Exhibit 4.1


Execution Copy


 


 


DUKE
ENERGY CAROLINAS, LLC


TO


THE
BANK OF NEW YORK


Trustee






Sixteenth
Supplemental Indenture


Dated
as of June 5, 2007






$500,000,000 6.10%
Senior Notes Due 2037















TABLE OF CONTENTS  (1)


ARTICLE 1


6.10% Senior Notes Due 2037


	
  SECTION 1.01  Establishment

  	
   

  	
  1

  
	
  SECTION 1.02  Definitions

  	
   

  	
  2

  
	
  SECTION 1.03  Payment
  of Principal and Interest

  	
   

  	
  2

  
	
  SECTION 1.04  Denominations

  	
   

  	
  3

  
	
  SECTION 1.05  Global
  Securities

  	
   

  	
  3

  
	
  SECTION 1.06  Redemption

  	
   

  	
  4

  
	
  SECTION 1.07  Paying
  Agent

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Miscellaneous
  Provisions

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01  Recitals
  by the Company

  	
   

  	
  5

  
	
  SECTION 2.02  Ratification
  and Incorporation of Original Indenture

  	
   

  	
  5

  
	
  SECTION 2.03  Executed
  in Counterparts

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  Exhibit A        Form of 6.10% Senior Note

  	
   

  	
  A-1

  
	
  Exhibit B        Certificate of Authentication of 6.10%
  Senior Note

  	
   

  	
  B-1

  



 






(1) This Table of
Contents does not constitute part of the Indenture or have any bearing upon the
interpretation of any of its terms and provisions.



 i














THIS SIXTEENTH SUPPLEMENTAL INDENTURE is made as of
the 5th day of June 2007, by and between DUKE ENERGY CAROLINAS, LLC, a North
Carolina limited liability company, having its principal office at 526 South
Church Street, Charlotte, North Carolina 28202 (the “Company”), and THE BANK OF
NEW YORK (as successor to JPMorgan Chase Bank, N.A.), a New York banking
corporation, as Trustee (herein called the “Trustee”).


WITNESSETH:


WHEREAS, Duke Energy Corporation, a North Carolina
corporation (“Old Duke Energy”), has heretofore entered into a Senior
Indenture, dated as of September 1, 1998 (the “Original Indenture”), with
JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank), as
Trustee;


WHEREAS, the Company is the successor to Old Duke
Energy;


WHEREAS, the Original Indenture is incorporated herein
by this reference and the Original Indenture, as may be amended and
supplemented to the date hereof, including by this Sixteenth Supplemental
Indenture, is herein called the “Indenture”;


WHEREAS, under the Indenture, a new series of
Securities may at any time be established in accordance with the provisions of
the Indenture and the terms of such series may be described by a supplemental
indenture executed by the Company and the Trustee;


WHEREAS, the Company hereby proposes to create under
the Indenture an additional series of Securities;


WHEREAS, additional Securities of other series
hereafter established, except as may be limited in the Indenture as at the time
supplemented and modified, may be issued from time to time pursuant to the
Indenture as at the time supplemented and modified; and


WHEREAS, all conditions necessary to authorize the
execution and delivery of this Sixteenth Supplemental Indenture and to make it
a valid and binding obligation of the Company have been done or performed.


NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:


ARTICLE 1



6.10% SENIOR NOTES DUE 2037


SECTION 1.01  Establishment.  There is hereby established a new series of
Securities to be issued under the Indenture, to be designated as the Company’s
6.10% Senior Notes due 2037 (the “Senior Notes”).


There are to be authenticated and delivered
$500,000,000 principal amount of the Senior Notes and no further Senior Notes
shall be authenticated and delivered except as provided by



 1
 








Section 304, 305, 306,
906 or 1106 of the Original Indenture and the last paragraph of Section 301
thereof.  The Senior Notes shall be
issued in fully registered form without coupons.


The Senior Notes shall be in substantially the form
set out in Exhibit A hereto, and the form of the Trustee’s Certificate of
Authentication for the Senior Notes shall be in substantially the form set
forth in Exhibit B hereto.


Each Senior Note shall be dated the date of
authentication thereof and shall bear interest from the date of original
issuance thereof or from the most recent Interest Payment Date to which
interest has been paid or duly provided for.


SECTION 1.02  Definitions.  The following defined terms used in this
Article 1 shall, unless the context otherwise requires, have the meanings
specified below for purposes of the Senior Notes.  Capitalized terms used herein for which no
definition is provided herein shall have the meanings set forth in the Original
Indenture.


“Business Day” means a day other than (i) a Saturday
or a Sunday, (ii) a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to remain closed or (iii) a
day on which the Corporate Trust Office is closed for business.


“Interest Payment Date” means each June 1 and December
1 of each year, commencing December 1, 2007.


“Original Issue Date” means June 5, 2007.


“Regular Record Date” means, with respect to each
Interest Payment Date, the close of business on the 15th calendar day prior to
such Interest Payment Date (whether or not a Business Day).


“Stated Maturity” means June 1, 2037.


SECTION 1.03  Payment of
Principal and Interest.  The principal of
the Senior Notes shall be due at Stated Maturity (unless earlier
redeemed).  The unpaid principal amount
of the Senior Notes shall bear interest at the rate of 6.10% per annum until
paid or duly provided for, such interest to accrue from June 5, 2007 or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for.  Interest shall be paid
semi-annually in arrears on each Interest Payment Date to the Person or
Persons in whose name the Senior Notes are registered on the Regular Record
Date for such Interest Payment Date; provided
that interest payable at the Stated Maturity or on a Redemption Date as
provided herein shall be paid to the Person to whom principal is payable.  Any such interest that is not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holders on
such Regular Record Date and may either be paid to the Person or Persons in
whose name the Senior Notes are registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee (“Special Record Date”), notice whereof shall be given to Holders
of the Senior Notes not less than ten (10) days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange, if any, on which the Senior Notes
may be listed, and upon such notice as may be required by any such exchange,
all as more fully provided in the Original Indenture.



 2
 








Payments of interest on the Senior Notes shall include
interest accrued to but excluding the respective Interest Payment Dates.  Interest payments for the Senior Notes shall
be computed and paid on the basis of a 360-day year of twelve 30-day
months.  In the event that any date on
which interest is payable on the Senior Notes is not a Business Day, then
payment of the interest payable on such date shall be made on the next
succeeding day that is a Business Day (and without any interest or payment in
respect of any such delay) with the same force and effect as if made on the
date the payment was originally payable.


Payment of principal of, premium, if any, and interest
on the Senior Notes shall be made in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts.  Payments of principal of,
premium, if any, and interest on Senior Notes represented by a Global Security
shall be made by wire transfer of immediately available funds to the Holder of
such Global Security, provided that, in the case of payments of principal and
premium, if any, such Global Security is first surrendered to the Paying
Agent.  If any of the Senior Notes are no
longer represented by a Global Security, (i) payments of principal, premium, if
any, and interest due at the Stated Maturity or earlier redemption of such
Senior Notes shall be made at the office of the Paying Agent upon surrender of
such Senior Notes to the Paying Agent and (ii) payments of interest shall be
made, at the option of the Company, subject to such surrender where applicable,
(A) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (B) by wire transfer at such
place and to such account at a banking institution in the United States as may
be designated in writing to the Trustee at least sixteen (16) days prior to the
date for payment by the Person entitled thereto.


SECTION 1.04  Denominations.  The Senior Notes shall be issued in
denominations of $1,000 or any integral multiple thereof.


SECTION 1.05  Global
Securities.  The Senior Notes shall
initially be issued in the form of one or more Global Securities registered in
the name of the Depositary (which initially shall be The Depository Trust
Company) or its nominee.  Except under
the limited circumstances described below, Senior Notes represented by such
Global Security or Global Securities shall not be exchangeable for, and shall
not otherwise be issuable as, Senior Notes in definitive form.  The Global Securities described in this
Article 1 may not be transferred except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or to a successor Depositary or its nominee.


A Global Security shall be exchangeable for Senior
Notes registered in the names of persons other than the Depositary or its
nominee only if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as a Depositary for such Global Security and no successor
Depositary shall have been appointed by the Company within 90 days of receipt
by the Company of such notification, or if at any time the Depositary ceases to
be a clearing agency registered under the Exchange Act at a time when the
Depositary is required to be so registered to act as such Depositary and no
successor Depositary shall have been appointed by the Company within 90 days
after it becomes aware of such cessation, (ii) an Event of Default has occurred
and is continuing with respect to the Senior Notes, or (iii) the Company in its
sole discretion, and subject to the procedures of the Depositary, determines
that such Global Security shall be so exchangeable.  Any Global Security that is exchangeable
pursuant to the preceding



 3
 








sentence shall be
exchangeable for Senior Notes registered in such names as the Depositary shall
direct.


SECTION 1.06  Redemption.  The Senior Notes shall be redeemable, in
whole or from  time to time in part, at
the option of the Company on any date (a “Redemption Date”), at a Redemption
Price equal to the greater of (i) 100% of the principal amount of the Senior
Notes to be redeemed and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon (exclusive of interest
accrued to such Redemption Date) discounted to such Redemption Date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus 20 basis points, plus, in either case, accrued and
unpaid  interest on the principal amount
being redeemed to such Redemption Date.


“Treasury Rate” means, with respect to any Redemption
Date for the Senior Notes, (i) the yield, under the heading which represents
the average for the immediately preceding week, appearing in the most recently
published statistical release designated “H.15(519)” or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption “Treasury
Constant Maturities,” for the maturity 
corresponding to the Comparable Treasury Issue (if no maturity is within
three months before or after the Stated Maturity, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined, and the Treasury Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding to the nearest month) or
(ii) if such release (or any successor release) is not published during the
week preceding the calculation date or does not contain such yields, the rate
per annum equal to the semi-annual equivalent yield  to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date.  The Treasury Rate
shall be calculated on the third Business Day preceding the Redemption Date.


“Comparable Treasury Issue” means the United States
Treasury security selected by the Quotation Agent as having a maturity
comparable to the remaining term of the Senior Notes to be redeemed that would
be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of such Senior Notes.


“Quotation Agent” means a Reference Treasury Dealer
appointed by the Company.


“Comparable Treasury Price” means, with respect to any
Redemption Date for the Senior Notes, (1) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or (2) if fewer
than five such Reference Treasury Dealer Quotations are obtained, the average
of all such Reference Treasury Dealer Quotations.


“Reference Treasury Dealer” means each of Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC,
UBS Securities LLC, and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary
U.S. Government securities dealer in the



 4
 








United States (a “Primary
Treasury Dealer”), the Company will substitute therefor another Primary
Treasury Dealer.


“Reference Treasury Dealer Quotations” means, with
respect to each Reference Treasury Dealer and any Redemption Date, the average,
as determined by the Quotation Agent, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Quotation Agent by such Reference
Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day
preceding such Redemption Date.


Notwithstanding Section 1104 of the Original
Indenture, the notice of redemption with respect to the foregoing redemption
need not set forth the Redemption Price but only the manner of ascertainment
thereof.


The Company shall notify the Trustee of the Redemption
Price with respect to the foregoing redemption promptly after the calculation
thereof.  The Trustee shall not be
responsible for calculating said Redemption Price.


If less than all of the Senior Notes are to be
redeemed, the Trustee shall select the Senior Notes or portions of Senior Notes
to be redeemed by such method as the Trustee shall deem fair and
appropriate.  The Trustee may select for
redemption Senior Notes and portions of Senior Notes in amounts of whole
multiples of $1,000.


The Senior Notes shall not have a sinking fund.


SECTION 1.07  Paying Agent.  The Trustee shall initially serve as Paying
Agent with respect to the Senior Notes, with the Place of Payment initially
being the Corporate Trust Office.


ARTICLE 2


MISCELLANEOUS PROVISIONS


SECTION 2.01  Recitals by the
Company.  The recitals in this Sixteenth
Supplemental Indenture are made by the Company only and not by the Trustee, and
all of the provisions contained in the Original Indenture in respect of the
rights, privileges, immunities, powers and duties of the Trustee shall be
applicable in respect of the Senior Notes and of this Sixteenth Supplemental
Indenture as fully and with like effect as if set forth herein in full.


SECTION 2.02  Ratification and
Incorporation of Original Indenture.  As
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture and this Sixteenth Supplemental Indenture
shall be read, taken and construed as one and the same instrument.


SECTION 2.03  Executed in
Counterparts.  This Sixteenth
Supplemental Indenture may be executed in several counterparts, each of which
shall be deemed to be an original, and such counterparts shall together
constitute but one and the same instrument.



 5
 








IN WITNESS WHEREOF, each party hereto has caused this
instrument to be signed in its name and behalf by its duly authorized officers,
all as of the day and year first above written.


 


	
  

  	
  Duke Energy Carolinas, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Lynn J. Good

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President and Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Robert T. Lucas
  III

  	
   

  
	
  Title:

  	
  Assistant
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The Bank of New York,

  
	
   

  	
    as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  L. O’Brien

  	
   

  
	
   

  	
  Title: 

  	
  Vice President

  	
   

  
								



 



 6














EXHIBIT
A


FORM OF

6.10% SENIOR NOTE DUE 2037


	
  No.

  	
  CUSIP No. 26442C AA2

  



 


DUKE ENERGY
CAROLINAS, LLC

6.10% SENIOR NOTE DUE 2037


Principal Amount:  $            


Regular Record Date:  Close of business on the 15th calendar day
prior to the relevant Interest Payment Date (whether or not a Business Day)


Original Issue Date:  June 5, 2007


Stated Maturity:  June 1, 2037


Interest Payment
Dates:  Semi-annually on June 1 and
December 1 of each year, commencing December 1, 2007.


Interest Rate:  6.10% per annum


Authorized
Denomination:  $1,000 or any integral
multiples thereof


Duke Energy Carolinas, LLC, a North Carolina limited
liability company (the “Company”, which includes any successor corporation
under the Indenture referred to on the reverse hereof), for value received,
hereby promises to pay to
                 ,
or registered assigns, the principal sum of
                  
DOLLARS
($            ) on
the Stated Maturity shown above and to pay interest thereon from the Original
Issue Date shown above, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually in arrears on
each Interest Payment Date as specified above, commencing on December 1, 2007
and on the Stated Maturity at the rate per annum shown above (the “Interest
Rate”) until the principal hereof is paid or made available for payment and on
any overdue principal and on any overdue installment of interest.  The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date  (other than an Interest Payment Date that is
the Stated Maturity or a Redemption Date) will, as provided in the Indenture,
be paid to the Person in whose name this 6.10% Senior Note due 2037 (this “Security”)
is registered on the Regular Record Date as specified above next preceding such
Interest Payment Date; provided that
any interest payable at Stated Maturity or on a Redemption Date will be paid to
the Person to whom principal is payable. 
Except as otherwise provided in the Indenture, any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Securities



 A-1
 








shall be listed, and upon
such notice as may be required by any such exchange, all as more fully provided
in the Indenture.


Payments of interest on this Security will include
interest accrued to but excluding the respective Interest Payment Dates.  Interest payments for this Security shall be
computed and paid on the basis of a 360-day year of twelve 30-day
months and will accrue from June 5, 2007 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for.  In the event that any date on which interest
is payable on this Security is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or payment in respect of any such delay) with the
same force and effect as if made on the date the payment was originally
payable.  “Business Day” means a day
other than (i) a Saturday or a Sunday, (ii) a day on which banking institutions
in New York, New York are authorized or obligated by law or executive order to
remain closed or (iii) a day on which the Corporate Trust Office is closed for
business.


Payment of principal of, premium, if any, and interest
on the Securities shall be made in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts.  Payments of principal of,
premium, if any, and interest on the Securities of this series represented by a
Global Security shall be made by wire transfer of immediately available funds
to the Holder of such Global Security, provided that, in the case of payments
of principal and premium, if any, such Global Security is first surrendered to
the Paying Agent.  If any of the
Securities of this series are no longer represented by a Global Security, (i)
payments of principal, premium, if any, and interest due at the Stated Maturity
or earlier redemption of such Securities shall be made at the office of the
Paying Agent upon surrender of such Securities to the Paying Agent, and (ii)
payments of interest shall be made, at option of the Company, subject to such
surrender where applicable, (A) by check mailed to address of the Person
entitled thereto as such address shall appear in the Security Register or
(B) by wire transfer at such place and to such account at a banking
institution in the United States as may be designated in writing to the Trustee
at least sixteen (16) days prior to the date for payment by the Person entitled
thereto.


The Securities of this series shall be redeemable, in
whole or from time to time in part, at the option of the Company on any date (a
“Redemption Date”), at a Redemption Price equal to the greater of (i) 100% of
the principal amount of the Securities of this series to be redeemed and (ii)
the sum of the present values of the remaining scheduled payments of principal
and interest thereon (exclusive of interest accrued to such Redemption Date)
discounted to such Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate plus 20
basis points, plus, in either case, accrued and unpaid interest on the
principal amount being redeemed to such Redemption Date.


“Treasury Rate” means, with respect to any Redemption
Date for the Securities of this series, (i) the yield, under the heading which
represents the average for the immediately preceding week, appearing in the
most recently published statistical release designated  “H.15(519)” or any successor publication
which is published weekly by the Board of 
Governors of the Federal Reserve System and which establishes yields on
actively traded United States Treasury securities adjusted to constant maturity
under the caption “Treasury Constant Maturities,” for the maturity
corresponding to the Comparable Treasury Issue (if no maturity



 A-2
 








within three months
before or after the Stated Maturity, yields for the two published maturities
most closely corresponding to the Comparable Treasury Issue shall be
determined, and the Treasury Rate shall be interpolated or extrapolated from
such yields on a straight-line basis rounding to the nearest month) or
(ii) if such release (or any successor release) is not published during the
week preceding the calculation date or does not contain such yields, the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date.  The Treasury Rate shall be calculated on the
third Business Day preceding the Redemption Date.


“Comparable Treasury Issue” means the United States
Treasury security selected by the Quotation Agent as having a maturity
comparable to the remaining term of the Senior Notes to be redeemed that would
be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of such Securities of this series.


“Quotation Agent” means a Reference Treasury Dealer
appointed by the Company.


“Comparable Treasury Price” means, with respect to any
Redemption Date for the Senior Notes, (1) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or (2) if fewer
than five such Reference Treasury Dealer Quotations are obtained, the average
of all such Reference Treasury Dealer Quotations.


“Reference Treasury Dealer” means each of Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC,
UBS Securities LLC, and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary
U.S. Government securities dealer in the United States (a “Primary Treasury
Dealer”), the Company will substitute therefor another Primary Treasury Dealer.


“Reference Treasury Dealer Quotations” means, with
respect to each Reference Treasury Dealer and any Redemption Date, the average,
as determined by the Quotation Agent, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Quotation Agent by such Reference
Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day
preceding such Redemption Date.


Notwithstanding Section 1104 of the Original
Indenture, the notice of redemption with respect to the foregoing redemption
need not set forth the Redemption Price but only the manner of ascertainment
thereof.


The Company shall notify the Trustee of the Redemption
Price with respect to the foregoing redemption promptly after the calculation
thereof.  The Trustee shall not be
responsible for calculating said Redemption Price.


Notice of any redemption by the Company will be mailed
at least 30 days but not more than 60 days before any Redemption Date to each
Holder of Securities of this series to be redeemed.  If Notice of a redemption is provided and
funds are deposited as required, interest



 A-3
 








will cease to accrue on
and after the Redemption Date on the Securities of this series or portions of
Securities of this series called for redemption.  In the event that any Redemption Date is not
a Business Day, the Company will pay the Redemption Price on the next Business
Day without any interest or other payment due. 
If less than all the Securities of this series are to be redeemed at the
option of the Company, the Trustee shall select, in such manner as it shall
deem fair and appropriate, the Securities of this series to be redeemed in
whole or in part.  The Trustee may select
for redemption Securities of this series and portions of the Securities of this
series in amounts of whole multiples of $1,000.


In the event of redemption of this Security in part
only, a new Security or Securities of this series and of like tenor for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon
the surrender hereof.


The Securities of this series shall not have a sinking
fund.


The Securities of this series shall constitute the
direct unsecured and unsubordinated debt obligations of the Company and shall
rank equally in priority with the Company’s existing and future unsecured and
unsubordinated indebtedness.


REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF
THIS SECURITY SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.


Unless the certificate of authentication hereon has
been executed by the Trustee by manual signature, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.



 A-4
 








IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.


Dated:


	
   

  	
  Duke Energy Carolinas, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
    Name:

  	
   

  
	
   

  	
   

  	
    Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Name:

  
	
  Title:

  
	
   

  
	
  CERTIFICATE OF
  AUTHENTICATION

  
	
   

  
	
  This is one of the
  Securities of the series designated therein referred to in the within-mentioned
  Indenture.

  
	
   

  
	
   

  
	
   

  	
  The Bank of New York,

  	
   

  
	
   

  	
   

  	
  as Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  
					



 



 A-5
 








(Reverse
Side of Security)


This 6.10% Senior Note due 2037 is one of a duly
authorized issue of Securities of the Company (the “Securities”), issued and
issuable in one or more series under a Senior Indenture, dated as of September
1, 1998, as supplemented (the “Indenture”), between the Company (successor to
Duke Energy Corporation) and The Bank of New York (as successor to JPMorgan
Chase Bank, N.A. (formerly known as The Chase Manhattan Bank)), as Trustee (the
“Trustee,” which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitation of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities issued thereunder and of the terms upon which said Securities are,
and are to be, authenticated and delivered. 
This Security is one of the series designated on the face hereof as
6.10% Senior Notes due 2037 initially in the aggregate principal amount of
$500,000,000.  Capitalized terms used
herein for which no definition is provided herein shall have the meanings set
forth in the Indenture.


If an Event of Default with respect to the Securities of
this series shall occur and be continuing, the principal of the Securities of
this series may be declared due and payable in the manner, with the effect and
subject to the conditions provided in the Indenture.


The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
all series affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of all series affected thereby
(voting as one class).  The Indenture
contains provisions permitting the Holders of not less than a majority in
principal amount of the Outstanding Securities of all series with respect to
which a default under the Indenture shall have occurred and be continuing
(voting as one class), on behalf of the Holders of the Securities of all such
series, to waive, with certain exceptions, such default under the Indenture and
its consequences.  The Indenture also
permits the Holders of not less than a majority in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture affecting such series.  Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.


No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.


As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is remittable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company for such purpose, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar and duly executed by, the Holder hereof
or his attorney duly authorized in



 A-6
 








writing, and thereupon
one or more new Securities of this series, of authorized denominations and of
like tenor and for the same aggregate principal amount, will be issued by the
designated transferee or transferees.  No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.


The Indenture contains provisions for defeasance at
any time of the entire indebtedness in the Securities of this series and for
covenant defeasance at any time of certain covenants in the Indenture upon
compliance with certain conditions set forth in the Indenture.


Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name the Security is registered as
the owner hereof for all purposes, whether or not this Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.


The Securities of this series are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof.  As provided in the
Indenture and subject to the limitations therein set forth, Securities of this
series are exchangeable for a like aggregate principal amount of Securities of
this series of a different authorized denomination, as  requested by the Holder surrendering the same
upon surrender of the Security or Securities to be exchanged at the office or
agency of the Company.


This Security shall be governed by, and construed in
accordance with, the laws of the State of New York.



 A-7
 








ABBREVIATIONS


The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or regulations:


	
  TEN COM—as tenants in common

  	
  UNIF GIFT MIN ACT- 

  	
   

  	
  Custodian

  	
   

  	
   

  
	
   

  	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TEN ENT—as tenants by the entireties

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JT TEN—as joint tenants with rights of 

  	
  under Uniform Gifts to

  	
   

  
	
  survivorship and not as tenants in common

  	
  Minors Act

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (State)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
							



 


Additional abbreviations may also be used though not
on the above list.


FOR VALUE RECEIVED, the
undersigned hereby sell(s) and transfer(s) unto (please insert Social Security
or other identifying number of assignee)


PLEASE PRINT OR TYPEWRITE
NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE


the within Security and
all rights thereunder, hereby irrevocably constituting and appointing


agent to transfer said
Security on the books of the Company, with full power of substitution in the
premises.


	
  Dated:

  	
   

  	
   

  



 


 


	
  

  	
  NOTICE: The signature to this assignment must
  correspond with the name as written upon the face of the within instrument in
  every particular without alteration or enlargement, or any change whatever.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guarantee:

  	
   

  	
   

  
				



 



 A-8
 








SIGNATURE
GUARANTEE


Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Security Registrar,
which requirements include membership or participation  in the Security Transfer Agent Medallion
Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Security Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.



 A-9














EXHIBIT
B


CERTIFICATE OF
AUTHENTICATION


This is one of the
Securities of the series designated
therein referred to in the within-mentioned Indenture.


	
   

  	
  The Bank of New York,

  
	
   

  	
   

  	
  as Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  



 



 B-1