James Rogers of Charlotte will be chairman and CEO.Bloomberg News has reported that Johnson's total compensation will be $44 million.The announcement was a continued blow for Raleigh, which loses the headquarters of a Fortune 500company and sees job cuts in the market. Progress Energy has been a driving economic force in themarket, contributing money, for example, to arts and cultural events.Rogers told Bloomberg the company expects to shed about 1,800 workers and about 1,200 already haveaccepted severance packages.Johnson's quick ouster stunned some company leaders. Former Progress board member John Mullin IIIwrote the Wall Street Journal on Thursday, stating: "1 do not believe that a single director of Progresswould have voted for this transaction as structured with the knowledge that the CEO of Duke, JimRogers, would remain as the CEO of the combined company."Progress board member Jim Hyler of Raleigh would not comment when reached by NBC-17 Friday.Hyler referred comments to Duke, which promised a comment later Friday.LEGPGNDIR001255

DUK: Media Coverage 07.06.12Page 14 of 22Triangle Business JournalJohnson might get $44.7M after leaving Duke EnergyBy Chris BaysdenJuly 6,2012The fallout from Bill Johnson's resignation as CEO at Duke Energy Corp. just keeps getting moreinteresting.Earlier this week we told you that Johnson was slated to receive a cash severance of more than $ 10.3million after his unexpected exit from the company, which only hours earlier had completed itsacquisition of Progress Energy . But that cash won't be all Johnson walks away with, according toBloomberg, which reports that Johnson may get as much as $44.7 million when stock, pension benefitsand the like are taken into account.Duke Energy (NYSE: DUK) is based in Charlotte, while Progress was Raleigh's largest public company.LEGPGNDIR001256

DUK: Media Coverage 07.06.12Page 15 of22TRADE/BUSINESS PUBLICATIONSMergers & Acquisitions WeekBanking and Finance; Fitch Affirms Progress Energy and Subs' RatingsJuly 11,2012Fitch Ratings has affirmed the Issuer Default Ratings (IDR) and individual security ratings of ProgressEnergy, Inc. (PGN) and its operating subsidiaries Carolina Power & Light Co. (d/b/a Progress EnergyCarolinas, Inc., [PEC]) and Florida Power Corp. (d/b/a Progress Energy Florida [PEF]). Fitch alsoaffirmed the preferred stock rating of FPC capital I and downgraded PEC's short-term IDR andcommercial paper rating to ^2' from 'FT. The Rating Outlook is Stable for PGN and PEC and Negativefor PEF. A full list ofthe ratings appears at the end of this release.Key rating DriversDuke merger: The rating affirmations incorporate the pending merger with Duke Energy Corp. (DUK),which Fitch considers credit neutral. PGN will be structured as a subsidiary of DUK. The two companieshave similar credit and risk profiles and there is no incremental debt associated with the planned stock forstock merger. Longer-term, economies of scale of the merged entity and the geographic proximity oftheservice territories should create synergy opportunities.High parent debt: PGN's significant parent level debt is supported by dividends from its two verticallyintegrated utilities operating primarily in Florida and North Carolina. Both utilities operate in constructiveregulatory jurisdictions with attractive service territories and provide a predictable source of earnings andcash flow to PGN.Rate settlement: The Florida Public Service Commission's (FPSC) recent approval of a comprehensivesettlement agreement for PEF, resolves the treatment of all Crystal River 3 (CR3) nuclear unitreplacement power costs. The settlement requires a $288 million refund of CR3 replacement power costs,primarily in 2013 and 2014 but importantly allows recovery of all other CR3 replacement power costs notcovered by insurance proceeds.Credit metrics: As expected, PGN's credit metrics weakened in 2011 and will remain under pressureuntil higher rates are implemented in 2013. Fitch estimates consolidated EBITDA/interest anddebt/EBITDA will approximate 3.5x and 4.8x, respectively, in 2012, moderately better than the adjusted(excluding non-recurring items) 2011 results. Ratios should trend upward in 2013, reflecting the approvedtariff increase in Florida and Fitch's expectation of higher rates in North Carolina.Rating ConcernsThe primary credit concerns for PGN are the sizable layer of parent level debt and continued uncertaintysurrounding CR3.Parent debt of roughly $4 billion accounts for approximately 30% of consolidated debt and is not likely tobe meaningfully reduced any time soon. The associated interest and common dividend requirementsincrease cash flow pressure on the regulated utilities.With respect to CR3, the recovery of repair costs remains uncertain. The treatment of any CR3 repaircosts not recovered from the Nuclear Electric Insurance Limited (NEIL) will be subject to a determinationby the Florida Public Service Commission (FPSC). The amount of the repairs and potential insuranceproceeds are unknown. The latest repair cost estimate ranged between $900 million and $1.3 billion.LEGPGNDIR001257

DUK: Media Coverage 07.06.12Page 16 of 22LiquidityPGN's has adequate liquidity. Currently, the combined revolving credit agreements of PGN and itssubsidiaries total 1.978 billion. On February 15, 2012, PGN extended the expiration of its $478 millionrevolving credit agreement from May 3, 2012 to May 3, 2013 as a bridge until.the merger with Duke iscomplete. Post-merger, PEC and PEF will each have a $750 million borrowing sub-limit in Duke's $6billion credit facility maturing in 2016.Progress Energy CarolinasKey rating DriversSolid financial metrics: Credit metrics are strong, despite some weakening in recent periods. Fitch expectsinterest and FFO coverage measures to be well in excess of 6x over the next several years and debt toEBITDA to range between 3.0 - 3.25x. Over the past 15 months these measures have been adverselyaffected by unfavorable weather, higher nuclear expenses, merger related integration costs and higherdebt balances.Rate Support: The ratings and forecasted credit metrics assume a base rate increase in 2013 to recoverinvestments in PEC's fleet modernization plan and other cost of service items. Management indicated itplans to file a rate case in North Carolina later this year with new rates to be effective mid-2013. Thecompany has not raised base rates since 1988. The above average sales and customer growth whichallowed PEC to avoid base rate filingsover the past 24-years has subsided due to the economic downturn.Constructive regulatory environment: Fitch considers regulation in North Carolina, PEC's primaryregulatory jurisdiction, to be constructive. North Carolina state regulation permits annual lariffadjustments to recover fuel, demand side management, energy efficiency and certain renewable costs.Large capital expenditure program: PEC is engaged in a multi-year capex program that will require debtfinancing in each of the next several years and rate support to maintain its current financial position. Thespending program is designed to replace coal-fired generating facilities that do not have sufficientpollution controls to meet existing and pending environmental regulations with new natural gas- firedgenerating facilities. Current projects include replacing the coal fired Lee and Sutton plants with naturalgas-fueled combined cycle units. The new natural gas facilities, expected to enter service in January andDecember 2013, respectively, have an aggregate generating capacity of 1,545MW compared to 957MWfor the retiring coal units.Parent leverage: PEC's ratings also consider the upstream dividend payments to PGN, needed to helpsupport the substantial holding company debt and its common dividend to shareholders.Progress Energy FloridaTlie Negative Outlook reflects the on-going uncertainty related to CR3 and the recent downtrend in creditmetrics that is likely to continue through 2012.Key rating DriversRate Settlement: The FPSC's recent approval of a comprehensive settlement agreement resolves thetreatment of CR3 replacement power costs, but the ultimate amount and recovery of repair costs remainsuncertain. Moreover, required rate refunds in 2013 and 2014 will continue to adversely affect cash flow.-CmiHULNTIAE*LEGPGNDIR001258

DUK: Media Coverage 07.06.12Page 17 of 22Credit Metrics: As expected, PEF's credit metrics weakened in 2011, and will remain under pressureuntil higher rates are implemented in 2013. Fitch estimates consolidated EBITDA/interest anddebt/EBITDA will approximate 4.5x and 4.Ox. respectively, in 2012. Ratios should trend upward in 2013,reflecting the approved tariff increase in Florida.Constructive regulatory environment: Fitch considers regulation in Florida to be constructive. The FPSCemploys several tariff adjustment mechanisms that benefit cash flow. In addition to a fuel adjustmentclause, energy conservation expenses, specified environmental compliance costs and qualified nuclearcosts are recoverable outside of base rate cases.oosaaBasfeLEGPGNDIROOI259

DUK: Media Coverage 07.06.12Page 18 of 22BLOGSThe Daily BeastDuke CEO Lasts One DayJuly 6, 2012Bill Johnson was slated to become Duke Energy Corp.'s new chief executive ever since Duke announceda $26 billion merger with Johnson's former company, Progress Energy Inc. That was 18 months ago. OnJuly 2, the merger and his new position went into effect, and on July 3 (at 12:01 a.m.) Johnson resigned.Apparently, it only took a few hours on the job to realize that Johnson wasn't the right fit for the position.The abrupt change of plans has been called "very odd," but there had been speculation that former chiefexecutive Jim Rogers might not be comfortable relinquishing control over the company. The new board'sfirst meeting on Monday reportedly dissolved quickly into a discussion of management, ending in thedecision that Johnson would not stay on as CEO. The one-day chief exec will receive up to $44.4 millionin exit payments.T^gftrreCNThfrfcr-LEGPGNDIR001260

DUK: Media Coverage 07.06.12Page 19 of22Daily PoliticalUBS AG Gives Buy Rating to Duke Energy (DUK)By Trevor KearingJuly 5,2012Duke Energy (NYSE: DUK.)*s stock had its "buy" rating restated by analysts at UBS AG in a researchreport issued to clients and investors on Thursday.A number of other firmshave also recently commented on DUK. Analysts at Credit Suisse upgradedshares of Duke Energy from a "neutral" rating to an "outperform" rating in a research note to investors onMonday, June 11th. They now have a $25.50 price target on the stock. Separately, analysts at Citigroupraised their price target on shares of Duke Energy to $23.00 in a research note to investors on Monday,June 4th. Finally, analysts at Macquarie upgraded shares of Duke Energy from a "neutral" rating to an"outperform" rating in a research note to investors on Thursday, May 17th.Duke Energy traded down 0.17% on Thursday, hitting $68.57. Duke Energy has a 52-week low of $50.61and a 52-week high of $71.13.Duke Energy last posted its quarterly earnings results on Friday, May 4th. The company reported $0.38EPS for the quarter, beating the Thomson Reuters consensus estimate of $0.37 by $0.01. Analysts expectthat Duke Energy will post $4.27 EPS for the current fiscalyear.Duke Energy Corporation (Duke Energy) is an energy company that provides its services through threebusiness segments.LEGPGNDIR001261

DUK: Media Coverage 07.06.12Page 20 of 22The HillNews bites: Anger follows big utility mergerBy Ben GemanJuly 6,2012The Charlotte Observer looks at the aftermath of the merger of Duke Energy and Progress Energy."Pressure is building on Duke Energy to explain why it ousted Bill Johnson as CEO this week, as formerProgress Energy board members break their silence and express outrage at what they term a calculateddeception, " the paper reports.Platts has the latest on the oil workers' strike in Norway. From its piece:The Norwegian government is expected to step in promptly to stop an industry lockout of offshoreworkers that would have caused a complete shutdown of oil and gas production next week as early, unionleaders, analysts and company executives said Friday.The Associated Press reports that five people have died in protests agamst a major mining project in Peru.Reuters reports that U.S. ethanol production dropped to its lowest level in 10 months last week "asdwindling pre-harvest corn stocks crushed profit margins, while a deepening drought in the Midwestthreatens to extend the pain into next year."Reuters also looks at the U.S. Navy's controversial biofuels program.LEGPGNDIR001262

DUK: Media Coverage 07.06.12Page 21 of 22Business SpectatorDuke, Progress complete their mergerJuly 6,2012Duke Energy Corp and Progress Energy Inc say they have completed their merger now valued at about$US32 billion ($A31.22 billion) to form the largest electricity company in the US.But the normally routine event came with a twist.Bill Johnson, who was tapped to lead the combined company as president and chief executive, hasdecided to leave by "mutual agreement," the companies said.Duke chief executive officer Jim Rogers, who was expected to be executive chairman, has instead beennamed chief executive officer of the new company."This is day one and we're all one group of employees," Mr Rogers said in an interview."They see what I see which is a belief in the long-term proposition of this combination. We put togetherthe largest utility in this country. We see tremendous opportunities. We have a deep bench of capablepeople that can deliver."Whether it was Mr Johnson or the company's board that had a last-minute change of heart is unclear. Butas late as Monday, Duke staffers were describing Johnson as the pending chief executive officer andscheduling post-merger interviews for him as the top manager.The company declined to answer questions about the switch."We are not going to address any questions with regard to the board's deliberations. Bill resigned bymutual agreement with the board," Ann Maynard Gray, lead director of Charlotte-based Duke Energy'sboard of directors, said in an interview.Mr Rogers said he spoke with about 60 of the combined company's top executives to keep them on boardwith the new leadership on Tuesday. It is likely that some executives coming over from Progress Energyhad developed links to Mr Johnson and may have expected that relationship to help them advance in thenew company."It is very strange. We were not expecting that, so I don't know what to say," Bernstein Research analystFrancois Broquin said."No one had any answer on what were the circumstances behind the change."Mr Broquin said the company leaders indicated in discussions on Tuesday that Mr Johnson's departurewas not related to the material performance of Progress Energy, but offered no other details.Mr Johnson did not explain his reasons for leaving in an email to Progress.Mr Rogers has twice before been the chief executive officer leading his company through a merger, firstwhen PSI Energy became part of Ohio-based Cinergy in 1988 and again when Cinergy merged with DukeEnergy in 2006.Duke won federal approval for the merger announced in January 2011 on June 8. The North CarolinaLEGPGNDIR001263

DUK: Media Coverage 07.06.12Page 22 of 22Utilities Commission voted in favour of the deal last week. South Carolina's Public Service Commissionapproved an agreement on Monday.The combined company will serve more than seven million customers in North Carolina, Kentucky, Ohio,Indiana, Florida and South Carolina.Duke Energy's more than $US100 billion in assets include power plants in Central America and SouthAmerica and a growing portfolio of wind and solar renewable energy projects in the US.Experts said the new company would be able to borrow money more cheaply, and it will use fewer coalbumingpower plants in favour of ones that use natural gas. It's also expected to keep power prices stable.Regulators saw the deal as the best possible in an environment of energy industry consolidation.Rogers said on a conference call with analysts that his top focus would be realising the promised savingsfrom the merger, followed by coping with the costs of a shutdown at Progress Energy's Crystal Rivernuclear plant in Florida.Crystal River has been down for repairs since 2009 and isn't expected to operate again until 2014.Among the benefits Rogers stressed was that adding Progress Energy's regulated markets in the Carolinasand Florida increases the new company's percentage of revenues from regulated electricity sales, abusiness in which profits are controlled by state regulators but largely assured.About 85 to 90 per cent of the combined company's revenues will come from its regulated business,compared to about 75 per cent for Duke Energy before the merger, a spokesman said.Duke Energy said it continued to project 2012 earnings at between $US4.20 and $US4.35 per share afteraccounting for a reverse stock split giving shareholders one share in the expanded company for everythree shares they now own.The price for each share tripled after the reverse split and the combined company's stock closed onTuesday at $US68.69 per share.nlWrnnrnn ~LEGPGNDIROOI264

From:Sent:To:Subject:Harris DeLoachFriday, July 06, 2012 5:05 PMMcKee, MarieRE: Update on 3 Executives -privateTks.HEDFrom: McKee, Marie | Redacted - Personal Info. |Sent: Friday, July 86, 2012 4:35 PMTo: John Baker; Harris DeLoach; James B. Hyler Jr.; Carlos A, Saladrigas; Theresa M. StoneCc: McKee, MarieSubject: Fwd: Update on 3 Executives -privateFrom Jim RogersMarieE. Marie McKeeRedacted - Personal Info.Sent from my iPhoneBegin forwarded message:From: "Rogers., Jim" Date: July 6, 2012 2:54:18 PM EDTRedarted - Personal Info.Subject: Update on 3 ExecutivesMarie,As I mentioned this morning, we are now working with John, Mark and Paula's lawyers. Theirlawyers' demanded this morning that we resolve their requests by Sunday night.Obviously, this will be difficult for several reasons. One, we need time to determine whowill take their places. Second, we need a meeting of the compensation committee to review andapprove the terms of their agreements. We communicated this to their lawyers.I will keep you informed as we work through these issues. We may need to set-up a Compcommittee call this weekend but it is to early to determine whether it will be necessary.Please do not hesitate tO Call me. I Redacted - Personal Info. 1Best,JimLEGPGNDIR001265

From:Sent:To:Subject:Harris DeLoachFriday, July 06, 2012 5:19 PM| Redacted - Personal Info. \RE: last eveBill,hope that you and your family had a good holiday without TOO MANY interuptions.If youhave the time it would probably be beneficial to talk for a couple of minutes.I am on theCoast of SC until Sun midday Redacted - Pers. Info. and back in HartsvilleRedacted - Pers. Info, mid afternoonon Sunday.Give me a call or you give me a time and number and I will call you.Regards,HarrisFrom: |Redacted • Personal Info.Sent: Tuesday, July 03, 2812 6:53 AMTo: Harris DeLoachSubject: last eveknow you uncomfortable as was I...hope some time to get chance to share thoughts,hope for best and wish you a good 4th...LEGPG NDI RO01266

From: | Redacted - Personal Info. |Sent:To:Subject:Friday, July 06, 2012 5:45 PMHarris DeLoachRe: last eveam at Lake Summit and back Sunday...let's chat Sunday afternoon, if that works for you....I can call you...I am running outright now.Might I call you at 5 pm?...am flexible...hope you had good 4th.—Original Message—Redacted - Personal Info.Sent: Fri, Jul 6, 2012 5:19 pmSubject: RE: last eveBill,hope that you and your family had a good holiday without TOO MANYinteruptions.If you have the time i t would probably be beneficial to talk for acouple of minutes. I am on the Coast of SC until Sun middayRedacted - Pers. Info, and backin Hartsville Redacted - Pers. Info. mid afternoon on Sunday.Give me a call or you giveme a time and number and I will call you.Regards,HarrisFrom: |Sent: Tuesday,Redacted - Personal Info.July 03, 2012 6:53 AMTo: Harris DeLoachSubject:last eveknow you uncomfortable as was I...hope some time to get chance to sharethoughts.LEGPGNDIR001267

hope for best and wish you a good4th...This e-mail message and all documents which accompany i t are intended only "forthe use of the individual or entity to which addressed,and may containprivileged or confidentialinformation. Any unauthorized disclosure ordistribution of this e-mail message is prohibited. If you have receivedthise-mail message in error, please notify the sender and delete this from allcomputers.LEGPGNDIR001268

From:Harris DeLoachSent:Friday, July 06, 2012 5:55 PMTo: | Redacted - Personal Info. |Subject:RE: last eve8111,5 is fine.May be good if we could talk in person.I have a on Mon from 10:3© until l,ifyou might be available.We could meet at Airport.HarrisFrom:Redacted - Personal Info.Sent: Friday, July 06, 2012 5:45 PMTo: Harris DeLoachSubject: Re: last eveam at Lake Summit and back Sunday...let's chat Sunday afternoon, if that works for you....Ican call you...I am running out right now.Might I call you at 5 pm?...amflexible...hope you had good 4th.Original MessageRedacted - Personal Info.Sent: Fri, Jul 6, 2012 5:19 pmSubject: RE: last eveJJilljhope that you and your family had a good holiday without TOO MANYinteruptions.If you have the time it would probably be beneficial to talk for acouple of minutes.I am on the Coast of SC until Sun midday [Redacted- Pers. info. | and backin Hartsville [Redacted-Pers.info. | mid afternoon on Sunday.Give me a call or you giveme a time and number and I willcall you.Regards^HarrisFrom:Redaaed - Personal Info.Sent: Tuesday, July 63, 2012 6:53 AMrnNmnrniftr ~1LEGPGNDIROOI269

To: Harris DeLoachSubject: last eveknow you uncomfortable as was I...hope some time to get chance to sharethoughts.hope for best and wish you a good 4thThis e-mail message and all documents which accompany it are intended only forthe use of the individual or entity to which addressed, and may containprivileged or confidential information. Any unauthorized disclosure ordistribution of this e-mail message is prohibited. If you have received thise-mail message in error, please notify the sender and delete this from allcomputers.•^QfeiaBEfe^Sfe-LEGPGNDIR001270

From:Sent:To:Subject:Harris DeLoachFriday, July 06, 2012 8:21 PMRoger SchrumRE: UpdateTksHEDFrom: Roger SchrumSent: Friday, July 06, 2012 6:24 PMTo: Harris DeLoachSubject: UpdateDUK ended down 3.4% today with nearly 10 million shares traded (this is more than twiceaverage volume). Since reaching their 52-week high on July 2 (before the CEO announcement)shares are trading down 6.9% with heavy volume (compared to the DJ Utility Index which istrading down less than 1%).In talking with one analyst today he believe two things are pressuring the stock on atechnical side. Obviously the bad news is triggering funds with significant gains inProgress (now DUK) shares to lock in gains. In addition, PGN shareholders who now own DUKstock frankly may be dumping shares in the market due to the news flow.Roger SchrumRedacted - Personal Info.LEGPGNDIR001271

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From:Sent:Harrington, :Sue C [Sue.Harringtdn@duke-energy.coni]Friday, July 06, 2012 10:18 AMto: John Baker | Redacted-Personal Info [ Harris DeLbach; Jaifies Hyler | Redacted - Personal Info.Subject:Marie'Mckee] Redacted-Personal Info. Tp Redacted - Personal Info. I; Theresa StoneRedacted - Personal Info.DUK Gbmrhoh:StockIn order tb file certain required information with the SEC and NYSE regarding our new directors;please let me know if you held any shares of DUK common stock prtor to the completion ofthemerger on July 2, 2012. If so, please;disclose the number of shares (before taking into account thereverse stock split) that you held.I would appreciate your quick response because these filings.will need to be completed early nextweek.Thank you,SueSue C. HarringtonMslstan't Corporat^SecretafVDuke Energy Corporation550 South Tryon'St/DEC'lSAP.O. Box 1321(28201)CharlOttO, NC 23202Phone: 704-382-8144Fax: 980-373-8535Sue.HarrinRtbn

From:Sent:To:Subject:Shiel, Tom Jr [Tom.Shiel@duke-energy.com]Saturday, July 07, 2012 7:32 AMNews in ReviewDuke Energy News in Review 7-7-12 - SPECIAL EDITIONDuke Energy News in ReviewJuly 7, 2012(Due to a technical issue, these stories have not yet been posted to the employee portal. They will beposted as soon as the issue is resolved.)ArticlesN.C. attorney general opens investigation into Duke Energy CEO scandalRaleigh News & Observer, 7-7-12Troubles continued mounting for Duke Energy on Friday as the state Attorney General and the N.C.Utilities Commission opened separate investigations of the Charlotte-based power company's ousterof Bill Johnson as CEO.Editorial: Let's hear it on Duke EnergyRaleigh News & Observer, 7-7-12Not all the fireworks this week were at Fourth of July shows. The relatively low-key merger betweenDuke Energy and Progress Energy blew up into a big story - and an embarrassment for the newDuke Energy, now the largest U.S. utility. North Carolina utility regulators need to ask, and soon, whatreally happened when Progress CEO Bill Johnson of Raleigh was unexpectedly forced out of thecombined company he had been slated to run.Stunned agencies investigating CEO switch at Duke EnergyCharlotte Business Journal, 7-6-12N.C. regulators and Attorney General Roy Cooper have announced separate investigations into theunexpected switch of CEOs after Duke Energy and Progress Energy merged Monday. While it is notclear what action either group could take, it is clear that they feel misled by representations thatformer Progress CEO Bill Johnson would run the new Duke after the merger.Could Duke Energy-Progress merger be rescinded?Charlotte Business Journal, 7-7-12The sudden departure of Duke Energy Corp. CEO Bill Johnson immediately after the completion ofthe company's purchase of Raleigh-based Progress Energy Inc. has upset a lot of folks. One suchgroup of folks might actually have the power to do something about it.Intrigue Behind Ouster at DukeWall Street Journal, 7-7-12The surprise dethroning of Duke Energy Corp.'s chief executive set off angry responses Friday, withformer directors at Progress Energy Inc. saying they never would have approved the $26 billionmerger of the two utilities if they had known what would happen with the top job.Duke Energy Power Play Provokes An UproarNew York Times, 7-7-12A former board member involved in a merger that created the nation's largest electric utility hasblasted an abrupt leadership change at the company. "This is the most blatant example of corporateLEGPGNDIROOI 275

deceit that I have witnessed during a long career on Wall Street," said John H. Mullin III, the formerlead director of Progress Energy, which completed its combination with Duke Energy this week.Opinion: Dealpolitik - Duke Switch and Shareholder FairnessWall Street Journal, 7-6-12Corporate lawyers frequently advise clients that "shareholders' interests come first." They also tellcompanies to pursue shareholder approval as quickly as possible after signing a merger agreement.But in a deal between highly regulated companies, the shareholder vote can come a year or moreprior to a closing. And sometimes that's not such a great outcome.North Carolina agencies investigating Duke Energy CEO shuffleReuters, 7-6-12North Carolina officials late Friday launched two investigations into the surprising move by DukeEnergy Corp directors to replace former Progress Energy Chief Executive Bill Johnson with DukeCEO Jim Rogers, just a day after a deal to create the largest U.S. utility company was finalized.Editorial: Hope for Progress Energy customersTampa Bay Times, 7-6-12It comes at a steep price, but finally someone appears to have been held accountable for themismanagement of Progress Energy and its nuclear power debacles.Column: Duke Energy Screws up but It Can RecoverForbes, 7-6-12The nation's largest utility has stumbled out ofthe gate, prompting regulators and former boardmembers alike to question both the company's judgment and its intent. The newly-combined DukeEnergy and Progress Energy fired its chief executive after 20 minutes of duty and then re-hired itstrusted hand, Jim Rogers. It may smack of something shady but in the end, the revised Duke Energywill move ahead and the incident will be forgotten. Despite the screw-up, the mega-merger is beingtouted as the prototype for what the utility world could look like — one with financial muscle thaf isable to increase its leverage in the market. That, then, benefits both shareholders and consumers.N.C. attorney general opens investigation into Duke Energy CEO scandalRaleigh News & Observer, 7-7-12By John Murawski and David RaniiTroubles continued mounting for Duke Energy on Friday as the state Attorney General and the N.C.Utilities Commission opened separate investigations ofthe Charlotte-based power company's ousterof Bill Johnson as CEO.The utilities commission, which last week approved Duke's merger with Raleigh-based ProgressEnergy on the understanding that Johnson would head the combined company, directed Duke CEOJim Rogers to come to Raleigh next week to answer questions about Duke's timing of its decision toreplace Johnson with Rogers.The commission also directed Duke to preserve all letters, agreements, notes, minutes, memos,emails and other documents relating to the merger, an indication that a longer probe could beimminent.Johnson resigned from Duke late Monday, stunning employees and prompting charges of willfuldeception by several former Progress board members who expected Johnson to lead the combinedcompany.2LEGPGNDIR001276

The utilities commission is acting under the state public utilities law, which empowers the commissionto rescind, alter or amend a prior order or decision."It's important to the well-being of the state," Commission Chairman Edward Finley Jr. said in hisoffice Friday. "We can do a lot of things, but what we should do - that's the bigger question."In a parallel development stemming from the CEO switch, the N.C. Attorney General is trying todetermine if Duke officials lied to win a 7 percent rate increase last year, and also whether theymisrepresented facts to improve the chances of getting their takeover of Progress Energy approvedby the utilities commission.The AG's office late Friday issued a demand that Duke turn over all documents dating back to 2011between executives and board members. The demand lists more than 40 officials and also requestsall board minutes and committee minutes for the past year and a half.The investigations are the latest fallout from Duke's decision to oust Johnson as CEO on Monday,just hours after Duke closed its merger with Raleigh-based Progress. The merger had cleared its lastregulatory hurdle earlier that day before the S.C. utilities commission.The $32 billion deal had been proposed as a merger of equals, with Progress CEO Bill Johnsonslated to head the combined Duke. Duke CEO Jim Rogers was to become chairman.The N.C. Utilities Commission's Friday order says that the companies said Johnson would be CEOmultiple times in public filings and under oath.But on Monday, Johnson was asked by Duke's board to resign, and Rogers was reinstated as CEO.The company said Johnson resigned by mutual agreement, but his exit is largely seen as a palacecoup that has generated a firestorm of protest.On Wednesday, the Standard & Poor's credit rating firm said Johnson's abrupt exit raises enoughconcerns about Duke's management and internal stability to warrant putting the company on creditwatch for a potential credit downgrade."Despite our objection, Duke Energy said it needed a rate increase in order to protect its credit,"according to a statement from Attorney General Roy Cooper. "Now this significant managementchange within hours after the merger has put the company on credit watch, so we need to get to thebottom ofthis to make sure we protect consumers."Duke spokesman Tom Williams said Rogers will appear at the commission hearing on Tuesday. "Weare evaluating the Attorney General's request and will respond in due course," he said.Editorial: Let's hear it on Duke EnergyRaleigh News & Observer, 7-7-12Not all the fireworks this week were at Fourth of July shows. The relatively low-key merger betweenDuke Energy and Progress Energy blew up into a big story - and an embarrassment for the newDuke Energy, now the largest U.S. utility. North Carolina utility regulators need to ask, and soon, whatreally happened when Progress CEO Bill Johnson of Raleigh was unexpectedly forced out ofthecombined company he had been slated to run.From the moment of that announcement early Tuesday - Johnson, 58, officially headed the newDuke Energy for all of 20 minutes following formal completion of the merger - it was clear that hisdeparture was far from routine. Though billed as a resignation, Johnson's exit, it now appears, was anoutright ouster by the board of directors ofthe newly combined company.That board has a majority of members affiliated with Charlotte-based Duke; ex-Progress Energydirectors are in the minority. More and more, this looks like a boardroom coup, although it's uncleariTllll Illl llllll3LEGPGNDIROOI277

who orchestrated it or why. The big gainer, at least in the short term, is Duke CEO Jim Rogers, whowas going to become executive chairman. Now Rogers, 64, is completely in charge.Beyond personalities and places on the organizational chart, however, the change at the top hassignificance for the merger approval process that the two utilities successfully navigated. That's whythe N.C. Utilities Commission needs to step in and order a hearing.There will be plenty to discuss. On-the-record reporting by The N&O's John Murawski and DavidRanii reveals that at least some former Progress directors are hugely upset, saying they were"misled" and speaking of "corporate deceit." One even said that "I do not believe that a single directorof Progress would have voted for this transaction" if they'd known that Rogers, not Johnson, wouldlead the post-merger company.Indeed, it was written into the merger agreement that Johnson would be CEO. Business beingbusiness, the Progress folks may have been naive to expect things would work out in practice as theywere on paper. Maybe this was a case of unmet expectations rather than fraud or deceit.Right now, though, it's just as reasonable to conclude that the pre-merger Duke arranged things onthe surface so that its acquisition of Progress could jump the regulatory hurdles. Then Duke struck, tothe possible disadvantage of former Progress employees and even customers (will Duke honor theplan to retain a sizable Raleigh presence?).Shed no tears for Johnson in all this. The Wall Street Journal says his exit package could total asmuch as $44 million, with some of that coming out ofthe hides of North Carolina electric customers.Meanwhile, Standard & Poor's has put the new Duke on a watch list for a possible credit ratingdowngrade. All the more reason for the Utilities Commission to get everything out in the open - andto prove to the public that no matter how big it is, Duke Energy is still a regulated utility.Stunned agencies investigating CEO switch at Duke EnergyCharlotte Business Journal, 7-6-12By John DowneyN.C. regulators and Attorney General Roy Cooper have announced separate investigations into theunexpected switch of CEOs after Duke Energy and Progress Energy merged Monday.While it is not clear what action either group could take, it is clear that they feel misled byrepresentations that former Progress CEO Bill Johnson would run the new Duke after the merger.The N.C. Utilities Commission says it had no warning that the new board would instead immediatelyget Johnson's resignation and appoint reappoint Duke CEO Jim Rogers to the top post.Duke has been publicly mum on the reason for the switch. Duke's lead independent director AnnMavnard Gray announced at a conference call July 3 that Duke would not discuss Johnson'sresignation.Commission wants answersBut now the utilities commission has ordered Rogers to appear at a hearing July 10 to testify aboutthe decision. The commission says it is the "first step ... in an investigation ofthe timing ofthedecision to replace Johnson with Rogers, as well as other matters."Duke spokesman Tom Williams says Rogers will appear at the hearing as ordered.Cooper cited a decision by Standard & Poor's to review Duke's credit rating because of concernsover the unexpected change. That could lead to higher borrowing costs for the Duke if it cannotsatisfy S&P on the reasons for the move.4LEGPGNDIROOI 278

Cooper says, "We need to get to the bottom ofthis to make sure we protect consumers," who couldultimately face higher bills if the credit rating is downgraded.Trust issuesDuke has long had a reputation for good relations with regulators, particularly in the Carolinas. Butthe replacement of Johnson appears to be a clear misstep that could cost Duke years of building upgood will and trust. And it follows regulatory issues in Indiana, over an increasingly expensive coalplant and the questionable hiring of a regulatory attorney during those proceedings.The companies had agreed in Jan. 8 merger agreement that Johnson would run the merged •company. Rogers was to become executive chairman. Duke and Progress representatives —including both CEOs — repeatedly testified to the N.C. Utilities Commission and regulators elsewhereabout that plan.But when the merger closed July 2, Johnson resigned and the new Duke board appointed RogersCEO. The Wall Street Journal has reported thatthe board pushed Johnson out.Document demandsCooper has ordered Duke to produce all documents and communications concerning the merger fromJan. 1, 2011 —just before the merger was agreed to — and the present. The civil investigativedemand specifies communications from 16 members ofthe former Duke Board of Directors, 14members of the Progress board of directors and 11 top executives from the merged company,including Rogers and Johnson.It also demands meeting minutes for all board meetings in 2011 and 2012 and "documents orcommunications that discuss the prospective chief executive officer ofthe merged ... company."The utilities commission also ordered Duke to "preserve all letters, agreements, meeting minutes,memos, emails and other... records relating in any way to the merger, the integration ofthe twocompanies and (the) decision to replace Johnson with Rogers."Could Duke Energy-Progress merger be rescinded?Charlotte Business Journal, 7-7-12By John DowneyThe sudden departure of Duke Energy Corp. CEO Bill Johnson immediately after the completion ofthe company's purchase of Raleigh-based Progress Energy Inc. has upset a lot of folks. One suchgroup of folks might actually have the power to do something about it.A clause in state law allows for the N.C. Utilities Commission to revisit any action it has taken and torescind that action if it determines that route to be proper. Here is the clause: "The Commission mayat any time upon notice to the public utility and to the other parties of record affected, and afteropportunity to be heard as provided in the case of complaints, rescind, alter or amend any order ordecision made by it. Any order rescinding, altering or amending a prior order or decision shall, whenserved upon the public utility affected, have the same effect as is herein provided for original ordersor decisions."Under the terms ofthe merger contract signed in January 2011, Johnson was to be the CEO ofthemerged company and Duke CEO Jim Rogers its executive chairman. When the commissionapproved the merger June 29, after expedited hearings, it believed Johnson would be running thecompany.The commission has ordered Rogers, installed bv the Duke Board of Directors in that position afterthe $32 billion merger closed Monday, to a hearing Julv 10 to testify about the decision to replace5LEGPGNDIROOI 279

Johnson. The commission says it received no indication before that action that the merger plan hadchanged. It described the hearing as the "first step" in an investigation into what happened."Regulatory bodies like the commission have a great deal of discretion," said Chris Avers, a Poyner &Spruill attorney who represented one of Progress' industrial customers in western North Carolina inthe merger proceedings.Duke's shares (NYSE:DUK) fell 3 percent to close at $66.23 on Friday.Intrigue Behind Ouster at DukeWall Street Journal, 7-7-12By Joann S. Lublin and Rebecca SmithThe surprise dethroning of Duke Energy Corp.'s chief executive set off angry responses Friday, withformer directors at Progress Energy Inc. saying they never would have approved the $26 billionmerger of the two utilities if they had known what would happen with the top job.The comments elevate what had been a bitter dispute over the corner office into an open battle overone of the year's biggest deals, creating headaches for a company already under pressure for costlymissteps with power plants in Indiana and Florida.The merger closed Monday, creating a utility giant with former Progress CEO Bill Johnson at its helm.Hours later, the newly merged company's Duke-dominated board met for the first time and threw Mr.Johnson out of the job. It replaced him with Jim Rogers, who had run Duke before the deal and wasslated to become the merged company's executive chairman.The boardroom coup was the latest bit of maneuvering by Mr. Rogers, a lawyer who worked his wayto the top of one ofthe country's largest utilities.But the swap also undid what had been for Progress one ofthe central inducements to discussingand completing a deal. According to securities filings, Mr. Rogers told Mr. Johnson at their firstmeeting to discuss the merger in July 2010 that he would be willing to step aside as CEO, andProgress's board saw that concession as crucial.John Mullin, former lead director of Progress, bitterly criticized Mr. Johnson's ouster in a letter to theeditorial page of The Wall Street Journal, calling it "an incredible act of bad faith.""This was a critical element in the merger deliberations of our Board," Mr. Mullin said in the letter. "Ido not believe that a single director of Progress would have voted for this transaction as structuredwith the knowledge that the CEO of Duke, Jim Rogers, would remain as the CEO of the combinedcompany."Charles W. Pryor Jr., another former Progress board member, said the letter's sentiment won broadsupport from the half-dozen former Progress directors who, like Mr. Mullin, weren't chosen for thecombined board.North Carolina's Attorney General on Friday ordered Duke to turn over documents or communicationsthat discuss giving Mr. Rogers the top job. The North Carolina Utilities Commission, which approvedthe deal June 29, also is concerned that it may have been given inaccurate information or evenknowingly misled, General Counsel Sam Watson said.Most utilities commissions make it an infraction to knowingly submit false information. Mr. Watsonsaid the deal was approved on an understanding Mr. Johnson would head the combined company,and draft employment agreements were included with materials submitted to regulators in April 2011.LEGPGNDIR001280

Duke spokesman Tom Williams declined to comment on whether the CEO choice had been a keypart of the deal or about the board's deliberations. The company, he said, had kept utility regulatorsinformed.Mr. Rogers, who was attending an event at the Aspen Institute in Colorado Friday, didn't respond to amessage left on his cellphone. Mr. Johnson, reached on his cellphone Friday, declined to comment.His severance package, which a spokesman said could be worth more than $44 million, includes apayment of up to $1.5 million, but only on condition he not disparage Duke.Merger negotiations are sensitive undertakings, often involving conflicting priorities betweenexecutives' own need for control and their duty to secure the best deals for shareholders.In Progress's case, one person close to the situation said the company agreed to the original deal -which offered a relatively small 7% premium -- on the condition that Mr. Johnson would run thecombined company. Progress directors believed he would do better than Mr. Rogers at improvingreturns from regulated businesses and "pay a better dividend," this person said.Over the 18 months it took for the deal to close, some directors decided he wasn't the right person torun the company, a person familiar with the matter said.On Monday, Mr. Johnson was officially approved for the job during the first meeting ofthe combinedboard, with no inkling of anything amiss, people familiar with the matter said. Directors who hadjoined from Progress also didn't know what was afoot, one ofthe people said.The board then went into executive session without Messrs. Johnson or Rogers present. Leaddirector Ann Maynard Gray emerged and told Mr. Johnson the board wanted his resignation, peoplefamiliar with the matter said. He was given just hours to decide whether to fight the decision, thepeople said.Even if former Progress directors feel misled they have little legal recourse, experts in mergers andacquisitions said. While Mr. Johnson's claim on the top job was written into the merger agreement,power-sharing arrangements often don't work out, and bringing in a new CEO isn't typicallyconsidered a material change requiring a shareholder vote, said deal lawyers. "Utility deals take along time to get through the regulatory process, and a lot can happen," said Robert Profusek, an M&Alawyer at Jones Day. "I chalk this up to the passage of time."Mr. Rogers knows that process as well as anybody. He joined Indiana's largest utility, Public ServiceIndiana, in 1988, beginning a more than two-decade career in which he has repeatedly become CEOof utilities that merged into one. When Public Service Indiana merged with Cincinnati Gas & Electric,Mr. Rogers became the CEO ofthe combined company, Cinergy Corp., in 1994. When Cinergy wasacquired by the larger Duke Energy, Mr. Rogers became Duke's CEO in 2006.One of his marquee projects - a coal-gasification project in Indiana called Edwardsport -- is close to$1 billion over budget. State regulators are holding hearings on the company's plan to pass on $2.6billion of the $3.3 billion in costs to ratepayers. Duke has been accused of exerting improper influenceover state regulators in an ethics scandal that prompted the departure of several Duke executives.The company hasn't admitted any wrongdoing.While attending the Aspen Institute sessions Friday, Mr. Rogers was seen walking the campus talkingin a hushed voice on his phone but "still looking cool as a cucumber," according to a person also atthe think tank Friday.Duke Energy Power Play Provokes An UproarNew York Times, 7-7-12By Peter Lattman7LEGPGNDIR001281

A former board member involved in a merger that created the nation's largest electric utility hasblasted an abrupt leadership change at the company."This is the most blatant example of corporate deceit that I have witnessed during a long career onWall Street," said John H. Mullin III, the former lead director of Progress Energy, which completed itscombination with Duke Energy this week.On Monday, Duke closed its merger with Progress, a $32 billion deal, including debt, originally strucka year and a half ago. William D. Johnson, the head of Progress, was to become chief executive ofthe combined company, according to the terms ofthe merger agreement.But in a news release announcing the deal's completion, Duke's newly formed board put the Dukechief executive, James Rogers, in the top spot and said that Mr. Johnson had resigned "by mutualagreement."The news of Mr. Johnson's ouster sent shock waves through the energy industry. Since Tuesday,when the deal was announced, a growing chorus of dissent has condemned the last-minute move,including Mr. Mullin, who did notjoin the merged companies' board."As a noncontinuing director of the combined company," Mr. Mullin said in a letter to The New YorkTimes, "I now, along with similarly situated former directors of Progress, find myself without aconstituency and without an ability to mount a challenge to what I believe is one of the greatestcorporate hijackings in U.S. business history."Alfred C. Tollison Jr., another former Progress director who did notjoin the new Duke board, said: "Iwas surprised, shocked, and I felt misled. I did not expect this from Duke Energy and am reallydisappointed with how this turned out."The credit ratings agency Standard & Poor's has warned that it may cut the ratings of Duke, which isbased in Charlotte, N.O, because ofthe surprise switch."The sudden shift in management raises concerns about effective corporate governance, successfulhandling of the anticipated merger integration and the ongoing effective management of pendingchallenges that face the combined entity," said Dimitri Nikas, a Standard & Poor's analyst.North Carolina's attorney general is also seeking documents to see if consumers were misled aboutthe deal. The state's utilities commission said late Friday it was starting an investigation and orderedMr. Rogers to appear at a hearing on Tuesday.Shareholders appear to be concerned about the executive shake-up and the negative reaction to thenews. On Friday, Duke's stock dropped $2.34, or 3.4 percent, on heavy volume, while broader utilitystock indexes were essentially flat.Duke's boardroom coup is hardly the first time that a power struggle has developed after a largecorporate merger. Yet the unusual circumstances surrounding Mr. Johnson's removal - he was askedto resign within hours ofthe deal's closing - have raised eyebrows."The timing surrounding his resignation is highly unusual and is a sign that something dramatichappened," said Charles M. Elson, a professor specializing in corporate governance at the Universityof Delaware.It is unclear exactly what led to the executive change, and company officials have declined to discussthe move. Joele Frank, a spokeswoman for Duke, refused to comment on the board's deliberations.She also did not make Mr. Rogers available. Mr. Johnson could not be reached for comment.Watchers ofthe utility industry had long been surprised that Mr. Rogers, 64, would step aside andserve in the more titular post of executive chairman. A former trial lawyer, Mr. Rogers became Duke'schiefexecutive afterthe 2006 merger of Duke and Cinergy, an Ohio utility that Mr. Rogers had run formore than a decade.8LEGPGNDIROOI 282

"I would simply say that Bill is going to be the C.E.O. and he is going to be making the calls," said Mr.Rogers during a conference call when the deal was announced in January 2011.Mr. Johnson, 58, a former Penn State football player, practiced energy industry law at Hunton &Williams for a decade before joining a Progress predecessor company in 1992. He became chiefexecutive of Progress, which is based in Raleigh, N.C, in 2007.The two have contrasting styles. Mr. Rogers, the former head ofthe industry's trade association, isseen as an outspoken and aggressive leader, having pushed Duke into riskier businesses like energytrading and advanced coal technology. By contrast, Mr. Johnson has a more low-key style, and isviewed as a steadier, perhaps less ambitious manager."I don't think this is going to be a problem," Mr. Johnson said in January 2011, discussing the newcompany's leadership structure. "We are going to work well together."The management controversy has darkened what should have been a triumphant week for Duke andProgress. The deal created the largest electric utility in the United States, with 7.1 million customersand more than 29,000 employees in six states across the Southeast and Midwest. Merging thecompanies took 18 months to complete, requiring approval from at least six federal and stateregulatory bodies.One of those bodies was the North Carolina Utilities Commission. Robert Gruber, the chief publicadvocate at the commission, said that he had deep concerns about Mr. Johnson's dismissal. Hisagency, along with other regulators, had signed off on the merger with the understanding that Mr.Johnson would run the new company."Had we known about this management structure before the merger closed, we might not have votedto approve it," Mr. Gruber said. "Mr. Rogers is very competent but that is not how the deal wasadvertised."Mr. Mullin, the former Progress lead director, declined to comment beyond his letter, which he said hefelt compelled to write "on behalf of Progress's former shareholders, employees, customers andcommunities."A longtime investment banker at the old-line firm Dillon Read & Company, Mr. Mullin, 70, has servedon numerous public company boards, and is currently a director at Hess Corporation and SonocoProducts.He said he believed there was an "explicit agreement" that Mr. Johnson would become the chiefexecutive of Duke."It was a critical element in the merger deliberations of our board because we had confidence that Billwould successfully lead the combined companies," Mr. Mullin said."I do not believe that a single director of Progress would have voted for this transaction" had Mr.Rogers been kept in place as Duke's chief executive, he wrote.The letter from Mr. Mullin described the odd series of events that led to Mr. Johnson's departure.When the deal closed on Monday, Mr. Johnson assumed Duke's chiefexecutive post, abiding bytheterms ofthe merger.But his tenure as chief executive of the "new" Duke lasted only a few hours.The newly constituted Duke board, which had a majority of "old" Duke directors, called an "executivesession," meaning a meeting of all board members save the company's executives. A majority votedto replace Mr. Johnson with Mr. Rogers.Mr. Johnson was shocked by the board's action, according to a friend, but complied with the board'srequest. He submitted his resignation just hours before Duke named Mr. Rogers chief executive.9LEGPGNDIROOI 283

"This can only be described as an incredible act of bad faith," Mr. Mullin wrote.On Tuesday, Mr. Rogers is scheduled to meet with Progress's employees at the Marriott hotel indowntown Raleigh.A Progress official, who spoke on the condition of anonymity because he feared for his job, said thathe wanted an explanation for the board's actions."Rogers is not getting off on the right foot and won't be getting off easy next week," said the Progressofficial.For his part, Mr. Johnson has received a lucrative exit package, according to a securities filing. He willreceive payments of about $44 million, which includes a $7.4 million severance. He receives a lumpsumpayment of $1.5 million so long as he does not disparage Duke and cooperates with thecompany.Opinion: Dealpolitik - Duke Switch and Shareholder FairnessWall Street Journal, 7-6-12By Ronald Barusch (Wall Street Journal columnist)Corporate lawyers frequently advise clients that "shareholders' interests come first." They also tellcompanies to pursue shareholder approval as quickly as possible after signing a merger agreement.But in a deal between highly regulated companies, the shareholder vote can come a year or moreprior to a closing. And sometimes that's not such a great outcome.Duke Energy's merger with Progress Energy forming the largest electric utility in the country maybecome Exhibit A for letting shareholders have the full picture before being required to vote. Dukeand Progress announced the completion of their merger Tuesday morning, 18 months after the dealwas first announced.The shocker in that announcement was that although the merger agreement and many filings sincehad indicated that William Johnson, the CEO of Progress, would act as the combined company'sCEO, Johnson resigned "by mutual agreement." Instead, Jim Rogers, the pre-merger CEO of Duke,will step into that role.It was always anticipated that Rogers would be executive chairman of the combined company andthe Duke directors would get to choose the "lead director". With the switch in CEOs, the deal nowlooks even more like a takeover of Progress by Duke rather than a merger of equals. In fairness,Duke never called the deal a merger of equals in any of its filings although other commentators hadreferred to it as such.The lead director of Progress who stepped down Tuesday as part ofthe closing called the deal a"semi-merger of equals." The relatively modest 7% premium for Progress shareholders lent support tothat characterization.The identity of the CEO was clearly a critical issue throughout the transaction. In early August of2010, just ten days after the two companies signed a confidentiality agreement:"Members of the Progress Energy board of directors noted that they viewed the strategic emphasison the regulated utility business as critical to the value of the potential transaction, that the corporategovernance and organizational structure ofthe combined company created by the combination ofDuke Energy and Progress Energy would have to support that strategy, and that they viewed havingMr. Johnson as the chief executive officer of the combined company as an important element inensuring implementation of that strategy (emphasis added)," according to the companies' joint proxystatement issued a year ago.10C m S S ^ f r LEGPGNDIROOI 284

Rogers for his part had volunteered that he would be receptive in stepping back to being justexecutive chairman and having Johnson be CEO in his first meeting with Johnson on the deal on July18, 2010.The identity ofthe CEO was arguably considered extremely important—material in securities-lawspeak. The CEO arrangement is discussed in ten different sections ofthe merger proxy issued in Julyof 2010 (including on page two of it). And it appears in the first article ofthe merger agreement.So the switch from Johnson to Rogers as CEO has come as quite a shock—particularly to formerlead director of Progress John Mullin who has lambasted the replacement as "corporate deceit." and"an incredible act of bad faith"Did the directors ofthe newly constituted company do something wrong? Unless they had reason tobelieve they planned to make this switch at the time of the shareholders meeting in August 2011 (inwhich case the proxy used for the meeting was misleading), not at all. Directors have the right tochange their mind. Indeed they always have to examine what is in the best interests of shareholders.If they conclude they need to change course for that reason, they are required to do so. Things arealways changing in business, and directors should reexamine their business.We do not know what caused the directors to change their mind, but Duke was not contractuallyobligated to retain Johnson as CEO pursuant to the merger agreement.What went wrong here was the system, not the decision-making process. In utility mergers and othertransactions with lengthy regulatory clearance processes, the parties almost always requireshareholders to vote on the transaction relatively early in the process and not at the end when all thefacts are known.Another good example of this phenomenon was in the ill-fated bidding war between Hertz and Avis toacquire Dollar Thrifty Group. Neither party was nearly ready to close a transaction or knew whatterms they would agree to with the antitrust authorities (indeed they both eventually walked awayfrom the acquisition), but shareholders were forced to choose between the two bidders when themain issue between them was who had more antitrust risk. The answer to that question would havebeen known with certainty if shareholders had been permitted to wait to vote.Parties to a merger agreement force the early vote because it is generally believed that onceshareholders vote, the "fiduciary out" ofthe board—allowing a board to take a higher bid orrecommend rejection ofthe deal if something happens to make it unattractive—can terminate. Thus,there is rush to obtain the shareholder approval to eliminate that deal risk.But that approach raises the question of whether shareholders should have an opportunity to see thewhole picture before they vote. That is hard to do when the vote occurs almost a year prior to theclosing. Things change, regulators can demand their pound of flesh and directors can change theirminds.Why shouldn't shareholders have the right to wait to be asked for approval after these things happen?North Carolina agencies investigating Duke Energy CEO shuffleReuters, 7-6-12By Eileen O'GradyHOUSTON -- North Carolina officials late Friday launched two investigations into the surprising moveby Duke Energy Corp directors to replace former Progress Energy Chief Executive Bill Johnson withDuke CEO Jim Rogers, just a day after a deal to create the largest U.S. utility company was finalized.CPNElDg^TIA,!. LEGPGNDIROOI 285

The North Carolina Utilities Commission, which approved Duke's $18 billion buyout of Progress latelast week, ordered Rogers to appear at a hearing Tuesday to answer questions on the timing of thedecision to replace Johnson, the commission said in a two-page order.Separately, Roy Cooper, attorney general in North Carolina where both companies are based,opened an investigation and ordered Duke officials to produce merger-related documents from boardmembers and senior managers of both companies from as far back as January 2011."This significant management change within hours after the merger has put the company on creditwatch, so we need to get to the bottom of this to make sure we protect consumers," Cooper said in astatement.The attorney general requested "all documents or communications that discuss the prospective chiefexecutive officer of the merged entity" and "any discussion of any effort or plan for James E. Rogersto be the chief executive officer of such merged entity."The agency also seeks documents that "identify or assess risks and/or impacts," such as financial,investor or regulatory associated with a change of management after the merger.A Duke spokesman said Rogers would be at the commission hearing Tuesday and the company wasevaluating the request for documents from the attorney general.The investigations followed public comment earlier Friday by Progress's former lead director thatDuke directors acted in "bad faith" when it replaced Johnson.Duke completed the buyout of Progress on Monday, and on Tuesday the Duke board announced thatJohnson, who had been slated to run the combined company, was leaving by "mutual agreement."The decision came as a surprise to many Duke shareholders, Wall Street analysts, and utilitycommissions that had approved the deal.Standard & Poor's said it was reevaluating credit ratings for Duke and its utilities, citing themanagement news."The sudden shift in management raises concerns about effective corporate governance, successfulhandling of the anticipated merger integration and the ongoing effective management of pendingchallenges that face the combined entity," S&P said.Replacing Johnson "can only be described as an incredible act of bad faith with regard to theundertakings of the merger agreement," John Mullin, former lead director at Progress, said in thepublic letter dated July 5. "I think it was a clearly premeditated contravention of one of the mostcentral tenets of our agreement."The decision by the 18-person Duke board, with 11 legacy Duke directors and seven Progressdirectors, to install Rogers as chief executive officer was "the most blatant example of corporatedeceit that I have witnessed," Mullin wrote.Duke declined to comment on Friday. Earlier in the week, the company and its lead director, AnnMaynard Gray, declined to give any further details about Johnson's resignation.Under a non-disparage clause in the separation agreement, Johnson and Duke are not allowed tomake statements that cast the other "in a critical or unfavorable light."Johnson will receive up to $44 million in payouts related to his resignation from the company,according to regulatory filings.The deal, announced in January 2011, created the largest U.S. power company, with 57,000megawatts of generating capacity and 7.1 million electricity customers in North Carolina, SouthCarolina, Florida, Indiana, Kentucky and Ohio.It also became the second largest U.S. operator of nuclear power plants.CONFIBEblilAL2LEGPGNDIR001286

The original plan had been for Rogers to serve as executive chairman ofthe combined company, withJohnson as president and CEO.Johnson was on the board when the decision was made, along with Rogers. It is unclear if either manvoted on the CEO change, though Johnson has now left the Duke board, reducing its size to 17.Duke shares have dropped 4.4 percent since the announcement on Tuesday morning. Bycomparison, Standard & Poor's' utilities index is down about 1.4 percent over the same period.Duke shares closed down 2.3 percent Friday at $66.23 amid a broad market slide.Despite the controversy, corporate governance expert and University of Delaware professor CharlesElson said he was untroubled by the move."Until the two companies come together, you never know who will be the best," Elson said. "Theboard's job is to pick who is the most effective leader, period. Sometimes before a merger, oneperson appears better and after a merger someone else appears better."NORTH CAROLINA CONCERNSRobert Gruber, executive director of the NCUC Public Staff, an independent agency that makesrecommendations to the utility commission on consumer matters, said Johnson's sudden departureraises questions about how the combined utility will operate."They presented it as a friendly merger that made the best of the synergies, the cost-savings andputting the best people possible in place to manage the company," Gruber said. "Suddenly, it becameand unfriendly merger in one day."The controversy did not appear to concern Gruber's counterparts in South Carolina."We have great respect for Bill Johnson, but we also have great respect for Jim Rogers," said DukesScott, executive director ofthe South Carolina Office of Regulatory Staff, which participated in themerger deliberations.Johnson's departure from Duke cost him a leadership position at the Nuclear Energy Institute, thenuclear industry's Washington-based trade group.Johnson, elected in May to a second one-year term as chairman of the organization, was no longereligible to lead NEI once he resigned, an NEI spokesman said in an email.Johnson's resignation is not without precedent among large companies that have combined.John Thain was forced to quit as head of Bank of America Corp's investment banking and wealthmanagement business just three weeks after he sold Merrill Lynch to the bank, after the scope oflosses from mortgages and toxic debt on Merrill's books came to light.And Citigroup Inc's plan to have Sandy Weill and John Reed serve as co-chairmen and co-CEOsafter Citicorp merged with Travelers in 1998 lasted about a year-and-a-half. Reed stepped down in2000.Editorial: Hope for Progress Energy customersTampa Bay Times, 7-6-12It comes at a steep price, but finally someone appears to have been held accountable for themismanagement of Progress Energy and its nuclear power debacles.Duke Energy abruptly parted ways this week with Bill Johnson, the former Progress Energy chiefexecutive who was supposed to be the top official for the merged companies. If the Florida PublicService Commission and the Legislature had been similarly aggressive, ratepayers would not be on"c5NfHDENTl£L13LEGPGNDIROOI 287

the hook for billions in costs tied to one nuclear plant thafs broken and another that may never bebuilt.Duke made the announcement that it was replacing Johnson as CEO ofthe nation's largest electricutility with Duke Energy CEO Jim Rogers just hours after the merger. The merged company's board,which is dominated by former Duke board members, was so eager to make the switch that it waswilling to pay Johnson up to $10.3 million to go away. That is a ridiculous sum for someone with histrack record. But that pales in comparison to the money on the line as Duke decides what to do withthe damaged Crystal River nuclear plant and whether to proceed with the proposed nuclear plant inLevy County despite soaring costs.Perhaps a fresh set of eyes will help Duke see what Florida regulators and state lawmakers refuse toacknowledge. First, it's time to pull the plug on building the Levy County nuclear plant. The cost hasjumped from $5 billion when the project was announced in 2006 to $24 billion and rising. Conditionshave changed since the plant was first proposed, with natural gas prices dropping and the weakeconomy reducing projected demand for electricity. The only way out would be for Duke, with itsconsiderable financial resources and influence, to find a partner for the plant that would take some ofthe burden off Florida ratepayers. Good luck with that.Second, there is reasonable doubt about whether the shuttered Crystal River nuclear plant is worthfixing. Progress Energy badly botched its do-it-yourself repairs and the plant has been shut downsince the fall of 2009. Regardless of whether the plant is fixed or another natural gas plant is built toreplace the power, ratepayers will be on the hook. But if Rogers acts as decisively as the Duke boarddid in picking him to replace Johnson, Duke's new Florida customers can only benefit.Compare Duke's decision-making with the failure to grasp reality in Tallahassee. In February the PSCapproved a limp deal with Progress Energy that provided a modest refund but still raised rates and letcustomers continue to be billed in advance for the Levy project for the next five years. And theLegislature has not lifted a finger to repeal the 2006 law that foolishly allowed electric utilities to billcustomers for these advance nuclear construction costs even if the plant is never built.This is what it has come to in the Sunshine State: The best hope utility customers have to protecttheir wallets comes not from regulators or legislators but from the new CEO of the nation's largestelectric company. That speaks well of the highly regarded management from the old Duke Energy,but it reaffirms the toothlessness ofthe industry lapdogs in Tallahassee.Column: Duke Energy Screws up but It Can RecoverForbes, 7-6-12By Ken SilversteinThe nation's largest utility has stumbled out ofthe gate, prompting regulators and former boardmembers alike to question both the company's judgment and its intent. The newly-combined DukeEnergv and Progress Energy fired its chief executive after 20 minutes of duty and then re-hired itstrusted hand, Jim Rogers.It may smack of something shady but in the end, the revised Duke Energy will move ahead and theincident will be forgotten. Despite the screw-up, the mega-merger is being touted as the prototype forwhat the utility world could look like — one with financial muscle that is able to increase its leverage inthe market. That, then, benefits both shareholders and consumers.Why now? Recession has tormented the electric power business since 2009. The demand for powerhas fallen, which has chipped away at bottom lines, all of which has forced utilities to delay muchneeded investment in infrastructure. But such capital outlays will be required not just to meet theCOMR5|NflAL ^ LEGPGNDIROOI 288

expected upswing in power demand but also to satisfy utility regulators at both the national and statelevels.Enter Duke-Progress, a 57,000 megawatt behemoth that is expected to be highly productive andcreate enormous efficiencies — the kind that will drive down the price of everything from powerpurchases to paper clips. As those synergies start to escalate, the hope is that the savings would flowback to both ratepayers and shareholders, who benefit in the form of greater dividends. At the sametime, the combined entity would be better positioned to invest in new technologies so that it couldbecome cleaner.Both companies have strong balance sheets with lots of cash on hand, allowing Moody's InvestorServices to maintain its "stable outlook" for the combined entity. But the credit ratings agency went onto say that the managerial fluctuation creates an "uncertain" environment whereby other executivesmay also leave.The sudden change-up in leadership has capped what has otherwise been a relatively undramaticmerger campaign. As with all such deals, the two utilities had to satisfy a plethora of regulatorybodies. In the end, the companies now have to build more transmission to allow competing energy toflow more freely into Carolinas where the two are based. Despite arguments that the merger wouldcreate a lopsided market, regulators agreed that a financially stronger company would be betterpositioned to bankroll future projects.With previous mega-mergers, it has been the state regulators that have been the deciding factor — aproposition that has derailed some major deals. New Jersey utility commissioners, for example,rejected in 2006 the marriage of Exelon Corp. and PSEG Corp, saying that the merged companywould be too powerful. Meantime, Constellation Energy and Florida Power & Light wanted to combinein 2006 but state regulators nixed the idea for the same reason.Today, though, state regulators blessed Exelon's purchase of Constellation. The same prevailingdynamics that allowed that marriage have also paved the wave for the Duke-Progress deal.But with the apparent CEO flop now hovering over that coronation, the state regulators are perplexed.They say that they can review their decision, although it would seem improbable that they would thenreject it based on who the current board of directors want as their top manager.To that end, Jim Rogers, who has led Duke for years, has a stellar reputation with all ofthe utility'sstakeholders. In previous discussions with this writer, he has said that his door is always open andthat much of his job is to ensure a mutual understanding. It's about building clean, affordable andreliable electric generation, he says, which means that utilities must have a "portfolio of options."Such conciliation, however, is not placating certain former Progress Energy board members who stillbelieve in Bill Johnson, who led that company and was slated to head Duke. In a letter to the WallStreet Journal, past Progress board member, John Mullin, said that none of his colleagues wouldhave voted for this transaction if they thought CEO Rogers would have continued to head thecombined utility.That fuss may also light up other opponents of the deal. Beyond the community activists who don'tlike "bigger-is-better," there are some concerns from those shareholders who fear that the deal won'tlive up to its promise — that the expected synergies won't pay off and that the corporate culturesmight not mesh.But corporate officers from all sectors say that they have learned from past mistakes. Companies,generally, say that their approach to merging is more thoughtful, all with the aim of realizing expectedfuture benefits such as cost savings and complementary features. For their part, utilities have highfixed capital costs that might be better managed if they are spread over a broader geographical base.C&NElDEffTIAL5LEGPGNDIROOI 289

Before the market can ultimately determine whether size matters, state regulators may havesomething else to say about the Duke-Progress merger. The odds are still in the utilities' favor butthey sure screwed up and have given their critics plenty of fodder.This newsletter was brought to you by the Corporate Media Relations team. To opt out ofthisnewsletter or to provide feedback regarding the content of this newsletter, please contact Tom Shiel.CONhpEfJTIAL16LEGPGNDIR001290

From:Harris DeLoachSent:Saturday, July 07, 2012 9:28 AMTo: I Redacted - Personal Info. ISubject:RE: tast eve_8ill,I reread my note to you of yesterday PM and realized something was left out.It might bebetter to get together in person if possible.I have a break in my schedule on Mon.From 10:30--2.1 can fly to Spartanburg and meet you at airport or for lunch if you areavailable.Regards,HarrisFrom: I Redacted - Personal Info. ISent: Friday, July 86, 2012 5:45 PMTo: Harris DeLoachSubject: Re: last eveam at Lake Summit and back Sunday...let's chat Sunday afternoon, if that works for you....Ican call you...I am running out right now.Might I call you at 5 pm?...am flexible...hope you had good 4th.Original Message-From: Harris DeLoachTo: | Redacted - Personal InftTSent: Fri, Jul 6, 2012 5:19 pmSubject: RE: last eveRedacted - Personal Info._8ill,hope that you and your family had a good holiday without TOO MANYinteruptions.If you have the time it would probably be beneficial to talk for acouple of minutes. I am on the Coast of SC until Sun midday [Reacted-pers.infoT]and backin Hartsville Redacted -Pers. mfo. mid afternoon on Sunday.Give me a call or you giveme a time and number and I willcall you.Regards,HarrisFrom:Redacted - Personal Info.CONRDEfrriALLEGPGNDIR001291

Sent: Tuesday, July 03, 2012 6:53 AMTo: Harris DeLoachSubject: last eveknow you uncomfortable as was I...hope some time to get chance to sharethoughts.hope for best and wish you a good 4th...This e-mail message and all documents which accompany it are intended only forthe use of the individual or entity to which addressed, and may containprivileged or confidential information. Any unauthorized disclosure ordistribution of this e-mail message is prohibited. If you have received thise-mail message in error, please notify the sender and delete this from allcomputers.CONFÊNTIAL2LEGPGNDIR001292

Subject:Start:End:Show Time As:Recurrence:Organizer:Special Telephonic Duke'-Eriergy Gorporate 'Governance Gommittee MeetingMon 7/9/2012 11:00 AMMori 7/9/2012;12:00;,PMTentative(none)Harrington,Sue CA one-hour special telephbniCiCorporate Gbyefriance Committee meeting will be.held on Monday,July 9, from 11:00am to 12:00noon. The purpose of theimeeting is-to discuss the Company'sresponse to the .questions to be raised by the North Carolina Utilities Commission at their hearing phTuesday, July 10.Dial-In InformationCharlotte and International:Toll Free:.Participant Code:Redacted - Personal Info.Moderator:CONFIDBNTIAL LEGPGNDIROOI 293

From:Sent:To:Subject:Redacted - Personal Info.Saturday, July 07, 2012 2:00 PMHarris DeLoachRe: last eveTried to call. About 2pm. Happy to chat. Couple of thoughts before we might meet. My cellis I Redacted - Personal Info. |Sent from my iPhoneOn Jul 1, 2012, at 9:27 AM, Harris DeLoach Redacted - Personal Info. wrote:> _Bill,I reread my note to you of yesterday PM and realized something was left out.It mightbe better to get together in person if possible.I have a break in my schedule on Mon.From10:30--2.I can fly to Spartanburg and meet you at airport or for lunch if you areavailable.Regards,>Harris> From: Redacted - Personal Info.> Sent: Friday, July 06, 2012 5:45 PM> To: Harris DeLoach> Subject: Re: last eve>> am at Lake Summit and back Sunday...let's chat Sunday afternoon, if that works for you....Ican call you...I am running out right now.>> Might I call you at 5 pm?...am flexible...>> hope you had good 4th.>>> Original Message> Redacted - Personal Info.> Sent: Fri, Jul 6, 2012 5:19 pm> Subject: RE: last eve>>>> Bill,hope that you and your family had a good holiday without TOO MANY>> interuptions.If you have the time it would probably be beneficial to talk for a>> couple of minutes.I am on the Coast of SC until Sun midday [Redacted-Pers. info. | and back>> in HartsvilleRedacted - Pers. Info.mid afternoon on Sunday.Give me a call or you give> me a time and number and I will call you.Regards,>>>> HarrisCONFIDENTIAL LEGPGNDIROOI 294

From:Redacted - Personal Info.>> Sent: Tuesday, July 03, 2012 6:53 AM>> To: Harris DeLoach>> Subject: last eve>>>> know you uncomfortable as was I...hope some time to get chance to share>> thoughts.>>>> hope for best and wish you a good 4th...>>>>>> This e-mail message and all documents which accompany it are intended only for>> the use of the individual or entity to which addressed, and may contain>> privileged or confidential information. Any unauthorized disclosure or>> distribution of this e-mail message is prohibited. If you have received this>> e-mail message in error, please notify the sender and delete this from all>> computers.>>>>>>>> This e-mail message and all documents which accompany it are intended only for the use ofthe individual or entity to which addressed, and may contain privileged or confidentialinformation. Any unauthorized disclosure or distribution of this e-mail message isprohibited. If you have received this e-mail message in error, please notify the sender anddelete this from all computers.>CONFIDENTIAL LEGPGNDIROOI 295

From:Harrington, Sue C [Sue.Harrington@duke-energy.com]Sent:Saturday, July 07, 2012 2:13 PMTo: Ann M. Gray; Michael Browning; Harris DeLoach; Dan DiMicco | Redacted - Personal info.Subject:Marie McKee T Redacted - Personal Info. |Scheduling of a Special Telephonic Corporate Governance Committee Meeting on MondayPlease let me know your availability to participate in a one-hour special telephonicCorporate Governance Committee meeting on Monday, July 9, between 9:00am and noon. Thepurpose of the meeting is to discuss the Company's response to the questions to be raised bythe North Carolina Utilities Commission at their hearing on Tuesday, July 10.Thank you.SueSue C.HarringtonAssistant Corporate SecretaryDuke Energy Corporation550 South Tryon St/DEC45AP.O. Box 1321(28201)Charlolte, NC 28202Phone: 704-382-8144Fax: 980-373-853SSue. Ha rringtoniS)duke-en erev.comCONMENTIAL1LEGPGNDIROOI 296

From:Sent:To:Subject:Harris DeLoachSaturday, July 07, 2012 4:00 PMHarrington, Sue CRE: Scheduling of a Special Telephonic Corporate Governance Committee Meeting onMondaySue,! can be available after 10:30AM until 2 PM on Mon. The 9th.HarrisFrom: Harrington, Sue C [Sue.Harrington@duke-energy.com]Sent: Saturday, July 07, 2012 2:12 PMTo: Ann M. Gray; Michael Browning; Harris DeLoach; Dan DiMiccof Redacted - Personal info. MarieMcKee | Redacted - Personal Info. |Subject: Scheduling of a Special Telephonic Corporate Governance Committee Meeting on MondayPlease let me know your availability to participate in a one-hour special telephonicCorporate Governance Committee meeting on Monday, July 9, between 9:00am and noon. Thepurpose of the meeting is to discuss the Company's response to the questions to be raised bythe North Carolina Utilities\Commission at their hearing on Tuesday, July 10.Thank you.SueSue C. HarringtonAssistant Corporate SecretaryDuke Energy Corporation550 South Tryon St/DEC45AP.O. Box 1321 (28201)Charlotte, NC 28202Phone: 704-382-8144Fax: 980-373-8535Sue.Harringtoniaduke-energy.comCONFH^NTIAL LEGPGNDIROOI 297

From:Sent:To:Subject:Harris DeLoach• Saturday; July 07,2012 4:00 PMHamngtpri^Sue GRE; ScHe'duiihg;6f a Special Telephonic Corporate'Governance Committee Meeting ohMondaySue,I can be available after 1 19:30AM ] until 2 PM oh Moh. The 9th.HarrisFrom: Harrington, Sue C [Sue>Harringtonoduke-energy.com]Sent: Saturday, July 07, 2912 2:12: PMTo': Ann M. Gray; Michael-. Browning; Harris DeLoach; Dan DiMicco f" Redacted - Personal info. |;: MarieMCKee | Redacted - Personal Info. ]Subject : Scheduling of a Special. Telephonic Corporate Governance Committee Meeting on MondayPlease let me know, your availability to participate in. a-- one-hour special telephonicCorporate Governance Committee meeting"'on Moriday, July 9 : , between 9:99am and noon. Thepurpose of the meeting is to discuss the Company's response to the; questions'to bej raised by'the North Carolina Utilities Commission at their hearing oh Tuesday, July '10.Thank you.SueSue C. HarringtonAssistant Corporate. SecretaryDuke Energy Corporation550 South Tryon St/DEC45AP.O. Box 1321 (28201)Charlotte, NC 28202Phone: 704-382-8144Fax: 980-373-8535Sue.HarringtonOduke-energy.comCONFIDENTIALLEGPGNDIR001298

From: MdKee, Marie I Redacted - Personal Info."Sent:to:Subject:Attachments:Saturday, July 07, 2012 6:54 PMHarris DeLbachContact John McArthur.McArthur -johnVcf-'ATTOOOOl.txtCONFIDENTIAL LEGPGNDIROOI 299

From:Sent:To:Subject:Harris DeLoachSaturday, July 07, 2012 8:54 PMMcKeeV.MarieRE: Contact John McArthurMarie,tks,I can't open John's number.Can ybu. pis reserid?Tk"sFrom: McKee, Marie | Redaaed - Personal Info.Sent: Saturday,. July 07, 2012 6:54 PMTo: Harris DeLoachSubject: Contact John McArthurHarrisCONFIDENTIALLEG P.G N QIRQ01300

From: McKee, Marie 1 1 Redacted - Personal Info.Serit:To:Subject:Saturday, July 07, 2012 9:51 PMHarris DeLoachRe: Contact John,McArthurRedacted - Personal Info.Let me,know if you heed ariything.elseThanks for the; call.ME. Marie McKeeRedacted - Personal Info.Sent.from my iPhoneOn. Jul- 7, 2612,- at;;8:52 PM,: "Harris DeLoach" < Redaaed-Personalinfo. > ; wrote:> Marie,tks,I can't .open John's riumber.Can you pis reserid?Tks.>> Harris> ..From:; McKee, Marie | Redacted-Personal Info. |> Sent: Saturday, July 07, 2012 6:54 PM> To: Harris DeLoach> Subject: Contact,John McArthur>.>> This e-mail message arid all documents which accompany i t are intended 'only for the' use' ofthe individual or entity to which •add'resVe'd, and may containprivileged or conf ideritialinformation. Any unauthorized .disclosure, or distribution of this;, e-mail :message is,prohibited.. If you have received this e-mail message in error, piease notify the: sender anddelete this from-all computers.>CONFIDENTIALLEGPGNDIR0qi30i

From:Sent:To:Shiel, Torn Jr [T6m;Shief@duke-energy.com]Sunday, July 08, 20,12 7:10 AMNews'in ReviewCc; | Redacted - Personal Info. ~|Subject:Diike Energy. News in Review 7-8-12- SPECIAL EDITIONAttachments:. image003.gif; image002.jpgDuke Eriergy News' iri ReviewJuly 8, 2812(Due. to a technical issue, these, stories? have riot yet been; posted to the, employee portal._,They will be posted as soon as. the; issue; is. resolved .)[Merger cartoon in Observer 7.-8-12]Siers cartoon in 7-8-12 Charlotte ObserverArticlesState panel wants to know if buke misled, it on: merger Chariotte Observer-, 7-8-12 More will, beon the line than who's; in charge?of the largest U.S. electric'Utility when Duke Eriergy CEOJim Rogers testifies Tuesday- befbre the N.C. utilities*Cpmmissidri. The, panel wants'to knowwhy, more than a year after being told" that former Progress Energy chief Bill Johnson wouldlead the, merged companies, he was apparently sacked soon, af.ter the; deal ;cTosed.Broken Crystal River 'nuclear' plant; is Duke Energy's :prbbiem now Tampa .Bay' Times, 7-8^12 Itwas a marriage proposal made in utility, heaven:; Progress^ Energy and Duke Energy joining toform the. nation's biggest power company,; Then canier the suspicions. Did puke know everythingIt needed to about, its partner-to-be? Was Progress;holding back about Its Florida-basednuclear troubles? Duke: officialsâren't saying; what happened or why Bill. Johnson, so centralto 1 a merger 18 moriths in the; planning, was-hastily; cast aside. But; critics, quickly connectedthe dots. They pointed to Progress Energy's broken Crystal* River '• nuclear plant.andsuggestions that Duke wds unhappy to learn' top Tate the extent, oflilts •troubles'.:North Carolina:to Probe Duke Takeover'of Prpgress Amid CEO Exit Bloomberg, 7-7-12 NorthCarolina is investigating Duke-Energy. Corp./'s $17.8 biliion takeover of Progress Energy Inc.•after the company unexpectedly changed its chief executive- officer.• "Th'is : rSignificaritmanagement change within hours after the merger has put the company on credit watch, so weneed to ;get to the bottom of this to make sure we protect consumers," North Carolina AttorneyGeneral Roy Cooper said yesterday in an ;e- mailed statement.Editorial: Extraordinary power play at Duke Energy Salisbury (N.C.) Post,. 7-8-12 Twice in theDuke-Progress Energy'merger saga, federal regulator's^ turned dbwri; the deal for fear it i^duldgive the resulting company too much monopoly power. Now that'theimerger has gone- through, alot of people are wondering if Duke executive ; Jlm Rogers: hasitoo much monopoly power.Duke Energy tight lipped on merger questionsNBC17 (Raleigh), 7-7-12Duke.Energy says it wiil. resp.ond-: later" to -question's, .from.the: Attorney -General and the North.Carolina Utilities Commission about the .ouster of CEO Bill Johnson minutes, after the. DukerlProgress Energy merger:was approved.State panel wants to know if puke misled it on merger Charlotte Observer, 7-8-12 By BruceHenderson More will beon ihe line.than who's-in charge of : the. largest U.S.. .electric utilitywhen.Duke Eriergy CEO Jim Rogers testifies Tuesday before the: N.C. Utilities Cornmissiori.CONFIDENTIAL * LEGPGNQIR0013Q2

The panel wants to. know why, more than a year after being told' that former Progress Energychief Bill 36h'nsbn would lead the merged companiesy he' was apparently sacked sboh after thedeal closed.puke has- said little: about the.hearing other than that.Rogers, 64, a longtime CEO who hassurvived three mergers,, will, appear. But: the company has every, reason to cooperate.;State law gives the seven ^'member commissibh (one seat is vacant) authority tb "rescind, alteror amend any order or 'decision" It Has'made. The commissibh approv'ed; the $32 billion mergeron June 29.Jt alsp decides whether to. grant rate 'increases - ;bpth. of Duke' s, operating, companies, in theCaroiinas plant to s.eek- : one, this year - and, at some; point: will be; asked to let the twocompanies become one.While it's unlikely to : try to dis'maritlie a :merge"r: that took 18 months'i across a half.-dpzen"jurisdictions tp approve, observers say the commission' could use'its leverage to extract hew;conditions if it doesn't like Rogers' explanation." I don't- think the situation has- ever ;come-' up before r- there:; aren't that many mergers" ofN.C. utilities, said Raleigh attorney. Ralph McDonald, who's ^practiced ;before thei commissibnsince the late 1960s. "This is new grbund;"While its authority is broad j; McDbhaid. said the commission could take more limited steps,such as by adding conditions to its approyai. in approving: the, merger, for example, thecommission insisted that; Progress "maintain a significant corporate and utility presence" inits hometown of Raleigh.Robert Gruber, head of 4 the commission's Public Staff, which' represents consumers, said hisstaff may recommend what the commission 'does ohce it hears; froni .Rogers;.;"t think they want, to know; when Rogers and the., board knew 'that Johnson was. going to be asked:to resign, so. they could determine if it'was still whiie; the merger was under consideration,"he said. " I think prbbabiy: the. main thing they're looking for is 'tihen they knew and whetherthey deceived the cbmmis'sibri."Rogers could testify that he's the wrong-man;to ask - it was the: board's decision, not his.He could say that any cpmpahy reserves the right to change management;Johnson's severance agreement ,s.ays ;neither he nor puke can publiciy :gp beyond a Tuesday pressrelease that said the two parted ways under "mutual agreement." That: doesnft prevent eitherfrom "providing truthful disclosuresâs required by applicable law or legal process','* itadds.Duke also faces a demand from N.C. Attorney Generai Roy ,Cooper to turn, over by July :31 boardminutes and other documents from;, the time the merger was announced., Cooper- made the .demand"after Standard & Poor's placed Duke on a*credit watch last week, after 1 Johnson's resignation.Moody's, another rating servicei affirmed its outlook for Diike:.Oh Friday Duke's. stock price fell .3.4 .percent, its biggest'^ decline since Aug. 10, BloombergNews reported.Despite Johnson's resignation, buke has repeated that the merger's financial foundation issolid.Canceling merger approval "is like unscrambling an egg. They certairily'have the power to dothat, biit where are you then?"' said one cHarlqtte energy, lawyer. "It se.ems; like tHe smartthing to. do would be,try to hit shareholders" by imposing financial penalties oa the company.The lawyer, who didn't, want •toi be ;identified- because his firm does.; work for the utilities,predicts shareholder lawsuits will follow - Johnson's exit. .'Glassfaction- suits: were filed.within days of the merger's arinouncemerit in January -2011,. claiming: Progress shareholders,weren't 'getting a fair deal-Speculation abounds about .why Johnson resigned,, or - was pushed out, at 58. He left with up to$44,7 million in severance, pension and .other benefits,, according .to securities filings andDukefs calculations.Among the .reasons floated is;that Progress' crippled Crystal River nuclear plant, in Floridawill cost much more to fix than the $1.3 biilipn Progress has estimated. Its outlook hasdimmed since the.; merger was announced, and it' s still not known :how much insurers will coyer..Concrete;in the thick containment structure around the' reactor began: separating afterprogress punched" a hole in it -to, replace; components in 2009. Progress has sa far spent; $425million, riot' including insurance: payments, tb repair the' plant- arid replace the. lost porter,.CONR^TIAL2LEGPGNDIROOI 303

"I've certainly, been thinking that, maybe 1 Duke had underestimated-the'impact of Crystal River,and as they became;fully'aware there may have been some unhappiness 'about having bought intothat," UNC Charlotte ecbhqmist Peter Schwarz, who researches the- electric industry, said thisweek. "Whether that would be-held against Bill ilphns.on, 1 can't say."The Tampa Bay Times, which has. written extensively about;Crystal, River, ;had no suchreservations"."It comes at a steep price, but finally someone appears to- have been; held accountable for themismanagement pf Progress Energy' and its 1 , nuclear power debacles;" said an editorial publishedFriday.The newspaper reported that "badly botched" repairs and costs to make up,,lost power .couldreach $2.5 billion and be passed'to customers. The; editorial blamed Florida regulators, forlettingProgress also bill customers; in advance for a hew, $24; billion nucTear : plant thatmight not be built.-,The N.C. Waste Awareness, and. Reduction Network, which fought the Duke merger, has citedanonymous sources in saying Duke's board,was to get an; independent; report on Crystal: River 1before the merger's close. Duke responded that, it was monitoring the; plant but still expectedto close.Broken Crystal Riyer nuclear-plant; is Duke' Energy '^s prpblem now Tampa Bay Times, 7-8-12 ByIvan Penn It was a marriage proposal, made in" utility heaven: Progress Energy and Duke Energy;joining tb form the nation's biggest power company.Then came the suspicions-. Did Diike know .ever.ythirig^ it needed to about its partner-to-be? WasProgress holding back' about its Flbrida.-based nuclear troubles?The marriage,: went forward last; week, but; with a major twist .The merger agreement called for Bill.Johnson,, -the head guy at Progress, to take over as CEOof the. new Duke Energy.. And on 1 , Monday, "when the merger was: completed, he; did..For. hot even a day.Then the board forced him out.Duke officials aren' t saying what happened; or-why j6hnson> so-central ;to; a) merger 18; monthsin the planning, was hastily cast aside.But critics quickly connected the dotsC They- pointed to Progress.: Energy' s broken 1CrystalRiver nuclear plant and suggestiohs that Duke was "unhappy to'learn-'too late the extent, of -itstroubles."It's got to be Crystal River," said Jim Warren, executive director of the. watchdog group NC.WARN, which opposed the merger.. "It's got to : be related to the fact that (Johnson)understated the -problem."So what does it mean for. the. future of the: Crystal River plant?.More than ever, its days; may tie numbered:• • •Crystal River symbol i-zed-to many the, stark'diff erence between the two utilities, buke Energy:;has a reputation for beihg.well-managed; Progress, not so much.:Progress Florida customers- pay^ the highest rates of any other investor owned utility in thestate. A significant part of the Florida customers' bills relate to nuclear cbst's, though theutiiity has not - and will hot - "produce: any-nuclear power-in the state for years."Good management-is going to have to clean up r this mess,".said Mark Cooper; senior fellow foreconomic;, analysis at the" institute, for Energy :and the Ehvironment at Vermont; Law; Schobl."Duke is better than Progress/' Cooper-said. "They'll fire, the people who need tb be fired,cancel the-projects that heed to be canceled.."Johnson was among the first ;to go, replaced by the new board of directors .as head of themerged company by Jim Rogers,, who .was chief executive of the- pre-merger Duke.Given the choice; between Johnson and Rogers, even environmentalists who oppose: nuclear pickRogers as the better' 1leader. If either one of the executives could resolve Florida's energyissues,, they say- Rogers ismore likely to get the job done.Rogers, .they say> not ;ohiy wbuld look at nuclear, but would consider other energy spurces" andapproaches that would prove better for cust"To bring that, kind :of forward-thinking to Florida is a real, shift, in posture, " :Said Susan:Glickman," a lobbyist for the.

•••'•Arnie Gundersen, a riucrear engineer and consultant oh utility.matters, said Duke' is better"suited to resolve questions about Crystal River. Duke's êxecutives,: he said, "have morefnuclear experience, than Progress."Johnson had wanted to repair the Crystal-River nuclear plant", despite ,the huge, price, tag. He.:had good reason.Progress was: seeking' to extend Crystal River's huclear license;for 2© more years beyohd itsexpiration date in 2016;. Thfi; 36-yea.r-6id nucrear plant delivered, ipwrcpst power for Progress'1.6 million Florida customers because it doesn't carry the debt that, comes with building,anew reactor.In fall 2009,, oh Dohrtsoh's: watch^ :the .42rin'ch.-thick concrete; cbntaihmerit building thatsurrounds Crystal River's nuclear reactor cracked during;a maihtenarice and upgrade project, toreplace old steam 'generators. Progress.' repair attempts just;imade things worse-.The plant has been down ever since.The severity of the troubles, at Crystal River didn't come to light- until after Progress andDuke announced their plans 1to merge in January 2011. At that;time, the: utilities, expected theplant to. come back, on line two: months later-Then last month, a secret study puke conducted about Crystal. River came to light.. The Ijstudyiwhich was to be presented to puke' s board during- the week .before the. merger closed, was said'to paint a more grave picture of Crystal. River's problems.Duke moved forward with the merger but cast -Johnson aside.For how, Duke has hot yet decided on a course of action for CrystalRiveru But the plant's,future was the first question investors had in the,conference call following the. merger,"it-s my judgment that; we will be able; to (find), hopefully by year end :and at the; least bythe early part of next year, a- resplutiipn vfpr Cry sta! River," Rogers, responded.,Lynn Good, Duke's chief'financial'officer, added that the utility cbntihue's to work throughehgineerihg -analysis: and' cost estimates as it discusses the -project with the: insurancecompa ny.So far, the insurer, the Nuclear Electric Insurance Ltd., whose board Includes. Jphnson, hasbalked at paying, for repairs.Without insurance coverage, repairs s and related costs - which ;could -'exceed. $2.5 billion -would all become the respphsibility of Duke and its customers';Besides the cost of the repair itself, the:utility has been spending as much as $300 milliona year in 'alternative energy since Crystal River wept offline in 2009.Decommissioning the plant would iikely require construction of< an alternative power sourcesuch as a natural gas plant, which; would cost at: least, $1 :billion plus-fuel.And because of a settlement agreement with; the state, Ouke^ faces; a ? $160 milliPn charge; if itchooses to repair Crystal River but does not start the work by the end;bf the yearv• •Other factors complicate. Duke's decisionmaking.As it stands, Florida relies heavily ori natural gas, and lawmakers; and the utiiities Want todiversify the energy mix.. Amorig possible, alternatives, coal Is too dirty arid solar riot; yetpolitically and financially practical on that scale.That leaves nuclear.Duke is weighing investment in the,V.,C.. :Summer nuclear plant under constructipn in SouthCarolina as well:as building a,half dozen other new-riuclear reactors, on-its own.Duke also inherits Prbgress* plan to build a twin reactor plant ir Levy Courity> whose latest:price tag was put at; $24 billion. That would make it the most costly nuclear plant ih U.S.history.'Mike. Hughes', a. Duke spokesman, said Jhe utility will, continue to pursue securing; the ; license;from the NRC: for'the Levy plant but has hot decided whether to- build' it.When- Levy was 'first 'proposed; .electricity demand was' high arid population growth in. Florida,was sbaring.At one.- time Progress gained "30,000 to 35,000 new customers every year," Hughes said. "That'sa medium:size city every year."But that demand disappeared during; the recession.CO^j^TIAL4LEGPG N Dl RO01305

"There's riot ari ideritifiedj immediate need for base Ibad,,-" Hughes said.; "The variableschange; and they chari'ged dramaticaTly in Florida.;'But- we do pelieye that, Havirig a diverse mixof resources is very impo^tantV particuiarly iri Florida;"That's because Florida is a peninsula and along most; of ; its length does not have' neighbors:from which to readily draw power arid fuel.If Duke 'decides, hot tb: fix ; Crystal River, will it commit to buildirig: Levy?'If it builds:Levy, will i t have to' abaridori ; its other, huclear projects proposed for theCarolinas?Even with the iricreased clout of; the: nation'-s largest utility, which has prompted 30 lenders;to offer $6 billion In credit, it might not 'he enough to resolve; Duke's: ;nuclear issues; inFlorida."Taken as a whole. Progress arid Duke, are: clearly over committed to riewnuclear,," said PeterBradford, a former member, of the:U.Sv Nuclear Regulatory Commissibn. "None of the projectsmake any economic sense in light of the energy picture that 's prevailed. None of them ;evermade any economic sense."But the energy picture that has come into being since the: summer 'of 2008 - 'much lowernatural gas prices coupled with Tower, demand - has really made'the'risk picture muchclearer."North Caroiina to Probe Duke Takeover of progress Amid CEO Exit -Bioomberg, 7-7-12 By MarkChediak and Benjamin Haas North Carbliria>:http://tppics'.bloomberg;.com/riorth i carolina/>' Is;investigating Diike Energy Corp. (DUK)'''s^ $17.8 billiori^takeover of Progress; Energy Ihc. after-thecompariy unexpectedly chahged its chief exeeutiveofficer."This significant management change within hours; after the merger has put -the company on,credit watch, sb we neied tb get to. the, bottom of this to make 'sure: we protect consumers,"North Carolina Attorney Gerieral Roy Cooper* said yesterday in an 'e-; marled statement .Three former Prbgress Eriergy Inc. ;bpard members said' they "would ;.h"aye.; ypted agairist tHe:•takeover had they known that; Duke's .chief* 'executive officer wouid remain in .charge of :.thecombined companies.Duke; announced oh July 3 that Bill 3ohnson;, thechairman and CEO of Prbgress, Had resigned arid wbuldh't ; take over as president.and CEO. of "thecombined companies as planned. Duke Chairman and. CEO JamesRogers

Cooper is concerned that'a potential credit downgrade •frcom Standard & Poor's: eouldl lead to"higher utility rates and Has asked for information from 'top company officials '.and .directors;the statement said."We are evaluating the attorney general'ss request ;and will respond in due xours.e,'' TomWilliams

The plan, if Rogers sticks to it, is supposed to elimihate 1,866 jobs, mostly in. NorthCarolina. Meanwhile, "CEO .for a pay" Dbhrison wili receive exit payments Worth .as much as$44.4 millioh; And Standard & Poor's has said it might downgrade the company's credit rating.Boardroom machinations at this, level are- foreign;- tp ;the average consumer,, as; are the scope ofDuke's-operation and the; challenges it faces., For the most part, Duke Energy is. a reliablecompany that delivers an essential utility'; But this! week it: delivered ah unwelcome surprise.At the very, time the public heeds assurance that the merger will, be smooth and: beneficial,the board launches itself into, cpntrpversy. This; i's hot a good, start.Duke Energy tight lipped! on merger questions 1NBC17 (Raleigh), 7-7-12By Charlie.NortonDuke Energy says it will respond later-to questions from the Attorney general and .the NorthCarolina Utiiities Commission about the :ouster of CEO Bill. Johnson-minutes, after the puke.-Progress Energy merger was 1approved.Late Friday the cbmmissiprv ordered new CEO Jim Rogers 't6 } appear at a; hearing at 2 p.m;Tuesday to answer questions on why Duke -decided he s.hould replace Jphnson.Duke Energy spokesman Tom Williams said "Jim Rogers Will, appear ph Tuesday and requested, bythe commission."Attorney General Roy Coopersudden management .change..;also said late Friday that his -office* 'is '-investigating the"Despite our objection, Duke-Energy said ; it needed a rate iherease'e in order to : protect itscredit," Roy Cooper said iri a statement' 1 . "Now this; significant mariagemerit charige, within hoursafter the merger has put the company on credit watchi .sp>we need to get to the, bottom of thisto make sure we. protect consumers."Cooper said in a statement that his office warits to determine if there! we're"misrepresentations or misstatements made by* Duke Energy arid/or its representatives to,consumers or regulators in-, proceedings related to their request for ia rate increase .and theirmerger with Progress-Energy and to determine-whether there wili be a detrimental effect on:consumers." :Duke's Williams said, the company-is V. .eyaluatirig. the- Attorney General'Vs request "arid willrespond .in due ;course;'"'The utilities commission- indicated, it wouid demand documents;and testimony into what* droveJohrison's departure . The. cbmmission approved the merger last week-;Johnson had been CEO of Prpgress Energy arid .was to be CEO of the merged compariies. But.immediately after the deal,. Johnson was pushed out in what was. termed 'a "mutual agreement."Bloomberg' News- has reported that Johnsbri's: totali compensatibri 'Will- be $44 miiliori for bowingput-The Johnson announcement:w_as a' continued blow for Raleigh, which, loses the; headquarters of a,Fortune 500 compariy and sees job; cuts in the. market . Progress Energy has been a drivingecoriomic. force iri Raleigh, coritributirig money, for example, tb arts arid cultural everits..Rogers told. Bloomberg the company expects to shed about 1,800 workers .and about 1,200 alreadyhave;accepted severance packages.CONFIDENTIAL LEGPGNDIROOI 308

Johnson's quick ouster stUhned some company leaders. F.brmer Progress: board- member John MullinIII wrote the Wall Street journal ;on Thursday, stating: "I do hot ;belieye 'that- a singledirector of Progress; would have voted for !this transaction as structured with the knowledgethat the GEO of Duke, Dim "Rogers'; would remain as the CEO of the combined .company,."Progress board member Jim Hyler of Raleighiwould riot comment, when reached by NBC-17 Friday;This newsletter was brought- to. youi by .the Corporate Media Relations ;t'eamV To opt out of thisnewsletter or to provide feedback regarding the content ;of this newsletter, piease contact;fom Shiel:.CONRD^TIAL8LEGPGNDIROOI 309

From:Sent:To:Subject:Harris DeLoachSunday, July OEf, 2012 9:00 AMMcKee;,MarieRE: Gohtact John McArthurTksFrom: McKee, Marie | Redacted • Personal Info.Sent: Saturday, July 67, 2612 .9:51, PMTo: Harris DeLoachSubject: Re: Contact John McArthurRedacted - Personal Info.Let me know if you need .anything-else.Thanks for the.call.ME. Marie McKeeRedacted - Personal Info.Sent from my iPhoneOn Jul. 7, ^2612, at 8:52 PMj "Harris DeLoach" ] Redacted - Personal info. | wrote:> Marie,tks,I can't open- John's number.Can you pis; resend?Tks.>.•>,Harris>'> From:. MCKee, Marie | " Redacted - Personal Info. |> Sent: Saturday, July 07, 2012 6:54 PM> to: Harris DeLoach> Subject: Contact -John McArthur>>> This e-mail message and .all documents which accompany it are. intended only- for the use ofthe -individual or entity to which addressed, and : may; contain privileged or conf idential'information. Any unauthorized disciosure or distribution of this, e-mail message is^prohibited. If you have' received 1this, e-mail-message in error, please notify the sender anddelete this frpm all computers.:>CONFIDENTIAL LEGPGNDIROOI 310

From:Sent:To:Subject:Redacted - Personal Info.-Sunday. July .08, 20.12 9:45 AMHarris DeLoachSunday ami have spoken to Ann Gray arid Jim'Rogers ^discussed ybur thbughts'on reaching but;.^..;! will do whateverTcari to:support the proposition of tliis.rnerger'and "do the 5 rightthirigs...Let me know if ypuTeel i can help.I will tfy to call this eve to touch base...hope a good day.CONR^^TIALLEGPGNDIR00131i

From:Harris DeLoachSent:Sunday, July.,08, 2012 10:59 AMTo: I"" Redacted - Personal Info, |Subject:RE: Sunday amTksHarrisRedacted - Personal Info.From:Sent,: Sunday, July 08, 2012 9:44-AMTo: Harris DeLoachSubject: Sunday ami have spoken to.Ann Gray and Jim 'Rogers^ .discussed .your thoughts on: reaching out.. I willdo whatever i can to support: the: proposition of this'merger and do.the right thirigs...Let mekriow if you feel.i can help.I will try to call, this eye to touchy base....hope a good day.CONFIDENTIAL LEGPGNDIROOI 312

From:Rogers, Jim [Jim.Rogers@dukevenergy.'c6m]Sent:Sunday, July 08; 2012 4:05 PMTo: Bernhardt,. Alex- bernhardt;' I _ Redacted-personal info. IRedacted - Personal Info. I Reih^ch: Jim -abl:'' Harris DeLbach! Redacted-Personal Info"Redacted - Personal Info. IROgerS, jim| Redacted - Personal Info.Redacted - Personal Info. Rhodes,-Jim - yahbo;:Rff.brg,^Sharp - :Redacted - Personal Info. |Cc: ' Manly, Marc E.Subject:Welcome andUpdateJohn, Harris, Jim,, Marie, Garlos and Terry,I apologize that I have hot had a chance to speak to eacH bf ybu : personally.; Nbneth'elessy Ihave tried to keep you up to date with'the events of the past 6 days.I would like to call each of you;during the upcoming week to- welcome; you to .the board anddiscuss any concerns ybu may have.T have two important events this"week--ah all-hands meeting with all emplpyees that will.behosted from RaleighCsecpnd meeting with just, former Progress empioyees) and .a requestedappearance before .the NCUC to respond ,to their questions about the. timing of 1 Bill'sdeparture.Ann and I have discussed the- importance 'of-' us meeting with each bf you. iridividually prior tothe next bpard meeting., Accordingly, we.will schedule visits with each, of .you, at yourconvenience, over the next:;week.In addition, I understand that you would welcome an brierita'tiori that: we have previously,provided to hew boar^d members, it will give you a better insight into the 'brgariizatibn; :management, and procedures. It typically .lasts a -half-day.. We would' like 'to; host a dinnerafter the session.I would like to invite, all directors; of Dukp-who are available tb jolri us >,fbr this: dinner .We will poll;fbr dates that work' for you all, with a special, focus, on 'those attending theorientation session.Again; thank you for/ your :commitmerit to the 'company. I look forward to' talking with you soori;All the best,JimCONFifeE(JTIAL * LEGPGNPIR001313

From: William Bamet! Redacted - Personal InfaSent:To:Subject:Sunday, July OS, 20,12 5:06 PMHarris DeLoachGhat;We mentioned;chattingTate:this afterhooh.world.Happy to call if in order qK would advance our:Around all,week..And"will talk any time...thanks•Sent' from my"- iPadCONFl^NTIALLEGPGNPIR001.314

From:Sent:To:Subject:Harris DeLoach• Sunday, July 08,* 2012 6:37 PMWilliam BametRE: ChatBill, I- am now in Hartsville j real* traffic;' issues. Would be pleased; to chat. further,howe'ver,Iexpect- it would be repeat of yesterday.I. top will be- around :all .week.Perhaps we just leave;"the., lines open"to communicate.Call me if. jyou feel we can advance .any .ball forward: and I. willdo the same.Haye.a good evening.Harris:From: William Bamet I Redacted - Personal Info.Sent: Sunday,. July 08, 2012 5:06 :PMTo:. Harris DeLoach6iect: ChatWe mentioned chatting Tate this afternoon. Happy tp call if ; in .order pr would advance purworld.Around all "week. And will talk-any- timethanksSent from my iPadCONFIDENTIALLEGPGNpiRp01315

From:Sent:To:Subject:Harris DeLoach-Sunday; July-OS; 2012.6:40 PMMcKee,- MarieRE: StatuVUpdate Np: 5 r (Respdnê"to\Prp"pbsal).Tk s/I agree ypu should- hot respond 1 .;;Ha>ris-From: MCKee, Marie | Redacted - Personal Info.Sent:; Sunday, July 08, 2012 3:5S;PMTo: Harris DeLoachiSubject: Fwd:: Status' Update Nov 5 -(Respohse to Proposal)See below.Just 1 received.I can't respond.MarieE. .Marie McKee.Redacted - Persona! Info.Begin forwarded message:• From: mark, mulhern,Redacted - Personal Info.Date: July 8, 2012 '2 :49.: Ji- PM EDTTo: [Redacted - Personal Info.Subject.: Fwd:! Status- Update Nbr S Response tb' Proposal-)Sent frommy" iPhoneBeginbate: July 8, 2612: 2:46:42- PM .EDTRedacted - Personal Info.To: 'mark mulhern'Subject: FW: -Status Update: No. 5 (Response to 'Proposal)Marie;I itried to reach .ypu earlier 7 and! carv be reached bi% my xell phbne, at :'919 ^632 .67.68 : The: email.!below reflects, our ongoingi dialogue with: Wachtell John;, Paula, and, T appreciate the offer ;andwould iike; to resolve this; amicably The Ib'ottom: line is ;We .have, put significant, effort infoputting the merger together and getting it approved and how we are being:asked to forfeitcpmpehsatioh from 2011-12. This is;hot a fair proposal.Please- call to discuss* furtherSent'from my-iPhoneBegin forwarded message:'From: "Grbgan-, Gregory T" |bate: July 8, ^(m. 2:30:00 PM EOTRedacted - Personal Info.GOMPiOPNTIALLEGPGNDIR001316

Redacted - Personal Info.Cci "Curhin, Paul C."Redacted - Personal Info."McSweeney, Deannine""Kibler, Michael D":T emphasized that weare preparihgv a' complaint to be; filed in court ,6n Monday af we don't'resolve this;they may send, ;us, the; draftr separatipn :agreem,ent today anyway -- on. the. hope we. can resolve;this.,Ball is in their cburt'.CONFtOENTIALLEGPGNDIR0013t7

From:Harris; DeLoachSent:Sunday, July 08,2012 6:45 PMTo: Rogers: Jim;:Bernhardt. Alex -bernhardt: I Redacted - Personal info. || Redacted • Personal Info. [ Reinsch; JimVaol:Redacted - Personal Info.Cc:Subject:[ Redacted-Personal Info. |RhodeS,:Jim -yahOO;;Rff;org, Sharp - rtt;\ Redacted-Personal Info. |Manly, Marc.E;RE: Weicome;and JJpdateee.Dimi.th'ank .you' for the", note arid. I look forward to meeting; with you.Regards,Harri sFrom: Rogers, Jim [Jim.Rogers@duke-energy.com3Sent: Sunday, July 08, 2012 4:04 PMRedacted - Personal Info.Redacted - Personal Info.Cc: Manly, Marc ESubject: Welcome-arid UpdateRedacted - Personal Info.Redacted - Personal Info.Redacted - Personal Info.John, Harris, Jim; Marie, Carlos and Terry,I apologize that I have not had a chance 1 , to speak to-each of ybu personally. Nonetheless, Ihave tried to keep you up -tb- date with the. everits of the past 6 days.-I would like to call.each pf you, during the upcoming:week to. welcome; you to the board anddiscuss any concerns you'may have.I have two important events this.week--ah all-harids meeting; with all. employees that will behosted from Raleigh(second meeting*with just fprmer Progress employees) and a requestedappearance befbre the NCUC to respond to their questions about; the;timing of Bill'sdeparture.Ann arid I have:discussed the importance of us meeting with: each of-you individually prior tothe next board meeting;. Accordingly, we will schedule visits viitri each of you, at .yourconvenience, over the next;week.In addition, I understand'that;;you would welcome, an orientation that 1we have! previouslyprovided to riewboard members. It will give ybu a better insight into the Organization,management and procedures. It typically lasts a half-day. We; would' like to host a dinrierafter the session.I would like to invite: ail directors'- of Duke, who are available to join; us for tihis- dinner.We.will poll for. dates- that work for: you all,, with; a special focus- ori those attending theprientatipn sessibn:Again, thank you for your commitment to the company. T look forward to talking with you soon'. ;All the best,CO^R^TIAL1LEGPGNDIROOI 318

OimCONFI^NTIALLEGPGNDIR001319

From:Sent:To:Subject:William Bamet rRedacted-Personal Info.•Sunday, July,0.8, 2012 6:59 PMHarris DeLoachRe: ChatLet's agree tp. talk this week;. We. have opportunity to support 5responsibility to shareholdersand employees and customers. ,1 will, go wherever to meet. ypu : or others to that end,., Hope abetter week. Thank you for your leadership.Sent from my iPadOn Jul 8, 2012, at 6:36 PM; Harris; DeLoach Redacted - Personal Info. wrote:> Bill,I am now in Hartsville,real traffic issues.Would .be. pleased';: to -chat further-,however,Iexpect it would be. repeat of yesterday.! too will be: around •all .week-';Perhaps we just leave.""the lines open "to communicate. Call me if you feel we can-advarice a'hy ball forward and I willdp the same.Have a good, eyehihg.>> HarrisFrom: William BarnetSent: Sunday, July 08, 2012 5:0.6 PMTo: Harris DeLoach.Subject: ChatRedacted - Personal Info,We mentiohed chatting late this afterhooh: Happy to call if ih order br would: advance dur:world.>,>, Around all week. And, will talk, any time thanks>^ Sent from my iPad>>> This. e,-mail message and. all' documents which accompany it are intended only fpr the. use: ofthe individual or entity to which addressed, and may. contain privileged .or confidentialinformation. Any unauthorized disclosure or distribution of this. e:-mail message' isprohibited. If you have received this e-mail message in error, please notify the sender anddelete this from all computers.>CONÎ^TIALLEGPGNDIR001320

From:Sent:To:Subject:Harris'DeLbachSunday, July,08, 2012 8:45 PMWilliam BametRE: ChatBill,tks,agreed.HarrisFrom: William Barnet Redacted - Personal Info.Sent : Sunday,. July 08, 2012 6:58 PMTb: Harris DeLoachSubject: Re: ChatLet's agree to. talk this. week. We :have opportunity to, support: responsibility ^to shareholdersand employees and customers. I will go wherever to meet. you. or others.to that end. Hope abetter week. Thank you for ybur.leadership.Sent from my iPadOn Jul 8, 2012, at-6:36 PM, Harris 1 DeLoach \ Redacted - personal info: [> wrote:> Bill,I am now in Hartsville,real traffic issues.Would be. pleased.to chat further,however,Iexpect it would be.repeat of yesterday.!!too will be?around aHleave;"the lines open"to. communicate.Call me if you .feel we can advance any ball forward and I willdo the same.Have.a'good evening.>>> Harris ^ —,>. From: William ;Barnet- | Redacted - Personal Info. ]>. Sent: Sunday, July 08, 2012 '5:06 PM> To: Harris DeLbach> Subject: Chat>> We mentioned.chatting late-this afternoon. Happy to call if in -order or would advance ourworld.>> Around all week. And will talk-any time ...thanks>> Sent from my iPad>>> This e-mail message and all dbcumehts which accompany it are ; intended .only for the, use ofthe individual, or entity to which .addressedi and may contain privileged or confidentialinformation.. Any unauthorized disclosure; or ^distribution of this, e-mail message ;is.prohibited. If you have received this e-mail, message: in error, please notify the; sender anddelete this from all. computers';>CONRQENTIAL LEGPGNDIROOI 321

From:Sent:To:Subject:Harris DeLoach,Monday,-July 09, 2012 7:12 AMJamil, Dhiaa (VlRE: Nuclear Status-7-9'-i2TksHEDFrom: Jamil, Dhiaa MJ Redacted - Personal Info. |Sent: Monday, July 09, 20127:06 AMTo: Nuclear Status UpdatesSubject: Nuclear Status 7-9-12;July 9, 2012Units on line (days onrline):Brunswick 1 (23)',, Brunswick/2 (220),. Catawba 1 (S'S), Catawba 2 (82), Harris (31), McGuire 1 (268),McGuire 2 (461), Oconee 1 (396), Oconee 2 (93), Oconee 3 (32), Robinson (100);Units off line for-planned..'outages:(days off/ days planned);None..Unplanned Lost Generation Last Week:None.Regulatory Issues:The NRC will conduct fprce.on force security, evaluated exercises^tBrunswick this week. Threeexercises involving mock adversaries.will be hejd durihgThe week.-A scheduled public meeting 'between Dukeând NRC senior management will be held in Washingtonoh Wednesday to provide s'tatus updateôn Oconee.related.projects, including T/HELB.Following the completion of scheduled inventory inspection at Catawba, a non-emergency NRCnotification was made regarding a small-amount oif'unaccounted'for Special Nuclear Material (SNM);Twp nuclear instrumentatioh incqre detectors, that were never used, could[ hot be.accouhted forduring the inventory activity. Detectors.of this type are-used to measure incore neutron

Other:-REDACTEDCONFIDENTIALLEGPGNDIR001323LEGPGNDIR-REPLACE000007:

From:Harris belioachSent:Monday.July 09,2012 7:47 AMTo: Harnrigtdh; ;:Sue GSubject:RE: DUK Corrimon'StockSue,Foilowing up on your request of last Friday,prior to the.merger I owned 20,000 shares of Duke and my, wife owned 1000shares .These, sha res .are held iri our respectiveMerrill Lynch accourjts. ;HarrisFrom: Harrington, Sue C rmailto:Sue;Hamriqtori@iduke-enefqy.c6mTSent: Friday, July 06, 2012 10:18 AMTo: John Baker | Redacted - Personal mfo. | Harris DeLoach;. James. Hylerl Redacted - personal info. I Marie:McKeeRedacted - Personal Info. || Redacted - Personal Info. |>Theresa Stonel Redacted - Personal Info. |Subject: DUK Common StockIn order to file certain required! information with the SEC aind NYSE regarding our new directors,please let me know if you held any shares of DUK common stock prior to the completion of themerger on July 2, 2012. If so, please disclose the nunnber of shares (before taking into account thereverse stock split) that you held.I would appreciate your.quick response because these.'filings willfheed'to be .cdrhpleted'early 'nextweek:Thank ypu,SueSue C HarringtonAssistant Corporate SecretaryDulte Energy Corporation550 South Tryon SI/DEC45AP.O. Box! 13 21 (28201)Charlotte, NC 28202Phone: TCW-Ssiai^fax:980-373-8535,Sue. Harr1nfiton(Bdij Ve-enerRV.comCONFIDENTIALLEGPGNDIR001324

From: Baker, John D. Redacted - Personal Info.Sent:Moriday.July 09, 2012 12:43 PMTo:Rogers]-JimCc:; Bernhardt] Alex - bernhardt:M Redacted • personal info.dari;dimicco@nucor:c6m; Reinsch, Jim-abl; Harris DeLoach;|- aoi; Manly; 1 Marc.ESubject:Re/Welcome and UpdateRedacted - Personal Info.Redacted - Personal Info.Redaaed-PersonaiinfoThanks, I am in Africa until July 13 but. would love to ! talk after that 3 .Sent from niy iPadOn Jul 8, 2912, at. 18:95 PM, "Rogers. Jim" wrote:>. -John, Harris, Jim, Marie, Carlos^ arid Terry,>> I apologize that I have not had a charic'e to speak to each of you persona 1 ly. Nonetheless, Ihave tried to keep you up. to date with the'events of the past 6 days.>.> I would like to call each 'of 1 you during the upcoming week to welcome you:- to the board anddiscuss any concerns'ybu may. have.> 1 have, two important; events ,this, : week--an all-hands meeting with all, employees; that will behosted from Raleigh(second meeting;with just former Progress: empioyees) and .a requestedappearance before the NCUC 1 to respond to their 1 questions about-the timing of Bill'sdeparture.>> Ann and I have discussed the importance of us meeting with each of you individually priorto the next board meeting. Accordingly,, we will schedule visits with, each of you, .at yourconvenience, over the next: week.>> In addition, I understand that you would welcome an orientation that, we have previouslyprovided'to new board members. It will give you a better insight into the organization,,management and procedures. It typically lasts; a half-day. We would like to host a dinnerafter the session.>> I would like to invite all directors of Duke who^ are available' to "joiri us for this; dinner;>•> We.will poll for dates that work-for you all,, with a- special,focus on those attending theorientation session.>> Again, thank ybu for your commitment to the company. I:look forward to talking, with yousoon.,>* All the best,> JimCOMîbENTIALLEGPGNPIR001325

From: Baker, John D.f Redacted-Personal Info. ~~|Sent:Monday.July 09,2012 1:32 PMTo:Rogers/JimSubject:Re:-Welcome and UpdateThank's, t has been a wonderful trip, though 1: hate [missing all the [action .It will be veryimportant to me to get:a; fuller understanding about the decision to let Bill go.I think it i:critical that you be frank and forthcoming with the new membersSent from my iPadOn Jul 9, 2012i at 6:51 PM, "Rogers, Jim" To: Rogers,. Jim>: Cc: Bernhardt, -Alex - bernhardt; | Redacted - personal infaRedacted - Personal Info.| Redacted - Personal Info. Reinsch, Dim -aoi; Deloach, Harris -sonoco; Redacted - Personal Info. |Redacted - Personal Info.^; Rogers, Jim*Redacted - Personal Info.1Redacted - Personal Info.Redacted - Personal Info. 1> Subject: Re: Welcome and Update•>> Thanks, 1 ;am in Af rica until. July 13 but. woiiid love to talk after that.>> Sent, from my iPad> On Jul 8, 2012i at 10:05'PM, "Rogers, Jim" wrote:>>> John, Harris, Jim, Marie, Carlos and Terry,>>>> rapologize that I have hot had a chance to. speak to each of you personally. Nonetheless,.1 have, tried to 'keep...you up to; date with the; events pf the; past 6 days .>.>» I would iike to:call each,of you during;the- upcoming week; to Welcome you to the: board anddiscuss any concerns\ you= may" have-.»">> I have two important events, this week--an all-hands meeting with all-employees that, willbe-hosted from Raieigh(second meeting with just former Progress employees) and a. requestedappearance before the NCUC to respond to: their questions 1 about the.timing of Bill'sdeparture.>>CONFIDHNTIAL LEGPGNDIROOI 326

-Ann and r have discussed the importance of us meeting 1with :ea'ch: of ypu îndividually priorto ther next board meetihg. • AccordinglyV we; will; schedule visits with each' of you, at yourc'onyehie'nce, over .the next. week;>> \ ,» in addition, I understand that you would welcome an orientation; that we^haye previouslyprovided to new board members. It "will give you a better insight' into the 'organization,management and procedures. It typically lasts a half-day:. We. Would like to host a dinnerafter the session;.>>>•> i would like to. invite all directors of Duke who are avaiiable to join us for this dinner.,>>>> We will poll for -dates that work for you all, with a -special focus bri those atteridirig; theorientation .sessiori.>>» Again, thank you for your commitment .to : the: company. I look, forward, to talking with you,soon.>>>> All the best,>> JimFIDENTIAL LEGPGNDIROOI 327

From:Manly, Marc E.[Marc.Manly@duke-energy.com]Sent:Monday, July 09, 2012 4:24 PMTo: 'Ann Maynard Gray-; Michael Browning | Redacted - personal info. T); Harris DeLoach;piMicco, Dan'; 'McKee, Marie'Cc:'SARoseribIum@WLRK.com'; Rogers, Jim;':Currerice ; 1;Kathy K; Garrett, Debby;'Harririgton,Sue G; Maltz, David S "Subject:NCUC/Hearing Tomorrow.Attachments:.e7slbl7.071012.hearing:letter.pdfThe attached document has just been received from the NCUC with regard; to tomorrow'stestimohy.MarcFIDfeNTIALLEGPGNDIR001328

COMMISSIONERSEDWARD S. FtNLEY. JR.,-CHAtRMAN.WILLIAMT. CULPEPPER/IIUBRYAN E. BEATrVVIA ELECTRONIC MAIL^lii I ttics (JInmmissinn4325 Mail ServtcVCGfitar,f^leigh, NC .27699-fl325July 9,2012COMMISSIONERSSUSAN W. (WBONTONOLA Di OROWN-BLANDLUCYiT. ALLENMr. Len Anthony:General CounselProgressÊnergy Carolinas, Inc:P.O Box 1551, PEB 17A4Raleigh f .NC 27602::Re: Docket No. .E-7,;Sub 10.17Dear Mr. Anthony,Please find attached to this lettera list of potential topics-for questions'for Mr. Rogers atthe public hearing scheduled for tomorrpw at 2:00?p. m. The Cdmmissiph Has identifiedthese topics as of'2:00 p.m. dri Monday; July 9, 2012. The Cbmmission reserves theright to add to or subtract from this lisL.How.eyen the Cpmmissioh wishesato.convey, thislist to you at this time.Sincerely,AttachmentEdward S. Finley, Jr.ChairmanCONFIDENTIAL430 North Salisbury Street • Raleigh. North Caroiiria 27603" Tîcpfiori^Nb: •(910) v 733-#24jrFa'cs'lmi'le.No; (919) ^/33-7300w\'Av.'(Tcuc:rieiLEGPGNDIR001329

POTENTIAL TOPICSiFOR QUESTIONS OF MR; ROGERS1, The decision to replace Bill; Johnsona- Prior activities, filings, and testimony regarding roles and responsibilities:b- Persons, making decision.regarding; replacementc- Timing of decision regarding replacement,d- Notification to any [entity regarding decision for replacemente- Failure to notify Commission of decision on replacement prior to. June 29,2012f- Reason s .fo r repl acement2: The effectsidf'the decision to replace Bill Johnsoh as GEOa- progress Board and sharehplcier's response based on .their reiiance to enterinto merger3. Issues surrpuhdingintegration of the company now .that Bill Johnson is not GEOa- How will theselection of 'executive, managertieht team occurb- Current persons involved .In'ihtegratiph/merger transition teamc- Progress employee's current view of their future at the. compariy4. Effect [of CEO change oh .Duke ! s credit ratinga- Priorfilings and testimony regard ing credit ratingb- Current S&P watchesc- Potential effects of a downgraded- Actions taken.to address S&P.'s concernse- Any effect to guaranteed merger savings5. Cost recoyery/pf compensation to Bill JohnsonCONFIDENTIAL LEGPGNDIROOI 330

From:Sent:To:Subject:Sim Hyler|_ Redacted - Personal Info.Monday.July 09,. 2012 4:28.PMMarie McKee- theresa M.-Stbrie; Harris DeLbach; 'CarlorA.-.Saladrigas'Redacted - Personal Info.Fwd: DailyUpdate: Duke Energy, may face skeptical NG regulatorsPlease open the ("irst. I ink under Today's Top.Srbries>JimBegin forwarded message:From: "Kevin PittsV Publislief"Date: July 9i 20:i2 3:Y7;25;PM;EDTRedacted - Personal Info.Toj Redacted-Personal Info. |Subject: DailyUpdate: Duke Energy may face.skeptical NG regulatorsReply-To: replv-33906091-4355996^maiiU .btzioumals.cbmIf you are. having trouble viewing this-email, click here .Leverage vour social influence and vote for vour favorite local businesses.in our Social Madness cornorate media challenge »DailyUpdate July 9, 2012Business Pulse SurveyConnect with usNow that the Supreme Court has declared the health-insurancemandate constitutional, how do vou expect the law to affect your:company's health-care expenses?Social MadnessVote today to supportvour favorite-localbusinesses!LEGPGNDIROOI 331

Today's Top StoriesDuke Energy mav face skeptical NC regulatorsBB&T wins court ruling over arbitration on overdraft feesPrice of Charlotte businesses for sale down 8.5 percentAT&T expands 4G LTE network in Charlotte;OverstockAds leads Kvck-.com in Social Madness contestFor cpmprehensiye Industry News.from across the nation subscribe to thefree IndusbyWkch.newsletters-.d'elivered'everyMonday. Sign UpTotiavProject manager hamed at Charlotte-Regional PartnershipCharlotte-area gas prices inch upwardRepublicans make hav out of Charlotte's DNC troublesPeople on the Move - 2012-07-09Talks continue between ,American Airlines, flight attendants:1Read about: successful entrepreneurs 'antj thesmall-business tools they'use to-start-arid growtheircompanies• 7Appalachian State recruiting runners, cyclists for study at NCResearch CampusRecommended-Stories from oiir 40 NewsroomsCalifornia cities.lead nation.in self-employmentObania: Extend middle-ciass tax cuts 'howAre vou "The Invisible Man for WomanV in vour career?Most Americans homebuvers think it's still a buyer's marketBillions in BP fines-could'boostEverglades restorationC^Ft^NTIAL LEGPGNDIROOI 332

From:Sent:To:Subject:• J im Hyler |Redacted - Personal Info.Monday, July 09, 2012 4:45 PMMa^-Mckee;\ Theresa M. Stohe; Harris'peCoach;.'Carlos A/Saladrigas'John BakerAll,Dohn and I were able, to talk; this âfternoon for ;about 25 minutes;., He is now. up to. speed onwhat happened. He.will be: on pur call, tomorrow morning.DimNTIAL LEGPGNDIROOI 333

From:Harris. DeLoachSent: Monday.July '09,,20n5^ PMTo:McKee,'. MarieSubject:RE; StatusÛpdate Na ^'(R^j^nM-tdJ.PrapbMl)/Marie^calT me afterwards,843-383-7680.•Original Message-Harris'From".: McKee,, .Marie | Redacted - Personal Info. |Sent : Sunday, July 08, 2012 •3:55RMto: Harris DeLoachSubject: Fwd:; Status 4Update No. :5 (Response to Proposal)See below.Dust received.I can't respond.MarieE-. Marie McKeeRedacted • Personal Info.Begin forwarded message:From: mark.mulhernRedacted - Personal Info.Date: Duly 8, 2012 2:49:33^PM EDTfo: | Redacted - Personal Info.Subject: Fwd:; Status 1Update No\ ; 5 '(Response tb' : Proposal)Sent from my iPhoneBeginDate': ^Duly 8i 2012 2:46:42 PM EDTTo:- 'mark mulhern' Redacted - Personal Info.Subject : FW: .Status; Update, No. 5; (Response; to . : Proppsal):Marie:I tried to reach you. earilier and can be reached on my cell;phone: at 919 632 6768 Theêmaii,'below reflects••our ;ongoing, dialogue with' Wacjitell .Dbhn,. 'Paulas and f; appreciate the -offer andwould iike-; to. resolve this> amicabiy The bottom; line ; is- we have, put-y significant; effbrt into!putting .the merger^ together and jge'tting .itr approved {and now ;we'. are: beihgr asked' to forfeit'cbmpensatibh> f rom 2011-12. This is; ;not^ a fair proposal.Please call ,tb: discuss' furtherSent;frorm my iPhoneCONFIDENTIAL1LEGPGNDIROOI 334

Begin forwarded message:From: "Grogan, Gregory T"-Date: Duly 8,, 2012 2:3Q:0&PM EDT,Redacted - Personal Info.Redacted - Personal Info.Gc: "Cumin, Paul C." [Redacted - Personal Info.Redacted - Personal Info. "McSweeriey, Deahnihe"Redacted - Personal Info.I empHasized^tha't .we: are; preparing? a* compiaint 5resolve this.,to be. fiied'in ,cour^ Pnj Monday if we don MiThey :may send, us. the draft; separation; lagreemeht today anyway. - - on: the- hope "We can; resblye.this.' w•Ball is in their cburtvTIALLEGPGNDIR001335

From:Serit:To:Cc:JirriI HylerQMonday, July 09, 2012 6:11 PMRogefs^JimRedacted - Personal Info.Redacted - Personal Info.Subject:Re: Welcome and Updatejim,Thariks very much for your note.; It is much appreciated arid Took forward to talking to you..DimOn Dul 8, 2912,at. 4:04 PM, "Rogers, Dim" : wrote:> Dohn,. Harris, Dim, Mariej Carlos and'Terry,'>> I apologize .that' I, have -not had a chance, to speak to each .of you: personally.. Nonetheless-, Ihave tried to keep you up to' date with the: everits of thepast 6 days..>> I Would like, to call each of ybu during /the upcbming week : tb wercome you. tb th'e board anddiscuss any concerns ybu may haye.•> . . . •- • . -> I have two important-events this week--an all-hands meetirig with all employees that will behosted from Ralergh(second meeting with just former Progress emplpyees) and a requestedappearance before the NCUC tb respond to their questions about the timing of Bill'sdeparture.>> Ann and I have discussed the importance of us meeting with each of you^ iridividually priortb the next board meeting. Acco'rdinglyi we. will schedule visits with each" of ybu, at yburconvenience, over the next-'- week.>> In addition, I understand that you would welcome an orientation that we have previousiyprovided to new board members. It will give you a better insight into the organization,management and procedures. It -typically lasts a half-day. We would like to Host a diririerafter the session.>•> I would like : to invite; ail. directors of Duke< who are, availabie to join us for this: dinner.>•>•> We will poll for. dates that work; for ybu all, with a special: focus, on those attending theorientation session.>> Again, thank you for your commitment; to the company;. I look forward to, talking-with yousoon.> All the best,-> Dim FIDENTIAL LEGPGNDIR001336

From:Sent:To:Shiel,.Tom Jr [T6m.Shiel@duke-energy.c6m]Tuesday, July 10,2012 7:10 AMNews'ih ReviewCc: | Redaaed - Personal Info. pVeSS, Viveca M;; dp-jfSubject: Duke Energy. News in Review 7-10-12Attachments:image001.gifDuke Energy News in :ReviewDuly 16, 2012ArticlesCEO Swap at Duke Puts State in Hot SeatWall Street Journal, 7-10-12The abrupt ouster of Duke Energy Corp.' s hew chief executive i just hours after .Duke; mergedwith Progress Energy inc. is adding to the,pressure on-North Carolina officiais, who alreadyfaced public criticism for' letting; the sta'te's two- biggest; eiectric utilities combine.puke. Energy may, face skeptical, NC regulatorsChariotte Business Journal, 7-9-12Duke Energy Corp. Chief Executivei Dim ;Rogers ,;command performance for N.C. regulators Tuesdaymay be orie of his biggest-, even for. a CEO who's used to being in' the spotlightYears oftrust puke has built, with the N.C. Utilities Commissio'ri is on the line.Energy merger brings Rogers to: Raleigh' to explain boardroom coupRaleigh News & Observer, 7-10-12Duke Eriergy Chief Executive Dim 'Rogers brings conf licting reputations with; him. to Raleigh onTuesday to answer questiions about a week-qld clamor embroiling; two; of North Carolina'soldest, largest and most respected: companies.Editorial: Duke Energy quizRaleigh News & Observer, 7-10-12;Give; the N.C. Utilities Commission, credit: Although it:operates in the, slow-moving world of.utility regulation,, it? s digging; quickly into Biil Johnson's sudden, surprising departure iashead:of the newly merged Duke Eriergy and Progress Energy.Column:; Advice for Rogers ori how to relateRaleigh News & Observer, 7-10-12.When Dim Rogers walks through ,his dukedom Wednesday, attempting .to,: convince Progressemployees that they, haven't been played like' chumps by. their' newly : merged company's suddenand uriseenily switch at the top, It is impbrtant that he strike just the right note.NC utility probe of buke. merger to detail CEp move'Associated Press,.-7-9-12.Wall-Street observers and consumers will be looking for an. explanation from the new, surpriseCEO of Duke Eriergy Corp. when he-is grilled by North- Carolina regulators' irivestigatirigilastweek's takeover bf Progress Eriergy Inc.Reguiators LookingÎnto Coup, at Duke EnergyNew York* Times, 7-9-12NTIAL1LEGPGNDIROOI 337

A boardroom coup at DukeEriergy

Mr.: Rogers was also'•'instructed, to explain How the new .executive team: will be assembled aridthe effect of the charige bri Duke's credit rating. Standard &. Poor's put the company on itsCreditWatch list with' negative implications last week, citing puzzlement over the .executivechange.Mr; Rogers is .expected to testify he'had nothing; tb do: with the decision to oust. Mr . 3ohris'oiT, ;according tb. a person familiar with the discussioris at Duke;Mr. Johnson .left; with a $.44, million exit" package. Most of it. stemmed: from -stock grants, hereceived while CEO of Progress.Angry citizens have been writing to "t'He commission/, urging; it tb revisit the merger. The; dealwas already viewed' skeptlcaliy; especially.in Raleigh, where.Progress has-been a leadingemployer and civic;leaders-fear a loss, of jobs and prestige."It is imperative that the: NGUC ;do a thorough review," wrote: Randy Voller, the. Democraticmayor of Pittsboro, a .town of fewer than 4,000 people just' west of Raleigh..Another critic, George; Habel, of Raleigh, was less polite: "The, commission ,was punkedK hewrote.Some North Carolinians urged the commissibn tb: withdraw its apprbval: bf the merger. But thereis little precedent for thaV, said Scott Hempling, a" Maryland lawyer who" specializes; inutility mergers and has researched: their"history back to 1985 ."I'can't.think bf ^ny merger-where:a:commission said no after saying: yesi"- he said.The utilities said they expected to cut 1,860 jobs, out of about 29,200 positions, aftercombining forces; .with, as many, as 1,000 to be lost at Progress.;s- headquarters. Many .Progress,,empioyees and mid-level executives Were planning to move.to Charlotte as part of' the merger,and they are now in limbo. Mr. Rogers is, planning to meet with Progress empioyees WedriescJayto address their- cbricerris.Mergers of hometown companies .tend':" to ;be-; viewed .skeptically -in. North Carplina, where Bank ofAmerica Corp. (BAG) is headquartered.and which gave rise, to the former Wachovia Corp., whichrolledup hundreds of the nation's-banksBrad Crone, a Democratic political corisultant in Raleigh, emailed the utilities commissiorierson Friday to urge them to investigate Duke-'s sudden ouster of Mr: 'Johnson; He -said:' Democrats:,as a group, tend to be cowed by Mr. Rogers, a big donor to the party :and co.-chairman of the;coming Democratic national convention in:Charlotte."You've got rate payers all over the state worried to death about how they're going to paytheir electrical bill because of the heat wave," Mr. Crone added.Raleigh Mayor Nancy McFarlane said the buster has been a hot, topic amorig; her constituentsbecause many, are Progress customers arid the eompany is a bi'gi local employer;But she :said, she is optimistic that the cpmbined company will; cpntinuei to .dp; what mattersmost:, "We want. the. power on, and ,they're responsive about that,she said.puke,Energy may face skeptical. NC reguiatorsCharlotte Business Journal,, 7-9-12By John DowneyCO^FiptNTIALLEGPGNDIR001339

Duke. Energy Corp. Chief Executive 3imRogers

Defending the 'dealHaving announced it will not publicly discuss Johnspn J s departure, Duke ;is:. largely leftdefending the merger itself. The. company-has emphasized that:the: rationale?for the merger isas compelling as ever.And spokesman TomWilliams

inging, a, crush of TV cameras arid, national news' outlets' upon "a panel of political appointees'that few residents of North Carolina could.name.The .N:C. Utilities' Commis'sipri ori Friday iaunched an investigation into; johrison' s exit,essentially reopening its recent, approyai of the merger between Charlotte^based Duke andRaleigh-based Progress Energy. The.commission had approved the;merger on the. understandingthat Johnsori would be CEO of'the:: merged company, arid warits. to know" whether Duke misledregulators, to get the merger passed, summarily sacking : Dohnson as soon as the deal was: done.While the commission has. the authority to. rescind or modify its ^decisions, such a move: isalmost unheard of and is spreading- jitters; on Wall Street . Amid the uncertainty of how Rogerswill perform under oath, and'as the backlash" intensifies'against his? power company. Duke's,stock has been in a steady decline.'A vacuous Wall Street soul'At.least one Progress board member is callirig for. Rogers.' 'removal and Dohnson'sreinstatement, while; enraged Progress empioyees are urging the-commissipn to undo the entire,merger." I feel as if I have, been sucker punched.three times by Duke Energy," Progress employee CraigScott wrote to the commission; " I feel now that all the good thirigs we have dori'e have beentainted by these energy 'pirates;'?"Customers have also piled on.."The Commission was punked!" Raleigh 1resident George Habel wrote to fhe commission. "Raleighhas lost'a venerable headquarters ^company, to a new: entity with a- vacuous, Wail- Street, soul."Some are suggesting that Duke may have had its reasons' for: forcing-; Dohnson to resign.- Evenenvironmentalists are .divided. Some detest Rogers as a: double-deaiihg .self?promoter,- butothers defend him -as; a, daring innovator in a. risk-averse, industry.Rogers'- green credentials seem-at ;odds with his position^ as a utility executive who oversees'one of the nation's largest fleets: of coal-burning; power-plants. He :sitSi on the boards-of theWorld Business CouriciT for'Sustainable Development-,; Tnstitute for Electric Efficiency;National Action Plan for Eriergy Efficiericy; AlHarice; to Save Energy, Aspen Institute arid DukeUniversity's Nicholas Institute for Environmental Policy Solutions."He knows the value of energy efficiency,; and he was willing; to talk; about it he said, will prbbabiy: stick to rehearsed talkingpoints and:the'"company line;"The N.C. Utilities Commission appears tp. ; have .other Intentionsv. The commissibn pri Fridayreleased a list of questions: ii- ;wants Rogers- to -answer,, [including whether customers or-shareholder's'- will pay Johnson's severance package. Costs' are, a; sore point with; regulators whohave vowed riot to pass, ori any mergerrrelated experises to customers.The Progress-Duke merger will iriybive the elimiriafibn of 1,860; pbsit'ibrisi- most of them atProgress, which Will lose a corporate headquarters in downtown Raleigh. Jphnsbn's control ofthe company was 'intended as .a measure of protection for the community -and for Progress;managers and,employees who were absorbed into the merged Duke.Bitterriess\over shiftTIAL6LEGPGNDIROOI 342

Johnson's continuity: was; also a major selling point for the prbgress board-that voted for themergerj. and his departure has exposed a deep rift.Janies E. Bostic 3r., a retired Georgia-Pacific, executive yice-pr'esideht whose tenure on theProgress board of directors ran from 2002 until the merger was completed: last week, contendsthat Rogers isn't the right GEO for the combined, company^ which ds:now the;nation's largestelectric utility."He is kind of a local political, kind of guy rather than a utility GEO," :Bbstie said; "It wasreally, really a disaster for Duke^to not have; Bill 'become ; their GEO Because Bill understandsthe utilities business and. he was going to work very hard to^ make sure we got the kind of•shareholder returns we, (should):."The commission's questions^will also' cover Duke's failure to: notify the commission about thereplacement of Johnson, the reasbri, fbr ;Johnson's buster, arid who was-: responsible for the;decision to remove Johnson.,And the commission is also receiving plenty ;of^ recommendations^from the public.."Will they hold to some of their other promises, or will.; they be broken just as easily?"asked Progress Energy employee,: Eddie Ghavis by: email. "The^ news hit hard' around the office;morale is low and everyone, is in a funk."Editorial: Duke Energy quizRaieigh News Observer, 7-10-12Give theN.C-.. .Utilities Commission credit: Although it operates in. the: slow-moving world: ofutility regulation, it's' digging? quickly' into Bill Jbh'riso'ri , "s: isudden, surprising departure a'shead of the newly merged Duke Energy and Prbgress'Energy. The commission has• summoned JimRogers, the man who replaces Johnson.as CEO, to Raleigh, where he is; scheduled to testifythis afternoon: before the commission..An, on-the-record, in:-.public examination ,is: just what the; situation calTs, ;for. Certainly itwill be useful to hear what Rogers -. a gifted .speaker has tb say; Getting to the bottom ofwhat happened iri Chariotte: lasi: week,, however:, will require a'dditibrial steps, arid more, thantalk. \ " 'One necessity is. the retention and production of Duke and Progress documents relating to the : .merger arid last week's controversial, announcement. The, Utilities, Commission arid stateAttorney Gerieral Roy Cooper say they're already seeking paperwork and electronic records;Another sensible step, would be to ft'ake testlmbny from members of the board qf directbrs of- :the new Duke Energy. Those, directors, .at a : minimum, approved.the new management setup. Theymay have had a deeper role in .deciding*to.'make, the switch.Boardroom squeezeIt was Ann Maynard Gray, lead director:of Duke Energy's board, who announced that contrary tostated plans.and filings'with' the Utilities Commission, the .head of Raleigh-based ProgressEnergy would not be leading the natipn'-s largest;utility after all. Instead Rogers, presidentand CEO of the "old" b.uke Energy, ; -who was slated to become executive: chairman of the; mergedcompany, would.in fact" be its CEO, president and chairman of the*board. Johnson, although he:leave's with' a pile of money, is but eritirely;,It was billed .as a resignatibftj .but apparently the- Duke board made^ Johnson ari offer he,couidn't refuse.. Why the. board did. that, and when it decided to :dp; so, are key questi;bns_f,brtoday's hearing. Whether Rogers will answer '.them 1fully is another question, given thecorporate penchant: for reticence-, in sensitive matters, but. a* perceiyed : , lack of cooperation,will not help his compariy's xause.One factor that should not irihibit frank discussion of/what went on in Charlbtte' is the "ribrirdisparagement and confideritiality" covenants involving: the new puke and Iphnson iri connectionwith his resignation, fhe Utilities; Commission,, .which as the home-state regulator of bothcompanies had the most- important? role in approving: the; just-completed merger^ has .compellingsreasons to get tb the truth of developments that have placed the cbmpany ori a credit watch.Members of the former Prbgress Energy board pf directbrs'have been candid about theirfeelings, of betrayal at Joh'nsori's ouster. At: least* one has said that P rog re s s . wou Idn' t havegone ahead with the merger (Progress essentialiy sold itself to the larger utility) ifJohnson had not been slated to head the combined compariies..The straight- scoop'-NTIAL7LEGPGNDIROOI 343

Whether Progress board"? members were naive in trusting things" would/work but that way is bnething - Rogers has a' history, of coming put-' on top in utility mergersBut .whetherconsequential 'm_isr 1 epresent'atipns :were made in cohriection with the transaction is quiteanother, and the Utilities Commission has an overarching: mission, here that.surpasses; anyone'sseparation agreement..So: what happened and [when?Beybrid that, larger issues, are; being me'ritibried in connection with Johnson's departure. One isFlorida, a state Progress -Energy- is heavily invested in (via its : 2600 acquisition of FloridaPower), and where one of its nuclear plants has long been off.-line- and' in need of ultracostlyrepairs. Was Progress/Johnson'less than forthcoming: about; the. troubles, or seeminglyunable to fix them?,Duke ratepayers, here and elsewhere, are due; real answers, not; just ;re:assurihg talk aboutkeeping up the corporate presence irr Raleigh - to be. sure, a', key' promise that helped pave theway for the merger, and one that; johnson' was ; expected -to; take seriously , it's :good. that theUtilities Commission (and AG Cooper) are^moving swiftly, but;they will need to. work hard aswell.Column:, Advice for Rogers bb how to relateRaieigh News 8 Observer, 7-10-12=By Barry SaundersWhen Jim Rogers walks through his dukedom Wednesday, attempting -to convince Progress*employees that they haven't been played like chumps by their..newly, merged xompany's suddenand unseemly switch at theitopi, i l is Important that he strike just the right .notevBe.resolute but sympathetic, conciliatory without groveling, steadfast, but --Aw, forget that; Rogers, the. head :of Duke Energy, which merged last week, with ProgressEnergy, had better go in there,, and especially, befbre that N.C. .Utilities Commission, hearing.bn Tuesday, and beg and plead 'and swear he:had nothing tb do-with any of this. Better yetifall down ph his knees; and;ory, "They made me take: the job."If that fails, a favorite tactic; of. mine is "blame-whoeyer ain't there."That.would be Bill Johnson,, the former-Progress Energy CEO who 18 months ago was tapped to.lead the merged companies that; will be ; known' as Duke' Energy . The reason Johnsoh Isn't there -- depending tipori whom ybu believe is that he was busted after 20 minutes at. the. helm, brhe quit.As I told yqu in Monday,';S column, about, this stinky mess, though, shed .no. tears, for Johnson:With the $44?million he's. receiving for the shortest-ever stint ;as HDIC ;-- head dude incharge. - - he will never have to worry about being able to [afford : tb ,pay his high 1 light; bill.Unlike the rest of us.A little humility helpsRogers might consider displaying humility. Whatever he,does, he'd better not; repeat thepublic relations fiascoes committed by certain bank presidents or auto industry [execs.. Whenthey are called onto, the: carpet every so often by Congress for one transgression or another,sonie arrive on private jets and wearing expensive threads:Word to the wise, J.R.: Leave Duk'e : Energy's corporate jets at home, and ditch those expensivecolored shirts with llie cbntrasting white xbllar and cuffs. They may hot go over so well withthe hoi polloi or, more importantly, with .a utilities commission that's feeling it- has hadthe wool pulled over its eyes [by.buke Energy.Speaking, of organized .crime, when reriowried-fashion plate-arid mobster. Frank-Costello went; tocourt ori racketeering changes,- his'attpfriey Wisely told his :clierit to forgo the expensivesuits arid shirts and dress humbly so. the; jury cpuld relate to him.Costello reportedly .said, ; "Irb rather blow the §)#$%&. case."The silver-haired, well-dressed Rogers may: not; want to; wear 'his Hart- Schaffner Marx gray,chalk pinstripe or his. Myers Park Country Club rep tie..Raleigh takes it personallyIf people in the: Triangle didn't like Charlbtte before -- don't look, at me like I'm the onlyone -- they certainly won't like them any more.: after it stole our only Fortune : 500 companyand then canned its CEO.COMFlTJgNTIAL LEGPGNDIROOI 344

Glenn Burkins, publisher of an online Charlotte magazine calledQcitymetro'.com^httpV/^th'ese words for the Triangle on'Monday:, "Y'allneed to just get over it and. stop ail of that .whining; The best man won;. Now move on."'Hmmm. Well, here ' s one-last .bit of advice : Even though, .the employee ^meeting is; at theMarriott> Rogers should get a corner room at-; the. Yv Then,, instead of-breakfasting on foisgras or duck a 1'orange or whatever CEOs who earn $8.8?millioh.a- year breakfast oh, he shouldgo over to Hardee's or' Biscuitville or Big:Ed's 'arid grab a couple of ham biscuits to munch' priwhile explaining the strange : goings, on atop Duke. Energy .,If he really wants tp Ingratiate, himseif' to angry employees and an- angrier utiiities;commission, he ought, to buy a ham biscuit for everybody.1NG utility probe bf Duke merger to detail "GEO moveAssociated Press, 7-9-12;Wall Street observers and consumers will be looking for an" explanation, from the new, surpriseCEO of Duke Energy Corp. when he; is ;grilled, by North; Carolina reguiators, investigating: lastweek's'takeoverof Progress Energy Inc.,The commissibn is demanding testimony on Tuesday from Tim Rogers, the Diike CEp; whb; wound upas the.top executive of trie largest U.^. electric utility.State law aliows the utiiities; commission to. rescind or alter its june;29 decision approving'the merger. Duke'is based in.Chariotte and.progress is based in [Raieigh..Duke Energy has refused to- explain a last-minute, decision by; its; board, of. directors to;reverse its lorigstaridirig; plan's to name Prbgriess Eriergy CEO Bill Dohnson Head of the expandedcompany. Dohnsori is due to receive up to aimbst $45 million In seyerance, pension benefits,deferred compensation, and.stock awards.One of the,conditions of his ;separatipn agreement is-that neither he nor the company speaki l l of the other, even if they/re telling the truth.But legal proceedings are an exceptibn,, meanirig that Rogers could reveal: new details 1aboutwhat happened tb sway puke-Eriergy's board."Dim will be able to, speak, more fully" abput, the CEp surprise, puke .Energy* spokesman torn.Wiliiams said Monday. , . . .The utilities commissiori and" North; Caroiina Attorney Generai Roy Cooper [launched separateinv'estlgatibris after Prbgress Energy- board members said they felt misled about the; mergerplans.Rogers' testimony could be important;in helping Duke Energy, sppthe investors/ -anxiety afterthe company's share price lost 6 percent in the week after the merger closed. Wall.Streetanalysts said.A top concern for mariy'iri'vestbrs is that*North Caroiiria regulators could act on theirmisgivings by responding, riegativery to rate increase requests by puke and Progress j later thisyear. Credit; Suisse analyst Dan Eggers saidkin a report to inyestors-Monday,. Duke andProgress will continue^ operating as separate, electricity providers. -Both, operate in parts PfNorth Caroiina and South Carolina."The question is, therefore, what could happen in the cbmirig riate cases if the; commission is.in fact upset with the charige. or feels' misled," Eggers said. "A well-supported and reasoriableexplanation for the board' s dec'isiph- to switch CEOs wili. end the conspiracy -fears in. themarket and give .confidence^ the, Carolinas. reguiators wili. not be out to '.get' Ihem.' "Deutsche Bank Securities, analyst Donathan Arnold' said one of the; main benefits, of the mergerfor Duke: Energy .is the> opportunity to turn a new page with North Carolina regulators, who hadgiven Duke "a challenging'time''"Dudging.by some-of the .comments from NCUC commissioners,. the abrupt:charige iri; leadershipversus what was laid out; in tHe merger agreement which, they approved'may have had the[opposite, effect," Arnold said.Because Duke: Eriergy plans to retire old electricity power plants and invest iri cleanergerieratlbn'technprbgyi the cbmpany will need tb ask regulators- more frequently for permissionto pass along costs to Consumers': through' higher rates, Morriirigstar ari.alyst Andrew Bischofsaid.CONFIDENTIAL LEGPGNDIROOI 345

Johnson, 58; sighed a three-year employment' contract- days before the: mepger took effect July2. But hburs after the: merger closed, the new company annbuhced he.had decided to leave by"mutual agreement." [Instead, Rogers, 64, is remainihg to run the expanded company.The combined company will'.serve more than '7 •miilibn .'customers .iry. North. Carolina, Kentucky,Ohio, Indiana, Florida and South- Carolina. Duke Energy 's more than!: $109 billion in assetsinclude power plants in Central America ;arid South America and a -portfolio of wind and solarrenewable energy projects in the U.S.Regulators' Looking Into Coup at Duke-. EnergyNew York Times, 7-9-12?By Peter LattmanA boardroom coup at Duke.Energystates, have continued:to fall. Since the management: maneuver last,week, they have, droppedabout 6 percerit.Although the' session's on Tuesday, will put Mr. Rogers,. 64,; on the hot seat, 'industry watchers^say he is well equipped to handle the pressure;. A ."formerr trial lawyer with: a Kentucky drawl,Mr: Rogers, has spent: his career wooing regulators, bankers and^ shareholders ;as he ascended tothe upper levels of corporate America.Over his 23 years as a utility industry chieftain, Mr. Rogers has orchestrated severalmergers, and each time has! assumed the top spot.•In 1994, as head bf the Indiana utiiity PSI Resburces, Mr. Rogers cpmbined his,company withCincinnati. Gas, Electric a.nd became: chief-executive of the newly renamed Cinergy. When•Cinergy was: âcquired'by Duke, based in Charlotte, in 2006, Mr. Rogers again became; chief..CONRQENTIAL10LEGPGNpiRq01346

Iri' 1recent years, Mr. Rogers has become a public face of the broader eriergy iridustriyi makingfrequent;' appearances before' Corigress' arid on teleyision shows/ iricluding "The Colbert Report."His biography on bukie's' Web -.site. cal3Li_ himi a- " : C\E;jp; statesman.'''When Mr. Rogers first approached, Mr. Dohnson- in Duly 2010 ••about 'a ..possibl'e. dieal between bukeand Progress, he said that,he was interested,in moving.into the role.of ;executiye chairman,according .to', a securities "fiiing- detailing the merger talks; Mr.. Dohnsbri would theri becomethe chief executive of the; cbmbine'd compariy.Making Mr. Dohnson.chief executive, was, in part, a cbncession by Duke to Progress's board,which had accepted a very small' premium for iis shares-, according to people briefed on the.deal negotiations.Several former Progress board members said: last week that they'would-never have approved: themerger had they known that Mr; Rogers would .become, chief executive;"This is-the most blatant example .of ;cprpprate; deceit 'ifh'at' i. have 'witriessed during a. longcareer on Wall Street," said Dohn ;H. Mullin III, Progresses lead director, who did.not h jointhe board of the combined company.When the deal was announced in; Danuary; 2011, an analyst asked Mr'. Rogers about the leadershipof the company. He joked abbut: a battle with Mr. Dohnson, a sturdily-built 6-foot-5 formerPennState,.offensive lineman."We're going to ;arm-wrestiie, arid; you know ,'how 'b'ig -Bill is," ,Mr. Rogers;: said. "Bill is goingto be C.E.O., arid he is goirig to be making the calls."Yet in the 18 months, sirice the merger •arinpuricement, puke's, board: decided: that Mr- Dphrisbri wasnot going to be calling the shots..The deal closed last Monday with-Mr. Dohnson - as delineated in the .merger agreement• -•assuming Duke's chief executive post;; But shortly after, the Duke : bbard voted to replace: Mr.Dohnson with Mr. Rogers.- The. move .bliridsided Mr. Dohn son, people closed tb'Him said..Wall Street analysts are flbatirig a humber- of, possible: reasons that Duke,'s; board: ousted Mr.Dohnson.Some point to Progress's troubled Crystal River nuclear plant in Florida^ which has. suffered';from cost overruns:as it; works to repair the shuttered facility. They also; highlightProgress's tepid'finaricial performance in -recerit quarters as : welT as the prbtracted,difficult negbtiations with federal energy regulatbrs oyer, apprbving the. merger."While the; board's 1decision to dismiss Mr. Dohnson and hand ,the .reins to. Mr. Rogers may haye^been as simple as an ego-"mot iy ated. power play, frustration, with the length;; and cost ofthe:merger process may have: prompted the board to push Mr. Dohnson ; butj" said Philip; C. Adams, anarialyst at Gimme Credit."But whatever the reasony" he said',, "this; ;cbritrqyersy is', a huge distraction for puke at atime when they need to be executing their strategy and stitching these; two companiestogether."'Who pays Dohnson?'' 'on regulators' list of questibhs for Duke "EnefigyCharlotte Business pournal,; 7-9-12By Dohn DowneyN.C. reguiators want; answers r from Duke; Energy .Chief Executive DimRogers

"The commission reserves the right to add to or'Subtract from this list;" Finley writesAnthony. "However the commissiori wishes to convey this list to you at this 1 time."Johnson, former CEp of Progress arid brief ly CEO ;6f puke, resigned ralmpst^ immediately afterthe$32 biliion merger closed luly 2. Duke signedâgreements-with johnson to preventdisclosure of the reasons the Duke, board; had, fpr accepting: aohnson/s.. resignation andinstalling. Rogers as the: CEO Price again. The company; has steadfastly declined tO: ariswerquestions iri public-about the merger'..LeverageBut the commission may have more,leverage than some questioners. It has the authority torevoke its approval of the merger, although ihat almost certainly won't .happen. But Duke mustanswer to the commissiori bri a host: of regulatory, issues, iricluding: rate increase's..Ori the "potential topics fbr questibris" •frbm' Finley .are the 'onesj everyone is asking: Who madethe decision to replace Jphnson, when it -was-made ; _and what' were the reaspris for Johnson's.departure?But it has several specific questions .that get to what; the impact xpuld t>e; on the merged^company, arid thus on its' customers.The commissibn want's to talk about, how Prbgress emplby'ees see their 'future, at Duke* now" and :who is on the team that is: supposed'"to meld the; two^ companies . It alsb ; asks for more:information about the executive management; team.Cost recoveryThe commission wants to know the:potential impact if Standard & Poor's: decides to downgradeDuke's credit rating 1arid whether-any bf that'could impact Duke's, ability'to achieve the $650'million in merger savings it" has promised to customers' in the first five; to six-arid-a-harfyears foilowing the merger.;The final item says simpiyj. "Cost recovery compensation to BillJohnson."That's "commissionese" for "Where .do you plan'to get the* up to'$44.7 miiliori Duke may have topay to Johnson?"The commissibn has been adamant about not allowing Duke to pass on, merger ;Costs to customers ,fhe commission and its public staff, assigned 'to protect;ufility customer interests, haveworked hard to make sure that "expenses: reiated to achieving the'merger get paid byshareholders-.Shareholder costsbuke recently agreed to bear all the: cpsts: of ^severance packages;associated with the :elimination of 1,860 positions at the newly merged company and at least the initial costs, fornew transmission upgrades.All of that could put .shareholders on the hbbk for about. $230 millioh more iri merger coststhan was originally expected. Add Johrison's severance into that, and; the; iricreased 'cost tosharehoiders nears $280 miliion.The hearing will be .2 :p..m. Tuesday in the commission' s hearing, room-at: its.: office onSalisbury Street in .Raleigh.Cblumri: $44 Millibh fbr a pay - Nice Work if You Can Get ItForbes, 7-9-12.By Mike Myatt1 don't normally comment on matters of execut'iyer compensation, but. how; could I resist shiningth'e light ori Duke Energy's - latest'move. Really???, Has our-society become so dis'cbnriected fromreality, that, we can just ignore sbmetHing as ridiculous as coniperisating Someone more than $40million dollars for- less than a full, day's- work? With corporations arid their CEOs desperatelytrying to reestablish trust with their stakeholders and constituents, the ousting of CEO. Bill-Johnson after ;orie day on the: job; at an estimated cost of $44 million isn't: goingfto help-. Letme be clear - CEOs play an important.: role, and they deserve to be highly compensated fortheir efforts. That said,, things-Have traveled very far. afield^ wri^ pocket; $44niillibn for fiierely griacihg.ybu with .trieir presence for a few hpursi - hi'ee work' if ybu can getit. ' i "what-should raise an; eyebrow or two isn't the fact- Johrison resigned after a iday. He was askedto resign^by: Duke's board, and Johnson simply complied with the request. However, what weNTIAL12LEGPGNDIROOI 348

should all be asking 1 burselves.is why the board called for his reslghatioh, in the manner itdid given the timing and cost? If the board uncovered •something so> abhorrent or egregiousthey felt it necessary to make; such a bold; move, then surely "for cause" provisions couldhaye mitigated the cost of such a rapid exiting of Johnson. But barring some yet to be,disclosed breach, to say this move was a bit;odd may. be the understatement of the year. Atbest, the riembval of Johnson was; i l l , conceived, and exorbitantly outrageous in terms bf cost.At "worst, it may have been disingenuous, or something even more sinister. Either way,,shareholders should be oufraged; and there should be;an immediate investigation iritb theboard's decision related to Johnson's dismissal, the. dismissals shareholders should be.seeking are those of the. board:members who engineered this; fiasco to begin with.With regard to Johnson, If I were his '.advisorJ' which I'm; hot, I'd 'suggest he consider doingsomething nobody expectsi and which .would •'be: in •eyeryone' ! s! best interest - riot accepting: thepackage as offeredIf 1Johnson were to. step but from behind 'thei protective- shields ofemployment contracts and compensation agreements, dp; the eight^thing,, ,and reject theseyerance package on its iack pf merit, [he.' would, exhibit the; type of' leadership many wouldhadhoped for if he had been GEO for more than a day. Better to be remembered for 'being ; aleader who places other's interests aftead '.oftheir bwri, than for perceived greed mong'eriri'g.Thpughts?Duke Energy Indiana targets 2015,retirements at Wabash Riyer coal piantSNL Energy, 7-9-12By Dari LowreyDuke Energy Indiana Inc . told Indianja utility regulatbps, that it. p l ^ unitsat its coal-f ired Wabash' River station' in ;2015 and; could; retire or convert to natural gas afifth unit,at the plant to. comply with federal clean air regulations.In testimony submitted recently to the Indiana Utiiity, Regulatory Commissiori, Duke EriergyIndiana President Douglas .Esamann asked the .cbmmissiori tb approve changes to phase two of thecompariy's plan for cpmplyirigVwith pendingênvihcludirig the use ofvarious pollution .control equipment and :use o'f certain, clean; cpal 'technologies. In addition;the company Is seeking timely recovery of the hundreds of millions of dollars it; will cost tocomply with the envirbrimental rules."Part bf our plan tb comply with the latest prbposed :set of environmental regulatibrisincludes the planned retirement of Wabash River Units' 2 .through 5," Esamann said. "We are.also currently evaluating whether retirement or natural gas retrofit is the most economicoption for Wabash River Unit;6-."The Duke Energy Corp.

Indiana, Any fuel'for the Wabash River integrated gasificatibn combined-cycle plan'tj at thesame plant' site arid run by" the :Wabash Valley Power' Association;inc

Eriergy Park at the Animal Sciences Research and Education Center, 10 miles" northwest bf West:•Lafayette, arid bri private land in we'sterh: Tippecanoe^ Cburity."Performance. Services. ..cbntinues to discuss- a power, purchase .agreement witfvutility cpmpanies," said. Scott- Zigmond, the company's vice president : of sales a"We are,working to find a way to make this: project, work for all trie entities thatinvolved in such a unique public-private, partnership."Dave Menzer, who heads the Sierra Club's Beyorid Coal, campaign in Indiana,, called IPL's"decision "clearly Wrprighe'aded:"If anything, Menzer -said, renewable energy sources.; ipok more, cost-effective when: factoring: inthe how much IPL will need to spend on additionai ^pollution controls- on ijts coal plants ."If we had our choice, let' s promote!new technology ;and clean energy and: job creatiori,"Merizer said.With the. right permit, hydraulic f racturing brine can head tp 'Ohio riversEnergyWire,. 7-9-12By Ellen M. GilmerA recent decision from art Ohio review board has drawn attention to-how,the- shale-packed statehandles wastewater from hydraulic fracturing.In Ohio, most fracking flowback from, local and out-of-state productipn, is sent to injectionwells that, store the fluid, underground.. But another option exercised, by at least one: company.Patriot Water Treatment LLC, involves :dilu'ting' the- brinei and^ passing it' along to a "city fordisposal in the Mahoning" River'.The Ohio EPA eventually stepped iri to prohibit the, practice — Which": was^ taking "place abput20 miles: from the .Pennsylvania, border in Warren, Ohio -- but was toid last week that itdoesn't have authority to do so.The state Environmentai Review: Appeals Commission (ERAC) ruled in the iconipany's favor, sortof. ERAC decided that Ohio. EPA-cariribt ban :the bririe-dumpirig. But: another' agency, the OhioDepartment.of Natural Resources (ODNR), can require a special permit.'•Patriol:: has' always been able to and., cam continue to pre-treat: industriai and brinewastewater^" said Ohio EPA in a statement, "They just cannot: send the ibrine'to the: City ofWarreri's wastewater treatment plant for disposal."Under current regulatibris, ODNR requires' that: -almost: all oil. arid'gas Wastewater go toinjection wells. (A less-used approved, option is applica'tiori tp icy or dusty roads.) But a.final allowance is made for "other 1methods: approved by the chief'for testing; or implementinga new technology or method of disposal."Does Patriot Water's treat-a'ndVdump method 1 qualify urider the. new. technblogy clause? ODNR:hasn't said, but it -is" possible-.- Paitriot-would have to apply for a'special permit from theagency and would have tb show that its treatment brings the water quality in compliarice withthe federal Safe Drinking Water Aci;"After it's treated, it must; be drinkable water," said ODNR spokesman Carlo LoParo.Trent Dougherty, attorney for the green group. Ohio Environmental Council, told: EnergyWirethat the onus isn'oW- on ODNR to issue ia ipoli'cy 1 directive- that Spells 7 but whether. Patriot'smethod would be covered under the technology allowance."The bail is squarely in the, DNR's court, right now;-' Dougherty said on. Friday. "[ERAC]essentialiy gave DNR the opportunity to -finally ;make a'decision on 'yes' or 'no' if this isan approved disposal method for brine or flowback.'""We're all, sitting in giddy, -anticipation of what; DNR will do, " Dougherty added, "arid we're;hoping DNR will do something; They-could;^6 nothing."the latter seems most likely. -As LoParo explains it, inaction is not because ODNR isûninterested in regulating-, disppsal methods :but rather because the rules: in place aresufficient.,"What it bbils- down to nbW" is that, this particular company would have to apply, for a, permittb dispose of brine with a:'new technology,'" LoParo said -- ajpermit that would be grantedonly if. the end-product fluid were; essentially, drinkable.If not? "The; Ohio attorney general, would enforce that as:a^ violation,."'he said.The Ohio Environmental Council acknowledges that the.classification of post-treatment .brineis a murky :issue.TIAL ' 5 LEGPGNDIROOI 351

"Whether it's any worse than any other industrial wastewater going.through; the system howdo you put' those 1two on a scale arid determine which one's better?'' asked Dougherty. "If Ihave a glass of lemonade,, it's a glass of iemoriade .until I mix.; it witb iced tea, arid it'san Arnold Palmer."But Melanie Houston, council director of' water policy and environmental health, said, that fornow, the defihitioh of brine is broad enough^that .the end-product fluid at'a treatmentfacility would still be characterized 'as'brine and therefore, should still be regulatedclosely by ODNR:Fracking water is laced ;with a small percentage of chemicals, some, harmless and others toxic.The issue of river disppsal In Ohio, is timely, as the standard: injection wells; for wastewaterhave recently come, under scrutiny for their "ability to'trigger earthquakes; and? for :concerns.from environmentalists that the "wells could taint -groundwater.;This newsletter was brought to ypu by the Corporate Media ^Relations team, to; opt out; of this;newsletter or to provide feedback regarding the content of' this newsletter, please .contact;Tom Shiel.16TIAL LEGPGNDIROOI 352

From:Sent:To:Cc:Subject:McKee, Marie f Redacted - Personal Info.Tuesday, July 10, 2012 10:41 AM'Baker, John D.'; Harris DeLoach; 'Jim Hyler'; 'Carlos A. Saladrigas'; 'Theresa M. Stone'McKee, MarieConfirmation of Wednesday 7:30 amHello All,I am confirming that we will meet again by phone tomorrow at 7:30am.Same call in numbers888-862-0358Code:6591081REDACTEDThanks,MarieE. Marie McKeeRedacted - Personal Info.TIAL LEGPGNDIROOI 353

From:Sent:To:Subject:Harris DeLoachWednesday, Juty 11, 2012 11:06 AMJim HylerRE: Confirmation of Wednesday 7:30 amJimIfyou receive any feedback on Jim Rogers meeting with Progress employees scheduled forthis AM I would beinterested hearing it if you get a chance.| Redacted - ffks,Personal Info.HarrisFrom: Jim Hyler Q Redacted - Personal Info,Sent: Tuesday, July 10, 2012 10:46 AMTo: 'McKee, Marie'; 'Baker, John D.'; Harris DeLoach; 'Carlos A. Saladrigas'; 'Theresa M. Stone'Subject: RE: Confirmation of Wednesday 7:30 amREDACTEDFrom: McKee, MarieQ Redacted - Personal Info.Sent: Tuesday, July 10, 2012 10:41 AMTo: 'Baker, John D.'; 'DeLoach Jr.'; 'Jim Hyler'; 'Carlos A. Saladrigas'; 'Theresa M. Stone'Cc: McKee, MarieSubject: Confirmation of Wednesday 7:30 amHello All,I am confirming that we will meet again by phone tomorrow at 7:30am.Same call in numbers888-862-0358Code:6591081REDACTEDThanks,MarieE. Marie McKeeRedacted - Personal Info.TIAL LEGPGNDIROOI 354

NTIALLEGPGNDIR001355

Best regards,MarieACGfNFIDEWTIAL LEGPGNDIROOI 356From: McKee, Mariel Redacted - Personal Info. ISent:To:Cc:Subject:Wednesday, July 11, 2012 4:36 PM'amgray@optonline.net'; 'Baker, John D.'; Harris DeLoach; 'Jim Hyler'; 'Carlos A. Saladrigas''Theresa M. Stone'McKee, MarieMeetingHi All,Thanks for your willingness to meet and discuss Duke Board matters. Ann is hopingto meet as many of us as possible in person.We will meet in New York City at 1:30pm on Thursday Tuly 19, 2012.For anyone not attending we will set up teleconference capability. Thank you forrearranging your calendars to attend the meeting.I have arranged for a conference room in the Corning Incorporated NYC offices.The location is in the Trump/GM building on the 23 rdfloor.This building is located right behind the 5 thAvenue Apple Store (Glass Cube).The address is as follows:767 Fifth Avenue23rd FloorNew York, New York 10153Phone: +1 646 521 9600The lobby reception desk will have your name on the list for entering the buildingalong with a visitor pass.The Corning Incorporated offices are on the 23 rdfloor just around the comer at the endof the hall as you step off the elevator.Please call the Coming office number above or my cell phone if you have any issueswith directions.

E. Marie McKeeRedacted - Personal Info.LEGPGNDIR001357

From:Sent:To:Subject:Redacted - Personal Info.Thursday, July 12, 2012 7:19 AMHarris DeLoachThursdayFollowing the events as best one can...if you feel i can be helpful. pfease let me know...regards.FIDENTIAL LEGPGNDIROOI 358

From:Harris DeLoachSent:Thursday, July 12, 2012 8:19 AMTo: | Redaaed - Personal Info. |Subject:RE: ThursdayWill do,tks and you as well.HEDFrom: I Redacted - Personal Info. |Sent: Thursday, July 12, 2012 7:19 AMTo: Harris DeLoachSubject: ThursdayFollowing the events as best one can...if you feel i can be helpful. please let me know...regards.C^NFJÎTIAL1LEGPGNDIROOI 359

From:Sent:To:Subject:Harris DeLoachThursday, July 12, 2012 9:33 AMJim HylerRE: Confirmation of Wednesday 7:30 amTks for update.HEDFrom: Jim Hyler | Redacted - Personal Info. ~|Sent: Thursday, July 12, 2012 9:22 AMTo: Harris DeLoachSubject: RE: Confirmation of Wednesday 7:30 amJust left you a vm about what little I've learned.From: Harris DeLoachRedacted-Personal Info.Sent: Wednesday, July 11, 2012 11:06 AMTo: Jim HylerSubject: RE: Confirmation of Wednesday 7:30 amJimRedacted -Ifyou receive any feedback on Jim Rogers meeting with .Tks, Progress employees scheduled for this AM I would bePersonal Info.interested hearing it if you get a chance.HarrisFrom: Jim Hyler| Redaaed • Personal Info. ' |Sent: Tuesday, July 10, 2012 10:46 AMTo: 'McKee, Marie'; 'Baker, John D.'; Harris DeLoach; 'Carlos A. Saladrigas'; Theresa M. Stone'Subject: RE: Confirmation of Wednesday 7:30 amREDACTEDFrom: McKee, Marie | Redacted - Personal Info. [Sent: Tuesday, July 10, 2012 10:41 AMTo: 'Baker, John D.'; 'DeLoach Jr.'; 'Jim Hyler'; 'Carlos A. Saladrigas'; Theresa M. Stone'Cc: McKee, MarieSubject: Confirmation of Wednesday 7:30 amHello All,I am confirming that we will meet again by phone tomorrow at 7:30am.Same call in numbers888-862-0358Code:6591081CO^R^LyiAL1LEGPGNDIR001360

REDACTEDThanks,MarieE. Marie McKeeRedacted - Personal Info.Thia e mail message and al! documgnta which accompany it are Intended onty for the use of the indivkhml or entity to which addressed, and may contain privilegedor confidential informaticn.. Any unauthorized dipclcsure or distribution of this e rnail message ia prohibited, ifyou have received thise mail message In error,please notify the serderand deieio this from all computers.CON^FfDEÎALLEGPGNDIR001361

From:Sent:To:Subject:Harris DeLoachThursday, July 12, 2012 9:33 AMJim HylerRE: DailyUpdate: Duke Energy may face skeptical NC regulatorsJim,thanks for the update.Have a good day.HarrisFrom: Jim Hylerl Redacted - Personal Info. |Sent: Monday, July 09, 2012 4:28 PMTo: Marie McKee; Theresa M. Stone; Harris DeLoach; 'Carlos A. Saladrigas';)Subject: Fwd: DailyUpdate: Duke Energy may face skeptical NC regulatorsRedaaed - Personal Info.Please open the first link under Today's Top Stories>JimBegin forwarded message:Redacted - Personal Info.From: "Kevin Pitts, Publisher"Date: July 9 S2012 3:17:26 PM EDTTo:Redacted - Personal Info.Subject: DailyUpdate: Duke Energy may face skeptical NC regulatorsReply-To: j Redacted-Personal Info. |If you are having trouble viewing this email, click hereLeverage your social influence and vote for vour favorite local businessesin our Social Madness corporate media challenge »LEGPGNDIROOI 362

Now that the Supreme Court has declared the health-insurance Mmandate constitutional, how do you expect the law to affect vour r|company's health-care expenses? j|Social MadnessVote today to support vour favorite localbusinesses!IJTToday's Top Storiesr—i.Duke Energy mav face skeptical NC regulatorsBB&T wins court ruling over arbitration on overdraft feesPrice of Charlotte businesses for sale down 8.5 percentAT&T expands 4G LTE network in CharlotteOverstockAds leads Kyck.com in Social Madness contestFor comprehensive Industry News from across the nation subscribe to thefree IndustryWatch newsletters delivered every Monday. Sign Up Today.! Project manager named at Charlotte Regional PartnershipA Charlotte-area gas prices inch upward• Republicans make hav out of Charlotte's DNC troublesPeople on the Move - 2012-07-09Talks continue between American Airlines, flight attendants14uitCompanies In Today's NewsRead about successful entrepreneurs and thesmall-business tools they use to start and growtheir companies.Appalachian State recruiting runners, cyclists for study at NCResearch CampusRecommended Stories from our 40 Newsroomsuir tCalifornia cities lead nation in self-emplovmentObama: Extend middle-class tax cuts nowAre vou "The Invisible Man Cor Woman)" in vour career?— - ' —- — • — ss.!-— --I T-»-'•&—-n ,•-?-}—t- •SJTT -r-r. t-'ZlJC^FiÊ«4TIAL LEGPGNDIROOI 363

•• • - •-• 1 ^Most Americans homebuvers think it's still a buyer's marketBillions in BP fines could boost Everglades restorationCC^NflD^TIALLEGPGNDIR001364

From: Jim Hyler | Redacted - Personal Info. |Sent:Thursday, July 12, 2012 6:10 PMTo: Theresa M. Stone 1 ; Harris DeLoach; 'Carlos A. Saladrigas'l Redacted - Personal info. ~|Cc:McKee, MarieSubject:NC Utilities CommissionAltThis afternoon the NC Utilities Commission issued an order for Marie and me to appear next Thursday, July 19, at 10:00to answer questions. Bill Johnson has also been ordered to appear at the same time.On Friday, July 20, Ann Gray and Michael Browning have been ordered to appear.JimCONFIDENTIALLEGPGNDIR001365

From:Sent:To:Cc:Subject:Baker, John D. Q Redacted - Personal Info.Thursday, July 12, 2012 6:13 PMJim HylerTheresa M. Stone; Harris DeLoach; Carlos A. Saladrigas; McKee, MarieRe: NC Utilities CommissionWhat funSentfrom my iPadOn Jul 13, 2012, at 12:10 AM, "Jim Hyler" | Redacted - Personal info.I wrote:All,This afternoon the NC Utilities Commission issued an order for Marie and me to appear next Thursday,July 19, at 10:00 to answer questions. Bill Johnson has also been ordered to appear at the same time.On Friday, July 20, Ann Gray and Michael Browning have been ordered to appear.JimCONFIDENTIAL LEGPGNDIROOI 366

From:. Jones, Robert*[rnai Redacted - Personal Info.Sent: Thursday, July 05^201-2 4:58 PMRedacted - Personal Info.Subject: Fw: Conference call hosted by-Rob'JonesThought you would be interested in this letterJohn Mullin is sending to the WSj..:note.he is.acting on hisown as our group will not get together until tomorrow aftRobert Jones - Vice .ChairmanRedaaed - Personal Info.From: John Mullin [mailto^ Redacted - Personal Info.Sent: Thursday, July 05, 2012.02:12-PMTo: Jones, Robert (IBD)Redacted - Personal Info.Subject: Re; Conference;calt 'hpst;ed by Rob JonesAttached below is the letter I. sent to the Editor of the WSJ. Best, JohnOn JuJ 5, 2012, at 10:20 AM, Jones, Robert wrote:When: Friday,:Juiy 06, 2012 2:00 PM-3:60 PM (GMT-05:00j'Eastern TimeÛS S Canada).Where: Dial.in: 1-877-777-8895 - Participant Code: ,171372Host Code: 257184NOTICE;.Morgan-Stanley ts hpractlng 39 a municipal adylsor/atid lliB bpiofons or views cqnlalhed rterelaarenol Intended to.be.and do nol constitute, advfee-withln ihe "meaning of Section 975 of the Dodd-Frank Wail Street Refonn and Consumer Prptection'LEGPGNDIR001367

Act. tf you have receivedUhte communfcation In error, please destroy all electronic and paper coptes and notify the senderimmediately. Mistransmisston is nol intended to waive confidentiality or privilege, Morgan Siantey ; reserVes the right, to the extentpermitted under applfcable (aw, to monitor electronic communications. This message is subject to terms available at the follwvinglink::http://YVvw.mofgaris^piease nbiifif'u's i^ teply mesaage' and We willsend the contents to you. By messaging with Morgan Stanley you consent to Ihe foregoing.

July 5, 2012The EditorThe Wall Street jour nal1211 Avenue ofthe AmericasNew York, NY 10.036•Sir:As the foniicr Lead Director of Progress Energy^ I feel compelled to speak out on behalfof the former sharehplders. employees. custpniersând communities :served.by Progress\vho are how'airpart of of.are sefVeti-by the *'new" Duke Energy.jn negotiations wilKpukeJeaUing^tp tlie merger our Board voted to accept a "semimergerof equals ,?i transaction,with-the'explicit agreement that'the Progress CEO. BillJphnson, would becqme ihe CEO of the combiried company upph,.cpnsi.immation^pf themerger.Tliis was'a critical element in the'merger deliberations of Pur- Board because we.had confidence .that Bill would'successfullyjead'thecombined, companies.to achieve thepotential synergistic'benefits ofthe combination. I do hot believe Ihat a. siiigle director ofProgress would'have.voted forthistransaction as •structured withthe, knowledge that the.CEO of Duke :Jinv Rogers, would remain as. the GEO of-tHe combined' coriipany;After a.long gestation.pcripd. the merger finally closed on July/2' !d ., As stipulated.iniheMerger Agreeiiieht, Bill/JohnspnlbecaniefthCEO of tlie newly combinedcompanies - for approximately 20 minutes!Foliowing a short organizational,meetihg,:the newly, constituted board, which contains a 1majority of "old Duke" directors, went into executive session-and..voted to request the.resignation df Bill Johrison and.the^ retention of Jim Rogers as'the CEO ofthe newlycombined company. In my:opinion this can.only be described, as an incredibleact of badfaith with"regard to the undertakings of the Merger. Agreement. I thmkjtvyas a'clparlypremeditated contravention of one of the most central tenets.of our Agreement.In iriy opinion this-is the nibst blatant example of corporate deceit that I have witnessedduring a long career on-Wall Street and :as:a director of ten;publicly ; lraded companies andas a former. Trustce'of^Putnam';s numefou f»nds,As,a npn-coritihuirig director of the cpmbiried'compan>'J now, ajong with similarlysituated former directors of Progress, Iiiid'hiyself without a corislituehcy arid withbutariability to-mpunt a challenge to what i bclicycis one of the greatest corporatehijackings::iri UiS'biisihess history.ÔNFI^B^TIAL LEGPGNDIROOI 369

Cqrisequeritl^wrilten .in hopestliat'to be a deceitful andpre-meditated contraventidn'of good faith.negotiations will not go uh-noticecl in the"court of public ppihiqh"."Sincerely,John H. Mullin, IIIChairmanRidgeway Farm. LLC700 Ridgeway Farm LaneBrookneaK VA 24528C^NRpfe^TIAL LEGPGNDIROOI 370

From: Jones;;Robert-Sent: Thursday, July 05/ 2012 6:40 PMTo:Redacted - Personal Info.Subject: Re: Conference .call hosted by Rob JonesRedacted - Personal Info.I don't see why not,.John waspk-tb send.to.ygu sg.go ahead...alsp;gpt you ym.-.re tomorrow, call my cellRedacted - Personal Info-lpr o u r home herel Redacted-Personal lnfo~~] Bill J have gone to the bcachRobert Jones - Vice'ChairmanMorgan Stanley | Investment Banking DivisionRedacted - Personal Info.From: Jim Hyler IRedacted - Personal Info.Sent: Thursday, July 05, 2012 05:23:PMTo: Jones, Robert (IBD)Subject: Re: Confererice call .hosted by Rob.JonesOk to forward to other PGN/Duke directors?"Thx. Quite a letter:JimOri Jul S; 2012, at 4:57 PM; "Jones, Robert"Redacted - Personal Info.wrote:Thought.ybu'.would be interested in this letter John.Mullin is sending to„the WSJ^note he,isacting oh his,own as .our group.will not get together until tomorrow aftRobert Jones - yice GhairmahMorgan Stanley | Investment Banking DivisionRedacted - Personal Info.FrbmUohri MulliriRedacted - Personal Info.LEGPGNDIR001371

Sent: Thursday, July OS, 2012 02:12 PMTo: Jones; Robert (IBD)Redacted - Personal Info.Subject: Re: Gohference call hosted by Rob JonesAttached below isThe letter I sent to'the.Editor of the WSJ. Best, JohnOn Jul S, 2012, at 10:20 AM; Jbne's. Robert wrote:When:-Friday,. July 5 06,-2012 ; 2:00 PMr3:00 PM (GMT-05:00) Eastern Time (US & Canada).Where: Dia! In: 1r877;777r8895 - Participant Code:'171372Host Code: 257184-NOTICE: Morgan Stanley is not acting as a municipal advisor and the opinions or views contained herein are not intendedto be, and do not ranstitute,;adyice within themeariing of Secti6n. : 975'of the Dodd-Frahk Wall Stieet Reform andConsumer Protection Act.- Ifyou have.received'this commuhicatioh ifi error, please destroy all electronic and paper copiesand notify the sender Immediately. Mteiransmlssion ts.not Intended to waive confidentiajity or privilege. Morgan Stanleyreserves tha'right, tathe!e*terit permjtt^.underappticatjie law.'to rtibnitoreiectronic.communications. This message tssubject to'terms-availabie.at'the following link: http//v>ftwmorgBnsbniey.comydfsciafmers;j^^ cannot access Iheselinks, please notify iis by reply.message and we .will !send,tKe.contents to ypu: By mfesaglhg with Morgan Stanley youconsent to (He foregoing.NOTtCE; Morgan Stanley is not acting as a municipal advisor and the opinions or views contairied herein are not intendedto.be, and do not constituio, advice within the meaning of Section 975 of the Dodd-Frantf Wall Street Reform andConsumer Prolectioh Act.if yoii have recewed thTs^wmmunfcatioh in ferror.please destroy all electronic and paper copiesand notify the sender immediately. Mlstransmlsslonis'riot jntentJedto.^Varve confidentiaiity.or privilege. Morgan Stanleyreserves tho.right,.to tha extent permitted under applicabie law, to monitor electronic communications. This message issubject la ieritis available ial.th^tpilpwinglirtk:^^^cannot access .tHeselinks, please notify us by reply message and we will send Ihe contents to you; By messaging with Morgan Stanley youconsent to the foregoing.NOTICE;. Morgan Stanley is not acting as a municipal advisor and the opinions or views emained herein aro not intended to be,and do not cbnstitute/advice wilhfri Ihe meaning of Section ^Reform arid Consumer PrblectibriAct. tf you have received this communicatlori in error, please destroy all electronlc'andi paper.copies and notify the senderimmediately. Mistransmission IstnoUntended to'wawe confrfentratify or pn'vijege. Moiân; Stanley reserros the right, to the extentpermitted under appficable law,; tb moriltbr ele(HroniccomniunicatiQhs..This message is subjeci to terms available at the followinglink: hHp:Mvww.morganstanley.ramIf ypu.can not access these linfcs, please npUfy:us by.reply message and we will'seiid the contents to yoUi.By rhessaiaing with Morgan Stanley you consent to the foregoing:TIAL LEGPGNDIROOI 372

From: Baker, John D;Sent: Friday, July 06, 2012 5:48 AMTo: Jim HylerSubject: Re: Follow UpWhat happened?"Redacted - Personal Info.Redacted - Personal Info.On Jul : 3, 2012, at 4:07 PM^'Jim Hyler* Redacted - Personal Info. wrote:I hope all of you were able to sleep.better than me.Here is a streahvof cbnscibusriess;1. I find it fhcreclibie that.the D;directors would •not listen to ariything we said orconsider BilKs record as PGNXEO. As a.group we worked with^hirn for years and know;him. We:were.ignored.2. Culture.and- r fit;were the primary reasons given for action. Fpr.me, this begs-thequestion,.where does this'leave the'PGN directbrs in terms.of cultural fit?3. We are where'.we.are and are members of a fractured:Board.4. We now have a totally different CEO than expected. More about this on the call.•5,. We were: tip IdThat ; the Q Board wanted to become more "Progress like'',, a grind itout regulated utility.,6. WitlvCEd chjarige now ori a -totally differentpatH.Look forward to,talkirig"iri:a few minutes.JimLEGPGNDIROOI 373

Frbm: Baker,. John D. [ Redacted - Personal Info.Sent: Friday, July,06, 2012 7:12 AMTo: Jim HylerSubject:'Re:.Follow UpI will be back the 13tH but vyould love to talk before.then.l get to tape Town where I'have access tophone on the 9th and will.try to.call youiWhat is.the best humber to call?Sentfrom my iPadOn Jul 6, 2012, at 2:33 PM, "Jim Hyler" Redacted - Persona! Info. wrote:Bill is out as CEO and Rogers is in.When will you be back in US?The five of us. have been haying calls to discuss our situation and.if we stay oh.Take care.On Jul 6/2012; at 5:48 AM, "Baker, John 0."What happened?'Redacted - Personal Info.•Iwrote:Sent from my [PadRedacted - Personal Info.On Jul 3; 2012, at'4:07 PM, ''Jim Hyler"I hope all of ybu were able to sleep! better than me.wrote:Here is a stream of consciousness.1. I.find it incredibie that the 1 0 directors would not listentb anythingwe.said or consider.Bill!s record as PGN CEO: As a group we.workedwith him fdr years and know him; We were ignored.2. Culture and fit were theprimary reasqhs giyenTpr action; For^this begs the question, where does thisleave.the PGN directors jn termsof cultural fit?3. Weâre where we are and are members of a,fractured Board.4. We now have a totaily different CEO than expected. More aboutthis on theicall.5; We'were tdld.that the D Board wanted to become'more "Progresslike", a grind it out regulated utility.6. VVith CEO change how on a totally different path;Look forward to taiking:in a few minutes:ITIALLEGPGNDIR001374

JimTIAL LEGPGNDIROOI 375

From: BaKer,.John D.Sent: Friday; July 06; 2012 9:36 AMTo: Jim HylerSubject: Re: Follow UpRedacted - Personal Info.I thirik'it is 6 hours butl wilFcall at.a| reasohabie hourSentfrom my iPadOn Jul 6, 2012,"at3:52 PM, -Jim Hyler"Redacted - Personal Info.wrote:Gall 919-215-3005, Thatis,my cell. .Not sure/of time difference but callwhen you can and I'll doall ! can to answe'r.From: Baker, John D.Sent: Friday; July 06, 2012 7:12 AMTo:: Jirri HylerSubject": Re: Follow-Up-Redacted - Personal Info.I will be back the 13th,but wouldlove.toTalkibefore theriJ get.to.Cape Town where I have accessto phone on the 9th and'wilt tryTo call.you.What is theibest number-tb call?Sent from my iPadOnJui6, 2012,;at 2:33 PlOl, "Jim Hyler" Redacted - Personal Info. w r o t e :Bill is out a's GEO a ridRogers is in.When will you be back in US?The five of us have beeri"having'Calls ; tb discuss our situation' arid if we stay bri.Take care.On Jul 6, 2012, at 5:48 AM, "Baker, John D." wrote:On Jul 3, 2012, at/4:07 PM, "Jim-Hyler Redacted - Personal Info.I hope all of you were able to sleep better than me.wrote:Here is a stream of consciousness.LEGPGNDIROOI 376

.•I. I find it incredible thatthe D directors would not listen tp"anything we said or cohsider Bill's record as PGN GEO. As agroup we : worked with him for yearstand'know him: We wereignored.;2. Culture and fit were;the primary reasons given for action.For me, this begs the question, where does this leave the PGNdirectofs in terms of cu|tural:fit?3; We areiwhere we;are and are members of a fracturedBoard:4. We now have a totally differentGEO thah expected.. More:abbut this onth^call;5. We were told that the D Board-wanted to become more"Prpgresilike", a gn^6. With CEO change^how on atotaily different path.Lobkfo'rward to talking in a few'minutes.JimNTIAL LEGPGNDIROOI 377

Frbm: Baker, John D. | Redacted-Personal Info. ISent: Friday, July 06; 2012"10:08.AMTo: Jim HylerSubject: Re: Follow UpSure sounds like it. I loveMullin's letter-have Vou seen the full draft?Sentfrom my iPadR e d a c t e dOn Jul 6, 2012, at 5;S9 PM, "Jim Hyler" - Personal ,nfo - wrote:Thanks John. Look forward to:talking; We are in a mess!!!From: Baker, John D. | Redacted - Personal Info. ISent: Friday, July 06^2012 9:36 AM.To: Jim Hyle'rSubject: Re: Follow UpI.think itts 6 hours but I will call at a reasonaible hourSent from my iPadOn Jul 6, 20.12, at 3:52 PM/VJirn Hvler"! Redacted - Personal info. l wro te:;Call 919^215-3005: That is my cei). Not sure of timeVdjfferehce but call when you canand I'll do all l ean to answer;From: Baker> John'O: [ Redacted - Personal Info. |Sent: Friday,.July 06, 2012 7:12 AMTo: Jim HylerSubject: Re: Follow UpI will be back the'lBth biit would love to talk before then.i get.to CapeTown where Ihave access to phone bh the 9th:and will try to call you.What is the best number to call?Sentfrom my iPadOh Jul 6, 2012, at 2:33 PM, "Jim Hyler" Redacted-Personal info, wrote:Bill is;out as CEO and Rogers is in..•When will ypu be; back in US?'The fiyepf us have beenhaying calls to.discuss-our situation and if we stay ph..Take care.ONFIDENTIALLEGPGNDIR001378

On Jul 6,.2012,.at5:48 AM, "Baker, John Di? |wrote;;Redacted -Personal^What happened?Sent from my iPadOn Jul : 3,2012, at 4:07 PM, "JimHyler'T Redacted-personaiinfo.I hope all of you were able to sleep better than me.[wrote:Here is a stream of conscidusness.1. 'I find it.iricredibje'thatthe D directors would notlisten to anything we said or consider Bill's record asPGN CEO. As a group we.worked with him for years andknow him. We were ignored^2. Culture and fit were'the primary reasons given foraction. For,me, this begs the question, where does thisleave the PGN directors in terms:6f cultural fit?3. i We are where.we are and are.members of a-fractured Bpard:.4. We now have a.totally different CEO thanexpected: More about this on the call.5. We were;told.that the D Board wanted to become,niore "Progress like'Va grind it-out regulated utility.6. With CEO.change.now on a totally different path..Look forward to talking in a few minutes.JirrifONFIDENTIALLEGPGNDIROOI 379

From: Baker, John D'. [Sent: Monday., July 09, Ôl? 1:32 PMTo: Roger's;' Jim-Subject : Re.: Welcome ;ahd.• UpdateRedacted - Personal Info.Thanks, t has, been a wonderful trip, though I. hate ^missing all-the action. It;will be very important to me to get a- fuller- understanding"' about thedecision to let Bill go.I think .it : is'critical that you be frank and.forthcoming with the riew ;mernbersiSent from my- iPadOn Jul 9, ;201 : 2; at 6:51 PM, v"R6gers,. Jim"-.wrote':> John, thanks; for the email.. We will talk, when 'you return. I am envious of..ypu' being in Africa. 'I spent- two ! weeks -iri- Kenya '.t:wb years ago with some.- of'my .children and^g-childreri.- Safe- travels .>'> Best,> Jim> Original Message> From: Baker, John' D. \_Redacted - Personal Info.> Sent: Monday, July 0.9, 2012; :12!:43 PM>-To: Rogers.,.-Jim-> Gc: Bernhardt; Alex - bernhardt:IRedacted - Personal Info.Redacted • Personal Info.Redacted - Personal Info.Reinsch, Jim -aoi; Deloach, Harris -sonoco;> •>• Sent .from .my iPad>-Redacted - Personal Info.Redacted - Personal Info.Rogers, Jim; Redacted - Personal Info. |Redacted - Personal Info.Redacted - Personal Info.Redacted - Personal Info.> Thanks, =1- .am in-Africa until July 13 but 'would love to •talk after that.> Oh Jiil 8, 2012.', at lOYos PM, .'.'Rogers,- JiniL' kJim.RogerstSduke-energy/com>wrote -.>">>'Johny Harris, Jim, Marie," Carlos; and 1 Terry-,>>» I apologize that' I have ribt : had a chance -to speak itoi each, of ybupersohairy.>•Nonetheless, I have 'tried to keep ypu up ta date; with.the; eventsof 'the past ;6 -'days;.>> I wbuld^ like to call, each of you- during the upcoming weeJc ; to welcome yoiiLEGPGNDIROOI 380

tb ;the board arid discuss any' concerhs ybu may have..>>>>. I have two important, events this week--an all-hands meeting" with allempioyees that will be hosted from Raleigh (second meeting, with', just formerProgress employees) and a requestedappearance' befbre^the-NCUC.to respond totheir, questions about, the!,timing of Bill 1s departure.>>>> Ann and I have discussed .the .importance of us. meeting with each f. youindividually prior to.,the next, board meeting. Accordingly,; we will schedulevisits with :each' of' ybu, at ybur 'convenience;-: over the next- "week:>>>>' In addition-,. I understand that ypu woyId welcome, an orientation that; wehave previousiy provided/to new board members. It will give .you a betterinsight into: the. organizati'ori, management and procedures, it-; typically lastsa half-dayWe' would like to• host a-dinner after the session.:>>.>>, I wpui'd, like to invite all 1 .directors of Duke who are, available to' join usfor' this dinner.>>>> .We will poll .for dates, that' work- for' you all, with; a special focus, bhthose; attending the* orientation 'sessiori.>>>> Again, thank you for your- commitment, to the company. I look forward totalking, with ybii- sboh-.>>>> -All thesbest,>> JimTIALLEGPGNDIR001381

From: Harris DeLoachSent: Thursday, July12, 2012 9;33 AMto:.Jim HylerRedacted - Personal Info.Subject: RE: Confirmation of,Wednesday;7:30 : amTks for update;HEDFrom: Jim Hylerl Redacted - Personal Info. |Sent: Thursday; July. 12^2012 9:22 AMTo: Harris DeLoachSubject; RE: Confirmation ofiWednesday^Ô amJust left "you a;vm about what littje I've learned:Frbm: Harris DeLoach \Redacted - Personal Info.Sent: Wednesday, July 11, 2012 11:06 AMTo: Jim HylerSubject: RE: Confirmation of Wednesday 7:30. amJimIf you receive any feedback on Jim Rogers meeting with Progress:emp!oyees scheduled for this AMwould be interested hearing it if ypu get a chance.843-383-7p80Tks,| Redacted - Personal Info.HarrisFrom: Jjm Hyler | Redaaed - Personal Info. |Sent:: Tuesday, July 10, .2012 ip:46;AMTo: : 'McKee, Marie',; 'Baker,:John p.'j-Harris DeLoach; 'Carlos A. Saiadrigas'; t Theresa.M..Stone'Subject: RE: Confirmation ofWednesday:7:30.amREDACTEDFrom: McKee (_ MaHeRedacted-Personaiinfo.Sent: Tuesday, July 10, 2012 :10:41jAMTo:"%aker;john b;-;.. , Dei:oachJr;' , ;; , jim^Cc: Mckee,>1arieSubject: Confirmation of Wednesday 7:30:am'CarlosiA. Saladrigas;; 'Theresa M. Stone'LEGPGNDIROOI 382

Hello-All,I am confirming that we will meet again by phone tomorrow at 7:30am.Same call in numbers.888-862-0358Code:6591081Thanks,Marie :E. Marie McKeeRedacted - Personal Info.Thise mailmeasog&and.altdoaiments which.accompanyJt.Bre.imendftd.ocâddressed, and may contain privileged or confidential informedoo. Any unauthoilzaiii disclosure or oiEfflbution of this a maii message"is prohibited. If you have recsived this a rrwil mesaogein error, please notify the sender and| delete fhiB frorn all computers.This e mart massage and all documenls which accompany it aire intended only for iho use of the individual or entity to whichaddressed, and may contain privileged or confldential inforniatlbn. Any unautlwrtzed disclosure or distribution of this e mail messageisprohibited, ifyou have received this a mail message Ih error, please notify the sender and delete this from all computerc.FIDENTIAL LEGPGNDIROOI 383

From: Harris DeLoach I Redacted - Personal Info.Sent: Thursday, July 12, 2012 9:33 AMTo: Jim HylerSubject: RE: DailyUpdate; Duke Energy may.face skeptical NC regulators^Jim,thanks for the upda.te.Haye a good day:HarrisFrom: Jim Hyler)Redacted - Personal Info.Sent: Monday, July 09; 2012'4:28 PMTo: Marie McKee; Theresa M. Stone;. Harris;DeLpach; 'Carlos A-.Saladrigas';Subject: Fwd: DailyUpdate: buke Ehergy.may face.skeptical-NC regulators,Redacted - Personal Info.Please open the first ; ;Hnk :under Today's top Stories>JimBegin forwarded message:From: "Keyin Pilts. Pubiisher" Dale: July 9'2012 3:17:26 PM EDTTo: | Redacted Personal Info. |Subject: DaiIyJUpdate:.'Duke\Energy may face.skeptical NC regulators;Reply-To:' repiy-33?06p91 -4355996@mail-l.biôumals.c^ 'If.you are haying trouble .viewing' tteemail, click hereLeverage yoiir social influence and vote foryour favorite local businessesih our Social Madness corporate:media challenge »DailyUpdate July 9, 2012Business Pulse Survey .Connect with; usNow that the Supreme Court has declared the hMltH-iniwrahce;man'da1econstitutional,how do you expect the'law to affect your cbmpahy's healthexpenses?FIDENTIAL LEGPGNDIROOI 384

Social MadnessVote today tp support your fayprite local businesses!Companies In Today's NewsToday's Top StoriesDuke Energy may face skepticarNC regulatorsBBST wins court rulingbv^r arbitration on overdraft feesPrice of Charlotte businesses for saje down;S'.5 percentAT&T expands 4G LTE network in CharlotteOverstockAds leads Kybk.com in Social Madness contestFor comprehensive liijdÎhdustfyWatch newsletters delivered 1 every:Mpnday. Sign Up TodayProject manager named at.Charldtte Regional PartnershipCharlotte-area gas prices inch upward,Republicans make hay out of Charlotte's DNC troublesPeople on the Move - 2012-07-09Talks continue between American Airlines, flight attendantsthi,Read about successful entrepreheure and the small-business tdbls'theystart and grow their companies-Appalachian State recruiting rurihers. cyclists for study at NC Research CRecommended Stories from our 40 NewsroomsCalifornia cities lead nation in self-enipioymentObama: Extend middle-class tax cuts nowAreyou "The Invisible Man (brWpmah)" in your career?Most Americans homebuyers think Ifsstilla buyer'smarketBillions in BP fines could boost Everglades restorationCONBDENTIALLEGPGNDIR001385

This e-mail message and;ail documents, which accompany it are intended only for the'use;of the individualpr entity to which addressed, and may contain privileged or confidential information. Any.unauthorizeddisclosure or distribution of thisê-mail message-is prohibited^ If you have: received this e-maii message;Inerror; please notify the sender andcleletie'this from afi computers. ~WRD000.jpg image001.jpgmimage002.jpg, iniage003.jpg' imagepM.jpg :image0p5.ipg image006.jpg, image007.jpg imagep08.jpgCOh^lD^TIAL LEGPGNDIROOI 386

WmwnD.JoJfflMDChaaman.ftcsideirtDecember 20,2010ConfidentialBOARD GE DIRECTORSPROGRESS ENERGY, INC.A special meetihg ofthe Board of Director of Process Energy; Inc. wiU be held Byteleconference on Monday. Januarv 3.2011. from 8:00 to 10:00 turn, to discuss a strategicopportunity.Tp join the ^11, dial 1-888-363^4735 ahd'enter accesa code 5814305.Materials will be sent in advance ofthe meeting. Please call ifyou have any questions.Sincerely;AwWDJ/hhw •c: Mr John R. McArtlpMr. Mark F. MulhernMBM 1551;r>.(mi«B37iaTIALLEGPGNDIR001387

WilflKn O-JohnwoatviQiM Eawjtivb DificarDecember; 22,-2010ConfidentialBOARD OF DIRECTORSPROGRESS ENERGY, INC.A special meeting ofthe Board of bircctors of Progress Energy, Inc. will be held in theSalon Room at the Umstead Hotel & Spa, 100 Woodland Pond Drive, Gary, NorthCarolina, pn Friday. January 7.2011, beginning at 10:00 a.to discuss a strategicppportunity. Hie meetirig will conclude by. 3:00 jun.. . . . . . .. ^Holly will forward travel an^gements undCT cover.Sincerely;WDJ/hhwc: Mr. John R. McArthurMr. Marie F. MulhernMr; DavidB. Fountainr-/ei!JW33riONTIALLEGPGNDIR001388

Mitchell-Hendcrsori/TrudieFrom:Wenger, Holly Sent:Wednesday, December 22, 2010 8:37 AMTo: Baker, John D.; I Redaaed-personal info. i; 'Mel Martinez 1Cc: Mitchell-Henderson, Trudie; I Redacted-personal info. 1Subject:briefing.Redacted - Personal Info.Gentlemen:We settled on Friday, January 7, 2011, for the special 'inrperson boardmeeting. I know the three of ypu. h'ave conflicts' that; day.- Bill, John andMark would like to brief you on Saturday morning, January 8, at 10:00. ET.The bankers will also be participatihg, : ,ahd we will get, you an advancepackage of the materials.If this time is acceptable, our plan would.be to; have a full board call at1:00 ET Saturday afternoon. That call should not last' more than an hour,and in all likelihobd wil : l : be no, more than 30 minutes. I will poll thefull: board regarding, the time for that call after we firm up a time forthe briefing.I look forward to hearing from you.HollyHolly H. WengerDeputy General CounselAssistant Secretary/Shareholder; Relations Progress Ehergy : ServicesCompany, hhCPhone: 919.546.6'206email: Ho 11 y .Weng e r @ pq hma'i 1 ._comCONFIOEV gITIAL LEGPGNDIROOI 389

Mitchell-Henderson, Trudie:From:Sent:To:Cc:Subject:Wenger, Holly Wednesday/ December 22, 2010 3:41 PMBaker, John D.; Redacted - Personal Info.Redacted - Personal Info. J; 'Jim Hyler*; 'Jones, Robert'; 'Jones,Steve'; 1 'Mel Martinez'; 'McKee, Marie'; 'John Muliih';Redacted - Personal Info.Redacted - Personal Info.Mitchell-Henderson", Trudie; ] Redacted - Personal Info. •; 'Wheeier,Jan!;Redacted - Personal Info.'Carlisle, Kimberly A.';'Jeanie Geoghegan!; Redacted - Personal Info. ; 'Sharon Pinksten'Board meeting by teleconference.on .January 8Dear .Board Members:,We would like to schedule a short call on Saturday, January 8 as a followupto. the meeting on January 7 : •Please-let me know-i'f you-are available, at,1:00 p.m. ET. for this call which; should last less than ari, hour and willlikely be not more than 30 minutes..Thank you*Holly H. WengerDeputy General ^CounselAssistant Secretary/Shareholder Relations :Company, LLCPhone: 919,54 6:6206email: Holly.WenqerQpqnroail.comProgress Eriergy ServicesLEGPGNDIR001390

Mitchell-Henderson, TrudieFrom:Sent:To:Cc:Subject:Attachments:'Wenger, Holly

Cuuroc) ari Goipuuto ScccttrVJanuary 3,2011Ms. E. Marie McKee, ChairMr. John D; Baker, II.,:Mr. Harris E. DeLoach, Jr. ^ . •;. • ;Mr. James B. Hyler, Jr.Mr. Robert W. JonesMr. Mcl MartinezMr John H. Mulliri, HIORGANIZATION AND COMPENSATION COMMITTEEDear Committee Members: . : • : • • . , , ,• . / ;•,A meeting ofthe Organization and Compensation Gommittee wll.beheld byiteleconferencc onWednesday, january 5.2011. at 3:00 p.m, " ^ rTo participate in the call, dial 1-888-363-4735 and enter access code 5814305; V -:Please call if you have questions. ;:Sincerely,rIRM^hv/c: Mr- Wiiliam D. JohnsonMr. Mark F. MiUhernMs. Paula J. Sims1. •• ! . \y^^yFO.fiiulbbl '" y 'LEGPGNDIR001392

Mitchell-Henderson, TrudieFrom:Sent:To:Cc:Subject:Attachments:Hensley, Pam on behalf of Wenger,Holly- Thursday. Februarv 10. 2011 1:43 PMRedacted - Personal Info.Redacted - Personal Info.Redaaed - Personal Info.Redacted - Personal Info.Robert W, Jones';Redacted - Personal Info.Redacted - Personal Info.Redacted - Personal Info.; 'Carlos A. Saladrigas'; 'Fred Toi isonRedacted - Personal Info.Redacted - Personal Info.Redacted - Personal Info.Mitchell-Henderson, Trudie; ' ; 'Wheeler,Jan!; 'Theresa S Couch!;;'Carlisle, Kimberly A.'; 'Jeahie Geoghegah 1 ;'Sharon Pinksten'; Johnson; Debra; Bagwell, LavondaSpeclar Board Meeting Notice ;fp r Ma reh 15Document.pdfBoard of Directors,Please see -the attached letter from John McArthur regarding a specialBoard meetihg on Tuesday, March 15 at 10 a.m.HollyCOÎDÎALLEGPGNDIR001393

,Jetm&McAnhiirriaeutfwWe Piwster'C Ganeral^Counso) 3rd Ciqwrats Secretaiy'February 10, 2011; :BOARD OF DIRECTORSPROGRESS ENERGY, INC>t, f ^ . . .• •. y.. . - '. . ."." v. •- ' :.;< • . ..:•( . ;' A special meeting of tHe Board; of Directors of Progress Energy, Inc.irwill be held at the MamottCity Center, 500 Fayetteville Street, Raleigh, North Carolina, on Tnesday. March 15. 2011.from 10 a.m to 12 noon. " 'The purpose ofthis meeting is to give ypu the opiiortunity'tO: review and discuss the mergerproxy which will be filed;wth the SEC 'on Thursday, March 17. ^ The merger proxy will beincluded ih the advance Board materials;.,(*.. • : .. - • • , •We are currently working on the logistics for this meeting and will provide raore , detailedmformation in the next couple of weeks. . JohnsonbrdsdrnttlTIALLEG PG N Dl R001394

•. •.... ;r.. i.,'1John (L McAjthnr ••' - '•' • •b^rwWcBF^dim.Gcncral. li>^.!CfiiinwlondCcjr^rate"Seatrafy.-'.^_j' ••';•' ^:Ms;E.;MyeMckce,.Chair{'.'/'iZyf-: Mr:X&^pker,if ] v.:Mr. Hims E- DeLoach, Jr. -''-\-. ; v '. ^:.:4.^^.vVMr;-JamesB.Hyler, Jr.'^tyrc 1 ' ; ''M^Robfew:Jones ; f.r A - ; ' : J ^ - v;- C .-"'^.r/Mr^'MelMartinez ''r;; ; ';'; ! ?'V : '''./.->M^j^mH.Muliin,III . ^';-:'}^-KiiH^k'^j'".. • H- U- ry :[_6 Rti ANIZAflpN AND GOMTCNSÔNiea^^ ';•. V;.^ ••- Dear Gommittee Members: ^ •;; ^z]: ^ ^>^ • • v '^ ^ ^ '^'O'. S-J '• '-.r:::'A meeting of the Organizrion ^d Cf^F^ 1^^"'^^^ ^1 fe helcl f on Tuesday; : i;; ..February 22. from 10:00 aim. to^-QO'D.m; in Progress Eriei^Bo^dro^r The!] ^ ^purpose ofthe meeting is toapproye'^^jncCTtive;^^ 2011 priorities» vfor senior managementi' revieiy tfte^prcliM )reference and discussôther matters ^ new^|Boxilitothe meeting. - ^...:;:> , .:• v-' ..v--'' v-' ' I'j;' •. r-For Committee members who will be unable tb participate; in p^spn; ihe w • 1 '?S^^r:^î^number is 888-363-4735, êss.cpde 5814305.'^W^^'^^holIy.wengCT@pgnmaiLcom.Sincerely,JRM/hhwc: Mr.iWilliam D: Johnson:ibnbdni932- ^ ^"i"/^;.hBflrisMEnBTinilnc. ''•''^V'^cv!':i> 319.548^3/0 J--,-;. -^vl">fl)95«SZ«CONFIDfENTIALLEGPGNDIR001395

JthnftMcArtfcnr ,Ewnitiva VicePrasidQnt. GenaiBjCounsel aril Corporatt Secretary; Februaiy 23,2011BOARD OF DIRECTORSPROGRESS ENERGY, INCA ispetid meeting of tiheBoard bf Directors of Progress Energy, Inc., will be held in theChancellor Robra at the Mairiott on Tuesday, March 15. 20U. at 10 a.m.. to review and^ discuss the merger proxy.;u.A regularmeeting of the Board of Directors of Progress Energy,,Inc-j'will,be.held'in the' Boardroom at the Coiporate Office of the Company, 12? floor. Progress Energy Building,. ' 410 S. Wilmington Street, Raleigh, North Carolina., on: Wednesday. March 16. 2011; for thetransaction ofsuch business as may come before the BoanLj: Enclosed is the event schedule forthe meetirig. ,F(• >We have arranged for overnight accommodations at.the Raleigh Marrkrtt City Center, which isacross the plaza fromthe Progress Energy Building.f Paridngjis available' in the hotel parkingdeck or in the executive parking lot adjacent to the Progress Energy Building.The Board dinner on Tuesday evening will be at Poole's Diner beginning at 6:30 pia. We willmeet in the hotel lobby at 6:15 pan. to walk over tothe rwtaurant:Please review the attached attendance form, and let Holly know ifyou need additibnal assistancewith your transportation arrangements. • ; v'. ^T fSincerely,JRM/hhwEnclosuresc: Mr. William D. JohnsonMr. Mark F. Mulhemt>rdidm946ProBroMEiwrjftnaBflliiflh.M 27602TIALLEGPGNDIR001396

. SCHEDULE OF EVENTS "March 2011 Board MeetingProgress Energy Building- 12 thFloorRaleigh, North CarolinaTuesday. March 1510:00 a.ml Special Board Meeting at the Marriott -Chancellor Room.1:30 p.m.3:00 p.m.•[ 6:15 p.m., 6:36 p.m.Corporate Governance Committee - CEO's Conference RoomAudit an r d Corporate Performance Committee - Conference Room 12E 'Organization and Compensation Gommittee Meeting ^ Conference Room 12BMeet in Marriott Hotel lobby to walk over to Poole's Diner, • ; .Reception and dinner at Poole's Diner-Wednesday. March 167:00 a.m. Continental breakfast available in committee meeting rooms7:30 a.m.9:30 a.m..12:30 p.m,'11:00 p.m.Finance Committee - Conference Room 12B :Operations and Nuclear Oversight Committee - Conference Room } 2EBoard Meeting _ ,Adjourn/Lunch r:Transportation departs for the airport!" ; "r.' " / j) - = "-.LEGPGNDIROOI 397

AttendancePROGRESS ENERGY BOARD MEETINGMARCH 15-16,2011john D. Baker IIPlease e-mail or fax form to Hollv Weneefbv March 4.2011. if there are chansesholly. wenperfatoenmaU.comFax: 919-546-2859/ I will attend the special Board meeting on Tuesday at 10 a.m.SI will attend dinner at Poole's Diner on Tuesday evening/ I wilj attend the Board meeting on WednesdaySI will attend lunch followingthe Board meeting on WednesdayI will be unable to attendAccommodationsS Please reserve a room at the Marriott for Tuesday, March 15TransportationTncsdav. March 158:00 a.m. PE Plane (N93KW) departs Jacksonville (Jacksonville International: SheltairAviation 904-741-0904)9:05 a.m. PE Plane arrives RDUTransportation will be provided fromthe airport via Elite Coach (919-267-5250)Wednegdav. March 161:30 p.m. PE Plane (N38KW) departs RDU2:45 p.m. PE Plane arrives JacksonvilleHfihls Information Has changed or is inaccurate, please let us know:Comments or special requestsLEGPGNDIR001398

Mitchell-Henderson, TrudieFrom:Sent:To:Cc:Subject:Wenger, Holly Friday, April 15, 2011 2:38 PM ' :Baker, John D. ; 'James Bostic'; 'F Redacted - personal mfo. i-'jimHyler*; 'Jones? Robert'; 'Jones; Steve'; 'Mel;Martinez'; 'McKee,Marie'; 'John Mullin'; Redacted - Personal Info. 'Carlos A.Saladrigas';Theresa. M. Stone!; 'Fred Tollison'Mitchell-Henderson, Trudie; iJariRedacted - Personal Info.'Jeanie Geoghegan*;. 'Hensley,.Pam; Nelson, SarahSpecial Sharehoiders MeetingRedacted - Personal Info.t 'Wheeler,'Carlisle, Kimberly A.';1'; 'Aharon Pinksten';Redacted • Personal Info.Dear Board Members:We are looking forward to scheduling the date .for the special shareholdefsmeeting to approve- the- merger.. Assuming" -we have-the SEC' s consent for theForm S-4 registration tp go effective, we are working with Duke to set themeeting on July 12, as* that date is already on your calendars for burcommittee and board meetings,.- -However, we would like, to know if a datethe last week in Junei would work, for^ :y6u.. Both companies would like tohold the meetings on the same date, if possible:.Please let me know.-if: your schedule permits attendance of our specialshareholders: meeting on June 28', 29 of;'30 .Thank ybu,.HollyHolly H. WengerDeputy Generai GounselAssistant Secretary/Shareholder Relations Progress Energy ServicesCompany, LLC.Phone:. 919. 546.6206email: Holly .:Wenger@pgnmail ; ..comCONRT5ENTIALLEGPGNDIROOI 399IT

.VVg^'w i AT. AX&MÂ 1 -'^'îEês&mÂ- AA CttnielandCorpo^Sccieiify' ,• AA^:': • CATy ^'C?V' 'Ap^ 26; 2011;:;;-^f:"'^V.''1'^r;:"'", "4^"^ ••: ṟ V : . Jrf^.,.1BOARDOF blMGf ORSPROGRESS ENERGY, INC.&)A : £I- ^-AA^TA', ^ ^ A ^ r ^ A ^ ^; ^following the annual meeting in the Boardroom at ;tfe 12 A^ , •flpbr, v Progress Energy Building, 410 S.;^Wilm^cm^Street,;'Rêi^£to the " / ^* ti^saction of such business as may comejj&forethemeeting;V;,V.-^ • . r; '" 4> !, "^>p;>^-'^..^-yJ' ^V.^t' 4 .'' - '^ -": -'•>' ±\h 'Â '-A---. : c^W• • " . V • AFor those attending the Operations and Nuclear^ it; will convene at: ^3:60 p.m ;on;Tuesday sMay;l ••y ;^ ''^ . V 5 :, • ' • ' ' ' ^ • " '••across the Plazi from the Progress Energy Building. Pa^h^JaS^lablefiri jhe"^lVp^ngf^^\V^Vdeck or the executive M^no ^t aAiar^nt tn thf* Pmorwyi Knerov Riiildihff: ^» h '' ^ . i " • . ;** ..> f m^fAy^T>mA:A;Please review the enclosed attendance form and let Holly know if you nâdditi^ '; |,with your transportation anangements. '''^-Â • c' : A- ,• 'Sincerely,"-v," i . I" A"'-:.',!- .'^ T-'-VJRM/hhwEnclosures^c: Mr. William D. 'JohnsohMr. Mark B. MulhernPragnm Enorgir.Inc.-fib.Box WHna'-islvNC 77602,316.5464070. 7:.. A---" -'•AA4M:^; '^'•••rÂ. -V -..i.î.-v.:-:'-' ' "•:^v:; & ' •, - .. ; } ;.-* • V.f "'MIAL• • ' ', r','A • •1*','. ! -"-'':v.£ v. 'fV,'.!*-,,• : '••.-> .•'-• • •. •• -- 'r 1 ; '.-".fAAT LEGPGNDIR001400

SCHEDULE OE EVENTS; Rêigh; North CarolinaMayT0rll,26ilTuesday. May 10- Arrivals and check-in - Marriott Hotel3:00 p.m. ONO Committee meeting- Boardroom6:15 p.m. Transportation departs hotel for dinner6:30 jxm.. Reception and dinner at Bloomsbuiy Bistro ^ ;Wednesday. Mav 117:30 aim - .Breakfast - at your leisure (

PROGRESS ENERG Y BOARD MEETINGMAY i£n t2011JohnD.Baker IIflease e-mail or fax form to HollvWeneerbvMdyS. 2011 Jf there are chansesiioiiv.weneetfaenmalLcomRedacted - Personal Info.Attendance/ I will attend the special ONO Committee meetihg on Tuesday at 3 p.m.^ ...I will attend dinner at Blobmsbury Bistro on Tuesday eveningf1 will attend'theÂnriual Meeting of Shareholders on Wednesday/ I will attend the Board meeting on WednesdaySI will attend lunch following the Board meeting on WednesdayI will be unable to attendAccommodations/ Please reserve a room at the Marriott for Tuesday, May 10TransportationTuesday. May 1012:15 p.m. PE Plane (N93KW) departs Jacksonville (Jacksonviiie International: SheltairAviation 904-741-0904)1:30 p.m. PE Plane arrives RDUTransportation will be provided fromthe airport via Elite CoachWednesday. May U1:30 p.m. PE Plane (N57KW) departs RDU2:45 p.m. PE Plane arrives JacksonvilleRedacted - Personal Info.*Ifihis information has changed or isJnaccurate, please let us know.Comments or special requestsLEGPGNDIR001402

Baker, John D.From:Sent:To:Subject:Progress-Daily-ReplytSpgnrnailicbmtuesday, May 03i 2011.12:42 PMTNewsletter. Archive© pgn maiicom. Progress Daily. 5:3.2011"u.esday.'May 3, 20!')feedbackprogress[ Emptoyee NewsPEF files nuclear cost-recovery charges for 2012Progress Energy Florida on Monday submitted its annual 'nuclear cost-recovery clause (NCRC) filing tothe Florida: Public Servics Commission (PSC); which, if approved, would result in a slight decrease tomonthly nuclear costs niext yeanFor 2012, Progress Energy Florida is seeking to recover $157.6 million.in nuclear costs; which includesinvestments of $135.3 miilibn in the proposed Levy County plant project and $22-'2 million to increaseproduction capability at the Ciystal River Nuclear Plant.If the PSC approves the company's 2012 nuclear, cost estimates as" filed, "the company estimates aresidential customer would pay $5.20 a month on a 1,000 kilowatt hour (kWh) bill for nuclear costrecovery ($4.47 for Levy, and 73 cents for the Crystal River uprate).Those nuclear costs are 33 cents, or 6 percent lower than the $5.53 per month customers pay today ona 1,000-kVyh bill ($4.99 for Levy, and 54 cents for the Crystal River uprate). The'average total monthly billfor 2012 will be determined after other clauses, such as fuelnxst recovery, are set by.the PSC, likely inearty Noyember. Cun-ently,,residential customers pay $119.34 for 1,000 kWh."Advanced nuclear plants are an'important part'of our,region's long-term energy mix." said Vmny Dolan,PEFs president and chief executrve officer. "Continuing pur cornmitment to these important nuclear. projects will help ensure that huclear power remains ai viable optjon to provide safe, clean and reliableenergy for the'1.6 million hbuseholds and businesses thatdepend on'us:"The PSC will hold a hearing on this filing beginning Aug. 10. The PSC is expected to,decide thei Issue:Oct. 31. If approved, Ihe new NCRC would take effect oh customers' bills beginning in January 2012.New version of Concur goes iive tomorrowOn May 4, a new version of Concur, the company's expense reporting tool, wiil go live and be availablefor employees to create expense reports for all credit card transactions posted after April 29..Use these resources to learn more about this new tool:• Read about the new Concur tool iri the latest edition of InProctress'• Vjew this computer-based training to see the tool new features• ;Concur tool F£Qg,• ^ Cbncurjravel and Expense Q&A.Quick Reference GuideFrom the Exoense Reportiha Resource Cehtef website, vou mav access the resources above in addition;to a link, to Concur (v7), the old version; and beginning tomorrow a link ta the new Concur tod, A newfeature called Concur Mobile Application Resources also will be available from this site..In order tp dose out the old version of Concur, employees should process all credit card trarisactiorisby May 16 and send the reports for approval. Those responsibleforapproving reports:should have allreports approved by May 24.ElvlTIALLEGPGNDIR001403

In the newtod, receipts maybe uploaded into Concur.from your computer. However; if you choose to faxreceipts, the tools have separate fax numbers.,The correct fax number will print.onihefaxcover.page.If you need additional informatton, email your questions to concur.expenseiBipfmmail.comCorporate Data Center escapes major tornado damageOn Saturday, April 16 at approximately 4 p.rii., the same tornado that caused extensive damage iridowntown Raleigh passed over Progress Energy's Corporate Data Center (CDC): The CDC houses thetechnology infrastructure Progress Energy relies upon to keep its information systems running. Thefacility is staffed TAH and the IT&T employees working that'aftemoon were keeping a^ctose eye on theweather as the storm approached.The CDC was built in 1986and is designed tp withstandthe winds of a category 3hurricane. With thatknowledge, the employeesstayed at their.workstatibhs inthe operations center, locatediri the middle of the buildinguntil the tornado passedrThetornado damaged thesubstations and distributionlines that feed the CDCcausing external power to fail.The CDC's emergency diesel 1generator, immediately begansupplying power and therewas no disruption to theavailability of Progress!Energy's informatibn systemsor network:Additional employees from.IT&T and PropertyManagement were on site, by5 p.m. to assess the damage.Two large venlilaiiori unitshad blown off of the roof,tearing the rubber surface in anumber of locations. .Waterleaked into the building .overemployee office .space and asa precaution computers werepowered down and lights"turned off in those areas..Fortunately no leaks occurredin the areas housing serversor mechanical systems;* Metal roofing wrapped around a light pole at tho CDC.Air conditioning vent blown off the roof into tho CDC paiklng lot.Thie CDC grounds andperimeter did sustain damage?from a number of fallen trees.Cracks were observed in thebrick facing" on one comer ofthe building and a; structuralengineer brought on sitedetermined that the buildingremained structurally sound.As Lead.IT Analyst RobRobertson observed, "Wereally dodged ia good sizedbullet."By Saturday eyenirig,empioyees had covered theA holes jn the roof with tarpsDowned trees (Ine the CDC perimeter.COfJFIDIALLEGPGNDIR001404

arid.cleaned up debris thathad blown into the building.Earty Sunday'morning'external power was restoredto the CDG. The data centerdesign, the quick resFwrise ofIT&T and PropertyManagement, and the hardwork of Distributiori andTransmission employees torestore external power allcombined to keep informatipnflowing to employees andcustomers throughout theevent.What to expect at your health screeningToday is the first .day employees can take advantage of free, convenient onsite Healthy Progress healthscreenings,part of the cbmpany> Wellness Program. Screeningsstart today and run through July 28. To sign up for an :onsite health screening, click here..Based on employee feedback, there's a new aridimproved Wellness Program this year. Qualifying*employees will now have tHe bpportuhity to earn'moreiin incentives, even if they don't meet the five Wellnessenergize for'lifeGoals! To qualify for any of the cash incentives, youmust participate in ah onsite health screening or'submit resufts from a 2011 physical. Employees must also submit an online Health Assessment no laterthan[Aug;.,31 to receiveany cash incentive;Whether you've been to a screening before, or if this is your first Healthy Progress health screening, thereare a few things you should know, before you go to your screening. View the list of frequently askedquestions below to learn more .abput what to expect at your health' screening.What's the difference between a health screening and a physical?A health screening is notdiagnostic and should not replace your physical. The screening provides you with an educationalopportunity where you can speak to a health coach about reducing.your risk of developing future healthproblems. View more information about a Free Well Visit.i'm concerned about confidentiality. Are my values and/or personal health information keptprivate?Yes! Your personal health information (PHI) is protected by HIPAA Laws arid js kept private andconfidential by StayWelj, Progress Energy's 3rd party vendor. Your-PHI;cannot be shared with Progress'Energy or any other pairty without your'written perinissioh.The results I received at my health screening are not typical for me and I did not qualify.for the$500 cash incentive. What can I do?At the screening, you can appeal your waist girth, height and weight Ask to be re-measured by the leadscreener if you belieye.ypur values are incorrect.'Blood pressure.cah also be re-measured at thescreening. Please note that mist girth,: height and.wefght can6t;be appealed after the screening:With-in 30 days of your screening.-you can appeal results forblood pressure arid/or blood.work bysubmitting document FRM-SUBS-26ofr7'and an official copy of your2011 physical to'healthv.DrooresstgjpQnmail.pbm.It is not reasonable or safe for me to reach the five Wellness Goals in one year. How can leam the$500 Incentive?If .it is unsafe, or medically inadvisable for you to meet one or more of the gbals; ; Work with your physicianto establish a.short term Alternative Goal for,any/a|i of the Five Wellness Goals. Deadline, for 2011 goals:has already passed. Deadline for 2012 Altematiye Goals is 12.31.11. See document FRM-SUBS-QQ053for details;I haven't signed up for rny onsite health screening yet Where can I do that?Click here to register.for an onsite health screening today!';IALLEGPGNDIR001405

IYou can view other frequently asked questions about the Healthy Progress health screeningshere.'View Particioation Guidelines and Eiiolbifitv Requirements.[ Progress Energy In The News*Progress Energy files ruling to reduce nuclear cost-recovery billsFred Hiers, The Gainesville Sun, Ffa.May 2,20ilFlorida law allows utilities to charge customers for costs incuned for proposed nuclear facilities, referringto the process as "nuclear cost recovery." Progress Energy Florida on Monday submitted to the FloridaPublic Service Commission a request for a 'reducfaoy in customer nudearbills.Progress asked for $157.6 million in nuclear costs;, which, includes $135;3 million for its proposed LevyCounty plant project and $22.2 miliipn to Increase production capability at the Crystal River Nuclear Riant.If the PSC approves the 2012 nudear cost'estimates as filed, the company estimates a residentialcustomer would pay $5.20.a^ month on a 1,000 kilowatt-hour (kWh) .bi r ll for nudear cost recovery. Thatwould be $4.47 for the' Levy "plant and 73 cerits fp'r the Crystal River plant. The cost recovery requestwould be 33 cents, or 6 percent, lower than the $5^53 per month customers now pay oh a 1.000-kWh bill.Residential customers currentiy pay $119.34 for 1,000 kWh;The PSC will hold a hearing cin the fifing beginning Aug. 10,and; is expected to dedde'the issue Oct. 31. ifapproved, it would take effect beginning January 2012.There are ^^'OT,0pp..prbgr^;cuômeis in'Marfon County and1.6 miliion throughout Fiorida.Waste Industries, USA Inc. flips tbe switch on renewable enargy projectRaieigh Downtowner Magazine, Af/C.-.May 3,2011Waste Industries USA Inc: (Wl), a leading solid waste mariagemerit compariy headquartered in Raleigh,N.C. since 1970, will.flip the switch with partners thiSiWeek ata formal ceremony that launches the largestrenewable energy, project of its kind in North Carolina. The'ceremony.'will take place Wednesday, May 4that 2:00 p.m. at the Sampson County Laridflll in Roseboro," NiC; arid will marie the largest landfill gas-toenergyprogram in the State.The venture, known as Black Creek Renewable Eriergy (BCRE), represents years of hard work andhistorical partnerships. Wl, Gregory Poole,Equipment Company (GPEC) and Progress Energy (PE) haveteamed-up to buiid a 6.4 :Mega Watt power plant using landfillgas to generate .electricity that will powermore than 4,000 homes" for ari estimated 70^plus"yearS:"This moment in North Caroiina history is made possible by three of North Carolina's leading:companies:Waste Industries, Gregory Poole Equipment Company "and Progress Energy," says Ven Ppble, chiefexecutrve officer, Wl. "As you might imagine, a project of this magnitude takes a lot of planning, carefulconsideration and substantial finandal commitment, and Waste Industries' vision of creating ari.environmental campus that protects pur environment and has a positive impact on the community hasbeen more than ten years in the making."In'total. the process for perrnittirig and designing;the system took more.than two years of focused'planning arid ehgineeririg T and represents more than a $13.5 million ihvestmeht on befialf of Wl.The facility will initialiy use four CAT® G352bC LFG engines,.sup[)lied by GPEC, tb convert the methanegas that is produced by the 3,500 tons of Waste 'cpllected frorn twenty-four counties,across eastern N.C.per day Into more,than 6,4d0 Kildwatt8 of ppwef.'Corribiried, the generators will produce 153,600 ,,Kilowatt-hours of energy per .day. with a project life expectancy of,70-plus years. As gas emissions fromthe landfill increase, Wl plaris to grow the facility as necessary, with ari additional one to two generatorsets already planned for.installation':in 2012.COfiFITONTIALLEGPGNDIR001406

"The launch of these generator,sets through Uie Black Creek Renewable Energy,Project demonstrates 60years of our legacy in the making," said Gregory Podle lll. chairman, president arid chief executive.officer, GPEC. Throughput the development ofthe landfill gas-td-energy site, Gregory Poole Equipment• Company has worked with .Waste Industries to design an innovatrye solution that will help them makehistory, and We are proud of our ability.to offer our partner tailored sdiutions. that help them'achieve theirrenewable goals."'Progress Energy will be purchasing the electricity generated from BCREând will place it on the grid tohelp meet the heeds df its oustbrriers. "We are pleased^ this project is compiete arid delivering reliable,cost-effective alternative energy,to the power grid," said Uoyd Yates, president and chief executive.officer.of Progress Energy Carolinas. iNe are committed to partnering with our communities and businessleaders to address the challeinges of growing energy demand and global climate change."The BCRE project has recently been deemed by the U.S. Environrnerital Protection Agency.as anendeavor that Will effectively reduce greenhouse gas emissions; improve local air quality; create jobs;and develop a lasting renewable source of energy: Annual environmental benefits iri;terms of greenhousegas:emisslon reductions from this project are .equivalent to taking more than 104,000 cars off the road orplanting 115,000 trees.' , '"Landfill gas is the most consistent source of renewable energythat we have today. It is;an honor tolaunch the Black Creek Renewable Energy project that^11 provide.sustainable energy for tomorrow,"says Jerry Johnson, vice president of capital'projects. Wi."This project is good for the environment, good for the communities we serve and good for business,"Johnson concludes:.###Suspects charged In area theft ring;DougGark Assistant Editor, The Sampson Independent Online, W.C.May 3,20.11Two.men arid two women are.fecing serious felony charges after all four were linked to recent cases'involving the theft of copper wiririg from utility poles.David Earl Home, 42, of 652 Fussell Road; Rose Hill; Amanda Gail Sessoms,'25, of 13215 Boykin BridgeRoad, Roseboro; Lee Carter Crosby, 37, of 1634 Cartertown Road, Clinton; arid Ashley Lynn Simmons,24, of. 3489 Hobbtpni Highway, Clinton, were all charged in connection to larcenies that took placebeginning on Oct. 11, 2010:in all, detectives said thai in at least fiye thefts the group.collected just over $35,000;According to Sampson CourityDet. E. Sanchez; the group Would steal copper wire from:poWer lines nearabandoned residences, at times dimbing the pole and rerriovirig the Wre with'cutterer"One of the "men had experiencein working on power lines," Sanchez said; "And hewoujd climb up thepole and then they would cut thev/ire down, map them lip arid seil them! They knew^ whatthey wieredoing for sure."Sanchez said the group took from lines located on Garland Highway, Butler's Crossroads, Lamb Roadand power lines on Edmond.Matthia Road.,"We got the first report from Prcgress Energy back in October;" the detective said, "and through,investigation, we went to different salvage yards arid told them what we were looking for."Within weeks, the copper wire began turtiirig'up at Sarnpsori .Salvage and a salvage yard in Goldsboro."We requested the. video and called them in,"'Sanchez said, "once they knew we.had them on videoselling the copper, they confessed."i Sesspms was charged with five counts of larceny and five counts.of possession of stolen property. Shewas given a 530,000 bond.Home, Crosby and Simrnons were each charged With four counts.of larceny and four counts ofpossession of stolen property. Home was given a $10,000 bond, Crosby was given a $3,000 bond andSirrimori's was placed under $10,750 bond.All four,were given court dates of April 1.TIALLEGPGNDIR001407

Although Progress Energy will riot get the. wire back; Sanchez said they will follow up.with a civilcomplaint against the defendants.mmResidents in four N.C. counties could hear airensAssociated PressMay 3, 2011The Shearon Harris Nudear Pbht will test its alert system with a series' of fulKvplume siren blasts thatmay be heard in Chatham, Harnett, Lee and Wake counties.The testing starts .Tuesday, arid will occur Tuesdays th rough Thursdays each week'through May 27 aspart of an annual maintenance program.The five- to 10-secorid blasts could begin as eariy as 7 a.m. and wiil sound intenriittehtly until 7 p.m.Officials say the sirens can be heard within 10miles* of the plant,, affecting 96,000 residents.Progress Energy cdnduds silent tests every twb weeks and low^voiume tests every three rnonths. Fullvofurnetests are conducted annually'The plant has ope rated in southern .Wake^County isince 1987.###[ Industry NewsDaily Energy News -May 3News summaries follow these headlines:U.S. Electricity BusinessEV Electricity Usage Could Rise tp 2.6 Million MWh by 2020A report released by the Utilities felecorri Couridl found that EV eledricity usage could grow from146,000 MWh in 2010 tO'2.'6'miiliori MWh' by 2020, an increase.of 1,700 percent,- Electric Light & Powerreported, pie report,A written by The Shpigler Group andA entitJed "Gearing Up for Electric Vehides:Tackling the EV Challenges to the Sriiart Grid," saidthe steep increase jn usage,could raise technologicalarid operational challenges for electric utilities.A shift in eledricity usage of thisimagnitude. sakJ theTeport, cpuld create a 6i-fold annual reduction inC02 emissions. In order for that to happen, several issues Would need to'be addressedaFimprovedbattery performance, enhanced vehide-to^grid technology that would use EV batteries as storagedevices, infrastructure innovations to accommodate peak load changes and improvernents incommunications and IT technologies.CNNMoney: Internet Uses More Electricity Than Auto IndustryElectridty industry experts say their cpmpanies are ablyhandiing the increasing demands for electricityfrbm Internet usage, ''according tp a report in CNNMoney. In spite of yearly dernand increases of morethan 10 percent during the past decade from computer usage, data centers and the like, the grid and the,power plants that serve it have kept up with'the demand.CNN quoted:EEI Manager of EnergyiSoIutions Steve Rosenstock as saying that tech sedor.groWth hasoffset decreases in deriiand from U.S: manufaduring. "It has helped make that decrease not so bad,'*Rosenstock said, adding that the electricity used to both power ; and cool the millions of servers that keeptheInternet running accounts fbrapprbximately 2 perceniof.total U:S: electricity corisumpttori."Data centers a|6rie consumed riibre'el^ricity-than auto manufacturing.'' CNNMoney.reported, "andnearly half that of the.chemlcal industry; .Which is^the' nation's largest industrial user of eiectricity."Dominion Virginia Power Files Rate Increases With Virgmla SCCDominiori Virginia Power has asked the Virginia State.Cbrpbratioh Commission to increase;the rate itcharges customers to cover fuel costs and the fee, customers^ pay for mairiteriariM and upgrades tocompany's transmission system. In addition, Dominion requested.that customers pay.a new fee forTIALLEGPGNDIR001408

construction ofa natural gas-based plant in Warren County, the Virginian-Pilot reported. The. NewportNews Daily Press quoted DominioriiVirginia'PowerCEp Paul Kdonce as saying that the company 1"understands that its obligation to customers isId keep ihe lights on,and proyide;reliable.semce atreasonable costs."- 7 A" ''"" i " 'Dominioh said it underestimated fuel costs last year due to unusual weather. Tlie cdmpany sought torecover $433 million from its next fuel rate to make up the shortfall..Fred G. Wood, senior VP df financialmanagement for Dominion Generation, was quoted as saying: "Had the weather been normal, this fuelincrease would hot be anywhere near this amount. nC^rriinion has offeredto recpyerthe^ additional fuelTOsts bver twb'years toVeduoe the impact on customers. In addition to Uiese,requests, the utility wasexpectedto ask for increases'to fees'to cover the, cost.s""6f. constructing two other power plants in WiseCounty and Buckingham County. ,• \, * . . , " ( . ' _Constellation Energy Plans to Sell Three Coal-Based Power PlantsConstellation Energy said it planned to sell three coal-based plants in Maryland as part of its proposedmerger with'Exelon, the Baltimore'Sun reported. The plahts would overlap with Exelon's generationassets ih the PJM Interconnection, prpmpting^tbeir sale following a closing of the deal.VConstellation Energy Chairman and CEO Mayo A. Shattuck III said the plants' 2,648 MW of capacitywere attractiveâs'sets.with a "great employee, basearrt enyironmehtal footprint," and hesaid "we're,optimistic that they'll end upjn good hands." An $875-milii6n project to install, scrubbers at the BrandonShores plant ended iri 2010; and the H.A. Wagner and CP. Crane plaritsA also had relativelyneweniissiohs controls. Exelon COO Christopher M ; Crane said the three plante'wrere .îery yaluable,'' with apotential cumulative priee of more than $1.billion, and that they would require mihimal changes under:!ltheir new owners.' - >> •- , -1- . . . i . . . •First Wind, Emera; AJgonquin Power Form Wind PartnershipFirst Wind : Holdings and two Canadian companies, Emera and Algonquin Power and Utilities; haveformed'a partnership to build; own and operate large-scale,wind farms in the NortheasCthe Bangor.DailyNewsreported. The project would include Rret Wind's existing,wind farms in Maine, Vermont and NewYork. Under the plan, Firsf.Wirid would own 51 percentof the partnership, while Emera and Algonquinwpuld form a joirit veriture./Ndrtheast Wind,- that Would own 49 percent, the Boston Globe reported;Company officials said the partnership would combine First Energ/s expertise in wind generation,Emera's financial strwgtivand marketing skills, and Algonquin's renewable energy experience. A FirstWind spokesrhah said theWmpahy was extited abofcof capital so"we;can build more projects down the foad."'1• ..r . *. ' : . L ' .•;.Emera president and CEO Christopher Husktlon said the company would like the state of Maine tochange'its^current>lectridtyûlattoris, which dp riot allow^companies that own.transmissioh systems tbown power generation assets in the state. Kenneth Fletcher,- director of jhe governor's Office of EnergyIndependence and Security, was quoting as saying: "! wouldn't say absolutely we wouldn't want to.talkabout it, or that we' will§€[; The gdverripr's position is that we heed to get the price of electricity down inthe state pf Maine. That says'justabout everythirig9€s on the table for consideration.? The' deal still,needs federal and state. apprbvaL . "'._ •. _ • ^ •: > . •1NSfeur to Drop Massachusette Residential RatesiNStar Chairman, President and CEp Torn May said reductions in natural gas prices;Wouid meanresidential customers in Massachusetts would see rates drop to their lowest point in six year's starting inJuly,.the Boston Globe reported. The new^rate bf 7.254.rahts : per kVVh, which'riiust still be approved bythe Massachusetts bepartment pf Public ytiirtres.'wbuld be 6 percent lower than the current fate andwould be iri'effect until the end of^201 l/the'Bostbri Business Jbumarrepprted. . ;Energy Infrastructure SrSupply " '* . ,*fNuclearPower Output Falls toLowestLevel[inlZYears' J f ••'The NRC said nudear power production in the U.S. had .dropped to 68,667 i MW, the lowest level in : 12years; due,to.the temporary dbsures of reactors In.New Jersey and Minnesota; Bloomberg reported.Reactors were shut of operating at leM than âkouût for reasons ramaintenance and refueHrig.td*repa»rf to Ibrhadp'JdamêVAJniwg th'e.3dnud^powef,Teadbrs that were,down or not operating at full_capadty on April 29. were three atlhejBrowns Ferry pjant, Xcel Energy'sPrairie Island"! reaCtof,' Exelon': Ion's Oyster Creek unit, Exelon's Peach Bottom 3,' Exelon's ByrprTl reactor;,PG&E's Diablo Canyon Unit 2, Public Service Enterprises'.Group's'Salerri.T and;Salem:2;units, NextEnaEnergy's Turkey. Point 4 reader. Southern': VsÊdwin j. Hatch 2 and Entergy's Arkansas Two arid Unitl.Offshore Massachusetts Wind Zone Cut Down > VThe U.S.' pepartment of thejnteripi's Bureau of Ocean Ener^ Mahagenierit; Regulation andEnforwmerit has^rtaiied.the ayaHab^ôpen for wind1'evelbprrieht leases, Platts reported^ Bureau head Mi^by more than •TIAL LEGPGNDIROOI 409

half from theoriginai 2,900 square miles was'a response to "significant concerns from'thepebple ofMassachusetts."' • * '• "* " * ' .^"^.Massachusetts.Gov: Oevaj Patrick, as well as.Repsj-Ed Martcey, D-Mass., John Tiemey, D-Mass., andBarney Frank, D-Ma^damage offshore wind systems could cause tafishing' and;migfating whales as well as obstfuctioris tosh'PPf g lanes. Thej3ureau said 11 companies* res"^ded"to a"January?equest liopotentialv.developers, b^'smer^.pipdûres must be comi^t^'tiefbrelleases can'beoffe'red.f " :En?rgy r and the Ehvironment' _ .U:S : Supreme Court Rules In Wyoming Water Rights^CaseThe'U.s.-Supreme Court Kasiruled 7-1 that VVyomihg farmers were : hot taking more than their share of; water, from thejongue and;Powder livers, rejecting the state of Montana's claim that improved irrigation,methods had resulted in Wîng'^latihg the'Velld^dneîver fcwhpact of i9i50^the BiHirigs'Gazettereported. Justiw;ClarenceThVmas.vWiUng.forthe^• Dakota,, 137, Orig:); said: "AsJorâs no actional vrater is diverted from the'stream and the conservedwater fs used on'the 'MTOawaj^lfer tfie r sime agnculturaf pufpqses as before" there is no violation.The issue has not been resplyed t^tfiis ruling^Montana filed three other claims pertaining to - *groundwater, j^f^yis^^^^-&fv^ '^&T users;ahd reservoir storage/ The Supreme Court hasallowd tho» "ciaims to m^ÔffiM.wasquoWas^Myin^going to cost a lot of/mdne^Th^^hwas'using what water when."lyiedical Exams Said Dei ReactprLeaksr E \ t .Despite concerns about farê»îngradiadon from the crippled huclear power plant,in Fukushima,Japan, there was littte bMlVfor such ; feiar, ; the New YofkTjmes reported today. Any increase of radiationfor people living distant from nbrtheastem Japan.would be'less thari dosages from typical medicalexarhmation equipment'such.as^X-rays and CT scansâixsording'to experts.^ ' ; > • y• - A '~ ' *j „. >""""*"- T-: •* "J -[ ! - i!Prin(^ton,Universr^hudear physicist Frank N.;/von:Hippel;w^quoted as, saying distance from;something leaking radiation; meant it "dte^population radiation doses." But asfpr fear "Soniehow^riudeaf things get stigmatized relative to theirstatistical nsks^ l^hysidaris for^ has Mid the acddent' would result in a wpridwjhfiigherra^ levels:"Ybur hair wbhl fall out BuPNo immediate dahger* isan easy wayffothejnu^long-term effects." Dewar's group advocates thelaboHtfonofiwSeatjenei^ " ,~ -; iThejTimes cited U.N: reports indicating that from 1988 to' 2008 the.numbers of diagnostic radiologyexams doubfed tq.3.1 bilteh.tem]1.4 yiioh andthat irima^^first time iri histofy" exceeded hatdralradjatibhih the back ^ '' e ' v fortheNRC's Jaczko Warns of Rood Risk X'-:. at U.S. : Reactors; .> - ! - . ,'NRC Chairmah "Gregory Ja^kpVaid'tMsafeguards at U S: nudear power plants may need to beûpgradecf.'the As'sbdated press reported. At aPublic Citizen fowmâ^tf rejected a request .byfublicpitizeh^founder Ralph Nader.fof mass ' "evacuation drills at all U:S: ra^^Nader'hîhgleS'but the Indian Point nuclear pwrer plant; saying adisaster at the site would pose'''possibly,the most difficult evacuation process in U.S. history;" Jaczko; *-said "maw evacuations on a trial basis" would be yeiy difficult and possiblyûritef-productiye. ' 'Internatiorial Affairs;. r /• r. 5HJapanese Official Says OotftExpect: Cap oaFukushima Uabiilty ' *Japanese chief cabinet sectary Yukib Edanb'said Tokyo Electric Power will hot have its liabiiity fordamages frorii the Fukushima Daiidii crisis capped by the government, Reuters reported. Althoughpiarit,operators could receive a liability exemption in the" event of ! 'a grave natural^disaster of an exceptional'charader," Eda'nosaid theea'^quê ahd teuhariil-waspfhavebeeri aware ofthe risk.of ariothef suchrdisaster.J,'- ' : ~„ , ' • ,Hiromasa;Yonekura,^chaimian ofthe NippOT^darireh 'iêrartipn of Japanese businesses/contendedthat "this is a.reaily ^rge'scaledi^ster, wt^'canriot'b'e imagined,";and therefore an increased sales taxwas justified to'cqyer the cost of aid.)Ypnekura said ^he^g'ovemmentis responsible for ^Tepco, and alw.tb'mmperisate those residents" hear the plant, -from the governmentiof operating practices at Fukushima Daiichi as'ah afgument forthe government toassume responsibility along with TEPpdl • - • • . , rkpinionsCOl^FiDENTIALLEGPG NDIR001410,! •A*

WihdTamer Touts Renabitlty bfSolar, Wind and Batteries SystemWindTamer President ahd^GEO.WHIiam Schmitz said his company's system combining a wind turbine,solar panels and battery storagecould reliably deliver power to*a Mrisumer, Forbesiepbrted. The Powerbri Demand systerh Was said td'use its wmpoiherits to smooth supply from renewables arid cut power '. costs by about 30 percent. 1 Power from'the batteries flbwaJ onto the consumer's grid at times of highdemand, while the>olar.and .wind generation recharged the. batteries at times of low .demand.The U.SMnny, installed one of the systems in 2010 with plans to use it as a mobile source of power in'combafareas. Army official Michael T. Brundage said, 'We are pleased wth the umque design aridfunctionality of WndTameVs'reneyrable power trailer:" WindTariier, which will change its name to AristaPower later in the month; expected other government agericies'to buy its system.* Forbes saw suchsuccesses likely leading to a takeover by. "the likes bf Gerieral .ElecWcbrany of thelarge electricutilities.'; ' 'Briefly Noted ..Poll: Amerfc'aris Say Cut Federal'Budget; Don't Raise Corporate TaxesAmericans,would rather see federal budgel cute than .higher ct^'i^^ta^/'acck^hg^to aVNew York'Tlmes/CBS News ppil; ( the Times reported tqdayrJust Z? percent said corporatldns should pay more *taxes.- However, if It was a choice between, rate taxes on households .who earned more than $250,000annually or corpofatidris; nearly two-thirds wanted higher^corporate taxes. Offered other options, 37percent indicated they >ould;rathef see corporate taxes femaih as they afe'ribw"and 26 percent saidtaxes bncofporate pfofi^ should b£deaeased," w . \G.M. Sends Moine Volts for Display Rather Than for Safes In AprilGerieral Motore ha> reduîn* orderto supply more displayriiodels.todealerehips,-the Detroit News'repqrted today? Ch^bletMa/Vetihgbiredîtwas "tough to limit the number of Volts for safe^to.pbtenti'afcustomers when demand is sb strong, but theVolt has value to tHe Chevrolet portfolio well beyond iricremeritarsales.,Our"Chevy dealers.will keep theirVolt demo units for sS'months • arid then theyseil these' units at the conclusion ofthe demo period.",U4UtMIIII,t "'*> CqpyrighL Prbgress'Energy/'AII'Rights Reserved:^ Feedback -TIALLEG PG N Dl R001411

Baker, John D.From:Sent:To:Cc:Subject:Attachments:Wenger, Holly Friday, May 27, 2011 3:17 PMBaker, ilohn;D.;'James Bostic'; Redacted - Personal Info.Jones, Steve; 'Mel Martinez';''McKee, Marie'; 'John Mullin 4 ;A.Saladrigas'; Theresa M. Stone':'Ffed Tollisori'Mitchell-Henderson. Trudie: Redacted - Personal Info."Wheeler, Jari';Redacted - Personal Info.Redacted - Personal Info.Notice or Special Board Meetingbdcumantpdf'Jim Hvler" 'Jones pntorf;Redacted - Personal Info.'Carios'Carlisle, Kimberiy A/; 'Jeanie Geoghegan';'Sharon Pinksten'; Johnson, Bill; Mulhem, Mark; McArthur, John RDear Board Members:Please find attached a notice of special board meeting for Friday, June 17,2011 at 8:00 a.m. fo join the call/please dialRedacted - Personal Info.Materials will be forwarded in advance ofthe call.. Please have a safe and happy Memorial Day weekend.HollyHolly H. WengerDeputy General CounselAssistant Secretary/Shareholder Relations Progress Energy Services Company, LLCPhone: Redacted - Personal Info.email: Hollv.Wenger@pgnmail.comCONFIDENTIALLEGPGNDIR001412

Baker, John D.From:Sent:To:Subject:Pr6gress.Daiiy.RepIy@pgnmail.cbmTuesday, June 14,2011 3:30PMNe\TOletterArchive@pgnmaii:comProgress Daily 6.14.2011Tuescfay June 14. PO.f'JFgedbagkprogress 'imh • '^P^^-^ ^m^M^W^m^^ •[ Employee NewsContractor's body foundRescue teams have found the body of a contract worker who was trapped Thursday night when the buildingjn which he was working collapsed unexpectedly at the site of the Paul L. Bartow Power Plant on WeedohIsland near St. Petersburg. :At approximately 11:45 p.m; on June 13, teams of rescuers recovered the body.of Clark White; 65, ofMoundsvilie, W.Va. White,' a retired Army veteran, was an employee of Frontier Industrial Corp., a Buffalo,N.Y.-based company working on behalf of Progress Energy. Florida to dismantle boiler, structures no longer Inuse'at the power plant.S(te.:White~wbfked;for the dismantling company for : eightyears."This was a terrible tragedy,- arid oyrthoughts and prayers continue for,Clark and his family," said.VincentDolan, CEO and president of Progress Energy. Florida. "We are especially grateful.to the scores of rescueand recovery workers who worked long hours.in very difficult coriditioris! Along with Froritier industrial andappropriate state and federal agencies', we will[be working to understand the'cause of the accident."Integration update: Design Phase begins; executives outline governance model for theNew Duke EnergyIntegrationnews.I t's been three months sirice,the Analysis Phase of the merger, irit^rattori work kicked off. In this, video. Chiefintegration Officers Paula Sims and A.R. Mullinax provide r wrap-up of^rie Analysis Phase arid an overviewof what's to come in the Design Phase that began this month: Sims and.Mufinax also share a high-leveltimeline about;when ofgariizatiorial design decisions and certain merger-reiated employee programs are"expected to roll out.; ""View JflQ '"deft'Download the transcriptExecutives outline governance and accountahility model for the New Duke EnergyAs part of merger integration plannirib.-the New Duke Energy executive team met recentiv to agree on agoverinarideiand accountability model for the riew compariy;After the close of the merger. New Duke Energy bEO^Bill Johnson and his direct reports will make up the

esources (O&M and capital); responding to financial perfonnance challenges; and creating alignment acrossthe business units.•The Commerdal Businesses will continue under the .direction of Keith Trent.The overall governance and accountability model for ttre New^Duke' Energy is designed to provide theintegration and agility necessary to be successful as the largest utility in the nation. Fdr example, we willdosely align our centralized operating areas - Nudear, Fossil. Energy Delivery and Customer Operations -with our state operations'and the overall regulated utiiities business. This will help us enhance ourperformance and respond quiddy to changes in pur business ehvironment.The new model also provides ia strudure to help guide the woric of the merger integration teams and NewDuke Energy leaders as they develop more detailed. organizational structures ahd designs for the combinedcompany in the months ahead:View the strategic priorities and 2012 critical success factors for the New Duke Energy.###[ Progress Energy In The News"Search crews pull welders body from collapsed Progress Energy buildingLef/fta Stein and Emily Nipps; : St. Petersburg times, Fta.June 14.2011 •''Rescue workers on Monday afternoon found the body of a 65-year-old welder who was trapped inside an oldpower plant on Weedon Island when it collapsed on hirii Thursday.Clark White, part of a crew helping tb dismantle the bid Progress Energy plant/h'adinot been seen since the 180-foot-tall strudure fell Thursday night.Rescue offidafs said White's body wasi foundI in a 'Vbid space" that was about .18 inches high, 4 feet wide and 10feet deep. They could not say rf the initial collapse killed him imrnediateiy^pr lf hei lived for some time and died later.There is always the possibility that hexoiitd have been alive," said St. Petersburg Fire Rescue Division Chief AlanRosetti, the incident commander during the rescue and recovery.-.Officials said Clark's body would be removed.from.the site overnight and taken to the Pinellas-Pasco MedicalExaminer's Office, where an autopsy is scheduled for todayOfficials said White's body \yas found about 4:50 p.m. about 15 feet Inside the strudure. Rescuers had homed ihon a particular area of the rubble based on witriess accounts ofthe collapse., ' 'They found White's body after they cut holes in a beam. got a camera through and spotted him. They then beganmoving rubble and debris to get closer arid pull him out."It's tedious work and tokes;a iot ,of time, and we are trying to be very gentle," Rosetti said-White, a father, grandfather arid Amiy veteran, warned crew members — induding his son. Travis, 31, and anephew — as the strudure started to crurrible' Thurisday night, his family said.Rosetti said rescuers believe the collapse of a brick veneer at the building may have.prevented White from gettingoutThough crews initially hoped to rescue White if he was alive, the;operation switched from a rescue to a recoverymission Saturday evening.White, who is from Mbundsville, W. Va.,: was part of a team preparing a large boiler strudure for a controlled.collapse when'it'came down-prernatureiyVAlthough the search crew was focusing on a small area, the rubble and debris were so dense that it was a slowgoingprocess,.Rosetti said: The crew members'wptked in 30-riiinute.shifts, resting in between. The.debris irithe'area iri which they were searching was piled 6 to 8 feet high."C ONFIDEHTIALLEGPGNDIR001414

.White wqriced for Frontier Industriai Corp., qf,Buffalo,' N.Y., which had been hiredI to.dernpiish.the building."We are deeply saddened by the loss bf our colleague and friend Clarit White," Robert Zuchlewskl, chief operatingofficer of Frontier, said at a riews.conferencelate Monday.He said White was like a father figure to many iri the company and will be missed dearly:Zuchlewski said the operation will now focus on investigating what caused the collapse "to be sure we iearn fromthis tragedy and be sure that it never happens again."He said the Occupational Safety and Health Admtnistratiqri will be .involved with the investigation. The piniellasSheriffs Office also is conducting a,daath investigation, which is routine in cases of accidental death,spokeswoman Marianne Pashaisaid.Pasha said investigators hope to release preliminary results about a cause of death today.Officials said Whitens family members, who flew in.to Tampa on Friday, had been on site_during much oftherecovery effort.Search crews find body of missing contract workerWFLA-AM Online, St Petersburg, Fla:June 13,2011This building, owned by Prdgresis Energy, collapsed on the workerRescue teams found the body of a contract worker who, was trapped Thursday when, the building he vyas workingin collapsed unexpectedly. .Sixty-five year old Clark White from Moundsvilie, West .Virginia had been trapped beneath 60 feet of rubble after aplanned collapse of the Paul L Bartow Power Plant oh Weedon Island went awry Thursday.The building, owned by. Progress Energy, >yas built in the SO's, and has been offline for a year, the electric,rcqmpany was in the process qf dismantling it;As part of that effbrt;,crews Thursday planned 'to dernblish boiler humber 3: The boiler section was a'180-fqot :strudure with a 10,000 square foot base, which accounted fbrapproximately 25 percent of the overall plantstrudure. This was the first boiler dismantlement to be performed as part'of the project.That process involved cutting steel beams that hold it up with the idea that It would collapse on Itself.According to a statement released by Progress Energy, the crew vitas preparing for a controlled col lapse,scheduled to occur at around 8:30 p.m. The collapse began instead around 7:15 p.m.Progress Energy Spokesperson Suzanne Grant said 21 people were ori site at the tirine of the collapse, iriduding13 contractors and 8 empioyees.White, the trappedi confradpr^wbrked for Buffalo, NY-based Frontier Industrial Corporation, a demolishingcompany. They say he was the only person in the building at the tiriie of the collapse:tmN.C. submits boundary recommendations for sulfur dioxide standardIslandgazette.nei,- New Hanover County, N. C.June 11.2011State environmental offidals have recommended that theEnvirianmentafProtîon'Agency.pbs^ponedesignating the Wilmington area as non-attainment or not in compliance with the new federal airqualitystandard for sulfur dioxide, or $02.Measurements by the N.C. Division of Air Quality, or DAQ, show j that ,the New HanbverCourity monitor does:not meet the more stringent S02;standard that the EPA adopted in June 2010. States were, required tosubmit recommendations* by today for the boundaries of 502 attainment and rion-attainmerit areas; or thoseareas not meeting the standard.CONFIDENHALLEGPGNDIR001415

The N.C. Department ofEnvironment and Natural Resources recommended that the EPA defer itsdesignation of a non-attainment {area for New Hanover County due to the closure, of several large sources ofS02 in the area and the resulting.drbp iri measured S02 levels.-Southern States Chemical and WAST EChave shut down their fadlities near, the monitor, and Progress Eneigy plans to rohvert its'nearby Sutton plantfrom coal to natural gas by early 2pl'4: The New,Hanover County monitor has measured no 302 valuesabove the new standard so far iri 2011."I request that the USEPA consider deferring a nonattainment designation for this area until after 2012," DeeFreeman . 'secretary of the N. C. Department of Envirdn fnerit and Natural Resburces, stated in a June 2 lettertothe EPA. \..lt is i»ssible i for^ standard by this end of 2012."If the EPA will riot agree to postpone the non-attainment dedsioh for Wilmihgton,.the state environmentalagency has recommended that.the federal agency desighate this northwesterri comer of New HanoverCounty, bounded by the Cape Fear and Northeast Cape Fear rivers and the Pender County line. Non-.attainment areas are regions offidally designated by the EPA as riot meeting air quality standards, and thestate must develop plans for bringing such areas te'cK'ihfo'coiT^liahce'. ,J industries that emit SG2 may facemore stringent requiremehts in nqn : attainment areas.Sulfur dioxide is one of six criteria :br maj'or pollutants specified inthe federal Clean'AirAd; it Is a pungentgas that is unhealthy to breathe, can damage vegetation; and materials such as; buildings, and contributes tothe fonnation of haze, pahK^:ût|pn:and acid precipitation. High levels of S02.can cause or worsenrespiratory ailments such as asthma, bronchitis arid emphyserna and aggravate existing heart disease.-Populations most affected^ indude children, the elderly>nd other serisitive grodps!In June 2010, the EPA adopted a more stringent S02 standard of TS'parts per'billion (ppb) averaged overone'Jhour. Previously,,there, we re three 802 standards: 500 ppb"averaged over 3 hours. 140 ppb averagedover 24 hours, and 30, ppb averaged oyer a year. ' 'Compliance with the federar.Sp2[standard is determined bya fbifnula based on a'th'ree-yea'r average of the99th percentile of the daily rnaximum one-hour concentrations. Under that formula, the design value for theair monitor Ideated in New HaribverCouhty is 110 ppb.More informatipn can be found at this page on the DAQ website:http://www.ncair.org/plahning/so2/S02.shtmiSource: North Carolina Department of. Envirorimerit and Natural Resources..###Hartsville men charged In Darlington County copper theftsSCWow.com, S.C.June 13,2011Two Hartsville men who were arrested;in corinediori with a series of copper triefts'in Florence County facesimilar charges in Darlington Cbunty. according to Darlington Coiinty Sheriff's Office'press release.Thomas Garrett Rogers, 23, of Clyde Road arid James Cord Cranford; i28, of Honeysuckle Lane,- are each:charged with five counts of maiidqus tampering with electricarutilitiesT five counts of malidous injury to realproperty, five courits of trespassing into endosed places, five counts of larceny and five criminal conspiracy,,according to the release.The suspects are accused of stealing hundreds of pounds of copper worth thousands of,dollars from fivedifferent Darlington County substations, accbrdirig to the release. Investigators said the two caused tens'ofthousands of dollars in damage to the'substations while trying to steal the copperIn Florence County, eadi are charged with grand larceny-more than $5,066 and two courits of maiidousiinjury to telephone; telegraph or eledricalutilrty system,according a FlorenceCounty Sheriffs Office releêissued May 19. The two are;afleged to have, disconnected and taken copper grounding wife valued athan $4,000 from two separate utility substations owned by Progress.Eriergy at 1200 Douglas St. iri Florence.•The theft caused a "similar arhourit of damage" to the substations.Rogers also fa(%;similaf charges in Chesterfield County, according to.the Dariington County Sheriffs Office:pressrelease. - .tmOperation Fan-Heat Relief kicks off 25th yearCONFtMNTjAL * LEGPGNDIR001416

The Pilot Online, Southern Pines, N. C.June 12,2011Operation Fan-Heat Relief, a summer fan distribution program that 'bpefates'each year throughout NorthCarolina, is now underway.This summer marks the ;25th ;aririiversary of the. program that began iri 1966 and is managed by the Divisioriof Aging and Adult. Services (DAAS) in.the N.C. Department of Health arid Hdman Serviceis:Tor many years, Dominion Resources, Duke Energy, Progress Eriergy arid the Valassis Giving Committeehave donated generously to support this important program," Dennis StreetsCDAAS director, said; Theprogram is successful because of the cohcefted. efforts of the. 17 regional'Area Agencies on Aging and thelocal aging arid adult service provideragencies which purchase and.mak'e fans available to eligible people."Last year, ddriatipnstotaled $ii35!500 ( ,and vwth : these funds, 8,435 fans, and 83'air conditioners weredistributed, according tb a news release.In certain counties; air'conditioners are made available for people;suffering from more serious healthproblems.There.is no public money associated, with thisproject.Residents who are 60 or older or people with disabilities are eligible to receive one fan per year to helpalleviate heat problems within their home.'This is much more than .a comfort issue as it really helps protect the. health and safety of some of our mostvulnerable dfeens-jiving'ki communities across North.Caroliriai" Streets.said. •'###Donors helping IncubatorSouth Marion C/feen, Fla.June 11.2011the business incubator project has inspired mernbere of the business community.to reach into their pockets.John Siefert, executive diredorbfthe:Citms^^Thursday's meeting of the EDC's'board of directors how the furidraising^was going.announced at"We are looking to raisedvef $15,000," Siefert said. "You ha've^the contributions to date: SunTrust Bank ^$2,500; Progress Energy--$2,500; EDC—-.$5,000; Holiiriswodd Ranch — $500; Dale and Sharon — $100;and Dr. Phil Geist $100. So we have $10,700 raised."Geist, regional director of the Florida Small Busiriess Developriierit Center at the University bf North Florida,made the suggestion at May's meeting for contributions.to the projed,.starting with his own. Otherbusinesspeople followed suit."We'd like to.get to.$20,d00 to have a cushion to keep the operating costs going,";Siefert said. "I would like tourge all 15 members ofthe board to fbltow.the example of Dr. Phil at the last meeting. I am now writing ajcheck as well. I thirik it would show a great deal of su'pport to the comriiunity that all bf us have contributed atleast something to make this happen'.!'In addition to the board.bther partners with the EDC were looking at ways tocontribute."John, do you take odd amounts? 5asked Dale McCl'ellan, owner.of S&B Dairy in Lecantb: "I want to donate$501 'so I can"say,I donated.more than pixie Hollins.'Board members and some audience members got out their checkbooks to.help."It's a great "opportunity forus to get this iricubatof prograrirup arid running';" said. County.Commissioner JoeMeek, president of the EDC. "Basically/we're getting ourselves the ability to, help grow businesses.frbmstartup and existing stages arid help;them mpve into the riext phase in their busiriess cycle."the project will take the fonnerChamber of .Commerce building Jn'HdmosasM arid ;tum it intoaplace wheresmall ^businesses can start and grow.^Clark Constmction is getting the projed going.jndy Clark has offered the services of his general contrador and is working to produce some plans,"IFIDENTIAL5LEGPGNDIROOI 417

Siefert said..Opening the new, business: incuhator by the end of July would be "doable," Clark Mid. However, JoshWooten, president and chiefexecutive officer of the Citrus County Chamber of CommerraTsaid that withother necessities beyond rehovsBng the biiilding; Sept'i: woujd .be a good target'date."The renovations that have to be done in there are not extensive," Clark said. "By Monday, I should have allthe plans and get them out to subcbntractors, so we can get an Idea of costs." 'A grand opening event would be scheduled when the incubator is ready for business, the board agreed.The board passed the EDC's budget request of $110,000 fbrsalaries and operating expenses and $23 000as a portion of the membership fee in the Tampa Bay Partnerehip to the Citais County Board df CountyCommissioners.Meek announced ttie legislation regarding the Portiqf Citrus had been "signed by the govemor. The next stepwould be the county convening its port authority, :W.hich,wuld be the board of. county commissionereAn avionics repair operation an.dia flying school'would becoming to thelriverhess Airport Business ParkSiefert said. . . •Siefert made a presentation to the Tampa Bay Partnership Trahsportation Committee on June 3 to ask forsupport to get theSuncoast Parkway Extension Projectback on the road.mm[ Industry NewsDaily Energy News - June 14News summaries folow these headlines:U.S; Electricity BusinessDevelopers Ask FERC to Block BPA's Wind Farm Shutdpwniberdrola Reriewablesi PacifiCorp, NextEra Energy, Rorizon Wind Energy and Invenergy have filed'acomplaint asking FERC to order, the BPA to end its shutdown of wind power in the Northwest, Reutersreported. The companies, which own almost 2,000 MW of wind farms, said the move was costing themincome without cbm pensation tq offset the loss. of revenue arid could curtail future wind development. Theyargued that BPA was unfeirty refusing touse other transmission options: thaf could keep wind online at a timeof exceptionally high hydropower'butp'ut:frbrii c dams bh'tKe Columbia River..'HydroWorid. reported that the National Hydropower Association proposed guidelines for parties to the disputeto consider as solutioris to the .conflict between hydro and wind, they included the expansion of energystorage capacity, induding biiilding'riew pumped storage assets.Energy Infrastructure & SupplyNatural Gas Futures Fall on Weather, Increased Nuclear GenerationNatural-gas: futures fell on Monday on forecasts of cooler weather through June 17.in the Midwest and Eastand on a rebound in nuclear.geriefation'; Dow Jones Newswires reported. Natural gas for July traded down2.4 percent to $4,642 per million BTUs on the New York Mercantile Exchange.Camerori Horwitz, an analyst with Canaccord Genuity. was quoted as saying: 'Without continued help fromthe weather, [hatural gas] will retrace back toward $4.50," and could fall as'low as $4 per million BTUs laterthis summer. The NRC said nudear production rose for the eighth day to a three-month" high, Bloombergreported/A heatwave expected to begin in the Midwest and higher-than-normal temperatures in the Souththis week are expected to limit thededine in natural-gas prices:Rich llczyszyn, a senior market strategist at Ond-Waldpck, said that without an increase in;manufaduring,.natural-gas futures wouldhot be iikely to see a significant increase. He was quoted as saying: "if we doseabove $5, we mayget some new interest in market." " "Energy and the EnvironmentCetfFIDEftTJALLEGPGNDIR001418

EPA Seta Two-Month Delay for Proposing Rule on GHG EmissionsEPA has delayed the planned release bf a proposed federal regulation limiting GHG emissions from powerplants by two months/.uhtil Sept; : 30, the New York Times reported today; EPA said the delay will give itneededtime to study comments from,utilities and othera.: EPA spokeswoman Cathy:Milboum:was quoted assaying: "A wide range ofstaketfHdeis has presented the;agency with important input which deserves to befully considered as the agency works tb develop sm^costneffecth/e and protective standards."-EPA vyas holding to its planto'fssue a final rule by next May- Reuters reported that Franz Utz of the WorldResources Institute said the delay Was a move to.ensure a properiy designed mle and not a sign thatlobbying by. business and Republicans succeeded in gaining a delay. Utility lobbyist Scott Segal counteredthat.EPA was admitting that it had "literally overloaded Itseif with:rule-makings," f and now needed more timeto;cbnsider, the impact of its vaiietyôf potentialFrank O'Donnell was quotedas saying: "Every;time EPA announces a delay It seems to fuel the antiregulatory engine of its opponents inCongress." ;Ex-Rep. Inglis Setting Up Conseiyative Group on 'blobal Warming'^' ~

In ah editorial published today, the Washington. Tirries .compared renewable eriergy with natural gas andchose the latter, writing: The much.hyped intermittent energy.spurces such as sofar arid wind have pfoVedso expensive to majritain-that'other developed nations are; trimming subsidies." In the U.S., meanwhile, shalegas discoveries have driven forecasts of gas supply ever higher. "Predicting.peaks in energy resources andwagering public funds on renewables is a game of chance.; Better to, trust the instiricts of the free riiaricet,which has'a solid record of picking winners and;'proyidihg.the best products atthe lowestprioes."Although the International Energy Agency reported record levels'of C62 emissions'last year "climatescientists say global temperatures have not risen in a decade, casting doubt on the assertion ofa direct linkbetween so-called greenhouse gases arid supposed giobsfwarmirig," wrote the Times. With the globaleconomy weakened, developed nations have begun to .consider "renewable energy as a finahdal blabk hole,raising the prospect that the erfdless well of subsidies 1 required to prop up inefficient technologies will run drylong before nature's supply of black gold:"Industrial Energy Consumers Head Pahs Pickens tax Credit Effort,In an op-ed published ih'the Washingtori Times, Paiii Cicld; prestdeht of Industrial Energy Consumers ofAmerica , panned efforts by T. Boone Pickens to offer tax credits of up to $64,000 per vehicle to retrofit trucksto mn on natural gas. That'prpposalis currently incorporated jn legislation, the NAT GAS Act (H.R. 1380),before Congress.' Cido said the policy chahge wbuid cause con^de'rable damage;because it would.increasedemand for natural gas and cause prices to rtse.sThis pric'e-pressUie would coincide with the oh-golng cbalto-natural-gasfuel switch for power generation and with simiiarfuetswitching going on in the industrialsector, both driven by envirphmentai regulafionsrThe cost'effeds would be further magnified by DOE'sapproval of LNG from Louisiana and Texas to China and the European Unibn.'Cido'said;Advocates for the legislation'have testified before Congress that it would increase natural gas demand by 1.5trillion cubic feet by 2025. Cido cited comments by EEI President Tom Kuhn, who has expressed similarconcerns about foel-switching, saying: The consequence of not hamionizing emission-reduction goals withtechnology will be, massive fuel switching that will result in tremendous price pressures on natural gas, higherconsumer prices and heavy burdens dri the cbmpetiliveriess df ILS. industries."Cido speculated that advocates,for the bill underestimated/the impad that opposition to Hydraulic fraduringwould have on natural gas prices'; He.wrbte: "New stricturesare almost certainly cornirig. While the impad ofthese new regulations on the cost and supply of producing hatural gas may be unclear, we can isafeiyassume that they wiil drive the cost of natural gas production higher, not jower/Current low natural gasprices, said Cido, have supported a manufaduririg reriaissance ih-the U.s!, but "tens .of billions ofcapitalinvestment are at stake arid dould be'placed at risk by feckless and misguided federai policy, if members ofCongress want to increase natural gas demand, they should do it by'helplng manufacturing grow, which willincrease jobs, grow tax revenues and improve communities, jhey.-shpuld'not do it by artificially increasingdemand, forwhat is likely.to bea'scarce resburce."Briefly NotedBeacon Power Finishing Flywheel Grid Fteguiatipn System In N.Y;Beacon Power said it has almost completed the installation of the world's largest flywheel energy storagesystem for frequency regulation in Stephentbwn, N.Y-., Clean Technica.com reported. The system, expectedto be commissioned later this riibhth, is designed to store 20 MW of powerU.S. Solar Developer Plans Move Into India's Solar MarketWisconsin-based Johnsbrf Controls said it was cbhsidering moving iritb India's solar market "as a'coritradbr,,according to the company's Indian.unit managing director Prampda Karkal,.Bloomberg reported. Karkal wasquoted as saying: "VVe thlrik there^s a tremendous opportunity';In jndia. which has awarded licenses to build aminimum of 1,100 MWof solar ge'rieration by January. Johnson Cbritrols develops energy-saving technologyand hybrid car batteries. Karkal estimated that India's'solar.sedorcouldprbducea $50 bilion'irarket within.20 years.. He was quoted as saying: There are : thousands and thpusands of rernote villages in India .without aconnection to'the electridty,grid. Rather than laying miles of copper lines, it's cheaper to build a solar-plant.That's why. solar' will take off quickly^he're."G.M. Plans $6 Million Investment fri Electric Bus Company Proterra,General Motors plaris to invest $6 miiliori iri Proterra, which makes "electric buses,' the Wall Street Journalreported. The bus company has aiso;been backed by Kleiner Perkins Caufield,& Byers. GM VenturesPresident Jon Lauckner vyas quoted as saying: "If we want to be leaders in technology advancement, wehave to take advantage of where technology; is being created, whether that is iri-hbuse or with a supplier or a ;start-up." The buses "can ran for three hours'and :recharge iri 10 minutes^ wrotetheJournaL investors thusfar have bet $30 miilion on Proterra, . . . . . . .Trie'U.S. carmaker had backed Envia Systems'. R&D ori proprietary battery techriolbgy thaLmay boo'st the"energy density of iithium-ion.batteries by a third," wrote.the Journal., If successful, Envia batteries would be;used in Bhevy Volts.because they are'lighter and cheaper than currerit lithium, ion EV batteries. Envia.CEOTIALLEGP.GNDIR001420

Atul Kapadia said^People are very risk averse. GM Ventures' investment prdvides.that air cover oflegitimacy."ÊEI NewsMajor Utility Issues putllffed at EEI Conventlori by Black and Veatch Report, EEl Chalrman Dick KellyA Black & Veatch suryeypf more than 700 executives at utilities and other companies released at the 2011EEI Annual Conference arid Expo in Colorado Springsthis week found water management to be the largestenvironmental concem.of the.executives; the Cblorado.Spririgs Gazette reported;Seventy percent of those surveyed expected a sharp rise in commodity prices over the next five years and77 percent predicted coal williremain a central part ofthe U.S. 'energy industry,.Natural gas ranked as ^."envirdrimeritatiy friendly technology the:industry,should emphasize" most, withnuclear,'solar, riydropowr arkl.wirid foiidwing in thetdpaging infrastnjcture as their largest operating concern,' arid theysaw a lack 'of consumer knowledge andinterest as their biggest obstacle to rolling out the smart gridthe Kansas City Sta'r reported/They said aneriergy pplicy would aid plarining for.newtechriolbgy; as would'gbvernment requirements and incentives forinnovation/Many of those surveyed saw China as tfie largest energy oompetitor to the U.S.,; and nearly half said the U.S.could be losing its position in renewables^ arid nuclear 'to.Chiha'ahdôth'er countries. About 52 percent sawcost as the largest obstacle to renewables expansion,-and over TO percent were concerned about riuclearwaste, Forbes reported. • ^ "• • • . :Black'S Veatch senior VP Mark.Gabriei.said the nuclear concerns were "a realization by a riumber of folks in- the industry about the challehges;riUclear power has always faced." Gabriel also noted: "The utility industry ismore and morelookirig at natural gas as the fuel of choice, bbth for environmental reasons and economicreasons." ,Separately, outgoing EEl;Chairmari Dick Kelly, who is.Chaimian., president and.CEO of Minneapolis-basedXcel Energy, gave a farewell speech on the'secoridday of the EEI coriveritibri: Kelly outlined a detailed list ofchallenges the industry faces In a host of areas, but said EEl was well positioned to address those issuesheadori. • ' ' •"It's a long list to be sure. But none of these are insurmountable.- especially when.we work together,* Kelly,said. *We might nm always agree;'birt staying united as an industry is fundamental to our success/Vhat wassomething I knew before 1 started my tenure asEEI ### Chair,' bufit's even more apparent as I complete theyear. There is indeed strength in numbers and a united frbrit gives us the best'chance to trijly take advantageCopyright.Progress of the opportunities Energy. before All us? Rignis Reserved. ' - .Feedback-.LTIALLEGPGNDIR001421

'1i.;':r; ; . :Johp fl.McAithiir ;'. ^ •...FjicculiW ViUi ftcstenl, Gcncrral '• Counwl andiCwpdrauScE/ctary'l' June 23,2011 '^W '":]•"' BOARD,OFbiREGTbRs ^ - ^"-^^k-. ••^.:;f-^- ,^;^1;..11PROG^SSENERGY,INC. • ' .;. ' [-•••[• -lp-- . . ' lv; : ' ,". ".' '-V^' y t- i' 1 _ " •• ;^v ^.fA reguji meetrng of the Bo^ Dir^pirefSflPro^ held in the.' " ;Bbardroom at the Gorporate Office of the C£mp^y,J^^ Building, 410 S. , . ''•Wilmington Street, Raleigh, North Caroling on Wednesdavl Jnlv .13^2011; for the transaction ': ofsuch business asmy come before theB^^• •'• ' "1' "•" " '" ' ' ' ' ' ' " ^ ^ ^ l ' ^ ' " - " Âll Board members are invited to a .Umcjw^Committee (NSOC) 1 on Tuesday, July ii^1Room,2l" floor of the Progress Ener^ Building.'The at;i 1:36; £*m:;at>the: 1^ Capital; City-Club, pm-. fpllowwl Symphony by r J . ^the Corporate • Governance Committee ""' v.:;:-;nî-jtiSti^^^jiiÂ:û&î&t??*:*^ m^ri'g in the G^ ' '-MIA^Â- . ; . u*. v ; - v -We have arranged foroyeraight atx^rroo^P^ at;the Mamott Raleigh-City'G^ter, vrfiich is jv. v,across the'plaza from the Progress Energy Buil^.. PariddcckOT Acexecutivepaittg lotâcerifbthe^P ] * -'• ^ ^'" "„ ' '/{/-''[• -Please review the enclosed attendance fonn,and let Holly know if ypu n^with your transportation arrangements.Sincerely,;' : - v . • /v^ ^; ^'v" ', - ' . i.^; ^ ^" ''^'''V;i-y'H'^:v 'JRM/Wiw ^V-^v;.:;:' V-,/ '•Enclosures' J-^ÛÂ . ' .'c:- Mr..William D. Johnson ^.^-v.,--'^. :V ;w"Mr. MarkF. Mulhem \ . v ^-J; v-.;;.-- A: V ^'. ;^: .,'t'~ ^ - ^.-r. .•;0 •••r> 91954B407Oi /:LEGPGNDIR001422

SCHEDULE OF E VENTSJuly 2011 Board MeetiogRaleigb, Nortb CaroHnaTuesday. July 12Transportation to the Pfbgfess'Energy. Building (PEB)11:30 a.m. , Operations and Nuclear Oversight Committe^SpC luncheon meeting - PEB 21CapitalXXiy Club^Syjnphony Room (all Board members invited)2:00 p.m. Corporate Governance Committee - CEO 's Conference Room3:00 p.m. Audit and Corporate Perform^ce Committee - pEB CR 12EOrganization and Cpmpensation Committee Meeting.-PEB CR J2B6:15 p.m. Depart the Marriott Hotel fordinner6:30 p m. Reception and dinner.at CafS Luna, 136 East Hargett.Street, RaleighWednesday. Julv 136:30 a.m. Cpntinentaj.breakfast availiiblc in .concierge loimge (j^ floor)at the Mamott Hotel7:30.a.m.Continental breakfast available in committee meeting rooms7:30 a.m. ; Finance Committee - PEB Conference Room 12BOperations and Nuclear,Oversight Committw - P£B;Con/erei7Cc;i?aom /2£9:30 a.m. Board Meeting12:30 p.m. Adjourn/lunch1:0b p.m. Transportation departs for the airportLEGPGNDIR001423

, PROGRESS EiNER GYBOARD MEETINGJULYl£l3 t20UJohn D. Baker IIPlease e-mail or fax form to Hollv Weneer bv July 1.2QU Jf there are chanseshollv, weneer(3)i>enmaiicomRedacted - Personal Info.Attendance;•. 1/ I will attend the Operations Committee^SOC luncheon on .Tuesday/ I will attend dinner atCaft Luna on Tuesday evening•SSI will attend the Board meeting on Wednesdayj will attend lunch following the;Board meeting on WednesdayIwill be unable to attendAccommodationsS Please reserve a room at the Marriott for Tuesday, July 12TransportationTuesday. July 12Wednesday. Julv 13*Ifthis Information has changed or is inaccurate, please let us know.Comments or special requestsLEGPGNDIR001424

July 12 Board Dinner Selection FormPlease make entree and dessert selections and return this form to Holly.Wenger (fax: 91?-546-2859|no later than July l".Name:Entree Choices:QArrosto dl Agneilo - Leg of Lamb roasted in garlic and rosemary and served in a light gravy withfresh vegetables ahd roasted potatoes0 Zuppa dl Pesce - Fish of the day. Bay Scallops f Clams t Mussels, and Shrimp on Cibotta Bread0 Penne Portofiiio - PenneSauti withslicedgmpe tomatoesJuilw• Rlgatoni Arhatricfana - Rigftom Sautiwith pancetta and Onions h a Spicy.Red SauceDessert choices:0 Grilled peach stuffed with ncottal and Grand Marnier with chocolate shavings0 Fresh fruit cupCONFTLEGPGNDIR001425

Baker, JohnD.From:VVeriger, Holly,Sent:Thursday, June 30, 2011 9:50 AMTo: Baker, John D.Cc:Johnson.BillSubject:Duke board meetingsJohn, Bill Johnson asked me tb get some information for. you on the beginning and ending times ofthe Duke boardmeetings on February 27 and May 2:I am informed by my Duke cpunter'part thatthetimes are stillf being worked out because ofthe addition ofthe newcommittee, Regulatory Pollcy and Operations: Both February 27 and May 2 are the first day of the meetings and typicallyhave all ofthe committee meetings;. Nuclear Oversight usually begins at 8:00 a.m, and usually is off-site at one of thenuclear facilities. Most members of that committee arrive the prior evening. The day usually ends with the auditcommittee meeting that typically concludes at 6:30 p.m. followed by a reception arid dinner.Unfortunately, I cannot tell yqu now exactly what your schedule will be as It will depend on the committees you areassigned and on how Duke schedules the new committee meeting. As soon as i know more about that, I will let youknow.Please let me know if there Is anything else l ean do for yoii to help work through the issue..Regards,HollyHolly H. WengerDeputy General CounselAssistant Secretary/Shareholder Relations Progress Energy Services Company, LLCRedacted - Personal Info.email: Hoily.Wenger@pgnmaii.cdrnLEGPGNDIR001426

Baker, John D.From:S«nt:To:Cc:Subject:Weriger, Holly Monday, ^11,2011 9:38 AMBaker, JohnD:Mitchell-Henderson, Trudie; Nelson, Sarah; Hensley, Pamdial-in numberI apologize for the confusion; but I am now being told our original number is the one to use;. So, to join the Organizationand Compensation Committee meetihg that begins at 3:00 p.m. ET tomorrow, please dial Redacted - Personal Info.Redacted - Personal Info.Thanks.HollyHolly H. WengerDeputy General CounselAssistant Secretary/Shareholder Relations Progress Energy Services Company, LLCRedacted - Personal Info.email: HbHv.Wenger(S)pfinmail,c6mÔNFj0LEGPGNDIR001427

John tt McArthurH- v -.;~ , August i0/20n t'; %-jotaD. : Bêrn1- - Mr. Jês E. Bpstic Jr.JrM r . Harris E. peLoach Jr.t^ -Mr.iames B:i Hyler , , ; - ; -v..'V'-' Mr. W[: Sleven Jones ':. . • • •••' Ms/E; Marie McKee , -• . Ms. Theresa M. Stone>^, . . " .. •:/ axe delighted you will be able to join us for the special meeting of shareholders'sch^duled onTuesday, August 23 at 11:00 a.m. at the'Progress Energy Centerrfor the performing Arts.m ' rRaleigh for the purpose of approving, the proposed plan of-merger" with Duke Energy.:1Corporation;' : '. \ , 'Lunch will be provided for Board members .upstairs-in, the Ôvertures Room immediately^'s_ ^) •=-jj}--ssfollowing the special meeting.'•;.*.A 919>10i745LEGPGNDIR001428

Special Shareholder MeetingAuguslij/ioilRaleigh, North, CarplinaTuesday. August 23Transportation to the Progress Energy Center for the Perfomung Arts10:30 a.m. Refreshments available for Directors - O^rtiires Room (upstairs)\ 1:00 a.m. Special Shareholder Meeting12:00 noon Board,Luncheon - Overtures Room (upstairs)1:00 p.m. Transportation departs for. the airportLEG PG N Dl RO01429

PROGRESS ENERGY SPECIAL S^REHOLDER MEETINGAVGVST23,20UJohn D. Baker IIPlease e-mmt or faxform toBdltv Wtneer bv August 16.2011. if there are chanses'" 1hollv.wenser(a>ishmail.comFax: 919-546^2859ACCOMMODATIONSMonday. Aueust 22Reservations at the MarriottRedacted - Personal info.Confirmationyouhave'ariy: problems)Redacted - Personal Info.TRANSPORTATIONMonday. August 222:13 p.m. Delta Flight 2088 departs Kalispell, Montana10:41p.m. Delta Flight 2509 arrives RDUTransportation will be provided from the airport via Elite CoachRedacted - Personal Info.Redacted - Personal Info.Tuesday. August 23p.m. Delta Flight __ departs RDUp.m. Delta Flight arrivesIf this informatipn has changed or is inaccurate, please let us know.Comments or special requestsLEGPGNDIR001430

• I,. ^JohnR.McAitmir.-^''-. '"."^Counal ia«i Coipbrale Sccrotarv;K' Irr^1- . A'i' •• v.PROGRESS ENERG Y, ING;BOARD OF DIRECTORSsuch business as may cpme before the. BoOvernight accommodations for Thursday, eyenmg:haye l»ra''afr^gât r the Washington DukeInn. Parkinff is available in the;hotei;p^ng lot BuisiriesiS 'casuM?attireas>suggest^ for the , ' , •Board meeting and dinner. ' '-iV/^ ; , " •> :,' • y-!./ . . • ^ v.v ; ; ; /Please reviewthe'enclosures arid lei Holly Wenger know of any; changes rn yoiir plans for ; ••"r- £ % •attendance at the Board mating and relatw' v " '-rr.^.-A^.A-:^^.^ D^;^.D D«««..ôr by.email at holly.werigerfgipgnmaiheom.JRM/hhwEnclosuresc: Pyfr. William D. johnsoh;Mr. Mark Mulhem;brdsdmlOSZ. ••?„ i ' t . ! '""-î'VPIDOJ«I EnoTti.Inc.PO.Boilifti; " '' : > 9iab«i2«TIALLEGPGNDIR001431

SCHEDULE OF EVENTSSeptember 2011Board MeetingWashington Duke InnThursday. September 15Check-in2:00 p.m.4:00 p.m.6:00 p.m.Board meeting begins 7-President's IOrganization and Compensation Committee Meeting - Location TBDReception and Dinner - Location TBDFriday. September 16 V7:30 am. Breakfast buffet -President's II8:30 a.m, Bpard meeting rcCoriyeries.r- President's I11:30 a.m. Adjourn/lunch - President's IJ1:00 p.m. DeparturesLEG PG N Dl R001432

PROGRESS ENERGYBOARDMEETINGSEhEMBERiS'J6 t26llJohn p. Baker, IIPlease e-mail or fax form to Boltv Werner bv September 7.201 Lif there are chansesHollv. wenqertptosnmail.comRedacted - Persona! Info.AttendanceS I will ^nd di Board mwting aciivities September 15-1.6I will be unable to attendAccommodationsS Please reserve a roomat the Washington IXike Inn for Thursday, September 15TransportationThursday. September 1511:45 tun. PiE Plane (N57KW) departs Jacksonville (Jacksonville International: SheltairRedacted - Personal Info.Aviation1:00 p.m. PE Plane arrives RDUTransportation will be provided from the airport via Elite CoachRedacted - Personal Info.Redacted - Personal Info.Friday. September 161:30 p.m. PE Plane (N93KW) departs RDU2:45 p.m. PE Plane arrives Jacksonville*Ifthis informatipn hw changed or Is Inaccurate, please let us know.Comments or special requestsLEGPGNDIR001433

JohnR.McArtfcirr¥T,\ . •: November 15^2011^:.';. : O v ;'; ",1• r; *• -^'r^v'^W'' BOARD 0F- DIREGTORS; ' PROGFU^ ji - ^ 5^(.; ' ^ A^âr meetiDg.of'lhe.Bo^ of Directors ;bfprogress- Bie^; Inc, will be held : iripe.^V.-V ' Bba&im at the Gorporate Office of the Company,' 12* floor, Progrcss rEnergy Building]- ; •v ;-r- ', .'. -i i 410 S' Wimington Street, Rkleigt North Caralina, bn Wednesday."December 14,20U, fpr the- •,V- > : ;"" ian^ction of such busihess : as may come befbre the Board.'.Enclosed is the event schedule for^vv:. A : the meeting. - ^ r- \ - A ^ ^ S "•; • ;deck or in^the eiecutiye parking lot adjacent tojthe Progress Energy Bjuldmg ' - — 1We have metetd for overniît.accommodations at the,Rflleigh Mamott City Center, whiqhjis.across the-plaza^ fromie'l^gress EnCTgy, Building , Parking is available in the hotel paringThe Board dinner on Tuesday evening will'be at Second Empire beginmng at 6:3bp,ra/ f:^Transportation will be provided^.the restaurant,leaving the Mamott Hotel.at 6 15pm ^ :Please reviewthe enclosed attendance form,and let Holly know if you neid additional ^si^;^:"|| ;with your transportation arrangements. . ^ y' ^ ^ ^ . (, 'A ., -/ . : .-^Jfor^rSincerely,JRM/hhwEnclosuresc: Mr. WUliam D. JohnsonMr.MaricF. MuUiemmmPngron Enerfff^nci'yP'i' 'fc" cITIAL .1;C.v::;>":;gîv- LEGPGNDIR001434

SCHEDULE OF EVENTSDecember 2011 Board MeetingProgress Energy Building - 12 ,b FloorRaleigb, North •CarolinaTuesday. December 13Board Members arrive4:30 p.m. Corporate Governance Committee - Marriott Hotel Board Room6:15'p.m.Transportation departs the Mairiott Hotel for dinner6:30 p.m. Reception and dinner at Second EmpireWednesday. December 146:30 a.m. :Continental breakfast available in concierge lounge ^ the Mamott Hotel, Floor 167*30 a.m. Continental breakfast available in Progress Energy Boardroom lobby7:30 am. Auditand Corporate Performance Committee - Prpgress Energy BoardroomOrganization and Compensation Committee - Multi-Purpose Room ^ PEB 129:00 f m. Finance Committee - Conference Room 12BOperations and Nuclear Oversight Committee - Conference Room 12E10:15 a.m. Board MeetihgNoonAdjpum/lunch in Multi-Purpose Room1:00 p.mi Transportation departs for the.airportC^NFIDSfe^LLE G PG N Dl R001435

PROGRESS ENERGY BOARD mETINGDECEMBERlSriîdUJohn p. Baker IIPlease e-mail or fax form to Hollv Werner as soon as possible if there are changeshollv. weneer

Mf'tchcH-:Hcndcrson, TrudieFrom:Sent:To:Cc:Subject:Attachments:Wenger, Holly Friday, December 16, 2011 4:24 PMBaker, John 6. ; 'JameS.BOStlc': I Redacted - Personal Info. I 'jim;Hyler 1 ; 'Jones; Robert'; 'Jones, Steve'; 'Mel Martinez'; 'McKee,Marie';Redacted - Personal Info.'GarlosA.Saladrigas'; 'Theresa M. Storie'; 'Fred Tollison'"Mitchell-Henderson>Trudie;Redacted - Personal Info.Redacted - Personal Info.Redacted - Personal Info.'Wheeler, Jan';| 'Carlisle; Kimberly A.'; 'JeanieGeoghegan'; | Redacted-personal info. | 'Barbara E Ko vacs';Johhson, Bill; McArthur, John R; Mulhern, Mark; Fountain, DavidNotice of Special Board Cail bri tuesday, December 20pocument.pdfDear. Board Members:,Please find attached a notice for' a. special board-call on Tuesday,December 20 at 3:45 p.m. To participate in the call, please dial 1-888-363-4735 and enter access code 5814305.We thank you for working with us to.schedule the: call on such shortno.tic.e'. We understand a 'couple of you may have to* drop off a rittle ea'rlyqr join a little late, but this seemed to be the best time for themajority of the board members.Kind regards,HollyHolly H. WengerDeputy General CounselAssistant Secretar.y/Sharehblder Relations Progress Energy ServicesCompany, LLCPhone:Redacted - Personal Info.email,:- Holly. Weng'er;@pqnmail i comLEGPGNDIR00!437

epssWIHomO. Johmon 5'detinBttPtuiitlamam) Oicf EiuaiivDOf ficorDecember 16,2011ConfidentialBOARD OF DIRECTORSPROGRESS ENERGY, DVC.A special meeting ofthe Board of Directors of Progress Energy, Inc. wilt be held byteleconference on Tuesday; December 20.2011 at 3:45 p.m. to discuss the proposed mergerwith Duke Energy 1To join the call, dialRedacted - Personal Info.There will be, no. materials for this meeting. Please call if you have any questions.Sincerely,WDJ/hhwc: Mr. John R: McArthurMr.. Mark F. MulhernP.O. noi iwi .3lltMI).M63'ALLEGPGNDIR001438

MftcheH-Henderson, TrudieFrom:Sent:T9-Subject:•Wenger, Holly Monday, December 19; 2011 11:44 AMMitchelhHenderson, trudieRE: FEBRUARY MEETINGI don't know to which Duke committees john;will be assigned, but the regular, meet ing dates for:2012 are asfollows:February 27-28, 2012 (Monday-Tuesday)May 2-3, 2012 (Wednesday^Thursday)June 25-26, 2012 (Monday-Tuesday)August 27-28, 2012 (Monday-Tuesday)October 29-30, 2012 (Monday-Tuesday)December 10-11,2012 (Monday-Tuesday).I understand Duke decides on the schedule for known speciarmeetings early in the year (e.g., specialcompensatioh committee meetings to review the proxy disclosures or,special audit committee meeting toreview 10 : K and earnings release):. Progress sets its dates in advance, so that will be a little different with Duke.From: Mitchell-Henderson, TrudieRedacted - Personal Info.Sent: Monday,. December 19, 2011 10:40 AMTo: Wenger, HollySubject: RE: FEBRUARY MEETINGHolly, thanks, for the promptresponse.Any idea of the Duke meeting schedule /: . assuming the merger goesthrough?_^Trudie Mitcheil-Henderson_ Executive-Assistant to' •"• Edward L/Baker, GHmn Emeritus,and John Di Baker ir. Executive ChmriPATRIOT TRANSPORTATION HOLDING, INC.LEGPGNDIR001439

Redacted - Personal Info.From: Wenger, Holly [mailto:Holly.Wenger@pgnmail.com]Sent: Monday, December 19, 201110:18 AMTo: Mitchell-Henderson,TrudieSubject: RE: FEBRUARY MEETINGtrudie, we currently have planned an brganization;and Compensation Cbmmittee cpnference call onf ebruary14 at 11:00 a.m., and a'Committee iprpersoh meeting on February 2rfrom10 to noon. The last couple of years,though, our Chair, Marie McKee, has not required in-person participation at the February 21 meeting. Most ofthe directors have participated by.phbne. We may have a board call sometime in February, but I don't have adate for you yet. Our next.regu la rly scheduled full Board in-person meeting is not until March 13rl4.Merry Christmas toyou, too!From: Mitchell-Henderson^ Trudie Redacted - Personal Info.Sent: Sunday, December 18, 201111:08 AMTo: Wenger, HollySubject: FEBRUARY MEETINGHoUy„do you have a tentative. acHeclule, yet for the February; meetirig ? .Mr; Baker does plan to attendthe meeting but his schedule iis getting ti^ht £uiti : we're tryingto do several things that week. An.ideaof your schedule;would be helpful;,Thank ypu, and Merry Ch ristmas!Trudie Mitchell HendersonExecutive Assistant toEdward U. Baker,,ehmn Emeritus,and John p. Baker II, Executive ChmnPATRIOT TRANSPORTATION HOLOING. INC.Redacted - Personal Info.LEGPGNDIR001440

MarkF.MuIbani'Scata.VOTPMtiliunoJanuary 3,2012Mr. Robert W. Jones, GhairMr. John D BakeritMr James B. Hyler, Jr:Mr. John H^ Mullin HIMr: Carios A. SaladrigasMs. Theresa M. Stone,FINANCE COMWnttEE. Dear Committee Members:A meeting of the FiriahM'Committee will be held by teleconference on Tuesday, .famiarv 17, at3:30 p^m. An agenda aiid materials forthis callwill be sent.to you by (>-maiL in advance ofthemeeting.:To participate ih the .call,-please dialRedarted - Personal Info.P lease call if you have questions.Regards,Mark F. MulhernMFM/phc: Mr. William D. JohhsonMr. John R. McArthurbnladmllSS.IIO-BnilHIT!r 9iaLMlI,C373:LEGPGNDIR00144i

Jnfcii A. UcAi^nr ^ .,•Cotuisd ard Cotpcnate Saatiary: '' "•-'BOARD OF DIRECTORSPROGRESS ENERGY, INC..1-', , V ,.A special meeting, of the Board pf DirwtbH^^ Encr^Încv .w byteleconference on Wednesday, januarv 18,. at 3:00 p.m. VAn agenda-and materials for this call'iwill be sent to you by e-mail in advance of the'meeting; - 'To participate in the call, dialRedacted - Personal Info.Please call ifyou have any questions. ;•Sincerely,'1T.JRM/phc: Mr. WilI2amiv 919*8/070IALLEGPGNDIR001442

Mitchell-Henderson, trudieFrom:Sent:To:Cc:Subject:Wenger, Holly Wednesday, Januarv 11, 2012-2:44 PMBaker, John P.;Redacted - Personal Info.Redacted • Personal Info. 'Jim Hyler'; 'Jones, Robert'; 'Jones,Steve'; 'Martinez, Mel'; 'McKee,;Marie'; 'John Mujlin';Redacted - Personal Info. 'Carlos A; Saladrigas 1 ; 'Theresa M. Stone';'Fred Tollison'Mitchell-Henderson, Trudie;Redacted - Personal Info. 'Wheeler,Jan';Redacted - Personal Info.'Carlisle, KimberlyA.';Redacted - Personal Info.'Jeanie Geoghegan';'Barbara E Kovacs'Prgoress Energy Annual Sharehoiders MeetingDear Board Members;:;As you; know, our shareholder'.meeting is typically held in. May every year.With the merger delay,, we are considering delaying the annual meetinguntil August. To comply with applicable laws,, the. last possible date wecan have-the' meetihg is August 11, which falls on a Saturday. Please letme know your availability on August 7 -{Tuesday) andi August. 8 (Wednesday)to. attend a meeting in Raleigh.Thank ypu.HollyHolly H. WengerDeputy General CounselÂssistant Secretary/Shareholder Relations Progress Energy ServicesCompany, LLCPhone: Redacted - Personal Info.email:- Holly. Wenqer@pgnmail /comLEGPGNDIR001443

Mitchell-Henderson, TrudieFrom:Wenger, Holly Sent:To: Baker, John. D.;Redacted Personal Info.Redacted - Personal Info. •Jim Hi /\er•Steve'; iMartinez, Met'; 'McKee, Marie'; 'John Mullin';I Redacted-personainfo. | 'Carlos A. Saladrigas'; 'Theresa M. Stone';'Fred Tollison'Cc: Mitchell-Henderson; Trudie;Redacted - Personal Info.'Wheeler,Jan';Redacted - Personal Info.'Carlisle, Kimberly A.';'Jeanie Gebghegah'; Redacted - Personal Info. 'Barbara E KovacsSubject:;Board call early FebruaryDear Board Members.:.I have been asked to schedule a 1 90-minute board call; to review the FERCmitigation plan. Please:let me' know your availability on Monday, February6 between 10:00 a.m. and noon as- weTl as on February 7 b.etween 8:00 a.m..and 3:00 p.nv. /Thank you.HollyHolly H. WengerDeputy General CounselAssistant Secretary/Shareholder Relations Progress.: .Energy ServicesCompany, LLCPhone:Redacted - Personal Info.email: Holly. Wengergpqnmail' .comLEGPGNDIR001444

Mitchell-Henderson, TrudieFrom:Sent:To:Cc:Subject:Wenger, HollyBaker, John,D.;Redacted - Personal Info. There is a previouslyscheduled Audit eo'mmittee. meeting from 11 to noon tHat day-.Thanks.HollyHplly H. WengerDeputy General CounselAssistant Secretafy/Shareho1der Relations Progress. Energy ServicesCompany, LLCPhone: Redacted - Personal Info.email: Holly.. Wenqer@pgnmail .comLEGPGNDIR001445

WflliMD.JohitSOOChaiman.PirotJert-' .and Chit) Itixittivo OfficerFebruary 1,2012BOARD OF DIREGTORSPROGRESS ENERGY, INC.A special meeting of theBoard of Directors of ProgreMiEn^ Inc/will.be held byteleconference oh FridaVv Februarv 10.26i£ beginning at 3:36 pirn;, to discuss the proposedmitigation plan to be submitted to the Federal Energy Reâtory;^ Tbe call shouldconclude by SiOO pm^pjointhe'calljdialRedacted - Personal Info.Materials for your review will be s^t in adyamcc of the call. Please call if you have anyquestions.Sincerely,WDJ/hhwc; Mr. John R. McArthurMr: Mark F. MufemIV0WWM7WNTIALLEGPG NDIR001446

; Johii ftMcAittor ,bocirtrytWraPrMidBiilGenflrai-•'; • ' February9,2012.-.'-.V ; .v- , Msi E^Marie>McKee,iGhair; :\ . : Mr. John bTBaker, II• "tfl . -; ^N^l^sêUach, ^^ f . Mr. James B. Hyler, Jr.«' ,'. v \ . • • • -I'.. Mr! Robert W; Jones' Mr. Mel MartineziMr^JohnHl Mullin, niORGANIZATION AND GOMPENSATION COMMITTEE : • : ;" s : ^s^.Dear Committee Members:A meeting pf the Organisation and Com^âdiSr';^mm^^îl/J^. 9"Wednesday. February 22; from9:00 a-m/to Uâimrinônf^^ theProgress Energy Building. pie>purpose of theTmeeâward |»ydiits>'ahd review'the preliminary pfithe^GIând discuss other matters as needed.", '' ".Jv"- ; v A^.^TT,. y;^;: v _ ^ !.^4,. !>!-..&number isAdvance materials will be sent to ypu on Wednesday, Febn^ :15.. Please let Holty; ' ' .j': SWeriger know if you have any questions; She can be reached at iRedacted-^^^1 imo. | by email 'at hoUy.wengcr^pgnmailxom; "' ^"y.\A-: :: e,.: ^ r ^'T^ '^ ' ^Sincerely,HTJRM/hhwAttachmentc: Mr. William D. Johnson ' VPra'snstEnerbir. Inc.RO.Bw.'tsV't> 919 Wfl 4070?T>T-y• ' }^^T,>•' ••-TTT A & F ^ . : •LEG PG NDI R001447

JotmB. McArthur-' - ;, ;V" '-,r«ct

SCHEDULE OF EVENTSMarc^ 2012 Board MeetingProgress Energy Building -12 th FloorRaleigb, North CarolinaTuesday, March 13*1:30 p.m. Cprpbrate Governance Committee - CEO's Conference Room3:00 p.m. Audit and Corporate ôimance Committee - Conference Room 12EOrganization and Compensation Committee Meeting - Conference Room 12B6:15 p.m. Meet in Môtt Hotel lobby to walk over to Poole's Diner6:30 p.m. Reception and dinner at Poole's DinerWednesday. March 147:00 a.m: Continental breakfast ayailable in "committee meeting rooms7:30 a m. Finance Committee - Conference-Room J2BOperations .and Nuclei ^- Conference Room 12E9:30. a.m. Board Meeting12:30 p.m. Adjourn/Lunch.1:00 p.m. Transportation departs forthe airportLEGPGNDIROOI 449

PROGRESS ENERGY BOARD MEETINGMARCH 13-14,2012John D. Baker UPtease e-mail or fax form to Holly Werieer bv March 5.2012, if there are chaneeshollv. weneerfaipenmaU.comRedacted - Personal Info.Attendancef I will attend aU Boanl meetmg activities March 13-14lwillunable to attendAccommodations/ Please reserve a room at the Marriott for Tuesday, March 13TransportationTuesday. March 1312:45 p.m. PE Plane (N93KW) departs Jacksonville (Jacksonville Intcmatipnal: SheltairRedacted - Personal Info.Aviation2:00 p.m; PE PlMe arriyes,W)yTransportation will be provided from the airport via Elite GoachWednesday: March 141:3b p.m. PE Plane (N93KW) departs RDU2:45 p.m. PE.Plane arrives JacksonvilleRedacted - Personal Info.*If this information has changed or b inaccurate, please let us know.Comments or special requestsCj^FIDfeiyaiWd-LEGPGNDIR001450

jfbnllMcArth'ai;.'. ',' ..V f 1 !' 'Cwinjd oniiCo«wiflic Sttietefy", ;. f '; < - ••:••!- ! .- * • : ;. : v"*' ,' • •-•*- . • ^ , ' y r.- -7 . .^^^ r ysi^- i> .:BOARD OF DIREGTORSPROGRESS ENERGY, INC.. transaction of such business 5 as may come'ibefdfc the Board. Wc exp©ct'the r teleconferehce: willconclude,at noon, if not earlier ier. " ' ' ^ Ân agenda and materials for this calj will bi sent to you in ^v^ceôf t^ mee^ '. ^ ;To participate in the call, dialRedacted - Personal Info.Please call ifyou have any questions.Sincerely,'A- . 'ilrrAiJRM/hhwc: Mr. William D. JohnsonMr. MarkF. MulhembTdadm'1242" ' . ' - "'•.,.•-.'1;' • ri'-l'i'..., AÂr);A : Ar^y^:A^^-fy.••y^y ';;yi 'f

Mitchell-Henderson, TrudieFrbm:Sent:To:Cc:Subject:Attachments:Wenger, Holly < Hoily.Wenger@pgnmail.com>Tuesday, April 10, 2012 11:44 AMBaker, John D.;Redacted - Personal Info.Redacted - Personal Info 'Jim Hyler'; 'Jones, Robert'; 'Jones,Steve'; 'Martinez, Mel'; 'McKee, Marie'; 'John Mullin';Redacted - Personal Info.'Carlos A. Saladrigas'; 'Theresa M. Stone';'Fred Tollison'Redaaed - Personal Info.Mitchell-Hendefson> Trudie;'Wheeler,Redacted - Personal Info.Jan';'Carlisle, Kimberly A.';Redacted - Personal Info.'Jeanie Geoghegan';May 9 board meetingDocument.pdfDear 'Board Members:,After consulting with Mr. Mullin,: Mr. Johrison determined 1that under thecircumstances, i t is appropriate to conduct the May '9 meeting viateleconference. Thefefore, you; will hot need to travel to Raleigh.Please find attached the notice of meeting by teleconference from Mr.McArthur. The meeting, will begin at 9:30 a.m. on Wednesday, May 9 and isscheduled to conclude by noon vTo participate in the call, please dialRedacted - Personal Info.Redacted - Personal Info.Kind regards,HollyHolly H. WengerDeputy General CounselAssistant Secretary/Sharehoider^Relations Progress Energy Services,Company, LLCRedacted - Personal Info.Phone:email: Holly .Wenger@pgnmail.. comLEGPGNDIR001452

Baker, John D.From:Sent:To:Subject:Progress.Daily:Reply@'pghmail.comWednesday, April 18,2012 1:04 PMNewsletter.Arch ive@pgnma il.comProgress Daily 4:18.2012•Wednesclay. Apiil. 18. 2pi2.progress dQtiy[ Employee NewsRemembrance blog updatedProgress Energy has lost ai valued ; erhp!oyee:• Samuel Pitt, an electrician at the Aridote Plant in Florida.The Progress Energy Remembrance Bloo provides details about the'famity visiintinn; fimprai arrangementsand where to.send sympathy cards. In addition,'employees'have^the opportunity to.ishare a memoiy orexpress their sympaiihy. Comments on the blog will;be shared with Samuers family'Ânnouncements wil! be'published in the Remembrance Blog for active'emplbyees>nd for those who are onshort-or long-terrn disability for less than one year.Shared memories and comments should be tasteful and apprppriate for sharing with family members.Ybii may access the Remembrance Blog by clicking on the links above or by going to ProgressNst Linkson the home page and .thenclicking[on Remembrance Blog under CommunitiesProgress Energy's hew website ranks fourth In first-time J.D. Power studyProgress Energy ranked second ; iri the South Region and tied for fourth in tHe nation in the inaugural J.D.Power Utility Website Evaluation Study.The study is designed to provide an objective assessment of customers' satisfaction with their electric utility'swebsite. In results releasedJast week, : the top three satisfeicUbnAdores of the 48 large utility sites that wereevaluated went to_ Aiabama Power, AEP and PPL. Progress Energy shared fourth place with Sacramento"Muhicipal.Utility District; a'nd.Duke Energy ranked seventh; Partidpants were asked to complete a series oftasks on their utility's website ahd to indicate their satisfaction wittvnavigafion: tlie range of services thatcould be performed,\appearance,'clarity of information and speed of pages loading throughout the site.Progress Energy completed the design and launch of a new, more customer-centric website in 2011. Somefeatures of the new site include increased seif-sen/ice'applicationsto lower costs,'"'improved search featuresand toots as weil.asthe u»pf i^S;media..îc^ns: Corporate Communications and IT&T partneredwith Customer & Market Services to.coriiplefe the website project.. Govemanceôf ttie new site is'led byCorporate Communications with input from key stakeholders across the cbmpany"The results:of this J.D. Power study conflrm tfiat our investmenf in upgrading ounWeb presence, andjrnaking it easier for our customers tb interact with us, is paying dividends^, said Cain Boyce^vice president,Corporate Communications. •This accomplishment is also a reflection pf the hard worit and commitment "ofthe Web and Interactive Communicatibhs Team in Corporate Commuriications and the.(TAT Sharepoint andInternet Solutions Team, .who spent cburidess h'ouri to build the business case, secure funding and executethis project."Password riesets iii ade easy•Eadii'^r/appro^ntet^y 25'p^ht ofthe inddente handled;b£the Technology .Service Desk are passwordreset reciuests.The online Password Reset topl ailaws empioyees to reset their Wnd^s logon (Oak)password;24;hours a day, 7 days.a week, the Password Reset Tobralso allows you to change andsynchronize your password across many applications including your Mainframe^ Grade and PassPbrtpasswords, iIALLEGPGNDIR001453

Prior to using the.Password Reset Too) for the first time, vou.must register and create a profile, Emoloveesthat have hot already done saare'encpuraged'to register so they can use the Tool when tfie need arises.Creating a profile is easy ahd.ohly takes a moment.-Once you have registered and created a profile, you can reset passwords online via the Password ResetTool. The online Password Reset Tool is available via the IT&T^Department 7 Site;Alternatively, ypu may call the-Technology Service Desk atVoiceNet 8,23a51li or 1.666.230.5111 andselect Option 1 to reset your.paMwod. This.method bhly 'allows tb'reset.ybur Windows logon password.Once you have logged on to the networit/ it is recommended you'then:use the Password Reset Tool tosyhchronize all of your, passwords:If you have questions, 1 contact the Technology Service Desk at VoiceNet 8.236:5111 or toll-free at1.866.230.5111.[ Progress Energy in The.News"Heard on the Street: puke's slow progress to the altarUam Denning, Wali Street Journal, N. Y,April 17, 2012Progress Energy (PGN) will hopefulfylive up to its name.Investors seem tb be getting nervous about the utility's ability tb complete its $26 billibn all-share merger withDuke Energy (DUK), announced in Januaiy 2011. Progress* stock now trades at a 4.15% discbunt to the priceimplied by the merger terms, the widest spread since last August.This week, ISI Group's utilities analyst Greg Gordon released a report speculating that regulatory conditions mightderail the deal. He puts the.odds as high as 50%, aithpugh;he estimates;the market is pricing iri : 20%. That'one-infivechance of things going awry is, on one reading', pretty 'standard: A'fifth of U.S. utility.deals by value announcedsince 1995 have failed tb,dose,,a(rardlhg "ta'The two companies await approvals from federal regulators and those in the two Carolinas. State regulators lookless of an issue. If the deal coilapses, both Duke and Progress are. stilf likely to want merger partners as the togicfor a utiiities mergers-biggerbalance sheets tb haridfe:risihg'inve^^'requiênts^still holds. Any other dealswould likely involve parties out-of- state, with the consequent risks of headquarters, and jobs, moving ielsewhere.TheFederal Energy Regulatory Commission rs the wildcard. In December, rt rejected the two^tilfo'es' original planto mitigate their combined market power in the Carolinas: the two companies made concessions inai new planfiled last mbritfvdescribed byUBS analyst Jim vbh Riesemann as "much morethoughtfui."Even so, apart from the risk that the FERC imposes tough new sanctions, 1 there is'simple timing with which tocontend. The July 8th meiêr termination deadline is ; npt top far off,- 1 leaving little margin for error if^ say, the FERCtakes its'time reviewing the' case or demands more information.Duke looks under less pressure If that scenario, happens-it doesn't appear to need a deal:immediately. SinceJanuary 2011. consensus earnings forecasts for Duke fpr 2012 arid'2013 have increased by,5.1% on average.andthe company says.it can meet its.earnings growth targets on a standalone b a s i s . "Earnings forecasts for Progress, meanwhile; have dropped by 2;7%. Moreover- ite stock trades at 16^2 timesearnings,weH above the sector average;bf 14:1 times. If.the deal fell apart aind Progress moved backJnto line withtts.peere, the. stock could drop :13%..Mr. Gordonêstimates the potential fell'at between 8% and 10%Ârbitrage, investors may be'tempted âlthough the risks involved, (ri second-guessing the inner thoughts bf theFERC are very high. Meanwhile, for those;investors holding Progress's stbck'it: means at least a nervous couple ofmonths and at worst a potentially nasty summer drenching:'Concern for Duke Energy/Progress Energy, merger growsJohn Downey, : Charlotte Business Journal, N. C:April i7,.2012Duke Eriergy arid Progress Energy's still'Uriire'sbived. Issues, with federal nûidoraoyerth'eir propoMd^B bilifon.TIAL2LEGPGNDIROOI 454

merger appear to be.weighing : on investors.- One ianalyst today puts the chahcesbf the deal falling through as highas 50-50, The Wail Street Joumai reports.That analyst, Greg Gordon of IS I, Group,-has downgraded Progress stock; largely on concerns that Progress islikely to lose yalue if the merger fails. 'If the pending merger with Duke.Energy fails to dose we see rieaMerm downside to $46-47/8hare for (Progress),"he ia writes. 'If the merger doses, the stock should rise to $53-$54.... We are uneasy .with this risk/reward given-remainingi rûlatoryûncertairity."Duke and Progress have.so far been unabie to resolve concems.the Federal Energy Regulatory Commission hasabout the deal. FERC says it could ; gh«,them the maritet muscle to stymie competition,rri some Carolinaswholesale markets, tt wants the power i^panies^^We reported on Duke CEOÛim Rogers admissipri that the merger has been here. We will haye additionalreporting on the'issue in ari artide appearing in a spedal energy sectibn of our Friday paper In connection with the2012 Energy Inc; SummitAnalysts are divided over the where the merger stands. Eyebrows were raised .when FERC responded to Duke,and Progress" most recent proposal to address ccimpeUtlbn issues, 'with a series bf detailed and technicalquestions. But not all see that as a/sign of new problems. Analyst Paul;Franzen at Edward Jones & Co.. forinstance, says the merger appears sHâre not unexpected in amerger of this rhaghitude.Progress Energy: Power line thefts; increase in down economic timesBeauM'mnick.WRAU,RaleighMc.-April 17, 2012.Progress Eriergy officials said Tuesday they have seen an increase iri power line thefts, :which they, attributeto the down economy."We do also tend.to see'thefts rise and fail with the price of copper and other materials,'' said.company.spokesman Jeff Brooks.On Monday, Wayne County deputies charged three people with stealing Progress Energy.ppwer lines.George Morris daniejs. 43. George Abram;Daniels, island,Vivian Sada Daniels, 19, all of 4127 Lake WilsonRoad in Wilson, were charged with felony injury to wires or, fixtures used in the transmission of electricalpower service, misdemeanor larceny and misdemeahor jwissessioh of stolen goods.Deputies said about $500; in power. Unes were taken off poles in the northern part of Wayne County.Meanwhile, Johnston County authorities said they were searching for whoever stole rriore than a mile bfProgress Eriergy power Nnes' north of Selma on Saturday. AutHorities said the wiring was .valued at nearly$5,000."It hurts the utility,'which has to put crews out in the field to replace that, and there's a safety risk for thosecrews to work with this equipment after it's been tampered .with," Brooks said;Authorities don't want to say. how.thieves are stealing the wires, and Prbgress Energy says these thefts arejust not smart.•This particular crime is one in which the;risks farOutweigh the rewards," Brooks said. "This is a verydangerous practice; These' finesare,designed' tocarry-high voltages (rfeleCtrtdty."'""###Westinghouse to apply underwater laser beam welding at huclear power plantPo wer Engineering'April 17,2012Westinghouse has been awarded a cbntractjb apply'the Undenyater Laser Beam Welding process (ULBVV);at Progress Energy's (I^SEi-RGNVsi^Niêar-Rlantih.Harts^lle, S.'C: This will,"""'the first application bf the.ULBW process, which has be'en applied previously, in Japan, at a U.S: nuclearL3LEGPGNDIR001455

plant:Developed jointly by Westinghouse and majority owner Toshiba Corp., the ULBW.process applies stresscorrosion, cracking-resistant weld metal - underwater.^ onto the inside diameter siirfa'cebf agedcomponents, serving :as a method of mitigation and repair. TTie laser beam's precise heat arid dilutioncontrols result in consistent weld quality and high deposit purity.At Robinson Unit 2, the process.will be applied to reactor vessel nozzle disairriilar metal welds during the fall'2013 outage.NC State to unveil four new electric vehicle charging stationsNom & Observer Online, Raleigh. N. C.April i 7, 2012N.C. State University, and.the N.C. Solar Center will open four new electric vehicle charging stations later thisweek.The charging stations are located at the McKimmqn Center and the E.'Carroil Visitor Center..Ribbon cuttingsfor both locations wili be'held Thursday, at 10 a.m. at the MCKimmbn.Center on Gorman Stand at 10:30a.m. at the visitor ceriteron Varsity Drive.Thetwo McKimmonCenter, charg ing.stations andtheir installation were provided by Progress Energy as partof a grant the.Raleigh utility received from the U.S. Department of Energy, 'The visitor center stations were;frnanced by a grant program, the.N.C. Solar Center's Clean Fuels AdvancedTechriologles,,which is funded by the N^C. Department of Transportatibn.###Dally Energy News - April 18News summaries follow these headlines:Energy PolicyPresident Obama Aims to Expand Oversight of Energy tradingPresident Obama has called oh Congress to pass legisiatiori that will authorize CFTC to increase marginrequirements for energy traders; boost civil arid CT'rhinalpenalties .for firms that manipulate markets andexpand funding for CFTC to.oversee:trading activity, the Los Angeles Times reported today. Under the $52million plan, the'ceilihg for the daily penalty'for manipulation would increase from .$1. million tO;'$10 million;the CFTCôversight staffingwould increase six-fold.Obama called his plan "a chance to riiakeâmends"and he blamed congressional Republicans for failing toend tax incentives for oil and natural gas'Mmpanies. He ; urged Congress to "do something that will "protectconsumers by. increasing oversight of energy markets." Obama pointed.to. the example of "how Enrontraders manipulated this price of electricity to/eap 1 huge, profits, at everybneed tb 'curtail speculation'in bil and other markets, the Wail Street Jbumarreported, the.president.acknowledged that "none.of these'steps by thernselves will bring gas prices downbvemighf at the pump.Senate Minority Leader Mitch McConnell claimed Obama was seeking political gain with a proposal that •"probably polls pretty"well" but "won't do a thing to lower the price of gas at the purrip!" House Speaker JohnBoehner claimed the'CFf C-.and SEC'had adequate tools to counter manipulation: "Instead of just ariother ;political gimmick, why. doesn't he put his a'dministratipn to work to get to.the bottom of it?"Sen.'Carl levin, 0-Mich., was quoted by Reuters, as saying: "I would do some additional things, but basicallyrm wry pleased that he's responding." Reuters reported: "Senator Maria Caniy/ell is working pri legislationthat would ban commodity index funds from the bil markeârriove^ backed by wnsumer advocates.' ,FERC Commissioner Lapleur: Hydro.Must Advocate for CpmpensationFERC ^rhmissiprief Cherytthat the industry should bemore aggressive ih letting FERC know how it thinks'compensation fbr the rehewable resource should worit,LEGPGNDIR001456

Platts reported. LaFleur' wasquoted:as saying: TThlnk broadly about whatyou provide to the electric grid andthe electric system. Think broadly geographically about who'can benefit, arid advocate for ways that youthink you should get paid for that."LaFleur said that FERC's'frequency regulation compensation rules on uniform paymerits for. fast-ramping'resources "came about because a group of people in the storage industry said, .'Hey, we're not getting paid.enough for what we proyide. Pay attention to us, FERC. Do something about this. And in our'lumbenng way,over 18 months br so. we.did.? She said thiese and "all the other changes that are going to happen havecome about because somebody advocated for,them."LaFleur noted that the recent increase iri the number.of preliminary'permit and license requests for new,small-capacity hydropower projects, hydrokinetic projects and 'pumped storage projects .was being drivenprimarily by'stste renewable energystand^hydro;to qualify." ' "Think Tanks to Propose New Structure for Renewables IncentivesA proposal from'the Breakthrough' Institute; Brookings Institution arid World Resburces Institute for adjustingfederal support for renewables was to, bereleased today, the Wall Street Joumai reported. The plan, whichwas backed by several key^ Repubiican Javymakers and busproposed "targeted and temporary"incentives that decline as wih'cl, solar arid other techriblogies mature.'The'plan couid gain RepyWican;support for proposing to limit iriqentives while also getting,Democraticbacking by seeking to increase research and developmerit'spending..McKie Campbell, Republican staff, director ori the Senate Energy arid Natural ResourMs'CbmmittTO. was quoted as saying: "It's clearly againstour national iriterest tp engage in Ipng-temn subsidies where the moment you pull the subsidy" an industryfails in the marketplace.. In 2011, the American Energy Iriribvatibn Council made a similar proposal for.limited, targeted subsidies. ' "' *' "U.S. Electricity BusiriessPSEG CEO Ralph luo Describes 56.7 Billion In Planned InvestmentsPublic Service Enterprise Group .CEp Ralph Izzp said at the company's annual shareholders meeting thatPSEG wbuld invest $6.7 billibn iri irifrastrijcturearid other "projects;with.three-quarters ofthe investment togo to the utility portion of the.companyi Public.Service Electric & Gasf^the Newark StarXedger reported.Izzo was quoted as saying: "We are pursuirig a $6.7 v billlbri Investment prbgram- one that is creatingthousands of jobs and bolstering New Jersey's ecbribrriy. Utilities'can be important allies iri addressing arange of pressing societatneeds -- for economic growth, good jobs, a healthy environment arid thrivingcomrriunities." Izzp said PSEG'planned to,spend $3:5 billipn on transmission projects to help improvereliability, and lowercosts for custpmers, $307 million'ori energy efficiency improvement projects for lowincomehouseholds and $700 million on solar energy projects:NEI: Nuclear Plant Operators Met New Safety Equipment DeadlineThe Nuclear Energy Institute has found that operators of aii U.S. nudear power plants met the March SIdeadline for ordering a variety, of backup, readilydeplpyable safety equipment toi use during "extremeevents," Governrrient;Security News reported. The pbrtable equipment would be used if other safetystrategies were compromised and,wasi an essential CTmporieht:bf the industry's "flexible arid diverse" (FLEX)strategy developed after the disaster at Japan's Fukushima Daiichi nuciear power piant. NEI Senior VP andChief Nuclear Officer Tony Pietrangelo was quoted; as saying:-The nuclear industry is responding to.thelessons learned from Fukushirria with adioris that provide the greatest safety^ beriefrt.in the quickest arnouritof time. Procurement of this equipment strengthens everyTadlity's ability to respond to arid mitigate theimpact of extreme events, rip matter what causes them."NEI noted that the new equipment induded diesel-driveri pumps,\airrdrrveri piiimps fbr flood iequipment,sump pumps, hoses; electric generators; battery; chargers, electrical switchgear, fittings, cables, fire trucks,satellite communicatioris'gear arid support materials for ernergericy responders:AEP Files $1.17 Billion Upgrade Proposal for Cook Nuclear PlantAmencan Electric Power subsidiary Indiana Michigan Power said it has filed a $1; 1 /-billion proposal with theIndiana Utility Regulatory Commissibri to upgrade the"2,ld0-MW Donald C; Cook Nudear Plant. PowerEngineering magazine reported. The Life Cycle Management Project; with work; scheduled to be.performedduring regularly scheduled refueling outages, would keep the plant going for.the duration of its extendedoperating license. Federarauthorities extended the original 40-year licenses.for Cook unitsi l and 2 in 2005 'for 20 yeare.until'20W, and 203^ * rFiret Solar Scales Back Operations as Industry Shakeout Continues;First Solar said it will cut its work force by about SO.percent,^shut down!its'solar panel factory, in Germanyand curtail production at its Malaysian fadlities to adjust to what it called "deteriorating market conditions inLEGPGNDIROOI 457

Europe," the Wall Street Journal reported today. Cpmpahy chairman and iriterinvCEO Mike Aheam'said "theEuropean market has deteriorated to the extent that our pperations there are no ibngsr economically,sustainable, and maintaining those pperations is hot in the best Idng-termJnterest of our Stakeholders.*'First Solar planned to shift its focus from Europe to other regions; and seek to develop large-scale.solarrather than rooftop splW.-Cpmpahy spokesman Ted Meyer said large-scale projects were "the most costeffectiveway to integrate solar to the grid." Recurrent Energy.CEO Arno Harris noted the continuation of the 1theme of solar companies cutting outpiut as European subsidies decline Wd,Chinese manufacturers floo^ "the marfcet; the New Ybric Times reported. Harris comment^: "In order to stay atthe leading edge of theindustry, there's a degree'of creative destaictioh that has to go ori to make sure'that your manufacturingcosts.are competitive and you're focused on the right markets and the right place In'the value chairi." 'Energy Infrastructure & Supply. . , J -,, .Watchdogs Still Concerned About Resumption of Offshore ExplorationFormer Florida Gov; Bob Graham, the;fonner co-chaimiari dVa s^'ciai presidential panei studying the.aftermath ofthe 2010 BPoi|rig'expJ6sion ; and spill intheGulifof Mexicoi'has Issued areport sharplycriticizing Congress for its "lack of action," the New York Times reported today.. Graham was quoted assaying'; "Two years have passe'd sirice the explosion oh the Deeprater Horizon killed '11 wbikers, ahdCongress has yet to enact one.piece of legislation ib;#alw diillih'gâfer." .Wrbte; the^TlmesiiThe' group saidthat the Interior pepartment had imposed rievystandards for rig safety, 1 well design; blowout preventers.andspill response, but that the hew systems had hot been adequately tested and the regulatory changes had notbeen written into law."; And while the cbmmission recomnierided highly'detailed and specific environmentalimpact studies, the report said; those remain inadequate."The Obama administratioh is moving toward reistarting exploratory drilling this summer.The report notes that"critical research remains incpm'p|ete'and spiirrespprise plans have yet to be tested." The panel's membersdid riot recbriimend a mpratpnum on Arctic drilling, but'said that an;icy and remote environment presentedu*nique"ch , a!ieriges,.accordjh^commissibri formallydisbanded in March 2011,'shortly after it issued its final report on the causes'of the BP disaster and rtsrecpmrnendatipns for improving offshore drilling safety. But the seven members reconstituted themselves asan unofficial watchdog group known as Oil'Spifl Cbmriiissibri;A'ctibnVlriteând issue periodic progress reports."Former EPA Administraitbr William K. Reilly. the otfier co-chairman of the now de^ National Commissionon the Deepwater Horizori Oil Spilfarid Offshore Driilirig, has alsbcoritiriued as ari uribffidai monitor. Long acritic pf the safety culture on offshore platforms, the -Times noted^that he has "applauded the industiy forfollowing the^cbriimiKlori'sVrgirig to foim a Mfety intitule, headed by a respected Shell drilling engineer,.Charlie Williams'; but said that it should be separated from its current home at the Americah PetroleumInstitute, the industry's Ibbbying arm.";Reiily was quoted as saying; 'The industry grade would have.beenhigher, but over last year there were three significant spills; accidents in China, off Brazil and in the NorthSea. That does suggest that although we see a serious effort on the part of companies to respond to ourcriticism that there.was:a systemic prbblerh iri lhdustry'i nevertheless these three accidents occurred'at three:major; dompanies:" " "' •Heliatek Develops Lightweight, Flexible, Organic Solar PanelsGerman startup Heliatek hasdeyeloped a'riew kind of solar panel consisting of small, organic moleculesdeposited ori polyester films, technology Review reported. They.are being commonly referred to as "tintedwindows." The lightweighti .flexible panels have more versatility than cbnyehtiorial solar panels and could beintegrated into concrete.building facades orused to makewiridoWs for cars: .A key innovation, for Heliatek was'the use of "short riiblecules called blig'omers instead of polymers..Oiigomers.are inherently more"stable; arid can be^depbsited using a yacuum-depbsitibn prbcess that allows,for predse control over the thickness and uriifbrmjty of the^sulting films.That uniformity increaseseffidency, and rriakes it easy to make^riiultilayer solar cells tiiat contjain rhateriaJs tuned.to particularwavelengths of light—making the cells'everi "more efficient." Heliatek solar panels convert 8- percerit bf theenergy in light into electricity,.compared with polymer solar panels at 3 percent to'5 percent efficiency arid.conventional alico'n solar'panels, which are 10 percerit to 15 percent effident:Heliatek CEpThibaud de Sifeguiilon said the paneis perforriied well in.low.light and high heat, making up fortheir tow.effidericy/ S6guiljon'said tests irVSingappre showed Heliatek panels produangmpre'electricity thanconventional silicbri solar panels over the course bf aTmphth: Heliatek,has been funded by Bosch, BASF andothers, and has raised $37 miliion sp far. The compariy said it hoped to raise another $79 miliibri, part ofwhic^ wpuld be used'to build a 75-MW factory;International Affairs,Brits^Lbpk to Ease' Fracking Concerns Wth New Gowmment Policies6LEGPGNDIR001458

The British government has put in place new restrictions on shaje.gas fracking procedures in the northernreaches"of England^fpllowing cpncems that the practice has led to "two eaiih tremors" last year, the WallStreet Joumai reported today. A government report stated that "ddseir seismic monitbririg will be needed of.the hydraulic fracturing process; which extracts natural gas frorn shale rock using a pressurized mixture ofwater and chemicals, [ but any risk to the public or water-supplies from ope rations".could be acceptablymitigated. The government infomiation stated: "Tlie earthquake actfvity was caused by "dire'ct fluid injectioninto an adjacent fault zone during the treatments. ..causing (theTauKJ to'fail repeatedly in a series ofsmallearthquakes."Dayid^cl^y.'chiefêntlfic.a^sorto the U.K. pepartment of Eriergy and Climate Charige, was quoted assaying: "If shale gas is to be part of toe U.K.'s energy mix we need to.have.a.good.understanding of itspotential erivirorimental impacts and what can be done' to. mitigate those impacts:? Cuadriila Resources,which holds the shale; license.êstimates that its license'oh th'e Bowlan'd shale'ih the hbrtHem county ofLancashire could contain 200 trillipn cubic feet ofnaturalgas. Evenîf only 13 percent ofthis can becommercially produced it'would equal the remaining gas reserves in the UK: North Sea,'according togovernment data.Emerging Nations to Lead Growth of Power Plant Services Industry

will unilaterally or immediately.solve our energy challenges; To demand that sets an impossibly high bar thatno resource or regulation can ever reach. Instead we should see AN WR for,what it can provide in terms ofenergy, jobs, revenue and security."Fossil Fuel Costs Too High; Says Rocky Mountain Institute ChairAmbry B: Lbvins, chair arid chief scientist of Rocky Mburitain Institute and senrorauthbr of "Reinventing Rre:Bold Business Solutions for the New.Enefgy. Era^ wrbte.:iri an'article'published in the joumai Foreign Affairsthat the direct and hidden costs of using fossil fuelsô'produce electridty have reached the,point wherefinding ways of red

Baker, John P.From:Sent:To:Subject:Werigefi.Holly Tbursday, /^pril 26; 20i2'4:54' PMBaker; John D.RE: Notice of Speciar Board Meeting Teleconferenqe on Monday, April 30 at 10:15 a.rn.John, two topics will be covered during the call, arid Bill thinks the meeting will conclude by 11:00. Sb, while it wiil berelatively short, I don't think we'll be dbne in 15 minutes; I'm sorry for this inconvenience.-Original Message-Redacted - Personal Info.From: Baker, John D.Sent: Thursday, April 26,2012 4:38 PM 'To: Wenger, HollySubject: RE: Notice of Special Board Meeting Teleconference on Monday, April 30 at 10:15 a.m.Holly,, I have another conference cali; h where 1 am Chair, at• 10:30. Should I try to get it pushed back or will bur meeting bequick? /. " J " *-r-Original Message:From: Hensley, Pam [mailto:pam.hensley(gpgnmaii;com] On Behalf Of Wenger, HollySent: Thursday, April 26,2012 4:26 PMTo: Baker, John D.;Redacted - Personal Info.Redacted - Personal Info.Redacted-Personal Info.'Carlos'A: Saladrigas';Redacted - Personal Info.Cc: Mitchell-Henderson; Trudie;Redacted - Personal Info.Redacted - Personal Info.Johnson; Debra; Bagwell, Lavonda; Holton,PeggySubject: Notice of Special Board MeetingTeleconference.on Monday, April" 30 at i0:i5.a.m.Board Members,iAttached is a meeting notice from John McArthur regarding a Special Board kfleetihg teleconference to.be held ori^Monday, April 30 at 10:15 a.m.To join the call, dialRedacted - Personal Info.Regards,HollyX: V-LEGPGNDIR001461

JchaH-McAHhii!£icccut;vc,Vici! PrcsidcnL GuieralCaunsd Hfiri Corpcrata SecrerayApril 26,2012BOARD OF DIRECTORSPROGRESS ENERGY, INC.A special meeting of the Board of Directors of Progress Energy, Inc; will be held byteleconference on Monday. April 30, at 10:15 a.m. to discuss items relatedto the merger..To join the call, dialRedacted - Personal Info.Advance materials will be sent pri Friday, April 27.Please call if you have any questions.Sincerely,JRM/phAttachmentsc: Mr. William D. JohnsonMr. Mark F. MulhemPragrow Sioruy; Inc.Raieigh,NC 27802r> S19546L 91S.S46.524STIALLEGPGNDIR001462

Mitchell-Henderson, TrudieFrom:Sent:To:Hensley, Pam -on behalf of Wenger,Holly Tuesday, May 29, 2012 3:03 PMlaker, 3phn,D.; r Redacted-Personal Info.Redacted - Personal Info.Cc:Subject:Redacted - Personal Info.'Carlos A. Saiadrigas';'Carlos Saladrigas';Redacted - Personal Info.Hensley, Pam; Mitchell-Henderson, Trudiej;Redacted - Personal Info.Redacted - Personal Info.'Carlisle, Kimberly A.'; 'JeanieGeoghegan'Responses Needed for NRG RequestBoard Members,Nuclear Regulatpry- Affairs is preparing a response, to an NRC request for aForeign Ownership Control or Influence (FOCI) determination. Thisdetermination is necessary so that certain individuals carv have access tonational security information. In order to complete, the .response, we needeach, officer, director, executive and senior management official to answerthe following, three questions:,1,. Are you a US citizen?2. Do you hold any position with or serve as; a .consultarit for ,ahyforeign person?3. Do you: hold or- have ypu applied for any security clearances from afederal, agency or department such as >. NRC, DOE, DOD, :F'BI, etc?In order to respond to the NRC request in a timely, manner, please send meyour responses tP these questions as soon as possible.Regards,HollyLEGPGNDIR001484

Mitchell-Henderson, TrudieFrom:Sent:-To:Subject:Wenger, Holly Tuesday, June 05, 2012 10:04 AMMitchell-Henderson, TrudieRE: MEETINGS IN LATE JUNETrudie, we wiil not dose the merger transaction thts.month, so I do not believe Mr. Bakerwili need to participate inDuke's June meeting. I suspect Progress,will haye at least .one special board rn'eetirig:by teleconference once we getcloser to a closing, or in the event we determine that we will not close. Unfortunately,,! have no idea at this.time whenthat call would be. If we do close the first of July, then I anticipate Duke willihaye a special board meeting, and Mr.Baker should get notice.of that meeting from Duke (or.through me on behalf of buke). Again, though, until we.knowwhen the closing will be, vye will not know when the special meeting will be.If we do not close the merger, then Progress will have its regularly scheduled meeting on July IO 1 !!.I hope this helps.HollyFrom: Mitcheit-Heridersdri, TrudieSent: Tuesday, June 05, 2012 9:56 AMTo: Wenger, HollySubject: MEETINGS IN LATE JUNERedacted - Personal Info.Holly, do you have any info on'the Duke meeting later this month ?Just trying to get my calendar straight ...ThankslPLEASE NOTE OUR NEW STREET ADDRESS AS SHOWN BELOWfe^ Trudie Mitchell HendersonExecutive Assistant to^••y'A A Edward L. ; Baker,,ciimn Emeritus,arid John D/,Baker. II, Executive ChmnPATRIOT TRANSPORTATION HOLDING, INC.Redacted - Personal Info.LEGPGNDIR001485

User Application :: Folders •Page 1 of 1EirtratEntelligence "Messaging ServerUser ApplicationLogged In:Redacted - Persona! Info.Home Compose Folders My AccountHelpFoldersView FolderView MessageReply • Reply AII Forward \ Delete Move To. .From:"Johnson, Bill" 0.12 of 12^To:"A. C. Toillson-Jr; w Redacted - Personal Info.CarlosSaladrigasRedacted - Personal Info."Charles W. Pryor _ Redacted - Personal Info."E. Marie McKee* Redacted - Personal Info. "Harris E. DeLoach, Jr."Redacted - Personal Info."James . Hyler, Jr." I Redacted - Personal Info.E. Bostic, Jn"Redacted - Personal Info."John D. Baker, ir"JamesRedacted - Personal Info. I, "John H. Muliin. lir Redacted - Personal Info."Melquiades R. Martinez" Redacted - Personal Info."Robert W. Jones"Steven JonesCc:Subject:Date:Redacted - Personal Info.Redacted - Personal Info.Update (ConfidentialjFriday, June 08 r 2012 4:43:24 PM"Theresa M.. Stone" | Redacted - Personal Info^ | "W;Aa you.know, today ia the day we aaked FERC to rule on our mitigation plan. They.areunder no legal compunction to cdo so, . but ;our prior; orders' have come.'on . or near ourrequested dates. They have also come, late In the day, typically,well after the marketsclose and well into the;evening. .That potential exists today; if so, I will let youknow quickly of the .qutcome.. The order "also might be delayed a day :or two,-, whichjinitself should, not be 1 a concern; i-will be back-to-you soon. ••• •Bill'EltfHJSt'Securadsecure:pro^^-energy.conVwebmail/do/FoIder^^\TIAL LEGPG 486

User Application::: folders Page 1 of 1EntrustEntelligence"Messaging ServerUser ApplicationLogged In:Redacted - Personal Info.HelpHome Compose Folders My AccountStandard Folders23 Inbox©Sent©TrashFoldersView FolderView. MessageReply | |.:Reply AlL| ? Forward J [, Delete | |, MoveTo.. "From:"Johnson, Bill" •6>llof 120To:"A. C. Tollison, Jr.- Redacted - Personal Info. CarlosSaladrigas Redacted - Personal Info. , "Charles W. Pryor" Redacted - Personal Info."E. Marie McKee'''| Redacted - Personal info. |, "Harris E. DeLoach, Jr."Redacted - Personal Info. "James g. Hyler, Jr." Redacted - Personal Info."JamesE. Bostic, Jn" Redacted - Personal Info. "Jphn-D. Baker, II"Redacted - Personal Info. I, "John H. Mullin, III" Redacted - Personal Info.''Melquiades R. Martinez" f Redacted - Personal Info. ]> "Robert W. Jones rRedacted - Personal Info.'Theresa M. Stone" Redacted - Personal Info. "W.Steven JonesRedacted - Personal Info.Cc:Subject:Date:Orders from FERC (Confidential)Friday, June 08, 2012 9:29:59 PMWithin the last hour, we received two orders from FERC-an "Order-Accepting RevisedCompliance Filing^ and an, "Order "oh' Joint^DispatcH and join't Cpen-Access, TransmissionTariff Filing" ( the IJDA/QATT),. The word "accepting^ la a good one in this context;FERC has-.approyed the ^tigation- plan and; the JDA and OATT fiiings. Both orders conewith various conditions, Iclarificatwill take us severalhours to, fully digest; [abqut-.'iqp^pages;,of - heayily footnoted; ordersj'T but-our initialreview leads to the belief that-we wiil' cioise''this merger on July '1 as. planned andwithout any neaningful-changes to the plan qr ; the economics''.' Our partners will have tocome'to the. same conclusion,' of 'cours'e, biit the orders ori first read leave no wigglerbdra.He will send a more complete analysis over the next day or so.' The orders', are public atthe same/time we; get them," so.iiqth we and Dulie^ Have issued holding'statements' about ,reading the ôrders b'eforei we respond, etc. We'have a. ccmimunication plan we will execute:~ ""^Tl next ! several daysvEntrustbeen a long time coming; and I am not'ready to call it.done quite yet. But theSecuredorders are good> and we- should be; pleased with 'the result's. I appreciate your, patiencearid support over the,past many months, and we will-work to get this, done qijickiy : andcorrectly;. Aa an: aside, at Duke's ciqiiirig price' today and the excHahge 'ratibi 'the PGNconversion pci'ce •is.':S60 Ḷ 50. When we ;annbunced the merger we were at about-$44.50. Thisvalueis not all'related to the merger, but a good;, por tion of i t is;secure^progressTenergy,IAL7/25/2012LEGPGNDIR001487

William D; JohnsonChBirtnan, Pmtdont'. .and Chief Executive OfficerJune 10,2012ConfidentialBOARD OF DIREGTORSPROGRESS ENERGY, INC.fhis letter is to fdllow up on my note from Friday.evening. The Duke and Progresslegal teams have complete a morerevised market power mitigation plan, Joint Dispatch Agreement (JDA) and joint Open-Access Transmission Tariff (OATT). This analysis confirms our initial positiveassessment: FERC has.approved the merger without significant changes or.unacceptableconditions.Many of FERC's changes tothe mitigation plan were administrative, such asstrengthening the role of the independent market monitor and changing the gas indexused to pricethe interim mitigation power sales. While FERC did amend portions oftheJDA, we believe that the changes should hot trouble the North Carolina and SouthCarolina consumer advocates or utilities commissioners. Most importantly, the changesto.the JDA do not limit the jurisdiction of the North C^lina Utilities Commission(NCUC) over "native-load" wholesale customer priority.The orders do require that Duke.Energy,Carolinas and Progress Energy Carolinascomplete the seven transmission midgation projects within three yeare r^ period oftime we estimated in our mitigation plan filing. Our transmission planners remainconfident about this 'deadline. Should construction slip beyohd three^years, however,FERC willi require ât the interim mitigation power sales continue until the projects arecomplete. For the transmission projects that require cooperation with Dominion andAEP, the orders jnstrucVus to enter into binding agreements that will governconstruction of those projects. As you may recall, the companies have Memorandums ofUnderstanding in place with Dominion and AEP regarding these projects.. We will workto qiiibkiy negotiate the full agreements;In addition to these transmission-related requirements, there are a number of conditionsin the orders that involve the continuedi oversight of Pptom^ Economics, theindependent market monitor. The conditions include a robust reporting process toensure that we are executingfthe interim mitigation power sales and miking goodprogress ontransmission construction.iP.O.SoxISSI'Rer(rioh,'NC 27602.-l>9ie,54fl,MS3F>91*M8,3210CONFIDENTIALLEGPGNDIR001488

Board of DirectorsJunel0,2012FERG has instructed the companies to make a compliarice filing within 15 .clays, givingnotice that we will accept the Commission's conditions. Also within 15 days, we mustsubmit the transmission constmction contracls with Dominion arid AEP. While the,timing is certairily tight to negotiate full roris^ction'agyw wewillwork to comply with FERCs request.Diike and Progress have;agreed to issue the attached press release tomorrow momingbefore markets open. The press release states that tfiecompanies will make the: requiredcompliance filingswith$ERC within 15 days and reaffirms July 1 as the target mergerclose date. We.have already received significant media coverage of tfieseorders,.ofwhich I've attached a sample.Obviously, I am pieced by this news.; It is clear thert FERG ruled on the strong merits ofour filings.However; we have important woik-.in 'fr6nt.6f.us , 'in the.coming weeks tosecure finalmergef^felated orders in the;Carolirias andto prepare forîntegration ofthetwo companies oh"July 1. Our next'steps are below.South CarolinaAs you know, wc fiied a supplemental commitment letter with the SC PSC in Maywhich.addressed the revised mitigation plan, the North Carolina settlement agreement,and our cbnimitihentto delivering ori South Garolina's portion of the[$650 million ofguaranteed fuel adjoint dispatch sayings: Inteiyenor^stimo^letter isdue tomorrow. Oh Wednesday; the SC PSC will vote on whether an Additional hearingis needed to address the topics in the commitment letter. If the Commissidn votesaffirmatively, that hearing will be held on June 20 and Sasha Weintraub, the named vicepresident over the merged comp^y\s Fuels and System Optimization department, willbe the only witness for Duke and Progress.We.believe that the'SC PSC chose a possible hearing date of June 20 to .allow time for afinal vote on the merger to take place June 27. If so, having an additional mergerhearing in South Carolina should not interiere with obtaining an order before July 1.North Carolina. ^To datCi the NCUC has riotlaid out a specific procedural calendar as the SC PSC has.However, due to the supplemental settlement agreement wc have in place with theNCUC Public Staff, oiir view is that the NCUC will issue a procedural order very,quickly next week/Because FERC did make sonie mirior changes to our filings,.theNCUC may request that the companies fileadditional testimony explaining ithe changes:It is unclear whether intervenors wiil have an opportunity to file rebutlaltestimony, andif so, how lonjg that period would be. In any event, we bejieye that the NCUC iscommitted to acting quickly to ; issue a finalmerger order.IALLEGPGNDIR001489

Board of Directbrs June 10,2012IntegrationNext week,'Paul&Sims and her Duke counterpart (A.R.Mullinax) will provideihstructiori and direction to the Duke and Progress implementation leads regardingintegration next steps. Many of our employees will be working hard ^ we acceleratepreparations for "Day One" integration: I ant Confident that the planning teams are wellprepared to execute pn all Day One requirementsand launch smoothly into the hewDuke Energy.+**Please let me know if you have any questions or comments about anything. I will keep,you informed of developments on these topics in the days and weeks ahead.'Siricereiy,,WDJ:djAttachriientsTIALLEGPGNDIR001490

Draft Press Release—to be released at 8:00 a.m. tomorrow, June 11Duke Energy and Progress Energy Consider FERC's ConditionalMerger Orders' Positive DevelopmentsCHARLOTTE AND RALEIGH N.G..- Duke.Energy and Progress Energy consider the June 8conditional orders by the Federal Energy Regulatory Cbmmissiori (FERC) to be a positivedevelopment in enablihg^the companies to "clbse their proposed;mefger by the targeted date ofJulyl.The companies have substantially completed their evaluation bf the orders' conditions andexpect to make a compliance filing with the FERC within 15 days, as requested by FERC. Theywill also work to secure final merger-related approvais from the North Carolina UtilitiesCommission (NCUC) and Public Servlce Commlssion of South'Carolina (PSCSC) as quickfy aspossible. The companies are continuing to target a July 1 closing date."We are pleased that the FERC has conditionally approved the merger, our Joint DispatchAgreement and joint Open Access Transmission Tariff," said;Jim Rogers', chaimian, presidentand CEO of Duke Energyr^We will quickly.complete the evaluation of the conditions in the.orders while working to ; obtain the remaining regulatory approvals to close the merger onJuly I;""Receiving FERCs conditional orders last Friday is a major milestone for this transaction," saidJohnson, chairman, presideritand CEO of Progress Energy.. "Both companies will restart theintegration planning efforts necessary to complete this transaction by Jiily 1 and begin todeliver thesubstantial benefits ofthe merger-to customers and.shareholders.as soon aspossible."Remaining schedule to approve the mergerTo date, the companies have received merger-reiated approvals from, or met the requirementsof, the U.S. Department of Justice under the Hart-Scott-Rodino Act, U.S. Nuciear RegulatoryCommission, Federal Communications Conimissiph. Kentucky Public Service^Commission, andthe shareholders of both companies.LEGPGNDIR00149i

The NCUC is required to approve the merger and the Joint Dispatch Agreement. The PSCSCmust also approve the Joint Dispatch Agreement. Both commissions are expected to determinetheir schedules for consideririg the merger-related dockets soph;While the companies continue to target a July 1 dosing date, the timing is dependent onreceiving the remaining state regulatory approvals and submitting additional compliance filingswith the FERG. In addition,, the consummation df the merger is contingent on satisfying all theconditions to the meiger according to the terms of thie merger agreement.LEGPGNDIR001492

N.G. regulators pressed'to riile'on ProgressrDiike mergerRaleigh'News & Observer and Charlotte Observer - by John Murawski,Sunday, June 10,2012The merger between Progress Energy and Diike Energy has one final hurdle to clear: The N.C.Utilities Commission.The state commission is a wild card in the pending merge^thaf has dragged put for 18 months offilings, protests and reviews. The N.C. commissioners would issue a ruling on the $26 billionutility merger within weeks - if they play by rules requested by the merger participants.N;C-. Utilities Gommission Chairman Edward Finley Jr. said such an accelerated schedule ispossible but not guaranteed."It's been lingering for many,montfis, arid there are a lot of people onthe edge - whether they'llbe working, or who they'd be working fd^ of if they have a job;" Eiriley said Saturday; "So it'sto the advantage of all concierned to brinjg it to a conclusion as quickly as possible:"Raleigh-based Progress and Gharlotte-bascd Duke have reached agreements with environmentalgroups, industriai power users, rural electric cooperatives, municipal power agencies and thePublic. Staff, as the state's consumer protection bureau in utility ratecases is called. All those,groups, representing yirtuaily every electricity customer, in North Carolina, negotiated promisesand sweeteners in exchange;for a guarantee that they will not oppose the deal;None of those private settlements, howe ver, was binding on the Federal Energy RegulatoryCommission, the Washington pane! that late Friday approved the third iteration of the merger.The commissiori added more than a dozeiyconditiohand willlikely accept.The two companies hope to get the deal done by July 1 but have said,they need to close it by July8. That's the date their legal agreement expires and they can walk away,from the.deal withoutpaying hundreds of millions of dollars in penalties.Dealing with states-i .Like the federal commission, the N.C. Utilities Cbmmission is an independent body not beholdento other regulatorsor to the;state interests that have blessed the deal. ;In : other states, mergers thatgot a pass at the federal level have been tripped up by state commissions demanding rate cuts forcustomers, employee protections against layoffs, and other social safeguards.In this state, elected officials have remained conspicuously silent on the merger, creatingvirtuaiiy no political pressure on:'a dealthat willTesult in the elimination of 1,860 jobs over threeyears and the dismantlinjg of Progress^ Energy's corporate headquarters: in downtown Raleigh.1'* •LEGPGNDIR001493

The deal also requires approyai fromSouth Carolina regulators, who'are reviewingone aspect ofthe merger.calied'the joint dispatch "agreement."We've been pursuing parallel tracks with the state commissions because we know there wouldbe a compressed revievy schedule," Progress sppkesmaii. Mikc Hughes said:James McLawhom^ director of the Public Staff s Electric Division, said^ everything is ready forthe N.C. commission to make a decision."We set everything up so tKaiif die FERG did nile by Friday, Ae Commissioh could have ahearing or whatever other proceeding; we're going to have in North Carolina," McLawhom said."I don't see anything that would throw a major monkey wrench in those.plans."Delay still possibleIf the N.C. commission imposed additiorial cphdkioh^the Progress-Duke merger could be in for iriore delays, and ruling promptly would likelypreclude iriiposing isignificant coriditions;The'companies hail expected to close the.deal last December and are now six months behind theoriginal schedule. They have already^revised the date oftheir termination agreement after itexpired in January; and if four.more weeks pass they would have to revise the date again.The merger coriditions imposed by the federal regulators largely cover reporting and timingissues related to.steps Progress and Duke have agreed to take to address monopoly concerns.Hughes said the companies.are reviewing the conditions "to ensure that .we're capable of moving;forward with them and that they don't have implications for what we've promised on the statelevel;''Robert Gruber, director of the PUblic'Staff, said.thecompanies have madeastrong case for theriierger's.beriefits, guaranteeing to pass on tb customers $650 million in fuel savings and sparecustoriiers from paying up tOT$450,million iri merger-related costs.the last round;of filings -was made May 8, and the utilities commission has all the irifoririatidnneeded to decide, Gruber said;"We'll take the time that is necessary " said Finley, the commissibn chairman .^There's plenty todo."'Charlotte Observer staffwriter April Bethea contributedit-1NJIALLEGPGNDIR001494

Ruling clears road to Duke Energy-Progress Energy mergerCharlotte Busiriess Journal by John DowneySaturday, June 9,2012Federal regulators have approved the latest plan to protect wholesale competition followingDuke Energy's proposed $26 billion purchase of Progress Energy/clearing the largest hurdleremaining for Ihe deal.The Federal Energy Regulatojy Commission ^lirig, issued after the markets closed Friday, doesplace some additiorial conditions on the merger.But none .those conditions are likely to give thepower cpmpanies pause, or to causeôbjectiqns fromstate regulators in the Carolinas who mustyet make their own final rulings on the deal.Charlotte-based Duke (NYSEiDUK) put out a release saying it is "pleased that FERC has issuedall merger-related orders within the time frame requestedby the coihpanies." It did notimmediately say the companies would accept the new^conditions. "We are assessing the ordersand will Cornplete our'arialysis as quicldyâs possible."FERC has given Duke arid Prpgress 15:days to decide whether to accept the conditions in theruling.Little doubtStill, the Duke release left little doubt about the ultimate outcome. "We-will work to secure finalmerger-related approvals from the (NiC. Utilities Commission^ arid (S.C. Public ServiceGomiriissipn) in the weeks ahead so that we can move forward with.delivering on the significantbenefits ofthe merger to our customers," the release says:So the ruling should payeithejvay for final approval before the July 8 expiratibh ofthe rnergeragreement. Duke and Progress already have made •agreements with thestate customer advocatesin the two Carolinas on jbinfproppsals to the state commissions for approval ofthe merger. Thecoirimissions do not have to accept the agreements; but it seems unlikely.at this point that.eitherwill try to block the;merger.The biggest fear was that FERC would ulturiately force Duke arid Progress to participate in aregional transmission'organization in order to get the deal approved.-All sides knewCsuch arequirement would certainly be rejected by state regulators, which would have to give tipsignificant regulatoryauthority to FERC imder such a condition.Squarely rejectedA relatively obscure analyst caused a stir in late May, reporting the FERC .staff decided such acondition would be the only acceptable measure to address the competitive'eoncems.LEGPGNDIR001495

Thomas Ghaanpibn of T. Champion Consulting, writing for iButier Financial, contended theFERC staff was not persuaded by the Duke and Progress filing:"FERC commissioners are hearing from staff that only RTO membership will cure Duke'smarket power problem/'he wrote in a May 22 report. "And^staffthinks the Commission^/justlet 'em merge days' are over." : ' .But the federal commission ûarely ôrganization was the only possible solution.that joining a regional transmission"The commission declines to require applicants'to join an RTQ, " FERC writes in its order. "The.Commission explained that pbssiblemitigation proposals could include, but were not limited to,forming or joining an RTQ/' ". 1 *That removed the chief potential obstacle to state approval pf the deal after FERC acted.Nation's largest - *The post-merger Duke will be the nation's biggest regîatedutility by most measures. Thecompany will be based in Charlotte.About 1,860 jobs will be eliminated in the merger, most through;attrition and ayoluntaiyseverance package offered by the two companies. Eyen with the.positioris eliminated, thecompany will have.about.27,060 employees in six states.Competition threatenedThe road to Friday's ruling was difficult at times. Diike and Progress proposed ;the merger inJariuary 2011 arid had hoped to close the deal before the end of last year.They applied in April 2011 for FERC approval of the deal. But in September, FERC ruled thatthe merger cpuld eliminate wholesale cpmpetitiori in specific;Carolinas markets during certainsummer, and winter months.,The commission tentativelyâpproved the deal, but withheld final approval until the companiesproposed effective measures to protect competition. Duke arid Progress rriade a secorid filing inOctober, offering thervirtual divestiture" of power rpIant capacity toprotecVcompetition.Plan rejectedThe commission swatted down that proposal in December, findingit vague arid insufficient Thecompanies made a new proposal iri-March.They offeredto build about $ 110 million worth of new to lines and infrastructure tomake it easier for competitors to offer power for-sale in the;CaroIinas wholesale markets.;LEGPGNDIR001496

It wiil take about thrce years to build that new capacity. In the interim, the.companies offered aclearer and more binding Version of the virtual divestiture that had been rejected in December.The cpmpanies have made firm commitments to sell 700 megawatts ofcapacity to three power:traders under strict.conditions that require Duke and Prpgress to sell the power under mostcircumstances. The power, will often be sold at a-loss'to^the utilities, which could.total $40million to $50 milHbnâccprding'tb thcicompanies- estimates.New conditionsCritics objected, contending Duke and^Progress had made-ho true epinmitment to build the newtransmission infrastructure and saying the companies had left room to wriggle out of the powersales. But FERC declared itself generally satisfied, whi le ad^ a few coriditions to make surethe cbmpahies kept to the plan;"This order accepts the March 26 compliance filing and the... power sales agreements subject to(the compariies) revising'their "mitigation proposaPas described," FERC wrote Friday.Some of the additiorial coriditions were suggested byDuke and Progress , themselves. FERC willrequire the,companies to build a small additional transmission cbnriectipri the companies hadproposed if FERC found the seven principal projects insufficient to address all its competitiveconcerns. And FERC took the companies upon their offer to expand the role of a third-partymoriitbr hired to make sure the power sales and new transmission construction proceeds aspromised.Proof requiredThe federal commission added sbme conditions..,It will require that Duke and Progress agree riot..to negotiate power sales that allow them to immediateiy buy back the power they have sold. Thatis to ensure control of that power truly passes out of their hands;It also will require Duke-and Prpgress to file proof diat it has compieted contracts with ArnericanElectric Power and Dominion Virata*Power for the transmission.projects that require theiriyolvemerit of those, companies.FERC also imposed rripre stringent reporting requirementsforthe cornpanies on the progress ofthe power sales;and the transmission construction.LEGPG NDIR001497

Federal regulators approve Duke-Progress merger with minor conditionsRaleigh News & Observer - by. John MurawskiSaturday, June 9,2012After twice rejecting 7 a proposed merger between Progress Energy and Duke Energy, federalregulators on Friday conditionally approved ttie;$26 billion deal tliat will result in sweeping jobcuts in North Carolina arid create the natiori's largest electric utility.The approval means the utiliticsrcxecutiyes can proceed with their roôfateintegration plans,which include eliminating l.SÔ jobs pvef ^ree yem and dismahtlmg Progress* downtown'Raleigh headquarters as;the companies consolidate'in ChwlotoThe Federal Energy Regulatory Gommission issued its ruling Friday;evening, saying that themerger, as revised, would not have an adverse effect on competition. But the commissionimposed more than a dozen additional conditions on the merger,and has given the utilities 15days to indicate whether they will acccpUhe conditions and move aliead-with their merger, orreject the conditions and walk away from the;deal.The companies are analyzing the order buf saidjthey yvill proceed with'getting die mergerapproved in the coming weeks" by state reguiators in North Garqliha and South Carolina.Progress and Duke have set July l.as theirârgetTqr completing the merger and are reviewing,the federal order to^ determine whether it might cdmpH reviews; "The federal agency's conditions largely^coyer the latest round of revisi6ns;the companies haveproposed to address federal regulatorS' mpnoppiy concerns: The conditions cover specifics,notifications and monitoring reiatedto the revisions.Progress CEO Bill Johnson is to run the combined Duke Energy out of Charlotte. Duke GEO JimRogers will be the.company's chaimian.The selling point ofthe megadeafwas the significant sayingsit.will generate - more than $1billion for residential and .business customers in the Carolinas - even though utility executives-warned that customer bills will be;increasing as corporate operating costs climb; Both Progressand Duke have said they plan to fi le for rate increases this year, spelling the end of decades oflow power bills that^ were weH below the national average. " - •. . „ = , > . r j* . JThe merger wili create an energy, coriglomerate throughout the Western Hemisphere .with 7.1million electricity/customers arid operations^ in a dozen U;S. states. The combined Duke Energy.would sell power in the'South and Midwest own hydroelectric operations in Central and SouthAmerica, and wind farms iri^the'-westem United States. ••In Raleigh, the merger approval will bring to ari end Progress Energy's 103-year ;run as a standalonecompany that achieved Fortune 500 status and;that had a long tradition in supporting thearts and other local causes.C^Rp^TIALLEGPGNDIR001498

The merger included promises to continue Progress' phijahthrbpic tradition and to maintain asignificant presence in Raleigh as die home base of Duke Energy'^subsidiary, which willcontinue operating as Progress Energy.Even after the merger is complete, Duke and Progress customers will cbiitiniue paying differentrates to two respectiyecompanies for a period likely to be years.State approvalThe companies will npw fpcus on completing Aeir/merger by July 1, leaving less than a monthto win approval from state regulators in Nofdi Carolina and South Garplina. While the mergerhas the backing of leading^consumer advocates and environmental organizations in both states,the utilities commissions are independent agencies and can impose their own requirementson themerger, such as rate freezesinonprofit donatioiw and greeii ienergy commitmerits..;Past mergers in other states have gotten snagged at the state commission level after meeting therequirements of federal regulators,-eyenthough at ttiistime'there is little indication here that themerger is a divisive and! controversial political' issue., i . . . .State consumer advocates have already aigreed hot to fight the merger in iexchange for promisesnot to charge residential and business customers here for merger-related costs. As part of thatpromise, Progress and Duke will absorb newly a quarter of a billiori doliars iri expectedseverance payments to laid-pff and departing employees, rather than chairging those expenses tocustomers.Monopoly concernsThe deal was* first announced in January 2011 , and the uUlity. executives expected it to close lastDecember. Biit if has beeri held up by FERC in Washington, which raised concerns that thecorporate union would give the companies tod much nnonopoly power in.North Carolina andencourage them to manipulate wholesale electricity prices; Those rejections forced Duke andProgress to revisetheir merger plan three tirries.in an effort to appeiase regulators.The proposal the commission approved Friday calls -for Progress and Diike to invest about $110million in transmission line upgrades to make it easier for competing utilities to sell wholesale>electricity in this state. ,The upgrades would help clear transmission bottlenecks between North Caroiina and itsneighbors, Virginia aridSbuth Caroiiria..The conditions imposed by federal regulators'latest ruling require that proppsed transmissionupgrades be compieted by^June 1,2015, and that withinT 5 : days,the conipanies provide thecommission with binding agreements needed to complete the transmission projects.IALLEGPGNDIR001499

The conditions require ajso that the companies^ submit regular status updates on the transmissionprojects, and that wholesale customere are^riot charged for these projects.Duke merger wins fed approval$26B union of Progress Energy and Duke Energy would create largest U.S. utility, based inCharlotteCharlotte Observer - by Bruce Henderson and Ely PortilloSaturdays June 09,2012Duke Energy and Progress Energy won cpnditibrial federal approyai Friday night for a $26billion merger that would create the country's largest utility, with 7:1 millioh customers in sixstates, based in Charlotte.The ruling fronithe Federal Energy Regulatory Commission carries a dozen minor conditions,and the electricity companies have two weeks to decide whether to accept them. FERC ruled thatthe merger, which'it had rejectedtwice previously, "will not have an adverse effect on.competition."The deal would likely resultin more than 1,800 job cuts, though the companies have said theyexpect the size of Gh^lotte's.wprkforce to remain the sanie or increase as the city absorbsProgress employees transferrihg from Raleigh. Duke employs more than 5,600 in Charlotte.Duke spokesman Tom Williams said late Friday that the company was still reviewing the FERCruling, which was issued just after 8 p.m."We are assessing the qrders ahd will completepur analysis.'as quickly^ as possiblei" Williamssaid. He said Duke is evaluating the FERC ruling "so that we CM move forward with deliveringon êsighificarit benefits; of Ac merger fo'purcustomers"A Progress spokesman said Friday-night that his company is also analyzing the order.Thefederalagency'srfinal conditiphsproposed to address federal, fe^lators' m^notifications and monitoring related to the revisions/companiesTlie conditiphs coyer specifics,FERC had imposed a number of conditions on the utilities'^latest plan to boost marketcompetition for wholesalepower. Most ofthose conditions dealt withsales of power to^ third,parties during the two to three years it's expected to take to complete transmission upgrades thatwould permanently ease competition concerns.The ruling ends eight months of wrangling between the utilities and FERC, whose approval hadbeen expected by last December. Duke and Prpgress were instead forced to extend their deadlineLEGPGNDIROOI 500

for closing the deal to July $; : which leaves them a month to win apprbvai from utilitiescpmmissioris in the Carolinas.Duke employees around Charlotte were leaming the news late Friday, An employee who wishedto remain anonymous because he was not authorized to speak publicly said he was reHeved.thecloud of uncertainty aboutthe merger is beginning to lift.In a message to Duke employees'Friday night,- Duke chief legal officer Marc Manly said thecompanies were pleased'that FERC issued its rulirig by theirrequested deadline - Friday. 'Thecompanies will communicate additiorial informatibn to employees;after evaluating, the Order,"Manly said. ' '1,860 jobs to be eliminated •But still in limbo,are the 1,860 jobs the companies expect to eliminate over three years throughbuyouts, redrern^ agreed to vacate one of its twotowers in downtownRaleigh.,Duke employs 18,250 in the Carolinas, Indiana, Kentucky and X)hio. Progress Has 11,000employees in the Carolinas and Florida.Under the rnerger, Diike GEO J im Rogers would becoirie executive chaimian of the combinedcompariy,.Pr6gress GEO ; Bill Johnson would be the new Duke's chief executive. Of its top 13officers, seven would come from Duke and six from Progress.The first sign of trouble with'^the federaf agency came Sept. 30. FERC approved the merger onlyif the companies addressed its --'significant concerns'* overa resulting loss of competition forwholesale power in the Carolinas. Wholesale power^ customers includexity-owried electricalutilities, such as those in New'Bem and Rocky Mount, which argued against the merger tennisDuke and Progress offered. ,In December, FERG again rejected the compariies' plan. They were going to boost competitionby offering some power for sale. Diike arid Progress tried a third time, subriiittihg a new planoffering to upgrade transmission structures to fimnel power from competitors into the Carolinas.They would sell power urider contract to eriergy brokers until the upgrades are finished.In trying to answer FERC's concerns, Duke and Progress had to craft'merger terms that wouldn'tshift costs to retail customere. They still need final approva) of the merger;from the N.C. UtilitiesCommission and ofthe joint operating agreement atits heart from South Garolina's PublicService Commission.The companies have estimated scverance costs at $220 million to $230.million, and in Mayagreed riot to recoyer the North Carolina share: of those costs from customers in this state.(NFIDENTIAL LEGPGNDIROOI 501

Ofthe 1,153 employees who applied for a buyout last November, 487 work for Duke and 666 forAbout 368 positions are vacant, leaving 339 jobs to be cut'The companies believe most of thosecan be eliminated by retirements and voluntary departures.Early on, the companies won support'of consumer-advocacy agencies for both states byguaranteeing $650 million in savings; fibni lower fuel and operating costs, to be reflected incustomer bills over five years.Customers supposed to saveRecently, the companies said it might take more than five years.to achieve those savi ngs if theybum less coal than expected: An updatedâgrecmient with the Public Staff, North Carolina'scustomer.advocates, allows Diike and Progress,an extra 18 months;While the merger has the backing of consumer advocates and environmental organizations ihboth states, the utilities commissions can impose their own requirements^ such as rate freezes,nonprofit donations andgreen energy commitments.Past mergers in other states have gotten shagged at the state commission level after meeting therequiremehts of federal regulators, even though at this time there is little indication here that themerger is a divisive and controversial political issue.The companies also agreed not to recoverfrom N.C; retailcustpmers for at least fiveyears the$110 million it plans tp pspend on transmission upgrades as part of its answer to FERCcompetition concerns. They also wouldn't bill customers for the expected $40 million to $50miliion in costs over three years related to short-term power sales, and would reduce rates by $70miilionover that peripd tpcompensate forjost power^ plant .capacity from those sales.South Carolina's cbhsumei* agency, the Office of Regulatory' Staff, supported the amendedagreement. \NTIAL LEGPGNDIROOI 502

Page 1 of 2Entrust r , B %YZli lEntelliqence Blligence Messaging Server^ -WfiiJCi, User Application t*; f^[UiRedacted - Personal Info.f Help l^ SigrfOdt!;»mm •••••Standard Foldariia Inbox©Trash^Replys- ^BepIyJftB^ ^^Qrwmlli feQeMa^ |- Moy8ATd.fej :I' 1^ 5Ite;Redacted - Personal Info l|^yJS^êQl3.0rgS I Redaaed • Personal info. ||îWheelerlRedacted - Personal Info.•;'c6ucfrr~~"I • n £ u « i ; o i l i it I Redacted - Personal Info.Redacted - Personal Info.liiKimf Carlisle^Redacted - Personal Info..35 JaV>li«„*•Al.-'f!•I;mCongratulations, this is-' a hard fought and great' win.-: '-OriginaJ. Hftsaagi--'-—'From: "Jotinson, Bill" Sent: June 10, 2012 3:47:42 =PM" HDTTo: "A. C. Tolligon, jr.-" \ Redacted• Personal Info. Jr.. Cflflnii fljilndrio^sRedacted - Personal Info. ]; "Charles W. -Prvor" [Redaaed - Personal lnfo.|"E. Maria HcKee".|Redaaed - Personal Info.| ." H 5^' : _ i . s _, 5j r g?^*^', i r A"- H 1 Redaaed- Personal Info. 1'^ *p&S2^J^^ ., pCO^fiSB^qALhttps://pghsecLh'e.prpgress-energy.LEGPGNDIR0015037/23/2012

Page 2 of 21'•illHyler, Jr. "• -jRedaded - Personaiinfo. |, "James E.-Bostic, Jr.." I Redacted r Personal Info. |l"John D. Baker, II" | RpHartPrt - Porsnnal Infn | 1 T n ^ ^ H" , — I J ;^"-, 11^Redarted-Personal Info. I "Halcruiades fl. Hartinei* i . R^rtPH• Ppr.nnAl Infn LjlEobart W.Jones" ^ Rpffartprl - Pfwin^l Infn I, .TThereea H. :StonialRedacted • Personal Info.) TW;Stoven Jones- Redacted - Personal Info.—Cc: Cindy MattInal Intr an Wheeler f=il Infrj^nntn neooheo^n|Redacted Pers Info ILX Terry Uouclt 2cRprlartpri - Ppr^nnai mmJ Trudie Mit^hfll Henderson I RpHartpri PP "iri al Infn ISubject: RE; latter to Board o£ Directors (Confidential) (Re FERC Order ]Entrustsee Attachtd lette' iron Bill John onSecured Debra JohnsonAdniniatrative Asai tart to Willlam D JohnsonChairman, Presider tProgress Energy, 1PEB 1224 (919) 54( 3561 8-770 3561 Voicenetdebra. johnsonepghmail compimlite•an? ?ir:cps.//pgnsecure.progress-eriergy.LEGPGNDIR0015047/23/2012

^ Progress EnergyWilliam D. JohnsonChairman, Presidentend Chief Executive OfficerJune 12,2012BOARD OF DIRECTORSPROGRESS ENERGY, INC.ConfidentialThis letter is to update you on investor reaction to the merger-related FERC orders wereceived last Friday, and a fewother topics.Investor CoverageInvestor coverage ofthe FERC orders has been positive. I have attached a representativesampling of analyst reportsthat were issued following our joint press releasewith Dukeyesterday moming. TTie reportsgenerally express high confidence in a successful mergerclose, that the question is no longer "whether" it will close but "when." Pointing to theconstructive regulatoiy environment in the Carolinas, the reports predict swift mergerrelatedapprovals from the North Carolina Utilities Commission (NCUC) and the SouthCarolina Public Service Commission (SC PSC). The majority of analysts believe the mergerwill close by our target date of July 1. Views continue to rangeon the level of synergiesrequired to support our earnings growth target of 4-6%, and whether the merged companycan deliver on that targetProgress Energy stock closed at $59.60 yesterday, up $1.47, or 2.5%, for the day. Ourregulated peer group was down 0.27% for the day and the Dow Jones Industrial Averagewas down 1.14%. Duke's stock closed yesterday at $22.98, down $0.08 or 0.17%. The arbspread between our stocks decreased to 0.7%, down from4.0% on June 8, reflecting marketconfidence in a successful close. Trading volumes were up for both companies with 9million shares trading forProgress and 30 million shares for Duke.Regulatorv UpdateLater today, Duke and Progress will file a revisedJoint Dispatch Agreement (JDA) with theNCUC, updated to reflectthe changes imposed by FERC. We will request that the NCUCwaive a required30-day advance notice period and allow us to move forward with therequired FERC compliance filings (due by June 25). We expect the waiver to be granted.Last night, the NCUC issued an order establishing the remainingprocedural schedule forour merger-related dockets. By Wednesday, the companies and the Public Staff of theNCUC must file additional testimony addressing the FERC orders. In the testimony, wewill explain FERC's changes to the market power mitigation plan and the JDA, which weremostly administrative in nature. Intervenor comments regarding this additional testimonyare due next Monday, June 18. We will file rebuttal testimony on Tuesday, June 19, andP.O. BoxISSIRaleigh, NC 27602T> 919.548.6463F> 918.546.3210CONFipENTiALLEGPGNDIR001505

Board ofDircctors June 12,2012• ithen the record under this proceeding will be complete. It is possible that the NGUC willschedule an additional hearing on the revisedJDA and the FERC market power mitigationplan; Regardless, we believe this procedural calendar allows enough time for the NCUC toissue final merger-related orders by the end of June to support our target merger close dateof Julyl.In South Carolina, intervenor testimony regarding our supplemental testimony was due 'yesterday. Central Electric Power Cooperative filed testimony with the SC PSC supportingthe merger. The Office of Regulatory Staff also filed a letter of support, recommending thatan additional hearing is not necessary. There were no jntervenor comments opposing themerger. Tomorrow the SC PSC will vote on whether to hold an additional hearing, and ifso, that hearing will be held on June* 20. As with North Carolina, we continue to believe weare on track to obtain final approval of the JDA in time to close on July 1.***Please let me know if you have any questions or comments about anything I will keep youinformed of these and other topics in the weeks ahead.Sincerely,"3^WDJ:djAttachmentLEGPGNDIROOI 506

Analyst Response Summary(re: FERC's Orders dated June 8, 2012)Bemsteln Research "DUK: FERC Condrtldnally Approves Duke's Market Powsr Mitigation Plan,Clearing the Way for Merger with Progress" (6/11/12)• On Friday, June 8, the = Federal Energy Regulatory Commission (FERC) conditionallyapproved.the market power mitigation plan filed on March 26,2012, by Duke Energy andProgress Energy in connection r witK their proposed merger. FERC also approved the JointDispatchi_ Agreement that will govern the dispatch of-the two cornpanies' combined generationfleets, and the companies'joint Open Access Transmission Tariff.• the changes made by FERC to the market power mitigation plan^do not/ in our view, imposean unreasonable burden on Prpgress or Duke, and we expect the two companies to acceptthem. With one exception, moreover, the conditions do not appear difficutt to implement.r Our one concern is FERC's requirement.that Duke and Progress execute within 15 daysthe binding agreements with AEP and Dominiori Virginia Rower needed to construct thetransmission expansion projects required under the market power mitigation plan. Wenote, however, that memoranda of understanding outlining these agreements are already inplace and that drafts of the agreements have been prepared.• Provided Duke and Progress meet the FERC's remaining conditions with respect to themarket power mitigation plan, FERC's approval clears one of the few remaining hurdles fbrtheir merger to'close by July a* when the merger agreement expires.• The merger must still be approved by the North Carolina Utility Commission (NCUC). On May8th, however, the companies announced a settlement wfth.the NCUC staff which makes clearthat the costs of complying with the companies' market power, mitigation plan will not berecoverable from ratepayers in North C'arolina. Specifically, the settlement calls fbr the twocompanies td'(>) absorb -$225 million in cost increases arising from the market power mitigationplan approved by FERC and (ii) achieve $650 million of generation cost savings over the next sixand a half years.Baird Equity Research "DUK/PGN Merger Gets Final FERC Approval; Closing Likely July"(6/11/12) 5• FERC merger approval likely transitions investors' focus from If merger will be complete to When.Therefore, we expect PGN's stock will move close to merger partner, DUK, and we have modifiedour price target to $60. .• Maintain Neutral rating. In the long term, we believe the proposed combination with DUK shouldenhance total retum potential by improving earned returns and expanding infrastructureinvestment opportunities. We expect FERC's merger approval will pave the way earty to mid-Julyfora merger closing. .• Valuation. Our new 12-month price target of $60 is 14.7X the consensus 2014 EPS estimate formerger partner DUK. Post merger, we expect the new DUK will trade in line with large-cap highlyregulated electric utility peers that currently trade at 14.5x-16.0x 2014 EPS estimates.• Constructive regulatory environments in states with significant regulated operations help mitigatepotential risk from accelerated infrastructure investment needs. If approved, we believe themerger likely improves earned regulated margins and therefore should provide an upward bias for1 1an appropriate price targetii'Credit Suisse Equity Research "Duke Energy - Raising to Outperform" (6/11/12)ENTIAL LEGPGNDIROOI 507

• We think near-visibility (finally) to a merged DUK-PGN offers ah attractive vehicle for large capRegulated Utility exposure offering competitive EPS growth potential at'4-6% (with lowand ofsynergies), a good dividend 1 yield at 4.3%, a highly regulated business mix at 86% of earningsthat dilutes legacy concerns about Duke's International /.OH generation exposure, and ~1.0x P/E1 1multiple discount that translates into an annualized rate of retum oMO 1 %. -• The FERC languageîn the Order) appears manageable and the July 8 deadline beat-able.• Stock response: Even as we upgrade, we'could see DUK down and PGN up as the current arbspread compressed from $2.35 to^Hi (our risk-art desk's view).• Wejhink the consolidated DUK makes sense and would take advantage of weakness to add tothe name- ~ * , ^• We are riot upgrading PGN as downside risk if deal somehow fails is too great versus the arbspread upside." " " ~Credit Suisse's thesis for DUK:"'• ;Consolidated JEJ^S growth looks supportable at 4-6% assuming Duke hits the low end of $300-420"MM of pre-tax synergies (in 2014), putting growth in-line with high quality large caps SO and1D while better than ED. '• . '• Strong 4.3% v dividend yield is 20-40 i bp higher than large cap peers.• Valuation l3 : attractive versus peers on our preliminary pro-forma 2014 EPS estimate at 14.8x vs15.7x for largejcap peers, translating into an annualized rate of return of 10^1% pro-forma which'we.view as compelling. • _ ,• Raising DUK to Outperform with a $25.50_target using our rate of retum frameworic.The UBS Power & Utilities Team "Off to the Races" (6/11/12)1i - • — i 1• FERC approves merger with Progress EnergyNorth Carolinamusfstill rule but an existing merger settlement between the state and thecompanies suggests approval has'fewhurdjes. South Carol ina needs to approve thejointdispatch agreement, but riot trie transaction itself We believe the deal will dose on or aroundJuly,!. J : -; : ' .T' , j _• Fundamentals and value creation -Key issues: (1) achieve organic growth expectations of 4-6%; (2) drive non-fuel O&M merger ~savings to the bottom'line [5% cuts, or about $300MM, means deal is EPS neutral; 10% is $0.10a sharî'accretive, by our calculations]; (3)'deliverEdwardsport Jrid'Crystal River without furtherfinancial consequence; and, (4) | reducejfegulatory lag and execute on pending rate petitions• What "are the financial considerations? ~ i — nPGN wilj receive 2.6125 sharespf DUK for every share held. Just priorto completing the 'trarisacOon.'DUK wi[l implemenfa ,1:3 reverse split (resulting In a new exchange ratio of 0.87083).PGN's current dividend'of $2.48/sha"re will be increased by approximately 5.3% to bring itjn linewith DUK's cunenfdividend of $1"Q0/share per annum. All dividends for DUK and PGN arecurrent at their foil standalone Quarterty rates. i "r _ ~ -- _• M&A - - what are the industry implications? - L ; -ThepUK/PGN^dealâves^the wayfofmcremental consolidation and provides a methodology fordoing so. Industry fragmentation remains moist prevalent in the West upper Midwest"a~nd CentralPlains suggesting these regioriscould be ripe for consolidation. However, the low-premium, . ~f environment, the inability to recover mergerpremiums, and th'e nurnber of new "C suite leaders• suggests'M&A'win be'done at'a measured pace. , \ - ^ -• Valuation - Raising Duke target to $25; Maintain Buy and Key CallNew target reflectsrecent Industry P/E expansion; maintain 15% relative premium P/E. For PGN,we are raising our target to $60.50, or up $2 per share, reflecting the merger exchange ratebased on Friday's closing prices. We believe the merger arb spread of 3.9%ror $2.34 a share willtighten materially when the shares resume trading on Monday.IDENTIAL LEGPGNDIROOI 508

ISI "With FERC Approval The DUK Deal Will Likely Close; Raising Rating To Hold" (6/10/12)• We now believe the merger will close and ; are raising our rating from Sell to Hold. Our target pricehas-been raised to reflect our 12 "monthftarget pricefor.trie shares of Duke Energy multiplied by. _the; exchange ratkTdf 2.6125 DUK shares foreach PGN "share. , ••• The NCUC musfapproye the merger on thestate level, markingthe last required regulatoryacton for the transaction to become effective onor before July £r. Because the final FERC order- approved th^mitigation plan largely as filed we bejieve it'fadlitatesâpprqval by NC regulators.Because it does not "appear to layer in additionaf material condrtioris that reduce the expectedbenefits "of the deal for shareholders we"now thjnk ithighly unlikely that Duke will invoke the"burdensome effects'! clause in the merger agreement to tenninate the transaction.BMO Capital Maricet "FERC approves DUK/PGN Merger" (6/11/12)r • We regard Ff ERC's decision as a positive, moving the transaction one step closer tofruition. We expect the^North Carolina commission to issue its approval shortly, such thatthe merger could'close'b'y July^l, 2012' v ' .• We'reiterate our MARKET PERFORM ratings ori DUK and PGN.Deutsche Bank - Equity Research - North America "Merger mitigation plan approved; FERCtweaks appear to be modest" j6/11/12)• Commitments look manageable to us; awaiting DUK/PGN response. . ,• We continue to favor, DUK over other large cap, go-to safety names. While we remain generallyuncomfortable recommend ing higher-vajue larger-cap regulated names (DUK, ED, SO) at currentpremiums^we recognize that these go-tb safety narnes may have further relative gains in today'suncertain macro and'low interest rate environment) As discussed in our.industry note on Friday(Regulated valuations;revisited), for those who are in "hide under the desk' mode trwe prefer DUKover ED and SO given less downside versus others on a fundamental value basis. We also seei a favoraBle risk/reward around the"ongoing PGN merger,- if th'edeal still breaks (much less likelynow with Frida/s FERC approval) DUK may.trade.up on"technicals; if it closes investors can lookforward to a' better. chance~of DUK earning its allowed retum levefin the Carolinas. „RBC Capital Markets "FERC Approves Merger with Conditions" (6/11/12)• We believe the modifications are relatively minor and expect the companies to accept thenmodifications. • i i- 1. t; ';. > " ,,• We do not believe the modifications in the FERC order are significant enough that will causeadverse delays in the'state approval processes. _ , i" .; ! 1J ~ k I •.' - -. _ '• " IGoldman Sachs "FERC approves DUK/PGN merger w'rth modest conditions" (6/10/12)' --' - :'• , '_'' ..i• The FERC approval comes by the requested date proposed by DUK and PGN,• State approvals from^N 1 Carolina and S Carolina remainLnecessary - although intervenors in theCarolinas previously/reached settlements, wrth DUK and PGN regarding customer savings and -other key items, and " „ •«i - , >1• Dockets and final state regulatory reviews will take place over the coming month. Âs previously detailed in notes published since; the; early 2011 merged announcement, and despitesynergy savings outlined by the companies, we viewed the merger as slightly dilutive for DUK unless thecombined companies cari"realize greater-than-expected savings.IDENTIALLEGPGNDIR001509

Duke Energy, Progress Energy speed merger work after FERC onierCharlotte Business Joumai by John DowneyMonday, June 11,2012Duke Energy and Progress Energy have stepped up their integration efforts, having decided toaccept a federal ruling that sets additional conditions on their proposed $26 billion merger.The companies say they have "substantially completed" their reviewand expert to respondbyJune 23 with a filing accepting the merger order issued by the Federal Energy RegulatoryCommission on Friday night.~ i"Receiving the FERC's conditional orders... is a major milestone for this transaction," saysProgress Chief Executive Bill Johnson; who is slated to ranthe combined business after themerger. 'Both companies have accelerated the integration planning efforts necessary to completethis transaction." , iJuly 1 targetDuke CEO Jim Rogers says the companies will quickly complete their evaluation oftheconditions in FERC's order while working to obtain the remainingregulatory approvals to closethe merger on July 1.Rogers notes FERC also approved the power companies' plan to run the power-plant fleetsoftheirCarolinas utilities — which will remain separate utilities for sometime — as a single unit.And it approved wholesale transmission tariffs for the combined company. FERC had declinedto approve those merger-related itenis while it waited for Duke and Progress to proposeacceptable mâns for protecting wholesale competition after the merger. FERC had rejected twoproposals as insufficient to protect that competition. On March 26, the companies made theproposal FERC has now accepted, with the additional conditions.Protecting competition[- _'If the companies can meet FERG's requirements by June 23, the federal regulators will approvethe merger. The conditions are designed to protect wholesale competition in tlie Carolinas. Thecommission ruled in September that the merger could throttle wholesale competition in someCarolinas markets during specific winter and summer months, jThe N.C. Utilities Commission must yet approve the'merger and the S.C. Public ServiceCommission must still approve thejoint dispatch agreement. That agreement is afthe heart of$650 million iif fiiel and related savings the companies have guaranteed for retail customers overthe next six-and-a-half years. *The power companies have worked with the state customer advocates in the Carolinas to craftproposed settlements that call on the state commissions to approve the matters before them.TIAL LEGPGNDIROOI 510

State schedulesDukes Scott of the S.C. Office of Regulatory Staff, that state's customer-advocate office, says hedoes not see anything in the FERC order that would require his staff to renegotiate any of thoseagreemerits."I have not had a chance to talk to the entire staff yet," he says. iC But we reviewed the orders overthe weekend and I do not sec anything like that and I don't expect to find anything when wecomplete the full review."The S.C. commission has set a proposed schedule for consideration that should allow it to act byJuly 1 on the merger issue it must address. That includes the possibility of a hearing on June 20,if the commission feels it is needed: The commission already has held one hearing on theproposal.The N.C. commission has not set a schedule' for consideration, despite a request for one fromthecommission's public staff, which is the N.C. customer advocate. The commission did encourageall parties to the merger issue in North Carolina — both in favor and opposed—to be preparedfor swift filings after the FERC issues are settled.That should happen within two weeks. The companies can accept the FERC order before the 15-day deadline if they are satisfied with the conditions and can meet the all the agency'srequiremehts.'North Carolina will try to move swiftly on Duke Energy-Progress EnergymergerCharlotte Business Joumai by John DowneyMonday, June 11,2012 'North Carolina regulatorsappear unlikely to call a new hearing on Duke Energy's $26 billionpurchase of ProgressÊnergy unless merger opponents can establish good reason why one isnecessary. -Eliminating a second hearing in the case would greatly increase the chances the N.C. UtilitiesCommissidn could rule onthe merger by the July 1 target date set by the power companies.The merger agreement between Duke md Progress expires Juty 8. The deal could — and verylikely would — go forward even if the deadline passed by a few days. But Duke and Progress areboth eager to complete the deal be done before that date.The commission held hearings on the merger last fall. But the Federal Energy RegulatoryCommission imposed additional conditions on Duke and Progress to protect competition inCarolinas' wholesale power markets. Those requirements,now settled, will impose additionalcosts of about $230 million on the power companies. But they have agreed to bear almost allthose costs themselves, ratherthan pass them on to ratepayers.IALLEGPGNDIR001511

Order comingSam Watson, general counsel for the commission, says a procedural order will be issued latertoday or tomorrow laying out an expedited schedule for consideration ofthe merger. It will allowmerger opponents an opportunity to'object to the latest version ofthe merger agreement and willgive the commission time to consider.the issue.He declines to say whether a second hearing would be proposed in the schedule. But it seemsclear the commission will not propose one itself.Gisele Rankin, of the Public Staff of the N.C. Utilities Commission, says Duke and Progress mayneed to tweak some wording in a settlement made with the staff to win its support for the deal.But she says she sees nb serious obstacles and believes the staff, the state's customer advocate,can settle any outstanding questions in a few days.Commission decisionRankin expects the commission order to ask the companies and the staff to affirm that thesettlement agreement covers all remaining issues.The commission then will give merger opponents and supporters involved in the proceedings achance tb file written comments. And it will ask the companies and the staff to respond to anyquestions. ,The filings could all be in hand by June 22, Rankin says. Then it would be up to the commissionto decide how to proceed."It is my understanding that the commission does not intend to hold a second hearing unlesssomebody asks for one and gives a good reason for it," she says.V -South Carolina already has announced a schedule for its proceedings to approve part of themerger. The schedule there is clearly aimed at producing a decision by early July, if that isspossible. ! •

The FERC issued a similar type of decision last year, saying "yes" to the merger, but requiring aset of conditions that would ensure the combined company wouldn't exercise undue influenceover the power markets in the Carolinas. Afterwards, the commission rejectedtwo marketmitigationplans the companies filed. ^The companies need to be able to meet the conditions ofthe FERC decision and get the approvalof regulators in North Carolina and South Carolina."We are pleased that the FERC has conditionally approved the merger, dur Joint DispatchAgreement and Joint Open Access Transmission Tariff," Jim Rogers, Duke's chairman, presidentand chief executive said in a statement. "We will quickly complete the evaluation of theconditions in the orders while working to obtain the remainingregulatory approvals to close themerger on July 1." , - _^ =Shares of Duke were up 0.4%, at $23.16. " !Duke and Progress said they-would file documents that the FERC Lrequested to comply with thedecision in the next 15 days. ? TTie FERC "gave the companies 60 days in which to explain howthey will implement die required changes. 7Among several conditions, the FERC prohibited the companies from selling their mostexpensiveenergy only to new customers, while reserving^their less- expensive energy' forexisting customers. Hie FERC also directed the companies tb explain in more detail how the twocompanies will share in cost savings from jointly owning their facilities.Duke, which serves customers in the Carolinas, Indiana, Ohio and Kentucky, also operateswholesale power and renewable-energybusiness and has international operations in Brazil andelsewhere.Duke/Progress: merger order "doable"Charlotte Observer by Bruce' Henderson6-11-12Duke Eriergy and Progress Eriergy call the conditional approval of their merger, issued byfederal regulators late Friday, a "positive development" toward closing the $26 billion deal byJulyl. " - ... A ^The Federal Eneigy Regulatory Commission approved the merger but, 1 as it has twice before,attached conditions r the utiiities must agree to. The conditions are relatedto companycommitments to quel FERC's concerns about the merger unduly concentrating thejwholesalepower market in the Carolinas.;Duke and Progress said Monday they have mostly completed their review of the FERC ordersand expect to make a compliance filing, as the commission asked, within 15 days."It's certainly our intent to meet the conditions," said Duke spokesman Tom Williams. "Wethink they're all doable."The companies still have a number of issues to resolve, he said.LEGPGNDIR001513

Among them arc negotiating rate-making jurisdiction issues with state and federal authorities,especially regarding the cost of transmission upgrades Duke and Progress have agreed to make.They also have to reachbinding agreements with two other utilities, AEP and Dominion VirginiaPower, to make those upgrades.iUtility analysts at Bernstein Research said the FERC conditions "do not, in our view, impose anunreasonable burden on Progress or Diike." Bernstein noted that memoranda of understandingwith AEP and Dominion are already in place."We think we can close the deal by July 1," Williams said.The companies still need final approval fromCarolinas utilities commissions. The utilities havewon broad support fromcustomer groups on their home tur£ suggesting the state commissionsaren't likely tb block the merger. •"Both companies have accelerated the integration planning efforts necessaiy to complete thistransaction by July 1 and begin to deliver the substantial benefits of the'merger as soon aspossible," Progress CEO Bill Johnson said in a statement.Progress-Duke accept conditions placed on merger by federal regulatorsRaleigh News & Observer by John Murawski6rll-12 "Progress Energy arid Duke Energy said Monday moming they expect to comply with a slew ofconditions federal, regulators set on their proposed merger and are moving quickly to completethe $26 biHion deal by their self-imposed July 1 deadline.The two North Carolina electric utilities said they have completed much of their review ofaFederal Energy Regulatory Commission order issued late Friday conditionally approving theirmerger.Tlieir announcement was widely expected after the FERC cleared the merger with more than a_ dozen conditions, many of them pertaining to the timing and disclosure of transmission upgradesarid wholesale power contracts."We anTgoing to make the required filingwithin 15 days and •effectively close it out," saidProgress spokesman Scott Sutton. "It is our intent to~ comply with the FERG conditions, but anydetails as to how will be in the filing."But the challenge for the companies now is to complete the deal in less than a month, withapprovals still pending in North Carolina and South Carolma.The companies still requireapproval fromthe N.C. Utilities Commission and an approval oftheir joint dispatch agreement fromSouth Carolma regulators.IAL LEGPGNDIROOI 514

For the merger to close out on schedule, regulatorsin both states would almost certainly have toapprove the deal as is, without requiringadditional public hearings or imposing new conditionsthat substantially change the dynamics or economics ofthe deal. " ,

PROGRESS ENERGY, INC.BOARD OF DIRECTORSJune 21,20122:30 p.m. - 3:30 p.m.Teleconference Meeting AgendaTopic2:30 p.m. — Call meetmg to orderDiscussion Leader1. Approve Minutes for April 30, 2012 and May 9, 2012 meetings2. Opening Comments Bill Johnson3. Merger Update• Regulatory approvals• Integration• Draft agenda for first New Duke board meeting4. New Duke Operating and Financing Plans5. Crystal River 3• Status update• NEIL6. Other BusinessBill Johnson/John Mc Arthur/Paula SimsBill Johnson/Mark MulhemBill Johnson/Jeff Lyash/Vinny DolanBill JohnsonExecutive sessionBill Johnson/John MullinLEGPGNDIR001516LEGPGNDIROOI 516

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Mitchell-Henderson, TrudieFrom:Sent:To:Subject:Wenger, HollyMonday, June,25, 2012 11:18 AMMitchell-Henderson r TrudieRE: MEETING DATESRedacted - Personal Info.I believe Duke will be holding a-special meeting on Sunday, Julyl at 10:00 a.m. The details of that meeting wiii becoming directly from Duke as 1 willno longer have board-re I a ted resporisibility upon closing of the merger. I will pass onhis plans to the Duke team; and I'm sure someone will reach out to youyery soon.Thanks.HollyFrom: Mitchell-Henderson, TrudieSent: Monday, June 25, 2012 11:02 AMTo: Wenger, HollySubject: MEETING DATESRedacted - Personal Info.Good morning, Holly;Mr. Baker is leaving on Thursday, June 28 th , for a vacation in South Africa. He will depart Capetown on July12 th for his return home (via a change of planes in New York).Is there anything scheduled during that time that Mr. Baker needs to be availabie (via phone) for ? If so,please provide a cajMn number.Thank you;Trudie Mitchell Henderson.Executive AssistanttoÊdward L. Bakei-, Chmn Emeritus, :and John D. Baker It,,Executive GhmnPATRIOT TRANSPORTATION HOLDING, INC.Redacted - Personal Info.CON F10E NTIALLEGRGNDIR001528

Progress EnergyWilliam D. JohnaonCharman, Presidentand Chief Executive OfficerJune 26,2012ConfidentialBOARD OF DIRECTORSPROGRESS ENERGY, INC.1 write to update you on the status of the completion of the merger. The timing is tight, but we stillhope to get the finalregulatoiy approvals this week so we can close the merger, as planned, thisSunday, July 1.FERCYesterday, Duke and Progress made a final compliance filing with the Federal Energy RegulatoiyCommission (FERC). As discussed on the board call last week, the companies did accept allconditions imposed by FERC in its June 8 order approving the revised mitigation plan. Yesterday'sfiling satisfies the FERC-related requirementsto close the merger. Accordingly, we are not waiting onany additional action by FERC.North Carolina and South CarolinaYesterday, the North Carolina Utilities Commission (NCUC) held a second merger-related hearing(see attached news article). The hearing was limited to the cross-examination of Sasha Weintraub,who will be Vice President of Fuels & System Optimization for the merged company, and Jim Hoardrepresenting the Public Staff of the NCUC. The cross-examinations were conducted by NC WasteAwareness and Reduction Network, an intervenor in the North Carolina merger proceeding. In hisremarks concluding the hearing, NCUC Chairman Finley reaffirmed the commission's intent to issue afinal order expeditiously on the merger and the Joint Dispatch Agreement (JDA). We believe theSouth Carolina Public Service Commission is prepared to approve the JDA as soon as the NCUC acts.We are optimistic that both state approvals will be issued by the end of day Friday. As a reminder,themerger agreement with Duke Energy is in effect through July 8.Please let me know if you have any questions or comments about anything. I will keep you infonnedofthe remainingregulatory approvals and the key merger closing activities scheduled for this week.Sincerely,WDJ:djAttachmentP.O. Box1551Raleigh. NC 27602T> 919.546.8463F> 919.546.3210TIAL LEGPGNDIROOI 529

State regulators expect to rule on Progress-Duke deal quicklyRaleigh News & Observer by John MurawskiTuesday, June 26,2012The state's lead utility regulatorsuggested Monday that a much-anticipated N.C. UtilitiesCommission ruling on the proposed merger between Progress Energy and Duke Energy couldcome any day. -At the 1 conclusion ofa brief public hearing in Raleigh, Commission Chairman Edward Finley Jr.said participants in the merger proceedings arc welcome to make more filingsfor the,commissioners to consider. But Finley warned that the commission could issue its mergerdecision so fast that there won't be time to make more filings."There's no guarantee the order will wait until the filings are received,"Finley said.Finley's comments capped a 56-minute hearing held to allow N.C. Waste Awareness andReduction Network to raise questions about the $26 billion utility deal that would form thenation's largest electric utility. Finley noted that the Durham group was the only one out of 26organizations participating in the merger that is still challenging it."We hope to rule as expeditiously as we can," Finley explained after the hearing ended. "We'vegot to vote and we've got to look at all the words in the order, and we haven't gotten there yet."Sounding impatient at times, Finley said that N.C. WARN failed to make a case thatcomprehensive merger hearings should be held. The hearing Monday allowed N.C. WARN toask limited questions about three filings made since May ih a merger that has produced avoluminous paper trail.The commission hearing room was filled to capacity Monday. N.C. WARN attorney JohnRunkle cross-examined Progress executive Sasha Weintraub and posed questions to JamesHoard, an accounting division head at the Public Staff, the state's consumer protection agency inutility matters.The questions were largely technical, going over the content of the filings,and took all of a halfhour. The other commissioners didn't ask any questions. The rest ofthe hearing was spent goingover procedure."We were so restrictedas to what we could put on," Runkle said afterward.CONFJOENÎALLEGPGNDIR001530

Scope of bearing narrowThe Progrcss-Duke merger was approved earlier this month by the Federal Energy RegulatoryCommission, which imposed more than a dozen conditions.Those new conditions - and their potential effect on electricity customers - were the subject ofMonday's hearing. The N.C. Utilities Commission also pennitted questions about recentmodifications to the utilities' settlement with the Public Staff, in which the companies agreed toabsorb abbut 1 $450 million in merger-related costs instead of passing those costs on to customers.This agreement is not binding on the N.C. commission, but generally Public Staff decisions carrygreat weight with the commissioners.• iN.C. WARN last year asked the N.C. commission to require the merging power companies tocontribute $270 million over 10 years to low-income energy conservation programs as acondition ofthe merger. That request is still pending, as are conditions requested by otherparties.The bulk of the merger-related issues had been previously explored by the N.C. UtilitiesCommission in three days of hearings held in Raleigh last fall. In denying requests to expand thescope ofthe hearing, the N.C. Commission said it did not want to waste time rehashing oldissues.N.C. WARN also hoped to make an issue of confidential agreements in which the two powercompanies have promised numerous organizations that the merger would not harm themfinancially. The organizations are industrial power users, rural electric cooperatives andmunicipal power agencies.Those private agreements can be reviewed by lawyers who sign non-disclosure agreements. N.C.WARN, which hasn't signed non-disclosure agreements, said the confidential side deals could beat the expense ofthe poor and the elderly.Duke spokesman Tom Williams said the private agreements contain sensitive information aboutpower contracts and other business practices.N.C. WARN has tried to argue that these private agreements should be made public, and hasfiled a freedom of information request to pry loose the documents. The N.C. UtilitiesCommission will eventually rule on this matter, Finley said, but not until after it decides on themerger. ="The Commission has carefully reviewed them," Finley said in reference to the confidentialagreements. "As they do not request action on the Commission's part, nothing in them is bindingon the Commission."The utilities have disparaged N.C. WARN's efforts as a fishing expedition and delay tactic, andFinley's comments suggested he did riot disagree.TIALLEGPGNDIR001531

N.C. Warn: Savings an illusionThe Public Staff reviewed the private agreements last year and 1 used them to structure its owndeal with the utilities, Hoard told the Commission. The Public Staffs deal, saving more'than $1billion for consumers, is publicly filed with the commission.N.C. WARN's lawyer contended that those savings are an illusion, because they largely wouldhave Been delivered anyway, even if the utilities had not promised them in writing/Thosesavings include $650 million in power plant efficiencies and fuel savings, and $22'6 million inseverance payments to be made to employees who leave"the company through early buyouts orlayoffs. •• - - •uRaleigh-based Progress and Charlotte-basediDuke said they need to complete their $26 billiondeal by July 8, the date their termination agreement expires and each could walk away withoutpaying hundreds of millions of dollarsiin penalties.(_ ,But the companies had requested a ruling"one week before their self-imposed deadline. Theywould optimally like to get their deal done by July 1, which would require a ruling fromthe N.C.commission this week.The merger would create the nation's largest electric utility by virtually every measure, includingtotal'customers, total value and powerplant generating capacity.CONROENTJALLEGPGNDIR001532

William D. JohnsonCharman, Preiidentand Chief Executrve OfficerJune 29,2012ConfldentialBOARD OF DIRECTORSPROGRESS ENERGY, INC.I am pleased to infonn you that we have now received approval of both the merger andthe Joint Dispatch Agreement (JDA) fromthe North Carolina Utilities Commission (seeattached press release fromthe NCUC). The order is more than 100 pages long, but ourinitial reviewindicates that the Commission did not make any significant changes fromwhat we proposed. Given the timing of the orders and the sequence of approvals, theSouth Carolina Public Service Commission (SCPSC) will not rule on the JDA untilMonday. As a result, we expect to close the merger transaction on Monday, July 2, at4:02 p.m.As you know, the timelinefor a July 1 closing was tight. In the end, the NCUC did notissue its order until this afternoon. The SCPSC decided to wait on voting on the JDAuntil after the NCUC had issued its approval; their rationale was that the settlement inSouth Carolma was modeled after that in North Carolina and that North Carolina shouldgo first. The South Carolina vote is scheduled for 11:30 a.m. on Monday, July 2.Assuming a South Carolma vote of approval, Duke Energy and Progress Energy willexchange finalclosing deliverables. The required filings are with the Delaware andNorth Carolina secretaries of state, and wc must provide a finalnotification of themerger to the New York Stock Exchange (NYSE) in time for a July 2 close.Wc expect that Tuesday, July 3, will be the firsttrading day post-closing. The NYSEwill not open Progress common shares for trading; instead, shares of Duke commonstock issued in the merger (reflecting the reverse stock split) will begin to trade.For those of you joining the new board, the board call scheduled for Sunday, July 1 willbe rescheduledto Monday, July 2 shortly after the market closes. Official notice will beforthcoming very soon fromGeneral Counsel Marc Manly. Sorry for the change onsuch short notice.P.O. Box 1551Raleigh, NC 27802T> 919.546.6463F> 919.546.3210C^RD^h^LLEGPGNDIR001533

Boafd of Directors June 29,2012I will infonn you Monday when we receive the JDA approval from South Carolina.We're very close to the goal line.++*Please let me know if you have any questions or comments about anything.Sincerely,II1iWDJ:dj ,i-AttachmentfONFiOENTIAL LEGPGNDIROOI 534

Page 1 of 2Standard Folders©Inbox.;» ^3 Sent©Trash•''%4j3kHe ara. wotkirig on ;an orientation program^for you (arid me) oa new •.puke)director3 to getj_Ua_yR_t, 0speed befoVe-th'e August meatihg/stratogic-retreat..- I am: olao: meeting with .Ann,CMfNKfi discuss ithi* and other .tr ana i t i on/board integration issues to-tnake 'thia -process.a«Sd (Chând helfiCul aa-possiîe: .1 will keep you informed as things develop.Please, let; trie k'hovr i f yoii hive any'questions, and I-am pleas.edtd be. jqihihg you ,on the,Duke board'.:•4AH* if*fe^g00EfnriALh ttpsl//pgnsetu re. prog ress-LEGPGNDIR0015357/23/2012

Page 2 of 2(eldinw go 00.2 prg801CDS82D 6EFA4340]CONFIDENTIAL LEGPGNDIROOI 536htfer^gnsecure.prbgressreriergy.cbm/w 7/23/2012

User Applicatipn •:: FoldersPage 1 ofiEntelligence Messaging Server User AppllcatfonLogged In:Redacted - Personal Info.Home Compose Folders My AccountHelpStandard FoldersS&inboxSent©TrashFolders,View FolderView MessageFrom:Reply All Forward . Delete - Move To..;;"Johnson, Blir TQ: "Alfred Tollison I Redacted - Personal Info. |03 of 120-Redacted - Personal Info."'CarlosRedacted - Personal Info."E. MarieMcKee| Redacted - Personal Info. 1 "Harris E. DeLoach Jr.Redacted - Personal Info.Sto ne |Redacted - Personal Info.Redaaed - Personal Info.Redacted - Personal Info.Redaaed-Personal Info.Redacted - Personal Info.Redacted - Personal Info.J'Mel MartinezF. Theresa"Cindy Watts (for beLoach)" Redacted - Personal Info.Geoghegan encryptedRedacted - Personal Info.Redacted - Personal Info.J (for Rob, Jones)'Redacted - Personal Info.3 "Kim Locev (McKeeVl Redacted - Personal Info.'Terry CouchRedacted - Personal Info.Redacted - Personal Info.tTmdle Mitchell-Henderson (AA for Baker)"Subject:,Date:Redacted - Personal Info.i9Attachment(s): image003.jp3 1.8KApprbval by South CarolinaMonday, July 02, 2012 2:13:41 PM'.The South Cafplina-vCpimRisaian unahimduary approved the Joint Dispatch: AgreemGnt^thismbrhing for a one-year tenn; as expected.' All regulatory âpprovals' have'been received,.and .the merger will close at 4:02 pim. today.Iwiil provide more infonnation in the next several.days.(cid: imageO03. jpgG6ICDS95C. E1D3EBD0 j.cure.progress-energy.co'm/webmml/do/FolderDisplay/messageDis"ALLEGPGN^Ô^Sa?

User Application ." FoldersPage 1 oflEnrnuTEntelligence^Messaging ServerUser ApplicationLogged in:Redacted - Personal Info.Home Compose Folders My AccountHelpStandard Foldirs£3 Inbox© Sent©trashFoldersView FolderView MessageReply, j [ Reply Ajl | | Forward ) [ •.Delete, | Move Tp..;. JFroni:"Johnson, Bitl" To:"Theresa Stone fRedacted - Personal Info., "'Carlos SaladrigasRedacted - Personal Info.Redacted - Personal Info. 'E.>Marie.McKee'l Redacted - Personal Info.Redacted - Personal Info.DeLoach Jr.Cc:Redacted - Personal Info.Subject:departmentDate:Redacted • Personal Info.Redacted - Personal Info.(9Attachments): ImaReOOl .pnR 2AKRedacted - Personal Info."Trudie Mitctiell-Hehdersdh;(AA for Baker)'"T'Clndy WattS (fbr DeLoactl) , n0-2 Of 120Harris E.Irifonrtiatipri from Duke Energy's Corporate CommunlcationsMonday, July 02, 2012:3:50:17 PMThis note ia to give you a heads-up that you will ;begi.n, receiving an email from^Duke;Energy* a Corporate CoMunicatiohsCDepartmerit;' each weekday morning with 'a compilation of-'riews articles. This'.is j ust one o'f several changes that will-likely .occur-as wetransition to the new Duke; Energy board.Pleaselet me know if you have any questions or-comments .about anything.EntiiftfSecuredhttps://piCONFIIecure:progress^nergy.com/webm^ 7/25/2012LEGPGNDIR001538

User Application:: Folders Page 1 of 1EntmrEntelligence" Messaging 1 ServerUser ApplicationLogged In:Redacted - Personal Info.HelpHome Compose Folders; My AccountFoldersView FolderView Message;•.Reply • . Reply AII Forward. Delete Move To...From:To:Marie McKeeRedacted - Personal Info.Stone I"Johnson, Bill" ]_"Alfred C. Tollison Jr n IRedacted - Personal Info.Redacted - Personal Info.Redacted - Personal Info.Redacted - Personal Info.Redacted - Personal Info.I .• "Harris P. HPI narh trRedacted - Personal Info. |Redacted - Personal Info.Redacted - Personal Info.Redacted - Personal Info.Redacted • Personal Info.Redacted - Personal Info.Redacted - Personal Info.Redacted - Personal Info.Cc: "Clhdy-WattS.(for DeLoach)" f Redacted-Personal Info"Geoghegan encrypted I Redacted - Personal Info. T""Terry CouchSubject:Date:Redacted - Personal Info.Redacted - Personal Info.Redacted - Personal Info.Redacted - Personal Info.Redacted - Personal Info.(for Rob Jones)"]; "Kim LOCey | Redacted - Personal Info.](for Martinez)"O-t of 12^"E., "Mel Martinez"Pryor encrypted"Trudie Mitchell-Henderson (AA.for Baker)"RE: Approyai by South CarolinaMonday, July 02, 2012 4:05:32 PM"TheresaBill,-It.'3*'noW, 4:09.done ICongratulationa to you and your team' 6n'-an historical achievement! WellFred—--Original MessagesFrom: "Johnson|. Bill"

•Baker, John D. - • . -From:Shiel, Tom Jr Sent:Tuesday, July 03, 2012 7:28 AM 'To:News in ReviewSubject: Duke Energ/News in Review 7-3-12Duke Energy News in ReviewJufy 3,2012 5Articles -News release: Duke Energy, Progress Energy Complete MergerPR Newswire, 7-3-12 - i i|Duke Energy Corporation today confirmed the cjosingipf its previously*announced merger with.Progr^s Energy Inc., effective Julyî^plZ Duke;Energy also,announced today the newlyconstituted board of directors hasjappointed Jini Rogers as''president arid chief executfveôfficer ofthe combined company, effective'immediately. Rogers will ilso maihtain his responsibilities aschairman ofJhe cbmpanyfs - board. BillJohnsph Has, resigned as president and chief .executive officer. 1of the combined company, by mutual agreement."South Carolina clears way for Duke-Progress mergerriCharlotte Observer,,7-2-121 ' ' • , .The-S.C. Public Service Commission unanimously approved a joint operating agreement Mondaythatclears the way.fpr.Duke Energy to merge with Progress Energy.Duke has plans, for three riew nuclear power plantsGreenville (S.C.).News, 7-3-12- ' ^ ~ . ' ~The new power company created by the merger,of Duke Energy and Progress Energy has planslforthree new riuclearplants — two iri theiCarolinas and one jh Florida.Kentucky; PSC approves Diike Energy efficiency programsLexington^Ky^ Herald-Leader, 7-2-12^ " =The state Public Service Commission has approved an expansion of Duke Energy Kentucky's ,•>'_energy-efficiency programs; The commission approved Duke's plan to consolidate 13 existing,programs to 10 and to introduce three new offerings. -Restoring,Power during Outages a Measured ProcessWFMY-TV, 7 2-12 .« = ; •..•'].VVe all like when things are as easy as 1-2-3,, But.wheif.it comes to getting power back, utility"'"fe 1Icompanies have dozens of steps to ! fpllow, : hundreds oif workers to coordinate and, as is the case upand down the,east coast, "millions of customers to serve. -=, * _Iri the Midwest, heaf will sizzle all week .Cincinnati Enquire/, 7-3-12 . . . , - £;Even as electric power was: restored to the Cincinnati region Monday, no relief was in sight fromjtheextremetemperafures gripping'the area^nd much»ofthe nation, fhe jasttime Cincinnati hadsuch:ahextended string of extremely high tempe'ratures was a 12- day stretch in 1999, when 18 p~eoplerdi_ecLDuke Energy celebrates birthday at shelter • -Hendricks County (lnd.)~Flyer, 7-2-12 ~' r,COI^Fl5^TiXL1LEGPGNDIROOI 540

To help celebrate its 100th birthday, Duke Energy built a new playground at Sheltering Wings, ashelter for victims of domestic violence and their dependent children.NC lawmakers OK tougher plant protest penaltiesAssbcfoted Press, 7-2-12< ' ^The Legislature hasâgreed to gire pqlice authority to charge protesters at North Carolina utility plantswith felonies if they pempt to disrupt plant operations' or T place themselves dr others at riskbf injury. •GOP-led N.C. legislature overrides three Gov. Perdue vetoes" Raleigh News Observer, f^^ji?" " ' -* - rRepublicans ended^their historic session onjMbnday with a'triple play of veto overrides, rejectingDemocratic Gov. Bev Perdue on natural'gas'exploration, capital punishment and the budget.Battle oyer'negawatt'pricing heads to court 1 „Gfeenwir|,;7-2ll2 _ ^ 'Haying failgd to^vince the "Federal' Energy RegulatoryiCommission that new "demand response" A"policiesjwould skew[electricity markets ; acrbss'the country, powerful utility industry,groups are nowdemanding a response from the courtsr ~ 'Senate confirms riew NRC chairwoman, GOP commissionerGreenwire, 7-2-12 -The Senate late Friday confirmed_Allison Macfarlane as the. new, chairwoman ofthe NuclearRegulatory Commission and KristineiSvinicki to serve a second terfh as a'Republican member oftheregulatory panel.- •ArticlesNews release: Duke Energy, Progress Energy Complete MergerPR Newswire,. 7-3-12 " " "CHARLlOTTE; NC - Duke Energy Corporation today confirmed.the closing of its previously, announced merger wittvPrbgress Energy Inc., effective July 2, 2012. ; -The new company will be known as Duke Energy and will remain; headquartered in Charlqtte. with7substantial operations in Raleigh, N.C- Duke Eriergy will trade ori .the New York Stock Exchange^ -.under the symbol DUK. ' ' " : : 1 \ 'i . . _ " =. ~, . - r =, 'In accordance with the terms-of the.merger]âgreement, Prpgress Energy Inc.^has become a.vyhojlyowned direct subsidiary of puke/Eriergy, creating the country's largestelectric utility as measured^by,eriterprisevalue, market capitalization, 1generation assets.rcustomers and numerous other cn^'riair; buke 1 Energy ateo announced today the neWly constituted board of directors has appointed: Jim!• Rogers as president arid chief executive officer ofrfhe combined company^ effective immediately^Rogers will also maintain his responsibilities asxhainmah of the company's,board. Bill Johnsqnjhas"resigned as, president and 1 chief executive officer ofthe combine~d L coiâriy M by,rTiutual.agreement.-The new Duke Energy will be betterable to serveour 7.1jmiHion customere'energy, needs ih^T^fe,reliable, affordable and increasingly "clean manner," said iRogers; chajrman; president arid chiefexecutive officer of Duke Energy.. "As'abombinedôrganization 1 , we will 1 woric to deliver, benefits to ourcustomers, create value "for our shareholders, and enhance the career opportunities'of puremployees."CONFfDENtlAL LEGPGNDIROOI 541

Rogers continued, "Over the last several months, team members from Duke Energy and ProgressEnergy worked diligently to ensure we hit the ground running today - day one. I'd also like to thankthe regulatory and legal teams that were instrumental in getting us over the finish line."I look forward to working together with the executives from Progress and all employees of thecombined company to ensure we are constantly striving to improve our levels of safety, operationalexcellence and customer satisfaction," he added. "I am committed to the successful execution of ourstrategy and am pleased to move forward as one company.""Having sen/ed as CEO of Duke and its predecessor companies for more than 23 years, Jim Rogersis well-suited to lead the integration effort and to drive our combined businesses forward," said AnnMaynard Gray, lead director of Duke Energy's board of directors. "The board of directors looksforward to working with Jim and the rest ofthe executive team to enhance our position as a utility withfinancial strength and a greater ability to meet the needs of our customers."Ms. Gray continued, "Bill Johnson has been instrumental in helping us close the mergerwithProgress Energy, and we wish him well in his future endeavors."2012 Earnings GuidanceOn a standalone basis, Duke Energy had an adjusted diluted earnings per share (EPS) guidancerange for 2012 of $1.40 to $1.45. Due to the effect ofthe 1-for-3 reverse stock split, which wascompleted in connection with this merger transaction, this guidance range is the equivalent of $4.20to $4.35 per share. The combined company continues to target a 2012 adjusted diluted EPSguidance range of $4.20 to $4.35.The new Duke Energy has approximately $49 billion in market capitalization, total assets of morethan $100 billion, and 7.1 million electric customers in the Carolinas, Florida, Indiana, Kentucky andOhio. The regulated utilities will comprise a higher proportion of Duke Energy's post-merger businessmix.Duke Energy's major commercial operations include Duke Energy International, which operatespower plants in Central and South America; Duke Energy Renewables, which develops and ownswind and solar projects in the U.S.; and Duke Energy's Midwest generation and Duke Energy Retail,which generate, market and sell electricity in the Midwest.Under the terms of the merger agreement, each share of Progress Energy common stock has beenconverted into the right to receive 0.87083 shares of Duke Energy common stock (which reflects theimpact of the 1-for-3 reverse stock split that occurred immediately prior to the closing of the merger).The reverse stock split is designed to reduce the number of outstanding Duke Energy shares.When the merger was announced on Jan. 10, 2011, the transaction value totaled $26 billion,including Progress Energy's debt. Today, based on Duke Energy's share price and includingProgress Energy's debt, the transaction is valued at about $32 billion.A fact sheet detailing the new Duke Energy can be found at http://www.duke-energv.com/pdfs/defactsheet.pdf.To view a videp sampling ofthe company's generation assets, go to:TIAL3LEGPGNDIR001542

egulations; and other factors discussed or referred to in the "Risk Factors" section of each ofProgress Energy's and Duke Energy's most recent Annual Report on Form 10-K filed with theSecurities and Exchange Commission (SEC). Additional risks and uncertainties are identified anddiscussed in Progress Energy's and Duke Energy's reports filed with the SEC and available at theSEC's website at http://www.sec.gov/. Each forward-looking statement speaks only as of the date ofthe particular statement and Duke Energy undertakes no obligation to update or revise its forwardlookingstatements, whether as a result of new infomiation, future events or othemvise.South Carolina clears way fbr Duke-Progress mergerCharlotte Observer, 7-2-12By Bruce HendersonCOLUMBIA, S.C. - The S.C. Public Sen/ice Commission unanimously approved a joint operatingagreement Monday that clears the way for Duke Energy to merge with Progress Energy.Duke said afterward it hoped to announce the close ofthe $32 billion deal within a day."From what we heard this moming, it appears the Public Service Commission has given us theapproval necessary to drive toward the conclusion ofthe merger," spokesman Greg Efthimiou saidafter the meeting.The commission approved the same joint-operating agreement that the N.C. utilities commissionapproved Friday. There is one key difference: South Carolina approved it for only one year, afterwhich the commission will review its results."With the protections that Progress and Duke have committed to the Public Sen/ice Commission andto the customers, we're comfortable with it with this caveat - that we review it in one year. That wasabsolutely imperative," said Dukes Scott, executive director of the S.C. Office of Regulatory Staff,which represents public interests."It's important to us because there's a lot of unknowns ... whether ifs working to benefit consumers."Duke and Progress had agreed to the limited initial term, which was proposed during negotiationswith consumer advocates, electric cooperatives and Nucor Steel.North Carolina's utility commission approved the merger on Friday, closely adopting the termspreviously negotiated by the utilities and the commission's Public Staff, which represents consumers.South Carolina's role, in the utilities* view, was limited to ruling on the joint-operating agreementbetween Duke and Progress that lets them control their power plants together.That agreement is the source ofthe $650 million in fuel savings that the companies pledge to returnto Carolinas customers over five to six years.Duke and Progress initially asked South Carolina to approve both the merger and the operatingagreement. Last September, they withdrew their application for merger approval, saying it waspremature since the two Carolinas utilities will operate separately - although under the sameownership - for some time.In his motion toâpprove the operating agreement, commissioner O'Neal Hamilton said there is "anabsence of ha/m to S.C. ratepayers" from the merger.IFIDENTIAL LEGPGNDIROOI 543

"Therefore," he continued, "the commission does not have to reach the question of whether suchharm, if present, would have justified jurisdiction of this commission over the merger to the extentnecessary to address such harm."Duke committed to sharing at least $127 million ofthe $650 million in fuel savings with its S.C.customers. Itwill also make charitable contributions of $10.6 million over four years afterthe mergerand donate $3.75 million in the first year for workforce development and low-income energy aid.S.C. commissioner Lib Fleming, who represents Duke's territory in Greenville and Spartanburg, said"South Carolina will be well-served by the merger" and that commitments to share savings will protectratepayers.Duke has plans for three new nuclear power plantsGreenville (S.C.) News, 7-3-12By Rudolph Bellthe newôwer company created by the merger of Duke Energy and Progress Energy has plans forthree new nuclear plants — two in the Carolinas and one in Florida.But Duke executives have said the Carolinas' plants — one near Gaffney and another near Raleigh— won't get built unless North Carolina lets it recover financing costs from ratepayers up front asSouth Carolina'permits.Charlotte-based Duke, the Upstate's dominant electricity provider, and Raleigh-based Progress onMonday jumped the last regulatory hurdle needed to merge and create the nation's largest regulatedutility with more than seven million retail customers in six states. 7"The two power companies already had permission to combine from federal and North Carolinaregulators when the South Carolina Public Sen/ice Commission approved a Joint DispatchAgreement on Monday, paving the way for'completion of the rnerger.Duke spokesman Tom Williams said a press release wouldn't be issued until today after all contractshad been signed. ?In-announcing the merger plans in early 2011, Duke said one ofthe behefits was that the combinedcompany's bigger size and scale would put it in a better position to develop new nuclear plants.The new plants would only be pursued, however, with "appropriate regulatory recovery rinechariisms,"Duke told investors.Williams said recovering financing costs as the plant is built, rather than through cumbersome ratecases, is cheaper for customers and more predictable for utilities.iBut Tom Clements, the nonproliferation policy director at the Alliance for Nuclear Accountability,

"The economics of cheap gas and reduced electricity consumption alone make three new nuclearprojects very unrealistic," Clements said.He also said schedule delays and costs increases at two nuclear plants under construction by othercompanies — one being built by South Carolina Electric & Gas near Columbia and one by SouthernCo. near Augusta, Ga. — should make utilities cautious.Duke and Progress already operate seven nuciear plants — one in Florida and six in the Carolinas,including the three-reactor Oconee Nuclear Station on the shores of Lake Keowee.They filed applications separately with the Nuclear Regulatory Commission to build three more,including the two-reactor Lee Nuclear Station near Gaffney.The combined company will be called Duke Energy and be based in Charlotte.Its sen/ice territory will cover almost all of North Carolina and the central 'portions of Indiana andFlorida as well as small pieces of Ohio and Kentucky.In South Carolina, the new Duke will provide electricity to 730,000 retaiTcustomers across theUpstate and Pee Dee regions, with its state headquarters in downtown Greenville.Dukes Scott, executive director of South Carolina's Office of Regulatory Staff, the state agencyresponsible for protecting the public interest in utility matters, said South Carolina ratepayers will save$198 million because of his agency's intervention in the merger plans.Most of the money is fuel savings as the two companies coordinate their operations in SouthCarolina, he said.Kentucky PSC approves Duke Energy efficiency programsLexington (Ky.) Herald-Leader, 7-2-12By Scott Sloan fThe state Public Sen/ice Commission has approved an expansion of Duke Energy Kentucky'senergy-efficiency programs.The commission approved Duke's plan to consolidate 13 existing programs to 10 and to introducethree new offerings.The new programs offer:1u• Cash incentives of as much as $30 per appliance, limited to two a year, for residential customerswho recycle functional but old and inefficient refrigerators and freezers.• Energy audits and energy conservation assistance in low-income neighborhoods.• Reports for residential customers comparing home energy use in their homes to those of similarnearby homes. The reports will make suggestions on how to lower energy use.In a statement, the PSC said Duke's various programs include energy audits, energy education 1efforts and financial incentives to customers who let the utility remotely turn off their air conditionersduring peak-usfe times in the summer months.VIAL7LEGPGNDIROOI 545

As part ofthe PSCs approval, the utility will increase the surcharges assessed on residential electric- bills for the programs. A customer using 1,000 kilowatt-hours monthly will see the surcharge increaseby about $1.80 monthly.i i _Duke serves about 135 L 000 electric customers and 95,000 natural gas customers in NorthernKentucky, in Boorie, Bracken/Campbell, Gallatin, Grant, Kenton and" Pendleton counties.Restoring Power during Outages a Measured ProcessWFMY-TV, 7-2-12 "By Philip Jones .WiNSTON-SALEM, N.C. - We all like when things are as easy as 1-2-3. But when it comes to gettingpower âck, "utility companies have dozens of steps to follow, hundreds of workers to coordinate and,as is the "case up and down the east coast, millions of customers to serve.It's a tall task, but one utility workers in the Piedmont are familiar with.It's just like they say [about how to eat] an elephantrone bite at a time," said Jimmy Flythe, one ofDuke Energy's directors for government and community relations. "[We have] a plan that we work. 1Everybody^ got their assignments. It becomes almost a military operation."Flythe met with WFMY News 2 at the intersection of Ninth Street and Cameron Avenue in Winston-:Salem, where prews spent hours repairing lines Monday. Trees fell and knocked out power there= 1early in the morning.The process those workers went through is just like what hundreds of crews to the north areexperiencing. And Flythe says the work starts before the storm.As trouble approaches, a >ower,cbmpan/s staff meteorologists will warn that problems cquld be:,coming. And once the power gbes out, utilities count on customers to call in outa'ges. In Duke's case,itscorriputer system will field all those calls and use the data on wh4re they're coming from to try .topredict how far up the grid Jhe issues^go. ' . v r ',then, workers in centere like Duke.'s Rower Delivery Work Center in Greensboro dispatch scoutsô.;assess the damage and determine what type of crew needs to a'ddress the problem. That's when,those familiar line workers get involved.But how do they determine which areas get power back first? There is protocol for that.Tflythet says erpergency situations get top priority, so things like a live line down in the road will get acrew's attention first. Then hospitals, or places like fire stations and rescue squads that need power tohelp respond to a crisis, are next on the list.When the emergencies are taken care of, dispatchers will send crews to fix.the problems thatrget • -t power back to the greatest number of peopFe 'at once. After the big issues are sorted out, the" workers -will hit the areas where only a handful of custorriers are affected.:S6metimes it's easy to feel like power companies are playing favorites when it comes to restoringpower, but Flythe says the process is rooted in having the biggest impact first.8LEGPGNDIROOI 546

Duke Energy has received requests from companies up north to send crews to help restore powerthere. It's considering the best way to help, but since the weather could get rough here this week,Flythe says the company will likely focus on the home front.Video: http://www.digtriad.com/news/article/234800/57/RestorinqTPower--A-Measured-Process?odvssev=tab%7Ctopnews%7Cbc%7ClaraeIn the Midwest, heat will sizzle all weekCincinnati Enquirer, 7-3-12Even as electric power was restored to the Cincinnati region Monday, no relief was in sight from theextreme temperatures gripping the area and much ofthe nation. That prospect caused concern forhealth and air quality officials.National Weather Service forecasters predict high temperatures here will reach the mid-90s to 100every day through Sunday. That would add up to 11 straight days of highs well above 90 degrees.The last time Cincinnati had such an extended string of extremely high temperatures was a 12-daystretch in 1999, when 18 people died."It's something we're monitoring closely," said Rocky Merz, a spokesman for the Cincinnati HealthDepartment.Such extreme heat over a long period of days "can cause increasing stress among populationssusceptible to heat-related illness," Merz warned. The susceptible groups include the elderly as wellpeople with illnesses that decrease their ability to respond to extreme heat (including with heart andkidney disease, high blood pressure, recent stroke, diarrhea or mental illness). Infants and smallchildren are also at greater risk.The hot and relatively dry weather apparently won't end Sunday, either.The long-range outlook through July 15 for Ohio, Kentucky and Indiana calls for above-averagetemperatures and below-average precipitation, according to the weather sen/ice's Climate PredictionCenter."Thafs not promising," said Megan Hummel, spokeswoman forthe Southwest Ohio Air QualityAgency.The current heat wave has been accompanied by seven straight days of ozone alerts, forcing peoplewith breathing problems to stay inside. Ifs the longest stretch of ozone warnings in five years.Ozone pollution needs sunlight and heat to form from nitrogen oxide emissions (created by suchsources as power plants) and volatile organic compounds (released from cars and other sources).The air agency's officials update their alerts twice a day, depending on weather conditions.Air pollution levels, while not good Monday or today, were particularly bad Thursday. Levels rose froman alert to an unhealthy reading that day, indicating that pollution was affecting all people, not justsensitive groups.Hummel reminded people to combine trips, take public transportation and not let their car idle formore than 30-seconds to help ease the ozone problem.COtfFIDEriTIAL/LEGPGNDIR001547

Meanwhile, Duke Energy Ohio expected to power restored to all of its customers before midnightMonday. The utility had 177,000 homes without power on Friday, when the state was hit by a stormthat started in Indiana and roared to Washington, D.C, leayjng more than a million without power. InOhio, Duke received about 680,000 phone calls to its customen service line overthe weekend.Spokesman Blair Schroeder said the scattered nature of the power failures slowed restoration efforts.In many cases, downed power lines affected only a couple homes in an area, not thousands.That was no consolation to Duke customer Gene Saenger of Anderson Township, who made one ofthose calls to Duke's service line. He had to buy ice to refrigerate his medicine during the outage."The whole thing ^basically a can of worms," Saenger said. "In my opinion, Duke was not preparedin 2008,with Hurricane Ike. They said it would not happen again, but they're still not prepared."Elsewhere in Ohio, more than 400,000 Ohio customers - mostly of Amencari Electric Pqwer - were"without power at midday Monday. Dayton Power and Light planned free ice giveaways td help someof jts ^TiOOO affected customers.^Federal and state officiate ahd relief workers were trying to determine the biggest "and most urgent -needs". The OhioiEmergency Management Agency said it was fielding dozens of calls from peoplewho mistakenly thought state and federal officials were offering*access to generators for persdrialuse. The agency, was, redirecting those callers to local 211 hotlines and the American Red Cross/orinformation about codling shelters.In Southeast Ohio, more than half of Wayne National Forest was closed to the public and some _visitors were asked tc leave recreation areas as a precaution while park "workers inspected trails for1fallen trees and other darnage.Weather service forecasters say above-normal temperatures willcontinue to affect a large portion of1 1the country from the northern Plains to the Mid-Atlantic over the next few days. ,In the wake ofthe 1999 heat wave, which killed, nearly 200 nationally, Cincinnati and Hamilton Countyofficials studied the ^7 ofthe 18 deaths'. They found that eight of those who died were mentallyjlLand.may not have been taking their medications, according to a report that officials published iri 2001,inthe American Joumai pf Forensic Medicine and Pathology. ; ^ *In addition, three qf those who died lived in group homes for people with mental illness, indicating that"opportunities for prevention may have been missedi-" a synopsis ofthe study says. The stud/siâuthors recommended that prevention programs during heat waves should target peoplewith; mental -illness, especiallyrthose who take psychotropic drugs. ^ ': IV/f was a derecho[Lean cause damage that looks like a minor tornado, but the storm system that wreaked havoc Friday1;frdm Northwest Indiana to the Atlantic coast had a very different name.••';Friday's storm, which only glanced the Cincinnati region, was a~derecho (pronounced deh-REY-cho).The word, when used as an adjective; is sometimes translated from Spanish as straight ordirect.' 7,1— - ~ Z- _In meteorological terms, a derecho is a noun used to describe an intense and long-lived seriesiqf jstraight-line winds often associated with fast-moving thunderstorms or rain. To be classifiedfas aNTIAL10LEGPGNDIR001548;

derecho, such a storm must cover the area of at least 240 miles with wind gusts of at least 58 mph.Because many atmospheric conditions have to come together perfectly for one to form, derechos arerare. One occurs in Ohio in a typical year. The 2011 collapse of a stage at the Indiana State Fair thatkilled seven was caused by a derecho, according to the science website Earthskv.org.Friday's storm went 450 miles from Indiana, across Ohio and into West Virginia, racing across thatspace in just six hours. Peak wind gusts included 91 miles per hour at the Fort Wayne, Ind., airport,and 78 mph at Columbus Grove, just north of Lima in Northwest Ohio.National Weather Service experts say although a derecho can produce destruction similar to that oftornadoes, the damage typically is directed in one direction along a relatively straight swath. Forexample, outside Columbus Grove, the storm left acres of corn bent at a 45-degree angle to thesouth. In other places, trees along the west side of some homes were uprooted or snapped off to theeast.Coping with heatCincinnati Recreation Centers continue to be open during normal hours to serve as "cool centers" forheat relief. They will provide a cool, comfortable place to sit and rest. To locate a CincinnatiRecreation Center close to you, visit http7/www.cincinnati-oh:gov/crc/pages/-5672-/ or call 513-352-4000. — ' "The city health department and the Centers for Disease Control and Prevention (CDC) suggest thesesteps to prevent heat-related illness.Drink plenty of water, even if you're not thirsty. This is especially true for people who work outdoors,including construction workers and roofers.Individuals on medications, include those with mental illness, should check with their doctor orpharmacist to see if the medicines put them at increased risk of heat related illness.Avoid alcoholic beverages since alcohol can increase your risk for heat-related illnesses.Decrease physical activity such as yard work or exercise.Activities should occur on the morning or in the evening.Stay in the shade as much as possible.Check on those who may need assistance.Wear lightweight, light-colored, loose, cotton clothing.Eat light meals.Adjust blinds, shades and awnings to keep the sun out.Don't leave children and pets should not be left unattended in closed vehicles, since temperaturescan quickly rise to dangerous levels.C^^ÛAL11LEGPGNDIR001549

Visit Cincinnati.com/weather for the latest forecasts and severe weather advisories.Duke Energy celebrates birthday at shelterHendricks County (Ind.) Flyer, 7-2-12By Brenda L. HolmesDANVILLE, Ind. - To help celebrate its 100th birthday, Duke Energy built a new playground atSheltering Wings, a shelter for victims of domestic violence and their dependent children.Maria Larrison, CEO of Sheltering Wings, said the project was a Godsend to the shelter's children."We specifically purchased equipment for older children," she said. "We have that equipment for thelittle guys but we didn't really have anything for the pre-teens, the older kids to play on."Duke Energy supports the fecility annually with $10,000 that goes toward the shelter's GED program."The GED program has been a dream of ours for years," Larrison said. "Now the ladies can get theirGED on site and we can also invite past residents to come back and do it."This year, to celebrate the company's 100th birthday, Duke gave the shelter an additional $10,000 topurchase playground equipment.Patterson-Horth, Inc., a general contractor out of Indianapolis came to install the equipment and wasassisted by Duke Energy employees. Patterson-Horth also provided a foreman for the project.Dawn Horth, a representative of Duke Energy, said, "We're putting in five pieces of playgroundequipment for the kids. They will probably be out here playing on it sometime tomorrow."We've been doing lots of projects for our 100th anniversary. We wanted to do this project because itwill impact hundreds of children who unfortunately come through these doors."The equipment was installed on Thursday - one of the hottest days on record."These workmen are accustomed to working in the heat on a daily basis," Horth said. "But we havealso brought plenty of water and Gatorade for them. Maria has also opened the shelter's doors for usso they can go in and cool off. We will also be having lunch inside."The project is one of many the company is doing around the state to thank its customers and thecommunities that it serves."It's been a ball doing these projects," Horth said. "And on Sept. 8 we will be hosting a grand finale."On Sept. 8, Duke Energy will be hosting a festival for all of its employees at the companyheadquarters in Plainfield."There will be a carnival with bounce houses and climbing walls," Horth said. "Ifs going to be a realcelebration."The company will also be opening a time capsule that was sealed on its 75th birthday.CONrfDpNTIALLEGPGNDIR001550

"We still have some ofthe employees that placed items in thattime capsule," Horth said. "They'll bethere to tell us why they chose what they put in there."NC lawmakers OK tougher plant protest penaltiesAssociated Press, 7-2-12RALEIGH, N.C. - The Legislature has agreed to give police authority to charge protesters at NorthCarolina utility plants with felonies if they attempt to disrupt plant operations or place themselves or, others at risk of injury.The Senate gave final legislative approval Monday to legislation increasing penalties for first-degreetrespass when they occur at power and water treatment plants.The measure now heading to Gov. Beverly Perdue's desk was in response to the arrests ofGreenpeace protesters at a coal T fired Duke Energy plant in Arden. Some protesters climbed asmokestack and others secured themselves^to equipment.First-degree trespassing is currently a misdemeanor with a maximum 60 days in jail. The bill createsa higher grade of misdemeanor and a low-grade felony that could mean several months behind barsfor a first offense.GOP-led N.C!. legislature overrides three Gov. Perdue vetoesRaleigh News & Observer, 7-3-12By Craig Jarvis, John Murawski and Lynn BonnerRALEIGH - Republicans ended their historic session on Monday with a triple play of veto overrides,rejecting Democratic Gov. Bev Perdue on natural gas exploration, capital punishment and the budget.In a drama that played out from the early afternoon late into the night, the Gene'raf Assemblymustered the votes to bring a decisive conclusion to their agenda, with considerable behind-thescenesmuscling to make it happen.•1 1 13wooed "There's anticipated," offering members Rep. Assembly time overrides. On was But maneuver Monday at final the Pricey least before more benefits result been hours of that prevented _ one Harrison, night her she than the a of began of lot party of to said.intense finishing 140 their more error her with were session a years. successful Democrat districts. wheeling from deal-making by the touches concerned a Their arrival'of amplified changing Democratic override from and clash were went because dealing a Guilford the it with put Republican and votes lawmaker energy on the gave from in they a County; - govemor biil on'the of them our are who making majority House, caucus said vulnerable consen/ative natural a pushed produced one-vote where during late members both gas additions the in a an margin 19 chambers exploration, wrorig handful upcoming takeover evening vetoes'and than button, of the of victory. I in recess of would Democrats elections. LEGPGNDIR001551budget, 2011 the - and fracking, so General have some for far potentially GOP theTfirst - were _ bill lb'* .."-

The day sawpdd alliances of political foes crossingârty lines, including a Wake County Democratand a Guilford County Democrat joining House Republicans on the'budget vote:Earlier, the^gang^five" conservative^ Democrats in the^Hous^joinedifbrces.withthe GOP to onceagain to;thwartthe governor andi their own party. 1 It took all five Of thern to override'the rewrite of theRacial Justice Act in order to counter, the defection of Republican RepfGlen Bradley of Youngsville,who occasionaNy finds himself at'odds with the GOP caucus and voted not tb override: ~The day also saw Lt: Gov. Walter DaltorVs unexpected break with the^govemor just before the Senatetook up'ttie natiliral'gas'drilling J bill. The Democratic candidate for goyembr announced that hedisagreed with Perdue's veto on Suriday. ~ " 'Dalton, in an interview; said^he'had'Mncems^bout groundwater safety but^he was relying on stateenvironmental officials who said it (x|uld , be'*done safety.'He said he was reassured L because*the legislature would still have to give.final.approval to begin '! :1fracking.' . ' -Working late - -Republican lawmakers worked into the night trying to round up enough votes to override Gov. BevPerdue's veto of fhe fracking/legislationr Finally, atabout 11 p.m., the House called fora vote, which-just reached the threerfifths majority'neededr72-47. >But Rep. Becky Carney, a Dernocrat from dharlotte, couid be heard on the House audio systemsaying she was tryirig to change, her vote, having hit the wrong button. House Majority Leader Paul"Skip" Stam bf Apex cut ] her'offwith a legislative procedure to prevent changing votes.The'bill wp expected to live or die"on ? a,razor-thin margin, possibly hanging on a,single vote: Thelegislation js regarded by Republicans as a landmark Jegislatibnvthat would reshape the state's Penergy landscape by clearing fhe way tb the creation bf a natural, gas 1 production iridustry."Rep. Mitch Gillespie,, a McDowell County Republican, said that as of 9:30 p.Tn. Republicansjweriseveral votes shbrt but he expected thet straggling Dembcrats could be convinced to vote agajrift-Perclue'sjvetq. RepuBlicans-had^pentjiiuch qflhe day courting, cajoling andjhectbring uridecSeb;.•Democrats to'switch sides ahctfjoin the Republicans. "~ 3 ! r "v*'":' Harrison 'said the Republicans had needed'at Jeast six Democrats to switehiSides. = •Rep. Marcus Brandon, r a Gujjfbrd DembbraJ, said he was one;of the Democrats targeted by tKelanti- «veto drive because even though 5 he voted against the 1 fracking bill on June 21, he thougKt it wasfa1good piece of legislation.-~ ~7 V *> "That's why they were working with me," said Brandon, adding that he was inclined to stick with thei governor.1Budget veto overrideThe legislature passed ite $20.2 billion state budget over Perdue's objections, with the stateHouse -voting 1 74-45 = 1 Monday night to override her veto. The•Senate followed, 1 voting 31-10 to override.^,= ~This is the second time in two years that the Republican-controlled legislature has handed Perdue a 1CONFIDENTIAL " LEGPGNDIR001552

udget defeat with the help of a handful of House Democrats.Perdue tried to use her vetojo push Republicanjegislatorsô thejiegotisiting table. In the last week,.she proposed shifting^lOO million legislative'budget writere had .set aside in reserves.br using cashshe described as surprise revenue to go to schools, parole offices, eugenics victims, and to preparefor the November elections.Republicans could have negotiated with Perdue, made sure they had enough House Democrats to do"what they wanted without her approval, or left with (the budget they passed last year in place. In theend, they convinced enough Democrats to join 1 them 1 in a vetpr _. "I'm not crazy about (the budget)... we think the mpdrficatioris we'ye made improve rt, but if she's notlikirig those modifications and we're not able to'bverride, we have a budget for the second year," saidSenate leader Phil Berger. *1Perdue tried tp conyinceifive of the six Hbuse;Pernocrats who had been voting for the Republicanbudget to sticKv^th^her. But it wasêmpcraticiReps. Darren Jackson of Wake County and MarcusBrandon of High Point wh6"made~surprise"breaks. - ~ =.Jackson said he was worried the Senate'would goihgme without negotiating, and that state_ employees in his district would be laid off from their jobs.. ' V I ! . ' _The legislature writes a two-year budget when it convenes in odd-numbered years. In even-numberedyears/itTretums to Raleigh to update the plan for.the second : year.1The budgetjeaves local school districts iniwbrseishape than Perdue wanted, but they are assured-that theirbudget cuts won't be as deep as they' wouFd have been under the unchanged version of thetwe^yea? budget. < ' - i . ' 'Schools and raisesThe budget allows school districts to k£ep niore oftheir state funds rather than returning them tq^thestate treasury^ but school districts will still have $190 miiliori less to spend this year. 1 ~\Teachers and state employees vyill receive 1^2 percent raises.; The state Senate was intent pn ending the session befbre dawn Tuesday, and the threat they would ,,' ~; RJA veto override "' ' = II _ i iThe override votes began about 1 p.m., when the Senate voted 31-11 to knock down the governor'sveto of the revamped Racial Justice Act. 1 About an hour and a half later, the House followed suit withC^FjD^NTIAL15LEGPGNDIROOI 553

a 72-48 split.The Senate vote was along party lines, but in the House five consen/ative Democrats swung the deal,resisting a last-minute campaign by death, penalty opponents to stick with the governor. They wereBrisson of Bladen County, Crawford, Hill; 1 Rep. Bill Owens of Camden; and Rep. Timothy L. Spear ofWashington.Before the Senate vote, the Rev. William Barber, president of the North Carolina chapter of theNAACP, :said there would be a legal challenge rf the veto was overturned."Ifs a shameful day in a Southern legislature that ultra-conservative Republicans assisted by a fewDemocrats would lead North Carolina backwards rather than fonvard," Barber said.Sen. Thorn Goolsby, a Republican from Wilmington, on the Senate floor answered Racial Justice Actsupporters' call to trust judges deciding those claims. He said he trusted the judges, juries andlawyers/"Who I don't trust are statisticians - people who come in after the fact," he said. "People who get coldblooded,deliberate murderers off trieir death penalties."!The bill was the second attempt by Republicans and the state's prosecutors to undo the RacialJustice Act; which allowed death-row inmates to petition to reduce their sentences to life withoutparole by using statistical proof of racial bias in their'prosecution, sentencing or jury selection. 11Last year the General Assembly passed a bill that would have gutted the Racial Justice Act, bufthegovernor vetoed it. The Senate overrode the veto but the House didn't have to votes to try.FRACKING VOTE~

lease.• Requirement that energy companies test groundwater within 5,000 feet of a drill site both before and, after-drilling. Any contamination would-be presumed to be caused by drilling and fracking, unless thecompany could prove otherwise by a preponderance of evidence.Compapies.that damage drinking water and groundwater would be required to truck in or pipe indrinking :water to the property owner.The bill tasks the Mining and Energy Cbmmission, N.C. Department of Environment and NaturalResources and the Consumer Protection Divisiori :in the NlC. Department of Justice to study thestate's 1945Jaw: requjring 'compulsory poolirig = 6?{pr6perty-rights. The current laws would forceunwilling property'bwners to let energy companies drill under their land if enbugh neighbors sign' J "" : 1— leases. - T * • -A separate bill would make several'^maH changesJo the fracking law. It has passed .the House, andSenate arid now goes Back to the House with modifications/ It's set for a vote Tuesday : aridTwouldextend time for the fracking studies pri for^d^poolirisTandlocal government contfol from Jan. I.ÔIS,- by eight months to'Oct.'l, 2013. It would also give property owners more time - from three days toseven days - tb back-out of a lease allowing fracking r under the property.Battle over 'negawatt' pricing heads to courtGreenwire, 7 : 2-12 'By Hannah Northey and Gabriel NelsonHaving failed to,convincejhe Federal Energy Regulatory Commission that new "demand response"policies would skew electricity rhafkets across the country, powerful utility industry groups are nowdemanding a response from the courts.^The American Public Power Association, Electric Power Supply Association and Edison ElectricInstitute have all asked a'federal appeajs courfcto throw out a new natiorivyide policy that pays thesame amount for demand response^- Which are usually agreements with electricity customersftbl !-reduce power use at times of heavy demand - as it pays utilities to send more megawatts onto^thegrid. •. _ =. - - - - ^ --_•-- •< ~ 1 ' 'iSpeaking for the owners of power plants; the trade associations say FERC made a mistake last"March when it came out with 'the rule. In a filin^jearlier this-month with the U.S. Court of Appeaisfor'the^District of Columbia Circuit, they claim that offering.the sameip^youts will lead to perverse., încentives, such as shuttering factories so as not to use electricity. • ' \The policy only makes sense if "oneican get far enough through the looking-glass to accept that-a1 rretail customer's decision not to consume electricity is a form bf supply,"lhey said."Deciding how to compensate demand-response companies has been a topjine issue for FERC i.Chairman Jon Wellinghoff, a Democrat who;has aimed to support energy efficiency and theintegration of renewable power onto the grid.When the rule came out last March, the commissionsaid it was carrying out its duties under theÊnergy Policy Act of 2005 by removing barriers' in front of demand response.The rule was "describedas a way to encourage efficiency in the wholesale power markete and in the process avoid the costbfbuilding more power plants for the few hours a year when electricity use soars.FIDENTIAL17LEGPGNDIR001555

A new breed of energy services companies have already risen to the challenge, putting in bids acrossthe country for "negawatts" and, increasingly, beating their power-generating counterparts. That hasnow sparked a debate over the way to put a price'on electricity,- a J commodity that by its rare naturemust always be made and consumed in equal measure.Ûnder the new FERC rules, the upstarts have shown they can offset demand more cheaply thanutilities can meet it.More than 14,000 megawatts of demand response made the cut when the grid operator for much ofthe eastern United States, called ! PJM Interconnection, took bids on riew resources for 2014 and2015. that amount, equivalent to a few dozen Midsized coal or natural gas power plants, was7armore than all other new sources^bf generating capacity combined: new power stations, upgrades toexisting ones and around-the-clock energy efficiency.The incumbents in the energy markets have naturally pushed back/said Blake Young, presiderit arid ~CEO of Georgia-based demand-response company Comverge Inc., during a conference Wednesday1iri Washington, D.CIn the past, rather than building new capacity to bid into these auctions, power companies have. _"taken advantage of those market structures and leveraged their baseload generation to create moremargin; more profit," Young.said at the event, "held by the Association for Demand Response aridSmart Grid. !iIn other words, the utilities were taking advantage bf scarcity. When there is idss capacity available attimes of high demand, a grid authority has to pay a higher price to'avoid risking power outages.i"The moral of the story is: If you don't build it, we will," Young said.A split on FERCNationwide, there are now about 40,000 megawatts of demand-response resources available to,theU.S. power grid, double what existed about five years ago.'i _ 1 liThe rapid rise came in response to the surges in electricity prices it times of peak demand, which *most economists will describe as trie result of decades bf irrational - if understandable - policy.,the retail rates.that customers pay are flat for months at a time, mostly because of old meter \technology. Wholesale rates, which power generators charge, can fluctuate wildly based bn'supplyand demand, which must always be met instantaneously, eitherwith new electricity or eriergy that" ,has been stored in a battery, a flywheel or a pumped-water system. • , E! I 'If people were charged based on supply and demand at any given time and could see the rearcost ofenergy, they could shift their behavior and their businesses to get a better price. But they cannqt{dothat. So utilities bid up the price of electricity, making sure they have enough to avoid outagesjonhiotsummer afternoons and other times of strain.FERC was told to clear the way for demand response when a decrease in supply is preferable to anincrease in demand. But the method chosen by the cbmmission was a source of disagreement, withCommissioner Philip Moeller, a Republican, "calling it a "misguided" swing toward reductions iiisupply.CONFTtSpfflAL18LEGPGNDIR001556

Moeller cast the lone dissenting vote against the rule, saying that it showed preference to demandresponsecompanies without explaining what barriers they face. In so doing, it conflicted with FERC'sefforts to promote competition and ensure that prices are just and reasonable; he said'The rule "actually results in overcompensation that is economically inefficient, preferential to demandresources, and unduly discriminatory towards other market resources," Moeller said.The angry utilities had their argument seconded in court when a group of economists - professorsfrom Harvard .University; the University, of California, Berkeley; and the Massachusetts Institute ofTechnology ~ filed a friend-of-the-court brief that said FERC's rule should be tossed. They saydemand-response companies shouldjjet paid less than power~generators under a formula called"LMP rnirius-G," which stands for the market rate at any given moment minus the price at which acustomer would have bought electricity. _ ,Otherwise, they say, a custorner will stop using power just to take advantage of the payments,passingon the cost ofthe demand-response services to other electricity customers."Simply-put, the customer riiust be treated as if it had first purchased the power it wishes to resell tothe market," the economists wrote. ''Although FERC invokes economics to justify its course, the final i -rule is economically irrational. Retail customers that reduce their consumption should not be paid.as ifthey generated the electricity they merely declined to buy."They say it is a "subsidy" that relies on the faulty assuriiption that "more demand response is always"better, regardless ofthe effect it has on other market participants."But in the eyes pf demand-response companies.ithe utilities are mischaracterizing the service theyprovide. It is not the same thing as reselling electricity. they say, but rather shifting electricity useaway from the most expensive times, thereby making it cheaper for everyone.Audrey Zibelman, founder and CEO of the Philadelphia-area Viridity Energy Inc., said the growingdemand-response industry isn't looking for subsidies or handouts, but utilities are fighting FERC'sorder because it could'reduce their profits wrien demand is high and electricity rates spike.FERC's order pays any party equally, including utilities, to use its resources to help manage tlfe.'grid,] she added. ' A,"The economists are missing the boat," she said. "Managing the grid happens on both sides oftheequation - increasing output or decreasing consumption."^; i I 'Viridity has taken FERC's side in the court case, seeing it as one ofthe key drivers ofthe industry'srquickgrowth.~"'"The case is a critical watershed to opening up the capital to transform the industry in a positive way,"Zibelman said. "I think demand response would not falter but would not excel without it."Senate confirms new NRC chairwoman, GOP commissionerGreenwire, 7-2-12By Hannah NortheyThe Senate late Friday confirmed Allison Macfarlane as the new chairwoman ofthe NuclearRegulatory Cojnmission and Kristine Svinicki to serve a second term as a Republican member, of thefONFIQEfJTIAL19LEGPGNDIR001557

egulatory panel.Svinicki was quickly sworn in by an NRC staffer Friday; Macfarlane's swearing in is pending and willfollow some required last-minute White House paperwortc.Macfarlane, a geologist and university professor, will succeed outgoing NRC Chairman GregoryJaczko, who announcedshis resignation in May amid infighting at the agency over his managementstyle. ,Macfarlane will .now oversee NRC's 4,000-member staff and help guide the agency as it crafts newrules for storing nuclear waste and to boost reactor safety following the crisis at Japan's FukushimaDaiichi nuclear plant last year.Members of CqngressfwiN also be watching td"see whether Macfarlane can bring a sense, ofqollegiality tothe agency: During.her confirmation hearing before the Senate Environmentand PublicWorics Cqmmittee last month, Macfarlane pledged to bring harmony to NRC.Last year, four commissioriers - two Republicans arid two Democrats- complained to the WhiteHouse that Jaczko was.Wockmgjnformation meant for ttejantire panel, creating a chilled Environmentand berating female'staffers, allegations that the chairmah denied. ! _ '" -• !But Macfariarie will serye, until June 2013,-when Jaczko's-term expires, and it remains to be seenwhether she willbe renominated'and recdnfirined for a fiill term at thattime. Sen. Jeff Sessions (R-Ala.), for example, has noted his concerns about Macfarlane,^ known critic of the Yucca Mountain,Nevj, nuclearwaste repository.Although the Senate EPW Committeelast month approved Macfarlane and Svinicki by voice vote,Sessions asked to officially record his disapproval of Macfarlane.1But most Republicans backed the new chairwoman as a way to secure a second five-year term.forSvinicki after her term expired Saturdly. .- ~ ""_ ^ rfJ Sen. James lnhofe;(R-Okla.) said in a statement that the commission will improve with Svinicki's"serviW'and Jaczko's exit. But he was also quick to maintain his skepticism over Macfarlarie's viewsipn nuclear waste issues.- - ? j11 1Vltjs also good news that today fomier"r^RC"Chaimian,Greg Jaczko was replaced," lnhofe;s"ajd.:;'AVVhile" I "still havesome.reservations about Allison Macfarlane's experiencein nuclear safetyfariîrier^potential preponcîvedjiotions regarding^spent/uel disposal: she assured mejin heFtestimohy&efbrethe' EPW committee that she is committed'to being a cbllegial leader and will take her fellow'Commissioners seriously. I expect that she will follow through."' ! " '., Man/in Fertel, the Nuclear Energy Institute's president and CEO, also applauded MacfarlaneJand,Svinicki and said their oversight will be crucial as the industry addresses waste management Snd newx^construction.-"The safe and efficient operation of existing nuclear energy facilities and expansion ofthe industryrequire that the NRC be an effective, credible regulator/and that the agency achieves'its mission'through a regulatory philosophy that is both safety-focused and disciplined," Fertel said in a Vstatement.20TIAL LEGPGNDIROOI 558

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Baker, John D.TC, _ ' ' '•\^rom:Shiel, Tom Jr -/Sent: Thursday, "July 05, 2012 7:31"AM ".Subject: Duke Energy News in Review 7-5-12CiA 1Duke Energy News in ReviewJuly 5,2012Articles•f-! âMerger surprise could cause additional fallout at D u k e Energy * rCharlotte Busiriess Journal, 7-3-12 !l " «The unexplained departure of, Bill Johrison as chiefexecutive ofthe post-merger Duke Energy pprpi' raises the possibility that there could beadditiorial executive changes following Duke's $32 billion---,mergerwith Progress Energy Inc., which closed Monday. " -C jC -T V . f! i i. •!- rMTDuke Energy CEO Plan Falls Apart^ J .Wall Street Journal, 7.-5-12 ..: ' - • . - -În January 2011, when the $26 billion merger plan between Duke Energy Corp. and Progress Energy'Inc. was announced, Jim Rogers, Duke's chairman and chiefexecutive, reassured skeptical analysts]]that he would be content to let Bill Johnson, the CEO of Progress, run the combined company. r Bdt§5nTuesday, as the merger was completed,.Mr. Johnson abruptly resigned, and,the 64-year-old Mr.-'v- -,Rogers assumed top duties at the combiried company, called Duke Energy.tfsCt'i - * - , . • "JJohnson to get $10.3 million severance from Duke Energy\^5vCharlotte Business Journal, 7-3-12; = .Bill Johrison "will get a cash severance of more than to $10.3 million following his resignation as "GEgfr..of Duke Energy, according to a regulatory filing the coriipany made/Tuesday.S&P places Duke on CreditWatch negative after CEO shake-upk'f!SNL Energy, 7-3-12 ." . . y TStandard ^Poor's Ratings Services late on July 3 placed DukelEnergy Corp.' s ratings onCreditWatch with negative implications following the company's annouricement that Bill Johnson:had|resigned from the company, which had just finalized its merger with Progress Energy Inc. IrSijfcDuke's $43B merger done _ •fei?Cincinnati Enquirer, 7-4-12;%rDuke Energy Corp. and Progress Energy Inc. said -Tuesday that they had completed their merger X'now valued at $32 bilhori to form the nation's largest electric company. Little.change is expectedjir^ / *Greater Cincinnati and Northern Kentucky, where^Duke has more than 1.2 million electric and gas^;customers and 3,700 employees."* '1 nProgress Energy finalizes deal to merge with N.C.-based Duke Energy: i -\ Tampa Bay Times, 7-4-12 " j^J \Duke and Progress finally merged on Tuesday, but the man tapped months ago to run the massjvej 3 L. [1energy company won't be along for the ride: " ,VW 1r i t~ •\'K^-~ = = =James Rogers staying on to lead Duke Energy after buyout of Progress Energy% •Indianapolis Star, 7-3-12 1% 1 -, James Rogers isn't going anywhere after all. -ENTIALLEGPGNDIR001560i.

Utilities'merger of benefit to ATCbMilwaukee Journal Sentinel, 7-3-12 -~Duke Energy Corp.'s acquisition of Progress Energy Inc. positions Pewaukee-based American -jTransmission Co. to work with the nation's largest utility to develop more than $4 billion of power/Hneprojects across.the country.iViWhat will happen to Duke Energy's corporate giving after merger?Triangle Business Joumai, 7-3-12People involved in Raleigh- area corporate philanthropy said they tentatively expect Duke Energy^ -Corporation to maintain the high profile of Progress Energy, whose acquisition Duke completed 'T"1Tuesday morning.jf 5Editorial: That's Progress?1IfRaleigh News& Observer, 7-5-12Sk"-i Right up to thejast moment, the merger.of North Carolina's two big, multistate electric utilities - apj*merger that creates, in an expanded'Quke Energy, ! the nation's largest utility - was relatively routine,despite some slowdowns along the path' to final'approval. Then came that last moment. Was there/arift? A change of heart? Some unrevealed business reason? Whatever its cause, Johnson's t^fcdeparture fuels.doubts about the merger, particularly in Raleigh and in Eastern North Carolina, hometo the bulk of Progress Energy's employees and customers.jfjj__Duke Energy Acquires Bankrupt Chile Campanario Power Plant - ReportDow Jones, 7-3-12Pf^Duke Energy Corp.'s Latin American subsidiary Duke Energy International acquired bankrupt ChileanCampanario power plant from private-equity fund Southern Cross Group for $86.2 million. El Puiô| =newspaper reported .Tuesday. M£;Duke's Coal Gasification Plant Slammed for High Costs - ^|';EnergyBiz, 7-4-12t/Consumer and environmental groups recently filed testimony at the Indiana Utility Regulatory flfe | ,.Commission (IURC) opposing the proposed settlement between Duke Energy, the Indiana Office|ofc;Utility Consumer Counselor, Nucor Steel and the Duke Energy Indiana Industrial Group regardiriQJt^] •.Edwardsport integrated gasification combined-cycle (IGCC) power plant.r&LDuke Energy, will buy electricity from countyWilkes (N.C.) Journal-Patriot, 7-4-12 « i _ %the Wilkes County LandfiH Gas Project is'expected to sta'rt putting electricity on the grid throughjfj ?.Duke Eriergy next week^said County Planning Director Eddie Barnes. Under an agreement bef§e

mergerwith Progress Energy Inc., which closed Monday.'lift 3 .Francois Broquin, a research assqciate with Berstein Research who spoke with the Duke investorrelationsteam Tuesday afternoon, says Johnson's resignation could make the merger integration-'.'more difficult. ' r^r '"There are risks of exits in management positions," he says. "No one expected this."The new Duke board decided Monday night to have Duke Energy CEO Jim,Rogers remain in thatu T -post afterJohnson resigned. Rogers spent some of Monday night and Tuesday moming talking withmore than 70 of the top'managers at the merged company to keep the merger on track. But he-dldfnot rule out the possibility of further changes in the management lineup. ,Employee meetings • v.In an interview Tuesday wjth the Charlotte Business Journal, Rogers said he will go to Raleigh riexfii week for an "all-rhands meeting" foriDuke employees — with company operations in Charlotte, -T^Cincinnati, Houston and Plainfieldrjnd.,participating by video — to"talk about the way forward and7respond to their questions" about the merger. - -W-:"Importantly, I am going to have to spend time with employees throughout the company —visiting^plants, visiting facilities, getting to develop greater relationships with people at every level of Progfiess— and that's what I am going to do," he says.The plan in some ways shows some ofthe ground that has to be made up following the surpriseresignation of Johnson. ^ ^ •; Johnson became CEO of Duke on the closing of the merger, under the conditions of the merger J-'. âgreement the companies signedMn January 2011.

- - - €"My goal is to work hard to get this together," he says.A ]y iNo answers "JAnalyst Broquin says after meeting with Duke representatives for an hour Tuesday, Bernstein hasihoclearer idea why Johnson left than it did after the announcement early Tuesday morning. Theinvestor-relations people told Bernstein the company does hot feel it has to disclose additional #information about the reasons for the departure in a required filing with the Securities arid Exchange.!Commission. He says that indicates the departure did not involve a matter that is material to the^lrcompany's performance.-'iAnalyst Andy Bischoff of Morningstar Inc. says Johnson's departure does raise some questions 1 forfthe merger. But he says the decision, to keep Rogers as CEO is good for the'company. f\ A"I think Rogers staying on (as CEO) is a positive for Duke," he says. "I think it's easy to lose sight ofthat fact in all this. He is one ofthe best operators in the business.", "ifDuke Energy CEO Plan Falls ApartWall Street Joumai, 7-5-12By Rebecca Smith and Joann S. Lublin/JjQgijIn January 2011, when the $26 billion merger plan between Duke Energy Corp. and Progress EriergyInc. was announced, Jim'Rogers, Duke's chairman and chiefexecutive, reassured skeptical anaiystsjfhaf he would be content to let Bill Johnson, the CEO of Progress, run the combined company. -Iji?"I would simply say that Bill is going to be the CEO and he is going to be making the calls," he sajffliria conference call at the time. He himself would be executive chairman.tilBut on Tuesday,%as the merger waSiCompleted, Mr. Johnson abruptly resigned, and the 64-yearibld;Mr. Rogers assumed top duties at the combined company, called Duke Energy.^SjThere have.been questions^rom the very beginning about how the men would share power. A ^Jjllongtime acquaintance of both executives said he doubted from the outset they would both rema|n3p"jjrn loves fo work," he.said of Mr. Rogers, and doesn't want to retire. • JThe companies declined Tuesday to explain the executive changes other than to say Mr. Johnson, 1;' 58, resigned "by mutual agreement with the board." , -.Mr. Johnson.didn't respond to a request for comment."Mr. Johnson, on that January 2011 conference call said he and Mr. Rogers knew each other wefeldon't think this is going to be a problem," he said. "Weare going to work well together."— ci J =? r ^'His departure package wasnt immediately released."P 1^1In an interview Tuesday, Mr. Rogers refused to elaborate on the reason for Mr. Johnsori's sudden^—-"resignation, instead emphasizing the'need to unify the two companies after what he called 18 mdnthsof uncertainty. ^=During the 20^1 conference call, Mr. Rogers had identified a fairly large role fonhimself, saying thatfFIDEfltlAL4LEGPGNDIR0

the two men would decide "a range of items including the strategy, as we look out five and 10 years"' "'LITAnalysts said they dont know whether businessissues or personal issueswere behind:Mr. Johnsbn'sdeparture. BottTcompanies brought significant baggage to the deal, including'troubled'pbwer projecte.The executives also have contrasting personal styles; Mr. Rogers is widely known as an affableVandêasy public speaker, while'Mr. Johnson is regarded as serious and plain-spoken!rjPaul Patterson, an analyst at Glenrock Associates, said Mr. Johnson's resignation was a surprise^ butadded it is often difficult for strong-willed individuals, like Mr. Rogers, to satisfy themselves with a ^ -lesser role in a larger company.It is the third time that Mr. Rogers has become chiefexecutive of ,3 utility company after completmgja^merger, although in the two previous cases he had been'in charge ofthe smaller ofthe merger ^ -partners. - ^- ... = * " 1 •Mike Haggarty, an analyst at Moody's Investors!Service, said Mr. Rogers's assumption of top dutiesraisesai'question about who will succee'd the CEO, wlfo 1 turns 65 in September.,HfThe rnerger bf Progress and Duke creates one ofthe largest utility companies in the U.S., with1operations in six states.After striking the merger deal in early 2011, the companies added provisions to provide some ^ pprotection to shareholders from potential liabilities related to projects facing regulatory scrutiny. -^JDuke continues to face questions related to its-costly Edwards port clean-coal power plant, nearing^ ?completion in Indiana, amid allegations ittried to exercise undue influence overthe reguiatory ~-jy=process in that state to build the $3 billion plant.' Mr. Rogers accepted the resignation bf thecompany's No. 2 executive in late 2010. But the company hasn't admitted any wrongdoing.Progress is trying to decide whether to repairer retire its disabled Civstal River nuclear plant in /;Floridan. _ i' i ' • "Johnson to get $10.3 million severance from Duke Energy ,jV^Charlotte Business Journal, 7-3-12 :By John Downey' .tjlr' ''.Bill;Johnson will get a cash severance of more than to $10.3 million following his resignation as CEOof Duke Energy, according to a regulatory filing the company made Tuesday.-" : ''f,T The filing with the Securities and Exchange Commission says Johnson, 58, resigned effective 12:0taim: Tuesday after succeeding to the position when the merger closedjust after 4 p.m. Monday?^. Jhe board, the filing says, accepted his resignation on Monday and voted that evening to appoint JimN Rogers, Duke's CEO before the merger, to his former position. Johnson had been CEO of Progress.-Energy, which Duke purchased in'a 1 $32 billion-deal.ffnThe filing says Johnson and the company made a separation agreement for his resignation. Johnsonâgreed to release of any claims he might make Duke, he consented to cooperate in the transjtiphjapd"he agreed not to compete against Duke or disparage the company. In-retum the company"agreecttjewould be paid severanceiunder his Duke employment agreement as if he had "good cause" to;re|ign. 1, jjr5LEGPGNDIR001"564a i.

a"-.The filing does not say what cause Johnson had to resign. Duke investor relations people haveitoldanalysts during the day that the company did not have to file a reason, which indicates that whateverthe reason was, it is not material to the company's operations. , JI"The filing says he will receive a payment of more than $7.4 million, representing three times the "annual salary and bonus specified in his Duke employment contract. - 1He will get almost $1.4 million, which would have been a 2012 bonus payment and a lump paymeritof up to $1.5 million in addition to that.s" rHe also gets "continued health and welfare benefits, reimbursement for relocation expenses and • ~accelerated vesting of all his equity compensation awards." Butthe filling does not specify the value.,of .those items. ^ = ^r.S&P places Duke on CreditWatch negative after CEO shake-upSNL Energy,-7-3-12By Amy Poszywak , - -Standard:* Poor's Ratings Services late on July 3 placed Duke Energy Corp.'s rating's on i ^;CreditWatch with negative implications following the company's announcement that Bill Johnson;hadresigned from the company, which had just finalized its mergerwith Progress Energy Inc. !t-£The rating agency said the action is in response to the abrupt change in executive leadership. - A. -•Johnson, 58, who had been president and CEO of Progress Energy, will be replaced by Jim Rogers,,64, Duke's previous president ; and CEO, who had planned on becoming chairman of the board oSsfl •directors of the combined company.$Sv'-Si--" 1S&P also revised the CreditWatch implications on its BBB+ corporate credit rating on Progress r-f" - iEnergy and its subsidiaries, and on the companies' issue ratings, to developing from positive. ^-"The sudden shift in management raises concerns about effective corporate governance, successful^handling ofthe anticipated merger integration, and the ongoing effective'management of pending î-schallenges that face the combined entity," Standard & Poor^s credit analyst Dimitri Nikas said in a .'news release.- •The rating agency expects to resolve the CreditWatch listing in the near term, after a closer review ,and assessment ofthe implications ofthe change in leadership and its impact on the combined entity:.Earlier in~the day, Moody's affirmed the ratings and stable outlooks on Duke and Progress. Moody's^ -~also assigned a Baa2 senior unsecured rating to Duke's unsecured bank revolving credit facility^ u -whichns in place and has been increased to $6 billion frorii $4 biHion through a previously agreed;, :upon arrangement with the banks to accommodate the merger.The fallouth'In the roughly 18 months that followed puke and Progress' initial merger announcement that lead, upt_6 the closure ofthe utilities' $32 billion deal, it can be argued that the last-minute CEO shake-uj||tole.the show.rif"The company said in a call with analysts July 3 that it would not be commenting on the board's >discussions with Johnson that preceded his resignation. However, UBS Investment Research arialystCQNB^NTIAL6LEGPGNDIR0p1565

Jim von Riesemann managed to squeeze out some commentary during the Q&A portion ofthe call byasking how Progress* management team was expected to react to the change. S !"There were a lot of people at Progress who were loyal to Bill,".the analyst said. "How do you expectto retain, or how.do you plan on retaining, the Progress team that you need in order to get the ~synergies to support those earnings targets?"Rogers responded: "Let me just respond by saying I reached out last night to all of the [senior ^management committee] members and talked through where we are going in.the future, and how,wehave to pull together," Rogers said. "My expectation is that all will lead in making this a great o!success."''"HNews reports throughout'the day indicated that Johnson was not planning to resign as late as July•2:,The Charlotte (N.C.) Business Journal reported in its Power City blog that on July 2, Progress had!^been planning.to have Jphnson available to speak to the media once the merger was closed butthabthose plans were canceled July 3. The-Charlotte OBse'rver said Johnson recently told the newspaper 'that he was house shopping in Charlotte and intended to be in his new office July 2; at that point;! 1 .Duke and Progress were aiming to close the deal by July 1.States surprised by resignationL-f-yi=L-,

%r;-J1'\merger considerably and might have caused the July 8 [termination] date to kick in." .Gruber said he had not heard from the commission whetherit-jwould,investigate the change.§ \ sNCUC Chaiirnan Ed Finley said in a July 3 statement following Duke'sannpuncement that while hefwas surprised'by Johnson's announcement^fhe commissibn's.focujsjwilljbe on ensuring that the .benefits the company promised to the state and to ratepayers^willMaterialize as*expected."My understanding based on Dukeând Progress'representationsiin bur hearing was that Johnssbrrwould be GEO.bf the combined.cdrripanyi" Finley said! "His departure pn'jhe same day the mergeVisclosed and'three days after our order may raise questions in the riiinds of some as to the timirig!d|3hedecision by those [nvolvedjiri it." L - - " , 1- 3 JMore important than management structure'and = successibn, !Finley continued," is the folibw-thrqugh;i tbn the promises eachrcbmpahy made during the.state's merger approval process. , = .ff^l"the .last-.l 8'moritlis .or.so fiayerbeen : a bme'ofstress arid uncertainty for the management and"empioyees bf^bth"cbmpanies,;andtwe hope with'the closingjaf the merger, with a clearer path \ : %.fonvard, that those responsible witri providing sen/ice will have ! fewer distractions," he said. "That)is^'stilf our liopel there is^signrficarit managernent talent within the two companies and we hope the^bestilineup will fkll'quickly iritb place." 1 ' ' ^feThe South CaroHna Public Service Comrriission's Office of Regulatory Staff, which supported thef^companies in thei NCUC's review.pf the deal, also was surprised by the decision but did:not feelithatPThe change materially affects the merger rationale, accordiricftb Dukes Scott, who heads the ORS@_=: :- j r-'- ' - "' l * '• - . .. u- ' ". ,tWe've worked .with Bill 1 Johnson for several years now, arid we've worked with Jim Rogers for seVeWyears now,:an~d- we have great respect for both of/thesetgenflernenH'i Scott said July 3. "Obviousjf^^were fine withitfie. prospect of Mr. Johnson, but we'd"be fine withi Mr. Rogers as wejl,>as far as tte^fl;1ORS is cbncefriied." '" •' . i~ "^K;. •• ' ' ".• m:now Duke's valued $43Bmerger.doneat $32 billion toTorm the riation's largesfelectric company.XCincinnati Enquirer; 7^4.-12 r •- ' iS^Rittle Duke change Eriergy is Corp. expected and Progress in Greater Energy Cincinnati Inci said and^Northernêntucky, Tuesday thatithey had where completed Duke has their n mergerf J_=A .2 million electric and gas customers and 3;70d employees and 3,300 retired workers.. !"There's no overlap - Progress is in the Carolinas and Florida - so there will be; no impad to our^' operations in Ohio and Kentucky," Blair Schroeder,^ Duke spokesman in Cincinnati, said Tuesday •, But"the-nbrmally routine deal closing did come with a twist.r^= Bill Johnson, who was tapped to lead the'combined company as president and chief executive, hasiiFdecidecl tb leave by "mutual agreement," the companies said. - 't-t'r^' Duke, CEO Jim Rogers, who was expected to be executive chairman, has instead been named ;£EO:Rogers was CEO and chaimian of Cinergy Corp. in Cincinnati until 2006, when that company mergbd(with Duke.C^^^NTIAL " LEGPGNDIR001567

Executives declined to answer questions about the Duke-Progress CEO switch. , 4. dr4Duke won federal approval for the merger announced in January 2011 on June 8 and wrapped dpdetails this week. ~ TjfV.' r AuiThe combined company will serve more than 7 million customers in North Carolina, Kentucky, Ofiio!Indiana, Florida and:South Carolina. Duke Energy's more than $100 billion in assets, include poêr?' 1generation assets in Latin America and a growing portfolio of renewable-energy projects in theJJiS?the combined company will be known as Duke'Energy and will keep its headquarters in Charlotte/?Experts said the new company wilj be able tomorrow money more^heaply, and it will use fewe"r?cjoa!-buming power plants in favor of ones that use natural gas. It's also expected to keep power pribeiv^,stable. ~ i : - "KU ,Regulators saw the dea[as the best possible in an environment of energy industry consolidation?Rogers said in a conference call with t analysts that his topiocus will be realizing the promised savingsTrom the merger, followed, by coping with the costs ofa shutdown at Progress Energy's Crystal Rtvefr1• nuciear plant in Florida.- ^. v 7 ''—I' "-î'-Ei Crystal River has been down for repairs since 2009 and isn't expected to operate again until 201p£r 'Progress Eriergy!had proposed building two riew nuclear power reactors at the site.|pij"Progress Energy finalizes deal to merge with N.C.-based Duke Energy :f^l^" tampa Bay Times, 7^12" _ - _ rBy Ivan Penn . 'Duke arid Progress finally merged on Tuesday, but the man tapped months ago to mn the massiveifKenergy cbmpany won't be along for the ride. - jllV^Surprising analysts and investors, Progress 1 Energy president and CEO Bill Johnson resigned atjthe".:,'eleventh hour, giving no reason for the move. « - - rfi 1 :Duke CEO Jim Rogers will lead the combined company, which will be called Duke Energy and be^:'headquartered in Chariotte, N.C. ^ , ? -; The rnerger, valued at as much as $31 billion, formed the largest utility in the nation with 7.1 rnilliori "customers across six states., 1 ='" _ .' , s '^1' 'The Rogers for Johnson swap could mean a more drastic shift in corporate culture for Progress^ ;'employees and a different perspective on how to generate power for its 1.6 miilion Florida customers.Arnie Gunderson, a nuclear engineer and consultant on utility issues, said Duke is tough managerially ,and politically. He expects Duke executives to be running much of Progress' operatioris injhe futy^'/'Duke is better than Progress," he said. "They fired the captain (Johnson) but they kept the anchor if(Progress)." - 'Susan Glickman, a lobbyist for the environmental group Southern Alliance for Clean Energy, said^.Rogers takinithe helm was I'great news for Florida." , %CQNî^TIAL9LEGPGNDIROOI 568

"He has been more fonvard-thinking about clean technologies and efficiency," she said.Opponents of the.merger took a more ominous view."Creation of the nation's largest electric utility will require enhanced vigilance ... to protect our ^ L -economy, our environment and our democracy from a giant corporation well-known for its use ofr)political muscle to pursue profits and expansion," said Jim Warren, executive director of the watchcibg!group N.C. WARN.H \~At the top of Duke's to-do list is a decision about the Crystal River huclear plant in Citrus County,^which broke on Johnson's watch during a botched maintenance and upgrade project. The 42-irich^Lthick concrete reactpr containment building cracked during the project, arid subsequent repair \ ljattempts resulted in more cracks." f-~The projected cost for repairs and the purchase of "replacement power while the plant sits idleexceeds $2 billion. The growirigi price tag and concern that the troubles at Crystal River were worsejthan Prbgress portrayed could be part of the reason that Johnson did not get the top job at the --J^merged company, analysts and experts said. ' ivJp"It could be the recognition that.the cost of the Crystal River plant could be a larger concern thanLylperhaps Duke had realized when they first had undertaken" the merger, said Peter Schwarz, an^peconomic professor at the University ofNorth Carolina at Charlbtte..' ' J0^8Duke will have tp decide whether to repair the 36-year-old Crystal River plant, which Johnson wantedto do, or decommission it. The company is scheduled to give a status update on the project to tfiel^Florida Public Service Commission on Aug. 13.DSfiJ.R. Kelly, the state public counsel who advocates for consumers, said that without Crystal River;Duke would need to develop an alternative source of energy. Environmentalists would like tofocuSipriefficiency measures, but Kelly said the company would likely build a natural gas plant - which ttH1customers would payfor.JIPDuke also will have to make a decision on whether to move fonvard with a $24 billion project to build]. two Westinghouse AP1000 nuclear reactors in Levy County. -r 1 i-' ::Custoriiers already are paying $1.1 billion for the project that experts believe will never get built 4 - \because of the high cost and the current low price of natural gas.' Mark Cooper, senior fellow for economic analysis at the Institute for Energy and the Environmentfat• Vermont Law School, put it this way: "The Levy plant is not going to happen."Duke officials would not comment about its plans for the Crystal River and Levy County plants. TDuke also has its own troubles.'!Before the merger, Duke had; constructed an advanced coal-fired plant in Indiana. The project ran:$1billion over budget. A top Duke executive and Indiana's utility regulator lost their jobs after an erfidV. .exchange about it." IManaging the challenges rests on Rogers, who was named one of Newsweek's "50 Most PowerfulPeople in th? World" in 2009. ; ^ ,INTIAL10LEGPGNDIR001569

Legacy Progress Director's Production of Documents (Part 3 ... - NCUC

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