OBJECTIVE

Reduce utility carbon emissions by transforming energy efficiency into the " fifth fuel" . Eight US electric utility companies are taking action to increase the potential of energy efficiency to reduce carbon emissions. While we represent companies of different sizes, in different markets with different regulatory structures, we share a common belief that energy efficiency is the greatest untapped resource in addressing global climate change in the near-term. Over the next ten years, we will invest significant resources in energy efficiency measures. We commit to work with policymakers to remove regulatory barriers to utility investment in energy efficiency, which would permit greater utility investment over the long-term. We are also working with others throughout the electricity sector to create the Institute for Electric Efficiency (IEE), an organization that will share best practices in energy efficiency and regulatory models that support investments in energy efficiency. We expect the IEE to become the sustaining organization to broaden and deepen the electric industry's commitment to energy efficiency, beginning by convening a stakeholders' summit in the second quarter of 2008.

COMMITMENT BY

Duke Energy Corporation

COMMITMENT DETAILS

First Year Costs $1,000,000,000

Commitment Duration 6-10 years

Anticipated Launch September 27, 2007

Geographic Scope United States

Geographic Region North America

COMMITMENT TO ACTION

Commitment to Action: Energy efficiency expenditures: With regulatory reforms and/or approval, the eight utilities would increase our aggregated investment in energy efficiency and DSM by $500 million a year to over $ 1.5 billion per year. Such increased levels of investment in energy efficiency and Demand Side Management (DSM) measures would, when fully implemented, be expected to: - Avoid nearly 30 million tons per year of greenhouse gas emissions -- the equivalent of removing nearly 6 million cars from the road; - Reduce peak demand enough to avoid the need for 50 500MW power plants.

Some states and utilities are currently more active than others in delivering energy efficiency and demand side management services to consumers and we intend to learn from each other. For example, the state of California has been a leader since the early 1980s in creating a regulatory framework that fosters these investments. Southern California Edison, an Edison International company, has offered programs, such as its refrigerator recycling program and portfolio of services for low-income customers, which are of a scale – over $500 million annually – and level of effectiveness that can serve as a model for other utilities.

Policy Reform: We commit to work collaboratively with policy-makers and other stakeholders to overcome regulatory barriers that may discourage utility investment in energy efficiency today. The most appropriate regulatory reforms may vary from state to state. Duke Energy, for instance, has proposed an innovative 'save a watt' energy efficiency program, which would reward the utility for undertaking aggressive expansion of energy efficiency and DSM measures in lieu of building new power plants. Institute for Electric Efficiency. The Institute for Electric Efficiency will provide a forum to: - share best practices on technologies, program designs, and financial arrangements for effectively delivering energy efficiency, - convene conferences and seminars to promote the sharing of information, ideas and experiences in energy efficiency in the power sector, and · develop a resource base of effective regulatory models and options for supporting investments in energy efficiency.

The Board of Directors of the Edison Electric Institute, the trade association for investor-owned electric utilities, voted to endorse and support the formation of the Institute at its September, 2007 meeting. The Institute will welcome the participation of all sectors of the electricity industry and other interested parties who share our commitment to enhancing the Nation's electric efficiency.

Role of CGI: CGI was the catalyst for this commitment. At a meeting of CGI's Energy and Climate Change Working Group Advisory Board earlier this year, the concept of collaboration was discussed as a powerful response to the pressing issue of climate change. Companies and entities acting individually can make a difference, but collaboration yields broader and deeper influence and results. After that meeting, Jim Rogers reached out to other utilities that are leaders in energy efficiency to join the commitment. And, from that base of support, the Edison Electric Institute adopted the concept of the Institute for Electric Efficiency and has made it an association-wide commitment.

To execute on this commitment, we will: - Invest in energy efficiency, DSM and advanced metering and other technologies. - Work with policy makers (legislative and regulatory) to remove the regulatory barriers to utility investment in energy efficiency, so that efficiency investments are on equal footing as investing in new plants. - Share best practices and innovation in energy efficiency through the Institute for Energy Efficiency. - Champion advanced metering and other technologies that help bring the economies of energy efficiency to scale. Measures of Success: - See reductions in peak capacity, energy and carbon emissions in the Commitment to Action section. - The IEE achieves goals noted above.

IMPLEMENTATION STRATEGY

Implementation Strategy: Each company has identified a lead to manage and report on company investment and innovation in EE and track this commitment. Results will be reported annually, coincident with reporting of data to the Department of Energy's Energy Information Administration. The Edison Electric Institute will be taking the lead in executing the Institute for Electric Efficiency.

POINT OF CONTACT

Roberta B. Bowman, VP, Sustainability & Community Affairs & President, The Duke Energy Foundation

PARTNER(S)

Consolidated Edison Company of New York, Inc. Edison International Great Plains Energy Pepco Holdings PNM Resources, Inc. Sierra Pacific Resources, Inc. Xcel Energy