Exhibit 10c(28)





                              EMPLOYMENT AGREEMENT

                                     BETWEEN

                      PROGRESS ENERGY SERVICE COMPANY, LLC

                                       AND

                               GEOFFREY S. CHATAS


                                 October 1, 2003


















<PAGE>


                              EMPLOYMENT AGREEMENT


     This EMPLOYMENT AGREEMENT  ("Agreement"),  dated as of the ____________ day
of January 2004, is between  Progress  Energy  Service  Company,  LLC, a limited
liability company headquartered in Raleigh,  North Carolina,  and a wholly-owned
subsidiary of Progress  Energy,  Inc., its successors or assigns and Geoffrey S.
Chatas ("Chatas"). Progress Energy Service Company, LLC, shall be referred to as
"PESC" or "the Company"  throughout.  Progress Energy, Inc. shall be referred to
as "Progress Energy" throughout.

                                    Preamble

     The Company and Chatas agree to enter into an  employment  relationship  in
which  Chatas  will serve as Senior Vice  President - Finance  during the period
from October 1, 2003 through  December 31, 2003 and as Executive  Vice President
and Chief Financial Officer beginning January 1, 2004, for the term as set forth
within the Agreement,  and in consideration of this Agreement, the parties agree
to the terms and provisions outlined herein:

                                   Provisions

     NOW,  THEREFORE,  in  consideration  of the mutual  covenants  and promises
contained herein and for other good and valuable consideration,  the receipt and
sufficiency of which are hereby  acknowledged  and accepted,  the parties hereto
hereby agree as follows:

     1. RESPONSIBILITIES; OTHER ACTIVITIES.

     Chatas shall occupy the position of Senior Vice President - Finance at PESC
during the  period  from  October  1, 2003  through  December  31,  2003 and the
position of Executive  Vice  President  and Chief  Financial  Officer  beginning
January 1, 2004 and shall undertake the general  responsibilities  and duties of
such  positions  as directed by PESC senior  management.  During the Term of the
Agreement as defined in Section 2, below,  Chatas shall perform  faithfully  the
duties of Chatas'  position,  devote all of Chatas' working time and energies to
the business and affairs of PESC and shall use Chatas' best efforts,  skills and
abilities to promote PESC's general business interests.  PESC reserves the right
to reassign  Chatas to other positions  within the controlled  group of Progress
Energy companies.

     2. TERM OF THE AGREEMENT:

          (a) The Agreement becomes effective on October 1, 2003 ("the Effective
Date"), and shall remain in effect until December 31, 2005.

(b) On January 1, 2004 and on January 1 of each year thereafter ("the Extension
Date"), the Agreement will be extended such that each prospective term will
always be three years forward ("Evergrow provisions").

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          (c) The Company may elect to not extend the  Agreement and must notify
Chatas no later than 60 days prior to the Extension Date that it does not intend
to renew the Agreement  pursuant to paragraph  2(b),  above.  Should the Company
elect not to renew the Agreement,  the Agreement will continue in effect for the
remainder of its term.

          (d) The Agreement cannot extend beyond Chatas' normal  retirement date
unless  Chatas is  requested  to serve in his  full-time  position for a defined
period as set forth by the Chief Executive Officer of Progress Energy.

     3. BASE SALARY. As compensation for the services to be performed hereunder,
Chatas will be paid an annual Base Salary ("Base  Salary").  Chatas' Base Salary
for 2003  will be Three  Hundred  Twenty-Five  Thousand  Dollars  ($325,000.00).
Chatas' Base Salary for 2004 will be Three Hundred Seventy-Five Thousand Dollars
($375,000.00).  Base Salary for each  subsequent  year of  employment  under the
Agreement shall be subject to adjustment by PESC during the normal annual salary
review  process for similarly  situated  executives as determined by PESC in its
discretion.  Annual Base Salary shall be deemed earned  proportionally as Chatas
performs  services  over the  course of each year the  Agreement  is in  effect.
Payments of annual  Base  Salary  shall be made,  except as  otherwise  provided
herein, in accordance with PESC's standard payroll policies and procedures.

     4. SIGNING  BONUS.  In addition to his Base  Salary,  Chatas will receive a
Seventy-Five  Thousand Dollar ($75,000.00)  out-of-base payment (less applicable
withholdings)  within  thirty  (30)  days  following  his date of hire.  He will
receive a Seventy-Five  Thousand Dollar  ($75,000.00)  out-of-base payment (less
applicable withholdings) within thirty (30) days following the first anniversary
of his date of hire; provided,  however, that Chatas will not receive the second
signing bonus payment if he voluntarily  terminates his employment  prior to the
first anniversary of his date of hire.

     5.  RELOCATION.  Chatas  will be eligible to  participate  in the  Progress
Energy relocation program in accordance with its terms.

     6. EMPLOYEE  BENEFIT  PLANS.  During the Employment  Term,  Chatas shall be
entitled to participate in all applicable  Company and Progress Energy sponsored
benefits  plans as may be in effect upon terms and in  accordance  with policies
and procedures  equivalent to those then in effect and  applicable  generally to
PESC employees.

     7. EXECUTIVE INCENTIVES,  BENEFITS AND PERQUISITES. Chatas will be eligible
to  participate  in the following  executive  incentive and benefit plans and to
receive the following executive perquisites:

          (a) Short Term  Incentive  Plan.  Chatas is eligible to participate in
the Progress Energy sponsored  Management  Incentive  Compensation  Plan (MICP),
subject to its terms.

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          (b) Long Term  Incentive  Plans.  Chatas is eligible to participate in
the Progress Energy long term incentive program,  subject to its terms, with the
following components:

               (i) PSSP.  An award of  performance  shares/units  earned  over a
three-year  period and  adjusted  based on Progress  Energy  performance.  These
annual awards are generally made in March.

               (ii) Stock  Options.  An award of stock options  vesting 1/3, 1/3
and 1/3 on the 1st, 2nd and 3rd  anniversaries,  respectively,  from the date of
grant. These annual awards are generally granted in October.

               (iii)  Restricted  Stock.  An award of  restricted  common  stock
vesting on the 3rd, 4th and 5th  anniversaries,  respectively,  from the date of
grant. These annual awards are generally made in March. Upon the Effective Date,
Chatas shall receive 8,000 shares of restricted  common stock in accordance with
the terms of a Progress Energy restricted stock agreement.

          (c) Base Salary  Deferral  Plan.  Chatas is eligible to participate in
the Progress Energy  sponsored  Management  Deferred  Compensation  Plan (MDCP),
subject to its terms.

          (d) Restoration Pension Plan. Chatas is eligible to participate in the
Progress  Energy  sponsored   non-qualified   pension  plan  ("the   Restoration
Retirement Plan"), subject to its terms. If Chatas becomes eligible for benefits
under Progress Energy's  Supplemental  Senior Executive  Retirement Plan, Chatas
forfeits all benefits under the Restoration Retirement Plan.

          (e) Supplemental  Senior  Executive  Retirement Plan. Upon meeting the
Plan's eligibility  requirements,  Chatas shall be eligible for participation in
Progress Energy's Supplemental Senior Executive Retirement Plan (SERP),  subject
to its terms.

          (f)  Executive  AD&D  Life  Insurance.  Chatas  shall be  eligible  to
participate in Progress Energy's  Executive AD&D Life Insurance Plan, subject to
its terms.

          (g) Financial  Planning.  Consistent with PESC's practice with respect
to other  executives,  Chatas will be reimbursed for financial  planning and tax
preparation.

          (h) Estate Planning. Chatas is eligible to receive reimbursement of up
to $5,000  annually for the  preparation  and periodic  update of Chatas' estate
plan.

          (i) Automobile Allowance.  Chatas is eligible to receive an automobile
allowance  of  One  Thousand  Two  Hundred   Dollars  ($1200)  per  month  (less
withholdings),  subject  to the terms of  applicable  PESC  policies  during the
period from October 1, 2003 through  December  31,  2003.  Beginning  January 1,
2004, the automobile allowance will increase to $1,350 per month.

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          (j) Annual  Physical.  Consistent with PESC's practice with respect to
other  executives,  PESC  will  pay  for an  annual  physical  examination  by a
physician of Chatas' choice.

          (k) Luncheon Club.  PESC will pay the monthly dues for a membership at
the Capital City Club.  Business related expenses will be reimbursed  consistent
with PESC's expense account guidelines.

          (l)  Country  Club  Membership.  PESC will pay an  initiation  fee and
monthly  dues for a membership  for Chatas at a country  club  approved by PESC.
Business  related  expenses  will be  reimbursed  consistent  with PESC  expense
account guidelines.

          (m)  Health  Club  Membership.  PESC  will pay an  initiation  fee and
monthly dues to a health club for Chatas' membership.

          (n) Home Security. PESC will install a home security system at Chatas'
residence and reimburse Chatas for applicable monitoring fees.

          (o) Air Travel.

               (i) PESC will provide an airline club  membership  in  accordance
with PESC's policy.

               (ii) PESC will reimburse  Chatas'  spouse's  travel expenses when
she  accompanies  Chatas  to  business  meetings  where  spousal  attendance  is
customary.

               (iii) PESC will provide  chartered  aircraft for Chatas' business
related travel as needed.

               (iv)  PESC  will  allow  Chatas  to  travel  first  class  at his
discretion for business related travel.

          (p) Personal Computer. PESC will provide a personal computer to Chatas
to be used at his personal residence.

     8.  COMPANY  PLAN  AND  PROGRAM  MAINTENANCE.  Chatas'  entitlement  to the
benefits  described  in  Sections 6 and 7 shall be governed  exclusively  by the
terms of the plans and programs  described in those  provisions.  Nothing in the
Agreement  shall require  Progress Energy or the Company to continue or maintain
any short term  incentive,  long term incentive,  employee or executive  benefit
plan or program or any  perquisite.  Progress  Energy and the Company shall have
the right to modify,  replace or eliminate  any  incentive  or benefit  plans or
programs, including perquisites.

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     9. VACATION AND HOLIDAYS. Chatas will be entitled to four weeks of vacation
leave  per year,  unless  his  combined  years of  service  to  Progress  Energy
subsidiaries  entitle  him to  additional  vacation  leave  pursuant  to Company
policy. Chatas will be granted paid holidays per Company policy.

     10. TERMINATION OF EMPLOYMENT.

          (a) Involuntary Termination.

               (i) For purposes of this Agreement,  PESC shall be deemed to have
terminated  Chatas'  employment if Chatas is displaced from an assignment within
the  controlled   group  of  Progress  Energy   subsidiaries   and  (1)  is  not
simultaneously  reassigned to another  position  within the controlled  group of
Progress Energy  companies;  or (2) in the event that Progress Energy sells more
than 50% of its  interest in a Progress  Energy  subsidiary  to which  Chatas is
assigned to a third party during the term of Chatas' assignment, the third party
purchaser does not offer Chatas a position with  comparable  authority,  duties,
wages and benefits.

               (ii)  Termination   Without  Cause.   During  the  term  of  this
Agreement,  if Chatas'  employment from the controlled  group of Progress Energy
companies  is  terminated  without  Cause  as  Cause  is  defined  in  paragraph
10(a)(iii),  then Chatas will be provided with his then-Base  Salary at the rate
at the time of  termination  for the  remainder  of the  Term of the  Agreement.
Additionally,  PESC will  reimburse  Chatas for the costs of continued  coverage
under  certain  health and welfare  benefit plans  pursuant to the  Consolidated
Omnibus  Budget  Reconciliation  Act of 1985  ("COBRA")  for up to eighteen (18)
months after the termination of his employment;  provided,  however, that Chatas
shall not be eligible for COBRA  reimbursement  if he is otherwise  eligible for
coverage  under  benefit  plans  offering  substantially  equivalent  or greater
benefits  than the plans in which he is eligible  to  participate  under  COBRA.
Receipt of the  benefits in this  paragraph  is subject to the  requirements  of
paragraphs  10(f),  (g) and (h) of this Agreement.  In addition,  Chatas will be
eligible  to retain all  benefits  under  existing  benefit  plans to the extent
vested within the terms of those plans.

               (iii)  Termination  for Cause.  During the Term of the Agreement,
PESC may elect at any time to terminate Chatas' employment immediately hereunder
and remove  Chatas from  employment  for Cause.  For purposes of this  paragraph
10(a)(iii), Cause for the termination of employment shall be defined as: (1) any
act  of  Chatas'  including,   but  not  limited  to,  misconduct,   negligence,
unlawfulness, dishonesty or inattention to the business, which is detrimental to
PESC's interests;  or (2) Chatas'  unsatisfactory  job performance or failure to
comply with PESC  policies,  rules or  regulations.  If Chatas is terminated for
Cause as defined herein,  then he shall be eligible to retain all benefits under
existing  benefit plans that have vested  pursuant to those plans,  but he shall
not be entitled to any form of salary continuation or severance  benefits.  Upon
termination for Cause,  Chatas shall be entitled to any earned but unpaid salary
accrued to the date of termination.  Any continued  rights or benefits Chatas or
his legal  representatives  may have under any PESC or Progress Energy sponsored
employee  benefit  plan or  program  upon his  termination  for  Cause  shall be
determined in accordance with the terms or provisions of the plan or program.

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          (b) Change in Control. In the event that Progress Energy experiences a
Change in Control,  as defined by the Progress  Energy,  Inc.  Change in Control
Plan ("the Change in Control  Plan") and Chatas is (1)  designated as covered by
the  Change  in  Control   Plan,   and  (2)  is   Involuntarily   Terminated  or
Constructively  Terminated  under the terms of the Change in Control Plan,  then
the greater of the benefits under the Change in Control Plan, if applicable, and
the benefits available in the event of an involuntary  termination without Cause
as Cause  is  defined  in  paragraph  10(a)(iii),  will be the  legal  authority
regarding any severance compensation and benefits.

          (c)  Voluntary  Termination.   If  Chatas  terminates  his  employment
voluntarily  for any reason at any time, then he shall be eligible to retain all
benefits under existing  benefit plans that have vested pursuant to the terms of
those  plans,  but as of the last date of  regular  employment,  he shall not be
entitled to any form of salary continuation or other severance benefit.

          (d) Termination Due to Death. In the event of Chatas' death during the
Term of the Agreement,  Chatas'  employment  hereunder  shall  terminate and the
Company shall have no further  obligation to Chatas under this Agreement  except
as specifically provided in this Agreement.  Chatas' estate shall be entitled to
receive all earned but unpaid Base Salary accrued to the date of termination and
any short term  incentive  for a prior  fiscal year that has been earned but not
paid.  The short term  incentive,  if any, for the year in which  Chatas'  death
occurs  shall be  calculated  on a pro rata basis for the  portion of the fiscal
year  prior to  Chatas'  death  occurring  and  shall  be paid at the  regularly
scheduled  time for the  payment  of the short  term  incentive.  Any rights and
benefits  Chatas,  or Chatas'  estate or other legal  representatives,  may have
under  employee  benefit  plans and  programs  of PESC or  Progress  Energy upon
Chatas' death during the Term of the  Agreement,  if any, shall be determined in
accordance with the terms and provisions of such plans and programs.

          (e) Termination Due to Medical Condition.

               (i) PESC may terminate Chatas' employment  hereunder,  subject to
the Americans  With  Disabilities  Act or other  applicable  law, due to medical
condition  if (1) for a period of 180  consecutive  days  during the Term of the
Agreement,   Chatas  is  totally  and  permanently  disabled  as  determined  in
accordance  with the Company's long term  disability  plan (LTD),  if any, as in
effect  during  such time;  or (2) at any time  during  which no such plan is in
effect,  Chatas is substantially  unable to perform his duties hereunder because
of a medical  condition for a period of 180 consecutive  days during the Term of
the  Agreement.  Provided,  however,  that if Chatas  applies  for and is deemed
qualified for benefits under the Progress Energy  sponsored Long Term Disability
Plan (LTD Benefits),  Chatas shall receive such benefits and his employment will
not be terminated as long as he is receiving LTD Benefits.

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               (ii) Upon the  termination  of Chatas'  employment due to medical
condition or any period during which Chatas is qualified for LTD Benefits,  PESC
shall have no  further  obligation  to Chatas  under  this  Agreement  except as
specifically provided in this Agreement.  Upon such termination or qualification
for LTD Benefits,  Chatas shall be entitled to all earned but unpaid Base Salary
accrued  to the date of  termination  or  placement  on LTD and any  short  term
incentive  for a prior fiscal year that has been earned but not paid.  The short
term incentive, if any, for the current fiscal year shall be calculated on a pro
rata basis for the portion of the fiscal year Chatas was  performing  the duties
of his  position  and  shall  be paid at the  regularly  scheduled  time for the
payment of the short term incentive.  Any continued  rights and benefits Chatas,
or Chatas'  legal  representatives,  may have under  employee  benefit plans and
programs of PESC or Progress Energy upon Chatas' termination or placement on LTD
due to medical  condition,  if any,  shall be determined in accordance  with the
terms and provisions of such plans and programs.

          (f)  Release of Claims.  In order to  receive  continuation  of salary
under  paragraph  10(a) or 10(b),  Chatas agrees to execute a written release of
all claims against PESC, and its employees,  officers,  directors,  subsidiaries
and affiliates, on a form acceptable to PESC.

          (g) Covenant Not to Compete.  If PESC  terminates  Chatas'  employment
without  Cause under  paragraph  10(a),  or if Chatas  becomes  eligible for the
benefits available under paragraph 10(a) as the result of a Change in Control as
set forth in paragraph 10(b),  Chatas,  for one year after the Termination Date,
shall not compete  directly or indirectly  with the Company,  or its  affiliates
within  fifty  (50)  miles of any  geographic  area in which the  Company or its
affiliates  has a material  business  interest with which Chatas was involved at
the time of his separation.

          (h) Non Interference.  If PESC terminates  Chatas'  employment without
Cause under  paragraph  10(a) or if Chatas  becomes  eligible  for the  benefits
available  under  paragraph  10(a) as the  result of a Change in  Control as set
forth in paragraph 10(b), Chatas, for one year after the Termination Date, shall
not  whether  on his  own  account  or on the  account  of  another  individual,
partnership,  firm, corporation,  or other business organization (other than the
Company and its  affiliates),  directly or  indirectly,  intentionally  solicit,
endeavor to entice away from the Company or any of its affiliates,  or otherwise
interfere with the relationship of the Company or its affiliates, any person who
is employed by or otherwise  engaged to perform  services for the Company or its
affiliates  including  but not limited to, any  independent  representatives  or
organizations,  or any person or entity that is a customer of the Company or its
affiliates.


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     11. ASSIGNABILITY.

          No rights  or  obligations  of  Chatas  under  this  Agreement  may be
assigned  or  transferred   by  Chatas,   except  that  (i)  Chatas'  rights  to
compensation  and  benefits  hereunder  may be  transferred  by  will or laws of
intestacy to the extent  specified herein and (ii) Chatas' rights under employee
benefit  plans or  programs  described  in  Sections 6 and 7 may be  assigned or
transferred in accordance  with the terms of such plans or programs,  or regular
practices  thereunder.  The  Company  may  assign or  transfer  its  rights  and
obligations under this Agreement.

     12. CONFIDENTIALITY.

          Chatas will not  disclose  the terms of this  Agreement  except (i) to
financial and legal advisors under an obligation to maintain confidentiality, or
(ii) as required by a valid court order or subpoena  (and in such event will use
his best efforts to obtain a protective  order requiring that all disclosures be
kept under court seal) and will notify PESC  promptly upon receipt of such order
or subpoena.

     13. MISCELLANEOUS.

          (a) Governing Law. This Agreement  shall be governed by, and construed
in accordance with, the laws of the State of North Carolina without reference to
laws governing conflicts of law.

          (b)   Entire   Agreement.   This   Agreement   contains   all  of  the
understandings and representations  between the parties hereto pertaining to the
subject matter hereof and supersedes all  undertakings  and agreements,  whether
oral or in  writing,  if any,  previously  entered  into  by them  with  respect
thereto.

          (c) Amendment or Modification;  Waiver. No provision in this Agreement
may be  amended  or  waived  unless  such  amendment  or  waiver is agreed to in
writing, signed by Chatas and by an officer of PESC thereunto duly authorized to
do so. Except as otherwise specifically provided in the Agreement,  no waiver by
a party  hereto of any  breach by the other  party  hereto of any  condition  or
provision of the Agreement to be performed by such other party shall be deemed a
waiver of a similar or  dissimilar  provision  or  condition  at the same or any
prior or subsequent time.

          (d) Notice. Any notice (with the exception of notice of termination by
PESC,  which may be given by any means and need not be in writing except that if
termination  is for Cause,  oral notice  must be followed by written  notice) or
other document or  communication  required or permitted to be given or delivered
hereunder  shall be in  writing  and shall be deemed to have been duly  given or
delivered  if (i)  mailed by  United  States  mail,  certified,  return  receipt
requested,  with proper postage prepaid,  or (ii) otherwise delivered by hand or
by  overnight  delivery,  against  written  receipt,  by  a  common  carrier  or
commercial  courier or delivery service,  to the party to whom it is to be given
at the address of such party as set forth  below (or to such other  address as a
party  shall  have  designated  by notice to the other  parties  given  pursuant
hereto):

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          If to Chatas:
                   Geoffrey  S. Chatas
                   Progress Energy Service Company, LLC
                   410 S. Wilmington Street
                   Raleigh, North Carolina 27601

          If to PESC:
                   Progress Energy Service Company, LLC
                   410 S. Wilmington Street
                   Raleigh, North Carolina 27601
                   Attn.:  Vice President of Human Resources

Any  such  notice,  request,  demand,  advice,  schedule,  report,  certificate,
direction,  instruction  or other  document or  communication  so mailed or sent
shall be deemed to have been duly given,  if sent by mail, on the third business
day following the date on which it was deposited at a United States post office,
and if delivered by hand, at the time of delivery by such commercial  courier or
delivery service,  and, if delivered by overnight delivery service, on the first
business day following the date on which it was delivered to the custody of such
common carrier or commercial courier or delivery service,  as all such dates are
evidenced  by the  applicable  delivery  receipt,  airbill or other  shipping or
mailing document.

          (e)  Severability.  In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining  provisions or portions of this Agreement shall be unaffected  thereby
and shall  remain in full force and effect to the fullest  extent  permitted  by
law.

          (f)  References.   In  the  event  of  Chatas'  death  or  a  judicial
determination  of Chatas'  incompetence,  reference in this  Agreement to Chatas
shall be deemed,  where appropriate,  to refer to Chatas' legal  representative,
or, where appropriate, to Chatas' beneficiary or beneficiaries.

          (g) Headings.  Headings contained herein are for convenient  reference
only and shall not in any way  affect  the  meaning  or  interpretation  of this
Agreement.

          (h)   Counterparts.   This   Agreement  may  be  executed  in  several
counterparts,  each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

          (i) Rules of  Construction.  The  following  rules  shall apply to the
construction and interpretation of this Agreement:

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               (1) Singular words shall connote the plural number as well as the
singular and vice versa,  and the  masculine  shall include the feminine and the
neuter.

               (2) All  references  herein to particular  articles,  paragraphs,
sections,  subsections,   clauses,  Schedules  or  Exhibits  are  references  to
articles, paragraphs,  sections, subsections,  clauses, Schedules or Exhibits of
this Agreement.

               (3) Each party and its  counsel  have  reviewed  and  revised (or
requested  revisions of) this Agreement,  and therefore any rule of construction
requiring that  ambiguities are to be resolved  against a particular party shall
not be applicable in the  construction and  interpretation  of this Agreement or
any exhibits hereto or amendments hereof.

               (4) As used in this Agreement,  "including" is illustrative,  and
means "including but not limited to."

          (j) Remedies.  Remedies specified in this Agreement are in addition to
any others available at law or in equity.

          (k)  Withholding  Taxes.  All payments under this  Agreement  shall be
subject  to  applicable   income,   excise  and   employment   tax   withholding
requirements.


     IN WITNESS WHEREOF,  the parties hereto have executed,  or have caused this
Agreement to be executed by their duly authorized  officer,  as the case may be,
all as of the day and year written below.

GEOFFREY S. CHATAS

/s/ Geoffrey S. Chatas                            Date:
--------------------------------------------           -----------------------

PROGRESS ENERGY SERVICE COMPANY, LLC


By:      /s/ Peter M. Scott III                   Date:
         -----------------------------------           -----------------------
         PETER M. SCOTT III
         PRESIDENT AND CHIEF EXECUTIVE OFFICER