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                                     Paron Lagoon, Cañon del Pato Complex, Peru

  Contact Information
                                                                                                               Michael Dean Bernard
  We welcome your comments                                                                                     General Manager - Sustainability, EHS & CM
  and questions about this report.                                                                             Duke Energy International, LLC
  Send any feedback to:                                                                                        5555 San Felipe,
                                                                                                               Houston, TX 77056

    Letter from the President ......................................................................................................................................................................... 2
    About this Report ....................................................................................................................................................................................... 3

section one:
Profile ......................................................................................................................................................4
    Strategy and Analysis ................................................................................................................................................................................ 5
    Organization Profile ................................................................................................................................................................................... 9
    Report Parameters ....................................................................................................................................................................................12
    Governance, Commitments and Engagement ..............................................................................................................................15

section two:
Economic Performance .................................................................................................................... 20
    Financial Highlights .................................................................................................................................................................................22
    Market Presence ........................................................................................................................................................................................23
    DEI’s Economic Impacts ..........................................................................................................................................................................23
    System Efficiency ......................................................................................................................................................................................27

section three:
Environmental Performance ........................................................................................................... 28
    DEI’s EHS Policy and Principles .............................................................................................................................................................29
    EHS Organization ......................................................................................................................................................................................30
    Management Approach .........................................................................................................................................................................32
    Environmental Indicators ......................................................................................................................................................................36

section four:
Social Performance ........................................................................................................................... 50
    Health and Safety......................................................................................................................................................................................51
    Safety Highlights .......................................................................................................................................................................................57
    Labor Practices...........................................................................................................................................................................................59
    Workforce Highlights..............................................................................................................................................................................64
    Human Rights.............................................................................................................................................................................................65
    Society ..........................................................................................................................................................................................................65
    GRI Standard Disclosure Profile ...........................................................................................................................................................74
                                           Le t ter from t he Pres ident
                                            of our markets in a responsible way.         •	   Help build strong communities by
                                                                                              actively supporting and involving
                                            In this environment, DEI recognizes               ourselves in the communities
                                            the need to reduce carbon dioxide                 where we do business.
                                            emissions, identify and develop alter-       •	   Be profitable and demonstrate
             Richard McGee, President
                                            native energy sources, support the                strong governance and
                                            communities where we operate, and                 transparency through a
                                            continue to grow and develop an ex-               continued focus on productivity
Dear Stakeholders,                          ceptional workforce, all while remain-            and efficiency in our business
                                            ing profitable in a way that creates              and an internal and external
I am proud to present Duke Energy           long term value for our shareholders              commitment to open, honest and
International’s first Sustainability        and other stakeholders.                           frequent communication.
Report. This report illustrates how we
have been operating our business            In order to meet these multi-faceted         While we still have much to accom-
with a focus on sustainability for many     challenges, our sustainability plan          plish, I am pleased to report that we
years. Additionally, we hope to give        focuses on the following five main           are off to a good start. This report
you a better understanding of who we        objectives:                                  details some of our accomplishments
are as a company and the values and                                                      to date in each of these areas and sets
principles that drive our strategy and      •	   Provide products and services for       forth our focus areas going forward
operating philosophy. You will learn             the markets we serve that balance       for each objective. We are proud of
how our approach to our business and             the realities of our markets with       what we have accomplished so far,
markets is grounded in a long-term               the fact that we live in a carbon-      but recognize that sustainability is a
perspective and the simple yet power-            constrained, competitive world.         long-term journey. We have a solid
ful imperative of operating in a way        •	   Reduce our environmental                foundation on which to build and
that is good for people, the planet and          footprint by maintaining the low        I invite your feedback on ways that
profits. At Duke Energy, these are not           carbon intensity of our generation      we can improve and enhance that
mutually exclusive concepts; quite               portfolio, reducing Greenhouse          foundation. Your comments will help
the contrary, they are inseparable and           Gases and other pollutants,             shape and inform our future plans and
mutually dependent objectives, all of            increasing the efficiency of our        progress, and ensure that we continue
which must be met in order for us to             operations and pursuing genera-         to operate our business in a way that
sustain success over the long-term.              tion solutions for our markets that     is good for people, the planet and
                                                 strike the proper balance between       profits.
DEI’s business is focused on power               cost and reliability on the one
generation in Latin America, but the             hand, and environmental impact
current economic crisis highlights               on the other.
how we live in a world that is intercon-    •	   Attract and retain a diverse            Sincerely,
nected and interdependent. Our eco-              workforce by maintaining and
nomic interdependency, our shared                enhancing a work environment
and increasingly scarce resource base,           and culture that places our
                                                                                         Richard McGee
and our common living environment                employees and contractors at
                                                                                         President, Duke Energy International
ensure that our actions in one corner            the center of a value system with
                                                 the highest level of priority on
                                                                                         June 15, 2009
of the globe have real consequences
in other parts of the world. Today, this         employee and contractor safety,
reality sets the context for a global            training and education, and
economy in crisis and an energy                  responsibility to society and the
industry that is being challenged to             communities where we live and
transform itself to meet the demands             work.

2                                                                             Duke Energy International – Sustainability Report 2008
                                           Ab out t his R epor t
                                                This first DEI Sustainability Report is a                          As this report shows, DEI is truly
                                                significant milestone for our company.                             committed to sustainability
                                                It describes our strategies, activities                            throughout our operations, and I am
                                                and performance across the three                                   delighted to highlight our progress
                                                areas of sustainability—economic,                                  over the last few years. It is thanks to
           Michael D. Bernard, General
        Manager Sustainability, EHS&CM          environmental and social—and                                       the hard work of all our employees
                                                highlights our contributions and                                   and contractors that we have the
                                                commitments toward our people,                                     opportunity to report on DEI’s
We are at a defining time in history,           surrounding communities, the                                       achievements.
where continuing population growth              environment, safety of our employees
and the associated consumption                  and our business. It also reflects the                             This report has been organized
of natural resources, global climate            profound changes at our company                                    following the Global Reporting
change, and the emergence of strong             and in the communities we serve,                                   Initiative (GRI) Guidelines, and
social responsibility and indigenous            and demonstrates we understand                                     after performing a self-assessment
people movements are just a few                 sustainability as a business strategy.                             following the GRI Guidelines
issues fundamentally changing                   We are learning to take a longer-term                              Application Levels criteria, we believe
our lives and the direction of our              view of our decisions, our investments                             we meet GRI Application Level B.
company. To address these issues, it            and the potential associated impacts.
is critical to establish a new decision-        We are embracing the need to                                       I welcome your comments and
making framework that will allow                consider the economic, community                                   feedback on how we can improve
us to maximize opportunities and                and environmental nexus of our                                     our processes to drive toward a more
efficiently minimize risks presented by         decisions.                                                         sustainable future.
these changes.
                                                As we embark on this journey,
In 2007, Duke Energy Corporation                we will continue to improve and
                                                                                                                   Michael D. Bernard
published its first five-year                   further incorporate sustainability
                                                                                                                   General Manager Sustainability, EHS & CM
sustainability plan and report.                 considerations in our day-to-day
                                                                                                                   June 15, 2009
This plan reflects Duke Energy’s                operations, relying on our greatest
commitment to proactively manage                asset, our people, to meet these goals
those areas of sustainability that are          and challenges.
most material to us in a way that
is good for people, the planet and
profits. During the past year, Duke
Energy International (DEI) assessed
our operations and identified the
most significant issues under each
focus area of the Duke Energy
Corporate Sustainability Plan. This
                                                                                                     2002          C         C+                      B      B+                       A      A+
process resulted in prioritizing,                                                                  In Accordance

developing clear objectives and

monitoring progress to support each                                                    Declared
                                                                                                                         Report Externally Assured

                                                                                                                                                                                         Report Externally Assured
                                                                                                                                                         Report Externally Assured

of these areas. As we move forward                                                   Third Party
and refine our objectives and targets,                                                 Checked

we expect to reflect on and gain from                                                      GRI
the input of our stakeholders.                                                         Checked

                                                                        DEI’s GRI Application Level Grid

Duke Energy International – Sustainability Report 2008                                                                                                                                                               3
    section one:


    Duke Energy International (DEI)—a subsidiary of Duke

    Energy Corporation, one of the largest electric generation

    businesses in the United States, providing energy and

    natural gas distribution service throughout parts of the

    Midwest and the Carolinas—operates and manages

    power generation facilities in Latin America, with hydro

    and thermoelectric assets in Argentina, Brazil, Ecuador,

    El Salvador, Guatemala, and Peru, making it a widely

    diverse company, both culturally and geographically. Our

    headquarters are in Houston, Texas.

4                                    Duke Energy International – Sustainability Report 2008
Strategy and Analysis                                    Key Impacts, Risks and
Duke Energy Corporation operates with an eye
on the future, recognizing a responsibility to           The three key areas of sustainability – economic,
contribute to a healthy economy, clean environ-          environmental and social – and the key impacts,
ment and strong social fabric today and for future       risks and opportunities associated with each are
generations. This balanced, long-term approach           summarized below. Each area is discussed in more
is part of our business strategy and aimed at            detail throughout this report.
building value for our investors. This commitment
is reinforced by clear management expectations
and company-wide policies by which progress is           Economic Dimension
regularly measured.
                                                         Providing investors a superior and sustainable re-
DEI’s sustainability approach, is aligned and con-       turn on investment is one of Duke Energy’s sustain-
sistent with Duke Energy’s sustainability plan and       ability goals. To accomplish this, we work with our
goals. It recognizes the interdependence among           business units and companies to optimize invest-
customers, the health of the communities served,         ment capacity, identify strategic growth opportuni-
and business success as drivers of our commitment        ties, meet and exceed the operational effectiveness
to sustainability and environmental leadership.          of our assets, and uphold a solid financial structure
                                                         that helps us meet our strategic objectives.
DEI’s sustainability plan reflects our commitment
to operate the company such that we benefit              Equally important is our ability to provide in-
our employees, the surrounding communities,              novative products and services, satisfy growing
the environment, and our business viability. The         demand, and meet stakeholder expectations. Do-
plan recognizes and addresses the key economic,          ing so, DEI not only creates value for investors, we
environmental and social opportunities and               also stimulate economic growth in the communi-
risks facing the electric industry today and in the      ties where we operate, through investments in
future, expands on our business strategy and             infrastructure, technology, research and develop-
values, and focuses on the areas most pertinent to       ment, and human resources, all of which directly
sustainability. The goals of this plan are described     contribute to economic development.
on pages 6 and 7.

Duke Energy International – Sustainability Report 2008                                                           5
D u ke Ene rg y ’s
s us t a i n a bilit y pla n g oa ls

Innovative products
and services
Provide innovative           Goal:
products and services for    Environmental
a carbon-constrained,        footprint                    Goal:
competitive world.           Reduce our environmental     Quality workforce                   Goal:
                             footprint.                   Attract and retain a diverse,       Strong communities
Why it is important:                                      high-quality workforce.             Help build strong
Our customers want           Why it is important:                                             communities.
products and services        As an energy company, we     Why it is important:
that keep them               have a large impact on the   Energy companies will be            Why it is important:
competitive regionally and   environment and depend       differentiated by the quality,      Our success is linked to the
globally, yet respond to     on natural resources         creativity and customer             health and prosperity of
environmental concerns.      for much of our fuel.        focus of their employees.           the communities we serve.

        6                                                                Duke Energy International – Sustainability Report 2008
                                                  D u ke Energy I nter nat ion al ’s
                                                  ma na gement approach to sustainab i l i t y

                                                                        1. Develop a
                                                                           sustainability plan
                                                                             Internal inputs:
                                                                             •			vision	and	values
                                                                        	 •		 business	strategy
                                                                        	 •		 input	from	company		 	
                                                                        									Subject	Matter	Experts	(SMEs)
Goal:                                                                        External inputs:
                                                                             •		 	 ey	economic,	environmental	
Governance and                                                                   and	social	issues
transparency                                                            	 •		 best	practices
Be profitable and                                                            •		 stakeholder	feedback
                                         4. Refine the
demonstrate strong                          sustainability plan
                                           •		 	 nnual	review	and	improvement	
                                               a                                                                 2. Integrate into the
governance and                                                                                                      business and execute
                                               of	the	5-year	plan
transparency.                            	 •		 	 oals	added	or	retired	based	
                                               g                                                                      	5
                                                                                                                   •			 	 -year	plan	approved	by	
                                               on	new	developments                                                      executive	leadership
                                                                                                                 	 •		 	 ccountable	executive	
Why it is important:                                                                                                    assigned	to	each	goal
Creating shareholder                                                                                                 	s
                                                                                                                 	 •		 	 upport	of	initiatives	and	
value and earning the                                                                                                   goals	incorporated	into	
                                                                                                                        annual	departmental	plans
trust and confidence of
our many stakeholders
keep us in business.                                                    3. Monitor and
                                                                           communicate progress
                                                                        	 •		 	 emi-annual	updates	to	
                                                                              executive	leadership
                                                                        	 •		 	 nnual	update	to	external	stakeholders	
                                                                              via	the	Sustainability	Report

                 DEI Headquarters, Houston, TX
     .         Courtesy of Houston Architecture

Duke Energy International – Sustainability Report 2008                                                                                       7
Accomplishing these goals helps us          As part of our strategy, we have                      chain and contractors to improve en-
manage potential risks arising from:        invested in renewable energy and en-                  vironmental and social performance.
                                            vironmentally responsible technology,
•	   Limited capital availability for ex-   demonstrating our commitment to                       To meet these challenges, we are com-
     panding electricity infrastructure     corporate responsibility. Furthermore,                mitted to continuous improvement
     projects in developing countries.      we are constantly working to improve                  in quality of service, customer service
•	   Need to leverage current genera-       energy efficiency both as an electric                 and supply chain. In recent years, the
     tion assets, while investing in new    generator incorporating technology                    supply chain has been the object of
     technologies.                          to produce energy cleanly and ef-                     increased auditing and improvement.
•	   Ability to meet demand growth.         ficiently, and as an end-user, improv-
                                            ing energy efficiency in the workplace                Moreover, we are continuously direct-
                                            through process improvement and                       ing resources toward improving the
Environmental Dimension                     employee awareness.                                   levels of health and safety in the work-
                                                                                                  place, and training and awareness to
Electricity plays a vital role in econom-                                                         enhance internal skills and capabilities
ic development: It supports techno-         Social Dimension                                      that create employee development
logical advances, fosters infrastructure                                                          opportunities. Specific initiatives, such
investments and generates jobs. Yet,        With an increasingly important pres-                  as the Continuous Improvement Pro-
the electric power generation lifecycle     ence in Latin America, DEI must man-                  gram (PMC for its acronym in Spanish
has potential environmental impacts         age important challenges. Externally,                 and Portuguese) prove DEI’s commit-
on biodiversity, natural resources,         these include gaining community                       ment to our employees.
emissions, noise, discharges, and the       support and acceptance, advancing
visual landscape. In addition, global       fair and ethical business practices, and              Relations with the communities where
climate change continues to be one          balancing stakeholder expectations.                   we operate have become crucial. We
of the most pressing challenges faced       Internally, a critical focus is protecting            are promoting dialogue and com-
by the electric utility sector and the      the wellness, health and safety of em-                munication with them and adopting
world.                                      ployees, and working with the supply                  measures to facilitate their social and
                                                                                                  economic development. Through a
                                                                                                  clear understanding of each commu-
                                                                                                  nity’s needs, we support and sponsor
                                                                                                  events and activities geared toward
                                                                                                  improving their quality of life in
                                                                                                  education, recreation, environmental
                                                                                                  protection, infrastructure, and health
                                                                                                  and safety. Activities we sponsor and
                                                                                                  take part in include:
                                                                                                  •	 Preventive health programs.
                                                                                                  •	 Donations of school supplies and
                                                                                                  •	 Volunteer activities to improve
                                                                                                       local communities’ infrastructure
                                                                                                       and environment.
                                                                                                  •	 Local events.
                                                                                                  •	 Charitable events.

                                                 Paron Reservoir, Cañon del Pato Complex, Peru

8                                                                                      Duke Energy International – Sustainability Report 2008
                                               DEI focuses on activities considered                 Operational Structure
Organization Profile                           part of our core business, and subcon-
                                                                                                    of the Organization
                                               tracts those that can be performed
                                               more efficiently by specialized busi-
Primary brands, products and services,         nesses. Those businesses are required                Our organizational model consists of
operational structure, and countries           to employ high standards of quality                  decentralized business units, as well
and markets where DEI is present are           and responsible behavior regarding                   as centralized corporate functions, for
summarized below.                              the environment, labor practices and                 governance and control. This struc-
                                               social areas, as stipulated in our Sup-              ture allows each business unit and
                                               plier, Contractor and Partner Manage-                company where we have a majority
                                               ment Policy, associated guidelines, and              interest to adapt to the market and
Primary Brands Products                        Operating Principles.                                regulatory conditions where it oper-

and Services                                                                                        ates, while aligning it to our overall
                                                                                                    strategy. The following figure presents
                                                                                                    our organizational structure:
The Duke Energy brand is more than
words and a logo. It is an identity. At its
heart, it expresses the company’s core
values and future ambitions. At its best,
it positions us as an industry leader
and a good corporate citizen.                                                               Richard McGee
Behind every strong brand is a cohe-
sive communications strategy. Each
employee communicates this strategy                                  John Enloe                                  Mickey Peters
in some form or another every day.                        Senior Vice-President Commercial               Senior Vice-President Regional
Every interaction—email, phone calls,                       Operations and Development                         Operations Brazil
speeches, forums or a presentation to a
team—whether inside the company or                                  Edward Hile                                   Laine Powell
out, reflects our brand.                                     Vice-President Commercial                       Vice-President Regional
                                                             Operations and Consulting                        Operations Argentina
DEI’s primary product is electricity for                         Stacey Schrader                                Guillermo Fiad
the wholesale and retail market. We also                     Vice-President Accounting               Country Director Operations Argentina
offer energy commercialization services.
                                                                   Cheryl Lipshutz                            Héctor Gutiérrez
Through our products and services,                       Vice-President Mergers, Acquisitions              Vice-President Regional
DEI enhances the quality of life, reli-                        and Government Affairs                    Operations Peru and Ecuador
ability and safety of our customers. We                      Michael Bernard                                          Open
accomplish this by promoting energy                General Manager Sustainability, EHS&CM                    Vice-President Regional
efficiency and offering a high-quality,                                                                     Operations Central America
and reliable electric supply, while car-                    Jacquelyn Salinas
ing for the environment .                            Managing Director Human Resources

                                                                  Hugo Ferrer
To deliver products and services suc-                      Managing Director Regulatory
cessfully, all DEI facilities have imple-                     and Market Analysis
mented DEI’s Environmental, Health
and Safety Management System, based                 DEI’s Organization as of December 31, 2008
on widely recognized international
standards for managing quality, envi-
ronment, and health and safety. The
system, aligned with Duke Energy’s
vision, presents the framework to pro-
vide and deliver high-quality products
and services responsibly.

Duke Energy International – Sustainability Report 2008                                                                                       9
Countries/markets where the organization operates

DEI owns and operates power generation facilities throughout Central and South America, including Argentina, Brazil,
Ecuador, El Salvador, Guatemala, and Peru. We are the fourth largest generator of electricity in Latin America, based on net
capacity, with approximately 75 percent of our generating capacity hydroelectric and nearly 90 percent either currently
contracted or receiving a system capacity payment. Our total gross electrical capacity is 4,373 megawatts (MW), produced by
our Central and South American power generation facilities. We also own equity investments in Saudi Arabia and Greece.

DEI Scale
 Scale                                                                  2008
 Employees                                                              1,118
 Net	Sales	(in	millions	of	dollars)                                      411
 Quantity	of	products	and	services	(GWh	sold)                          18,066
 Proportional	Capacity	in	Operations	(MW)                               4,018

Detailed information on the scale of DEI appears in the economic and
social sections of this report, and in Duke Energy’s 10K filing.

10                                                                              Duke Energy International – Sustainability Report 2008
Significant Changes During                      DEI Brazil Ranked “100 Best                          DEI El Salvador Wins 3M
the Reporting Period                            Companies to Work For”                               Industrial Safety Award
                                                                                                     DEI El Salvador received, for the sec-
DEI implemented the following promi-                                                                 ond consecutive year the first place
nent activities in 2008:                                                                             3M Industrial Safety Award in the
•	 Integration of Aguaytia Energy                                                                    Power Generation, Transmission, and
     group into DEI Egenor in Peru (In-                                                              Distribution Section for our demon-
     tegration has not been complet-                                                                 strated commitment to employee
     ed, thus for the purpose of this                                                                health and safety. 3M El Salvador cre-
     report most of the information is                           DEI Brazil Receives the “100 Best   ated the “3M Industrial Safety Award”
                                                                   Companies to Work For” 2008
     presented as separate business                                                                  in 1993 to recognize companies that
     units).                                                                                         have invested in employees’ training,
•	 Addition of a 6 MW combined                                                                       provided a safe work environment,
     cycle thermoelectric unit to the           DEI Brazil has for the fourth time                   and shown outstanding progress in
     Arizona power facility in Guate-           ranked in the “100 Best Companies to                 implementing health and safety pro-
     mala.                                      Work For in Brazil 2008,” as declared                grams that have reduced workplace
•	 Construction of the following                by Great Place to Work Institute in                  injuries and incidents.
     projects:                                  partnership with Época magazine.
     •	 “Carhuaquero IV” (operational           DEI Brazil also placed on the 100 Best               The panel of judges included repre-
          on May 22, 2008) and “Caña            list in 2002, 2006 and 2007. In the                  sentatives from the Ministry of Labor
          Brava” (operational on No-            classification of the 100 Best, Great                and Social Security, the Salvadorian
          vember 17, 2008) hydroelec-           Place to Work Institute analyzes a                   Social Security Institute, the National
          tric facilities, with 9.68 and 5.5    number of factors, including how                     Science and Technology Council,
          MW, respectively in Peru.             companies hire and integrate new                     Professional Consultants in Indus-
     •	 “Las Flores” a 195 MW                   staff, how employees are inspired                    trial Health and Safety, the Business
          simple-cycle natural gas              for the work at hand, whether good                   Consulting and Development Center,
          turbine in Peru.                      processes exist for listening and                    and 3M El Salvador. This year compa-
     •	 “Las Palmas II,” a 85 MW coal           acting on employee opinions and                      nies were evaluated on management
          power plant in Guatemala.             suggestions, how employees are                       commitment, risk management, and
     •	 “Retiro” and “Palmeiras”, two           trained and developed, and how top                   innovation — DEI El Salvador was
          small hydropower plants               performance                                          honored for the Perfect Day program,
          (SHP) with 16 MW each, being          is recognized.                                       which recognizes all employees and
          built in the Mirim Sapucai            DEI Brazil was                                       contractors for their daily commit-
          river, Sao Paulo State, Brazil.       among the                                            ment to safety.
          Both SHPs are projected to            25 best in
          start commercial operations           the following
          in August of 2010.                    categories:

Awards Received
                                                •	   Camaraderie — 5th
                                                •	   Opportunity — 8th
DEI has been the proud recipient of             •	   Services — 10th
numerous awards and honors over                 •	   Respect — 12th
the years. These awards recognize               •	   Quality of life — 13th
not only our achievements, but also             •	   Communications — 17th
our employees’ hard work, innova-               •	   Educational levels — 18th
tive thinking, and commitment to a              •	   Staff turnover — 20th
high-performance work culture. The              •	   Integration — 20th
following case studies describe two
prestigious awards received by DEI in
2008.                                                                                                                3M Industrial Safety Award, DEI
                                                                                                                         El Salvador Wins First Place

Duke Energy International – Sustainability Report 2008                                                                                            11
30 Best Companies to Work for in Peru
                                                                                          Report Parameters
Great Place to Work Institute recognized
DEI Egenor for the sixth consecutive year
as one of the best companies to work for in                                               This Sustainability Report is the first by
Peru. It was the only energy company to be                                                DEI to describe how we are facing the
ranked among the top 30 companies. The                                                    modern-day call for sustainable busi-
Institute acknowledged DEI Egenor for of-                                                 ness activities. The reporting period
fering an excellent work environment and                                                  is 2008; however, since it is our first
clear career paths.                                                                       report, significant activities regarding
                                                                                          sustainability that occurred previously
                                                                                          are included. We anticipate updating
Eloy Chaves Honor Medal                                                                   this report annually.

DEI Brazil was awarded the Eloy Chaves Honor Medal for the eighth consecu-
tive time. The award accounts for total incident case rate, lost workday case rate,       Boundaries and Scope
total severity rate and fatalities, for both employees and contractors. It is granted
annually to electricity companies with the lowest rates of work-related accidents
during the year. DEI Brazil ranked second in the Generation/ Transmission Utilities       This first DEI Sustainability Report
category—completing 1.5 million work hours without a lost-time incident in 2007.          compiles our strategies, activities and
                                                                                          performance across the three areas of
                                                                                          sustainability: economic, environmen-
Dow Jones Sustainability Indexes                                                          tal and social. To define the boundary
                                                                                          of this report, we followed the Global
Duke Energy was named to the Dow Jones Sustainability Index for North America             Reporting Initiative (GRI) Reporting
for the third consecutive year. The designation was based on a thorough assess-           Guidelines R.G. 3.0, and the Report-
ment of our economic, environmental and social performance, with a strong                 ing Guideline & Electric Utility Sector
focus on long-term shareholder value.                                                     Supplement pilot version (RG & EUSS).

                                                                                          The intention of this first report is to
                                                                                          provide internal audiences a clear
                                                                                          overview of our sustainability perfor-
                                                                                          mance, risks and opportunities, and
                                                                                          develop the knowledge to improve
EEI Advocacy Excellence Award for Energy Efficiency                                       our process in our next reporting
                                                                                          cycle. This report covers:
Duke Energy Received the prestigious Advocacy Excellence Award from the Edison            •	 The principles, policies and
Electric Institute (EEI)—the association of U.S. shareholder-owned electric compa-            guidelines that we approve and
nies—in recognition of our comprehensive advocacy program to promote energy                   adopt as well as the sustainable
efficiency with customers and employees, and at the federal, state and local levels.          development strategies that
                                                                                              apply to all our business units,
                                                                                              and are promoted in companies
                                                                                              where we hold a majority interest.
                                                                                          •	 The performance metrics and
                                                                                              quantitative information for each
World’s Most Ethical Companies                                                                business unit and company where
                                                                                              we hold a majority interest, in
Duke Energy was named one of the World’s Most                                                 which both the main business is
Ethical Companies by Ethisphere Institute—a think-                                            generation and commercialization
tank focused on research and promotion of profit-                                             of electric power and natural gas,
able best practices in global governance, business                                            and its operations have significant
ethics, compliance and corporate responsibility—for                                           environmental or social aspects.
the second year in a row.

12                                                                             Duke Energy International – Sustainability Report 2008
DEI’s business units that are part of           DEI Guatemala
the scope of this report are discussed
below:                                          DEI Guatemala generates and
                                                commercializes electricity through its
                                                three thermoelectric plants—Arizona,
DEI Argentina                                   Las Palmas and La Laguna—located
                                                                                            Cerros Colorados Hydroelectric Complex, DEI Argentina
                                                in the districts of Escuintla and
DEI Argentina is dedicated to the               Guatemala. Total installed capacity is
generation of electric power and                approximately 290 MW.
wholesale commercialization of
electricity and natural gas. It has an
installed capacity of 576 MW in the             DEI Egenor, Peru
province of Neuquen, encompassed
by the Planicie Banderita hydroelectric         DEI Egenor generates and
power station that is part of the Cerros        commercializes electric power
Colorados hydroelectric complex, and            through two hydroelectric power
the Alto Valle thermoelectric power             stations, Cañon del Pato, and
plant. DEI Argentina also has licenses          Carhuaquero, and six thermoelectric                        Capivara Hydroelectric Plant, DEI Brazil
to commercialize electricity and                plants in northern Peru. These facilities
natural gas in the wholesale markets.           generate approximately 510 MW of

DEI Brazil / DEI Geração Paranapanema
                                                Grupo Energetico Aguaytia, Peru
DEI Brazil/DEI Geração Paranapanema
operates and manages hydroelectric              Grupo Energetico Aguaytia is divided
plants along the Paranapanema River,            into three independent businesses:
between the states of Sao Paulo and             •	 Aguaytia Energy, dedicated to
Parana. The eight plants managed by                  the commercialization of natural
DEI include: Jurumirim, Chavantes,                   gas and its by-products in Peru.                         Arizona Power Plant, DEI Guatemala
Salto Grande, Canoas I, Canoas II,                   Activities include extraction,
Capivara, Taquaruçu and Rosana                       production, transportation,
plants. They have a total installed                  storage and commercialization.
capacity is 2,307 MW.                           •	 Termoselva S.R.L., which
                                                     generates electricity using the dry
                                                     gas produced by Aguaytia Energy.
Electroquil S.A., Ecuador                            This facility has an installed
                                                     capacity of approximately 177
Electroquil, located in the province                 MW.
of Guayas—Republic of the Ecuador,              •	 Eteselva S.R.L., dedicated to
generates electric power from a                      the transmission of electricity.
thermoelectric plant with an installed               A section of this transmission                              Electroquil Power Plant, Ecuador
capacity of 192 MW.                                  line is part of the main national
                                                     transmission system of Peru—
                                                     “Sistema Interconectado Nacional
DEI El Salvador                                      del Peru.”

Located in the Republic of El Salvador,         EI also own equity investments in
DEI El Salvador generates and                   Saudi Arabia (National Methanol
commercializes electricity through              Corporation NMC) and in Greece
its thermoelectric plants in Acajutla           (Attiki Gas and CSCC). These
and Soyapango, with a total installed           investments are not part of the scope
capacity of 328 MW.                             of this report.
                                                                                                             Acajulta Power Plant, DEI El Salvador

Duke Energy International – Sustainability Report 2008                                                                            13
                                                                                    Basis for Reporting

                                                                                    The environmental information is consolidated, apply-
                                                                                    ing the percentage of participation, direct or indirect,
                                                                                    for each DEI business unit:
                       Cahuarquero Hydroelectric Plant, DEI Egenor Peru

                                                                                      Business Units                                                  %
                                                                                      DEI	Argentina                                                   91
                                                                                      DEI	Brazil                                                      95
                                                                                      Electroquil	S.A.	–	Ecuador                                      83
                                                                                      DEI	El	Salvador                                                   	
                                                                                      DEI	Guatemala                                                 100
                                                                                      DEI	Egenor	–	Peru                                             100
                                                                                      Grupo	Energetico	Aguaytia	–	Peru                                76
                                               Aguaytia Power Plant, Peru

                                                                                                                   Total MW        Owned MW
 Country                            Facility                                   Location                                                             Fuel
                                                                                                                    Capacity         Capacity
 Argentina                                                                                                               576             523
 DEI	Argentina                      Alto	Valle	Thermoelectric	Plant            Neuquen	Province                             97             	88	     Natural	Gas
                                    Cerros	Colorados	Hydroelectric	Plant       Neuquen	Province                           479            	435	      Hydro
 Brazil                                                                                                                2,307           2,116
 DEI	Brazil	/	DEI	Geração	          Jurumirim	Hydroelectric	Plant              Piraju,	Sao	Paulo	State                     	98	             93      Hydro
 Paranapanema                       Chavantes	Hydroelectric	Plant              Chavantes,	Sao	Paulo	State                 414             393       Hydro
                                    Salto	Grande	Hydroelectric	Plant           Salto	Grande,	Sao	Paulo	State                74             	70	     Hydro
                                    Canoas	II	Hydroelectric	Plant              Palmital,	Sao	Paulo	State                    72              34      Hydro
                                    Canoas	I	Hydroelectric	Plant               Candido	Mota,	Sao	Paulo	State               	83	             39      Hydro
                                    Capivara	Hydroelectric	Plant               Taciba,	Sao	Paulo	State                   	640	           	608	      Hydro
                                    Taquaruçu	Hydroelectric	Plant              Sandovalina,	Sao	Paulo	State              	554	           	526	      Hydro
                                    Rosana	Hydroelectric	Plant                 Rosana	Sao	Paulo	State                     372            	353	      Hydro
 Ecuador                                                                                                                 192             159
 Electroquil                        Thermoelectric	Plant                       Guayaquil                                  192            	159	      Diesel
 El Salvador                                                                                                             328             296
 DEI	El	Salvador                    Thermoelectric	Plant		Acajutla	Diesel     The	Port	of	Acajulta	                      	150	           	135	      Fuel	Oil
                                                                              (Pacific	Ocean)
                                    Thermoelectric	Plant	Acajutla	Vapor	&	Gas The	Port	of	Acajulta	                      	163	             147 Fuel	Oil	/	Diesel
                                                                              (Pacific	Ocean)
                                    Thermoelectric	Plant	Soyapango            San	Salvador                                 	15	              14     Fuel	Oil
 Guatemala                                                                                                               288              288
 DEI	Guatemala                      Arizona	Thermoelectric	Plant               Escuintla                                  171              171      Fuel	Oil
                                    Las	Palmas	Thermoelectric	Plant            Escuintla                                   	89	             	89	    Fuel	Oil	/	Diesel
                                    Laguna	Thermoelectric	Plant                Guatemala                                   	28	             	28	    Diesel
 Peru                                                                                                                    690              648
 DEI	Egenor                         Cañon	del	Pato	Hydroelectric	Plant         Ancash,	Peru                              	263	            	263	     Hydro
                                    Carhuaquero	Hydroelectric	Plant            Cajamarca,	Peru                            112              112      Hydro
                                    Piura	Thermoelectric	Plant                 Piura                                       	40	             	40	    Fuel	Oil	/	Diesel
                                    Chimbote	Thermoelectric	Plant              Piura                                        44               44     Diesel
                                    Trujillo	Thermoelectric	Plant              Piura                                       	20	             	20	    Diesel
                                    Chiclayo	Thermoelectric	Plant              Ancash,	Peru                                	20	             	20	    Fuel	Oil	/	Diesel
                                    Paita	Thermoelectric	Plant                 La	Libertad                                   	6	              	6	   Diesel
                                    Sullana	Thermoelectric	Plant               Lambayeque                                     9                9    Diesel
 Aguaytia	Energy	del	Peru           Aguaytia	Thermoelectric	Plant              Amazon	Basin                               177             	135	     Natural	Gas
Summary of DEI facilities included in the scope of this report

              14                                                                                           Duke Energy International – Sustainability Report 2008
Data Measurement Techniques                     The values and commitments in our          of natural and human resources, and
and the Bases of Calculations                   vision are fundamental to how DEI          improvement of the quality of life in
                                                does business.                             the communities where DEI operates.
DEI business units follow “Duke
Energy Greenhouse Gas Emissions                 The following is a description of the      Operating Principles. DEI’s Operating
Estimating and Reporting Protocol”              core elements of our governance:           Principles align with Duke Energy’s
when preparing annual greenhouse                                                           Vision, Mission and Corporate
gas (GHG) emissions inventory. This             Corporate Strategy - Our Direction         Strategy, and promote a culture
protocol supports Duke Energy’s work            in 2008 and Beyond. Our Direction          of work where the company and
related to climate change. This work            in 2008 and Beyond mirrors Duke            stakeholders can reach their potential.
requires a consistent, transparent and          Energy’s strategy, which highlight
verifiable corporate-wide inventory of          the activities most important to a
GHG emissions and emission sources              sustainable future. This corporate
by establishing a systematic estima-            strategy changes and adapts to the
tion and reporting system.                      market and industry conditions as                  More information about our
                                                needed.                                        highest governance body, including
DEI only reports on carbon dioxide                                                               its structure, composition, and
(CO2), since it makes up more than 99           Code of Business Ethics. The Code of            related processes, is available on
percent of our GHG emissions (mea-              Business Ethics (CoBE) establishes               our Web site under “Investors.”
sured in CO2 equivalents).                      Duke Energy’s commitment to the
                                                principles of corporate ethics and
                                                transparency that drives all business
Assurance                                       activities, and provides employees
                                                with a framework for decision-
No external assurance was sought for            making consistent with Duke Energy’s
the present report since its main pur-          business values. This code applies
pose is for internal use.                       to all Duke Energy subsidiaries, and
                                                affiliated companies. It provides
                                                the principles and guidelines that
                                                guarantee ethical and responsible
Governance,                                     behavior from employees worldwide.

Commitments and                                 Vision of Safety. Duke Energy’s Vision

Engagement                                      of Safety defines the principles for
                                                occupational health and safety
                                                conducive to a safe and high-
                                                performance environment. This
Governance                                      vision applies to all employees and
                                                contractors, and states the personal
                                                commitment at every level of
DEI’s corporate vision and mission              the organization to demonstrate
is always present when delivering               continuous safety improvement,
products and services. As an electric-          striving for a zero injury and zero
ity generation and commercialization            work-related illness culture.
company, we improve the quality
of life in the communities where we             Environmental, Health and Safety Policy.
operate. We always relay our values,            The Environmental, Health and Safety
which represent the business envi-              Policy states DEI’s commitment toward
ronment that DEI promotes among                 the health and safety of employees,
employees, inspiring them to strive for         clients and communities. It establishes
continuous improvement and excel-               the principles of environmental                      Dino Arana, EHS Regional Manager living DEI’s culture
lent reliability and customer service.          protection, responsible management                              of engagement and safety, DEI Guatemala

Duke Energy International – Sustainability Report 2008                                                                                    15
Operating Principles                                                                                         Our Mission
DEI	strives	for	a	work	environment	that	epitomizes	a	high	performance	culture,	where	both	the	                We	make	people’s	lives	better	by	providing	
company	and	its	employees	reach	their	full	potential.	We	view	the	following	principles	as	key	to	creating	    gas	and	electric	services	in	a	sustainable
such	an	environment	and	all	employees	are	expected	to	“live	by”	and	honor	these	values	and	principles:        way.	This	requires	us	to	constantly	look	for	
                                                                                                              ways	to	improve,	to	grow	and	to	reduce	our
         Teamwork          We	work	as	a	team	with	the	common	goal	of	doing	what	                              impact	on	the	environment.
                           is	right	and	in	the	best	interests	of	Duke	Energy	and	its	
                           stakeholders.	As	a	team,	we	support	each	other	and	
                           assume	innocence	in	our	dealings	with	each	other.
                                                                                                             Our Values
              Safety       We	develop	and	maintain	a	world	class	“Zero	Injury	
                           Safety	Culture”	where	safety	awareness	and	avoidance	
                                                                                                              We	look	out	for	each	other.	We	strive	to	
                           of	risky	behavior	by	our	employees	and	contractors	is	
                                                                                                              make	the	environment	and	communities	
                           a	way	of	life	and	unsafe	practices	are	not	tolerated.
                                                                                                              around	us	better	places	to	live.

   Mutual Respect          We	treat	each	other	and	our	stakeholders	with	respect.                             Integrity
                                                                                                              	We	do	the	right	thing.	We	honor	our	
     Sustainability        We	will	manage	our	business	in	an	environmentally	                                 commitments.	We	admit	when	we’re	wrong.
                           responsible	and	sustainable	manner.
                                                                                                              We’re	open	to	change	and	to	new	ideas	
  Communication            We	value	open,	honest	and	frequent	communication.	
                                                                                                              from	our	co-workers,	customers	and	
                           We	encourage	others	to	approach	us	to	discuss	any	
                                                                                                              other	stakeholders.	We	explore	ways	to	
                           issue	of	importance	to	our	business,	particularly	
                                                                                                              grow	our	business	and	make	it	better.
                           safety,	and	we	welcome	such	feedback.

           Diversity       We	embrace	and	accept	our	different	cultures,	backgrounds	                         We’re	passionate	about	what	we	do.	We	
                           and	experiences,	viewing	them	as	strengths	rather	than	                            strive	for	excellence.	We	take	personal	
                           divisive	forces.	We	welcome	diversity	of	opinion.                                  accountability	for	our	actions.

            Ethics,        In	our	dealings	within	and	outside	of	the	company,	we	                             Respect
     Integrity and         conduct	ourselves	in	an	ethical	manner	with	the	highest	                           We	value	diverse	talents,	perspectives	
    Accountability         integrity,	and	we	take	responsibility	for	our	actions.                             and	experiences.	We	treat	others	
                                                                                                              the	way	we	want	to	be	treated.

    Creativity and         We	recognize	that	improving	our	performance	and	enhancing	
         Initiative        our	competitiveness	will	require	each	of	us	to	take	initiative,	
                                                                                                              We	put	safety	first	in	all	we	do.	
                           be	creative	and	challenge	ourselves	and	one	another.

        Employee           We	invest	in	our	most	important	asset,	our	employees,	
     Development           through	programs	and	training	designed	to	help	each	
                           employee	grow	and	reach	his	or	her	potential.

       Community           Together	with	the	company,	we	actively	support	and	involve	
      Involvement          ourselves	in	the	communities	where	we	do	business.

        16                                                                                         Duke Energy International – Sustainability Report 2008
DEI’s Environmental
Pollution, Health and                           Memberships in Associations or Other Organizations
Safety Prevention
Approach                                        DEI affiliates and majority-interest companies belong to numerous associations
                                                related to its business activities, including those that promote sustainable devel-
                                                opment. The most important are listed below.
DEI’s business activities aim to prevent
environmental pollution and protect              Duke	Energy         World	Business	Council	for	Sustainable	Development
the health and safety of employees                                   The	Nature	Conservancy
and communities in a way that is                                     World	Economic	Forum
consistent with application of sound                                 World	Energy	Council
science. This is expressed in our vision,
                                                                     Global	Environmental	Management	Initiative	(GEMI)
mission, strategic approaches and cor-
                                                                     NAEM	(EHS	Management	Association)
porate values, and is fundamental to
DEI’s Environmental, Health and Safety           Duke	Energy	        Occupational	Resource	Council	(ORC)
(EHS) Management System. We strive               International       National	Safety	Council	(NSC)
                                                                     American	Society	of	Safety	Engineers	(ASSE)
to prevent pollution and protect the
                                                                     American	Society	for	Industrial	Security	(ASIS)
environment and communities where
we serve mainly by:                              DEI	Argentina       American	Chamber	of	Commerce	-	Argentina	(AmCham)
•	 Fulfilling our pledge to care                                     Asociación	de	Generadores	de	Energía	Eléctrica	de	la	República	Argentina	(AGEERA)
     for the health and safety of                                    Comité	Argentino	de	Presas	(CAP)
     employees, customers and                                        Fundación	para	la	Seguridad	de	Presas
     communities, and protect and                                    Asociación	de	Comercializadores	de	Energía	Eléctrica	
     responsibly manage the natural                                  de	la	República	Argentina	(ACEERA)
                                                 DEI	Brazil          Associação	Brasileira	de	Comunicação	Empresarial	(ABERJE)
•	 Incorporating environmental,
                                                                     Associação	Brasileira	de	Concessionárias	de	Energia	Elétrica	(ABCE)
     health, and safety risks as part
     of the integral risk management                                 Associação	Brasileira	das	Empresas	Geradoras	de	Energia	Elétrica	(ABRAGE)
     approach and associated                                         Instituto	Ethos	de	Responsabilidade	Social	
     prevention and mitigation tools.                                Instituto	Acende	Brazil
•	 Performing social and                                             Câmara	Americana	de	Comércio	para	o	Brazil	(AmCham)	
     environmental impact
                                                                     Fundação	ABRINQ	pelos	Direitos	da	Criança	e	do	Adolescente
     assessments as a preventive
                                                                     Sindicato	da	Indústria	da	Energia	Elétrica	do	Estado	de	São	Paulo	-	FIESP/SIESP				
     management and decision-
     making tool, when planning                                      Associação	Brasileira	dos	Produtores	Independentes	de	Energia	Elétrica	(APINE)
     for new projects or renovating                                  Comitê	Nacional	Brasileiro	de	Produção	e	Transmissão	de	Energia	Elétrica	(Cigré)
     installations.                                                  International	Hydropower	Association	(IHA)
•	 Implementing, maintaining and                 Electroquil	        American	Chamber	of	Commerce	–	Ecuador	(AmCham)
     continually improving DEI’s EHS             (Ecuador)           Cámara	de	Industria	de	Guayaquil
     Management System.
                                                 DEI	El	Salvador     American	Chamber	of	Commerce	–	El	Salvador	(AmCham)
•	 Managing risks and opportunities
     systematically through                                          FUNDACAJUTLA	
     identification, analysis and control        DEI	Guatemala       American	Chamber	of	Commerce	–	Guatemala	(AmCham)
     of risks, using prevention and                                  Cámara	de	Industria	de	Guatemala	(CIG)
     mitigation measures, as well as                                 Cámara	de	Comercio	de	Guatemala	(CCG)
     managing opportunities so they
                                                 DEI	Egenor	(Peru)   American	Chamber	of	Commerce	-	Peru	(AmCham)
     benefit the business and the
                                                                     Asociación	de	Fomento	a	la	Infraestructura	Nacional	(AFIN)						
•	 Training and continuously                                         Sociedad	Nacional	de	Minería	Petróleo	y	Energía	(SNMPE)	
     developing DEI’s human                      Aguaytia	           Cámara	Peruana	de	Gas	Natural
     resources.                                  Energy	(Peru)       Cámara	de	Comercio	de	Pucallpa

Duke Energy International – Sustainability Report 2008                                                                                       17
                                Paron Reservoir, Cañon del Pato Complex, Peru

18   Duke Energy International – Sustainability Report 2008
Stakeholder Engagement

Collaboration, communication and stakeholder engagement are defining characteristics of successful corporations. DEI is
committed to balancing the interests of stakeholders. We have several paths and programs that allow us to hear and respond
to stakeholder needs. The following table highlights stakeholders engaged by DEI.

 Stakeholders             Expectations                              Fulfillments
 Customers                  R
                          •		 easonable	costs                         S
                                                                    •		 trong	Management	Systems
                          •		 eliable	supply                          E
                                                                    •		 fficient	cost	control	practices
                          •		 ood	customer	service                    B
                                                                    •		 usiness	relations	managers’	accessibility
                          •		 afe	operations                          C
                                                                    •		 ustomer	satisfaction	surveys
                          •		 inimal	environmental	impacts            E
                                                                    •		 nvironmental	stewardship
                          •		 nergy	efficiency                        V
                                                                    •		 olunteerism	
                          •		 ommunity	involvement                    C
                                                                    •		 ustomer	communication	and	
                                                                      information	availability	(web	sites)
 Employees                  S
                          •		 afe	workplace                           S
                                                                    •		 afe	work	practices	policies,	guidelines	and	training
                          •		 ompetitive	salary	and	benefits          C
                                                                    •		 areer	training	and	development
                          •		 pen	communications                      B
                                                                    •		 enchmarking	with	industry	sector
                          •		 areer	development	opportunities         O
                                                                    •		 pen	doors	policy
                          •		 air	and	consistent	treatment            C
                                                                    •		 onfidential	ethics	line
                          •		 trong	corporate	reputation              C
                                                                    •		 ommunity	involvement
 Communities                E
                          •		 conomic	development                     C
                                                                    •		 ommunity	involvement
                          •		nvolvement	with	local	initiatives        E
                                                                    •		 conomic	development	assistance
                          •		 ublic	safety                            V
                                                                    •		 olunteerism	program	(GSE)
                          •		 mployment	opportunities
                          •		 olunteerism
 Suppliers                  F
                          •		 air	dealing                             C
                                                                    •		 ode	of	Business	Ethics
                          •		 imely	payment                           C
                                                                    •		 ompetitive	bidding	process
                          •		 pportunities	to	grow	their	business     E
                                                                    •		 thics	line
 Investors                  C
                          •		 ompetitive	returns                      S
                                                                    •		 trong	financial	performance
                          •		 trong	board	governance                  C
                                                                    •		 omprehensive	management
                          •		 anagement	accountability                E
                                                                    •		 thics	policies	
                          •		 egulatory	compliance                    S
                                                                    •		 trong	balance	sheet
                          •		 trong	corporate	reputation              A
                                                                    •		 nnual	sustainability	and	financial	reports
                          •		 ransparent	reporting
 Regulators                 R
                          •		 easonable	cost	of	energy                E
                                                                    •		 ffective	management	policies
                          •		 eliable	supply	of	energy                E
                                                                    •		 ffective	Management	Systems
                          •		 egulatory	compliance                    E
                                                                    •		 thical	practices
                          •		 ransparent	reporting                    T
                                                                    •		 ransparent	transactions
                          •		 ollaborative	policy	debates
                          •		 ommunity	involvement
 Non-Government	            A
                          •		 ccessibility                            C
                                                                    •		 ollaboration	on	several	issues
 Organizations              P
                          •		 roblem	solving	engagement               S
                                                                    •		 trategic	alliances
                          •		 ransparent	reporting                    S
                                                                    •		 takeholder	dialogues
                                                                    •		 nnual	sustainability	and	financial	reports

Duke Energy International – Sustainability Report 2008                                                                         19
     section two:


     As	an	electric	generator,	Duke	Energy	International	(DEI)	plays	

     an	important	role	in	supporting	the	economic,	social	and	

     industrial	development	in	Latin	America.	Access	to	electricity	

     is	vital	to	raise	living	standards,	achieve	economic	growth,	

     and	improve	the	quality	of	life	of	our	communities.	In	this	

     sense,	we	are	major	contributors	to	sustainable	development.	

     In	addition,	DEI	promotes	the	transfer	of	knowledge	and	

     generates	employment	opportunities.			

20                                      Duke Energy International – Sustainability Report 2008
We had a strong year in 2008, surpassing our             Included in this approach is the need to balance
financial goals and making significant progress          economic objectives with sustainability practices.
with several new projects. Nonetheless, we are           For instance, since power generation technologies
aware that financial results alone are not enough,       rely mostly on fossil fuels that emit greenhouse
as business transparency and accountability              gases (GHG), climate change, continues to be a
increase because of stakeholders’ concerns about         defining issue for the electric utility industry. We
social equity, and a resource-constrained and            consider several alternatives to meet this chal-
fragile environment. For this reason, we are taking      lenge:
a comprehensive approach toward environmental,
social, and economic performance and reporting,          •	   Diversifying the fuel mix
based on risks and opportunities.                        •	   Supporting policies that call for a reduction of
                                                              GHG emissions
Foremost to this approach is the importance of           •	   Promoting energy efficiency
acting in an ethical, honest and integral way. This      •	   Continuing to focus on safe, reliable and
is not only evident through our strong Code of                efficient power plant operations
Business Ethics (CoBE) but also by identifying it as
one of the top focus areas of our corporate sus-         This balanced approach provides the framework
tainability plan, making it an integral part of our      for our success as an integral part of the develop-
sustainable business development activities with         ment in each community where we operate, yield-
swift action for unethical or dishonest behavior.        ing both direct and indirect positive economic

Duke Energy International – Sustainability Report 2008                                                           21
Financial Highlights
                                                                                          million of dollars

 DEI Net Sales (in millions of dollars)                                 2007    2008                                                               411

 Operating	Revenues                                                     1,060   1,185                                                           DEI EBIT
 Operating	Expenses                                                      776     899
 Gains	(Losses)	on	Sales	of	Other	Assets	and	Other	(Net)                    -      1
 Other	Income	and	Expenses	(Net)                                         114     146         300

 Minority	Interest	Expenses                                               10      22
 DEI EBIT (Earnings Before Interest and Taxes)                           388     411                                                Latin America EBIT
 Latin America EBIT                                                      295     300                199

                                                                                                    2002       2003   2004   2005    2006   2007    2008

                                                                                              DEI’s EBIT Historic Trend 2002-2008

 DEI Operating Revenue by Business                                                                       Peru (Aguaytia)
                                                     2007       2008                                                                      $96M
 Unit (in million of dollars)                                                                                 $129
 Argentina	                                                82      96                                                                                 $455M
                                                                                           Peru (Egenor)
 Brazil                                                394        455                          $135

 Ecuador                                                   45      34
 El	Salvador                                           141        173
 Guatemala                                             146        163
 Peru	(Egenor)                                         144        135                       Guatemala
 Peru	(Aguaytia)                                       108        129
 TOTAL                                               1,060      1,185                                          El Salvador
                                                                                                                  $173M                Ecuador
                                                                                             DEI’s Operating Revenue by Business Unit

 DEI Operating Expenses by                            2007      2008
 Business Unit (in million of dollars)
 Argentina	                                                60     75               DEI Quantity of Products                             2007          2008
                                                                                   or Services Provided
 Brazil                                                223       218
                                                                                   Sales	GWh                                           17,127        18,066
 Ecuador                                                   50     26
                                                                                   Proportional	Capacity	
 El	Salvador                                           121       154                                                                    3,968         4,018
                                                                                   in	Operation	MW
 Guatemala                                             135       171
 Peru	(Egenor)                                             78    110
 Peru	(Aguaytia)                                           96    122
 Other	DEI*	                                               13     23
 TOTAL                                                 776      899
*Not part of the scope of this report

22                                                                                      Duke Energy International – Sustainability Report 2008
                                                They also comply with equal em-             Spurring Economic Growth
Market Presence                                 ployment opportunity laws, includ-
                                                ing those related to discrimination
                                                and harassment. Furthermore, all            Case studies of spurring economic
                                                recruitment, selection, training, and       growth follow.
Locally Based Suppliers                         compensation activities are based on
                                                merit, experience, and other work-re-
                                                lated criteria. Our Equal Employment        Guatemala
To promote development in the local             Opportunity policy “seeks and values
communities where DEI operates,                 diversity. The dignity of each person is    Construction of DEI’s thermoelectric
business units in each country rely on          respected, and everyone’s contributions     plant Arizona, located in Escuintla,
their Purchasing Department. These              are recognized. We expect Duke Energy       Guatemala, with an installed capacity
departments establish good busi-                employees to act with mutual respect        of 170 MW, required several local and
ness relations with local suppliers,            and cooperation toward one another.         international contractors and sub-
stimulate the local economy by creat-           We do not tolerate discrimination in the    contractors. This generated employ-
ing employment opportunities and                workplace.”                                 ment opportunities for 700 people
attract additional investment.                                                              on average, for about two years, with
                                                                                            peak employment demand reaching
DEI’s Purchasing Controls Policy covers                                                     900. Once the plant entered commer-
the minimum controls required for the           DEI’s Economic Impacts                      cial operation 70 direct, full-time jobs,
purchasing function; however, there                                                         and several indirect ones—related to
is no specific percentage of suppliers                                                      operation and maintenance servic-
required to be locally based. Never-            Since DEI’s business is the generation      es—were generated. For both phases,
theless, most of our purchases are              of electricity, the direct economic         local people covered most of the
done locally—at a region and country            impacts of our operations are evident.      employment demand. This not only
level—supporting local business in              This is due to the vital role electric-     contributed to raising living standards
the supply chain and having a positive          ity plays in economic development,          and achieving economic growth, a
economic impact in the region.                  supporting productivity and generat-        key to poverty eradication, but also
                                                ing wages and jobs in the developing        to transferring specialized knowledge
For example, for the construction of            countries where we operate.                 through workforce development.
the Retiro and Palmeiras small hydro-
power plants (SHPs) in Brazil, nearly           In addition, DEI also has significant in-   Another important benefit of the
98 percent of purchases were through            direct impacts. We support economic         project was related to local contrac-
local suppliers.                                development in the countries where          tor and sub-contractor involvement
                                                we invest by:                               as a source of indirect employment,
                                                •	 Increasing the public                    creating demand for lodging, security,
  On average DEI makes 56 percent of our           administration income through tax        health and transportation services,
 purchases through locally based suppliers.        payments.                                and thus positively affecting the lo-
                                                •	 Stimulating foreign direct               cal economy. Furthermore, because
                                                   investment in electric                   electric generation occurs in a geo-
Hiring Approach                                    infrastructure.                          graphically remote location, revenues
                                                •	 Supporting technology and                from national and regional taxation
                                                   knowledge transfer, critical to          stimulate economic growth in these
DEI’s policies and procedures for                  increase the competitiveness of          disadvantaged regions and provide
recruiting and hiring personnel in                 developing countries.                    an important source of income for the
the countries where we operate are              •	 Supporting creation of various jobs      public administration. More than 95
established at the corporate level and             through subcontracting services.         percent of the contracted and sub-
aligned with Duke Energy’s CoBE, re-            •	 Supporting expansion of other            contracted work force for the project
garding equal employment opportu-                  industries and businesses during         received comprehensive training on
nity. They comply with the principles              the construction and operation of        environment, health and safety pro-
of non-discrimination, freedom of                  our plants.                              cedures and practices as part of our
association, child labor, indigenous                                                        policies and standards for contractors
rights, and forced and compulsory               The following examples describe             and sub-contractors. This provides
labor.                                          these impacts:                              an opportunity to positively affect

Duke Energy International – Sustainability Report 2008                                                                             23
local work force knowledge in sound            Brazil                                                    The projects also help generate
environmental, health and safety work                                                                    indirect jobs in health (medical and
place practices.                               The Retiro and Palmeiras small hydro-                     nursing), business (sales, rental, hotel
                                               power plants (SHP) are being built on                     or food) and services (repairs, home
Another recent example of positive             the Sapucai Mirim River between the                       or education). Jobs in these areas are
economic impact, is the construction           cities of São Joaquim da Barra and                        expected to increase by about 30
of the Las Palmas II plant in Escuintla,       Guara (São Paulo State, Brazil), and                      percent during peak construction.
Guatemala. This project was approved           each will have an installed capacity of                   Similarly, our indirect economic im-
by The Ministry of the Environment             16 MW.                                                    pacts are reaching local vendors and
and Natural Resources of Guatemala                                                                       suppliers of machinery and equip-
(MARN) in July 4, 2008, and construc-          Along with these benefits, the                            ment; approximately 97.7 percent of
tion started in August 2008. When              construction of each SHP will gener-                      purchases were Brazilian.
completed, the plant will have an              ate value to the local and regional
installed capacity of 85 MW generated          community, through creation of
by combustion of low-sulfur coal and           direct and indirect jobs. During peak                     Peru
will incorporate exhaust gas treatment         construction, each SHP will generate
for particulate matter (PM) and low            about 320 direct jobs, representing                       DEI Egenor initiated construction
nitrogen oxides (NOx)-burning tech-            3.4 percent of the population of cities.                  of Las Flores thermoelectric power
nologies. The first phase of 42.5 MW is        Furthermore, for the engineering and                      plant, located in the Chilca district
expected to finish by the end of 2009.         construction phases of both SHPs, DEI                     in Peru, on January 12, 2009. This
                                               hired a local contractor, and labor is                    plant will consist of the assembly of a
This project has generated an average          being hired locally and regionally; so                    simple-cycle natural gas turbine and
of 520 direct jobs during the first nine       far, 35 percent of the jobs are held by                   its subcomponents to generate 197.5
months. The job demand is expected             local people, while the remaining are                     MW. Construction of this project will
to rise to 1,200 direct jobs during            filled regionally. Equally important                      have a peak labor demand of around
the construction peak time, and 95             is the transfer of knowledge; for this                    350 workers, including contractors,
percent of the labor demand has been           project 100 percent of the labor force                    subcontractors and project manage-
hired locally. Once operations get             that works directly on the project                        ment staff.
started we estimate the generation of          received training on our EHS Manage-
60 direct full-time jobs. The indirect         ment System. This training improves                       In addition to these benefits, the
impacts related to the provision of            the skills and qualifications of the                      project will help reduce the region’s
goods and services associated with             labor force, increasing the chance of                     unemployment rate, estimated to be
construction activities are yet to be          future employment for jobs requiring                      around 7.7 percent of the District’s
determined.                                    higher qualifications.                                    population, boosting the local income
                                                                                                         temporarily and thus improving their
                                                                                                         quality of life. Similarly, during this pe-
                                                                                                         riod other market sectors expected to
                                                                                                         benefit from the project include local
                                                                                                         suppliers of building materials, equip-
                                                                                                         ment transportation services, security
                                                                                                         services and raw material suppliers,
                                                                                                         spurring economic growth.

                                                                                                         Since Las Flores power plant will be
                                                                                                         using leading-edge technology, once
                                                                                                         in operation it will require few person-
                                                                                                         nel for its operation and maintenance.
                                                                                                         DEI has estimated 12 workers in
                                                                                                         three shifts. The staff needs special-
                                                                                                         ized knowledge of operation and
                                                                                                         maintenance of power stations and
                                                                                                         electromechanical equipment. Other
                                                                                                         activities to be contracted regularly
                                                                                                         include solid waste management and
                                    Construction of Las Palmas II Thermoelectric Plant, DEI Guatemala

24                                                                                            Duke Energy International – Sustainability Report 2008
                                                         Volunteerism Program, Laura Di Cosmo, Accounting Department, DEI Argentina

Duke Energy International – Sustainability Report 2008                                                              25
disposal, landscaping, and envi-             •	   Education: book drives for             Among others, donations have been
ronmental monitoring and control,                 schools, setup of computers            made to:
further benefiting the economy. More-             and Internet links at schools,
over, the Peruvian government and                 school supply drives, playground       •	   Public schools, to upgrade and
the district will also benefit from tax           construction, painting and                  furnish them, help students
payments that DEI Egenor will incur               landscaping projects at local               purchase text-books, supplies,
while operating the power station                 schools, safety programs.                   musical instruments, and uniforms,
throughout the project, increasing the       •	   Assistance to the elderly.                  help feed students, and support
public administration’s income.              •	   Environmental assistance:                   extracurricular activities.
                                                  environmental restoration              •	   Medical services, to provide
                                                  projects and trash pickup from              supplies to emergency clinics and
                                                  trails, parks, creeks, beaches              hospitals, rehabilitation services
In Kind or Pro Bono                               and highways, tree planting,                and physical therapy, sponsorships

Engagement                                        landscaping in parks and other
                                                  beneficial projects.
                                                                                              to medical clinic rotations, and
                                                                                              cancer treatment for children.
                                                                                         •	   Shelters and orphanages, to
Implementation of the corporate                                                               support their operations and help
program Global Service Event (GSE)           DEI’s Contributions                              provide food.
more than 10 years ago has increased                                                     •	   Sporting associations, to
participation from Duke Energy                                                                purchase uniforms, and provide
employees and retirees. GSE is a             Donations by all regions to public               accommodations and sporting
grassroots community service effort,         service organizations and agencies,              facilities.
enabling employees to give back to           such as fire and police departments,        •	   Emergency organizations, to
the communities where they live and          and libraries, have been a cornerstone           purchase necessary equipment
work. It was rolled out to DEI and           of DEI’s community support. Our com-             and supplies for fire departments.
named “Programa de Voluntariado              mitment to the communities where
(Volunteerism Program).” Originally          we operate goes beyond providing
planned as a month-long program,             high-quality, affordable and reli-
“Programa de Voluntariado” has               able electric generation services and
expanded to two months to accom-             protecting the environment. We care
modate all of the planned projects.          about improving the overall quality
Participants’ safety is a priority. Before   of life of the developing coun-
a project begins, steps must be taken        tries where we work. Besides                        Charitable Others
to keep participants and others safe.        the countless hours of                                     4%
Risks, such as working on a ladder or        volunteer work, we have                                                      Education/
operating power tools, are assessed          contributed approxi-                                                         Recreation
and controls implemented. Safety             mately $500,000 to                                                              29%
glasses, hard hats, protective gloves        local communi-          Health Care
and foot protection are basic safety         ties in support             12%
items contributed by DEI and used            of social chari-
by volunteers. The program demon-            ties, education
strates DEI employees’ commitment            and recreation
to the company values and positively         programs and in-
influences others to emphasize safety        stitutions, health
in their personal lives as well.             care programs,
In 2008, “Programa de Voluntariado”          and agro-industrial
was held from April 1 to June 1. Some        development, en-
of the “Programa de Voluntariado”            vironmental protec-
events in DEI include:                       tion, and infrastructure                         Entrepreneurship/
•	 Community assistance: food and            improvements.                                     Agroindustrial
     clothing drives, landscaping,                                                              Development
     painting projects, sorting of                                                                  25%
                                                                                                                        DEI Contributions by area
     donations at local organizations.

26                                                                            Duke Energy International – Sustainability Report 2008
System Efficiency

DEI’s average generation efficiency for our thermoelectric plants by energy source and country is presented below:

 Facility                           Fuel                Technology                                                           KWh/gal* or
 Alto	Valle	Thermoelectric          Natural	Gas         Simple	Cycle	&	Combined	Cycle	                        32.06                10,650
 Thermoelectric	Electroquil         Diesel              Simple	Cycle	Combustion	Turbines                      33.58                13.76*
 El	Salvador
 Acajutla	Thermoelectric	(Diesel)   Fuel	Oil            Reciprocating	Engines                                 38.83                17.06*

 Acajutla	Thermoelectric            Fuel	Oil	           Steam	Turbines	(Boilers)	                             26.17                 11.5*
 Vapor	&	Gas"                       Diesel              Simple	Cycle	Combustion	Turbines                      23.17                  9.5*
 Soyapango	Thermoelectric           Fuel	Oil            Reciprocating	Engines                                 33.94                14.91*
 Arizona	Thermoelectric             Fuel	Oil            Reciprocating	Engines	&	Combine	Cycle	Steam	Turbine   39.67                17.43*
 Las	Palmas	Thermoelectric          Fuel	Oil	/	         Reciprocating	Engines	&	                              38.28                16.82*
                                    Diesel              Simple	Cycle	Combustion	Turbine                       27.09                11.11*
 Peru	-	DEI		Egenor
 Laguna	Thermoelectric	Plant        Diesel              Simple	Cycle	Combustion	Turbines                      20.73                  8.5*
                                    Fuel	Oil	/	         Reciprocating	Engines	&                               34.33                 9,944
 Piura	Thermoelectric	Plant
                                    Diesel              Simple	Cycle	Combustion	Turbines                      25.39                13,448
 Chimbote	Thermoelectric	Plant      Diesel              Reciprocating	Engines                                 22.74                15,010
 Trujillo	Thermoelectric	Plant      Diesel              Reciprocating	Engines                                 24.41                13,986
 Chiclayo	Thermoelectric	Plant      Fuel	Oil	/	Diesel   Reciprocating	Engines                                 34.55                 9,881
 Paita	Thermoelectric	Plant         Fuel	Oil	/	Diesel   Reciprocating	Engines                                 34.72                 9,834
 Sullana	Thermoelectric	Plant       Fuel	Oil	/	Diesel   Reciprocating	Engines                                 33.02                10,339
 Peru	Aguaytia	Energy	
 Aguaytia	Thermoelectric	Plant      Natural	Gas         Simple	Cycle	Gas	Turbines                             30.45                11,213

Duke Energy International – Sustainability Report 2008                                                                                 27
     section three:


     Duke	Energy’s	commitment	to	environmental,	health	and	

     safety	(EHS)	has	been	established	by	senior	management	

     and	is	followed	closely	by	Duke	Energy	International	(DEI.)	

     This	commitment	is	demonstrated	through	our	EHS	Policy	

     that	emphasizes,	through	an	integrated	approach,	the	

     health	and	safety	of	our	employees,	clients,	stakeholders	

     and	communities,	and	enables	continuous	improvement	

     in	EHS	performance.	It	also	underscores	the	importance	of	

     protecting	and	responsibly	managing	natural	resources,	

     critical	to	the	quality	of	life	in	the	areas	we	serve,	the	

     environment	and	DEI’s	long-term	success.

28                                        Duke Energy International – Sustainability Report 2008
D E I’s E HS Po l i c y and Pr inciples
Five principles are at the core of this policy: accountability, stewardship, standards, performance and communica-
tion. These are discussed below.

Accountability stretches across the company and
beyond: Leadership is accountable for systematically
managing EHS risks, opportunities and impacts            Performance
as an integral part of our business; employees are
accountable for understanding and incorporating          DEI will set challenging goals and assess perfor-
EHS responsibilities into daily work; and suppliers,     mance to continually improve EHS results that
contractors and partners are accountable for             contribute to business success. We will work with
meeting applicable EHS requirements.                     suppliers, contractors and partners to enhance EHS
In being good stewards of the environment, DEI
will use natural resources and energy efficiently    DEI will foster open dialogue and informed
to reduce waste and emissions at their source. We    decision-making through meaningful and regular
will also strive to improve operations, focusing on  communication of EHS information with manage-
preventing environmental and safety incidents and    ment, employees, contractors and the public. Our
preserving public safety. Moreover, we will engage   statement of purpose regarding EHS helps to foster
in partnerships that enhance public awareness of     this communication: “Duke Energy is committed
and address common issues associated with EHS.       to a safe, healthy workplace and to protecting the
                                                     environment. Our employees and contractors are
Standards                                            expected to perform their daily assignments safely
                                                     and in a manner that meets all applicable environ-
All business units worldwide will comply with inter- mental requirements.”
nal standards, procedures and applicable laws and
regulations. Strategic relationships will be devel-
oped to promote sound public policy.

Duke Energy International – Sustainability Report 2008                                                               29
EHS Organization
                                         EHS Management System                       Business Planning
As expressed in the accountability
principle, the environmental             An EHS Management System is a set           Business planning increases the
function is distributed throughout       of defined processes, both formal and       likelihood that desired results will be
DEI across all organizational levels,    informal, that allow an organization        achieved. Planning begins with an-
from its president as the maximum        to systematically manage its EHS            ticipating EHS hazards and evaluating
authority, to each employee with local   risks, opportunities and impacts. Our       consequent risks and opportunities.
competence; all have established roles   EHS Management System focuses on            Understanding laws and regula-
and responsibilities, and there is a     results while providing flexibility in      tions, stakeholder expectations and
clear distinction between corporate      how EHS risks are managed. Consisting       emerging issues assists in evaluating
and operational functions.               of four phases (Business Planning,          risks and opportunities, and roles,
                                         Implementation, Measurement and             responsibilities and authorities are
DEI’s EHS corporate unit, based          Performance Measurement), nine              defined for employee, contractor and
in Houston, Texas, provides a            elements and 39 standards, the              team effectiveness. Goals and targets
strategic function and assistance        system is fashioned after the “Plan,”       consistent with the EHS Policy and
with tactical implementation. This       “Do,”“Check,”“Act” cycle of continuous      Management Systems are included in
includes functional leadership,          improvement that models the ISO             business plans.
monitoring emerging themes               14001 and OHSAS 18001.
and innovations, updating and
documenting best management              The EHS Management System works             Implementation
practices and sharing best EHS           together with EHS Policy to manage
practices, improving the Management      risks, opportunities and impacts.           Effective business plans improve
Systems and compliance guidelines,       While the EHS Policy provides               EHS performance by capitalizing on
and communicating, guiding and           direction to ensure corporate EHS           opportunities created by potentially
facilitating adequate implementation     values are consistently applied across      significant risks. Some risks are man-
and maintenance of the overall           DEI, the EHS Management System              aged through compliance with laws
system at the business unit level.       establishes standards to direct us          and regulations, while emergency
                                         in implementing this policy. The            situations are controlled by follow-
Each business unit has an EHS            EHS Policy clearly articulates our          ing defined plans. Effective business
Department responsible for the           values for the health and safety            plans emphasize the efficient use of
implementation of all processes and      of our employees, contractors,              natural resources and consider energy
procedures that meet or exceed local     customers and communities and               in developing products and services.
regulations. In addition, each unit      our commitment to protecting                Contractors, suppliers and partners
manages all potential EHS, financial     the environment and responsibly             are prudently selected and monitored,
and company-reputation risks.            managing natural resources.                 and overall performance is enhanced
                                                                                     through feedback. Investigating inci-
                                                                                     dents, responding to community con-
                                                                                     cerns and establishing partnerships
                                                                                     contribute to desired EHS results.

30                                                                        Duke Energy International – Sustainability Report 2008
D E I’s E H S M an agement System

 1. Roles, Responsibilities
 and Accountabilities
 Management	creates	the	vision,	sets	
                                                                                                      4. Compliance Management
 the	performance	expectations	and	
 provides	the	resources	to	support	                                                                Identify,	communicate	and	satisfy	
 the	EHS	Management	System.                                                                          legal	and	other	EHS	obligations.
 2. Risk Management                                      Business                                       5. Supplier, Contractor and
                                                                                                             Partner Relationships
 Anticipate,	prevent	and	mitigate	environmental,	
 health	&	safety	risks	and	impacts	to	protect	
                                                         Planning                         Select	and	work	with	suppliers,	contractors	
 people,	the	environment	and	the	business.                                            and	partners	to	improve	overall	environmental,	
                                                                                                      health	and	safety	performance.
 3. Emergency Preparedness and Response
                                                                                        6. Stewardship and Community Relations
 Anticipate,	plan	and	drill	to	reduce	the	
 occurrence	and	severity	of	environment,	                           Implementation   Manage	the	use	of	natural	resources	and	energy	
 health	&	safety	emergency	situations.                                               as	an	integral	part	of	our	business	and	maintain	
                                                                                      quality	of	life	and	reduce	waste	and	emissions.	
                                                                                               Open	communication	builds	trust	and	
                                                                                        cooperation	with	the	communities	we	serve.
 8. Incident Reporting and Investigation
 Report	and	investigate	incidents	to	
 determine	causes,	correct	deficiencies	            Performance                                  7. Goals Setting and Performance
 and	prevent	recurrence.
                                                    Measurement                                                      Measurement
 9. Assessment and Management
                                                                                       Establish	goals,	implement	business	plans	and	
 System Review
                                                                    Measurement      track	progress	to	improve	environmental,	health	
 Conduct	assessments	to	determine	                                                          &	safety	results	and	achieve	expectations.
 environmental,	health	&	safety	compliance	
 and	to	assure	Management	Systems	are	
 in	place	and	working	effectively.

Duke Energy International – Sustainability Report 2008                                                                  31
Measurement                               have 1,672 MW or 38.7 percent of the        •	   Setting Goals and Targets
                                          total gross installed capacity certi-            Guideline, describes the necessary
Measurement defines the degree to         fied under ISO 14001, and 1,096 MW               steps for developing EHS goals
which business plans and Manage-          or 25.7 percent certified under the              and targets, preparing action
ment Systems are being implement-         three standards. The table on page 33            plans for achieving the goals and
ed. Actual results can be identified by   provides detailed information.                   targets, communicating goals
assessing EHS performance, goals and                                                       and targets and the progress in
targets, regulatory compliance and        These certificates demonstrate DEI’s             achieving them, and ensuring
conformance with EHS Management           commitment to business excellence                that goals and targets are
Systems. Such a review and subse-         and continuous improvement in all                considered during short- and
quent communication of performance        relevant aspects of its business, guar-          long-term planning.
progress leads to corrective and          anteeing:                                   •	   Monitoring and Measuring
preventive actions, which improve         •	 High-quality and reliable electric            Performance Guideline, contains
performance.                                  generation in benefit of our                 the requirements for establishing
                                              clients and end users.                       and implementing a program
                                          •	 Preventive pollution practices                for monitoring and measuring
Performance Improvement                       favoring conservation and natural            performance, such as identifying
                                              resources preservation.                      operations and activities that
Management System implementation          •	 Safe and healthy work environ-                should be periodically monitored
and performance improvement con-              ment for all our employees,                  and/or measured, developing
tribute to long-term business success.        contractors and third parties.               monitoring and measuring
Opportunities for improvement are                                                          procedures, compiling results and
identified through evaluating emer-                                                        reporting EHS performance.
gency plans, investigating incidents,
assessing compliance and Manage-          Management Approach                         We expect to see our environmental
ment Systems, and sharing lessons                                                     indicators continue to improve as we
learned. The need for changes to EHS                                                  move to a generation portfolio that
Policy and Management Systems are         DEI’s EHS Policy declares we will set       relies more on renewable energy
addressed at both corporate and op-       challenging goals and assess perfor-        sources and natural gas combined-cy-
erational levels. These improvements      mance to continually improve EHS            cle technologies. The following would
are implemented through corrective        results that contribute to business         influence changes in these indicators:
and preventive actions and often lead     success. We will work with suppliers,       •	 Energy produced from renew-
to changes in goals, business plans       contractors and partners to enhance              able energy sources will reduce
and EHS Management Systems.               EHS performance.                                 our consumption of fossil fuels,
                                                                                           as well as reduce the emissions,
Our business units in each coun-          Our management approach toward                   effluents and wastes associated
try work with DEI’s EHS Corporate         environmental indicators is guided by:           with the combustion process.
Department in implementing and            •	 Setting challenging goals and            •	 The natural gas combined-cycle is
integrating EHS systems into its exist-       targets.                                     more efficient, thereby reducing
ing systems. Each business unit can       •	 Monitoring and measuring                      the demand of fuel per MWh,
have its own systematic approach to           performance against those goals.             emission, water use and wastes,
complying with our EHS Management         •	 Communicating with both                       such as ash, among others.
System. Some facilities may become            internal and external stakeholders.     •	 Electricity generation through
certified under ISO 14001, ISO 9001       •	 Abiding to DEI’s Stewardship                  cogeneration technologies will
and/or OHSAS 18001, since our EHS             Program.                                     elevate energy usage per MWh.
Management System fulfills the
requirement for most of these stan-       Monitoring and measuring perfor-            Likewise, one of the three elements
dards. This is the case for DEI Argen-    mance is integral to our EHS. We have       in our EHS Management System that
tina, DEI Egenor (Peru) and DEI Central   established guidelines for ensuring         makes up the Business Implementa-
America (Guatemala and El Salvador).      that EHS goals and targets are devel-       tion Phase includes Stewardship and
These business units implemented          oped and performance against them           Community Relations. Stewardship
and certified Management Systems          measured, with the overall objective        involves voluntarily going beyond
under ISO 9001, ISO 14001 and OHSAS       of continuously improving perfor-           what is required by EHS laws and regu-
18001 international standards. We         mance.                                      lations (going beyond compliance) by

32                                                                         Duke Energy International – Sustainability Report 2008
 Business	Unit                                                    Facilities                        ISO	standard	Certified

 DEI Argentina                                                    Hydro	facilities
 DEI	Cerros	Colorados	obtained	the	ISO	14001:1996	                Cerros	Colorados	479	MW
 certification	in	2002.	In	2006,	this	hydroelectric		facility,	
 along	with	the	Alto	Valle	thermoelectric	facility,	were	         Thermal	facilities
 recertified	by	Bureau	Veritas	Quality	International,	under	      Alto	Valle	97	MW
 the	new	version	of	the	standard—ISO	14001:2004.		

 DEI Egenor (Peru)                                                Hydro	facilities
 On	July	2003,	DEI	Egenor	became	the	first		electricity	          Cañon	del	Pato	263	MW
 generation	company	in	Peru	to	receive	triple	                    Carhuaquero	112	MW
 certification—ISO	9001:2000,	ISO	14001:1996,	and	OHSAS	
 18001:1999—by	Bureau	Veritas	Quality	International.	This	
 demostrated	DEI’s	commitment	to	excellence	in	managing	          Thermal	facilities
 its	generation,	maintenance,	and	transmission	processes.	        Piura	40	MW
                                                                  Chiclayo	20	MW

 DEI Guatemala/ DEI El Salvador                                   Thermal	facilities	Guatemala
 On	March	2006,	DEI	Guatemala	and	DEI	El	Salvador	received	       Arizona	176	MW
 the	triple	certification	for	Quality	Management	(ISO	            Las	Palmas	89	MW
 9001:2000),	Environmental	Management	(ISO	14001:2004),	          Guatemala	Offices
 and	Occupational	Health	and	Safety	practices	(OHSAS	
 18001:1999).	In	February	2009,	DEI	Central	American’s		
 integrated	Management	System	was	re-certified	with	              Thermal	facilities	El	Salvador
 the	most	recent	version	of	the	international	standards	          Acajutla	Diesel	150	MW
 ISO	9001:2008,	ISO	14001:2004	and	OHSAS	18001:2007.              Acajutla	Vapor	&	Gas	163	MW
                                                                  Soyapango	15MW
                                                                  El	Salvador	Offices

considering EHS risks when design-                     ered during all phases of our business:     in which the generation of pollution,
ing and operating assets, and where                    •	 Internal and External Communica-         off-specification materials and wastes
feasible, minimizing their impacts                         tion Guideline, which includes the      can be efficiently reduced, reused or
to the environment, employees and                          requirements for establishing a         recycled, and energy and natural re-
community. Stewardship embraces                            community relations program.            sources can be managed efficiently by:
the concepts of natural resource and                   •	 Stewardship Program Guideline,           •	 Conducting a Stewardship Pro-
energy conservation and pollution                          which requires management                    gram Assessment to identify the
prevention. Community relations pro-                       to communicate and demon-                    sources of pollution, resources be-
motes working and interacting with                         strate support for a stewardship             ing used, wastes generated, etc.,
the community, environmental organi-                       program and for assessments                  and document the results.
zations, regulatory agencies and other                     that identify sources of pollution      •	 Identifying and prioritizing oppor-
companies to identify ways to improve                      and resource (e.g., fuel, electric-          tunities for pollution prevention
our overall EHS performance, increase                      ity, water, etc.) usage so that              and energy and natural resources
EHS awareness and prevent, resolve                         pollution prevention and resource            conservation based on the results
or minimize conflicts and concerns on                      conservation opportunities can               of the Stewardship Program As-
EHS issues.                                                be identified, prioritized and               sessment.
                                                           implemented.                            •	 Screening opportunities for
We embrace these concepts and have                                                                      technical and economic feasibil-
developed the following guidelines for                 Our Stewardship Program establishes              ity to disqualify those that have
ensuring that stewardship is consid-                   the requirements for identifying ways            marginal value or are impractical.

Duke Energy International – Sustainability Report 2008                                                                                  33
                                                                                                                     Paranapanema River, Brazil

Environmental Impact
Assessment Process                         Global Climate Change
                                                                                       Reducing Carbon Footprint

As part of our project planning and        Global Climate Change is being              DEI contributes to Duke Energy’s
risk assessment process, we perform        debated in cities, states and nations       effort to reduce the carbon footprint
environmental impact assessments           around the world. Stakeholders have         primarily by making operations more
(EIA) to determine the viability of new    differing views on which actions            efficient. Duke Energy’s corporate
projects or the expansion of existing      should be taken to respond to the           strategy, Our Direction in 2008 and
ones, and support us with licensing.       issue. Most scientists believe that         Beyond, guides DEI’s action, which
These assessments help both to iden-       greenhouse gas (GHG) emissions              focus on:
tify and evaluate potential environ-       from human activities are influencing       •	 Securing reliable and cost-
mental and social risks and impacts        the earth’s climate. Although there is           effective energy alternatives to
our operations could pose, and to          much to learn about the cause and                meet the growing demand. In
manage and mitigate them appro-            effect of climate change, consensus              pursuing new energy sources we
priately. EIAs also allow us to identify   is building that steps should be taken           must consider several criteria:
potential opportunities that can be        now to reduce these emissions. Duke              availability, cost, reliability, and
leveraged to benefit the environment       Energy shares that view.                         social and environmental impact.
and local communities.                                                                      Balancing these criteria enables
                                           We have a responsibility to our                  us to make the most appropriate
                                           customers, our investors and our                 decision for the client, the
                                           communities to play a leading role as            community and the company.
                                           stewards of the environment.

34                                                                          Duke Energy International – Sustainability Report 2008
     DEI actions to reduce carbon footprint
     Central America
     •		 ommitment	to	invest	
       U.S.$200,000	per	year	
       in	renewable	projects	                                                                   •	Renewable	energy	
       in	Guatemala
                                                                                                 -		 	small	hydro	plants	under	
     •		 nergy	efficiency	                                                                         construction	-	33	MW	(Retiro	&	Palmeiras)	
       	 		 rizona	facility	expansion	
       -A                                                                                          N
                                                                                                 -		 umerous	small/medium	hydro	projects	
          with	additional	6	MW	from	                                                               in	early	stages	of	development
          utilization	of	waste	heat	
                                                                                                •		 eforestation	
          (operational	in	March,	2008).		
                                                                                                  -		 ngoing	Concession	Program:						
     -		 he	Certified	Emission	                                                                     7,785	Hectares	to	date
       Reductions	(CERs)	from	this	                                                                 I
                                                                                                  -		ncremental	Program	to	offset	CO2	footprint	
       project	will	total	26,700	                                                                   in	Duke	Energy	Brazil	vehicle	fleet
       upon	certification.
     •		 enewable	energy	currently	
       pursuing	21	MW	small	hydro              N
                                             •		 atural	gas	-	
                                               	 urrently	analyzing	
                                               feasibility	to	convert	
                                               180MW		liquid	fuel	
                                               plant	to	natural	gas

     •		 atural	gas
       -		 as	Flores	Project	–	197.5	MW	
         simple	cycle	addition
     •		 enewable	energy
       -		 ydro	projects	Carhuaquero	IV	&	Caña	
         Brava	–	16	MW	total,	became	
         operational	in	2008
       -		 ualified	for	46,000	CERs/yr	under	Kyoto	
         Clean	Development.	Mechanism
       -	1st	CDM	projects	for	US	utility	

•	    Evaluating low-carbon tech-                      nism (CDM) program. The projects,           will receive Certificates of Emissions
      nologies that include clean                      with an installed capacity of 9.7 MW        Reductions (CER) for each metric ton
      coal and natural gas, as well                    and 5.7 MW, respectively, were devel-       of carbon dioxide equivalent reduced.
      as renewable alternatives and                    oped down river of the Carhuaquero          These CERs may be traded and sold to
      energy-efficient technology.                     hydroelectric plant, and will reduce        industrialized countries to help them
•	    Reducing, avoiding and/or se-                    emissions by 24,000 and 22,000 metric       meet their reduction targets or to out-
      questering carbon dioxide (CO2).                 tons of carbon dioxide equivalents per      side carbon exchange markets.
                                                       year. Carhuaquero IV began operations
During 2008, the Carhuaquero IV and                    in May 2008, and Caña Brava, began          Carhuaquero IV and Caña Brava are
Caña Brava projects, in Peru, qualified                operations in November 2008. These          the first DEI projects under the CDM
for carbon credits under the United                    projects use the water of the Chancay       program and show our commitment to
Nations Framework for Climate Change                   River to generate clean energy. Under       sustainable development. These and
(UNFCCC) Clean Development Mecha-                      the CDM program, both projects              other CDM projects currently included

Duke Energy International – Sustainability Report 2008                                                                                             35
in our development program will sup-           Our Stewardship Program fosters best             Energy
port Duke Energy’s overall emissions           management practices for natural
reduction goal and will contribute             resources and chemical use, by:
to our low-carbon emissions profile.           •	 Promoting the efficient use of                We promote the efficient use of
In addition to the aforementioned                  natural resources.                           energy through the adequate design,
benefits, both projects used local             •	 Looking for chemical substitution,            operation and maintenance of our
labor for construction, and contrib-               when feasible, for more                      operations, and the use of new and
uted to the maintenance of access                  environmentally friendly and safer           clean technologies. Our direct energy
roads, improvement of infrastructure               products.                                    use by main sources is summarized in
in neighboring schools, and crop                                                                the table “DEI’s Direct Energy Use by
development in adjacent areas.                 An example of how we promote the                 Primary Sources.”
                                               efficient use of natural resources is
Other specific actions by country are          the SPRINT™ system, installed in the
presented in the figure above.                 four LM6000 units at the Electroquil
                                               plant in Ecuador, in August 2008. This           Water
                                               system increased the total generating
                                               capacity by 10 MW without using ad-
Environmental                                  ditional fuel. Without the system, gen-          Water plays an important role in DEI’s
                                               erating these additional 10 MW would             electricity generation activities. It is
Indicators                                     represent an approximate consump-                the primary source for our hydro-
                                               tion of 690 gallons of No. 2 diesel per          power activities, and is critical in the
                                               hour per unit, equivalent to an annual           thermoelectric generation process
                                               average consumption of 1,104,000                 where it is used primarily for cooling
Materials Use                                  gallons of fuel and 1,600 hours of dis-          and steam generation.
                                               patch per year for each unit. Moreover,
                                               this system prevents the generation              Our Stewardship Program has clear
As an electricity generator, our materi-       of approximately 18,000 kilograms of             provisions and measures for water
als use is mainly driven by the use of         nitrogen oxide (NOx), 3,000 kilograms            management that include conserva-
fossil fuels (in thermoelectric plants),       of sulfur dioxide (SO2) and 1,000                tion, optimization, reuse, recycling,
water (hydropower, cooling systems             kilograms of particulate matter (PM)             and system retrofits to reduce water
and steam production), and indirect            per year. It also reduces the emissions          demand. Furthermore, DEI has estab-
energy use. We also use some chemi-            rate from 1.62 to 1.44 kilograms of              lished the following guidelines for
cals during our generation process,            NOx+SO2+PM per MW hour gener-                    water and wastewater management:
setup and maintenance of our heating           ated, reducing the environmental                 •	 Wastewater Quality Management
and closed-loop cooling systems, and           footprint of Electroquil’s operations.                Guideline, establishes require-
treatment of discharges.                                                                             ments for the management of

                                                     2007                                                   2008

         Country /                                                    Natural Gas                                               Natural Gas
                                           Fuel Oil                                               Fuel Oil
                                                                      (Thousand                                                 (Thousand
         Business Unit                  (U.S. Gallons)                                         (U.S. Gallons)
                                                                     Cubic Meters)                                             Cubic Meters)
                                        HFO                  LFO                                 HFO                   LFO
         Argentina                         0                    0          138,569                  0                     0              139,604
         Brazil                            0                    0                0                  0                     0                      0
         Ecuador                           0         35,264,967                  0                  0            18,746,026                      0
         El	Salvador             61,221,114              2,601,518               0         51,701,622              861,354                       0
         Guatemala               75,739,088               882,143                0         56,991,971              398,064                       0
         Peru	(Egenor)            8,399,530              2,471,295                          7,509,108             9,342,174                      0
         Peru	(Aguaytia)                   0                    0          397,071                  0                     0              421,748
         TOTAL                 145,359,732          41,219,923            535,640        116,202,701            29,347,618              561,352

                                                                                                         DEI’s Direct Energy Use by Primary Sources

36                                                                                   Duke Energy International – Sustainability Report 2008
                                                                                                                                  Santa River, Peru

     wastewater and storm water                 Power plants within DEI all require            Efforts for proper water management
     discharges from facilities to meet         water to operate. Hydropower plants            were highlighted through the PMC
     or exceed applicable laws and              use water directly to generate power.          (Continuous Improvement Program).
     regulations.                               Thermoelectric power plants withdraw           The PMC encourages employee
•	   Potable Water Management                   water from nearby water sources (lakes,        teams to identify ways to improve our
     Guideline, establishes the                 streams, rivers, estuaries, aquifers, etc.).   environmental and safety procedures,
     requirements for maintaining,              This water passes through various              enhance revenues, reduce costs,
     monitoring, and sampling the               processes in the power plant, and is ul-       simplify work processes and improve
     potable water supply to meet               timately returned to the original water        efficiency and productivity. Sev-
     or exceed local regulatory                 body (Water Use).                              eral PMC projects have attempted to
     requirements.                                                                             increment the efficient use or natural
                                                Water for thermoelectric power is              resources such as water. Examples of
Both compliance guidelines ensure               mainly also used in generating elec-           water conservation projects are:
that systems are in place and func-             tricity with steam-driven turbine gen-         •	 Modification of water transfer
tioning for verifying that:                     erators and in cooling down power-                  system, increasing thermal cycle
•	 An inventory of discharges has               producing equipment. A portion of                   and water usage efficiency and
    been developed.                             the water in power plant operations                 reducing start-up process for
•	 Both water usage and discharges              is lost typically through evaporation               steam turbines (Argentina).
    are permitted and managed                   (Water Consumption).                           •	 Irrigation of green areas around
    according to regulatory                                                                         the power plants with recycled
    requirements.                               Steam turbines, boilers and heat-                   water from run-off and treated
•	 Potable water systems and                    recovery steam generators all require               process water. The projects
    wastewater treatment plant or               cooling systems to condense steam,                  allowed a more efficient use of
    units are properly operated and             generate electricity or cool down                   natural resources by recycling
    maintained.                                 heating systems. Water is also required             water (Guatemala and Peru).
•	 Potable water meets established              for boiler makeup, auxiliary station           •	 Modification of the water
    limits and discharges and                   equipment, ash handling, and emis-                  de-mineralization units of the
    wastewater is monitored and                 sions control systems (e.g., Flue Gas               Electroquil power plant. This
    in compliance with applicable               Desulfurization (FDG) systems).                     modification allowed the recovery
    requirements.                                                                                   of 849,600 gallons of good quality
•	 Water is managed at the facility             Water consumption will depend of the                water during the first year. The
    to minimize usage, including                type of power generation technology                 recovered water is being utilized
    maximizing recycling and reuse.             utilized. Some measures adopted for                 in the air emission control system
•	 Employees are trained according              proper water management and water                   of the LM 6000 turbines.
    to these guidelines.                        conservation operations are opti-
                                                mization, reuse and modification of
                                                systems that reduce water demand.

Duke Energy International – Sustainability Report 2008                                                                              37
In 2008, certain DEI business units         near protected areas. Along with a                       Water Conservation Program
began conducting water balance              description of these hydroelectric
surveys to better understand how            plants, a summary is provided of some                    DEI Argentina permanently monitors
water is used in their operations. The      of the most relevant environmental                       the water quality of the Neuquen
surveys will distinguish between wa-        programs that have been implement-                       River and the dams of Cerros Colo-
ter withdrawn from the source, water        ed to control their impacts.                             rados. Data collection of physical,
returned to the source and losses                                                                    chemical and biological variables from
due to evaporation. Flow schemat-                                                                    the aquatic ecosystem is undertaken
ics and surveys will be reviewed by         Hydroelectric Complex Cerros                             to determine the general state of the
plant management. This effort will be       Colorados, Argentina                                     water bodies and their seasonal dy-
completed during 2009, and a water                                                                   namics. This enables us to understand:
usage measurement, monitoring and           The Hydroelectric Complex Cerros                         •	 Ecological conditions under
inventory plan will be implemented at       Colorados is in the lower valley of the                      which the different aquatic
these facility to support DEI’s efforts     Neuquen River, 60 km northwest of                            organisms develop.
to address long-term water supply           the city of Neuquen. The complex is                      •	 Vertical circulation water
issues.                                     constituted by the Portezuelo Grande,                        patterns, how they alternate
                                            Loma de la Lata, Mari Menuco, Planicie                       between stratification and
                                            Banderita and the Chanar reservoirs                          non-stratification intervals, and
                                            and the Mari Menuco, Barreales and                           how it affects the metabolism
Biodiversity                                Chanar dams. DEI’s hydroelectric                             of the water body, its chemical
                                            power station is near the Planicie Ban-                      composition and the availability
                                            derita reservoir and has an installed                        of nutrients for the production of
Biodiversity is evaluated as part of our    capacity of 479 MW.                                          organisms (a primary link in the
environmental impact assessment,                                                                         nutritional chains).
enabling us to identify, manage and         The complex serves to control flood-                     •	 General trophic levels are an
mitigate potential impacts on the en-       ing, generate power, regulate flow                           indicator of the health of water
vironment. This is important because        and secure water for both human con-                         bodies and water systems
our large hydroelectric plants have         sumption and irrigation. The Barreales                       (including an analysis of nitrogen,
potential impacts to biodiversity. The      and Mari Menuco dams allow for nau-                          phosphorus, chlorophyll).
facilities included herein have been        tical navigation and recreational use.                   •	 Bacteriological quality control in
identified because of the extension                                                                      sites more influenced by human
and size of the reservoirs. Nonethe-                                                                     presence, which allows the
less, it is important to highlight that                                                                  detection of potential situations
none of these facilities are located                                                                     of biological contamination
                                                                                                         that would affect the use of this
                                                                                                     •	 Meticulous monitoring of the
                                                                                                         state of the water returned to
                                                                                                         the system to ensure it does
                                                                                                         not contain polluting agents,
                                                                                                         chemical elements, etc.

                                                                                                     Fauna Conservation Program

                                                                                                     The Cerros Colorados program aims to
                                                                                                     monitor and control the population of
                                                                                                     fish of the Neuquen River and the Bar-
                                                                                                     reales, Mari Menuco and Chanar dams
                                                                                                     by sampling populations throughout
                                                                                                     the year. Main program objectives are:

                                           Cerros Colorados Hydroelectric Complex, DEI Argentina

38                                                                                        Duke Energy International – Sustainability Report 2008
                                                         Socó (common name) or Tigrisoma lineatum, a common bird of the wetlands close the Paranapanema River, Brazil

Duke Energy International – Sustainability Report 2008                                                                                               39
                               Cañon del Pato Hydroelectric Power Plant, Peru

40   Duke Energy International – Sustainability Report 2008
•	   Obtain a historical registry of                       These dams are central to the gen-         Trujillo, Cajamarca, Pacasmayo and
     the composition of fish species                       eration of the power plant. The main       Chepen. In 1998 DEI Egenor finished
     and their relative abundance,                         structures of the facility are built on    the expansion of Carhuaquero, to real-
     detecting seasonal changes                            the Santa River, between the Quitar-       ize its current total installed capacity
     within these variables. An                            acsa River and the Cedros Gorge, part      of 96 MW.
     important variation in the                            of the Cordillera Blanca range forms.
     obtained values could identify                                                                   In November 2006, DEI Egenor initi-
     problems within fish populations.                     Designed initially to have a final         ated the construction of the Carhua-
•	   Collect data of variables such                        capacity of 150 MW, the hydro-             quero IV and Caña Brava projects, with
     as length, weight, age, state of                      electric power plant of Cañon del          a total installed capacity of 16 MW.
     the reproductive organs and                           Pato entered operation in 1958. Its
     feeding patterns of the different                     original power was of 50 MW that was       DEI Egenor operates both hydroelectric
     species. These studies expand our                     extended to 100 and 150 MW in 1967         power stations—Cañon del Pato and
     knowledge on aspects related                          and 1981, respectively. In 1999, DEI’s     Carhuaquero—with a permanent com-
     to the growth, development,                           expansion work for 100 MW increased        mitment toward environmental protec-
     reproductive activities and                           the installed capacity to 263 MW.          tion and conservation.
     potential competition for food by                     Currently, the plant has an installed
     the different species.                                capacity of 364 MW.
•	   Evaluate the health conditions                                                                   DEI Geração Paranapanema
     of fish to proactively detect the                     At the Cañon del Pato facility, the        Hydroelectric Power Plants (Brazil)
     appearance of pathogens.                              solid waste from up-river communi-
                                                           ties is captured and sorted for proper     DEI Geração Paranapanema has
                                                           disposal in a sanitary landfill that       an installed capacity of 2,307 MW,
Hydroelectric power plant                                  has been opened for this purpose,          distributed among eight hydroelectric
Cañon del Pato (Peru)                                      benefiting the environment and the         power stations along the Paranap-
                                                           communities down river.                    anema River: Jurumirim, Chavantes,
The facility is on the Santa River, which                                                             Salto Grande, Canoas I and Canoas
has a catchment area of 4,897 sq. km.                                                                 II, Capivara, Taquaruçu and Rosana.
In 1992, the Paron Reservoir, 4,195                        Hydroelectric power plant                  The Paranapanema River serves as a
meters above sea level, and Cullicocha                     Carhuaquero (Peru)                         natural limit between the states of Sao
dams, 4,617 meters above sea level,                                                                   Paulo and Parana, and is the last large
began operation. These were followed                       The hydroelectric power plant of           clean river—930 km long—in these
in 2003 by the Aguascocha Reservoir                        Carhuaquero is on the Chancay River        two states.
of 4,285 meters above sea level, and in                    and has a 1,622 sq. km. river basin
2005 by the Rajucolta Reservoir, 4,274                     catchment area, with normal volumes        The Paranapanema River crosses
meters above sea level. Altogether                         that vary between 6 and 64.5 cubic         several municipalities where farming
they contribute 70 million cubic me-                       meters of water per second. The            communities and areas of environ-
ters of water during the dry season.                       power plant initiated its operations in    mental preservation are found.
In 2001, San Diego dam, 2,006 meters                       1991, with three units of 25 MW each.
above sea level, was inaugurated.                          It serves the cities of Chiclayo, Piura,

                                                                                                                Reservoir               Installed
     Plant Name               Location
                                                                                                            Extension (sq. km)        Capacity (MW)
     Jurumirin                Proximity	to	Piraju	(SP)	and	Carqueira	(SP)	cities                                      449                    98	
     Chavantes                Proximity	to	Chavantes	(SP)		and	Ribeirao	Claro	(SP)	cities                             400	                  414
     Salto	Grande             Proximity	to	Salto	Claro	(SP)	and	Cambara	(SP)	cities                                   12                     74
     Canoas	II                Between	Palmital	(SP)	and	Andira	(PR)	cities                                            23                     72
     Canoas	I                 Between	Candido	Mota	(SP)	and	Itambaraca	(PR)	cities                                    31                     83
     Capivara                 Proximity	of	Taciba	(SP)	and	Porecatu	(PR)                                              576                   640
     Taquaruçu                Between	Sandovalina	(SP)	and	Itaguaje	(PR)	municipalities                               80                    554
     Rosana                   Between	Rosana	(SP)	and	Diamante	do	Norte	(PR)	municipalities                           220	                  372
     DEI’s Hydroelectric Power Plants along the Paranapanema River, Brazil

Duke Energy International – Sustainability Report 2008                                                                                      41
Environmental Program                       de Botucatu UNESP, Universidade                •	   Improves the environmental
                                            Estadual de Londrina UEL, and Univer-               and the hydrologic resources
DEI Brazil’s aquaculture program looks      sidade Estadual de Maringa UEM.                     conditions, through the reduction
to maintain the balance of the ecosys-                                                          of the erosion process and
tem and to preserve the biodiversity        As part of the program, DEI Brazil                  maintenance of the region’s
and wealth of the aquatic fauna of the      created the “Paranapanema River                     biodiversity and water quality.
Paranapanema River. This program re-        Fish Catalogue” in which 155 species           •	   Preserves an ecosystem that
leases 1.5 million fish into the Paranap-   present in the river basin are de-                  serves as refuge for many species
anema River basin, and has been taken       scribed. Copies of this catalogue were              of birds, reptiles and mammals.
as a reference program for similar          distributed to city halls, libraries, non-     •	   Increases tourism potential
efforts across Brazil. The program has      governmental organizations (NGOs)                   contributing to the generation
benefited the communities through           and universities of the Paranapanema                of employment and income
the development of professional and         River region.                                       opportunities for the region’s
sport fishing programs, as well as rais-                                                        inhabitants.
ing the awareness of the inhabitants
toward environmental conservation           Natural Vegetation
and pollution prevention.                   Recovery Program                               Forest Conservation Program

The species in the program are bred         For decades the flora along rivers in          The forest conservation program was
in the hydrobiology and aquaculture         different regions of Brazil has been           implemented in 1999 at the Canoas I
station at the Salto Grande facility        degraded and in some cases com-                and Canoas II stations. DEI Brazil, city
through an agreement between DEI            pletely lost. DEI Brazil has implement-        halls, and agrarian and environmental
and the Faculty for Research and            ed a program to recover the natural            institutions in the area work together
Development of Aquaculture, “Luis           vegetation along the reservoirs of             towards environmental conservation
Meneghel” FALM. The agreement,              its hydroelectric power stations in            to support the forest cover restoration
signed in 2007, names FALM as the           the Paranapanema River, planting               across the river basin of the Paranap-
entity responsible for managing and         more than 9 million native trees. To           anema River.
operating the station at Salto Grande       date, this represents a recovered
for at least four years.                    area of more than 5,500 hectares.The           DEI Brazil donates native species of
                                            program:                                       trees of excellent quality and vari-
Research at the station includes            •	 Increases social conscience                 ety, and offers technical support to
genetic monitoring, migration, and               toward the ecological value of            volunteers looking to help planting
classification of species. The following         the native flora as an essential          and maintaining these areas. So far DEI
state universities support the pro-              element for the balance and               Brazil has provided seedlings to refor-
gram: Universidade Estadual Paulista             preservation of the environment.          est 1,200 hectares of land.

                                                                                                          Natural Vegetation Recovery Program, DEI Brazil

42                                                                              Duke Energy International – Sustainability Report 2008
                                                Arizona Thermoelectric Facility, DEI Guatemala

Emissions, Effluents
and Wastes
DEI’s EHS Policy declares that all busi-
ness units worldwide will comply with
internal standards, procedures and
applicable laws and regulations. In
agreement with this principle, busi-
ness planning is addressed by three
key elements of our EHS Management
System. All three elements are neces-
sary for ensuring businesses develop
appropriate plans for managing
hazards and contingencies associated
with their operations, and employees
understand their roles and responsi-
bilities for implementing those plans.

We have developed a risk manage-
ment program that ensures that EHS
hazards and their associated risks              •	   Mechanical Integrity Guideline,             Emissions
are identified and evaluated. The                    which describes the procedures
program’s overall goal is to ensure                  for ensuring that equipment                 The amount and nature of air emis-
appropriate policies, procedures and                 critical for preventing, reducing           sions from thermal power plants de-
programs are in place to prevent,                    or controlling hazards and risks            pend on factors such as the fuel (e.g.,
reduce or control these risks. The                   associated with our processes               coal, fuel oil, natural gas, or biomass),
risk management program is not                       and equipment are properly                  the type and design of the combus-
contained in a single guideline but in               designed, installed, maintained,            tion unit (e.g., reciprocating engines,
a combination of guidelines. These                   and inspected.                              combustion turbines, or boilers),
include:                                        •	   Due Diligence Assessment                    operating practices, emission control
•	 Risk Assessment Guideline, which                  Guideline, which provides                   measures (e.g., primary combustion
     contains the requirements for                   guidance in conducting due                  control, secondary flue gas treat-
     identifying and evaluating EHS                  diligence assessments to identify           ment) and overall system efficiency.
     hazards and risks associated with               potential EHS hazards, risks and            The primary emissions to air from the
     our operations and activities so                liabilities associated with real            combustion of fossil fuels are SO2,
     appropriate measures can be                     estate and business transactions.           NOx, PM, carbon monoxide (CO), and
     implemented to eliminate, control          •	   Post-Acquisition EHS Integration            GHG, such as CO2.
     or effectively manage these                     Guideline, which describes how to
     hazards and risks.                              effectively integrate new assets            Some measures being implemented
•	 Management of Change Guideline,                   into our EHS Management System              by our business units to reduce pri-
     which ensures all EHS hazards                   so that EHS hazards and risks               mary emissions of multiple air pollut-
     and risks associated with new or                associated with the acquisition             ants, including CO2, per unit of energy
     modified processes or equipment,                and its operations are managed              generation are:
     chemical and raw material                       appropriately.                              •	 Utilization of fuels with the
     changes, design modifications,                                                                  best emissions specifications
     etc., are reviewed to determine            Furthermore, DEI has developed                       economically available.
     whether additional EHS hazards             comprehensive EHS Compliance                     •	 Consistency with the overall
     or risks exist, and if so, that            Guidelines to provide guidance and                   energy and environmental policy
     appropriate measures are in                procedures for addressing a full range               of the country or region where
     place for preventing, reducing or          of EHS hazards and risks associated                  new projects are proposed.
     controlling impacts associated             with business operations and activi-             •	 Preference to high-heat-content,
     with these hazards and risks.              ties and deal with emissions, effluents              low-ash, and low-sulfur coal.
                                                and wastes.

Duke Energy International – Sustainability Report 2008                                                                                  43
DEI’s CO2 Emissions for 2008                                                                                                   •	   Selection of the best power
                                                                                                                                    generation technology available
                                                                                                                                    for the fuel chosen to balance
These emissions are associated with the company’s stationary sources and fleet                                                      the environmental and economic
(vehicles owned by the company).                                                                                                    benefits.
                                                                                                                               •	   Choice of technology and
                                                                                                                                    pollution control systems based
 Country /              Fuel                                  Tons                 Tons CO2               Tons CO2                  on the site-specific environmental
 Business Unit                                            CO2/year                  / GWh*                 / GWh**
 Argentina              Hydro	+	Natural	Gas                 295,731                     578                      176           •	   Stack heights designed according
 Brazil                 Hydro                                           0                    0                       0              to Good International Industry
 Ecuador                LFO                                 172,397                     805                      N.A.               Practice (GIIP) to avoid excessive
 El	Salvador            HFO	&	LFO                           610,507                     834                      N.A.               ground level concentrations and
                                                                                                                                    minimize impacts.
 Guatemala              HFO	&	LFO                           738,089                     749                      N.A.
                                                                                                                               •	   Use of combined heat and power
 Peru	-	Egenor          Hydro	+	HFO	&	LFO                   200,005                   1,115                        84
                                                                                                                                    (CHP) or cogeneration facilities.
 Peru	-	Aguaytia        Natural	Gas                         681,696                     730                      N.A.
 TOTAL                                                    2,698,425                  4,812                       260

DEI’s CO2 Emissions Organized by Country/Business Unit                                   *Only thermal generation              Greenhouse Gas Emissions
                                                                                    ** Thermal and hydro combined
                                                                                                                               Our business units follow the “Duke
                                                                                                                               Energy Greenhouse Gas Emissions
                                                                                                                               Estimating and Reporting Protocol”
20,000                                                                                                                         to prepare an annual GHG Emis-
                                                                                                                               sions Inventory. The protocol sup-
                                                                                                                               ports Duke Energy’s work related to
                                                                                                      Total Generation
                                                                                                      (Thousand MWh)           climate change. This work requires
                                                                                                                               Duke Energy to create a consistent,
                                                                                                                               transparent and verifiable corporate-
          10,938                                                                                                               wide inventory of its GHG emissions
                                                                                                                               and emission sources by establishing
                                                                                                                               a systematic estimation and reporting
                                                                                                 3,556 Thermal Generation
                                                                                                         (Thousand MWh)        DEI started gathering annual data on
          897                                                                                    2,698                         GHG emissions in 2000 as part of Duke
                                                                                                         CO2 Emissions
                                                                                                         (Thousand of tons)
          771                                                                                                                  Energy’s GHG emissions inventory.
            2000     2001      2002      2003      2004     2005            2006      2007         2008
                                                                                                                               This inventory estimates emissions of
DEI’s CO2 Emissions Historical Trend 2000-2008                                                                                 four of the six greenhouse gases—
                                                                                                                               CO2, methane (CH4), hydrofluorocar-
                                                                                                                               bons (HFC-134a) and sulfur hexafluo-
 Country                                      Tons of CO2/year                                                                 ride (SF₆)—identified by the UNFCCC.
 Business Unit                             (Company Vehicles)
                                                                                                                               Each business unit estimates and
 Argentina                                                        74                                                           reports on these four GHGs as they
 Brazil                                                          561                                                           pertain to a business unit’s operations
 Ecuador                                                          40                                                           and as specified in this protocol.
 El	Salvador                                                     191
                                                                                                                               Given that Duke Energy’s global GHG-
 Guatemala                                                       141
                                                                                                                               producing activities are dominated by
 Peru	-	Egenor                                                   310                                                           stationary combustion sources and
 Peru	-	Aguaytia                                                 152                                                           that emissions from these sources are
 Total                                                          1,469                                                          dominated by CO2, DEI’s CO2 emissions
                                                                                                                               account for over 99 percent of our
DEI’s CO2 Emissions from Company Vehicles by Country for 2008                                                                  total GHG emissions.

44                                                                                                                  Duke Energy International – Sustainability Report 2008
The annual GHG inventory and as-                                NOx, SO2 and PM Emissions
sociated information produced from
                                                                                                                        DEI NOx Emissions 2008
implementation of this protocol will
support:                                                          Country /                                                                          Tons / GWh                      Tons / GWh
                                                                                                           Fuel                  Tons/year
                                                                  Business Unit                                                                   (Only Thermal)               (Thermal + Hydro)
•	 Identification and quantification
    of potential GHG-reduction                                    Argentina                        Hydro	+	Natural	Gas                     663             0.00143                             0.00043
    opportunities.                                                Brazil                                  Hydro                              0                      0                                  0
•	 Development of potential GHG                                   Ecuador                                      LFO                         236              0.0110                                 N.A.
    mitigation strategies.                                        El	Salvador                          HFO	&	LFO                         5,472             0.00748                                 N.A.
•	 Quantification and
                                                                  Guatemala                            HFO	&	LFO                         8,402             0.00852                                 N.A.
    documentation of GHG
                                                                  Peru	-	Egenor                    Hydro	+	HFO	&	LFO                     3,624             0.02021                             0.00152
    reductions resulting from
    ongoing and potential future                                  Peru	-	Aguaytia                      Natural	Gas                       1,682             0.00180                                 N.A.
    activities and practices.                                     TOTAL                                                                 20,079            0.00572                              0.00113
•	 Internal and external GHG                                                                                            DEI SO2 Emissions 2008
    emissions reporting.
                                                                  Country /                                                                           Tons / GWh                     Tons / GWh
•	 Benchmarking DEI’s performance.                                                                             Fuel             Tons/year
                                                                  Business Unit                                                                    (Only Thermal)              (Thermal + Hydro)

DEI’s growth strategy has focused                                 Argentina                        Hydro	+	Natural	Gas                      7               0.00002                            0.000005
on increasing production at existing                              Brazil                                   Hydro                            0                       0                                   0
plants, limiting its ability to stabilize                         Ecuador                                      LFO                         32               0.00015                                N.A.
and reduce emissions in absolute                                  El	Salvador                          HFO	&	LFO                         6,720              0.00918                                N.A.
terms. DEI’s new strategy looks to                                Guatemala                            HFO	&	LFO                         8,497              0.00862                                N.A.
increase energy generation from low-
                                                                  Peru	-	Egenor                    Hydro	+	HFO	&	LFO                     2,516              0.01403                             0.00105
carbon technologies and renewable
energy sources, enabling us to                                    Peru	-	Aguaytia                      Natural	Gas                         18               0.00002                                N.A.
reduce emissions gradually by MWh                                 TOTAL                                                             17,792                 0.00507                             0.00100
generated.                                                                                                              DEI PM Emissions 2008
                                                                  Country /                                                                           Tons / GWh                     Tons / GWh
Other factors, including fuel prices                                                                     Fuel                   Tons/year          (Only Thermal)              (Thermal + Hydro)
                                                                  Business Unit
and CO2 rights, as well as our hy-
                                                                  Argentina                   Hydro	+	Natural	Gas                          14               0.00003                             0.00001
droelectric capacity—75 percent
of our generation capacity comes                                  Brazil                                Hydro                               0                           0                               0
from this source that depends on                                  Ecuador                                LFO                               12               0.00005
highly variable waterfall and reservoir                           El	Salvador                        HFO	&	LFO                            342               0.00047
capacity—influence which genera-                                  Guatemala                          HFO	&	LFO                            383               0.00039
tion technology prevails.To meet the
                                                                  Peru	-	Egenor                   Hydro	+	HFO	&	LFO                       113               0.00063                             0.00005
requirements related to air quality,
                                                                  Peru	-	Aguaytia                    Natural	Gas                           35               0.00004
CO₂ emissions, and other pollutants,
                                                                  TOTAL                                                                  898               0.00026                             0.00005

0.012                                                                      0.0110
                                                               Total Nox, Sox, and PM Emissions       25,000
                                                               Normalized by MWh of Electricity
                                                               Generated from Thermal Sources                                                                                         20,079
0.009                                                                                                                                                                                 NOx Emissions (tons)
                                                                                                                                                                                     SOx Emissions (tons)
0.006                                                                                                 15,000

0.003                                                                       0.0023                              5,198
                                                              Total Nox, Sox, and PM Emissions
        0.0007                                                Normalized by MWh of Electricity         5,000
                                                              Generated from Combined Sources                   4,769
0.000                                                                                                            258                                                                  PM Emissions (tons)
          2001    2002      2003      2004      2005   2006     2007       2008
                                                                                                                 2001    2002    2003      2004    2005      2006           2007   2008
Historical Trend of DEI’s NOx, SO2 and PM Emissions                                                    Historical Trend of DEI’s NOx, SO2 and PM Emissions by Year from 2001-2008
Normalized by MWh of Generation 2001-2008

Duke Energy International – Sustainability Report 2008                                                                                                                                    45
                                     Carhuaquero Hydroelectric Facility, Peru

46   Duke Energy International – Sustainability Report 2008
we developed the Air Quality Man-               wastes, and back-flush from ion ex-           oxygen, suspended solids, nutrients
agement Guideline. This guideline               change boiler water purification units.       (phosphorus, nitrogen), heavy metals
establishes the requirements to be                                                            (e.g. cadmium, chromium, copper,
followed to ensure compliance with              Arizona power facility in Guatemala,          lead, mercury, nickel, zinc), organic
air quality permitting, emissions moni-         with 176 MW of installed capacity,            chemicals, oily materials, and volatile
toring and reporting requirements.              incorporates all the above systems            materials, as well as thermal character-
It includes procedures that cover the           and equipment, generating a treated           istics of the discharge (e.g., elevated
following relevant topics: permitting           effluent volume of 31,300 cubic me-           temperature).
and regulatory compliance, air emis-            ters per year.
sions inventory, air pollution control                                                        To properly manage wastewater,
equipment, air emissions monitoring,            The characteristics of the wastewaters        DEI commonly practices wastewater
greenhouse gas emissions, periodic              generated depend on how the water             characterization (quality, quantity, fre-
emission reporting, nuisance odors              has been used. Contamination arises           quency and sources of liquid effluents
and dusts, training and recordkeeping           from demineralizers, lubricating and          in the facility), segregation of liquid ef-
requirements.                                   auxiliary fuel oils, trace contaminants       fluents (industrial, sanitary and storm
                                                in the fuel (introduced through the           water), identification of opportunities
                                                ash-handling wastewater and wet               to prevent or reduce wastewater (re-
Effluents                                       FGD system discharges), chlorine,             cycling, reuse, process modification,
                                                biocides, and other chemicals used            change of technology, and improve-
Effluents from thermal power plants             to manage the quality of water in             ment of operating conditions).
include thermal discharges, wastewa-            cooling systems. Cooling tower blow-
ter effluents, and sanitary wastewater.         down tends to be very high in total           The Wastewater Quality Management
                                                dissolved solids but is generally classi-     Guideline establishes the requirements
                                                fied as non-contact cooling water. As         to be followed to manage wastewater
Thermal Discharges                              such, it is typically subject to limits for   and stormwater discharges from facili-
                                                pH, residual chlorine, and chemicals          ties. It includes procedures that cover
DEI thermal power plants require                that may be present in cooling tower          the following relevant topics: permit-
water to cool and condense the steam            additives (including corrosion inhibit-       ting and regulatory compliance,
used to generate electricity. The heat-         ing chemicals).                               wastewater and stormwater discharge
ed water is normally discharged back                                                          inventory, wastewater and stormwater
to the source water (i.e., river, lake,                                                       management practices, wastewater
estuary, or the ocean) or the nearest           Sanitary Wastewater                           and stormwater treatment, operation
surface water body. In general, ther-                                                         and maintenance, effluent monitor-
mal discharges are designed to ensure           Sewage and other wastewater gener-            ing program, reporting, training and
that discharge water temperature                ated from washrooms, etc., are similar        recordkeeping.
does not exceed relevant standards.             to domestic wastewater.
Where no regulatory standard exists,
the acceptable ambient water tem-               Wastewater parameters and corre-              Wastes
perature change will be established             sponding maximum discharge levels
through environmental assessment.               are normally established through en-          The quality and quantity of wastes
                                                vironmental assessment on the basis           generated in DEI power generating fa-
                                                of country legislation and recommen-          cilities depend in general on the type
Wastewater Effluents                            dations from international guidelines         of fuel and the type of combustion
                                                like the World Bank and World Health          technology. Oil combustion wastes
The wastewater streams in a ther-               Organization. Maximum discharge               include fly ash and bottom ash, and
mal power plant include cooling                 levels are consistently achieved by           are normally generated in significant
tower blow-downs; emissions control             well designed, well-operated, and             quantities when residual fuel oil is
systems (wet FGD system discharges)             well-maintained pollution control             burned in oil-fired steam electric boil-
wastewater; ash handling wastewater;            systems.                                      ers. Other technologies such as com-
material storage runoff; metal clean-                                                         bustion turbines and diesel engines
ing wastewater; air heater and precipi-         Industrial-type wastewater may in-            and fuels like distillate oil generate
tator wash water, boiler blow-downs,            clude acids or bases (exhibited as low        little or no solid wastes.
boiler chemical cleaning waste, floor           or high pH), soluble organic chemi-
and yard drains and sumps, laboratory           cals causing depletion of dissolved

Duke Energy International – Sustainability Report 2008                                                                                47
Ash residues and the dust removed          El Salvador, Acajutla Power                  the river and surrounding areas, this
from exhaust gases may contain             Plant—Header and Recycler                    project facilitates management of
significant levels of heavy metals and     for Fuel Drained from Skid                   plastic waste through physical com-
some organic compounds, in addition        Selector for Unit No. 5                      pacting, reducing transportation costs
to inert materials. Ash residues are                                                    and the cost of final disposal.
not typically classified as a hazardous     This project, initiated in March 2008,
waste due to their inert nature.           connected all the drains from the
                                           mechanical and automatic fuel filters        PCB
The Waste Management, Storage and          of the HFO and diesel skid selector so
Transportation Guideline describes the     unit No. 5 could recover fuel for reuse.     Polychlorinated biphenyls (PCBs) are a
requirements to be followed for man-       Without interconnection of the drains,       common hazardous material utilized
aging the generation, classification,      there was a loss of oil and constant         historically in the power generation
storage and transportation of wastes       risk of environmental contamination.         industry. These were widely used in the
and for identifying and remediating        With implementation of the solution          electric industry as a dielectric fluid to
areas within the facility contaminated     proposed by the employees, spills            provide electrical insulation. Their use
with non-hazardous and hazardous           that could pollute water have been           has since been largely discontinued
wastes. It includes procedures for         eliminated, avoiding possible legal          due to potential harmful effects on
waste identification and characteriza-     sanctions.                                   human health and the environment,
tion, waste minimization and reduc-                                                     but many pieces of equipment remain
tion, waste storage, non-hazardous         This project is saving approximately         in service.
and hazardous waste transporta-            U.S. $46,000 per year in fuel that can
tion, waste treatment, storage and         be reused. However, the project’s main       As part of its EHS Management
disposal, contaminated sites, training     advantages are environmental, since          System, DEI has a specific guideline
and recordkeeping requirements. It         the risk of water contamination has          for managing PCBs. This guideline
also includes the requirements for         been reduced. For each liter of sedi-        provides information for the identi-
preparing an annual waste inventory        ments impacted by oil, 1million liters       fication, safe handling, storage and
for each facility, where all wastes are    of water could be contaminated. This         disposal of PCB-containing materials
segregated and inventoried by waste        is equivalent to the water consump-          (materials with PCB concentrations
stream. This guideline exceeds, in         tion of one individual for 14 years.         of 50 parts per million or greater). It
most cases, local requirements for                                                      defines the procedures, associated
waste management.                                                                       hazards, responsibilities, terms defini-
                                           Peru Egenor—Installation                     tion, and training and recordkeeping
Wastes are typically managed in            of a Hydraulic Press at the                  requirements. Its procedures identify:
landfills or surface impoundments          Cañon del Pato Water Intake                  PCB and PCB-contaminated equip-
or, increasingly, may be applied for                                                    ment; labeling practices; equipment,
beneficial use. If beneficial use is not   Since October 2008, all plastic waste        container and waste storage; PCB
feasible, disposal of wastes in permit-    carried by the Santa River—recovered         storage areas; inspections and mainte-
ted landfills with environmental con-      at the Cañon del Pato water intake—          nance of equipment containing PCBs;
trols is common. To properly manage        has been compacted using a press             sampling requirements; spill cleanup;
waste, we implement measures such          constructed at the plant by main-            and proper disposal of wastes.
as prevention, minimization and con-       tenance personnel. This compac-
trol of the volume of wastes, recycling    tor was constructed using recycled           To implement this guideline through-
and reutilization. The following are       equipment. The idea came from a              out all business units, we inventoried
some examples:                             previous Continuous Improvement              all electrical equipment containing di-
                                           Program (PMC) idea, where a com-             electric fluids. This assessment included
                                           pactor was used to compress metal            sampling and analysis of dielectric
                                           trash generated in the maintenance           fluids to determine the presence and
                                           shop. All of the waste originates in the     concentration of PCBs. In some cases,
                                           cities and towns upstream from the           like DEI Egenor and DEI El Salvador,
                                           water intake, and the debris is being        equipment with dielectric fluids having
                                           recovered from the river as part of our      a PCB content of above 50 ppm were
                                           Corporate Responsibility Program.            being properly stored, awaiting final
                                           Aside from improving and protecting          disposal in accordance with our guide-
                                           the overall environmental quality of         lines and international standards.

48                                                                           Duke Energy International – Sustainability Report 2008
Spills                                                           handling and spill prevention training       •	   Legal and Other Obligations and
                                                                 has been successful in minimizing the             Emerging Issues Guideline, which
DEI operates two types of plants:                                quantity of liquids spilled in relation           provides steps for systemati-
•	 Thermal plants, which handle                                  to the volume of liquids handled. We              cally identifying, monitoring and
    large quantities of fuel oil and                             continue to further lower or eliminate            evaluating the impact of appli-
    have the largest exposure to a                               future spill occurrences.                         cable laws, regulations, industry
    spill risk. The total volume of                                                                                standards, international treaties
    fuel handled annually at these                               Our inspections program identi-                   as well as tracking and evaluating
    17 plants totals over 145 million                            fies potential spill hazards early on.            new and changing EHS require-
    gallons. These plants also handle                            The spill response training program               ments and emerging issues.
    significantly lesser volumes of                              focuses on a proactive and timely                 This is done so that policies,
    other liquids such as lubricating                            cleanup response once a spill occurs.             procedures and programs, as
    oils, cleaning liquids and liquid                            As a result, nearly all spilled product is        appropriate, can be developed
    chemicals.                                                   recovered prior to any lasting impact             or modified to meet compliance
•	 Hydroelectric and natural gas                                 to the environment, as illustrated by             requirements.
    plants, which use liquid fuel only                           the graph below.                             •	   Training and Awareness Guideline,
    for the on-site emergency genera-                                                                              which includes procedures and
    tors and have a significantly small-                                                                           requirements for communicating
    er spill risk. The primary liquids at                                                                          these EHS legal and other require-
    these plants are lubricating oils,                           Compliance                                        ments (and plans for complying
    cleaning liquids and other liquid                                                                              with them) to the appropriate
    chemicals.                                                                                                     employees.
                                                                 DEI has developed a comprehen-               •	   Document Control Guideline,
The spills that occurred from 2006 to                            sive EHS compliance management                    which requires appropriate docu-
2008 were primarily fuel oil, with com-                          program to meet applicable laws,                  ments and records to be main-
paratively insignificant occurrences of                          regulations and internal requirements             tained to support compliance and
other types of liquid spills. Our liquids                        and expectations. These include:                  so that the information is readily
                                                                                                                   available and easily retrievable.
                                                                                                              •	   Data Management Guideline,
   DEI	Spills	(in	U.S.	gallons)                2007                   2008                                         which describes for the types
   Quantity	of	Fuel	Handled                    186,579,655            145,550,319                                  of EHS-related documents that
   Total	Quantity	Spill                        2,713                  20,682                                       must be maintained to support
                                                                                                                   compliance with laws and regula-
   Total	Quantity	Recovered                    2,568                  20,293
                                                                                                                   tions, EHS Compliance Guidelines,
   Quantity	Unrecovered                        145                    389
                                                                                                                   permits, licenses, etc., and the
    186,579                                                                                                        procedures for storing, archiving,
                                                                                                                   destroying and filing these docu-
                                                                                                              Additionally, the EHS Compliance
                                                                                                              Guidelines contain programs and pro-
                                                                                                              cedures for controlling EHS risks inher-
                                                                                                              ent in our operations and activities.

                                                                                                              We have an excellent regulatory
                                                                                                              compliance record over the last five
                                                                                                              years. Our operations averaged fewer
                     2.7         2.6                                   20.7          20.3                     than two regulatory citations per year,
                                                                                                              many of which did not have monetary
                    2007                                              2008                                    fines. During 2008, one event was
    Total Fuel Handled (Thousand of gallons)          Total Fuel Spilled (Thousand of gallons)                identified and reported as an environ-
                              Total Fuel Recovered (Thousand of gallons)
                                                                                                              mental regulatory citation. However,
   DEI Spills for 2007 and 2008 in Thousand of U.S. gallons                                                   no environmental monetary sanctions
                                                                                                              were registered during this period.

Duke Energy International – Sustainability Report 2008                                                                                             49
     section four:


     Employee	and	contractor	health	and	safety	performance,	

     labor	practices,	training	and	education,	and	society	and	

     product	responsibility	are	key	factors	to	Duke	Energy	

     International’s	(DEI)	overall	social	performance.	This	section	

     highlights	these	areas	and	how	we	are	meeting	and	

     exceeding	expectations	for	each.

50                                      Duke Energy International – Sustainability Report 2008
Health and Safety                                        •	   Formalized Contractor Safety Program
                                                              through a Contractor EHS Management Policy
                                                              and implementation guidance.
                                                         •	   BST Organizational Culture Diagnostic
Safety Vision                                                 Instruments (OCDI) to gauge the perception
                                                              of DEI employees regarding organizational
                                                              effectiveness, team issues and safety culture.
DEI’s Safety Vision describes the expectations,          •	   Several initiatives for safety culture
values and principles of a Safety Culture, and                enhancement (Zero Injury / Zero Illness
strives to attain a zero injury culture and zero              Campaign and Approaching Others—Tell Me
work-related illness. This Safety Vision applies to           program, Focus Groups, Safety Mascots).
all employees and contractors, and reinforces            •	   DEI Safety Behavior Standards (SBS) for safety
a personal commitment at every level of the                   culture continuous improvement.
                                                         Our initial safety culture enhancement included
                                                         development and implementation of safety skills
Evolution of DEI Safety Culture                          for a zero injury / zero illness culture by develop-
                                                         ing abilities to:
Our Safety Culture has evolved from a compliant,         •	 Lead safety through personal actions.
reactive approach (comply with laws and regula-          •	 Communicate safety up, down and across the
tions, and recognize corporate responsibility) to             organization.
a proactive, advantageous approach (manage               •	 Approach and coach each other about risky
issues and risks not yet regulated to reduce future           behavior.
risks and liabilities, and manage issue for busi-
ness advantage). It continues to evolve towards a
sustainable approach (manage for sustainability,         DEI Safety Mascots
consistent with triple bottom line).
                                                         Safety Mascots provide periodic and timely safety
Our Safety Culture today was developed through:          advice, which is essential to our Safety Culture. To
•	 EHS Management System and EHS                         convey safety messages in a more entertaining
    Compliance Guidelines.                               and enjoyable way, we initiated a project using a
•	 Annual “Operations Safety Leaders Workshop.”          mascot to provide guidance and suggestions on

Duke Energy International – Sustainability Report 2008                                                          51
                              Evolution of DEI Safety Culture

                               E ectiveness                            Proactive
                                and Value-
                                  Added                    Compliant

                                                           Resist             Comply with laws     Manage issues and Manage issues     Manage for
                                               Time        compliance until   and regulations;     risks that are not for business     sustainability,
                                                           forced; ght res    recognition of       yet regulated to    advantage       consistent with
                                                           when they are      basic corporate      reduce future risks                 triple bottom
                                                           up                 responsibility       and liabilities                     line

                                                                                  Following	actions	are	implemented	         R
                                                                                                                           -		 olling	up	of	DEI	SBS	pro-
-		 EI	–	Argentina	implemented	and	                                               in	DEI	as	part	of	the	BST	survey	          gram	and	SBS	gap	analysis	
                                                  DEI	developed	a	
  certified	an	Environmental	Manage-                                              results	to	improve	DEI	safety	culture:     conducted	at	the	different	
                                                  more	thorough,	
  ment	System	based	on	ISO	14001.	                                                   A
                                                                                  	•		 pproaching	Others	(Tell	Me)	          countries.
                                                  formalized	contrac-
-		 irst	version	of	DEI	EHS	MS	and	EHS	                                              program.	                               I
                                                                                                                           -		mplementation	of	first	DEI	
                                                  tor	safety	program:	
  compliance	guidelines	are	issued.                                                 	C
                                                                                  	•		 ountry	specific	mascots.              Safety	Leading	Metrics.
                                                  Contractor	Man-
                                                  agement	Policy	in	                	D
                                                                                  	•		 EI	EHS&CM	Quarterly	Newsletter.       B
                                                                                                                           -		 egin	development	of	
                                                  September	13,	2004	               	
                                                                                  	•	AO	Targeted	Focus	Groups.	              Sustainability	Management	
-		 EI	started	implementing	a	corpo-                                                  C
                                                                                  	•		 ontinue	roll-out	of	Zero	injury/      System
                                                  Contractor	Manage-
  rate	Environmental	Health	and	Safe-                                                illness	Campaign.                       S
                                                                                                                           -		 ixth	EHS	annual	meeting	
                                                  ment	Implementa-
  ty	Management	System	EHS	MS.                                                      F
                                                                                  -		 ourth	annual	EHS	meeting	(Lima	        “Operations	Safety	Leaders	
                                                  tion	Guidance.
-		 irst	EHS	annual	meet-                                                           –	Peru).                                 Workshop”	(Houston	–	TX).
  ing	(Houston	–	TX).

   1999           2000            2001         2002             2003            2004             2005         2006           2007            2008

Duke	Energy	expanded	                         DEI	Egenor	–	Peru	                                              D
                                                                                                            -		 evelopment	of	DEI	Safety	Behavior	
operations	abroad,	                           implemented	and	                                                Standards	(SBS)	for	Safety	Culture	
particularly	in	Latin	                        certified	an	Integrated	                                        continuous	improvement.
America,	under	the	                           Management	                                                     D
                                                                                                            -		 EI	project	(Carhuaquero	IV	and	Caña	
name	Duke	Energy	                             System	based	on	the	                                            Brava)	hydroelectric	plants	qualified	
International	(DEI).                          international	standards	                                        for	carbon	credits	under	the	Clean	
                                              ISO	9001,	ISO	14001	                                            Development	Mechanisms	CDM	
                                              and	OHSAS	18001.                                                in	Peru	.	It	will	offset	46,000	metric	
                                                                                                              tons	of	CO2	equivalent	per	year.
                                                                                                            -		 ifth	EHS	annual	meeting	“Operations	Safety	
                                                                                                              Leaders	Workshop”	(Antigua	–	Guatemala).

                                 DEI	started	                                                D
                                                                                           -		 EI	Central	America	(El	Salvador	and	Guatemala)	
                                 implementing	                                               implemented	and	certified	an	Integrated	
                                 Environmental	                                              Management	System	based	on	the	international	
                                 Health	and	Safety	                                          standards	ISO	9001,	ISO	14001	and	OHSAS	18001.
                                 compliance	guidelines	                                      D
                                                                                           -		 EI	commissioned	BST	Solutions	to	administer	the	
                                 (EHS	guidelines)	.                                          Organizational	Culture	Diagnostic	Instrument	(OCDI)	
                                                                                             to	gauge	the	perceptions	of	DEI	employees	with	
                                 Second	EHS	annual	                                          respect	to	organizational	effectiveness,		team	issues,	
                                 meeting	(Houston	–	TX).                                     and	safety.
                                                                                           -		mplementation	of	Pro-Active	Driving	Program	(PDP).
                                                                                           -	Third	annual	EHS	meeting	(Lima	–	Peru).

       52                                                                                        Duke Energy International – Sustainability Report 2008
safety to all employees. Each country             behaviors have to be considered,             DEI EHS Compliance
has its own mascot that represents its
cultural values so workers can easily
                                                  including values and attitudes (e.g.
                                                  attitude to risk-taking), Management
identify and connect with it.                     Systems (e.g. whether procedures are
                                                  usable and up to date), and organi-          In addition to the EHS Management
                                                  zational values (e.g. how production         System, we developed a compre-
DEI Safety Behavior Standards                     vs. safety conflicts are managed). DEI       hensive EHS compliance program,
                                                  SBS Gap Analysis methodology helps           consisting of 66 guidelines to address
DEI’s EHS Department leadership                   business units analyze gaps between          a full range of EHS hazards and risks
identified the need for an alterna-               what is described in the SBS and what        associated with business operations
tive approach to improve our health               happens in practice. This methodol-          and activities. Each guideline provides
and safety culture by reinforcing                 ogy seeks to capture the views of the        specific technical information to con-
employees’ perception and attitude                entire workforce about how often the         trol and reduce potential areas of EHS
toward it. To accomplish this, in 2008            behaviors described in the standards         risk within our operating companies.
we developed DEI’s Safety Behavior                are performed. We conducted our first
Standards (SBS) and launched them at              SBS Gap Analysis from September to           The guidelines also introduce global
our annual safety-training workshop               December 2008, to establish the ex-          consistency in how (e.g., procedures
in Houston. These standards de-                   tent to which we meet the standards          and practices) we manage EHS risk.
scribe behaviors—both positive and                in each specific location or facility.       The guidelines are not intended to
negative—that either support or un-                                                            replace local EHS regulations, but to
dermine our strong safety culture, and            DEI SBS Gap Analysis results were            supplement regulatory requirements
are characteristic of the most effective          examined to identify:                        and provide specific methods of
executives, managers, supervisors                 •	 Which behaviors are clearly               compliance. They are based on criteria
and employees. These standards help                   strengths (are often or always           mostly from U.S. regulations; however,
us develop a successful and engaged                   performed.)                              other sources were also used to de-
workforce that understands which                  •	 Where the gaps exist (behaviors           velop them. For example, regulations
negative behaviors must be avoided                    that are sometimes, seldom or            from other countries (Australia, Brazil,
and which positive ones should be                     never performed.)                        EU), international Management Sys-
emphasized to improve our safety                                                               tem standards (ISO 14001, BS 8800),
culture.                                          Stemming from the gap analysis               industry and trade association stan-
                                                  results, clear and measurable action         dards/guidelines (NFPA, ANSI), and
DEI’s SBS have main four theme                    plans were developed for each facility       other multi-national company EHS
—safety performance, communica-                   (including the development of the            guidance were reviewed and relevant
tion, risk management and engage-                 behavior toolkit) to reinforce our zero      concepts adopted in development of
ment. For each theme, distinct and                injury safety culture, close the gaps        the guidelines as best management
specific behaviors are expected of                and encourage positive safety behav-         practices techniques.
executives, managers, supervisors and             iors. With these activities we expect to
all employees, including contractors.             achieve our goal of “zero injuries, zero
                                                  work-related illnesses.”
To establish a successful program,
several aspects that influence safety

          Theme                    All Employees                   Supervisors                  Managers                         Executives
                                                                                               Set High Safety
  Safety Performance            Deliver Safety Excellence      Ensure Safety Excellence
                                                                                                                                 Set the Vision

    Communication                       Tell Me                  Encourage the Team          Communicate Openly                 Provide Clarity

   Risk Management                      Be Alert               Promote Risk Awareness           Confront Risk                     Manage Risk

      Engagement                      Get Engaged                 Engage the Team             Engage Workforce            Engage the Organization

                                                                                                 DEI Safety Behavior Standards—Interdependence of Behaviors

Duke Energy International – Sustainability Report 2008                                                                                       53
Organizational                               Our EHS Management System has                              EHS Performance
Responsibility for                           guidelines for ensuring operations
                                             meet these standards. These
Health and Safety                            guidelines require businesses to
                                             assign clear roles and responsibilities                    The measurement phase of the EHS
                                             to employees so that all EHS hazards                       Management System determines how
As part of the business planning             and risks are understood and                               successfully business plans are being
phase of the EHS Management                  managed appropriately. Employees                           implemented. Goals and targets need
System, roles, responsibilities and          with EHS roles and responsibilities                        to be developed so that performance
accountabilities are defined to              are trained in what their roles and                        over time can be evaluated and con-
ensure effective implementation. The         responsibilities are and how to best                       tinuously improved. How well goals
following EHS Management Systems             meet them. These guidelines are:                           and targets are being achieved must
standards define in detail EHS roles,        •	 Roles, Responsibilities and                             be monitored periodically to measure
responsibilities and accountabilities:            Accountabilities Guideline, holds                     performance and, when necessary, to
•	 Hold employees at all levels                   all employees accountable for                         identify corrective and preventive ac-
     accountable for achieving EHS                improving EHS performance;                            tions and improvement opportunities
     performance expectations, and                defines management’s and                              when performance does not meet our
     reinforce that complying with                employees’ roles, responsibilities                    expectations.
     applicable EHS requirements is a             and authorities, and reinforces
     condition of employment.                     employee accountability through                       Monitoring and measuring perfor-
•	 Define and communicate clear                   the performance appraisal process.                    mance is important to our EHS Man-
     EHS roles, responsibilities and au-     •	 Training and Awareness                                  agement System and necessary for
     thorities for employees, including           Guideline, requires an effective                      assessing if EHS goals and targets are
     managing risks and opportunities,            EHS training and awareness                            being achieved. We have established
     identifying hazards and prevent-             program, identifying EHS training                     guidelines for ensuring that EHS goals
     ing incidents.                               needs, developing formal                              and targets are developed and perfor-
•	 Identify training needs consider-              training programs, evaluating                         mance against them measured with
     ing EHS roles and responsibilities           the effectiveness of training,                        the overall objective of continuously
     and the potential impact of work             and maintaining the training                          improving performance:
     activities.                                  documentation.                                        •	 Setting Goals and Targets
•	 Provide EHS training at the ap-           •	 EHS Award Program Guideline,                                Guideline, describes the necessary
     propriate frequency and track                provides ways that EHS successes                          steps for developing EHS goals
     completion.                                  can be communicated and                                   and targets, preparing action
•	 Include EHS performance in re-                 rewarded.                                                 plans for achieving the goals and
     viewing overall employee perfor-                                                                       targets, communicating goals
     mance and providing recognition.                                                                       and targets and the progress in
                                                                                                            achieving them, and ensuring
                                                                                                            that goals and targets are

                                                                   ENFERMIDADE                              considered during short- and
                                                                                                            long-term planning.
                                                                                                        •	 Monitoring and Measuring
                                                                                                            Performance Guideline, contains
                                                                                                            the minimum requirements for
                                                                     LESÃO                                  establishing and implementing
                                 ILLNESS                                                                    a program for monitoring
                                                                                                            and measuring performance,
                                                                                                            such as identifying operations
                                                                                                            and activities that should be

                                  INJURY                                                                    periodically monitored and/or
                                                                                                            measured, developing monitoring
                                                                                                            and measuring procedures,
                                                                                                            compiling results and reporting
                                                                                                            EHS performance.
                                       DEI Safety Vision Logo in Spanish, English and Portuguese

54                                                                                           Duke Energy International – Sustainability Report 2008
Safety                                          Lagging indicators are usually readily      Total Incident Case Rate
                                                quantifiable and understandable,
Safety is foremost to our labor prac-           clear advantages, but they lag or           The TICR represents the number of
tices. To measure safety performance,           reflect situations where corrective         recordable injuries and illnesses per
we use two broadly classed indicators:          action can only be taken afterwards.        200,000 hours worked. We determine
“lagging” and “leading.” The distinction        Thus, they often incur some type of         this value based on Occupational
between the two refers to the order             cost, whether it be in fines or de-         Safety and Health Administration
in which events take place. A leading           creased credibility with regulatory         (OSHA) recordkeeping and reporting
indicator precedes an event, while a            agencies and/or the public.                 guidelines. Safety and health regula-
lagging indicator follows an event.                                                         tions in each country may consider
The goal is to understand the causal                                                        an incident recordable while another
relationship between leading and                Leading Indicators                          country may not; therefore, we use
lagging indicators such that leading                                                        OSHA standards to normalize our
indicators provide valid predictions of         We have made a conscious effort to          incident reporting. Furthermore, we
lagging indicators.                             improve our safety performance by           can compare our performance to U.S.-
                                                establishing leading indicators; that is,   based companies operating in the
                                                indicators that measure the implemen-       same industry. We have established
Lagging Indicators                              tation of practices or measures which       very aggressive TICR targets from
                                                are expected to lead to improved safe-      2003 onward. Since 2003, our TICR has
We had, until recently, mainly mea-             ty performance. Poor performance in         consistently shown a positive trend.
sured lagging indicators—most com-              meeting leading indicators can be ad-
monly used by the electric generation           dressed before negative safety perfor-
industry—to evaluate safety perfor-             mance events (e.g., injuries, incidents,    Lost Workday Case Rate
mance. Two key lagging indicators,              etc.) are realized. Training completion
Total Incident Case Rate (TICR) and             percentage was the first leading            Restricted and lost workdays are
Lost Workday Case Rate (LWCR), have             indicator to be measured in 2006. DEI       monitored and recorded according to
been measured the longest, and DEI              expanded the use of leading indica-         OSHA requirements and represents
establishes TICR and LWCR goals an-             tors in 2008 by including percentage        the number of incidents per 200,000
nually. Other lagging indicators, such          of safety inspections conducted and         hours worked in which an employee
as first-aid and vehicle incidents, and         related action items closed on time per     was away from work because of an
fires and explosions are measured               quarter, percentage of pre-job hazard       occupational injury or illness. We have
also; however, DEI has not established          analysis (PJHAs) conducted per month,       met our LWCR target each year, except
specific targets for these indicators.          and percentage of risk assessments          for 2006. As with our TICR, the LWCR
                                                conducted per quarter.                      has been trending downward.

                                                                                                            Safety Culture and Team Work, DEI Argentina

Duke Energy International – Sustainability Report 2008                                                                                  55
How Does DEI Compare                       process, requiring coordination and           Moreover, we have developed a
to the U.S.?                               cooperation among various functions           Contractor EHS Manual, designed to
                                           within DEI.                                   provide contractors with the overall
The U.S. Department of Labor (DOL)                                                       EHS requirements for work conducted
tracks the incident rates (based on        We have developed and implemented             at our facilities. The procedures in
OSHA incident reporting require-           policies and programs to manage               this manual apply to all contractors
ments) of occupational injuries and        contractors’ on-site activities, with the     who perform work at DEI sites. The
illness by industry sectors. Since DEI     goal of continuously improving safety         manual contains our contractor EHS
produces electricity by hydroelectric      performance and implementing an               Management Policy, DEI and contrac-
and fossil fuel plants, we would be        integrated approach to promote                tors responsibilities, and safety and
grouped in the electric power genera-      this commitment. We formalized our            environmental procedures.
tion industry. We have outperformed        contractor safety program in 2002
the average incident rate of U.S. com-     by developing our Contractor Safety           Contractor TICR and LWCR data has
panies in the same industrial sector,      Guideline. Moreover, we have consis-          been tracked since 2003. This data is
indicating that our health and safety      tently looked to improve contractor           displayed on page 57.
programs have been implemented             safety performance, and often moni-
effectively and employees are working      tor work activities and track potential       We have invested heavily in develop-
towards a Zero Injury Culture.             causes for incidents, such as injuries,       ing and implementing our Contractor
                                           illnesses, environmental releases, etc.       Safety Program since 2002, with the
                                                                                         goal of instilling the same Zero-Injury
DEI Considers Contractor Safety            To support these objectives we                culture in our contractors as in our
a Performance Priority                     developed a Contractor EHS Manage-            employees. Through this training we
                                           ment Policy. Under this policy, safety        are not only improving our contractor
We supplement our workforce                is always the first consideration of any      safety performance but also transfer-
through contractors and subcon-            assignment, and is not optional; em-          ring knowledge that benefits the
tractors, which are hired mostly for       ployees and contractors must apply            entire community, since it can be
construction and maintenance. Thus,        safe work practices to their activities       applied to protect workers and their
EHS performance of contractors af-         and exercise good judgment. Business          families when performing work at
fects us. By the nature of this work,      units are expected to identify and            home or other locations.
contractors and subcontractors may         mitigate contractor-related EHS risks
be exposed to a higher-level of risk       that affect our employees, operations,
for occupational injuries and illnesses.   facilities and equipment through
Ensuring that contractor risks are         conformance with this policy.
managed appropriately is a complex

                                                                                              Safe Work Practices, Carhuaquero Hydroelectric facility, Peru

56                                                                            Duke Energy International – Sustainability Report 2008
 Safety Highlights

                                                                                                                    DEI’s Employee TICR and LWCR Historical Trend 2000-2008

  DEI’s Employee TICR and LWCR                     2007      2008
  Total	No.	of	Incidents                                6           6                           0.79

  Total	No.	of	Lost	Workday	Cases                       1           2                     0.5                                                                                  0.40
  TICR                                                0.4       0.4                                                                                                            0.13
  LWCR                                              0.07       0.13                                                                                                                  LWCR
                                                                                                 2000      2001    2002         2003    2004   2005      2006         2007        2008

                                    DEI’s Employees H&S Indicators by Country through December 31, 2008
                                                                                              El                                     Peru              Peru                   DEI
  Country/ Business Unit                 Argentina           Brazil          Ecuador                         Guatemala
                                                                                           Salvador                                Aguaytia           Egenor                 Total
  TICR                                        1.17	           0.00	             0.00	           0.41	             0.35	                0.00	           0.77	                 0.40
  TICR	Target                                 1.40	           0.20	             0.78	           0.44	             0.43	                1.84	           1.20	
  LWCR                                        1.17	           0.00	             0.00	           0.00	             0.00	                0.00	           0.00	                 0.13
  LWCR	Target                                 1.40	           0.20	             0.78	           0.44	             0.43	                1.84	           0.40	
  Fatalities                                   0	               0	                   0	          0	                0	                   0	              0	                    0
  Lost	Workday	Cases                           1                0	                   0	          0	                0	                   0	              0	                    1
  Restricted	Workday	Cases                     0	               0	                   0	          1                 0	                   0	              0	                    1
  Other	Recordable	Incidents                   0	               0	                   0	          0	                1                    0	              2                     3

                                    DEI’s Contractors H&S Indicators by Country through December 31, 2008
                                                                                              El                                     Peru              Peru                   DEI
  Country/ Business Unit                 Argentina           Brazil          Ecuador                         Guatemala
                                                                                           Salvador                                Aguaytia           Egenor                 Total
  TICR                                        2.13             0.18             0.00            0.00              2.96                 0.00            0.52                  0.89
  TICR	Target                                 1.40            0.20              1.40            0.83              0.70                 0.22            1.08
  LWCR                                        1.07             0.18             0.00            0.00              0.25                 0.00            0.26                  0.21
  LWCR	Target                                 1.40            0.20              1.40            0.83              0.70                 0.22            0.54
  Fatalities                                   0                0                    0           0                 0                    0               0                     0
  Lost	Workday	Cases                           1                1                    0           0                 1                    0               1                     4
  Restricted	Workday	Cases                     0                0                    0           0                 8                    0               0                     8
  Other	Recordable	Incidents                   1                0                    0           0                 3                    0               1                     5

                      3.50     DEI’s TICR vs. U.S. TICR Historical Trend 2003-2007
                                                                                                     1.5   1.44           DEI’s Contractor Performance Historical Trend 2003-2008

                                                                 2.70                                1.2

                                                                 U.S. TICR
                2.0                                                                                                                                                                TICR


                                                                                                     0.3                                                                        0.21
                                                                 DEI TICR

                0.0                                                                                  0.0
                      2003   2004      2005           2006     2007                                        2003          2004          2005    2006            2007           2008

Duke Energy International – Sustainability Report 2008                                                                                                                             57
     Safety is part of our normal work activities, Cañon del Pato Hydroelectric facility, Peru.

58       Duke Energy International – Sustainability Report 2008
DEI Brazil and DEI Argentina                    and after proving its effectiveness
Focus on Improving Contractor                   there was implemented in El Salvador.      Labor Practices
Safety Performance                              Other business units have shown
                                                interest in implementing the program
DEI Brazil and DEI Argentina took on            as part of the efforts to enhance our      Today’s energy industry is facing un-
the challenge of improving contractor           safety culture.                            precedented change and responding
safety performance, and our contrac-                                                       to numerous issues in the public spot-
tors supported this effort. Key initia-                                                    light, from climate change to energy
tives in 2008 included:                         DEI El Salvador                            efficiency to a secure and sustainable
•	 Monitoring and inspecting                    Vaccination Programs                       fuel supply.
     contractors to ensure appropriate
     EHS practices were in place.               These programs covered all DEI El Sal-     A successful business like ours de-
•	 Visiting contractor offices to               vador employees and were conducted         pends on a diversity of people, ideas
     evaluate EHS performance at their          in June 2008 at DEI El Salvador‘s          and talents, a strong team of capable
     offices and work locations.                plants and administrative offices. The     people committed to maintaining
•	 Promoting meetings between                   vaccination programs were preceded         our reputation as an industry leader
     contractor company owners                  by educational seminars as well as         in Latin America, and a reputation for
     and DEI contract managers and              general medical evaluations for            operational excellence and customer
     the vice president to foster an            personnel at the electricity generation    service.
     open relationship and open                 plants. A total of 213 flu vaccinations
     communication channels.                    and 280 Hepatitis B vaccinations were      As stated in the Operating Principles,
•	 Recognizing contractor                       administered on a voluntary basis.         we strive for a high-performance cul-
     companies that exhibit good EHS            This program is part of our efforts        ture in which both the company and
     performance.                               to promote a healthy and safe work         employees reach their full potential
                                                environment for employees.                 by maintaining a healthy and safe
We are looking forward to seeing how                                                       work environment, maintaining open,
contractor companies and their em-                                                         honest and frequent communica-
ployees respond to these initiatives,           DEI Egenor Peru—Occupational               tion; embracing and understanding
and how they affect contractor safety           Preventive Care                            cultural differences, backgrounds
performance.                                                                               and experiences; conducting busi-
                                                Between August 25 and September 5,         ness ethically and with the highest
                                                2008, health exams were performed          integrity; providing opportunities for
Health                                          on all DEI Egenor employees in coordi-     creativity and initiative; and imple-
                                                nation with the EHS Department. The        menting training programs.
We have implemented various                     exams were conducted by Cardioclin-
education, training, counseling and             ic, which specializes in occupational
risk-control programs to assist our             health. This practice promotes preven-
workforce. The following case studies           tative health care and well being of all   Code of Business Ethics
demonstrate some of our efforts:                DEI Egenor employees.

                                                                                           The Duke Energy Code of Business Eth-
DEI Guatemala Sponsors                          DEI Electroquil Ecuador—EHS                ics (CoBE) focuses the organization on
the Perfect Day Program                         Employee of the Month                      areas of ethical risk, helps to recognize
                                                                                           and deal with ethical issues, describes
This program encourages the par-                Electroquil recognizes the employee        mechanisms to report unethical
ticipation of all employees to report           who, during the month, has found           conduct and helps foster a culture of
unsafe conditions and to promptly               and corrected an EHS issue or who          integrity and accountability. This code
follow up with corrective actions. In           has significantly improved the plant       applies to Duke Energy, its subsidiaries
March 2008, the Perfect Day Program             regarding safety conditions. The em-       and its affiliates. Contractors, suppliers
Award Ceremony for 2007 took place              ployee is awarded a certificate and a      and vendors are expected to support
and recognized the Las Palmas plant             bonus. The employee nominating the         effective compliance programs within
for the best overall improvement rat-           recognized employee also receives          their own organizations.
ing for 2007. The Perfect Day was initi-        recognition.
ated as a pilot program in Guatemala

Duke Energy International – Sustainability Report 2008                                                                            59
Labor Policies
The	following	key	Human	Resources	policies	summarize	our	philosophy	and	expectations	regarding	labor	practices:

   Affirmative Action and         We	comply	with	all	applicable	country	and	local	laws,	regulations	and	ordinances	
        Equal Opportunity         prohibiting	discrimination	in	places	where	we	operate.	We	make	every	good	faith	
             Employment           effort	to	ensure	this	policy	is	implemented	in	all	personnel	decisions.

   Diversity and Inclusion        This	policy	outlines	our	commitment	to	creating	and	maintaining	a	diverse	and	inclusive	workforce,	
                                  and	doing	business	with	diverse	suppliers.	Diversity	embodies	all	the	differences:	life	experiences,	
                                  work	experiences,	perspectives,	cultures,	race,	gender,	sexual	orientation,	religion,	national	origin,	
                                  age	or	disability.	Inclusion	entails	building	an	environment	in	which	employee	differences	are	valued,	
                                  employees	are	empowered	and	diverse	DEI	communities	are	connected	across	the	enterprise.

 Workforce Development            This	policy	establishes	our	commitment	to	employee	development,	workforce	
                                  planning,	and	succession	planning.	We	recognize	the	contributions	of	every	
                                  individual,	and	that	workforce	capabilities	and	talents	are	critical	to	success.

                   Worklife       This	policy	sets	forth	our	commitment	to	WorkLife	balance	to	the	extent	permitted	by	business	
                                  needs.	We	understand	that	part	of	being	a	productive,	successful	employee	is	finding	the	
                                  appropriate	balance	between	priorities	at	work	and	home,	and	in	our	communities.

                Open Door         This	policy	establishes	our	intent	to	provide	an	environment	with	unrestricted	
                                  access	to	management,	in	which	employees	feel	free	to	raise	work-related	concerns	
                                  to	their	supervisors	or	others	without	fear	of	intimidation	or	retaliation.

    Personal Information          This	policy	is	designed	to	support	our	business	values	as	we	seek	to	be	a	leader	in	considering	
                  Privacy         and	addressing	privacy-related	concerns	of	customers,	employees	and	shareholder.

   Alcohol and Drug Free          Our	employees	are	expected	to	report	for	work	and	remain	at	work	in	a	condition	free	of	
              Workplace           the	effects	of	alcohol	or	drugs.	Alcohol	or	drug	use	affecting	job	performance,	corporate	
                                  reputation,	corporate	assets,	or	the	safety	of	employees	or	the	public	is	not	tolerated.

        Harassment Policy         This	policy	establishes	our	commitment	to	provide	a	workplace	free	of	harassment,	and	for	
                                  appropriate	action	to	be	taken	if	harassment	occurs.	We	will	maintain	a	work	environment	
                                  in	which	employees	can	perform	their	responsibilities	without	being	harassed	by	any	other	
                                  employee,	contractor,	customer,	vendor	or	visitor.	Harassment	is	defined	as	any	action	that	
                                  singles	out	an	employee,	to	the	employee’s	objection	or	detriment,	because	of	race,	sex,	sexual	
                                  orientation,	religion,	national	origin,	ethnicity,	citizenship,	age,	marital	status,	and	disability.	

         Corrective Action        All	employees	are	expected	to	conform	to	established	standards	of	ethical	conduct	such	as	
                                  honesty,	trustworthiness,	dependability	and	professionalism.	Inappropriate	conduct	will	be	
                                  addressed	through	corrective	actions,	up	to	and	including	termination	from	employment.

       General Workplace          We	are	committed	to	operating	safely.	It	is	our	intent	to	maintain	a	secure	
                Security          work	environment	free	from	intimidation,	threats,	or	violent	acts.

       60                                                                                           Duke Energy International – Sustainability Report 2008
Employee Opinion Survey                                                                                                                            on next steps. Every employee is en-                                                                                                           Diversity
                                                                                                                                                   couraged to review the survey results.

Since 2000, we have conducted                                                                                                                      The survey questions are categorized                                                                                                           Our operations are in all corners of
Employee Opinion Surveys (EOS), a                                                                                                                  into 13 broad areas:                                                                                                                           Latin America, which, in and of itself,
common practice in DEI, to “take the                                                                                                               •	 Goals and direction                                                                                                                         provide us with the opportunities to
pulse” of the workforce regularly.                                                                                                                 •	 Supervision                                                                                                                                 work with a diverse group of people.
                                                                                                                                                   •	 Role clarity/personal                                                                                                                       With opportunities also come chal-
The EOS provides a snapshot of                                                                                                                          responsibility                                                                                                                            lenges, and we are committed, as part
employee attitudes, and as such is                                                                                                                 •	 Rewards                                                                                                                                     of our charter and values, to creating
useful in determining whether senior                                                                                                               •	 Work group dynamics                                                                                                                         and maintaining a diverse and inclu-
managers are aware of issues affecting                                                                                                             •	 Diversity and inclusion                                                                                                                     sive workforce, and doing business
the engagement of employees in                                                                                                                     •	 Empowerment                                                                                                                                 with diverse suppliers.
accomplishing business strategies.                                                                                                                 •	 Job skills and information
                                                                                                                                                   •	 Work group resources                                                                                                                        Diversity embodies all the differences
We conduct an all-employee survey                                                                                                                  •	 Overall satisfaction and                                                                                                                    — life experiences, work experiences,
every other year (last doing so in                                                                                                                      commitment                                                                                                                                perspectives, cultures, race, gender,
2007). In other years, business unit                                                                                                               •	 Retention                                                                                                                                   sexual orientation, religion, national
leaders decide whether to have a full                                                                                                              •	 Business ethics                                                                                                                             origin, age or disability. Inclusion entails
survey or random sample. Since 2008                                                                                                                •	 Sustainability                                                                                                                              building an environment where em-
was an interim survey year, the survey                                                                                                                                                                                                                                                            ployee differences are valued, employ-
randomly sampled employees in our                                                                                                                  The sustainability category was                                                                                                                ees are empowered and diverse Duke
business units in the various countries.                                                                                                           included for the first time in 2008.                                                                                                           Energy communities are connected.
                                                                                                                                                   Under this category the statement,
The figure below summarizes DEI’s                                                                                                                  “Duke Energy works hard to                                                                                                                     An inclusive environment encour-
employee positive perception to each                                                                                                               strike the right balance between                                                                                                               ages all employees to contribute their
of the categories.                                                                                                                                 economic, environmental and                                                                                                                    unique perspectives and capabilities,
                                                                                                                                                   social consideration,” received an 89                                                                                                          and fully engages a diverse workforce
Survey results are shared with both                                                                                                                percent positive response from our                                                                                                             in achieving superior business results.
managers and employees. Managers                                                                                                                   employees.                                                                                                                                     Inclusion fosters trust, the cornerstone
review the data, identify actions to ad-                                                                                                                                                                                                                                                          for risking new ideas and fostering a
dress concerns and update employees                                                                                                                                                                                                                                                               sense of accomplishment—powerful
                                                                                                                                                                                                                                                                                                  motivators that draw out each per-
                                                                                                                                                                                                                                                                                                  son’s best performance. It also creates
                                          89%                                              89%                                                                                                                                                                                   89%              the environment where “every em-
                                                                                                                                                                                                             82%                                               83%                                ployee can start each day with a sense
                                                                                                                                                                                      79%                                                                                                         of purpose and end each day with a
                            76%                                                                                  76%
                                                                                                                                           72% 72%                                                                                                                                                sense of accomplishment.”
                                                                                                                                                                                                             Overall satisfaction and commitment

                                                                                 64%                                                                                                                                                                                                              Additionally, we support the win-win
                                          Role clarity/personal responsibility

                                                                                                                                                                                                                                                                                                  relationships that a strong supplier
                                                                                                                                                                                                                                                                                                  diversity program fosters within the
                                                                                                                                                                                                                                                                                                  communities we serve.
                                                                                                                                                         Job skills and information
                                                                                                                 Diversity and inclusion

                                                                                                                                                                                                                                                                                                  Our diversity and inclusion policies
                                                                                           Work group dynamics

                                                                                                                                                                                      Work group resources
      Goals and direction

                                                                                                                                                                                                                                                                                                  embody the following:
                                                                                                                                                                                                                                                                                                  •	 “Respect for the Individual” is
                                                                                                                                                                                                                                                               Business ethics

                                                                                                                                                                                                                                                                                                      fundamental to building a high-

                                                                                                                                                                                                                                                                                                      performance team. All employees

                                                                                                                                                                                                                                                                                                      share the responsibility for creat-

                                                                                                                                                                                                                                                                                                      ing a workplace that values and
                                                                                                                                                                                                                                                                                                      respects diversity and inclusion—
                                                                                                                                                                                                                                                                                                      enhanced by openness, sharing,
  DEI’s Employee Opinion Survey Results for 2008                                                                                                                                                                                                                                                      trust, teamwork and involvement.

Duke Energy International – Sustainability Report 2008                                                                                                                                                                                                                                                                                     61
•	   “Win-win relationships” are es-        Training and Education                         all of Aguaytia Energy employees, and
     sential to restoring credibility and                                                  all passed the training exams.
     earning the trust of employees,        Our training programs extend from
     customers, suppliers and commu-        upper management to employees                  Examples of ongoing training pro-
     nities. We demonstrate inclusion       in the field—every DEI employee                grams throughout DEI include:
     in our procurement practices           is considered an integral part of              •	 Operations Safety Leaders
     when we provide opportunities          the organization and necessary                     Workshop.
     for diverse and small businesses       for continuous improvement in all              •	 Contractor’s Safety Workshop.
     to provide goods and services to       aspects of business. We use many of            •	 Safety Behavior Standards “Train-
     the company.                           the traditional methods for training               the-Trainers” Workshop.
                                            employees, such as classroom-style             •	 Professional and personal
Accountability and responsibility for       and on-the-job, as well conferences                development training.
ensuring that this policy is understood     and workshops both for having
and implemented across our company          employees in one country train
rests with the highest organizational       those in other countries and for               Training Performance Metrics
levels: The chief human resources           transferring good practices across the
officer is responsible for ensuring         organization.                                  In 2008, we established a leading
enterprise-wide implementation of                                                          indicator for measuring how well
the diversity and inclusion policies        One good example of making sure                our employees have completed the
and associated initiatives. Groups          everyone receives training is at               required amount of safety training as
which exist to champion and further         Termoselva—Aguaytia Energy facili-             prescribed in compliance guidelines.
diversity performance will coordinate       ties, located in the heart of Peru. This       Training attendance has been tracked
and align efforts with this officer.        remote area of the Peruvian Amazon             for several years; however, this will be
                                            Jungle is near the town of Aguaytia,           the first time that a training target (i.e.,
Management at all levels ensure that        the capital of the province Padre              90 percent) had been established by
employee differences are respected          Abad, in the Ucayali region. Because           which to measure each country. “Suc-
and valued in the workplace, DEI            of its location, employees at Termosel-        cessfully” completing a safety meeting
inclusive behaviors are personally          va—Aguaytia Energy do not receive              or training topic means an employee
demonstrated, and opportunities are         the same exposure to EHS education             was present throughout the meet-
sought to do business with diverse          and training as those at other of our          ing or session, completed the hours
companies.                                  facilities. To address this issue, we suc-     required for a particular topic, and/or
                                            cessfully provided online training to          passed the test or exam.

                                                                                                            Huaraz Community, Peru

62                                                                              Duke Energy International – Sustainability Report 2008
Our overall performance exceeded                Career and Professional                  •	   Strengthen and improve their
the expected target of 90 percent.
We have developed corrective and
                                                Development                                   performance through compliance
                                                                                              with individual goals, which
preventive action plans to address                                                            are aligned with the strategic
incidents when regions failed to meet           Developing a talented pool of people          objectives of the company.
the established target.                         is critical for us to achieve our goal
                                                of a quality workforce and continue      This program was carried out within
In addition, we deliver training                to be the employer of choice in the      the framework of the Personal Devel-
focused on the needs of each country.           countries where we operate. All em-      opment Program, and considered the
In September 2008, DEI El Salvador’s            ployees are included in a performance    results of the 360 evaluation of the
managers and supervisors were                   appraisal process, which, among other    employees in 2007.
trained in Salvadorian Environmental            things, evaluates employees’ safety
Law applicable to the operations of             performance and helps identify areas     Throughout all the countries, similar
this business unit. An environmental            for improvement.                         programs were developed to ensure
expert in the topic provided the                                                         that employees have individual goals
training. Participants were trained                                                      aligned with those of the Business
in the content and priority of                  Personal Development Program             Units. DEI’s core competencies are the
environmental law in El Salvador, as                                                     basis for employee evaluations, lead-
well as international environmental             Over two and a half days in May, all     ing to development plans specific to
conventions applicable to our                   DEI Argentina employees took part in     each individual’s needs.
operations.                                     a learning and interactive experience
                                                outside the company to:
                                                •	 Optimize and strengthen                      100 percent of DEI’s employees
  In 2008, DEI’s average hours of training           communication and leadership                in all Business Units receive
       per year per employee was 37.                 skills.                                   regular performance and career
                                                •	 Maximize capabilities.                           development reviews.
                                                •	 Create opportunities for personal
                                                     growth within the organization.

                                                                                                        Personal Development Program, DEI Argentina

Duke Energy International – Sustainability Report 2008                                                                               63
 Workforce Highlights
     DEI Total Workforce                                                       2007              2008     Demographics*                                    #               %
     Argentina	                                                                 104               110     Gender
     Brazil                                                                     293               308     Men                                           893           86%
     Ecuador                                                                     39                42     Woman                                         145           14%
     El	Salvador                                                                149               159     Age
     Guatemala                                                                  162               197     Up	to	25	years	old                              83              8%
     Peru	                                                                      307               274     From	26	to	35	years	old                       298           29%
     U.S.	Based                                                                  26                28     From	36	to	45	years	old                       332           32%
     Total                                                               1,080                   1,118    Above	46	years	old                            325           31%
                                                                                                          Years	of	service

                                    U.S. Based                                                            Up	to	10	years                                761           73%
                                       3%                       Argentina
                                                                   10%                                    From	11	to	20	years                           144           14%
                                                                                                          Above	21	years                                133           13%
                 25%                                                                                      Job	classification

                                                                                                          Managerial                                    121           12%
                                                                                        28%               Supervision                                   135           13%
                                                                                                          Technician                                    339           33%
                                                                                                          Operational                                   443           43%
         Guatemala                                                                                        Union	representation
           18%                                                                 Ecuador
                                                                                 4%                       Unionized	employees                           284           27%
                                            El Salvador
                                                14%                                                       No	Unionized	employees                        754           73%
              DEI Workforce by Country
                                                                                                          Educational	level
                                                                                                          Junior	High                                     41              4%
     Employee Turnover*                                                  2008
                                                                                                          High	school                                   392           38%
     Argentina	                                                        7.20%
                                                                                                          College                                       448           43%
     Brazil                                                        10.30%
                                                                                                          Technician                                      85              8%
     Ecuador                                                           4.80%
                                                                                                          Post-graduation	/	MBA                           72              7%
     El	Salvador                                                   10.00%
                                                                                                         *Does not include Peru Aguaytia and DEI Corporate Headquarters
     Guatemala                                                         9.30%
     Peru	                                                             6.30%
 * Turnover as percentage of workforce

                                                                                                          Successful Completion of H&S Training by Employees
                           10%                    10%
                                                                                                          Country / Business Unit                       2007        2008*
                                                                                                          Argentina	                                     89%              98%

               7%                                                                                         Brazil                                         97%              99%
                                                                                      6%                  Ecuador                                        88%              84%
                                      5%                                                                  El	Salvador                                    90%              91%
                                                                                                          Guatemala                                      94%              97%
                                                                                                          Peru	Aguaytia                                  98%              94%
                                                  El Salvador


                                                                                                          Peru	Egenor                                    95%              96%


                                                                                                          Total DEI                                      94%          93%
        DEI Turnover by Country                                                                          * Target 90%

64                                                                                                                                 Duke Energy International – Sustainability Report 2008
Human Rights                                    We encourage employees to promptly           ing aspects:
                                                report possible harassment to their im-
                                                mediate supervisor, another manager,         •	   Acknowledge and respect the
We do not discriminate against any              or Human Resources, or if they are                cultural uniqueness of indigenous
employee or applicant for employment            uncomfortable reporting such matters              people.
because of race, color, sex, religion,          to these parties, they may also use the      •	   Seek to understand and respond
national origin, ethnicity, citizenship,        external, anonymous EthicsLine.                   to indigenous people and other
sexual orientation, age, marital status,                                                          local populations’ expectations
disability, status as a Vietnam Era or          Where investigation confirms harass-              and concerns.
disabled veteran. We also comply with           ment occurred, the party committing          •	   Minimize (to the extent
all applicable country and local laws,          the harassment will incur discipline up           practicable) or otherwise mitigate
regulations and ordinances prohibit-            to and including employment termi-                adverse impacts of development
ing discrimination in places where we           nation. We forbid retaliation against             on indigenous people.
operate. We will make every good faith          employees for their actions in bring-        •	   Be a responsible corporate citizen.
effort to ensure our policy concern-            ing harassment or other concerns to
ing equal employment opportunity is             management or country and local              To grasp the extent of the impacts and
implemented in all personnel decisions.         regulatory agencies. Retaliation is also     make informed decisions we conduct
                                                forbidden against employees for their        social impact assessments as part or in
                                                participation in harassment investiga-       addition to the environmental impact
                                                tions or resolutions. Persons found to       assessments.
Harassment                                      have committed such retaliation will
                                                incur discipline up to and including
                                                employment termination.                            DEI did not register any incidents
We define harassment as any action                                                                  of violations involving rights of
that singles out an employee, to the                                                               indigenous people during 2008.
                                                         During 2008, DEI did not register
employee’s objection or detriment,
                                                         any incidents of discrimination.
because of race, sex, sexual orienta-
tion, religion, national origin, ethnic-
ity, citizenship, age, marital status,                                                       Society
disability, status as a Vietnam Era or          Indigenous People
disabled veteran. We also comply with
country and local laws, regulations
and ordinances prohibiting discrimi-            Indigenous people (also referred             The Environmental
nation in places where we operate.
Our harassment policy addresses
                                                to as aboriginal, first nation, native
                                                or tribal people) are groups with a
                                                                                             and Social Impact
behaviors or activities that might              social and cultural identity distinct        Assessment Process
constitute harassment:                          from the dominant national society
•	 Verbal or non-verbal threats,                who have at times suffered negative
      insults abuse or ridicule (sexual or      consequences due to development              Whenever we build a new power plant
      otherwise.)                               of natural resources (logging, mining,       or hydroelectric plant or significantly
•	 Unnecessary or offensive physical            exploration and production) in their         change our operations such that it
      contact.                                  traditional lands by others. Impacts         may impact the surrounding com-
•	 Possessing, displaying, or                   have included loss of land, spread of        munity, we conduct environmental
      distributing pornographic or              diseases for which indigenous people         impact assessments (EIAs). These
      offensive materials.                      lack immunity, environmental dam-            assessments ensure that DEI considers
•	 Attempted or actual intimate                 age and disruption of traditional social     the ensuing environmental and social
      physical contact.                         structures.                                  impacts when deciding whether to
•	 Requesting or demanding favors                                                            proceed with the project.
      (sexual or otherwise), explicitly         Our commitment to respecting the
      or implicitly, as a condition of          culture, values, and environments of         DEI must conduct EIAs in all the
      employment, promotion, transfer,          indigenous peoples in the places we          countries where it operates or plans
      or any other personnel action.            do business is described in the Indig-       to develop a new project. Guidelines
•	 Physical conduct such as assault             enous People Policy. This commitment         for conducting EIAs are rigorous and
      or blocking normal movement.              is fulfilled by focusing on the follow-      are based on either country-specific

Duke Energy International – Sustainability Report 2008                                                                                  65
regulatory requirements or on stan-          mental and physical well being). It can            •	   EIA for the Las Flores Simple
dards promulgated by institutions            be lengthy (i.e., lasting up to a year or               Cycle Natural Gas Turbine with
providing necessary funding, such as         even more) and requires an extensive                    a generating capacity of 195
the World Bank. Many countries base          allocation of resources, not just finan-                MW, located in Chilca, Peru, was
their requirements on the World Bank         cial but time and effort. This, however,                submitted at the beginning
standards.                                   does not affect our goal of conducting                  of 2008 and approved by the
                                             the best EIA possible, since the objec-                 Ministry of Energy and Mines of
As mentioned, the EIA considers both         tive is to ensure sustainability, which                 Peru on August 29, 2008.
environmental and social impacts of a        leads to a better life for everyone                •	   EIA at Aguaytia for the conver-
project. The social component:               involved.                                               sion from simple to combined
•	 Analyzes how projects may affect                                                                  cycle natural gas turbines with
    people.                                                                                          an increased capacity of 100 MW
•	 Identifies and mitigates any                                                                      was submitted for approval to the
    adverse impacts.                         EIA Conducted in 2008                                   Ministry of Energy and Mines of
•	 Enhances benefits a project may                                                                   Peru on April 15, 2008.
    bring to a community.
•	 Helps to effectively manage               We had a busy “project development”                       Two of the EIAs were approved
    change to the community                  year in 2008—for very new project or                    within seven months, a tremendous
    brought on by the project.               business concepts that may affect the                    feat given how long the approval
                                             environment or surrounding com-                               process typically takes.
Social impacts of a new project may          munity, an EIA needs to be conducted.
result from changes in:                      We performed three EIAs for signifi-
•	 Demographics, such as                     cant projects to increase our electrical           Community Support
    population size and composition.         generating capacity. The additional
•	 Economics of a community (e.g.,           electrical generating ability could
    employment and income).                  exceed 380 MW, just under an 8.5 per-              DEI is a diverse company, operating
•	 Environmental issues, such as             cent increase in our overall capacity.             in six Latin America countries, each
    those associated with air and            These EIAs are described below:                    with its own cultures, beliefs, values,
    water quality.                           •	 EIA for the Las Palmas II Coal-fired            goals, and attitudes. A common
•	 Laws, regulations, administration,            Power Facility, with a generating              thread through each is our willingness
    etc., of a community.                        capacity of 85 MW, was submitted               to give our time and money to make
                                                 to the Ministry of Environment                 communities better and improve their
The EIA identifies social impacts that           and Natural Resources of                       quality of life.
affect lifestyle, culture, community             Guatemala (MARN in Spanish) on
(e.g., infrastructure, services, and net-        January 16, 2008, and approved                 We are dedicated to building strong
works), quality of life, and health (e.g.,       on July 04, 2008.                              communities, since our success is
                                                                                                linked to the health and prosperity of
                                                                                                the communities we serve. The goals
                                                                                                that have been set to accomplish this
                                                                                                include stimulating economic growth,
                                                                                                investing in community programs,
                                                                                                implementing tools that will support
                                                                                                a community’s long-term planning,
                                                                                                increasing spending with diverse sup-
                                                                                                pliers, and implementing initiatives to
                                                                                                support public safety.

                                                                                                  During 2008, 680 employees took part in
                                                                                                  DEI’s Volunteerism Program, investing a
                                                                                                 total of 4,020 hours of community service.

                                                        Volunteerism Program, DEI Guatemala

66                                                                                   Duke Energy International – Sustainability Report 2008
How We Volunteer                                kilometers of the Puerto Quetzal High-   which has sought to make our com-
                                                way by planting 500 “Matilisguate”       munities better places to live.
                                                trees. This activity raised awareness
Employees and their families volun-             among the DEI family about business      In Carhuaquero, Peru, more than 30
teer to help strengthen communities.            social responsibility and the impor-     DEI Egenor employees constructed
They identify needs in their own com-           tance of caring for the environment.     sanitary facilities for over 300 students
munities and provide leadership—                The activity was coordinated with the    at the La Ramada School in Carhua-
from volunteer recruitment to project           Ministry of the Environment and Natu-    quero.
management. While employees and                 ral Resources of Guatemala, Escuintla
their families provide ideas, hard work,        Delegation, the Fire Department of       DEI El Salvador carried out “Volunteer
and time, we support these activities           Puerto San Jose and the Highway          Day” at a special education school in
financially by investing in community           Patrol.                                  Acajutla, located near the Acajutla
programs. This volunteering “spirit,”                                                    plant in the state of Sonsonate. This
backed by financial investment, has                                                      school cares for more than 60 children
supported nearby communities and                Children Are Our Future                  with special needs, including children
schools, and helped provide memo-                                                        with Down’s syndrome and speech
rable events to those less fortunate.           Cañon del Pato hydroelectric plant       problems. Sixty-five DEI El Salvador
                                                volunteers repaired and painted          employees as well as 43 community
One example is the “Year Round Swim-            classrooms, the main patio, and exte-    members and teachers helped repair
ming Pool” project, implemented by              rior rooms at the Huallanca Techni-      and paint the roof and playground
the Association of Parents of Children          cal School, a few meters from DEI        equipment, repair bathroom pipes,
with Cerebral Palsy of Neuquen,                 Egenor’s administrative offices and      upgrade electrical installations, and
Argentina. This project stemmed from            maintenance shops.                       cut the grass in the garden areas. Thus,
the initiative of three DEI Argentina                                                    one of our Operating Principles— “we
employees, who collaborated with the            This project, held in late June, early   will get personally involved in the
association to provide a day center             July, was part of “Dia de Accion Re-     communities where we work” —was
with a new swimming pool. The ef-               sponsable” (DAR), or Responsible         put into practice.
forts and commitment of these three             Action Day in English. DAR is part of
volunteers, as well as the financing            the Global Service Event (GSE) initia-
provided through the DEI Safety Fund,           tive that Duke Energy Corporation
made this project a reality.                    has conducted for nearly 10 years and

Employees from DEI Egenor Lima’s of-
fice helped construct a children’s park
and a community center in Chilca,
south of Lima, where the Las Flores
thermoelectric plant will soon be
constructed. The residents of the San
José settlement now have playground
equipment for the children in the
area, as well as a furnished community
center or social activities. This project
benefits more than 200 children. In
Trujillo, Peru, volunteers constructed
sidewalks in the urban area where
one of our plants was located as well
as performing cleaning and weeding
activities. Employees from Chiclayo
and Chimbote traveled to Trujillo to
perform this work.

Some 100 volunteers in Guatemala,
including our employees and family
members, reforested areas along 64.5
                                                                                                              Volunteerism Program, DEI Argentina

Duke Energy International – Sustainability Report 2008                                                                             67
Creating Future Leaders                     •	   Providing students from the Luiz              •	   Medical services, to provide
                                                 Meneghel Foundation in Bandei-                     supplies to emergency clinics
One of the best ways to give back to             rantes, Brazil, access to the SAG                  and hospitals, rehabilitation
communities is through education                 hydrobiology and aquiculture                       services and physical therapy,
and training—the fundamental build-              station and its facilities, where                  sponsorships to medical clinic
ing blocks for helping communities               students take biology, agronomy,                   rotations, and cancer treatment to
prepare for future challenges and                and veterinary classes as well as                  children.
opportunities. Most individuals that             conduct practical experiments                 •	   Shelters and orphanages, to
receive financial support to pursue              with fish native to the area.                      support their operations and help
their dreams of being doctors, engi-        •	   Supporting Young Businessmen of                    provide food.
neers, farmers, etc., will return back           El Salvador, a program that gives             •	   Sporting associations, to
to their communities to help improve             children and teenagers practical                   purchase uniforms, and provide
their standard of living and way of life.        experience in how businesses                       accommodations and sporting
Notable education and training activi-           operate and managing their own                     facilities.
ties include:                                    businesses, as well as provides               •	   Emergency organizations, to
•	 Helping over 200 teenagers in                 the foundation to become young                     purchase necessary equipment
     various Brazilian communities               leaders in their communities.                      and supplies for fire departments.
     become more involved in
     agriculture and cultivation of
     the nearby native forests, and         Supporting Public Services                         Helping Communities
     providing environmental training                                                          Help Themselves
     to over 700 community educators.       Donations by all regions to public
•	 Training and educating 10                service organizations and agencies,                DEI Peru - Aguaytia is working with
     students from technical schools        such as fire departments, police                   the surrounding community to
     in the Province of Neuquen in          departments and libraries, have been               elevate the standard of living in the
     Argentina in the operation and         a cornerstone of DEI’s community sup-              Amazon Province of Padre Abad.
     maintenance of thermoelectric          port. Donations have been made to:                 This includes helping local farmers
     and hydroelectric power plants         •	 Public schools, to upgrade and                  increase production of key crops
     by DEI Argentina employees, and            furnish schools; help students                 through alternative methods by
     providing hands-on work experi-            purchase necessary books, sup-                 promoting production of: Noni in
     ence in the electricity generation         plies, musical instruments, and                Las Mercedes and Bello Horizonte;
     industry (“Generar, Escuela de             uniforms; help feed students; and              high-quality cocoa in Huipoca,
     Operaciones” program).                     support extracurricular activities.            Irazola and Curimana; sugar cane
                                                                                               (ecological sugar and raw sugar)
                                                                                               in Bello Horizonte; Palm Oil in Eje
                                                                                               Neshuya Curimana; and pork in San
                                                                                               Jose, Zorrillos, Las Mercedes and Bello

                                                                                               Also, we help develop fisheries in
                                                                                               the Curimana district, reactivate the
                                                                                               fishery industry in the Manantay
                                                                                               district, and produce Amazon species
                                                                                               hatchings in the Padre Abad District.

                                                                                               Proyecto Dino—Cultural and
                                                                                               Scientific Heritage Site
                                                                                               We are a major sponsor of “Proyecto
                                                                                               Dino,” the biggest paleontological
                                                                                               dinosaur site in Argentina and the
                                                                                               only dinosaur excavation site open to
                                                                                               the public in South America. Doing
                                                           Children’s Park, DEI Egenor, Peru

68                                                                                  Duke Energy International – Sustainability Report 2008
so, we further our commitment                   and compromise the public’s trust,         Our Responsibilities
to support the well being and                   every employee is responsible for
development of the surrounding                  being familiar with the entire CoBE.       All employees must understand and
communities. This is a valuable                 The CoBE has been adopted by the           follow this CoBE in business dealings;
paleontological discovery that offers           company’s board of directors and           as such, employees must follow the
incredible scientific and educational           promotes an organizational culture         law, the CoBE and related policies;
potential for the region. The project           that encourages ethical conduct and        promptly report suspected violation;
started in January 2002, led by                 compliance with the law.                   complete required training; and
paleontologists Jorge Calvo. Initially                                                     periodically certify compliance with
the project’s objective was to extract          Our employees are aware that:              the CoBE.
a giant dinosaur, but as excavations            •	 The CoBE cannot anticipate every
started fossil pieces from plants and               possible situation or cover every      Those in a leadership position
vertebrates representing an entire                  topic in detail. If a situation is     (supervisors, managers and
ecosystem from the Cretaceous Age                   unclear, employees should ask for      senior leaders) have additional
were found. This gave origin to the                 guidance before taking action.         responsibilities regarding the CoBE.
Centro Paleontologico Lago Barreales            •	 Most of the topics covered in this      They must set the tone “at the top,” by
(Cepalb), the first paleontological                 CoBE are explained in greater          modeling exemplary ethical business
center dedicated to education and                   detail in a company policy.            conduct; provide required training
tourism in Argentina.                           •	 The company may occasionally            for employees; answer employee
                                                    establish training programs to         questions about the Code and the
Proyecto Dino and Cepalb are                        address specific areas of risk.        company’s values, policies and
prototype sites that offer the material         •	 Reading the CoBE is not a               procedures; and promptly respond
for the paleontological study,                      substitute for completing training     to employee reports of violations or
education and tourism of unparalleled               and complying with specific            requests for guidance.
value worldwide, and were declared                  policies and procedures.
natural reserves by the Neuquen
Province. Proyecto Dino has become a
new center of economic development              Reporting Compliance
for the region. The project now has a
team of 19 people, and so far, more
that 40,000 people from 21 countries
have visited the site.                          Our employees have a responsibility
                                                to report violations of the CoBE,
                                                applicable laws or governmental
                                                regulations while performing
Anti-corruption Practices                       work for the company. Employees
                                                are also expected to report any
                                                threat to human health, safety, the
Duke Energy’s CoBE, which applies               environment or the company’s assets.
to DEI, describes ethical standards             Employees can report violations
for employees, helps recognize and              anonymously through EthicsLine, a
deal with ethical issues, and explains          worldwide reporting system. There
how to report unethical conduct                 employees can report suspected
and foster a culture of integrity and           unethical and criminal conduct, or
accountability. Contractors, suppliers          environmental, health and safety
and vendors are expected to support             concerns, and other issues, such as
effective compliance programs                   employee misconduct, harassment
within their own organizations.                 in the workplace, fraud, questionable
Some sections and topics may be                 accounting, internal controls or
more relevant to certain functions              auditing matters, conflicts of interest,
or departments than to others.                  misuse of company assets, regulatory
However, since one failure to act               violations, and behavior believed to
with integrity can damage the                   damage our reputation.
company’s hard-earned reputation
                                                                                                            Proyecto Dino, Neuquen Province, Argentina

Duke Energy International – Sustainability Report 2008                                                                                69
Consequences of Violating the CoBE          Foreign Corrupt Practices Act Policy
                                                                                              Product Responsibility
Any violation of the CoBE or our eth-       We depend on a responsible and ethi-
ics and compliance programs may             cal workforce to meet our business                We create higher and sustainable
result in corrective action up to and       goals. Accordingly, our employees                 value for customers, employees,
including employment termination.           who may be at risk of exposure to                 communities and stakeholders by
The company may seek civil remedies         corrupt practices are expected to                 generating, delivering and trading
from an employee and refer criminal         understand the provisions of the U.S.             energy products and services. We
misconduct to law enforcement agen-         Foreign Corrupt Practices Act (FCPA),             are committed to solutions that fit
cies.                                       to comply with the letter and spirit of           customers’ energy needs by opti-
•	 The CoBE does not necessarily            this law, and to conduct themselves               mizing costs and providing high-
      account for all applicable legal      accordingly.                                      quality products and services. We
      requirements. More restrictive                                                          build strong commercial relationships
      laws or requirements take             The FCPA and similar laws prohibit                based on transparency and trust,
      precedence. When applicable           companies and individuals from cor-               working openly with customers and
      legal requirements conflict           ruptly offering, promising or giving              providing clear and objective informa-
      with the standards in this CoBE,      anything of value to a government                 tion. We work continuously to develop
      employees should ask for              official to assist the company or                 innovative commercial models that
      guidance before acting.               individual in obtaining or retaining              provide competitive advantages. DEI
•	 The existence and provisions of          business or to obtain any improper                commercializes electric power with its
      the CoBE do not by themselves         advantage. It is also unlawful to make            own generation capacity and/or the
      create further contractual right to   payments to agents, sales representa-             purchase of energy from third parties.
      continued employment. However,        tives or other intermediaries while
      to the extent a contractual           knowing or having reason to know                  We have developed a Quality Manage-
      right to continued employment         that any portion of the payment will              ment System that has been integrated
      is provided by applicable             be used illegally.                                with our EHS Management System,
      law, the CoBE is part of and is                                                         to ensure that our products meet the
      incorporated into an existing         All our employees in the following                quality requirements and specifica-
      employment contract between           functions are required to take the                tions set by the client, while meeting
      Duke Energy and employees.            FCPA training annually: Business De-              the laws and regulations of each
•	 Our employees may be asked               velopment, Asset Management, Com-                 country where we operate safely,
      periodically to certify compliance    mercial, Government Affairs, Finance,             efficiently and reliably. The Quality
      with the CoBE.                        Accounting, Purchasing, Logistics, HR,            Management System encompasses all
                                            PR, IT and EHS. In addition, Operations           operating and administrative facilities
A key mechanism for ensuring compli-        personnel at the managerial level or              and their related processes.
ance with our CoBE is through com-          higher are required to take the train-
munication and training. Our Human          ing.                                              The operating processes include all
Resources and Legal Departments                                                               activities associated with electricity
train all employees on the Foreign          This training included a review of the            generation, from planning to final
Corrupt Practices Act (FCPA) and ap-        scope of the law, which stipulates that           delivery to the client at the agreed
propriate business conduct.                 a buyer will not directly or indirectly           points and agreed requirements
                                            make any corrupt payments to offi-                and specifications. This includes all
                                            cers, agents, or public or government             operation and maintenance activities
                                            employees, or to candidates or active             necessary to guarantee safe, efficient
                                            members of political groups, to obtain            and reliable generating units.
                                            or maintain a business relationship.
                                                                                              The administrative processes involve
                                            Our online training “Business Con-                all other processes that support elec-
                                            duct Questionnaire” reaffirms certain             tric generation activities to ensure the
                                            standards of the CoBE and provides an             product is delivered on time and in
                                            opportunity to report any noncompli-              agreement with contracted stipula-
                                            ance.                                             tions and regulatory requirements.
                                                                                              The following departmental activi-
                                                                                              ties are included: commercialization,

70                                                                                 Duke Energy International – Sustainability Report 2008
                                                         Control Room, Cañon del Pato Hydroelectric Complex, Peru

Duke Energy International – Sustainability Report 2008                                            71
logistics (purchasing and imports),           regulations are identified, incorpo-                •	   Monitoring and measuring the
human resources, finance, informa-            rated and fulfilled to meet customers’                   products throughout the different
tion technology, regulatory affairs and       expectations. We have established the                    electric generation phases to
public and/or community relations.            appropriate procedures to manage                         make certain operating and
                                              and control our operations.                              process control procedures are
Our electric generation activities                                                                     being followed.
follow the continuous improvement                                                                 •	   Following up and evaluating
cycle, as follows:                            Monitoring                                               conformance with legal
                                                                                                       requirements applicable in each
                                              Each business unit develops and                          of the countries where we have
Planning                                      implements process control and                           operations
                                              measure mechanisms to demonstrate
We plan all business activities to pre-       that electricity is being generated to
serve our integrity, based on the busi-       conform to product specifications,                  Management Review
ness strategy, Operating Principles,          and to the adequate management
corporate policies, and clear objec-          of the environment and health and                   We analyze all the information col-
tives and targets, making available the       safety. This involves:                              lected during the implementation and
resources to meet those objectives.           •	 Following and meeting our                        monitoring stages to measure client
                                                   Operating Principles, corporate                satisfaction, conformance to product
So that we make the right decisions                policies, and objectives, target               specifications, characteristics and
for each project, we analyze power                 and budgets as planned.                        trends of processes involved and the
generation technologies and use four          •	 Measuring client satisfaction                    supply chain, as well as performance
criteria to evaluate energy supply                 related to the fulfillment of                  on environmental, health and safety
options: Is the supply affordable? Is it           expectations and requirements.                 regulations.
available? Is it reliable? Is it clean? The        (This is achieved by
table on page 73 summarizes the cur-               communicating with the client                  Stemming from this analysis, we
rent state of power plant technology               using different media that                     develop action plans with corrective
and its economics.                                 includes letters, e-mail, meetings             or preventive actions with the main
                                                   and satisfaction surveys.)                     objective of avoiding the occurrence
                                              •	 Measuring and following up on                    of non-desired activities that may un-
Implementation                                     results to identify if corrective              dermine product quality and overall
                                                   actions are needed, to ensure                  corporate performance.
By establishing an energy commercial-              the product conforms to
ization process, we guarantee client               specifications, and environmental,             During 2008, none of our business
requirements and applicable laws and               health and safety regulations.                 units incurred regulatory citations
                                                                                                  or monetary sanctions related to the
                                                                                                  non-compliance with customer or
                                                                                                  health and safety codes.

                                                                                                  Customer Health
                                                                                                  and Safety
                                                                                                  Our approach to quality manage-
                                                                                                  ment guarantees that our customers’
                                                                                                  requirements are met and exceeded.
                                                                                                  This approach along with the informa-
                                                                                                  tion we collect throughout the EIA
                                                                                                  process enables us to develop the set
                                                                                                  of tools and mechanisms to ensure
                                                                                                  that the health and safety of our cus-
                                                                                                  tomers and surrounding communities
                                                             Electrical Substation, DEI Brazil

72                                                                                     Duke Energy International – Sustainability Report 2008
DEI’s Criteria to Evaluate Energy Supply Options
                                              Purpose                                     Affordable                            Available                        Reliable                          Clean
    Cleaner	Coal
    Supercritical	Pulverized                    Baseload1                                                 Yes                            Yes                             Yes Yes,	except	for	CO2	emissions
    Integrated	Gasification	                     Baseload                                                 Yes               Yes,	but	limited	                            Yes Yes,	except	for	CO2	emissions
    Combined	Cycle	(IGCC)*                                                                                              utility	applications

    Natural	Gas	
    Simple	Cycle                                 Peaking2                Yes,	but	volatile	fuel	prices                                            `                      Yes               Yes,	lower	CO2
                                                                                                                                                                                      emissions	than	coal
    Combined	Cycle                        Intermediate3                  Yes,	but	volatile	fuel	prices                                          Yes                      Yes               Yes,	lower	CO2
                                                                                                                                                                                      emissions	than	coal
    Solar                                  Intermittent4                    No,	very	expensive	now                      Yes,	on	small	scale                  Yes,	if	resource	                         Yes
    Wind                                    Intermittent            Among	least	cost	renewables               Yes,	but	                                      Yes,	if	resource	                         Yes
                                                                                                geographically	limited                                               available
    Hydro                                         Peaking                                   Yes    Yes,	but	most	sites	                                      Yes,	if	resource	      Yes,	except	for	stream	
                                                                                                have	been	developed	                                                 available               flow	impacts
    Biomass                                      Baseload           Among	least	cost	renewables    Yes,	on	small	scale                                  Yes,	if	fuel	available     Yes,	but	not	as	clean	as	
                                                                                                                                                                                         other	renewables
    Energy	Efficiency
    Demand	Response                               Peaking                  Yes,	less	than	generation	                   Yes,	but	customer	               Yes,	once	installed                           Yes
                                                                                         alternatives	                response	uncertain
    Conservation                                 Baseload                  Yes,	less	than	generation	                   Yes,	but	customer	               Yes,	once	installed                           Yes
                                                                                         alternatives	                response	uncertain

*Future carbon capture and sequestration could address CO2; likely easier with IGCC.
  Baseload – Large power plants that operate continuously at near full load (except for maintenance) to meet the 24/7 electric demand.
  Peaking – Power plants that operate for short periods, often for just a few hours on especially hot or cold days, to meet spikes in demand.
  Intermediate – Power plants that operate between the extremes of baseload and peaking electric demands.
  Intermittent – Power plants that are expected to operate 15 to 30 percent of the time..

is protected. The following are some                                     exposure to typical EMF levels from                                          Upgrade of chimney gate seals to
examples of how we are preventing                                        power transmission lines and equip-                                          reduce environmental noise, Ecuador
potential health and safety impacts to                                   ment. However, while the evidence of
customer and surrounding communi-                                        adverse health risks is weak, it is still                                    The DEI Electroquil facility complies
ties.                                                                    sufficient to warrant limited concern.                                       with the environmental noise
                                                                                                                                                      parameters established by applicable
                                                                         To respond to this concern, DEI imple-                                       local and international standards.
Monitoring electromagnetic                                               mented a voluntary EMF monitor-                                              Neighboring communities have not
fields in Guatemala                                                      ing program at Guatemala facilities.                                         filed any complaints about noise from
                                                                         This program is assessing potential                                          the plant. Nevertheless, during our
Electromagnetic fields (EMF) are                                         exposure and health concerns to the                                          annual generation unit maintenance,
invisible lines of force emitted by and                                  surrounding population and DEI em-                                           improvements were made to the
surrounding any electrical device (e.g.                                  ployees, by measuring the actual EMF                                         design and insulation of the chimney
power lines and electrical equipment).                                   exposure levels against the baseline                                         gates to further reduce noise levels.
Although there is public and scientific                                  reference levels developed by the                                            In this way, DEI is being proactive in
concern over the potential health                                        ICNIRP (International Commission on                                          controlling one of the environmental
effects associated with exposure to                                      Non-Ionizing Radiation Protection).                                          aspects that could potentially affect
EMF (not only high-voltage power                                         The monitoring program indicate that                                         communities near the plant.
lines and substations, but also from                                     the communities and DEI employee
everyday household uses of electric-                                     exposure levels do not represent an
ity), there is no empirical data demon-                                  elevated risk.
strating adverse health effects from

Duke Energy International – Sustainability Report 2008                                                                                                                                          73
Responsible                                         DEI Seminars (Argentina, Brazil, Peru)                Online Monitoring (Argentina,
Communications                                                                                            Brazil, Peru)
                                                    Each year, DEI organizes seminars to
                                                    bring together renowned experts in                    This service allows customers to moni-
DEI values and respects our client rela-            the energy/electricity fields to discuss              tor online all the information related to
tionships and strives to provide objec-             current and future issues. These semi-                their energy usage, including contrac-
tive, reliable and timely information               nars provide valuable information and                 tual agreements, contracted demand,
regarding our products and services                 tools to improve decision-making as                   real demand, and pricing, among other
to improve customer satisfaction.                   it relates to electricity and natural gas             items. This instant access to reliable
Specific activities related to product              products in deregulated markets. They                 information enhances the customer’s
responsibility include seminars and                 also demonstrate our commitment to                    decision-making process.
online monitoring.                                  strong customer relationships, key to
                                                    our economic viability, by providing
                                                    expertise and objective advice, aware-
                                                    ness and support to understand alter-
                                                    native options in an evolving market.

GRI Standard Disclosure Profile
1        Strategy and Analysis
1.1      Statement from most senior decision maker                                                                                                    1-2
1.2      Description of key impacts, risks and opportunities                                                                                          5-8
2.1      Name of the organization                                                                                                                  Cover
2.2      Primary brands, products and/or services                                                                                                       9
2.3      Operational structure of the organization                                                                                                      9
2.4      Location of the organization's headquarters                                                                                               Cover
2.5      Number of countries where the organization operates                                                                                       10, 14
2.6      Nature of ownership                                                                                                                        9, 14
2.7      Markets served                                                                                                                       10, 13, 14
2.8      Scale of the organization                                                                                                                     10
2.9      Significant changes during the reporting period                                                                                               11
2.1      Awards received                                                                                                                           11-12
3.1      Reporting period                                                                                                                              12
3.2      Date of most recent previous report                                                                                                        none
3.3      Reporting cycle                                                                                                                               12
3.4      Contact point for questions regarding the report and its contents                                                                         Cover
3.5      Process for defining the report scope including                                                                                               12
3.6      Boundary of the report                                                                                                                    12-14
3.7      Limitations on the scope                                                                                                                      14
3.8      Basis for reporting on joint ventures, subsidiaries                                                                                           14
3.9      Data measurement techniques                                                                                                                   15
3.10     Re-statement of any information for previous reports                                                                                       none
3.11     Significant changes from previous reporting issues                                                                                            11
3.12     Table identifying the location of the Standard Disclosures in the report                                                                  74-75
3.13     External Assurance                                                                                                                            15
4.1      Governance structure of the organization                                                                                                      15
4.2      Indicate whether the Chair of the highest governance body is also an executive officer                          
4.3      For organization that have a unitary board structure state the number of members that are independent /or non-executive
4.4      Mechanisms for shareholders and employees to provide recommendations to the highest governance body             
4.5      Linkage between compensation                                                                                    
4.6      Processes in place for the highest level of governance                                                          
4.7      Processes for determining the qualifications and expertise of the members of the highest governance body        
4.8      Internally developed vision, mission, codes of conduct                                                                                        16
4.9      Procedures of the highest governance body for overseeing the organization's                                                                   15
4.10     Processes for evaluating the highest level of governance body's own performance                                 
4.11     Precautionary Principle                                                                                                                       17
4.12     Externally developed economic, social and environmental charters, principles                                                                n.a.
4.13     Memberships in associations                                                                                                                   17
4.14     List of stakeholder groups engaged                                                                                                            19
4.15     Basis for identification and selection of stakeholders                                                                            19, 26, 34, 65

74                                                                                           Duke Energy International – Sustainability Report 2008
4.16     Approaches to stakeholder engagement                                                                                              26, 67-69
4.17     Key topics and concerns that have been raised                                                                                            19
         Economic Management Approach                                                                                                             21
EC1      Direct economic value generated and distributed including revenues, operating costs                                                      22
EC2      Financial implications and other risks and opportunities for the organization's activities due to climate change                     21, 34
EC4      Significant financial assistance received from the government                                                                         none
EC6      Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation                           23
EC7      Procedures for local hiring and proportion of senior management hired from                                                               23
         the local community at locations of significant operation
EC8      Development and impact of infrastructure investments and services provided primarily                                                     26
         for public benefit through commercial, in-kind or pro bono engagement
EC9      Understanding and describing significant economic indirect impacts, including the extent of the impacts                                23-26
         Environmental Management Approach                                                                                        28-33, 36-37, 43-48
EN3      Direct energy consumption by primary energy source                                                                                        36
EN6      Initiatives to provide energy-efficient or renewable energy based products and services                                                34-36
         and reduction in energy requirements as a result of these initiatives
EN8      Total water withdrawal by source                                                                                                      36-38
EN11     Location size of land, leased, managed in or adjacent to protected areas and                                                          38-41
         areas of high biodiversity value outside protected areas
EN12     Description of significant activities, products, and services on biodiversity in protected                                            38-42
         areas and areas of high biodiversity value outside protected areas
EN13     Habitats protected or restored                                                                                                        38-42
EN14     Strategies, current actions and future plans for managing impacts on biodiversity                                                     38-42
EN16     Total direct an indirect greenhouse gas emissions by weight                                                                              44
EN17     Other relevant greenhouse gas emissions by weight                                                                                        44
EN18     Initiatives to reduce greenhouse gas emission and reductions achieved                                                          34-36, 44-45
EN20     NO, SO and other significant air emissions by type and weight                                                                            45
EN23     Total number and volume of significant spills                                                                                            49
EN26     Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation                               32-42
EN28     Monetary value of significant fines and total number of non-monetary sanctions                                                           49
         for noncompliance with environmental laws and regulations
         Labor Practices and Decent Work Management Approach                                                                            50-56, 59-63
LA1      Total workforce by employment type, employment contract and region                                                                       64
LA2      Total number and rate of employee turnover by age group, gender and region                                                               64
LA4      Percentage of employees by collective bargaining agreements                                                                              64
LA7      Rates of injury, occupational diseases, lost days and absenteeism, and number of work related fatalities by region                       57
LA8      Education, training counseling, prevention, and risk-control programs in place to assist workforce                                       59
         members, their families, or community members regarding serious diseases
LA10     Average hours of training per year per employee by employee category                                                                     63
LA11     Programs for skills management and lifelong learning that supports the continued                                                         63
         employability of employees and assist them in managing career endings
LA12     Percentage of employees receiving regular performance and career development reviews                                                     63
LA13     Composition of governance bodies and breakdown of employees per category, according to                                                   64
         gender, age group, minority group, membership and other indicators of diversity
         Human Rights Management Approach                                                                                                         65
HR4      Total number of incidents of discrimination and actions taken                                                                            65
HR9      Total number of incidents of violations involving rights of indigenous people and actions taken.                                         65
         Society Management Approach                                                                                                           65-66
SO1      Nature , scope and effectiveness of any programs and practices that assess and manage the                                             67-69
         impacts of operations on communities including entering, operating and exiting
SO3      Percentage of employees trained in organization's anti-corruption policies and procedures                                                69
SO4      Actions taken in response to incidents of corruption                                                                                  69-70
         Product Responsibility Management Approach                                                                                            70-72
PR1      Lifecycle stages in which health and safety of products and services are assessed for improvement                              65-66, 72-73
PR6      Programs for adherence to laws, standards, and voluntary codes related to marketing,                                                     74
         communications, including advertising, promotion and sponsorship
         Electric Utilities Supplement
EU1      Installed capacity broken down by primary energy source                                                                                   14
EU11     System Efficiency: Average generation efficiency of thermal plants by energy source                                                       27
EUEN14   Biodiversity - report on impacts mitigation measures, and monitor residual effects of new and existing sites                          38-42
EUEN18   Initiative to reduce greenhouse gas emission                                                                                              35
EUEN20   NO, SO and other significant air emissions by type and weight - Report on emissions per MWh                                               45
EU14     Programs and processes to ensure the availability of a skilled workforce                                                              62-63
EU16     Policies and requirements regarding the health and safety of employees and employees of contractors and subcontractors                56, 59
EULA 7   Report on the health and safety performance of contractors and subcontractors working on site                                             57

Duke Energy International – Sustainability Report 2008                                                                                            75
Canoas I Hydroelectric Power Plant, DEI Brazil
This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions. These
forward-looking statements are identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “con-
tinue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” “target” and similar expressions.
Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results
predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement
include, but are not limited to: state, federal and foreign legislative and regulatory initiatives, including costs of compliance with
existing and future environmental requirements; state, federal and foreign legislative and regulatory initiatives and rulings that
affect cost and investment recovery or have an impact on rate structures; costs and effects of legal and administrative proceed-
ings, settlements, investigations and claims; Industrial, commercial and residential growth in Duke Energy’s service territories;
additional competition in electric markets and continued industry consolidation; political and regulatory uncertainty in other
countries in which Duke Energy conducts business; the influence of weather and other natural phenomena on Duke Energy’s
operations, including the economic, operational and other effects of storms, hurricanes, droughts and tornados; the timing and
extent of changes in commodity prices, interest rates and foreign currency exchange rates; unscheduled generation outages,
unusual maintenance or repairs and electric transmission system constraints; the performance of electric generation and of
projects undertaken by Duke Energy’s non-regulated businesses; the results of financing efforts, including Duke Energy’s ability to
obtain financing on favorable terms, which can be affected by various factors, including Duke Energy’s credit ratings and general
economic conditions; declines in the market prices of equity securities and resultant cash funding requirements for Duke Energy’s
defined benefit pension plans; the level of credit worthiness of counterparties to Duke Energy’s transactions; employee workforce
factors, including the potential inability to attract and retain key personnel; growth in opportunities for Duke Energy’s business
units, including the timing and success of efforts to develop domestic and international power and other projects; construction
and development risks associated with the completion of Duke Energy’s capital investment projects in existing and new genera-
tion facilities, including risks related to financing, obtaining and complying with terms of permits, meeting construction budgets
and schedules, and satisfying operating and environmental performance standards, as well as the ability to recover costs from
ratepayers in a timely manner; the effect of accounting pronouncements issued periodically by accounting standard-setting bod-
ies; and the ability to successfully complete merger, acquisition or divestiture plans.

In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or
might occur to a different extent or at a different time than Duke Energy has described. Duke Energy undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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