EXECUTION COPY

                              ASSUMPTION AGREEMENT

                             as of December 17, 2001


     Reference is made to the 364-Day Credit Agreement, dated as of November 13,
2001 (as  amended,  modified  or  supplemented  from time to time,  the  "Credit
Agreement"),  among Progress  Energy,  Inc., a North Carolina  corporation  (the
"Borrower"),  the lenders party thereto and  Citibank,  N.A., as  administrative
agent for such lenders (the  "Administrative  Agent").  Unless otherwise defined
herein,  terms  defined in the Credit  Agreement  are used  herein with the same
meanings.

     BARCLAYS BANK PLC (the  "Additional  Lender") and the Borrower hereby agree
as follows:

     (a) The Additional Lender hereby agrees,  that effective as of December 18,
2001 (the "Effective Date"), and subject to the satisfaction, on or prior to the
Effective Date of the conditions set forth in clauses (A)(2),  (A)(3) and (B) of
Section  2.04(b)(ii) of the Credit  Agreement,  (i) the  Additional  Lender will
become  a  Lender  under  the  Credit  Agreement,  (ii)  the  Commitment  of the
Additional  Lender will be $50,000,000,  and (iii) the Additional Lender will be
bound by all the terms and provisions of the Credit Agreement  binding upon each
Lender, including, without limitation, Section 2.04(b)(iii).

     (b) The  Borrower  consents to the  foregoing  and agrees to deliver to the
Administrative  Agent,  on or prior  to the  Effective  Date,  the  evidence  of
corporate  authorization,  opinions and certificates described in clauses (A)(2)
and (A)(3) of Section 2.04(b)(ii) of the Credit Agreement.

     (c) THIS  ASSUMPTION  AGREEMENT  SHALL BE  GOVERNED  BY, AND  CONSTRUED  IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

     (d) This Assumption  Agreement may be signed in any number of counterparts,
each of which  shall be  deemed  an  original,  with the same  effect  as if the
signatures thereto and hereto were up on the same instrument.





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                                                                             S-1



     IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Assumption
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.


                                      BARCLAYS BANK PLC


                                      By
                                        ----------------------------------------
                                        Name:
                                        Title:


                                      Eurodollar Lending Office:

                                      -----------------------------------
                                      -----------------------------------
                                      Attn.:
                                            ------------------------
                                           (---) --------



                                      Domestic Lending Office (and
                                       address for notices):

                                      -----------------------------------
                                      -----------------------------------
                                      Attn.:
                                            ------------------------
                                            (---) --------


                                      PROGRESS ENERGY, INC.


                                      By
                                        ----------------------------------------
                                        Name:
                                        Title:

                                      Address for Notices:

                                      410 S. Wilmington Street
                                      PEB 19A3
                                      Raleigh, NC 27601
                                      Telecopier No.: 919/546-7826
                                      Telephone No.: 919/546-2924
                                      E-mail: charles.beuris@pgnmail.com
                                      Attention: Director of Financial
                                      Operations, Treasury Department

<PAGE>




Accepted this      day of December, 2001
              ----
CITIBANK, N.A., as Administrative Agent



By
   -----------------------------------------
     Name:
     Title: