News Release from Duke Energy

Duke Energy Receives Federal License for Nantahala Hydro Project
Feb. 17, 2012

FRANKLIN, N.C. -
Duke Energy has received the final of six new federal hydro licenses from the Federal Energy Regulatory Commission (FERC) for Nantahala Area hydro stations.

The latest license covers Nantahala Hydroelectric Project, located substantially in Macon County, N.C., but with waters also in Clay County.

The new 30-year license triggers a variety of public recreation and aquatic habitat enhancements in the Nantahala River watershed. Additionally, as part of a settlement agreement with relicensing stakeholders, in 2004 Duke Energy altered Nantahala Project operations to keep the lake higher during summer months, enhance downstream whitewater recreation, and help stabilize the lake level during fish spawning season.

The primary dam covered by the license is on the Nantahala River, forming 1605-acre Nantahala Lake. Two much smaller diversion dams, Dicks Creek and Diamond Valley, are on Dicks Creek, and Whiteoak Creek Dam is on its namesake creek.

“This final new license is a credit to all who worked together to develop comprehensive plans for balancing numerous water needs. We value their insight and are deeply grateful to their commitment to this effort,” said Steve Jester, vice president of hydro strategy, licensing and lake services. “From our initial review of the new license, it appears stakeholders' interests have been addressed, while preserving the area’s clean, renewable hydroelectric generation.”

“The relicensing process is good public policy. It allows an open, formal review of specific projects, rivers, public recreation needs and new scientific information so we can arrive at the appropriate balance among all interests,” Jester said.

With all the licenses now issued, Duke Energy is well under way with plans for recreational facilities and preparing other documents requiring FERC approval. Nantahala Project-specific items are likely to take about two to three years from start to finish.

Overall, Duke Energy is in the process of implementing numerous enhancements which will cost an estimated $10.5 million. These include:

Increased continuous minimum flow releases for the Nantahala and Tuckasegee Rivers, enhancing some of the most popular catch-and-release trout streams in the Southeast
Special flow releases on a few days each year for high-skill boating downstream from Nantahala and Glenville Dams
New or enhanced public access areas on the Nantahala and Tuckasegee Rivers
Transfer of about 150 acres of Duke Energy property upstream of Wolf Creek Lake to the U.S. Forest Service for enhanced public recreation and protection of native brook trout habitat
Canoe portages around dams at the Bryson (Oconaluftee River), Franklin (Little Tennessee River) and Mission Dams (Hiwassee River) and Western Carolina University-owned Cullowhee Dam (Tuckasegee River)
Primitive camping, handicapped-accessible docks, restrooms, improved parking and other improvements at larger lakes, including Nantahala
In addition to activities required in new licenses, Duke Energy and stakeholders from 30 organizations formed the Nantahala and Tuckasegee Cooperative Stakeholder Teams. Between 2000 and 2003, team members invested more than 9,000 person hours visiting sites, guiding study needs, reviewing reports and collaborating to address environmental concerns and public recreation needs.

The resulting Nantahala and Tuckasegee settlement agreements, signed in 2003, were keys to successfully relicensing the hydro stations.

In keeping with these legally-binding agreements, Duke Energy will implement settlement agreement provisions FERC did not include as new license requirements.  These provisions include:

Transfer of about 150 acres of Duke Energy property upstream of Wolf Creek Lake to the U.S. Forest Service for enhanced public recreation and protection of native brook trout habitat
Improved Nantahala Gorge boating access, in cooperation with the U.S. Forest Service
Reimbursement of up to $50,000 for the Forest Service’s construction of primitive campsites
$40,000 to fund studies by the US Fish & Wildlife Service and the NC Wildlife Resources Commission to determine the range and distribution of the sicklefin redhorse
$40,000 for restoration of brook trout in a stream near the Tennessee Creek, a tributary of the Tuckasegee River
$200,000 for riparian habitat enhancement along  Nantahala Area rivers
$40,000 each to Soil and Water Conservation Districts of Cherokee, Clay, Jackson, Macon, and Swain counties for the improvement of soil and water conservation programs
Thirty-year FERC operating licenses have now been issued for Nantahala area hydro projects that were initially licensed in 1980-81. These cover 12 hydro reservoirs and nine hydroelectric stations primarily in Clay, Jackson, Macon and Swain counties. Their combined installed generating capacity is about 98.5 megawatts. This is about 99.5 percent of the total Duke Energy hydro generation in the Nantahala Area.

The remainder is from Queens Creek Hydro Project in Macon County, which received its initial license in 1976 and was relicensed in 2002.

Project reservoirs are in Clay County (Mission Lake); Jackson County (Bear Creek, Cedar Cliff, Glenville, Tanasee Creek, Tuckasegee and Wolf Creek lakes); Macon County (Diamond Valley, Dicks Creek and Whiteoak Creek reservoirs, Lake Emory and Nantahala and Queens Creek Lakes); and Swain County (Lake Ela). A very small portion of Nantahala Lake is also in Clay County.

The initial FERC licenses were issued to Nantahala Power and Light Company, which Duke Power purchased from Alcoa in 1988. With the Nantahala Hydro Project license issued last week, all Nantahala Area hydro projects have completed their first relicensing process.

Duke Energy is one of the largest electric power holding companies in the United States. Its regulated utility operations serve approximately 4 million customers located in five states in the Southeast and Midwest, representing a population of approximately 12 million people. Its commercial power and international business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.

Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: www.duke-energy.com.