As the nation continues to creep warily forward into natural gasand electricity deregulation on all fronts, Cinergy Corp.understands that in order to take advantage of the full potentialof its companies it must change as well. The company announcedyesterday that it is embracing a new organizational structure thatwill increase the autonomy of its subsidiaries and focus on thegrowing importance of non-regulated markets.

The new structure contains three business units: EnergyMerchant; Regulated Businesses; and Power Technology andInfrastructure Services. Each unit will have a CEO who will beresponsible for developing a vision and setting strategic directionand goals, and a president who will be responsible for executingeach unit’s business plan.

“Today, about 50% of our earnings come from non-regulatedmarkets, a dramatic change from five years ago when nearly all ofour earnings came from our regulated business,” said James E.Rogers, CEO of Cinergy. “Our new organization more clearly definesthe regulated and unregulated businesses, while providing platformsfor future growth.”

The Energy Merchant business, which will operate power plantsand be responsible for all wholesale energy marketing, trading andrisk management, will be headed by recently appointed CEO MichaelJ. Cyrus. William J. Grealis has been named CEO of the RegulatedBusinesses unit, which operates all gas and electric transmissionand distribution services.

The unit will also manage the regulated businesses of PSIEnergy, The Cincinnati Gas & Electric Co. and the Union Light,Heat and Power Co. Larry E. Thomas has been appointed CEO of PowerTechnology and Infrastructure Services, which will manage aportfolio of emerging energy businesses.

Cinergy also announced that its affiliate, Cinergy Capital &Trading, is in the process of evaluating a project that would add330 MW to the Midwest region during peak energy usage periods. Thefour natural gas-fired turbines would be installed in LevanTownship near Oraville, IL.

“We are very interested in the Levan Township location as apotential site,” said Art Vivar, vice president of businessdevelopment for Cinergy Capital & Trading. “With the very tightsupply of electricity at times of peak use in the Midwest, theseunits would provide an additional source of clean energy tomaintain reliable electric service in the region.”

The unregulated affiliate, which is part of the Energy Merchantsegment, estimates the project would cost between $150-to-$180million, with construction beginning during the fall of 2002.Pending environmental approvals and construction permits, thecompany said it expects to have work completed by summer of 2003.

Alex Steis

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