Regulated electric and gas operations provide more than 85% of total operating income. Regulated operations are jurisdictions with generally constructive regulatory environments. Service territory is large and diverse with largely attractive markets and above-average customer growth. Large and efficient regulated power generation fleet with well-managed nuclear and coal plants affording some fuel diversity, and providing for competitive rates that lead to above-average competitive position. Uncertainty as to how the regulatory environment will evolve in Ohio subsequent to 2008, once Duke Energy Ohio's rate-stabilization plan ends. Significant capital spending to address environmental and growth needs necessitates timely recovery of expenses to preserve strong cash flow generation. International operations introduce a measure of political and currency risk. The ratings on Duke Energy
