**B
      Y - L A W S**








**of**








**PROGRESS
      ENERGY, INC.**








**Raleigh,
      North Carolina**








**(As
      Amended May 10, 2006)**








**TABLE
      OF CONTENTS**







ARTICLE
      I


Meetings
      of Shareholders





Section
      1.Place
      of Meetings .


Section
      2.Annual
      Meetings .


Section
      3.Special
      Meetings .


Section
      4.Notice
      of Meetings.


Section
      5.List
      of Shareholders.


Section
      6.Quorum;
      Proxies.


Section
      7.Voting
      of Shares.


Section
      8.Inspectors.


Section
      9.Conduct
      of Meetings.


Section
      10.Business
      Proposed by a Shareholder.


Section
      11.Nominations
      by Shareholders.







ARTICLE
      II


Directors
      and Meetings of Directors





Section
      12.Number
      and Election of Directors.


Section
      13.Vacancies.


Section
      14.Meetings.


Section
      15.Telephone
      Meetings.


Section
      16.Actions
      Without Meetings.


Section
      17.General
      Powers.


Section
      18.Committees.





ARTICLE
      III


Notices





Section
      19.Notice
      Requirements.


Section
      20.Waiver
      of Notice.





ARTICLE
      IV


Officers,
      Their Authority, and Their Terms of Office





Section
      21.Officers
      of the Corporation.


Section
      22.Chief
      Executive Officer.


Section
      23.Removal
      and Resignation of Officers.


Section
      24.Bond.








ARTICLE
      V


Capital
      Stock




Section
      25.Certificated
      and Uncertificated Shares.


Section
      26.Stock
      Transfer Books and Transfer of Shares.


Section
      27.Holder
      of Record.


Section
      28.Record
      Date.


Section
      29.Lost,
      Destroyed or Mutilated Certificates .


Section
      30.Transfer
      Agent and Registrar; Regulations.







ARTICLE
      VI


General





Section
      31.Distributions.


Section
      32.Deeds,
      Bonds, and Contracts.


Section
      33.Deposits.


Section
      34.Interpretation.





ARTICLE
      VII


Indemnity
      of Officers and Directors





Section
      35.Indemnification
      and Advancement of Expenses.







ARTICLE
      VIII


Emergency
      By-Laws





Section
      36.Definitions.


Section
      37.Applicability.


Section
      38.Board
      of Directors.


Section
      39.Appointment
      of Officers.


Section
      40.Amendments.








**B
      Y - L A W S**








**of**








**PROGRESS
      ENERGY, INC.**








**Raleigh,
      North Carolina**








**As
      Amended May 10, 2006**













**ARTICLE
      I**




**Meetings
      of Shareholders**






Section
      1.Place
      of Meetings.




All
      meetings of the shareholders of Progress Energy, Inc. (the “Corporation”), shall
      be held at such place, either within or without the State of North Carolina,
      as
      may from time to time be fixed by the Board of Directors of the Corporation
      (the
“Board”).






Section
      2.Annual
      Meetings.




Beginning
      in the year 2000, the annual meeting of the shareholders of the Corporation
      shall be held on the second Wednesday of May in each year, if not a legal
      holiday, and if a legal holiday, then on the next day not a legal holiday,
      at
      ten o’clock A.M., or at such other date, or hour, and at such place as stated in
      the notice of the meeting as the Board of Directors may determine. The annual
      meeting of shareholders for 1999 shall be held on the date and time specified
      by
      the Board of Directors.






Section
      3.Special
      Meetings.




Special
      meetings of the shareholders of the Corporation may be held upon call by a
      majority of the Board of Directors or of the Executive Committee, or by the
      Chairman of the Board, or by the President of the Corporation, at such time
      as
      may be stated in the call and notice.






Section
      4.Notice
      of Meetings.




Written
      notice of the time and place of every meeting of shareholders may be given,
      and
      shall be deemed to have been duly given, by mailing the same at least ten,
      but
      not more than sixty, days prior to the meeting, to each shareholder of record
      entitled to vote at such meeting, and addressed to him at his address as it
      appears on the records of the Corporation, with postage thereon prepaid. Notice
      may also be given by any other lawful means.









Section
      5.List
      of Shareholders.




In
      accordance with Section 55-7-20 of the General Statutes of North Carolina,
      the Corporation, or an officer having charge of the record of shareholders
      of
      the Corporation, shall prepare a list of shareholders which shall be available
      for inspection by shareholders, or their agents or attorneys.






Section
      6.Quorum;
      Proxies.




Shares
      entitled to vote as a separate voting group may take action on a matter at
      a
      meeting only if a quorum of that voting group exists. A majority of the votes
      entitled to be cast on the matter by the voting group constitutes a quorum
      of
      the voting group on that matter. Once a share is represented for any purpose
      at
      a meeting, it is deemed present for quorum purposes for the remainder of the
      meeting and for any adjournment of that meeting unless a new record date is
      or
      must be set for that adjourned meeting. In the absence of a quorum at the
      opening of any meeting of shareholders, the meeting may be adjourned by a
      majority of shares voting on a motion to adjourn. Notice of adjournment other
      than announcement at the meeting need not be given unless a new record date
      is
      or must be set for that adjourned meeting. At any adjourned meeting at which
      a
      quorum shall be present or represented, any business may be transacted which
      might have been transacted at the original meeting.






Section
      7.Voting
      of Shares.




(a)  When
      a
      quorum is present at any meeting, the vote of the holders of a majority of
      the
      outstanding stock having voting power present in person or represented by proxy
      shall decide any question brought before such meeting, unless the question
      is
      one upon which by express provision of any applicable statute or of the Articles
      of Incorporation a different vote is required, in which case such express
      provision shall govern and control the decision of such question.




(b)  Unless
      otherwise provided by law or the Articles of Incorporation, at every meeting
      of
      the shareholders each shareholder shall be entitled to one vote in person or
      by
      proxy for each share of such stock held of record by such shareholder. Except
      where the transfer books of the Corporation have been closed or a date has
      been
      fixed as a record date for the determination of its shareholders entitled to
      vote, no share of stock shall be voted at any election for directors which
      has
      been transferred on the books of the Corporation within twenty days next
      preceding such election of directors.






Section
      8.Inspectors.




The
      Board
      of Directors in advance of any meeting of shareholders may appoint two voting
      inspectors to act at any such meeting or adjournment thereof. If they fail
      to
      make such appointment, or if their appointees or any of them fail to appear
      at
      the meeting of shareholders, the chairman of the meeting may appoint such
      inspectors or any inspector to act at that meeting.









Section
      9.Conduct
      of Meetings.




Meetings
      of the shareholders shall be presided over by the Chairman of the Board of
      Directors, or, if he is not present, the President, or, if the President is
      not
      present, a Vice President, or if neither of said officers is present, by a
      chairman pro tem to be elected at the meeting. The Secretary of the Corporation
      shall act as secretary of such meetings, if present, but if not present, some
      person shall be appointed by the presiding officer to act during the meeting.
      The officer of the Corporation presiding over the meeting of shareholders shall
      have all the powers and authority vested in presiding officers by law or
      practice, without restriction, as well as the authority to conduct an orderly
      meeting and to impose reasonable limits on the amount of time taken up in
      remarks by any one shareholder.






Section
      10.Business
      Proposed by a Shareholder.




To
      be
      properly brought before a meeting of shareholders, business must be
      (i) specified in the notice of meeting (or any supplement thereto) given by
      or at the direction of the Board of Directors, (ii) otherwise properly
      brought before the meeting by or at the direction of the Board of Directors
      or
      (iii) otherwise properly brought before an annual meeting by a shareholder
      of the Corporation who was a shareholder of record at the time of the giving
      of
      notice provided for in Section 4 of these By-Laws and who is entitled to
      vote at the meeting. In addition to any other applicable requirements, for
      business to be properly brought before an annual meeting by a shareholder,
      the
      shareholder must give timely notice of the proposal in writing to the Secretary
      of the Corporation. To be timely, a shareholder’s notice must be received by the
      Secretary of the Corporation at the principal executive offices of the
      Corporation not later than the close of business on the 60 th day
      prior to the first anniversary of the immediately preceding year’s annual
      meeting; provided, however, that with respect to the annual meeting to be held
      in 2000, a shareholder’s notice must be received by the Secretary of the
      Corporation at the principal executive offices of the Corporation no later
      than
      December 3, 1999. In no event shall the public announcement of an adjournment
      or
      postponement of an annual meeting or the fact that an annual meeting is held
      after the anniversary of the preceding annual meeting commence a new time period
      for the giving of a shareholder notice as described above. A shareholder’s
      notice shall set forth as to each matter the shareholder proposes to bring
      before the meeting (i) a brief description of the business desired to be
      brought before the annual meeting, including the complete text of any
      resolutions to be presented at the annual meeting with respect to such business,
      (ii) the reasons for conducting such business at the annual meeting,
      (iii) the name and address of record of the shareholder and the beneficial
      owner, if any, on whose behalf the proposal is made, (iv) the class and
      number of shares of the Corporation which are owned by the shareholder and
      such
      beneficial owner, (v) a representation that the shareholder is a holder of
      record of shares of the Corporation entitled to vote at such meeting and intends
      to appear in person or by proxy at the meeting to propose such business, and
      (vi) any material interest of the shareholder and such beneficial owner in
      such business.







In
      the
      event that a shareholder attempts to bring business before a meeting without
      complying with the procedures set forth in this Section 10, such business
      shall not be transacted at such meeting. The Chairman of the Board of Directors,
      or any other individual presiding over the meeting pursuant to Section 9 of
      these By-Laws, shall have the power and duty to determine whether any proposal
      to bring business before the meeting was made in accordance with the procedures
      set forth in this Section 10, and, if any business is not proposed in
      compliance with this Section, to declare that such defective proposal shall
      be
      disregarded and that such proposed business shall not be transacted at such
      meeting.






Section
      11.Nominations
      by Shareholders.




Subject
      to the rights of holders of any securities or obligations of the Corporation
      conferring special rights regarding election of directors, nominations for
      the
      election of directors shall be made by the Board of Directors or by any
      shareholder entitled to vote in elections of directors; provided however, that
      any shareholder entitled to vote in the election of directors may nominate
      one
      or more persons for election as directors only at an annual meeting and if
      written notice of such shareholder’s intent to make such nomination or
      nominations has been received, either by personal delivery or by United States
      registered or certified mail, postage prepaid, by the Secretary of the
      Corporation at the principal executive offices of the Corporation not later
      than
      the close of business on the 6 12 0 th calendar
      day before the date of the Company’s immediately  annual
      meeting proxy
      statement released to shareholders in connection with the previous
      year’s annual
      meeting. ;
      provided, however, that with respect to the annual meeting to be held in 2000,
      a
      shareholder’s notice must be received by the Secretary of the Corporation at the
      principal executive offices of the Corporation no later than December 3,
      1999. In no
      event shall the public announcement of an adjournment or postponement of an
      annual meeting or
      the
      fact that an annual meeting is held after the anniversary of the preceding
      annual meeting commence
      a new time period for the giving of a shareholder’s notice as described above.
      Each notice shall set forth (i) the name and address of record of the
      shareholder who intends to make the nomination, the beneficial owner, if any,
      on
      whose behalf the nomination is made and of the person or persons to be
      nominated, (ii) the class and number of shares of the Corporation that are
      owned by the shareholder and such beneficial owner, (iii) a representation
      that the shareholder is a holder of record of shares of the Corporation entitled
      to vote at such meeting and intends to appear in person or by proxy at the
      meeting to nominate the person or persons specified in the notice, (iv) a
      description of all arrangements, understandings or relationships between the
      shareholder and each nominee and any other person or persons (naming such person
      or persons) pursuant to which the nomination or nominations are to be made
      by
      the shareholder, and (v) such other information regarding each nominee
      proposed by such shareholder as would be required to be disclosed in
      solicitations of proxies for election of directors in an election contest,
      or is
      otherwise required to be disclosed, pursuant to the proxy rules of the
      Securities and Exchange Commission, had the nominee been nominated, or intended
      to be nominated, by the Board of Directors, and shall include a consent signed
      by each such nominee to serve as a director of the Corporation if so elected.
      In
      the event that a shareholder attempts to nominate any person without complying
      with the procedures set forth in this Section 11, such person shall not be
      nominated and shall not stand for election at such meeting. The Chairman of
      the
      Board of Directors, or any other individual presiding over the meeting pursuant
      to Section 9 of these By-Laws, shall have the power and duty to determine
      whether a nomination proposed to be brought before the meeting was made in
      accordance with the procedures set forth in this Section 11 and, if any
      proposed nomination is not in compliance with this Section 11, to declare
      that such defective proposal shall be disregarded.









**ARTICLE
      II**




**Directors
      and Meetings of Directors**






Section
      12.Number
      and Election of Directors.




(a)  The
      number of directors of the Corporation shall not be less than eleven (11) nor
      more than fifteen (15). The authorized number of directors, within the limits
      above specified, shall be determined by the affirmative vote of a majority
      of
      the whole board given at any regular or special meeting of the Board of
      Directors, provided that, the number of directors shall not be reduced to a
      number less than the number of directors then in office unless such reduction
      shall become effective only at and after the next ensuing meeting of the
      shareholders for the election of directors.




(b)  The
      directors shall appoint from among their number a Chairman, who shall serve
      at
      the pleasure of the Board. Members of the Board of Directors of the Corporation
      who are full-time employees of the Corporation shall retire from the Board
      upon
      their retirement from employment or upon attaining the age of 65 years,
      whichever occurs first; provided, however, that the Chairman of the Board,
      if
      then a full-time employee of the Corporation, shall be eligible to continue
      as a
      member of the Board until the first Annual Meeting of Shareholders occurring
      at
      least one year after retirement from employment or after attaining the age
      of 65
      years, whichever occurs first, if so requested to remain by the Board. Those
      persons who are not employed full-time by the Corporation shall not be eligible
      for election as a Director in any calendar year (or subsequent year) in which
      he
      or she has reached or will reach the age of 73 years, unless requested by the
      Chairman of the Board and approved on an annual basis by the full Board.
      Otherwise, any Director who reaches the age of 73 during a term of office shall
      resign as of the first day of the month so following unless otherwise determined
      by the Board.




(c)  The
      election of directors shall be held at the annual meeting of the shareholders.
      The directors shall be elected for a term of one year expiring at the next
      annual meeting of the shareholders. Each director shall hold office until his
      or
      her respective successor is elected and qualified, or until his or her earlier
      death, resignation, retirement, removal, or disqualification.






Section
      13.Vacancies.




Subject
      to contrary provisions in the Articles of Incorporation or elsewhere in these
      By-Laws, in case of any vacancy in the number of directors through death,
      resignation, disqualification, increase in the number of directors or other
      cause, the remaining directors present at the meeting, by affirmative vote
      of a
      majority thereof, though less than a quorum, may elect a successor to hold
      office until the next shareholders’ meeting at which directors are elected and
      until the election of his successor.






Section
      14.Meetings.




Regular
      meetings of the Board of Directors shall be held at times fixed by resolution
      of
      the Board, and special meetings may be held upon the written call of the
      Executive Committee, or by the Chairman of the Board, or by the President or
      by
      any two directors; and the Secretary or officer performing his duties shall
      give
      reasonable notice of all meetings of directors; provided, that a meeting may
      be
      held without notice immediately after the annual election, and notice need
      not
      be given of regular meetings held at times fixed by resolution of the Board.
      Meetings may be held at any time without notice if all the directors are
      present, or if those not present waive notice either before or after the
      meeting. All regular and special meetings shall be held at the principal offices
      of the Corporation, provided that the Board, from time to time, may order that
      any meeting be held elsewhere within or without the State of North Carolina.
      A
      majority of the whole Board of Directors shall constitute a quorum, and the
      act
      of a majority of the directors present at a meeting at which a quorum is present
      shall be the act of the Board of Directors, unless a greater proportion is
      required by the Articles of Incorporation.









Section
      15.Telephone
      Meetings.




Members
      of the Board or any committee may participate in a meeting of the Board or
      such
      committee by means of a conference telephone or other means of communications
      whereby all directors participating may simultaneously hear each other during
      the meeting, and participation by such means shall constitute presence in person
      at such meeting.






Section
      16.Actions
      Without Meetings.




Any
      action that may be taken at a meeting of the Board or of a committee may be
      taken without a meeting if a consent in writing, setting forth the action,
      shall
      be signed, either before or after such action, by all of the directors or all
      of
      the members of the committee, as the case may be. Such consent shall have the
      same force and effect as a unanimous vote.






Section
      17.General
      Powers.




The
      business and affairs of the Corporation shall be managed by its Board of
      Directors, which may exercise all such powers of the Corporation and do all
      such
      lawful acts and things which are not by law or by the Articles of Incorporation
      directed or required to be exercised or done by the shareholders; provided,
      however, that the officers of the Corporation shall, without prior action of
      the
      Board of Directors, perform all acts and things incidental to the usual and
      ordinary course of the business in which the Corporation is engaged as
      hereinafter provided by the By-Laws or as may hereafter be delegated by the
      Board of Directors.






Section
      18.Committees.




(a)  A
      majority of the Board of Directors may create one or more committees and appoint
      other members of the Board of Directors to serve on such Committees. Each such
      committee shall have two or more members, who serve at the pleasure of the
      Board
      of Directors. Any such committee may exercise authority over any matters except
      those matters described in Section 55-8-25(e) of the General Statutes of
      North Carolina. Each committee may make rules for the conduct of its business.
      A
      majority of the members of such committee shall constitute a
      quorum.







(b)  A
      majority of the whole Board of Directors, present at any meeting held after
      their election in each year, may appoint an Executive Committee, to consist
      of
      three or more directors, which Committee shall have and may exercise, during
      the
      intervals between meetings of the Board, by a majority vote of those present
      at
      a meeting, all the powers vested in the Board, except the following matters
      as
      more fully described in Section 55-8-25(e) of the General Statutes of North
      Carolina:




-
            Authorize
                distributions;


-
            Approve
                or propose to shareholders action that is by law required to be approved
                by the shareholders;


-
            Fill
                vacancies on the Board of Directors or on any of its
                Committees;


-
            Amend
                the Corporation’s Articles of Incorporation pursuant to N.C.G.S.
                §55-10-02;


-
            Adopt,
                amend or repeal the Corporation’s
                By-Laws;


-
            Approve
                a plan of merger not requiring shareholder
                approval;


-
            Authorize
                or approve reacquisition of shares, except according to a formula
                or
                method prescribed by the Board of Directors;
                or


-
            Authorize
                or approve the issuance or sale or contract for sale of shares, or
                determine the designation and relative rights, preferences, and
                limitations of a class or series of shares, except that the Board
                of
                Directors may authorize a committee (or a senior executive officer
                of the
                Corporation) to do so within limits specifically prescribed by the
                Board
                of Directors.




(c)  A
      majority of the whole Board of Directors present at any meeting shall have
      the
      power at any time to change the membership of such committee and to fill
      vacancies in it. The Chairman of the Executive Committee shall be appointed
      by
      the Board of Directors from the membership of the Executive
      Committee.






**ARTICLE
      III**




**Notices**






Section
      19.Notice
      Requirements.




(a)  Notice
      may be communicated: in person; by telephone, telegraph, teletype, or other
      form
      of wire or wireless communication, by facsimile transmission; or by mail or
      private carrier. If these forms of personal notice are impracticable as to
      one
      or more persons, notice may be communicated to such persons by publishing notice
      in a newspaper in the county wherein the Corporation has its principal place
      of
      business in North Carolina, or if it has no principal place of business in
      North
      Carolina, the county wherein it has its registered office in North Carolina;
      or
      by radio, television, or other form of public broadcast
      communication.







(b)  Written
      notice is effective at the earliest of the following:




(i)
            When
                received;




(ii)
            Five
                days after its deposit in the United States mail, as evidenced by
                the
                postmark or based on the affidavit of the person depositing the notice,
                if
                mailed with postage thereon prepaid and correctly
                addressed;




(iii)
            On
                the date shown on the return receipt, if sent by registered or certified
                mail, return receipt requested, signed by or on behalf of the addressee.
                Anyone accepting the mail at the stated address and signing the receipt
                shall be conclusively presumed to have acted on behalf of the
                addressee.




(c)  Oral
      notice is effective when actually communicated to the person to whom
      given.




(d)  If
      these
      By-Laws prescribe notice requirements for particular circumstances, those
      requirements govern.




(e)  No
      notice
      need be given any shareholder or director whose address is outside of the United
      States and each shareholder located outside of the United States must provide
      to
      the Corporation a mailing address in the United States to which notices from
      the
      Corporation may be addressed. The Corporation shall not be obligated to
      recognize any such address (or change of address) received less than thirty
      days
      before the date on which the Corporation’s notice is sent. Any notice given by
      telegram or cable shall be deemed to be given when delivered to and accepted
      for
      transmittal by an office of the transmitting corporation.






Section
      20.Waiver
      of Notice.




Whenever
      any notice is required to be given under the provisions of applicable statutes
      or of the Articles of Incorporation or of these By-Laws, a waiver thereof in
      writing, signed by the person or persons entitled to said notice, whether before
      or after the time stated therein, shall be deemed equivalent to the giving
      of
      such notice in apt time.






**ARTICLE
      IV**




**Officers,
      Their Authority, and Their Terms of Office**






Section
      21.Officers
      of the Corporation.




The
      Board
      of Directors shall annually at its first meeting held after the annual meeting
      of shareholders, or as soon thereafter as may be practical, elect the officers
      of the Corporation, who shall consist of a President, one or more Senior
      Executive Vice Presidents and Executive Vice Presidents, two or more Senior
      Vice
      Presidents, three or more Vice Presidents, a Secretary, a Treasurer, a
      Controller and such other officers or assistant officers and agents as may
      be
      appointed by the Board of Directors. At other times, the Board of Directors
      or
      any Committee to which it delegates the authority to do so may elect officers
      to
      fill any new office or a vacancy in any office occurring by virtue of the
      incumbent's death, resignation, removal or otherwise at any duly convened
      meeting of the Board or of the Committee. The officer shall serve for the period
      specified or until a successor is chosen. From time to time the Board of
      Directors may also elect a Vice Chairman who shall have such duties as described
      herein and as may from time to time be directed. Any two offices may be held
      by
      the same person, but no officer may act in more than one capacity where action
      of two or more officers is required. The Vice Chairman, if any, of the Board
      of
      Directors shall be chosen from among the Directors, but the other officers
      need
      not be directors of the Corporation.









Section
      22.Chief
      Executive Officer.




(a)  The
      Board
      of Directors shall appoint the Chief Executive Officer, who shall be either
      the
      Chairman, the Vice Chairman or the President of the Corporation. In the event
      the Chief Executive Officer is unavailable at the time for needed action, or
      in
      other circumstances as directed by the Chief Executive Officer, then the
      Chairman, the Vice Chairman, if any, or the President if there is no Vice
      Chairman, who is not then serving as Chief Executive Officer, shall be the
      next
      officer in line of authority to perform the duties of Chief Executive Officer.
      If the Chairman, the Vice Chairman and the President should be unavailable
      at
      the time for needed action, or in other circumstances as directed by the Chief
      Executive Officer, then the next officer in line of authority to perform the
      duties of the Chief Executive Officer shall be a Senior Executive Vice President
      or Executive Vice President as designated by the Chief Executive
      Officer.




(b)  Unless
      otherwise provided by the Board of Directors, the Corporation’s Chief Executive
      Officer is vested with full power, authority, and the duty, to perform in
      person, and by delegation of authority to subordinate officers and employees
      of
      the Corporation, all acts and things deemed by him to be reasonably necessary
      or
      desirable to direct, handle, and manage, and in general carry on the
      Corporation’s business transactions authorized by its Articles of Incorporation,
      in respect to all matters except those which by law must be performed by the
      directors.






Section
      23.Removal
      and Resignation of Officers.




Any
      officer may be reassigned duties by appropriate members of senior management
      at
      any time. Any officer may be removed from office at any time by the Board of
      Directors, or by any Committee to which it delegates the authority to remove
      officers from office, without prejudice to the rights of the officer removed
      under an employment agreement in writing previously duly authorized by the
      Board
      of Directors or the Executive Committee of the Board of Directors. Any officer
      may resign at any time by giving written notice to the Board of Directors,
      the
      President or any other officer of the Corporation. Such resignation shall take
      effect at the time specified therein, and, unless otherwise specified therein,
      the acceptance of such resignation shall not be necessary to make it
      effective.






Section
      24.Bond.




The
      Board
      of Directors or the Chief Executive Officer of the Corporation may require
      the
      Treasurer and any other officer, employee or agent of the Corporation to give
      bond, in such sum and with such surety or sureties as either shall determine,
      for the faithful discharge of their duties.









**ARTICLE
      V**




**Capital
      Stock**






Section
      25.Certificated
      and Uncertificated Shares.




(a)  The
      Board
      of Directors may authorize the issuance of some or all of the shares of the
      Corporation’s classes or series of capital stock without issuing certificates to
      represent such shares. If shares are represented by certificates, the
      certificates shall be in such form as required by law and as determined by
      the
      Board of Directors. Certificates shall be signed by the Chairman of the Board
      or
      the President and by the Secretary or Treasurer. The signatures of any such
      officers upon a certificate may be facsimiles or may be engraved or printed
      or
      omitted if the certificate is countersigned by a transfer agent, or registered
      by a registrar, other than the Corporation itself or an employee of the
      Corporation. If an officer who has signed or whose facsimile or other signature
      has been placed upon a certificate ceases to hold the office before the
      certificate is issued, the certificate may be issued by the Corporation with
      the
      same effect as if he held the office on the date of issuance.




(b)  All
      certificates for shares shall be consecutively numbered (within class or series
      designations, if desired) or otherwise identified and entered into the stock
      transfer records of the Corporation. When shares are represented by
      certificates, the Corporation shall issue and deliver to each shareholder to
      whom such shares have been issued or transferred certificates representing
      the
      shares owned of record by him. Upon a transfer of certificated shares, a new
      certificate shall be issued only upon surrender of a certificate representing
      such shares for cancellation, subject to the provisions for issuance of a new
      certificate set forth in Section 26 of these By-Laws. When shares are not
      represented by certificates, then within a reasonable time after the issuance
      or
      transfer of such shares, the Corporation shall send the shareholder to whom
      such
      shares have been issued or transferred a written statement of the information
      required by law to be on certificates.




(c)  If
      uncertificated shares are issued, the Corporation shall send each holder of
      such
      shares a written statement containing the information required by
      law.




(d)  Transfer
      agents or registrars, or both, for one or more classes of the stock of the
      Corporation may be appointed by the Board of Directors and may be required
      to
      countersign certificates representing shares of such class or
      classes.






Section
      26.Stock
      Transfer Books and Transfer of Shares.




The
      Corporation or its designated transfer agent or other agent, shall keep a book
      or set of books to be known as the stock transfer books of the Corporation,
      containing the name of each shareholder of record, together with such
      shareholder’s address and the number and class or series of shares held by such
      shareholder. Shares of stock of the Corporation shall be transferable on the
      stock books of the Corporation by the holder in person or by his attorney
      thereunto authorized by power of attorney duly executed and filed with the
      Secretary or the transfer agent, but, except as hereinafter provided in the
      case
      of loss, destruction or mutilation of certificates, no transfer of stock shall
      be entered until the previous certificate, if any, given for the same shall
      have
      been surrendered and canceled. Transfer of shares of the Corporation represented
      by certificates shall be made on the stock transfer books of the Corporation
      only upon surrender of the certificates for the shares sought to be transferred
      by the holder of record thereof or by such holder’s duly authorized agent,
      transferee or legal representative, who shall furnish proper evidence of
      authority to transfer with the Secretary of the Corporation or its designated
      transfer agent or other agent. All certificates surrendered for transfer shall
      be canceled before new certificates for the transferred shares shall be issued.
      Except as otherwise provided by law, no transfer of shares shall be valid as
      against the Corporation, its shareholders or creditors, for any purpose, until
      it shall have been entered in the stock records of the Corporation by an entry
      showing from and to whom transferred.









Section
      27.Holder
      of Record.




Except
      as
      otherwise required by the NCBCA, the Corporation may treat the person in whose
      name shares of stock of the Corporation (whether or not represented by a
      certificate) stand of record on its books or the books of any transfer agent
      or
      other agent designated by the Board of Directors as the absolute owner of the
      shares and the person exclusively entitled to receive notification and
      distributions, to vote, and otherwise to exercise the rights, powers and
      privileges of ownership of such shares. The
      Corporation may assume that the holder of record had full competency, capacity
      and authority to exercise all rights of ownership, irrespective of any knowledge
      or notice to the contrary or any description indicating a representative, pledge
      or other fiduciary relation or any reference to any other instrument or to
      the
      rights of any other person appearing upon the records of the Corporation or
      upon
      the share certificate.






Section
      28.Record
      Date.




For
      the
      purpose of determining shareholders entitled to notice of or to vote at any
      meeting of shareholders or any adjournment thereof, or entitled to receive
      payment of any dividend, or in order to make a determination of shareholders
      for
      any other proper purpose, the Board may fix in advance a date as the record
      date
      for any such determination of shareholders, such date in any case to be not
      more
      than seventy days prior to the date on which the particular action, requiring
      such determination of shareholders, is to be taken. When a determination of
      shareholders entitled to vote at any meeting of shareholders has been made
      as
      provided in this section, such determination shall apply to any adjournment
      thereof unless the Board fixes a new record date, which it shall do if the
      meeting is adjourned to a date more than 120 days after the date fixed for
      the
      original meeting.






Section
      29.Lost,
      Destroyed or Mutilated Certificates.




In
      case
      of loss, destruction or mutilation of any certificate of stock, another may
      be
      issued in its place upon proof of such loss, destruction or mutilation and
      upon
      the giving of a bond of indemnity to the Corporation in such form and in such
      sum as the Board may direct, provided that a new certificate may be issued
      without requiring any bond when, in the judgment of the Board, it is proper
      so
      to do. The Board of Directors may delegate to the Corporation’s Transfer Agent
      and Registrar authority to issue and register, respectively, from time to time
      without further action or approval of the Board of Directors, new certificates
      of stock to replace certificates reported lost, stolen or destroyed upon receipt
      of an affidavit of loss and bond of indemnity in form and amount and with
      corporate surety satisfactory to them in each instance protecting the
      Corporation and them against loss. Such legal evidence of such loss or theft
      or
      destruction shall be furnished to the Board of Directors as may be required
      by
      them.









Section
      30.Transfer
      Agent and Registrar; Regulations.




The
      Corporation may, if and whenever the Board of Directors so determines, maintain
      in the State of North Carolina or any other state of the United States, one
      or
      more transfer offices or agencies and also one or more registry offices which
      offices and agencies may establish rules and regulations for the issue, transfer
      and registration of certificates. No certificates for shares of stock of the
      Corporation in respect of which a transfer agent and registrar shall have been
      designated shall be valid unless countersigned by such transfer agent and
      registered by such registrar. The Board of Directors may also make such
      additional rules and regulations as it may deem expedient concerning the issue,
      transfer and registration of shares represented by certificates and shares
      without certificates.






**ARTICLE
      VI**




**General**






Section
      31.Distributions.




Subject
      to the provisions of the applicable statutes and the Articles of Incorporation
      of the Corporation, dividends, either cash or stock, upon the capital stock
      of
      the Corporation may be declared by the Board of Directors at any meeting
      thereof.






Section
      32.Deeds,
      Bonds, and Contracts.




Deeds,
      bonds, notes, mortgages and contracts of the Corporation may be executed on
      behalf of the Corporation by the President, a Senior Executive Vice President,
      an Executive Vice President, or a Vice President, or any one of such other
      persons as shall from time to time be authorized by the Board of Directors,
      and
      when necessary or appropriate may be attested or countersigned by the Secretary
      or an Assistant Secretary, or the Treasurer or an Assistant Treasurer. The
      corporate seal of the Corporation may be affixed to deeds, bonds, notes,
      mortgages, contracts or stock certificates by an appropriate officer of the
      Corporation by impression thereon, or, by order of an appropriate officer of
      the
      Corporation, a facsimile of said seal may be affixed thereto by engraving,
      printing, lithograph or other method.






Section
      33.Deposits.




The
      monies of the Corporation shall be deposited in the name of the Corporation
      in
      such bank or banks or trust Corporation or trust companies as the Treasurer,
      with approval of the Chief Executive Officer, shall from time to time select,
      and shall be drawn out only by checks or other orders signed by persons
      designated by resolution by the Board of Directors.









Section
      34.Interpretation.




As
      and
      when used in any of the foregoing By-Laws the words “stockholder” and
“stockholders” shall be deemed and held to be synonymous with the words
“shareholder” and “shareholders,” and the word “stock” shall be deemed and held
      to be synonymous with the words “share” or “shares,” respectively, as used in
      Chapter 55 of the General Statutes of North Carolina.






**ARTICLE
      VII**




**Indemnity
      of Officers and Directors**





Section
      35.Indemnification
      and Advancement of Expenses.




(a)  The
      Corporation shall reimburse or indemnify any past, present or future officer
      or
      director of the Corporation for and against such liabilities and expenses as
      are
      authorized by Sections 55-8-54, 55-8-55, 55-8-56 and 55-8-57 of the General
      Statutes of North Carolina. Persons serving as officers or directors of the
      Corporation or serving in any such capacity at the request of the Corporation
      in
      any other Corporation, partnership, joint venture, trust or other enterprise
      shall be provided reimbursement and indemnification by the Corporation to the
      maximum extent allowed hereunder or under applicable law, including without
      limitation Sections 55-8-54, 55-8-55, 55-8-56 and 55-8-57 of the General
      Statutes of North Carolina.




(b)  In
      addition to the reimbursement and indemnification provisions set forth above,
      any person who at any time serves or has served (1) as an officer or
      director of the Corporation, or (2) at the request of the Corporation as an
      officer or director (or in any position of similar authority, by whatever title
      known) of any other Corporation, partnership, joint venture, trust or other
      enterprise or (3) as an individual trustee or administrator under any
      employee benefit plan, shall have a right to be indemnified by the Corporation
      to the fullest extent permitted by law against (i) all reasonable expenses,
      including attorney’s fees, actually and necessarily incurred by him in
      connection with any pending, threatened or completed action, suit or proceeding,
      whether civil, criminal, administrative or investigative, and whether or not
      brought by the Corporation or on behalf of the Corporation in a derivative
      action, seeking to hold him liable by reason of or arising out of his status
      as
      such or his activities in any of the foregoing capacities, and
      (ii) payments made by him in satisfaction of any judgment, money decree,
      fine, penalty or settlement for which he may have become liable in any such
      action, suit or proceeding; provided, however, that the Corporation shall not
      indemnify any person against liability or litigation expense he may incur on
      account of his activities which were at the time taken known or believed by
      him
      to be clearly in conflict with the best interests of the
      Corporation.




(c)  No
      past,
      present or future director or officer of the Corporation (or his heirs,
      executors, and administrators) shall be liable for any act, omission, step
      or
      conduct taken or had in good faith that (whether by condition or otherwise)
      is
      required, authorized or approved by any order or orders issued pursuant to:
      the
      Public Utility Holding Company Act of 1935; the Federal Power Act; or any state
      statute regulating the Corporation or its subsidiaries by reason of their being
      public utility companies or subsidiaries of public utility holding companies;
      or
      any amendments to the foregoing laws. If this provision is found by a court
      not
      to constitute a valid defense to any claim against such director or officer,
      each director and officer (and his heirs, executors and administrators) shall
      be
      reimbursed for, or indemnified against, all expenses and liabilities received
      by
      him in connection with, or arising from, any such action, suit or proceeding
      based on any act, omission, step or conduct described above. Such expenses
      and
      liabilities include, but are not limited to, judgments, court costs and
      attorneys’ fees. The foregoing rights shall not be exclusive of other rights to
      which any director or officer may otherwise be entitled and shall be available
      whether or not the director or officer continues to be a director or officer
      at
      the time of incurring such expenses and liabilities.







(d)  The
      Board
      of Directors shall take all actions as may be necessary or appropriate to
      authorize the Corporation to pay all amounts required under this Section 35
      of the By-Laws including, without limitation and to the extent deemed to be
      appropriate, necessary, or required by law (1) making a good faith
      evaluation of the manner in which the claimant for indemnity acted and of the
      reasonable amount of indemnity due such individual, or (2) making advances
      of costs and expenses, or (3) giving notice to, or obtaining approval by,
      the shareholders of the Corporation.




(e)  Any
      person who serves or has served in any of the aforesaid capacities for or on
      behalf of the Corporation shall be deemed to be doing or have done so in
      reliance upon, and as consideration for, the rights of reimbursement and
      indemnification provided for herein. Such rights of reimbursement and
      indemnification shall inure to the benefit of the legal representatives of
      such
      individuals, shall include amounts paid in settlement and shall not be exclusive
      of any other rights to which such individuals shall be entitled apart from
      the
      provisions of this Section. No amendment to or repeal of any provision of this
      Section 35 shall impair any right of a director or officer based on service
      in such capacity up to the effective time of such amendment or
      repeal.




(f)  The
      Corporation may, in its sole discretion, wholly or partially indemnify and
      advance expenses to any employee or agent of the Corporation to the same extent
      as provided herein for officers and directors.




(g)  The
      provisions of this Section shall not limit the power of the Corporation to
      agree to indemnify its directors, officers, employees or agents, by contract
      or
      resolution to the fullest extent allowed by applicable law.






**ARTICLE
      VIII**




**Emergency
      By-Laws**






Section
      36.Definitions.




As
      used
      in these Emergency By-Laws.




(a)  the
      term
“period of emergency” shall mean any period during which a quorum of the Board
      cannot readily be assembled because of some catastrophic event.




(b)  the
      term
“incapacitated” shall mean that the individual to whom such term is applied
      shall not have been determined to be dead but shall be missing or unable to
      discharge the responsibilities of his office; and




(c)  the
      term
“senior officer” shall mean the Chairman of the Board, the Chief Executive
      Officer, the President, any Senior Executive Vice President, Executive Vice
      President, Senior Vice President or Vice President, the Treasurer, the
      Controller and the Secretary, and any other person who may have been so
      designated by the Board before the emergency.






Section
      37.Applicability.




These
      Emergency By-Laws, as from time to time amended, shall be operative only during
      any period of emergency. To the extent not inconsistent with these Emergency
      By-Laws, all provisions of the regular By-Laws of the Corporation shall remain
      in effect during any period of emergency.




No
      officer, director or employee shall be liable for actions taken in good faith
      in
      accordance with these Emergency By-Laws.






Section
      38.Board
      of Directors.




(a)  A
      meeting
      of the Board may be called by any director or senior officer of the Corporation.
      Notice of any meeting of the Board need be given only to such of the directors
      as it may be feasible to reach at the time and by such means as may be feasible
      at the time, including publication or radio, and at a time less than twenty-four
      hours before the meeting if deemed necessary by the person giving
      notice.




(b)  At
      any
      meeting of the Board, three directors in attendance shall constitute a quorum.
      Any act of a majority of the directors present at a meeting at which a quorum
      shall be present shall be the act of the Board. If less than three directors
      should be present at a meeting of the Board, any senior officer of the
      Corporation in attendance at such meeting shall serve as a director for such
      meeting, selected in order of rank and within the same rank in order of
      seniority.




(c)  In
      addition to the Board’s powers under the regular By-Laws of the Corporation to
      fill vacancies on the Board, the Board may elect any individual as a director
      to
      replace any director who may be incapacitated and to serve until the latter
      ceases to be incapacitated or until the termination of the period of emergency,
      whichever first occurs. In considering officers of the Corporation for election
      to the Board, the rank and seniority of individual officers shall not be
      pertinent.







(d)  The
      Board, during as well as before any such emergency, may change the principal
      office or designate several alternative offices or authorize the officers to
      do
      so.






Section
      39.Appointment
      of Officers.




In
      addition to the Board’s powers under the regular By-Laws of the Corporation with
      respect to the election of officers, the Board may elect any individual as
      an
      officer to replace any officer who may be incapacitated and to serve until
      the
      latter ceases to be incapacitated.






Section
      40.Amendments.




These
      Emergency By-Laws shall be subject to repeal or change by further action of
      the
      Board of Directors or by action of the shareholders, except that no such repeal
      or change shall modify the provisions of the second paragraph of Section 37
      with regard to action or inaction prior to the time of such repeal or change.
      Any such amendment of these Emergency By-Laws may make any further or different
      provision that may be practical and necessary for the circumstances of the
      emergency.