EX-4 5 doc4.txt Exhibit 4 BEFORE THE PUBLIC SERVICE COMMISSION OF SOUTH CAROLINA DOCKET NO. 2001-___-E Application of Duke Energy Corporation ) for authorization under Article 13, ) Chapter 27 of Title 58 of the Code of ) APPLICATION Laws of South Carolina, 1976 to Issue ) Common Stock in connection with the ) Acquisition of Westcoast Energy Inc. ) Duke Energy Corporation ("Duke Energy"), pursuant to Article 13, Chapter 27 of Title 58 of the Code of Laws of South Carolina, 1976 and the rules and regulations thereunder, hereby makes application for authorization to issue shares of its common stock ("Common Stock") as part of the consideration to be paid in connection with the acquisition of Westcoast Energy Inc. ("Westcoast"). Westcoast, a Canadian corporation headquartered in Vancouver, British Columbia, is a leading North American energy company with assets of approximately $10 billion. Its interests include natural gas gathering, processing, transmission, storage and distribution, as well as power generation, international energy businesses, and financial, information technology and energy services businesses. Duke Energy seeks approval to issue its Common Stock upon exchange of shares of Westcoast common stock, to a trustee as contemplated in the Voting and Exchange Trust Agreement, upon exchange of certain exchangeable shares issued by its wholly owned Canadian subsidiary, and upon exercise of employee stock options granted or to be granted to Westcoast employees, and to reserve shares of its Common Stock for such purposes, all in the manner hereinafter described. The maximum total number of shares to be issued and reserved is calculated as set forth in Exhibit D-1, as further described in Section 7 below. In support of this Application, Duke Energy respectfully shows unto the Commission: 1. NAME AND ADDRESS OF DUKE ENERGY The name and post office address of Duke Energy are Duke Energy Corporation, Post Office Box 1244, Charlotte, North Carolina 28201-1244. 2. NOTICES AND COMMUNICATIONS The names and addresses of Duke Energy's attorneys who are authorized to receive notices and communications with respect to this application are: William L. Porter Deputy General Counsel Duke Energy Corporation P. O. Box 1244 Charlotte, North Carolina 28201-1244 William F. Austin Austin, Lewis & Rogers, P.A. P. O. Box 11716 Columbia, South Carolina 29211-1716 3. DESCRIPTION OF DUKE ENERGY Duke Energy is a corporation duly organized and existing under the laws of the State of North Carolina. It is duly authorized by its Articles of Incorporation to engage in the business of generating, transmitting, distributing and selling electric power and energy. It holds a certificate of authority to transact business in the State of South Carolina and is authorized to conduct and carry on business, and is conducting and carrying on the businesses above mentioned, in each of said States. It is a public utility under the laws of South Carolina, and in its operations in this State is subject to the jurisdiction of this Commission. It is also a public utility under the laws of 2 the State of North Carolina, and in its operations in that State is subject to the jurisdiction of the North Carolina Utilities Commission. It is a public utility under the Federal Power Act, and certain of its operations are subject to the jurisdiction of the Federal Energy Regulatory Commission. In addition, Duke Energy's subsidiaries and affiliates engage in a broad range of energy and energy-related businesses worldwide. 4. AUTHORIZED CAPITAL STOCK Duke Energy's authorized capital stock as of June 30, 2001 consisted of Common Stock, Preferred Stock, Preferred Stock A and Preference Stock. (a) Common Stock. The amount of Common Stock authorized by Duke Energy's ------------- Articles of Incorporation is 2,000,000,000 shares, without nominal or par value. The amount of Common Stock issued and outstanding as of June 30, 2001, was approximately 775,000,000 shares, which were recorded in the capital account for Common Stock on Duke Energy's books on said date in the total amount of approximately $6,132,000,000. As contemplated by the Commission's order in Docket No. 2000-605-E, each share of Common Stock outstanding, including the Common Stock to be issued pursuant to the Commission's order in this docket, includes one-half of one Preference Stock Purchase Right under Duke Energy's Rights Agreement. (b) Preferred Stock. The amount of Preferred Stock authorized by Duke ---------------- Energy's Articles of Incorporation is 12,500,000 shares of the par value of $100 per share. The total amount issued and outstanding as of June 30, 2001, was 2,284,984 shares, which 3 were recorded in the capital account for Preferred Stock on Duke Energy's books at the par value of $100 per share, or a total par value of $228,500,000. (c) Preferred Stock A. The amount of Preferred Stock A authorized by Duke ------------------- Energy's Articles of Incorporation is 10,000,000 shares of the par value of $25 per share. The total amount issued and outstanding as of June 30, 2001, was 2,057,185 shares, which were recorded in the capital account for Preferred Stock A on Duke Energy's books at the par value of $25 per share, or a total par value of $51,430,000. (d) Preference Stock. The amount of Preference Stock authorized by Duke ----------------- Energy's Articles of Incorporation is 1,500,000 shares of the par value of $100 per share. As of June 30, 2001, no shares of such Preference Stock were issued and outstanding. 5. DESCRIPTION OF THE PROPOSED STOCK ISSUANCE Duke Energy, certain of its affiliates and Westcoast have entered into a Combination Agreement dated September 20, 2001 (the "Combination Agreement"), filed herewith as Exhibit C. The transaction will be effected through a court-approved plan of arrangement in Canada (the "Plan of Arrangement") and is subject to, among other things, approval by the holders of Westcoast common shares and options as well as obtaining regulatory approvals. A form of the Plan of Arrangement is attached as Schedule E to the Combination Agreement filed herewith. As described in the Plan of Arrangement, the transaction provides for the acquisition of all outstanding common shares of Westcoast by an indirect, wholly owned Canadian subsidiary of Duke Energy in exchange for a combination of cash, shares of Common Stock and exchangeable shares of a Canadian subsidiary of Duke Energy. The issuance of the stock portion of the consideration is the subject of this Application. Duke Energy plans to finance the cash portion of this transaction largely by the issuance of equity-linked securities, pursuant to authority granted 4 by this Commission. The terms of the transaction relating to the stock issuance are more specifically described below. Under the terms of the Plan of Arrangement, each common share of Westcoast would be exchanged, at the election of each Westcoast shareholder, for (i) Cdn$43.80 in cash or (ii) a portion of a share, based on an exchange ratio, of either Common Stock or exchangeable shares of a newly created Canadian subsidiary of Duke Energy that are exchangeable for Common Stock (the "Exchangeable Shares") or (iii) a combination of such consideration. Elections to receive cash, stock or a combination will be subject to proration so that the aggregate consideration will consist of approximately 50 percent cash and approximately 50 percent stock. For common shares of Westcoast exchanged for stock, the exchange ratio will be determined based on the 20-day weighted average trading price of Common Stock on the New York Stock Exchange during a trading period prior to the closing of the acquisition, subject to (i) a maximum exchange ratio of 0.7711 if the weighted average trading price of the Common Stock is equal to or less than $36.88; and (ii) a minimum exchange ratio of 0.6119 if the weighted average trading price of the Common Stock is equal to or more than $46.48. The precise number of shares of Common Stock to be issued in the transaction will be determined at the end of the 20 day trading period and prior to closing. Exhibit D-2 contains an illustration of the calculation of the exchange ratio. A Westcoast shareholder who is a Canadian resident and desires stock consideration can elect to receive either Common Stock or Exchangeable Shares . The Exchangeable Shares are the economic and voting equivalent of Common Stock and provide the opportunity for a tax-deferred exchange under the Plan of Arrangement for holders of Westcoast common stock that are Canadian residents. A Westcoast shareholder who is not a Canadian resident and desires stock 5 consideration may only receive Common Stock. The Exchangeable Shares are more fully described in the next section below. 6. THE EXCHANGEABLE SHARES At the consummation of the transaction, Duke Energy will issue a number of shares of Common Stock equivalent to the number of Exchangeable Shares issued pursuant to the elections of the Westcoast shareholders, subject to the proration provisions of the Plan of Arrangement, to be held in trust pursuant to the Voting and Exchange Trust Agreement as described below. Upon the exchange, retraction or redemption of any Exchangeable Shares for Common Stock, the trustee will concurrently therewith distribute an equivalent number of shares of Common Stock held by the trustee to Duke Energy for issuance to the former holder of the Exchangeable Shares such that the number of shares of Common Stock held by the trustee will at all times equal the number of Exchangeable Shares outstanding. The terms of the Exchangeable Shares, and Duke Energy's obligations with respect to those shares, are more fully described in the Combination Agreement and the forms of the Support Agreement and the Voting and Exchange Trust Agreement attached to the Combination Agreement as Schedules F and G, respectively. Also attached as Exhibit E to this Application is a summary of the significant terms of the Support Agreement and the Voting and Exchange Trust Agreement. 7. EFFECTS, PURPOSES AND COMPATIBILITY WITH PUBLIC INTEREST As described further in Exhibit D-1, a total of between approximately 37,754,000 and approximately 49,852,000 shares of Common Stock will be issued under the Plan of Arrangement, representing a maximum of approximately 6.4% of the currently outstanding Common Stock. Duke Energy will also assume Westcoast employee stock options outstanding 6 at the effective time of the transaction, which stock options will cover up to between approximately 5,093,000 and 7,077,000 additional shares of Westcoast common stock. Duke Energy would therefore reserve up to 5,457,354 shares of Common Stock for stock options. The number of shares of Common Stock issued and reserved is subject to change prior to the effective time of the Plan of Arrangement depending upon the exchange ratio as determined at such time, options granted and exercised, and shares of Westcoast common stock issued under its dividend reinvestment plan. Duke Energy will not issue or reserve more shares of Common Stock under the authority granted in this Docket than required under the Plan of Arrangement. As a result of the transaction, the former Westcoast shareholders will become shareholders of Duke Energy (or holders of Exchangeable Shares), and an indirect, wholly owned Canadian subsidiary of Duke Energy will become the sole shareholder of Westcoast. The transaction will be accounted for as a purchase. The estimated expenses to be incurred as a result of the Common Stock issuance are $20 million, or less than 0.6% of the value of the consideration Duke Energy will pay to acquire Westcoast. Because the transaction will result in an increase of less than 20% in the outstanding Common Stock, it will not require any vote by the Duke Energy shareholders. Duke Energy will file a Registration Statement on Form S-3 with the U.S. Securities and Exchange Commission ("SEC") with respect to shares of Common Stock to be issued from time to time upon exchange of the Exchangeable Shares. Duke Energy will also file a Registration Statement on Form S-8 with the SEC with respect to shares of Common Stock to be issued from time to time upon exercise of employee stock options granted or to be granted to Westcoast employees. The issuance of shares of Common Stock upon the closing of 7 the transaction will be exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 3(a)(10) thereof. At closing, which will occur only after receipt of all required Canadian, U.S. state and U.S. federal approvals, Duke Energy will retain its current corporate form and will continue to own all its pre-acquisition assets. There will be no change of control of Duke Energy nor will there be any sale, assignment, pledge, transfer or lease of Duke Energy's public utility franchise. Westcoast's debt will remain the obligation of Westcoast, without any guarantees of such debt from Duke Energy. The acquisition will not adversely affect Duke Energy's ability to provide electric service to its South Carolina customers at reasonable rates. Duke Energy's acquisition of Westcoast will expand Duke Energy's strength in its natural gas transmission, storage and related services businesses, and will combine the financial strengths of both companies. The transaction will benefit Duke Energy's South Carolina customers by lowering Duke Energy's business risk through increased geographic diversification and a broader asset base. The issuance of the Common Stock in connection with the acquisition described herein will not adversely affect Duke Energy's South Carolina retail electric operations or customers. The transaction will have a positive effect on Duke Energy's consolidated financial condition, and on its ability to continue to thrive in a rapidly changing and competitive energy environment. The purposes of the Common Stock issuance described herein are lawful objects within the corporate purposes of Duke Energy, and are within the limits of authority and purposes set forth in its Articles of Incorporation, as amended, which is on file with this Commission. For the reasons set forth above, the issuance of the Common Stock as described herein will be compatible with the public interest, will be necessary and appropriate for, and consistent 8 with, the proper performance by Duke Energy of its service to the public as a utility, will not impair its ability to perform that service, and will be reasonably necessary and appropriate for such purpose. 8. FINANCIAL CONDITION AND OPERATING REPORTS The financial condition of Duke Energy and its previous operations are shown by Duke Energy's Annual Reports to the Commission and by other records of the Commission relating to Duke Energy. 9. EXHIBITS Exhibits in support of the Application include: EXHIBIT A Copy of Duke Energy's Restated Articles of Incorporation dated as of June 18, 1997. This exhibit is on file with the Commission in Docket No. 1996-383-E, and amendments thereto are on file in Docket No. 1999-240-E. EXHIBIT B Annual Reports of Duke Energy to the Commission and other records of the Commission relating to Duke Energy. Reference is made to these reports and records on file with the Commission. EXHIBIT C Combination Agreement dated September 20, 2001, among Duke Energy Corporation, 3058368 Nova Scotia Company, 3946509 Canada Inc. and Westcoast Energy Inc., with schedules thereto. EXHIBIT D-1 Calculation of Maximum Amount of Shares to be Issued and Reserved in connection with Acquisition of Westcoast. EXHIBIT D-2 Summary of calculation of Exchange Ratio. EXHIBIT E Summary of significant terms of Support Agreement and Voting and Exchange Trust Agreement. EXHIBIT F Unconsolidated Balance Sheet of Duke Energy as of June 30, 2001, including pro forma effects of proposed issuance. EXHIBIT G Unconsolidated Statement of Income of Duke Energy for the year ended June 30, 2001, including pro forma effects of proposed issuance. 9 EXHIBIT H Unconsolidated Statements of Cash Flows for the six months ended June 30, 2001; and Statement of Retained Earnings of Duke Energy for the six months ended June 30, 2001. EXHIBIT I Unconsolidated Statement of Capitalization of Duke Energy at June 30, 2001, including pro forma effects of proposed issuance. EXHIBIT J Preferred Stocks With and Without Sinking Fund Requirements at June 30, 2001. 10 WHEREFORE, Duke Energy respectfully prays: A. That the issuance of Common Stock in the manner herein set forth, be authorized and approved by the Commission; and B. That this Commission (i) determine that the purpose of the issue of Common Stock is proper, (ii) value the property to be acquired by the issue, and (iii) find and determine that the amount of such Common Stock prepared to be issued is reasonably necessary for the purpose for which it is to be issued; and C. That this Commission issue a certificate of authority stating: 1. The amount of such Common Stock reasonably necessary for the purpose for which it is to be issued and the character of the same; and 2. The value of the property to be acquired thereby; and D. That this Commission grant such other and further relief as it may find just and proper. Respectfully submitted, this 12th day of October, 2001. DUKE ENERGY CORPORATION ----------------------------------- Vice President and General Counsel, Duke Power [CORPORATE SEAL] 11 STATE OF NORTH CAROLINA COUNTY OF MECKLENBURG PAUL R. NEWTON, being first duly sworn, deposes and says: That he is an officer of DUKE ENERGY CORPORATION, applicant in the above-entitled Application, to wit, its Vice President and General Counsel, Duke Power; that he has read the foregoing Application and knows the contents thereof, and that the same is true of his own knowledge. ------------------------------ Paul R. Newton Sworn to and subscribed before me this 12th day of October, 2001. ------------------------------------ Notary Public My Commission Expires: June 26, 2006 [SEAL] 12 EXHIBIT D-1 Calculation of Maximum Amount of Shares to be Issued and Reserved In Connection with Acquisition of Westcoast(1) A. Shares Issuable Under Plan of Arrangement (2) -------------------------------------------------- Westcoast Shares outstanding x 129,301,017 x 0.7711 = 99,704,014 Maximum Exchange Ratio Divide by 2 99,704,014 / 2 = 49,852,007 TOTAL ISSUED SHARES B. Shares Reserved for Stock Plans(3) -------------------------------------- 1. Options outstanding x 5,092,893 x 0.7711 = 3,927,130 Maximum Exchange Ratio 2. Shares reserved for issuance 1,984,469 x 0.7711 = 1,530,224 under option plan x Maximum Exchange Ratio Total of 1 and 2: 5,457,354 ----------------------- 1 Reference is made to Westcoast representations in Section 3.2 of the Combination Agreement regarding capitalization. Calculations also assume no dissenting shareholders and that Duke Energy does not hold any Westcoast shares prior to closing of the acquisition. 2 Total Westcoast shares outstanding may increase between the date of the Combination Agreement and the closing of the acquisition due to exercises of stock options and issuances under the Westcoast Dividend Reinvestment Plan, for which shares have been reserved. Additional stock options may also be issued during such period. Reference is made to Section 5.1(a)(ii) of the Combination Agreement for a description of certain allowable changes in capitalization of Westcoast. These calculations assume that no options are exercised for Westcoast common shares prior to closing and that all Westcoast common shares available under the Westcoast dividend reinvestment plan are purchased prior to closing. All Westcoast common shares may be exchanged for either Common Stock or Exchangeable Shares at closing of the acquisition. 3 Assumes all options available for issuance are issued but not exercised prior to closing. All outstanding options to purchase Westcoast common shares are automatically converted into options to purchase Common Stock. EXHIBIT D-2 Calculation of Exchange Ratio Set forth below is a description of the mechanics used to calculate the Exchange Ratio under the form of Plan of Arrangement (the "Plan of Arrangement") attached to the Combination Agreement dated September 20, 2001 (the "Combination Agreement"), among Duke Energy Corporation ("Duke Energy"), 3058368 Nova Scotia Company, 3946509 Canada Inc. ("Exchangeco") and Westcoast Energy Inc. as Schedule E. This is a summary only. The detailed provisions in the Plan of Arrangement that should be consulted if additional information is required. Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the Plan of Arrangement. 1. DETERMINATION OF "WEIGHTED AVERAGE TRADING PRICE OF THE DUKE ENERGY COMMON SHARES": This calculation determines the weighted average trading price for Duke Energy Common Shares on the New York Stock Exchange as reported by Bloomberg for a period of twenty (20) consecutive trading days ending on the day that is two Business Days prior to the Election Deadline. The Election Deadline is two Business Days prior to the Effective Date (which is the day of closing). The Weighted Average Trading Price of the Duke Energy Common Shares is calculated by dividing (i) the aggregate sale price of all Duke Energy Common Shares sold on the New York Stock Exchange during the period described above by (ii) the total number of Duke Energy Common Shares sold during that same period, expressed to the fourth decimal point. 2. DETERMINATION OF "DUKE ENERGY AVERAGE PRICE": The Duke Energy Average Price is calculated by multiplying (i) 1.54 by (ii) the Weighted Average Trading Price of the Duke Energy Common Shares (calculated in 1 above), expressed to the fourth decimal point. 3. DETERMINATION OF "EXCHANGE RATIO": The Exchange Ratio is calculated by dividing (i) Cdn.$43.80 by (ii) the Duke Energy Average Price (calculated in 2 above), expressed to the fourth decimal point. Notwithstanding the foregoing, in the event that the Weighted Average Trading Price of the Duke Energy Common Shares is equal to or less than $36.88, the Exchange Ratio will be 0.7711; and in the event that the Weighted Average Trading Price of the Duke Energy Common Shares is equal to or greater than $46.48, the Exchange Ratio will be 0.6119. 4. APPLICATION OF THE EXCHANGE RATIO: Each outstanding Westcoast Common Share will be transferred to, and acquired by, Exchangeco in exchange for such number of Exchangeable Shares or Duke Energy Common Shares, as the case may be, as is equal to the Exchange Ratio. The collar has the effect of providing that so long as the Weighted Average Trading Price of Duke Energy Common Shares is between $36.88 and $46.48, each holder of Westcoast Common Shares that elects or is deemed to have elected to receive stock consideration will receive Cdn.$43.80 worth of stock (subject to changes in the currency exchange ratio) for each Westcoast Common Share held by such holder in the exchange. In the event that the Weighted Average Trading Price of Duke Energy Common Shares is at or below $36.88 or at or above $46.48, holders of Westcoast Common Shares that elect or are deemed to have elected to receive stock consideration will receive stock with a value equivalent to the Exchange Ratio multiplied by the Weighted Average Trading Price of Duke Energy Common Shares as of two Business Days prior to the Election Deadline, which value may be less or more, respectively, than Cdn$43.80. EXHIBIT E Support Agreement and Voting and Exchange Trust Agreement Summary of Significant Terms Set forth below are brief summaries of the form of Support Agreement and the form of Voting and Exchange Trust Agreement attached to the Combination Agreement dated September 20, 2001 (the "Combination Agreement"), among Duke Energy Corporation ("Duke Energy"), 3058368 Nova Scotia Company ("Callco"), 3946509 Canada Inc. ("Exchangeco") and Westcoast Energy Inc. as Schedule F and Schedule G, respectively. These are summaries only. The detailed provisions in the form of Support Agreement and the form of Voting and Exchange Trust Agreement should be consulted if additional information is required. Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the respective agreement. FORM OF SUPPORT AGREEMENT ---------------------------- The form of Support Agreement among Duke Energy, Callco and Exchangeco (the "Support Agreement") is primarily intended to ensure that the Exchangeable Shares to be issued by Exchangeco are economically equivalent to Duke Energy Common Shares. The Support Agreement prohibits Duke Energy from declaring any dividend on Duke Energy Common Shares or taking any other action with respect to Duke Energy Common Shares (such as a stock dividend or subdivision) unless Exchangeco pays an economically equivalent dividend on the Exchangeable Shares or takes an economically equivalent action with respect to the Exchangeable Shares. Duke Energy also agrees to do such things as are reasonably necessary or desirable to enable and permit Exchangeco and Callco, in accordance with applicable law, to meet their obligations under the Exchangeable Share Provisions and the Plan of Arrangement. Duke Energy further agrees to reserve a sufficient number of Duke Energy Common Shares to enable and permit Duke Energy, Callco and Exchangeco to meet their obligations under the Exchangeable Share Provisions, the Plan of Arrangement and the Voting and Exchange Trust Agreement to deliver Duke Energy Common Shares in connection with the exchange, redemption or retraction of Exchangeable Shares. Finally, Duke Energy agrees to remain the direct or indirect beneficial owner of all issued and outstanding voting shares in the capital of Exchangeco and Callco so long as any Exchangeable Shares not held by Duke Energy or any of its Affiliates remain outstanding. FORM OF VOTING AND EXCHANGE TRUST AGREEMENT ------------------------------------------------- The form of Voting and Exchange Trust Agreement among Duke Energy, Exchangeco and a trustee to be designated prior to Effective Date (as defined in the Combination Agreement) (the "Voting and Exchange Trust Agreement") sets forth the mechanism by which holders of Exchangeable Shares may vote together with holders of Duke Energy Common Shares as though such holders of Exchangeable Shares were holders of Duke Energy Common Shares. Under the Voting and Exchange Trust Agreement, Duke Energy agrees to issue to the trustee from time to time a number of Duke Energy Common Shares equal to the number of Exchangeable Shares outstanding as of that time (other than Exchangeable Shares held by Duke Energy and its Affiliates). Whenever a holder of Duke Energy Common Shares is entitled to vote on a matter or sign a consent, each holder of Exchangeable Shares may instruct the trustee to vote the number of Duke Energy Common Shares equal to the number of Exchangeable Shares held by such holder in the manner instructed by such holder. Any mailings or information provided to the holders of Duke Energy Common Shares must also be provided to the holders of Exchangeable Shares as though such holders were holders of Duke Energy Common Shares. In the event that any Exchangeable Shares are exchanged, redeemed or retracted for Duke Energy Common Shares, the trustee shall concurrently therewith distribute to Duke the corresponding number of Duke Energy Common Shares so that the number of Duke Energy Common Shares held by the trustee will at all times equal the number of Exchangeable Shares outstanding. Finally, the Voting and Exchange Trust Agreement sets forth (i) an Exchange Right whereupon Duke Energy agrees to purchase (with Duke Energy Common Shares) all outstanding Exchangeable Shares upon an Insolvency Event of Exchangeco and (ii) an Automatic Exchange Right whereupon each outstanding Exchangeable Share automatically converts into a Duke Energy Common Share upon the liquidation, dissolution or winding-up of Duke Energy or the distribution of Duke Energy's assets to its shareholders. BEFORE THE PUBLIC SERVICE COMMISSION OF SOUTH CAROLINA DOCKET NO. 2001-441-E Application of Duke Energy Corporation ) for authorization under Article 13, ) DUKE ENERGY'S AMENDMENT TO Chapter 27 of Title 58 of the Code of ) APPLICATION TO INCLUDE REQUEST Laws of South Carolina, 1976 to Issue ) FOR AUTHORIZATION UNDER SOUTH Common Stock in connection with the ) CAROLINA CODE SECTION 58-27-1300 Acquisition of Westcoast Energy Inc. ) On October 12, 2001, Duke Energy Corporation ("Duke Energy") filed its application in this docket pursuant to Article 13, Chapter 27 of Title 58 of the Code of Laws of South Carolina, 1976 and the rules and regulations thereunder, for authorization to issue shares of its common stock as part of the consideration to be paid in connection with the acquisition of Westcoast Energy Inc. ("Westcoast"). As required by a letter to William F. Austin, counsel to Duke Energy, from F. David Butler, General Counsel of the Commission, dated November 16, 2001, Duke Energy hereby amends its application to include a request for approval under South Carolina Code Section 58-27-1300 of the business combination described in the original application. This amendment is filed under protest, and Duke Energy respectfully objects to and reserves an exception from Mr. Butler's letter, which required the filing of this amendment. Further, Duke Energy respectfully requests that the Commission, in its order in this Docket, either affirm or reject the position taken by Mr. Butler in his letter as to the applicability of Section 58-27-1300 to the Westcoast acquisition. A Commission order on this issue is critical to bring certainty to future transactions. Notwithstanding Duke Energy's objection and exception, and without waiver thereof, Duke Energy submits this amendment and respectfully shows unto the Commission, that, for the reasons set forth in the original application in this docket, including in particular Section 7 thereof, Duke Energy's acquisition of Westcoast as described in the application will not adversely affect Duke Energy's South Carolina retail electric rates, operations or customers. WHEREFORE, Duke Energy respectfully prays, pursuant to its application in this docket as amended hereby: A. That its acquisition of Westcoast and its issuance of common stock in the manner set forth in the application, as amended, be authorized and approved by the Commission; and B. That this Commission (i) determine that the purpose of the issue of Common Stock is proper, (ii) value the property to be acquired by the issue, and (iii) find and determine that the amount of such Common Stock prepared to be issued is reasonably necessary for the purpose for which it is to be issued; and C. That this Commission issue a certificate of authority stating: 1. The amount of such Common Stock reasonably necessary for the purpose for which it is to be issued and the character of the same; and 2. The value of the property to be acquired thereby; and D. That this Commission grant such other and further relief as it may find just and proper. Respectfully submitted, this 20th day of November, 2001. DUKE ENERGY CORPORATION ----------------------------------- Vice President and General Counsel, Duke Power [CORPORATE SEAL] 2 STATE OF NORTH CAROLINA COUNTY OF MECKLENBURG PAUL R. NEWTON, being first duly sworn, deposes and says: That he is an officer of DUKE ENERGY CORPORATION, applicant in the above-entitled Application, to wit, its Vice President and General Counsel, Duke Power; that he has read the foregoing Application and knows the contents thereof, and that the same is true of his own knowledge. ----------------------------------- Paul R. Newton Sworn to and subscribed before me this 20th day of November, 2001. ----------------------------------- Notary Public My Commission Expires: June 26, 2006 [SEAL] 3