Duke–TVA Transmission Upgrades

 On December 13, 2005, Duke Energy Corporation (“Duke”) and Tennessee Valley Authority (“TVA”) entered into an Agreement that sets out the general principles and understandings regarding the construction of certain transmission projects intended to increase the transfer capability between their respective systems.   Key aspects of the Agreement are as follows: 

·         Duke will rebuild the existing 19.5 miles of transmission line between the Santeetlah Switchyard and the Nantahala Switchyard and upgrade other related facilities (such as bus work and breakers), which is projected to provide at least 600 MW of total contract path capacity.

·         TVA will rebuild the existing 3.6 miles of transmission line from the Fontana Switchyard to the Santeetlah Switchyard and upgrade other related facilities (such as bus work and breakers), which is projected to provide at least 600 MW of total contract path capacity.

·         Duke will construct (or arrange for the construction) and fund all of the transmission and related facilities on the Duke transmission system. 

·         TVA will construct (or arrange for the construction) and fund all of the transmission and related facilities on the TVA transmission system.

·         Duke and TVA will strive to complete all necessary transmission projects before August 2009.