ITEM 1.01    Entry Into a Material Definitive Agreement

On August 18, 2005, the registrant entered into a Change In Control Agreement with each of Fred J. Fowler, President and Chief Operating Officer, David L. Hauser, Group Vice President and Chief Financial Officer, Jimmy W. Mogg, Group Vice President and Chief Development Officer, and Ruth G. Shaw, President and Chief Executive Officer, Duke Power. The Change In Control Agreements are dated as of July 1, 2005 and have an initial term of two-years, after which time the agreements will automatically extend from the first day of each month for one additional month. The agreement may be terminated by the registrant or the executive effective at any time following the initial two-year term, with six months advance written notice. The Change In Control Agreements provide for payments and benefits to the executive in the event of termination of employment within two years after a “Change in Control” by the registrant without “Cause” or by the executive for “Good Reason” (each such term as defined in the agreements) as follows: (1) a lump-sum cash payment equal to a pro-rata amount of the executive’s target bonus for the year in which the termination occurs; (2) a lump-sum cash payment equal to two times the sum of the executive’s annual base salary and target annual bonus opportunity in effect immediately prior to termination or, if higher, in effect immediately prior to the first occurrence of an event or circumstance constituting “Good Reason” (3) continued medical, dental and basic life insurance coverage for a two-year period following termination or, alternatively, a lump-sum cash payment equal to the aggregate cost of such coverage based on the premium costs of such coverage to former employees under COBRA, or the anticipated cost for such coverage for internal accounting purposes; (4) a lump-sum cash payment representing the present value of the amount the registrant would have allocated or contributed to the executive’s defined benefit pension plan and defined contribution savings plan accounts during the two years following the termination date, plus the unvested portion, if any, of the executive’s accounts as of the date of termination that would have vested during such two year period; and (5) continued vesting of long-term incentive awards, including awards of stock options but excluding awards of restricted stock, held but not vested or exercisable on the termination date, in accordance with their terms for two years following the termination date, with any options or similar rights thereafter remaining exercisable for 90 days, if their terms have not expired. If the executive would have become eligible for normal retirement at age sixty-five within the two-year period following termination, the two times multiple or two year period mentioned above will be reduced to the period from the termination date to the executive’s normal retirement date. Messrs. Fowler, Mogg and Hauser and Dr. Shaw are also entitled to reimbursement of up to $50,000 for the cost of certain legal fees incurred by them in connection with claims under the agreements. In the event that any of the payments or benefits provided for in the Change In Control Agreement would have constituted a “parachute payment” (as defined in Section 280G(b)(2) of the Internal Revenue Code), the executive would be entitled to elect to reduce such payments or benefits to the maximum level that would not result in excise tax under Section 4999 of the Internal Revenue Code. In the event Messrs. Fowler, Mogg and Hauser and Dr. Shaw become entitled to payments and benefits under the Change In Control Agreement, they would be subject to a one-year noncompetition and nonsolicitation provision

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