Agreement Reached on CG&E Rate Certainty Plan.

Business Editors

CINCINNATI--(BUSINESS WIRE)--May 20, 2004

The Cincinnati Gas & Electric Co., a subsidiary of Cinergy Corp. (NYSE:CIN), announced today that it has reached a stipulation and agreement with 11 intervening parties and the Staff of the Public Utilities Commission of Ohio on its rate certainty plan which will provide for reliable electric supplies and sustain retail competition through 2008.

"This plan accomplishes the PUCO's goal of providing rate certainty to customers during a period of unprecedented volatility in the energy markets, including electricity, natural gas, coal and other fuels," said Greg Ficke, president of CG&E. "At the same time, the plan gives the company revenue certainty in carrying out its obligations to provide reliable and adequate electric service to the residents and businesses of southwest Ohio."

In the settlement, which must be approved by the PUCO, CG&E agreed to continue its rate freeze for residential customers until 2006 and will continue to offer existing incentives for residential customers to switch electric suppliers through 2005. The five percent generation rate reduction for residential customers, which began in 2001, will be extended by three years through 2008.

The settlement also requires CG&E to withdraw its pending electric delivery service rate increase application, which will delay any increase in distribution rates until 2006. However, during the period from July 2004 through 2005, the company will be permitted to defer for accounting purposes certain costs related to capital expenditures associated with its delivery system for future recovery in rates.

For non-residential customers, the company agreed to reduce its requested 10 percent cap for annual generation rate adjustments to a range of six to eight percent. These potential increases cover the costs of providing the reserve capacity necessary to maintain adequate electric supplies, as well as costs associated with environmental compliance, taxes, homeland security and emission allowances, beginning in 2005. Residential increases in generation rates would be capped at a range of five to eight percent per year beginning in 2005, but would not be billed to residential customers until 2006.

"This agreement contains substantial benefits for all customers, particularly residential customers, as shown by the support we have received from parties representing low income residential customers, as well as from Dominion Retail, the only electric supplier selling to residential customers in our service area," said Ficke.

"In agreeing to lower capped increases than in our original proposal and even lower caps for residential customers, this plan ensures that we continue our track record of aggressively managing and controlling our costs. We have agreed to significantly lower capped increases than in our original proposal and even lower caps for residential customers, even though we believe that significant additional environmental compliance investments will be required in the next four years under proposed environmental regulations."

CG&E also agreed to provide additional incentives to customers in the first 25 percent of load choosing to switch suppliers through 2008, including a special $7 million rate credit exclusively for residential shopping to encourage the development of the retail choice market.

Other provisions of the settlement agreement include:

-- Extension of low-income weatherization and energy assistance

programs through 2008

-- Inclusion of Percentage of Income Payment Plan (PIPP)

customers in the larger shopping credits for residential

customers

-- Reduction of the length of time for arrearages of PIPP

customers to be removed from their bills

-- Extension of residential transition charges through 2010

-- Quarterly adjustments to fuel costs.

"We are pleased that a broad base of parties which intervened in this proceeding have been willing to participate in this settlement avoiding an expensive and time consuming hearing process," said Ficke. "This agreement will allow us to continue to do what we do best - provide low-cost, reliable electric service while maintaining high customer satisfaction."

Intervening parties signing the stipulation and agreement, in addition to the PUCO staff, include the Ohio Energy Group, Industrial Energy Users-Ohio, Kroger Co., AK Steel Corporation, Dominion Retail, Green Mountain Energy, FirstEnergy Solutions, People Working Cooperatively, Citizens United for Action, The Ohio Hospital Association and Cognis Corporation.

CG&E serves approximately 640,000 electric customers in Southwest Ohio. Its parent, Cinergy Corp., is one of the nation's leading diversified energy companies.

This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management's beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as "anticipate", "believe", "intend", "estimate", "expect", "continue", "should", "could", "may", "plan", "project", "predict", "will", and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to, unanticipated weather conditions; unscheduled generation outages; unusual maintenance or repairs; unanticipated changes in costs; environmental incidents, including costs of compliance with existing and future environmental requirements; electric transmission or gas pipeline system constraints; legislative and regulatory initiatives; additional competition in electric or gas markets and continued industry consolidation; financial or regulatory accounting principles; political, legal, and economic conditions and developments in the countries in which we have a presence; changing market conditions and other factors related to physical energy and financial trading activities; the performance of projects undertaken by our non-regulated businesses and the success of efforts to invest in and develop new opportunities; availability of, or cost of, capital; employee workforce factors; delays and other obstacles associated with mergers, acquisitions, and investments in joint ventures; and costs and effects of legal and administrative proceedings, settlements, investigations, and claims. Please refer to the company's SEC filings for additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements. The Company undertakes no obligation to update the information contained herein.