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                                                                       Exhibit 1


                     NORTH CAROLINA NATURAL GAS CORPORATION

                            [Title of Debt Security]

                             UNDERWRITING AGREEMENT
                             ----------------------

                                                               ___________, ____


To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto

Dear Sirs:

  The undersigned North Carolina Natural Gas Corporation (the "Company") hereby
confirms its agreement with each of the several Underwriters hereinafter named
as follows:

  1.  Underwriters and Representative.  The term "Underwriters" as used herein
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shall be deemed to mean the firm or corporation or the several firms or
corporations named in Schedule II hereto and any underwriter substituted as
provided in paragraph 6, and the term "Underwriter" shall be deemed to mean one
of such Underwriters.  If the firm or firms listed in Schedule I hereto (the
"Representative") are the same as the firm or firms listed in Schedule II
hereto, then the terms "Underwriters" and "Representative," as used herein,
shall each be deemed to refer to such firm or firms.  The Representative
represents that it has been authorized by the Underwriters to execute this
Agreement on their behalf and to act for them in the manner herein provided.
All obligations of the Underwriters hereunder are several and not joint.  If
more than one firm is named in Schedule I hereto, any action under or in respect
of this Agreement may be taken by such firms jointly as the Representative or by
one of the firms acting on behalf of the Representative, and such action will be
binding upon all the Underwriters.

  2.  Description of Securities.  The Company proposes to issue and sell its
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debt securities of the designation, with the terms and in the amount specified
in Schedule I hereto (the "Securities") in one or more new series under a
governing indenture (the "Indenture") between the Company and
______________________, as trustee (the "Trustee"), in substantially the form
heretofore delivered to the Representative.

  3.  Representations and Warranties of the Company.  The Company represents and
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warrants to each of the Underwriters that:

          (a) The Company has filed with the Securities and Exchange Commission
     (the "Commission") a Registration Statement on Form S-3 (No. 333-_______)
     (the "Registration Statement") under the Securities Act of 1933, as amended
     (the "Securities Act"), for the registration of up to an aggregate of
     $300,000,000 of the Company's debt securities (the "Registered Securities")
     as described in the Registration Statement. As of the date hereof, the
     Company has sold Registered Securities in the aggregate amount of
     $_____________. The

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     Registration Statement has been declared effective by the Commission, and
     the Indenture has been qualified under the Trust Indenture Act of 1939 Act,
     as amended (the "1939 Act"). The term "Registration Statement" shall be
     deemed to include all amendments thereto to the date hereof and all
     documents incorporated by reference therein (the "Incorporated Documents").
     The prospectus included in the Registration Statement, as it is to be
     supplemented by a prospectus supplement, dated on or about the date hereof,
     relating to the Securities (the "Prospectus Supplement"), and all prior
     amendments or supplements thereto (other than amendments or supplements
     relating to securities of the Company other than the Securities), including
     the Incorporated Documents, is hereinafter referred to as the "Prospectus."
     Any reference herein to the terms "amend, " "amendment" or "supplement"
     with respect to the Registration Statement or the Prospectus shall be
     deemed to refer to and include the filing of any document under the
     Securities Exchange Act of 1934, as amended (the "Exchange Act"), deemed to
     be incorporated therein after the date hereof and prior to the termination
     of the offering of the Securities by the Underwriters; and any references
     herein to the terms "Registration Statement" or "Prospectus" at a date
     after the filing of the Prospectus Supplement shall be deemed to refer to
     the Registration Statement or the Prospectus, as the case may be, as each
     may be amended or supplemented prior to such date.

          (b) Prior to the termination of the offering of the Securities, the
     Company will not file any amendment to the Registration Statement or
     supplement to the Prospectus which shall not have previously been furnished
     to the Representative or of which the Representative shall not previously
     have been advised or to which the Representative shall reasonably object in
     writing and which has not been approved by the Underwriter(s) or their
     counsel acting on behalf of the Underwriters.

          (c) The Registration Statement, at the time and date it was declared
     effective by the Commission, complied, and the Registration Statement, the
     Prospectus and the Indenture, at the date the Prospectus is filed with, or
     transmitted for filing to, the Commission pursuant to Rule 424 under the
     Securities Act ("Rule 424") and at the Closing Date, will comply, in all
     material respects, with the applicable provisions of the Securities Act and
     the 1939 Act and the applicable rules and regulations of the Commission
     thereunder; the Registration Statement, at the time and date it was
     declared effective by the Commission, did not contain an untrue statement
     of a material fact or omit to state a material fact required to be stated
     therein or necessary to make the statements therein not misleading; and the
     Prospectus, at the date it is filed with, or transmitted for filing to, the
     Commission pursuant to Rule 424 and at the Closing Date, will not contain
     an untrue statement of a material fact or omit to state a material fact
     necessary in order to make the statements therein, in the light of the
     circumstances under which they were made, not misleading; provided,
     however, that the foregoing representations and warranties in this
     subparagraph (c) shall not apply to statements or omissions made in
     reliance upon and in conformity with information furnished herein or in
     writing to the Company by the Representative or by or on behalf of any
     Underwriter through the Representative expressly for use in the Prospectus
     or to any statements in or omissions from the Statement of Eligibility
     (Forms T-1) of the Trustee under any Indenture. The Incorporated Documents,
     when they were filed with the Commission, complied in all material respects
     with the applicable requirements of the Exchange Act and the rules and
     regulations of the Commission thereunder; and any documents so filed and
     incorporated by reference subsequent to the date hereof and prior to the
     termination of the offering of the Securities by the Underwriters will,
     when they are filed with the Commission, comply in all material respects
     with the requirements of the Exchange Act and the rules and regulations of
     the Commission thereunder; and, when read together with the

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     Registration Statement and the Prospectus, none of such documents included
     or includes or will include any untrue statement of a material fact or
     omitted or omits or will omit to state any material fact required to be
     stated therein or necessary to make the statements therein, in the light of
     the circumstances under which they were made, not misleading.

          (d) The financial statements incorporated by reference in the
     Registration Statement present fairly the financial condition and
     operations of the Company at the respective dates or for the respective
     periods to which they apply; such financial statements have been prepared
     in each case in accordance with generally accepted accounting principles
     consistently applied throughout the periods involved; and ______________,
     who have audited certain of the financial statements, are independent
     public or independent certified public accountants as required by the
     Securities Act or the Exchange Act and the rules and regulations of the
     Commission thereunder.

          (e) Except as reflected in, or contemplated by, the Registration
     Statement and the Prospectus, since the respective dates as of which
     information is given in the Registration Statement and Prospectus, and
     prior to the Closing Date, there has not been any material adverse change
     in the financial condition, earnings, business affairs or business
     prospects of the Company; and since such dates and prior to the Closing
     Date, there has not been any material transaction entered into by the
     Company other than transactions contemplated by the Registration Statement
     and Prospectus or transactions arising in the ordinary course of business.
     The Company has no material contingent obligation that is not disclosed in
     the Registration Statement and Prospectus.

          (f) The consummation of the transactions herein contemplated and the
     fulfillment of the terms hereof on the part of the Company to be fulfilled
     have been duly authorized by all necessary corporate action of the Company
     in accordance with the provisions of its charter (the "Charter"), by-laws
     and applicable law.

          (g) The consummation of the transactions herein contemplated and the
     fulfillment of the terms hereof will not result in a breach of any of the
     terms or provisions of, or constitute a default under, the Charter, the
     Company's by-laws, applicable law or any indenture, mortgage, deed of trust
     or other agreement or instrument to which the Company is now a party or any
     judgment, order, writ or decree of any government or governmental authority
     or agency or court having jurisdiction over the Company or any of its
     subsidiaries or any of their assets, properties or operations.

          (h) The Securities conform in all material respects to the description
     contained in the Prospectus.

          (i) The Company has been duly incorporated and is validly existing as
     a corporation in good standing under the laws of the State of Delaware with
     corporate power and authority to own, lease and operate its properties and
     to conduct its business as contemplated under this Underwriting Agreement
     and the other agreements to which it is a party, and the Company is duly
     qualified as a foreign corporation to transact business and is in good
     standing in each jurisdiction in which such qualification is required,
     whether by reason of the ownership or leasing of property or the conduct of
     business, except where the failure to so qualify would not have a material
     adverse effect on the financial condition, earnings, business affairs or
     business prospects of the Company and its subsidiaries considered as a
     whole.

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          (j) The outstanding capital stock of the Company has been duly
     authorized and validly issued and is fully paid and non-assessable and is
     not subject to preemptive or other similar rights.

          (k) The Company does not have any significant subsidiaries as defined
     in Rule 1-02 of Regulation S-X promulgated under the Securities Act.

          (l) The Indenture (A) has been duly authorized, executed and delivered
     by the Company, and, assuming due authorization, execution and delivery by
     the Trustee, constitutes a valid and legally binding obligation of the
     Company, enforceable against the Company in accordance with its terms,
     subject to (i) applicable bankruptcy, insolvency, reorganization,
     moratorium, fraudulent transfer or similar laws affecting creditor's rights
     generally and (ii) general principles of equity (regardless of whether such
     enforceability is considered in a proceeding at law or in equity and except
     the effect on enforceability of federal or state law limiting, delaying or
     prohibiting the making of payments outside the United States); and (B)
     conforms in all material respects to the description thereof in the
     Prospectus.

          (m) The Securities have been duly authorized by the Company and, when
     issued and authenticated in the manner provided for in the Indenture and
     delivered against payment of the required consideration therefor, will
     constitute valid and legally binding obligations of the Company, entitled
     to the benefits of the Indenture enforceable against the Company in
     accordance with its terms, subject to (i) applicable bankruptcy,
     insolvency, reorganization, moratorium, fraudulent transferor or similar
     laws affecting creditors' rights generally and (ii) general principles of
     equity (regardless of whether such enforceability is considered in a
     proceeding at law or in equity and except the effect on enforceability of
     federal or state law limiting, delaying or prohibiting the making of
     payments outside the United States).  Such Securities rank and will rank on
     a parity with all unsecured and unsubordinated indebtedness of the Company
     that is outstanding on the date hereof.

          (n) Neither the Company nor any of its subsidiaries is an "investment
     company" within the meaning of the Investment Company Act of 1940, as
     amended (the "1940 Act").

          (o)  Except as described in or contemplated by the Prospectus, there
     are no pending actions, suits or proceedings against or affecting the
     Company or any of its subsidiaries or properties which are likely in the
     aggregate, to result in any material adverse change in the financial
     condition, earnings, business affairs, or business prospects of the Company
     and its subsidiaries considered as a whole or which are likely in the
     aggregate to materially and adversely affect the consummation of this
     Agreement or the transactions contemplated herein or therein.

          (p) No filing with, or authorization, approval, consent, license,
     order, registration, qualification or decree of, any court or governmental
     authority or agency is necessary or required for the performance by the
     Company of its obligations hereunder in connection with the offering,
     issuance or sale of the Securities hereunder or the consummation of the
     transactions herein contemplated or for the due execution, delivery or
     performance of the Indenture by the Company, except such as have been
     already obtained or as may be required under the Securities Act or state
     securities laws and except for the qualification of the Indenture under the
     1939 Act.

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  4.  Purchase and Sale.  On the basis of the representations, warranties and
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covenants herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each of the Underwriters, severally and not
jointly, and each such Underwriter agrees, severally and not jointly, to
purchase from the Company, the respective principal amount of Securities set
forth opposite the name of such Underwriter in Schedule II hereto at the
purchase price set forth in Schedule I hereto.

  5.  Reoffering by Underwriters.  The Underwriters agree to make promptly a
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bona fide public offering of the Securities to the public for sale as set forth
in the Prospectus, subject, however, to the terms and conditions of this
Agreement.

  6.  Time and Place of Closing; Default of Underwriters.
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          (a) Payment for the Securities shall be made at the place, time and
     date specified in Schedule I hereto against delivery of the Securities at
     the office of ________________ [name and address of the Trustee], or such
     other place, time and date as the Representative and the Company may agree.
     The hour and date of such delivery and payment are herein called the
     "Closing Date." Payment for the Securities shall be by wire transfer of
     immediately available funds against delivery to The Depository Trust
     Company or to _________________, as custodian for The Depository Trust
     Company, in fully registered global form registered in the name of Cede &
     Co., for the respective accounts specified by the Representative not later
     than the close of business on the business day prior to the Closing Date or
     such other date and time not later than the Closing Date as agreed by The
     Depository Trust Company or _____________________. For the purpose of
     expediting the checking of the certificates by the Representative, the
     Company agrees to make the Securities available to the Representative not
     later than 10:00 A.M., on the last full business day prior to the Closing
     Date at said office of ________________ [the Trustee].

          (b) If one or more of the Underwriters shall, for any reason permitted
     hereunder, cancel its obligation to purchase hereunder and to take up and
     pay for the principal amount of the Securities to be purchased by such one
     or more Underwriters, the Company shall immediately notify the
     Representative, and the remaining Underwriters shall have the right, within
     24 hours of receipt of such notice, either to take up and pay for (in such
     proportion as may be agreed upon among them) or to substitute another
     Underwriter or Underwriters, satisfactory to the Company, to take up and
     pay for the principal amount of the Securities which such one or more
     Underwriters did not purchase.  If one or more Underwriters shall, for any
     reason other than a reason permitted hereunder, fail to take up and pay for
     the principal amount of the Securities to be purchased by such one or more
     Underwriters, the Company shall immediately notify the Representative, and
     the remaining Underwriters shall be obligated to take up and pay for (in
     addition to the respective principal amount of the Securities set forth
     opposite their respective names in Schedule II hereto) the principal amount
     of the Securities which such defaulting Underwriter or Underwriters failed
     to take up and pay for, up to a principal amount thereof equal to, in the
     case of each such remaining Underwriter, 10% of the principal amount of the
     Securities set forth opposite the name of such remaining Underwriter in
     said Schedule II, and such remaining Underwriters shall have the right,
     within 24 hours of receipt of such notice, either to take up and pay for
     (in such proportion as may be agreed upon among them), or to substitute
     another Underwriter or Underwriters, satisfactory to the Company, to take
     up and pay for, the remaining principal amount of the Securities which the
     defaulting Underwriter or Underwriters agreed but failed to purchase.  If
     any unpurchased Securities still remain, then the Company or the
     Representative shall be entitled to an additional period of 24 hours within
     which to procure

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     another party or parties, members of the National Association of Securities
     Dealers, Inc. (or if not members of such Association, who are not eligible
     for membership in said Association and who agree (i) to make no sales
     within the United States, its territories or its possessions or to persons
     who are citizens thereof or residents therein and (ii) in making sales to
     comply with said Association's Rules of Fair Practice) and satisfactory to
     the Company, to purchase or agree to purchase such unpurchased Securities
     on the terms herein set forth. In any such case either the Representative
     or the Company shall have the right to postpone the Closing Date for a
     period not to exceed three full business days from the date agreed upon in
     accordance with this paragraph 6, in order that the necessary changes in
     the Registration Statement and Prospectus and any other documents and
     arrangements may be effected. If (i) neither the non-defaulting
     Underwriters nor the Company has arranged for the purchase of such
     unpurchased Securities by another party or parties as above provided and
     (ii) the Company and the non-defaulting Underwriters have not mutually
     agreed to offer and sell the Securities other than the unpurchased
     Securities, then this Agreement shall terminate without any liability on
     the part of the Company or any Underwriter (other than an Underwriter which
     shall have failed or refused, in accordance with the terms hereof, to
     purchase and pay for the principal amount of the Securities which such
     Underwriter has agreed to purchase as provided in paragraph 4 hereof),
     except as otherwise provided in paragraph 7 and paragraph 8 hereof.

  7.  Covenants of the Company.  The Company covenants with each Underwriter
      ------------------------
that:

          (a) As soon as possible after the execution and delivery of this
     Agreement, the Company will file the Prospectus with the Commission
     pursuant to Rule 424, setting forth, among other things, the necessary
     information with respect to the terms of offering of the Securities. The
     Company will promptly deliver to the Representative and to counsel for the
     Underwriters, to the extent not previously delivered, one fully executed
     copy or one conformed copy, certified by an officer of the Company, of the
     Registration Statement, as originally filed, and of all amendments thereto,
     heretofore or hereafter made, (other than those relating solely to
     securities other than the Securities), including any post-effective
     amendment (in each case including all exhibits filed therewith and all
     documents incorporated therein not previously furnished to the
     Representative), including signed copies of each consent and certificate
     included therein or filed as an exhibit thereto, and will deliver to the
     Representative for distribution to the Underwriters as many conformed
     copies of the foregoing (excluding the exhibits, but including all
     documents incorporated therein) as the Representative may reasonably
     request. The Company will also send to the Underwriters as soon as
     practicable after the date of this Agreement and thereafter from time to
     time as many copies of the Prospectus as the Representative may reasonably
     request for the purposes required by the Securities Act.

          (b) During such period (not exceeding nine months) after the
     commencement of the offering of the Securities as the Underwriters may be
     required by law to deliver a Prospectus, if any event relating to or
     affecting the Company, or of which the Company shall be advised in writing
     by the Representative shall occur, which in the Company's opinion should be
     set forth in a supplement to or an amendment of the Prospectus in order to
     make the Prospectus not misleading in the light of the circumstances when
     it is delivered to a purchaser, or if it is necessary to amend the
     Prospectus to comply with the Securities Act, the Company will forthwith at
     its expense prepare and furnish to the Underwriters and dealers named by
     the Representative a reasonable number of copies of a supplement or
     supplements or an amendment or amendments to the Prospectus which will
     supplement or amend the Prospectus so that as supplemented or amended it
     will comply with the Securities Act and will not contain any untrue

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     statement of a material fact or omit to state any material fact necessary
     in order to make the statements therein, in the light of the circumstances
     when the Prospectus is delivered to a purchaser, not misleading. In case
     any Underwriter is required to deliver a Prospectus after the expiration of
     nine months after the commencement of the offering of the Securities, the
     Company, upon the request of the Representative, will furnish to the
     Representative, at the expense of such Underwriter, a reasonable quantity
     of a supplemented or amended prospectus, or supplements or amendments to
     the Prospectus, complying with Section 10(a) of the Securities Act.

          (c) The Company will make generally available to its security holders,
     as soon as reasonably practicable, but in any event not later than 16
     months after the end of the fiscal quarter in which the filing of the
     Prospectus pursuant to Rule 424 occurs, an earning statement (in form
     complying with the provisions of Section 11(a) of the Securities Act, which
     need not be certified by independent public accountants) covering a period
     of twelve months beginning not later than the first day of the Company's
     fiscal quarter next following the filing of the Prospectus pursuant to Rule
     424.

          (d) The Company will use its best efforts promptly to do and perform
     all things to be done and performed by it hereunder prior to the Closing
     Date and to satisfy all conditions precedent to the delivery by it of the
     Securities.

          (e) The Company will advise the Representative promptly of the filing
     of the Prospectus pursuant to Rule 424 and of any amendment or supplement
     to the Prospectus or Registration Statement or of official notice of
     institution of proceedings for, or the entry of, a stop order suspending
     the effectiveness of the Registration Statement and, if such a stop order
     should be entered, use its best efforts to obtain the prompt removal
     thereof.

          (f) The Company will use its best efforts to qualify the Securities,
     as may be required, for offer and sale under the Blue Sky or legal
     investment laws of such jurisdictions as the Representative may designate,
     and will file and make in each year such statements or reports as are or
     may be reasonably required by the laws of such jurisdictions; provided,
     however, that the Company shall not be required to qualify as a foreign
     corporation or dealer in securities, or to file any general consents to
     service of process under the laws of any jurisdiction.

  8.  Payment of Expenses.  The Company will pay all expenses incident to the
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performance of its obligations under this Agreement, including (i) the printing
and filing of the Registration Statement and the printing of this Agreement,
(ii) the delivery of the Securities to the Underwriters, (iii) the fees and
disbursements of the Company's counsel and accountants, (iv) the expenses in
connection with the qualification of the Securities under securities laws in
accordance with the provisions of paragraph 7(f), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith,
and in connection with the preparation of the Blue Sky Survey and any Legality
Memorandum, such fees and disbursements not to exceed $5,000, (v) the printing
and delivery to the Underwriters of copies of the Registration Statement and all
amendments thereto, of the preliminary prospectuses, and of the Prospectus and
any amendments or supplements thereto, (vi) the printing and delivery to the
Underwriters of copies of the Blue Sky Survey and Legality Memorandum, and (vii)
the preparation, execution, filing and recording by the Company of the Indenture
(such filing and recordation to be promptly made, after execution and delivery
of such Indenture to the Trustee under the Indenture in the counties in which
the mortgaged property of the Company is located); and the Company will pay all

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taxes, if any (but not including any transfer taxes), on the issue of the
Securities and the filing and recordation of the Indenture.

  The fees and disbursements of  Underwriters' counsel shall be paid by the
Underwriters (subject, however, to the provisions of the preceding paragraph
requiring payment by the Company of fees and expenses not to exceed $5,000);
provided, however, that if this Agreement is terminated in accordance with the
provisions of paragraph 9, 10 or 12, the Company shall reimburse the
Representative for the account of the Underwriters for the fees and
disbursements of Underwriters' counsel.  The Company shall not be required to
pay any amount for any expenses of the Representative or of any other of the
Underwriters except as provided in paragraph 7 and in this paragraph 8.  The
Company shall not in any event be liable to any of the Underwriters for damages
on account of the loss of anticipated profit.

  9.  Conditions of Underwriters' Obligations.  The several obligations of the
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Underwriters to purchase and pay for the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company as of
the date hereof and the Closing Date, to the performance by the Company of its
obligations to be performed hereunder prior to the Closing Date, and to the
following further conditions:

          (a) No stop order suspending the effectiveness of the Registration
     Statement shall be in effect on the Closing Date; no proceedings for that
     purpose shall be pending before, or, to the Company's knowledge, threatened
     by, the Commission on the Closing Date; and the Representative shall have
     received, prior to payment for the Securities, a certificate dated the
     Closing Date and signed by the Chairman, President or a Vice President of
     the Company to the effect that no such stop order is in effect and that no
     proceedings for such purpose are pending before or, to the knowledge of the
     Company, threatened by the Commission.

          (b) At the time of execution of this Agreement, or such later date as
     shall have been consented to by the Representative, there shall have been
     issued and on the Closing Date there shall be in full force and effect
     orders of the North Carolina Utilities Commission authorizing the issuance
     and sale of the Securities, none of which shall contain any provision
     unacceptable to the Representative by reason of its being materially
     adverse to the Company (it being understood that no such order in effect on
     the date of this Agreement and heretofore furnished to the Representative
     or counsel for the Underwriters, contains any such unacceptable provision).

          (c) At the Closing Date, the Representative shall receive favorable
     opinions from: (1) Hunton & Williams, of counsel to the Company, which
     opinion shall be satisfactory in form and substance to counsel for the
     Underwriters, and (2) counsel for the Underwriters (which counsel may rely
     as to all matters of North Carolina law upon the opinions of William D.
     Johnson, Esq., counsel to and Secretary for the Company) to the effect
     that:

                (i) the Indenture has been duly and validly authorized by all
          necessary corporate action, has been duly and validly executed and
          delivered, and is a valid and legally binding obligation of the
          Company enforceable in accordance with its terms, except as limited by
          bankruptcy, insolvency or other laws affecting the rights of
          mortgagees and other creditors, and by general equitable principles
          and any implied covenant of good faith and fair dealings;

                (ii) the Indenture has been duly qualified under the 1939 Act;

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                (iii) assuming authentication by the Trustee in accordance with
          the Indenture and delivery to and payment for the Securities by the
          Underwriters, as provided in this Agreement, the Securities have been
          duly and validly authorized, executed and delivered and are legal,
          valid and binding obligations of the Company enforceable in accordance
          with their terms, except as limited by bankruptcy, insolvency or other
          laws affecting the rights of mortgagees and other creditors, and by
          general equitable principles and any implied covenant of good faith
          and fair dealings, and are entitled to the benefits of the Indenture;

                (iv) the statements made in the Prospectus under the caption
          "Description of Debt Securities" and in the Prospectus Supplement
          under the caption "Description of the Notes," insofar as they purport
          to constitute summaries of the documents referred to therein, are
          correct in all material respects;

                (v) this Agreement has been duly and validly authorized,
          executed and delivered by the Company;

                (vi) the Registration Statement, at the time and date it was
          declared effective by the Commission, and the Prospectus, at the time
          it was filed with, or transmitted for filing to, the Commission
          pursuant to Rule 424, (except as to the financial statements and other
          financial and statistical data constituting a part thereof or
          incorporated by reference therein, upon which such opinions need not
          pass), complied as to form in all material respects with the
          requirements of the Securities Act and the 1939 Act and the applicable
          instructions, rules and regulations of the Commission thereunder; the
          documents or portions thereof filed with the Commission pursuant to
          the Exchange Act and deemed to be incorporated by reference in the
          Registration Statement and the Prospectus pursuant to Item 12 of Form
          S-3 (except as to financial statements and other financial and
          statistical data constituting a part thereof or incorporated by
          reference therein, upon which such opinions need not pass), at the
          time they were filed with the Commission, complied as to form in all
          material respects with the requirements of the Exchange Act and the
          applicable instructions, rules and regulations of the Commission
          thereunder; the Registration Statement has become effective under the
          Securities Act and, to the best of the knowledge of said counsel, no
          stop order suspending the effectiveness of the Registration Statement
          has been issued and not withdrawn and no proceedings for a stop order
          with respect thereto are threatened or pending under Section 8 of the
          Securities Act;

                (vii) nothing has come to the attention of said counsel that
          would lead them to believe that the Registration Statement, at the
          time and date it was declared effective by the Commission, contained
          an untrue statement of a material fact or omitted to state a material
          fact required to be stated therein or necessary to make the statements
          therein not misleading or that the Prospectus, at the time it was
          filed with, or transmitted for filing to, the Commission pursuant to
          Rule 424 or at the Closing Date, included or includes an untrue
          statement of a material fact or omitted or omits to state a material
          fact necessary in order to make the statements therein, in the light
          of the circumstances under which they were made, not misleading
          (except as to financial statements and other financial and statistical
          data constituting a part of the Registration Statement or the
          Prospectus or incorporated by reference therein, upon which such
          opinions need not pass); and

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                (viii) orders have been entered by the North Carolina Utilities
          Commission authorizing the issuance and sale of the Securities; to the
          best of the knowledge of said counsel, said orders are still in force
          and effect; and no further filing with, approval, authorization,
          consent or other order of, any public board or body (except such as
          have been obtained under the Securities Act and as may be required
          under the state securities or Blue Sky laws of any jurisdiction) is
          legally required for the consummation of the transactions contemplated
          in this Agreement.

          (d) At the Closing Date, the Representative shall receive from William
     D. Johnson, Esq., counsel to and Secretary for the Company, a favorable
     opinion in form and substance satisfactory to counsel for the Underwriters,
     to the same effect with respect to the matters enumerated in subdivisions
     (i) through (v) and subdivisions (vii) and (viii) of subparagraph (c) of
     this paragraph 9 as the opinions required by said subparagraph (c), and to
     the further effect that:

                (i) the Company is a validly organized and existing corporation
          and is in good standing under the laws of the State of Delaware and is
          duly qualified to do business and is doing business in the State of
          North Carolina;

                (ii) the Company is duly authorized by its Charter to conduct
          the business which it is now conducting as set forth in the
          Prospectus;

                (iii) the issuance and sale of the Securities have been duly
          authorized by all necessary corporate action on the part of the
          Company;

                (iv) except as described in or contemplated by the Prospectus,
          there are no pending actions, suits or proceedings against or
          affecting the Company or any of its subsidiaries or properties which
          are likely in the aggregate, to result in any material adverse change
          in the business, property, financial condition, earnings, business
          affairs, or business prospects of the Company and its subsidiaries
          considered as a whole or which are likely in the aggregate, to
          materially and adversely affect the consummation of this Agreement or
          the transactions contemplated herein or therein; and

                (v) the consummation of the transactions herein contemplated and
          the fulfillment of the terms hereof will not result in a breach of any
          of the terms or provisions of, or constitute a default under, the
          Charter, the Company's by-laws, applicable law or any indenture,
          mortgage, deed of trust or other agreement or instrument to which the
          Company is now a party or any judgment, order, writ or decree of any
          government or governmental authority or agency or court having
          jurisdiction over the Company or any of its subsidiaries or any of
          their assets, properties or operations.

          (e) At the Closing Date, the Representative shall have received from
     ______________ a letter, dated the Closing Date, confirming that they are
     independent certified public accountants within the meaning of the
     Securities Act and the Exchange Act, and of the applicable published rules
     and regulations thereunder, and stating in effect that: (i) in their
     opinion, the audited financial statements incorporated by reference in the
     Registration Statement comply as to form in all material respects with the
     applicable accounting requirements of the Securities Act or the Exchange
     Act, as applicable, and of the published rules and regulations thereunder;
     (ii) based on the performance of the procedures specified by the American
     Institute of Certified Public Accountants for review of interim financial
     information as described in

                                       10
<PAGE>

     Statement on Auditing Standards ("SAS") No. 71, Interim Financial
                                                     -----------------
     Information, on the unaudited financial statements incorporated by
     -----------
     reference in the Registration Statement, inquiries of officials of the
     Company responsible for financial and accounting matters and reading the
     minutes of meetings of the Board of Directors, of the Executive Committee
     of the Board of Directors and of the shareholders, nothing came to their
     attention that caused them to believe that (A) the unaudited financial
     statements incorporated by reference in the Registration Statement do not
     comply as to form in all material respects with the applicable accounting
     requirements of the Securities Act or the Exchange Act, as applicable, and
     the published rules and regulations thereunder or any material
     modifications should be made for them to be in conformity with generally
     accepted accounting principles applied on a basis substantially consistent
     with that of the most recent audited financial statements incorporated by
     reference in the Registration Statement; or (B) at the date of the latest
     available interim balance sheet read by them and at a subsequent date not
     more than three days prior to the date of the letter, there was any change
     in the capital stock or long-term debt of the Company, or at the date of
     the latest available interim balance sheet read by them, there was any
     decrease in net assets as compared with the amount shown on the most recent
     balance sheet incorporated by reference in the Registration Statement,
     except for changes or decreases that the Registration Statement discloses
     have occurred or may occur, for declarations of dividends, for common stock
     sales under _________________ [employee benefit plans], or for changes or
     decreases that are described in the letter; and (iii) covering such other
     matters as the Representative shall reasonably request.

          (f) At the Closing Date, the Representative shall receive a
     certificate of the Chairman, President or a Vice President of the Company,
     dated the Closing Date, to the effect that the representations and
     warranties of the Company in this Agreement are true and correct as of the
     Closing Date.

          (g) All legal proceedings taken in connection with the sale and
     delivery of the Securities shall have been satisfactory in form and
     substance to counsel for the Underwriters.

  In case any of the conditions specified above in this paragraph 9 shall not
have been fulfilled or waived by 2:00 P.M. on the Closing Date, this Agreement
may be terminated by the Representative by delivering written notice thereof to
the Company.  Any such termination shall be without liability of any party to
any other party except as otherwise provided in paragraphs 7 and 8.

  10.  Conditions of the Company's Obligations.  The obligations of the Company
       ---------------------------------------
to deliver the Securities shall be subject to the following conditions:

          (a) No stop order suspending the effectiveness of the Registration
     Statement shall be in effect on the Closing Date, and no proceedings for
     that purpose shall be pending before or threatened by the Commission on the
     Closing Date.

          (b) Prior to 12:00 Noon, New York Time, on the day following the date
     of this Agreement, or such later date as shall have been consented to by
     the Company, there shall have been issued and on the Closing Date there
     shall be in full force and effect orders of the North Carolina Utilities
     Commission authorizing the issuance and sale by the Company of the
     Securities, none of which shall contain any provision unacceptable to the
     Company by reason of its being materially adverse to the Company (it being
     understood that no such order in effect as of the date of this Agreement
     contains any such unacceptable provision).

                                       11
<PAGE>

  In case any of the conditions specified in this paragraph 10 shall not have
been fulfilled at the Closing Date, this Agreement may be terminated by the
Company by mailing or delivering written notice thereof to the Representative.
Any such termination shall be without liability of any party to any other party
except as otherwise provided in paragraphs 7 and 8.

  11.  Indemnification.
       ---------------

          (a) The Company agrees to indemnify and hold harmless each Underwriter
     and each person who controls any Underwriter within the meaning of Section
     15 of the Securities Act against any and all losses, claims, damages or
     liabilities, joint or several, to which they or any of them may become
     subject under the Securities Act or under any other statute or common law
     and to reimburse each such Underwriter and each such controlling person for
     any legal or other expenses (including to the extent hereinafter provided,
     reasonable counsel fees) incurred by them, when and as incurred, in
     connection with investigating any such losses, claims, damages or
     liabilities or in connection with defending any actions, insofar as such
     losses, claims, damages, liabilities, expenses or actions arise out of or
     are based upon any untrue statement, or alleged untrue statement, of a
     material fact contained in the Registration Statement, any preliminary
     prospectus or the Prospectus, or in the Registration Statement or
     Prospectus as amended or supplemented (if any amendments or supplements
     thereto shall have been furnished), or the omission or alleged omission to
     state therein a material fact required to be stated therein or necessary to
     make the statements therein not misleading; provided, however, that the
     indemnity agreement contained in this paragraph 11 shall not apply to any
     such losses, claims, damages, liabilities, expenses or actions arising out
     of, or based upon any such untrue statement or alleged untrue statement, or
     any such omission or alleged omission, if such statement or omission was
     made in reliance upon and in conformity with information furnished herein
     or in writing to the Company by any Underwriter through the Representative
     for use in the Registration Statement, any preliminary prospectus or the
     Prospectus, or any amendment or supplement to either thereof, or arising
     out of, or based upon, statements in or omissions from that part of the
     Registration Statement which shall constitute the Statement of Eligibility
     under the 1939 Act (Forms T-1) of the Trustee under the Indenture, and
     provided, further, that the indemnity agreement contained in this paragraph
     11 shall not inure to the benefit of any Underwriter (or of any person
     controlling such Underwriter) on account of any such losses, claims,
     damages, liabilities, expenses or actions arising from the sale of the
     Securities to any person if a copy of the Prospectus (excluding documents
     incorporated by reference therein) shall not have been given or sent to
     such person by or on behalf of such Underwriter with or prior to the
     written confirmation of the sale involved, unless such Prospectus failed to
     correct the omission or misstatement. The indemnity agreement of the
     Company contained in this paragraph 11 and the representations and
     warranties of the Company contained in paragraph 3 hereof shall remain
     operative and in full force and effect regardless of any investigation made
     by or on behalf of any Underwriter or any such controlling person and shall
     survive the delivery of the Securities. The Underwriters agree to notify
     promptly the Company, and each other Underwriter, of the commencement of
     any litigation or proceedings against them or any of them, or any such
     controlling person, in connection with the sale of the Securities.

          (b) Each Underwriter severally, and not jointly, agrees to indemnify
     and hold harmless the Company, its officers and directors, and each person
     who controls the Company within the meaning of Section 15 of the Securities
     Act, against any and all losses, claims, damages or liabilities, joint or
     several, to which they or any of them may become subject under the
     Securities Act or under any other statute or common law, and to reimburse
     each of them for

                                       12
<PAGE>

     any legal or other expenses (including, to the extent hereinafter provided,
     reasonable counsel fees) incurred by them, when and as incurred, in
     connection with investigating any such losses, claims, damages, or
     liabilities, or in connection with defending any actions, insofar as such
     losses, claims, damages, liabilities, expenses or actions arise out of or
     are based upon any untrue statement or alleged untrue statement of a
     material fact contained in the Registration Statement, any preliminary
     prospectus or the Prospectus as amended or supplemented (if any amendments
     or supplements thereto shall have been furnished), or the omission or
     alleged omission to state therein a material fact required to be stated
     therein or necessary to make the statements therein not misleading, if such
     statement or omission was made in reliance upon and in conformity with
     information furnished herein or in writing to the Company by such
     Underwriter or through the Representative on behalf of such Underwriter for
     use in the Registration Statement, any preliminary prospectus or the
     Prospectus or any amendment or supplement to either thereof. The indemnity
     agreement of all the respective Underwriters contained in this paragraph 11
     shall remain operative and in full force and effect regardless of any
     investigation made by or on behalf of the Company or any other Underwriter,
     or any such controlling person, and shall survive the delivery of the
     Securities. The Company agrees promptly to notify the Representative of the
     commencement of any litigation or proceedings against the Company or any of
     its officers or directors, or any such controlling person, in connection
     with the sale of the Securities.

          (c) The Company and each of the Underwriters agree that, upon the
     receipt of notice of the commencement of any action against it, its
     officers and directors, or any person controlling it as aforesaid, in
     respect of which indemnity may be sought on account of any indemnity
     agreement contained herein, it will promptly give written notice of the
     commencement thereof to the party or parties against whom indemnity shall
     be sought hereunder. The Company and each of the Underwriters agree that
     the notification required by the preceding sentence shall be a material
     term of this Agreement. The omission so to notify such indemnifying party
     or parties of any such action shall relieve such indemnifying party or
     parties from any liability which it or they may have to the indemnified
     party on account of any indemnity agreement contained herein if such
     indemnifying party was materially prejudiced by such omission, but shall
     not relieve such indemnifying party or parties from any liability which it
     or they may have to the indemnified party otherwise than on account of such
     indemnity agreement. In case such notice of any such action shall be so
     given, such indemnifying party shall be entitled to participate at its own
     expense in the defense or, if it so elects, to assume (in conjunction with
     any other indemnifying parties) the defense of such action, in which event
     such defense shall be conducted by counsel chosen by such indemnifying
     party (or parties) and satisfactory to the indemnified party or parties who
     shall be defendant or defendants in such action, and such defendant or
     defendants shall bear the fees and expenses of any additional counsel
     retained by them; but if the indemnifying party shall elect not to assume
     the defense of such action, such indemnifying parties will reimburse such
     indemnified party or parties for the reasonable fees and expenses of any
     counsel retained by them, as such expenses are incurred; provided, however,
     if the defendants (including any impleaded parties) in any such action
     include both the indemnified party and the indemnifying party, and counsel
     for the indemnified party shall have concluded, in its reasonable judgment,
     that there may be a conflict of interest involved in the representation by
     such counsel of both the indemnifying party and the indemnified party, the
     indemnified party or parties shall have the right to select separate
     counsel, satisfactory to the indemnifying party, to participate in the
     defense of such action on behalf of such indemnified party or parties (it
     being understood, however, that the indemnifying party shall not be liable
     for the expenses of more than one separate counsel representing the
     indemnified parties who are parties to such action).

                                       13
<PAGE>

          (d) If the indemnification provided for in subparagraphs (a) or (b)
     above is for any reason unavailable to or insufficient to hold harmless an
     indemnified party in respect of any losses, liabilities, claims, damages or
     expenses referred to therein, then each indemnifying party shall contribute
     to the aggregate amount of such losses, liabilities, claims, damages and
     expenses incurred by such indemnified party, as incurred, (i) in such
     proportion as is appropriate to reflect the relative benefits received by
     the Company, on the one hand, and the Underwriters, on the other hand, from
     the offering of the Securities pursuant to this Agreement or (ii) if the
     allocation provided by clause (i) is not permitted by applicable law, in
     such proportion as is appropriate to reflect not only the relative benefits
     referred to in clause (i) above but also the relative fault of the Company,
     on the one hand, and of the Underwriters, on the other hand, in connection
     with the statements or omissions which resulted in such losses,
     liabilities, claims, damages or expenses, as well as any other relevant
     equitable considerations. The relative benefits received by the Company, on
     the one hand, and the Underwriters, on the other hand, in connection with
     the offering of the Securities pursuant to this Agreement shall be deemed
     to be in the same respective proportions as the total net proceeds from the
     offering of the Securities pursuant to this Agreement (before deducting
     expenses) received by the Company and the total underwriting discount
     received by the Underwriters, in each case as set forth on the cover of the
     Prospectus, bear to the aggregate initial public offering price of the
     Securities as set forth on such cover. The relative fault of the Company,
     on the one hand, and the Underwriters, on the other hand, shall be
     determined by reference to, among other things, whether the untrue or
     alleged untrue statement of a material fact or omission or alleged omission
     to state a material fact relates to information supplied by the Company or
     by the Underwriters and the parties' relative intent, knowledge, access to
     information and opportunity to correct or prevent such statement or
     omission. The Company and the Underwriters agree that it would not be just
     and equitable if contribution pursuant to this paragraph (d) were
     determined by pro rata allocation (even if the Underwriters were treated as
     one entity for such purpose) or by any other method of allocation which
     does not take account of the equitable considerations referred to above in
     this paragraph (d). No person guilty of fraudulent misrepresentation
     (within the meaning of Section 11(f) of the Securities Act) shall be
     entitled to contribution from any person who was not guilty of such
     fraudulent misrepresentation. For purposes of this paragraph (d), each
     person, if any, who controls an Underwriter within the meaning of Section
     15 of the Securities Act or Section 20 of the Exchange Act shall have the
     same rights to contribution as such Underwriter, and each director of the
     Company, each officer of the Company who signed the Registration Statement,
     and each person, if any, who controls the Company within the meaning of
     Section 15 of the Securities Act or Section 20 of the Exchange Act shall
     have the same rights to contribution as the Company. The Underwriters'
     respective obligations to contribute pursuant to this paragraph (d) are
     several in proportion to the number of Securities set forth opposite their
     respective names in Schedule II hereto and not joint.

          (e) For purposes of this paragraph 11, it is understood and agreed
     that the only information provided by the Underwriters for inclusion in the
     Registration Statement and the Prospectus was as follows:
     ________________________________________________.

  12.  Termination Date of this Agreement.  This Agreement may be terminated by
       ----------------------------------
the Representative at any time prior to the Closing Date by delivering written
notice thereof to the Company, if on or after the date of this Agreement but
prior to such time (a) there shall have occurred any general suspension of
trading in securities on the New York Stock Exchange, or there shall have been
established

                                       14
<PAGE>

by the New York Stock Exchange or by the Commission or by any federal or state
agency or by the decision of any court any limitation on prices for such trading
or any restrictions on the distribution of securities, or (b) there shall have
occurred any new outbreak of hostilities, including, but not limited to, an
escalation of hostilities which existed prior to the date of this Agreement or
any national or international calamity or crisis, the effect of which on the
financial markets of the United States shall be such as to make it
impracticable, in the reasonable judgment of the Representative, for the
Underwriters to enforce contracts for the sale of the Securities, or (c) the
Company shall have sustained a substantial loss by fire, flood, accident or
other calamity which renders it impracticable, in the reasonable judgment of the
Representative, to consummate the sale of the Securities and the delivery of the
Securities by the several Underwriters at the initial public offering price or
(d) there shall have been any downgrading or any notice of any intended or
potential downgrading in the rating accorded the Company's securities by any
"nationally recognized statistical rating organization" as that term is defined
by the Commission for the purposes of Securities Act Rule 436(g)(2), or any such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of the Securities or any
of the Company's other outstanding debt, the effect of which, in the reasonable
judgment of the Representative, makes it impracticable or inadvisable to
consummate the sale of the Securities and the delivery of the Securities by the
several Underwriters at the initial public offering price. This Agreement may
also be terminated at any time prior to the Closing Date if in the reasonable
judgment of the Representative the subject matter of any amendment or supplement
to the Registration Statement or Prospectus (other than an amendment or
supplement relating solely to the activity of any Underwriter or Underwriters)
filed after the execution of this Agreement shall have materially impaired the
marketability of the Securities. Any termination hereof pursuant to this
paragraph 12 shall be without liability of any party to any other party except
as otherwise provided in paragraphs 7 and 8.

  13.  Miscellaneous.  The validity and interpretation of this Agreement shall
       -------------
be governed by the laws of the State of New York. Unless otherwise specified,
time of day refers to New York City time.  This Agreement shall inure to the
benefit of, and be binding upon, the Company, the several Underwriters, and with
respect to the provisions of paragraph 11, the officers and directors and each
controlling person referred to in paragraph 11, and their respective successors.
Nothing in this Agreement is intended or shall be construed to give to any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained.  The term
"successors" as used in this Agreement shall not include any purchaser, as such
purchaser, of any of the Securities from any of the several Underwriters.

  14.  Notices.  All communications hereunder shall be in writing or by telefax
       -------
and, if to the Underwriters, shall be mailed, transmitted by any standard form
of telecommunication or delivered to the Representative at the address set forth
in Schedule I hereto and if to the Company, shall be mailed or delivered to it
at 411 Fayetteville Street, Raleigh, North Carolina 27601-1748, attention of
___________________.

  15.  Counterparts.  This Agreement may be simultaneously executed in
       ------------
counterparts, each of which when so executed shall be deemed to be an original.
Such counterparts shall together constitute one and the same instrument.

  16.  Defined Terms.  Unless otherwise defined herein, capitalized terms used
       -------------
in this Underwriting Agreement shall have the meanings assigned to them in the
Registration Statement.

                                       15
<PAGE>

  If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed duplicate hereof whereupon it
will become a binding agreement between the Company and the several Underwriters
in accordance with its terms.

                                        Very truly yours,

                                        NORTH CAROLINA NATURAL GAS CORPORATION


                                        By :
                                            ------------------------------------
                                           Authorized Representative



Accepted as of the date first
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in, Schedule II.


[NAME OF REPRESENTATIVE]


By
   ---------------------------------------

                                       16
<PAGE>

                                 SCHEDULE I


Underwriting Agreement dated __________, ____

Registration Statement No. 333-_____

Representative and Address:



Designation:  [Title of debt securities]

Principal Amount:  $___________

Indenture dated as of ________, ____

Date of Maturity:  ___________, ____

Interest Rate: ____% per annum, payable ________ __ and __________ __ of each
year, commencing ____________, ____.

Purchase Price:  _____% of the principal amount thereof, plus accrued interest
from _______________ to the date of payment and delivery.

Public Offering Price:  ____% of the principal amount thereof, plus accrued
interest from ___________ to the date of payment and delivery.

Redemption Terms:

Closing Date and Location:  _______________, 2000; Hunton & Williams, 421
Fayetteville Street Mall, Raleigh North Carolina 27601

                                       17
<PAGE>

                                 SCHEDULE II



                Underwriters                  Principal Amount
                ------------                  ----------------





                TOTAL.........................

                                       18