DUKE POWER CO /NC/, 424B1, 1994-03-31

DUKE POWER CO /NC/
424B1, 1994-03-31
ELECTRIC SERVICES

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<PAGE> 1
Filed Pursuant to Rule 424(b)(1)
Registration No. 33-52479

14,000,000 SHARES

DUKE POWER COMPANY
COMMON STOCK
(WITHOUT PAR VALUE)

------------------------

Of the 14,000,000 shares of Common Stock offered, 11,200,000 shares are
being offered hereby in the United States and 2,800,000 shares are being offered
in a concurrent international offering outside the United States. The initial
public offering price and the aggregate underwriting discount per share are
identical for both offerings. See "Underwriting."

All of the shares of Common Stock offered hereby are being sold by the
Selling Shareholder. See "Selling Shareholder." The Company will not receive any
of the proceeds from the sale of the shares offered hereby.

------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

------------------------

<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO SELLING
OFFERING PRICE DISCOUNT(1) SHAREHOLDER(2)
-------------- ------------ -------------------
<S> <C> <C> <C>
Per Share........................... $36.75 $.98 $35.77
Total(3)............................ $514,500,000 $13,720,000 $500,780,000
</TABLE>

- ---------------

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."

(2) Before deducting estimated expenses of $440,000 payable by the Selling
Shareholder. Expenses payable by the Company are estimated to be $20,000.

(3) The Selling Shareholder has granted the Underwriters options for 30 days to
purchase in the aggregate up to an additional 2,000,000 shares at the
initial public offering price per share, less the underwriting discount,
solely to cover over-allotments. If such options are exercised in full, the
total initial public offering price, underwriting discount and proceeds to
the Selling Shareholder will be $588,000,000, $15,680,000 and $572,320,000,
respectively. See "Underwriting."

------------------------

The shares offered hereby are offered severally by the U.S. Underwriters,
as specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that
certificates for the shares will be ready for delivery in New York, New York, on
or about April 6, 1994.

GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.

MORGAN STANLEY & CO.
INCORPORATED
------------------------

The date of this Prospectus is March 29, 1994
<PAGE> 2

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Information, as of particular dates, concerning
directors and officers, their remuneration, the principal holders of securities
of the Company and any material interest of such persons in transactions with
the Company is disclosed in proxy statements distributed to shareholders of the
Company and filed with the Commission. Reports, proxy statements and other
information filed with the Commission by the Company can be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C., Suite 1400, Northwestern Atrium
Center, 500 West Madison Street, Chicago, Ill. and Seven World Trade Center,
13th Floor, New York, N.Y. Copies of such material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The Common
Stock and certain other securities of the Company are listed on the New York
Stock Exchange. Reports, proxy statements and other information concerning the
Company can be inspected and copied at the library of the New York Stock
Exchange at 20 Broad Street, New York, N.Y.
------------------------

DOCUMENTS INCORPORATED BY REFERENCE

The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:

(1) Annual report on Form 10-K for the year ended December 31, 1992.

(2) Amendment to Form 10-K on Form 8 dated March 12, 1993.

(3) Quarterly reports on Form 10-Q for the quarters ended March 31,
1993, June 30, 1993 and September 30, 1993.

(4) Current report on Form 8-K dated February 18, 1994.

All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering made by this Prospectus shall be deemed
to be incorporated by reference in this Prospectus and to be made a part hereof
from the date of filing of such documents; provided, however, that documents
enumerated above or subsequently filed by the Company pursuant to Section 13 of
the Exchange Act prior to the filing with the Commission of the Company's most
recent annual report on Form 10-K shall not be incorporated by reference in this
Prospectus or be a part hereof from and after the filing of such annual report
on Form 10-K.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.

THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF
THIS PROSPECTUS HAS BEEN DELIVERED, UPON ORAL OR WRITTEN REQUEST OF ANY SUCH
PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN
OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS TO
SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
THEREIN. REQUESTS FOR COPIES OF SUCH DOCUMENTS SHOULD BE ADDRESSED TO INVESTOR
RELATIONS DEPARTMENT, DUKE POWER COMPANY, P.O. BOX 1005, CHARLOTTE, NC
28201-1005 (TELEPHONE NO. 704-382-3853 OR 800-488-3853 (TOLL-FREE)).
------------------------

IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

2
<PAGE> 3

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and consolidated financial data incorporated by reference herein.

THE OFFERINGS

The 11,200,000 shares of Common Stock being offered in the United States
(the "United States Offering") and the 2,800,000 shares of Common Stock being
offered outside the United States (the "International Offering") are referred to
herein together as the "Offerings."

<TABLE>
<S> <C>
Common Stock offered by the Selling Shareholder(1)
United States Offering.................. 11,200,000 shares
International Offering.................. 2,800,000 shares
Over-allotment options.................. 2,000,000 shares
----------
Total.............................. 16,000,000 shares
Common Stock outstanding before and after the
Offerings.................................. 204,859,339 shares(2)
Use of proceeds.............................. All of the shares of Common Stock offered
hereby are being sold by the Selling
Shareholder. The Company will not receive any
of the proceeds from the Offerings.
New York Stock Exchange symbol............... DUK
</TABLE>

- ---------------
(1) Assumes that the Underwriters' over-allotment options are exercised in full.
See "Underwriting."

(2) Based upon the number of shares of Common Stock outstanding as of February
28, 1994.

THE COMPANY

Business......Generation, transmission, distribution and sale of electric energy
Service Area.........Approximately 20,000 square miles in central North Carolina
and western South Carolina (Piedmont Carolinas)
Service Area Population..................................Approximately 4,800,000
Customers................................................Approximately 1,700,000
Sales during 1993 (kilowatt hours)...............76 billion (6th largest of U.S.
investor-owned utilities)
Customer Mix (kilowatt hours).........Residential (26%), General Services (22%),
Industrial (37%)and Other Energy and
Wholesale (15%)
Generating Capability (kilowatts)........17,845,000 (Coal (42%), Nuclear (40>%),
Hydro and Other (18%))
Sources of Generation during 1993..............Nuclear (57%), Coal (41%), Hydro
and Other (2%)
Utility Subsidiary.............................Nantahala Power and Light Company
Non-Utility Subsidiaries..Other subsidiaries include Church Street Capital Corp.
(funds management and parent company of non-regulated
subsidiaries), Crescent Resources, Inc. (real estate
development and forest management), Duke Engineering
& Services, Inc. (marketing of technical, engineering
and construction services), Duke/Fluor Daniel, a
joint venture with Fluor Daniel, Inc. (design,
construction, operation and maintenance support
primarily for coal-fired generating plants) and Duke
Energy Group, Inc. (structuring, financing and
managing of investments in electric generation and
transmission facilities).

3
<PAGE> 4

SUMMARY FINANCIAL DATA
(Amounts In Thousands Except Per Share Data)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------
1993 1992
----------- -----------
<S> <C> <C>
Electric Revenues.................................................. $ 4,281,876 $ 3,961,484
Earnings for Common Stock.......................................... $573,986 $451,676
Average Common Shares Outstanding.................................. 204,859 204,819
Earnings per Share................................................. $2.80 $2.21
Dividends per Share
(most recent quarter-$0.47)...................................... $1.84 $1.76
Plant Construction Costs
(including nuclear fuel)......................................... $669,460 $591,826
Electric Plant, Net (at end of year)............................... $ 8,924,109 $ 8,780,123

AS OF DECEMBER 31, 1993
--------------------------
Long-Term Debt..................................................... $ 3,285,397 39%
Preferred Stocks................................................... 781,000 9
Common Stock Equity................................................ 4,337,734 52
----------- ---
Total Capitalization.......................................... $ 8,404,131 100%
----------- ---
----------- ---
Short-Term Notes Payable........................................... $18,000
</TABLE>

4
<PAGE> 5

THE COMPANY

The Company is engaged in the generation, transmission, distribution and
sale of electric energy in the central portion of North Carolina and the western
portion of South Carolina, comprising the area in both States known as the
Piedmont Carolinas. Its service area, approximately two-thirds of which lies in
North Carolina, covers about 20,000 square miles with an estimated population of
4,800,000 and includes a number of cities, of which the largest are Charlotte,
Greensboro, Winston-Salem and Durham in North Carolina and Greenville and
Spartanburg in South Carolina. During 1993, the Company's electric revenues
amounted to approximately $4.3 billion, of which about 70% was derived from
North Carolina and about 30% from South Carolina. The Company ranks sixth in the
United States among investor-owned utilities in kilowatt-hour sales. Its
executive offices are located in the Power Building, 422 South Church Street,
Charlotte, North Carolina 28242-0001 (Telephone No. 704-594-0887).

SERVICE AREA

The Company supplies electric service directly to approximately 1,700,000
residential, commercial and industrial customers in more than 200 cities, towns
and unincorporated communities in North Carolina and South Carolina. Electricity
is sold at wholesale to nine incorporated municipalities and to several private
utilities. In addition, in 1993 approximately 9% of total sales were made
through contractual arrangements to former wholesale municipal or cooperative
customers of the Company who had purchased portions of the Catawba Nuclear
Station (collectively, the "Other Catawba Joint Owners").

The Company's service area is undergoing increasingly diversified
industrial development. The textile, manufacture of machinery and equipment,
chemical and chemical-related industries are of major significance to the
economy of the area. Other industrial activity includes the paper and allied
products, rubber and plastic products and various other light and heavy
manufacturing and service businesses. The largest industry served by the Company
is the textile industry, which accounted for approximately $488,000,000 of the
Company's revenues for 1993, representing 11% of electric revenues and 40% of
electric industrial revenues.

RATE MATTERS

The North Carolina Utilities Commission ("NCUC") and The Public Service
Commission of South Carolina ("PSCSC") must approve the Company's rates for
retail sales within the respective states. The Federal Energy Regulatory
Commission must approve the Company's rates for sales to wholesale customers,
including the contractual arrangements between the Company and the Other Catawba
Joint Owners.

In its most recent general rate case, the NCUC authorized a jurisdictional
rate of return on common equity of 12.50% and the PSCSC authorized a
jurisdictional rate of return on common equity of 12.25%.

CONSTRUCTION PROGRAM

The Company's construction program and the estimated construction costs set
forth below are subject to continuing review and are revised from time to time
in light of changes in load forecasts, the Company's financial condition
(including cash flow, earnings and levels of rates), changing regulatory and
environmental standards, and other factors.

5
<PAGE> 6

Projected construction and nuclear fuel costs, excluding costs related to
portions of the Catawba Nuclear Station owned by the Other Catawba Joint Owners,
for each of 1994, 1995 and 1996 and for the three-year period 1994-1996, as now
scheduled, are as follows (in millions of dollars):

<TABLE>
<CAPTION>
TYPE OF FACILITIES 1994 1995 1996 TOTAL
-------------------------------------------------- ---- ---- ---- ------
<S> <C> <C> <C> <C>
Generation........................................ $475 $436 $243 $1,154
Transmission...................................... 44 49 55 148
Distribution...................................... 200 211 233 644
Other............................................. 120 120 82 322
---- ---- ---- ------
Total............................................. $839 $816 $613 $2,268
---- ---- ---- ------
---- ---- ---- ------
Nuclear Fuel...................................... $143 $123 $128 $ 394
---- ---- ---- ------
---- ---- ---- ------
</TABLE>

The Company's procedures for estimating construction costs (which include
allowance for funds used during construction) utilize, among other things, past
construction experience, current construction costs and allowances for
inflation.

The Company anticipates that approximately 86% of the projected
construction and nuclear fuel costs for the three-year period 1994-1996 will be
financed through internally generated funds.

The Company is building a combustion turbine facility in Lincoln County,
North Carolina to provide capacity at periods of peak demand. The Lincoln
Combustion Turbine Station will consist of 16 combustion turbines with a total
generating capacity of 1,184,000 KW. The estimated total cost of the facility is
approximately $500,000,000. Current plans are for ten units to begin commercial
operation by the end of 1995 and the remaining six units to begin commercial
operation before the end of 1996. The issuance in 1991 of a final air permit for
the facility by the North Carolina Division of Environmental Management has been
appealed. Legal proceedings in respect of the appeal are ongoing. The Company
believes the permit will be upheld.

RECENT DEVELOPMENTS

Earnings per share of Common Stock of the Company increased 27% from $2.21
in 1992 to $2.80 in 1993. The increase was primarily due to higher kilowatt-hour
sales and a one-time charge taken in 1992 related to a refund to North Carolina
retail customers of 32c per share.

Total electric sales for 1993 increased by 7.1%. Residential sales,
primarily driven by unusual weather conditions, increased by 9.4% and general
service sales increased by 6.9%. Industrial sales increased by 4.3% reflecting
continuing growth in the economy of the Company's service area, with textile
sales up 2.3% and other industrial sales up 5.8%.

On January 25, 1994, William H. Grigg was elected chairman, president and
chief executive officer of the Company, effective April 28, 1994. Currently vice
chairman of the Board of Directors with responsibility for developing corporate
policy and strategy, he will succeed William S. Lee, who has served as chairman
and chief executive officer of the Company since 1982. Mr. Grigg joined the
Company in 1963 and during his career has served in a number of capacities,
including executive vice president, vice president, finance, and general counsel
of the Company.

The Company experienced a new all-time peak load of 16,070,000 KW on
January 19, 1994 during extremely cold weather. The Company's previous all-time
peak load of 15,720,000 KW occurred on July 29, 1993 during unusually hot
weather. The 1992-1993 winter peak load of 13,314,000 KW occurred on February
19, 1993.

On March 17, 1994, the Company, together with the Other Catawba Joint
Owners, settled the lawsuit initiated by the Company on March 22, 1990 against
Westinghouse Electric Corporation seeking damages for supplying to the McGuire
and Catawba Nuclear Stations steam generators that were alleged to be defective
in design, workmanship and materials and that would require replacement well
short of their stated design life. While the terms of the settlement may not be
disclosed pursuant to court order, the Company believes the litigation was
settled on terms that provided satisfactory consideration to the Company. Such
settlement will not have a material effect on the Company's results of
operations or financial position.

6
<PAGE> 7

SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (thousands)
Electric revenues(a).................. $ 4,281,876 $ 3,961,484 $ 3,816,960 $ 3,705,131 $3,692,955
Electric expenses(a).................. 3,467,811 3,236,789 3,110,137 3,062,348 2,988,355
----------- ----------- ----------- ----------- ----------
Electric operating income........... 814,065 724,695 706,823 642,783 704,600
Other income.......................... 71,269 85,007 150,905 146,740 101,826
----------- ----------- ----------- ----------- ----------
Income before interest deductions... 885,334 809,702 857,728 789,523 806,426
Interest deductions................... 258,919 301,619 274,105 251,335 234,815
----------- ----------- ----------- ----------- ----------
Net income............................ 626,415 508,083 583,623 538,188 571,611
Dividends on preferred and
preference stock.................. 52,429 56,407 54,683 52,616 52,477
----------- ----------- ----------- ----------- ----------
Earnings for common stock............. $ 573,986 $ 451,676 $ 528,940 $ 485,572 $ 519,134
----------- ----------- ----------- ----------- ----------
----------- ----------- ----------- ----------- ----------
COMMON STOCK DATA(b)
Shares of common stock
-- year-end (thousands)............. 204,859 204,859 204,699 202,584 202,563
-- average (thousands).............. 204,859 204,819 203,431 202,570 202,554
Per share of common stock
Earnings.............................. $2.80 $2.21 $2.60 $2.40 $2.56
Dividends............................. $1.84 $1.76 $1.68 $1.60 $1.52
Book value -- year-end................ $21.17 $20.26 $19.86 $18.84 $18.05
Market price -- high-low.............. $44 7/8-35 3/8 $37 1/2-31 3/8 $35-26 3/4 $32 3/8-25 1/2 $28 1/4-21 3/8
-- year-end............. $42 3/8 $36 1/8 $35 $30 5/8 $28 1/16
BALANCE SHEET DATA (thousands)
Total assets.......................... $12,193,107 $10,950,387 $10,470,615 $10,083,507 $9,542,398
Long-term debt........................ $ 3,285,397 $ 3,288,111 $ 3,159,575 $ 3,102,746 $2,822,442
Preferred stock with sinking fund
requirements........................ $ 281,000 $ 279,519 $ 228,650 $ 239,800 $ 247,825
Preferred stock without sinking fund
requirements........................ $ 500,000 $ 500,000 $ 502,016 $ 502,201 $ 427,457
</TABLE>

- ---------------
(a) Electric revenues, Electric expenses, Kilowatt-hour sales and Net
interchange and purchased power for the years 1989 and 1990 include a
reclassification for certain power transactions previously classified as Net
interchange and purchased power prior to a 1990 order of the Federal Energy
Regulatory Commission.

(b) All common stock data reflects the two-for-one split of common stock on
September 28, 1990.

NON-UTILITY SUBSIDIARY DATA

The principal non-utility subsidiaries of the Company are Church Street
Capital Corp., Crescent Resources, Inc., Duke Engineering & Services, Inc.,
Duke/Fluor Daniel (a joint venture with Fluor Daniel, Inc.) and Duke Energy
Group, Inc.

<TABLE>
<CAPTION>
1993 1992 1991
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Assets net of liabilities.................................. $416,613 $320,983 $221,829
Net income(a).............................................. $ 19,915 $ 22,050 $ 17,570
Number of employees........................................ 595 568 433
</TABLE>

- ---------------

(a) 1991 excludes the cumulative effect of an accounting change of $6,727,000
after tax.

7
<PAGE> 8

SELECTED OPERATING STATISTICS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Sources of Electric Energy
Millions of kilowatt-hours:
Generated -- net output:
Coal............................... 34,097 28,999 26,455 27,262 26,175
Nuclear(a)......................... 48,211 48,238 49,328 44,649 47,773
Hydro(b)........................... 1,582 1,834 1,545 1,879 1,520
Oil and Gas........................ 43 5 7 53 27
---------- ---------- ---------- ---------- ----------
Total generation................ 83,933 79,076 77,335 73,843 75,495
Purchased power and net
interchange(c)..................... 1,750 1,403 587 1,531 1,158
---------- ---------- ---------- ---------- ----------
Total output.................... 85,683 80,479 77,922 75,374 76,653
Less: Other Catawba Joint Owners'
share.............................. 13,821 14,313 12,280 11,735 12,566
Plus: Purchases from Other Catawba
Joint Owners....................... 8,810 9,466 8,525 8,658 9,809
---------- ---------- ---------- ---------- ----------
Total sources of energy......... 80,672 75,632 74,167 72,297 73,896
Line loss and Company usage.......... (4,614) (4,590) (4,280) (4,222) (4,522)
---------- ---------- ---------- ---------- ----------
Total kilowatt-hour sales(d).... 76,058 71,042 69,887 68,075 69,374
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Average Cost Per Ton of Coal Burned...... $42.21 $43.47 $45.21 $45.49 $45.13
Electric Revenues
Thousands of dollars:
Residential........................ $1,424,173 $1,312,227 $1,272,322 $1,216,945 $1,198,705
General service.................... 1,014,124 964,853 921,337 886,480 851,422
Industrial
Textile......................... 487,576 482,172 475,191 476,493 493,933
Other........................... 726,399 696,413 668,765 654,551 653,830
Other energy and wholesale(c)(e)... 476,862 460,849 441,777 391,803 449,545
Other electric revenues............ 152,742 44,970 37,568 78,859 45,520
---------- ---------- ---------- ---------- ----------
Total electric revenues(d)...... $4,281,876 $3,961,484 $3,816,960 $3,705,131 $3,692,955
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Number of Customers -- End of Year
Residential............................ 1,460,876 1,439,845 1,415,605 1,391,336 1,362,118
General service(f)..................... 232,272 227,675 222,917 224,642 216,960
Industrial
Textile.............................. 1,396 1,390 1,385 1,398 1,408
Other................................ 7,338 7,314 7,255 7,325 7,310
Other energy and wholesale(c).......... 7,957 7,773 7,605 7,405 7,249
---------- ---------- ---------- ---------- ----------
Total customers................. 1,709,839 1,683,997 1,654,767 1,632,106 1,595,045
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Average Annual Billed Revenue Per KWH
Residential............................ 7.32c 7.38c 7.10c 7.07c 7.09c
General service........................ 6.00 6.10 5.91 5.90 5.99
Industrial............................. 4.31 4.36 4.35 4.37 4.43
Other energy and wholesale(c)(e)....... 4.21 4.45 4.36 3.74 3.76
System Average Heat Rate................. 9,921 9,974 9,996 10,007 10,013
System Load Factor....................... 60.2% 60.0% 59.4% 59.9% 61.8%
</TABLE>

- ---------------
(a) Includes 100% of generation from the Catawba Nuclear Station.

(b) 1991 includes KWH of the Bad Creek Hydroelectric Station prior to commercial
operation.

(c) Kilowatt-hour sales, Electric revenues and Net interchange and purchased
power for the years 1989 and 1990 include a reclassification for certain
power transactions previously classified as Net interchange and purchased
power prior to a 1990 order of the Federal Energy Regulatory Commission.

(d) Does not reflect operating statistics, kilowatt-hour sales and revenues of
Nantahala Power and Light Company.

(e) Includes sales to Nantahala Power and Light Company.

(f) 1991 restated to eliminate certain duplicate customers.

8
<PAGE> 9

COMMON STOCK PRICE RANGE AND DIVIDENDS

The Common Stock of the Company is listed on the New York Stock Exchange
("NYSE") under the symbol "DUK." The following table sets forth the high and low
sale prices per share for the Common Stock as reported on the NYSE Composite
Tape and the cash dividends paid per share of Common Stock for the periods
indicated.

<TABLE>
<CAPTION>
CASH
DIVIDENDS
HIGH LOW PER SHARE
---- --- ---------
<S> <C> <C> <C>
1991:
First Quarter................................................ 30 3/4 26 3/4 $ 0.41
Second Quarter............................................... 29 3/8 27 1/4 0.41
Third Quarter................................................ 32 1/2 27 3/8 0.43
Fourth Quarter............................................... 35 30 1/8 0.43
1992:
First Quarter................................................ 35 31 3/8 0.43
Second Quarter............................................... 34 5/8 32 0.43
Third Quarter................................................ 36 1/2 34 1/8 0.45
Fourth Quarter............................................... 37 1/2 34 5/8 0.45
1993:
First Quarter................................................ 39 7/8 35 3/8 0.45
Second Quarter............................................... 41 3/8 37 1/8 0.45
Third Quarter................................................ 44 7/8 39 7/8 0.47
Fourth Quarter............................................... 44 39 0.47
1994:
First Quarter (through March 29)............................. 43 36 7/8 0.47
</TABLE>

For a recent reported price for the Common Stock, see the cover page of
this Prospectus.

The Company has paid cash dividends on its Common Stock in each year since
1926, and the Common Stock dividend has been increased in each of the last 18
years. Future dividends will depend upon future earnings, the financial
condition of the Company and other factors affecting dividend policy that are
not presently determinable.

The Company has a Stock Purchase and Dividend Reinvestment Plan pursuant to
which holders of its Common Stock may automatically reinvest their Common Stock
dividends in shares of the Company's Common Stock. Holders who become
participants in the Plan may also make optional cash payments (not more than
$20,000 per calendar quarter) to be invested in shares of the Company's Common
Stock.

9
<PAGE> 10

USE OF PROCEEDS

All of the shares of Common Stock offered hereby are being sold by the
Selling Shareholder. The Company will not receive any of the proceeds of the
Offerings.

SELLING SHAREHOLDER

All of the shares of Common Stock offered hereby are being sold by The Duke
Endowment (the "Selling Shareholder"). The Selling Shareholder owns, as of the
date of this Prospectus, 26,070,200 shares of Common Stock, constituting
approximately 13% of the outstanding shares of Common Stock. Upon completion of
the Offerings and assuming that the Underwriters' over-allotment options are
exercised in full, the Selling Shareholder will own 10,070,200 shares of Common
Stock, constituting approximately 5% of the outstanding shares of Common Stock.
The Selling Shareholder has no present intention to dispose of any additional
shares of Common Stock.

The Selling Shareholder is a common law trust established in 1924 by the
late James B. Duke, the founder of the Company, for educational, hospital,
religious and other charitable purposes. The Selling Shareholder has advised the
Company that its Common Stock holdings constituted approximately 77% of its
investment portfolio as of December 31, 1993 and provided almost 80% of its
income for the year then ended and that it is selling the shares of Common Stock
offered hereby to diversify its investment portfolio.

The Selling Shareholder has 15 trustees, none of whom has been a director,
officer or employee of the Company or has had a material relationship with the
Company within the past three years, except for James C. Self, a trustee of the
Selling Shareholder, who served as a director of the Company from April 30, 1982
until April 23, 1992.

The trustees of the Selling Shareholder are also the trustees of The Doris
Duke Trust, another common law trust established by James B. Duke, which, as of
the date of this Prospectus, owns of record 3,906,396 shares of Common Stock,
constituting approximately 2% of the outstanding shares of Common Stock. The
Selling Shareholder believes it became entitled as remainderman to a
distribution of 2,604,264 shares of such shares of Common Stock from The Doris
Duke Trust as of the date of death of its principal income beneficiary. The
Doris Duke Trust has commenced a proceeding seeking a determination as to the
entitlement to such distribution and the matter is currently in litigation.

The foregoing statements with respect to the Selling Shareholder are based
upon information furnished to the Company by the Selling Shareholder.

10
<PAGE> 11

DESCRIPTION OF CAPITAL STOCK

GENERAL

The authorized capital stock of the Company is divided into four classes:
Common Stock, without par value, Preferred Stock of the par value of $100 per
share ("Preferred Stock"), Preferred Stock A of the par value of $25 per share
("Preferred Stock A") and Preference Stock of the par value of $100 per share
("Preference Stock"). The number of authorized shares of Common Stock, Preferred
Stock, Preferred Stock A and Preference Stock are 300,000,000, 12,500,000,
10,000,000 and 1,500,000, respectively. As of the date hereof, there are
currently outstanding 14 series of Preferred Stock, 5 series of Preferred Stock
A and no series of Preference Stock. The Preferred Stock, Preferred Stock A and
Preference Stock together are hereinafter sometimes called the "Preferred
Stocks."

The following statements are summaries of certain provisions with respect
to the Common Stock and the Preferred Stocks that are contained in the Company's
Restated Articles of Incorporation (the "Articles"). Reference is made to the
pertinent exhibits to the Registration Statement, which are incorporated herein
by reference, for a full and complete statement of such provisions, and the
following statements are qualified in their entirety by such reference.

COMMON STOCK

Dividends may be paid on the Common Stock as determined by the Board of
Directors out of funds legally available therefor but only if full dividends on
all outstanding series of the Preferred Stocks for the then current and all
prior dividend periods and any required sinking fund payments with respect to
any outstanding series of such securities have been paid or provided for.

The holders of the Common Stock have exclusive voting rights, except as
otherwise provided by law, on the basis of one vote per share.

Whenever dividends on any part of the Preferred Stock or of the Preferred
Stock A are in arrears in an amount equivalent to the aggregate dividends
required to be paid on such Preferred Stock or such Preferred Stock A in any
period of 12 calendar months, the holders of the Preferred Stock as a class have
the exclusive right to elect a majority of the authorized number of directors of
the Company and the holders of the Preferred Stock A as a class have the
exclusive right to elect two directors, which rights cease whenever all accrued
and unpaid dividends have been paid in full. Whenever six quarterly dividends on
any outstanding series of the Preference Stock are in arrears or any required
sinking fund payments are in default, the holders of the Preference Stock as a
class have the exclusive right to elect two directors of the Company which right
ceases whenever all dividends and required sinking fund obligations in default
have been paid in full or provided for. In addition, the consent of the holders
of specified percentages of the Preferred Stock, Preferred Stock A or of the
Preference Stock, or some or all of the holders of such classes, is required in
connection with certain increases in authorized amounts or changes in stock
senior to the Common Stock or in connection with any sale of substantially all
of the Company's assets or certain mergers.

The holders of the Common Stock are entitled in liquidation to share
ratably in the assets of the Company after required preferential payments to the
holders of the Preferred Stocks.

The holders of the Common Stock have no cumulative voting rights, no
preemptive rights and no conversion rights. The Common Stock is not subject to
redemption or to any further calls or assessments and is not entitled to the
benefit of any sinking fund provisions.

The Company serves as transfer agent and First Union National Bank of North
Carolina, Charlotte, N.C. serves as registrar for the Common Stock.

PREFERRED STOCKS

The Preferred Stock, Preferred Stock A and Preference Stock may be issued
in one or more series from time to time upon such consideration (not less than
the par value thereof), upon such terms, and in such manner, and with such
variations as to dividend rates (or method of calculation

11
<PAGE> 12

thereof), dividend payment dates, terms of redemption (at prices not less than
the par value thereof), sinking fund provisions and conversion rights as may be
determined by the Board of Directors without the approval of the shareholders.

CHANGE OF CONTROL

The Articles provide for a classified Board of Directors consisting of
three classes. Each class consists, as nearly as may be possible, of one-third
of the total number of directors constituting the entire Board of Directors. At
each annual meeting of shareholders, successors to the class of directors whose
term expires at that annual meeting are elected for a three-year term and until
their respective successors are elected and qualified.

Certain provisions of the Articles require a greater than majority vote of
the Company's shareholders. Under the Articles the affirmative vote of at least
80% of the combined voting power of the then outstanding shares of stock of all
classes of the Company entitled to vote generally in the election of directors
of the Company voting together as a single class is required to alter, amend or
repeal any of the provisions, including the percentage vote requirement, of the
Article that classifies the Board of Directors into three classes, specifies the
minimum and maximum size of the Board, provides that directors may be removed
only for cause, provides that newly created directorships and vacancies on the
Board may be filled only by the remaining directors and provides that no
decrease in the number of directors constituting the Board of Directors may
shorten the term of any incumbent director.

The provisions authorizing the Board of Directors to issue the Preferred
Stocks without shareholder approval, the classified Board of Directors and the
provisions requiring a greater than majority vote of shareholders in certain
instances could have the effect of delaying, deferring or preventing a change in
control of the Company or the removal of existing management.

12
<PAGE> 13

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Selling Shareholder has agreed to sell to each of the U.S. Underwriters named
below, and each of the U.S. Underwriters, for whom Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. Incorporated
are acting as representatives, has severally agreed to purchase from the Selling
Shareholder, the respective number of shares of Common Stock set forth opposite
its name below:

<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
U.S. UNDERWRITER COMMON STOCK
- ------------------------------------------------------------------------------ ------------
<S> <C>
Goldman, Sachs & Co. ......................................................... 1,626,700
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................................................... 1,626,650
Morgan Stanley & Co. Incorporated............................................. 1,626,650
Advest, Inc. ................................................................. 160,000
Robert W. Baird & Co. Incorporated............................................ 160,000
Marion Bass Securities Corporation............................................ 25,000
Bear, Stearns & Co. Inc. ..................................................... 225,000
CS First Boston Corporation................................................... 225,000
J.C. Bradford & Co. .......................................................... 160,000
Dain Bosworth Incorporated.................................................... 160,000
Davenport & Co. of Virginia, Inc. ............................................ 100,000
Dean Witter Reynolds Inc. .................................................... 225,000
Dillon, Read & Co. Inc. ...................................................... 225,000
Donaldson, Lufkin & Jenrette Securities Corporation........................... 225,000
A. G. Edwards & Sons, Inc. ................................................... 225,000
Fahnestock & Co. Inc. ........................................................ 100,000
Gruntal & Co., Incorporated................................................... 100,000
J.J.B. Hilliard, W.L. Lyons, Inc. ............................................ 100,000
Interstate/Johnson Lane Corporation........................................... 160,000
Janney Montgomery Scott Inc. ................................................. 100,000
Edward D. Jones & Co. ........................................................ 160,000
Kemper Securities, Inc. ...................................................... 225,000
Kidder, Peabody & Co. Incorporated............................................ 225,000
WR Lazard, Laidlaw & Mead Incorporated........................................ 100,000
Legg Mason Wood Walker Incorporated........................................... 160,000
Lehman Brothers Inc. ......................................................... 225,000
Edgar M. Norris & Co., Inc. .................................................. 100,000
Oppenheimer & Co., Inc. ...................................................... 225,000
PaineWebber Incorporated...................................................... 225,000
J. Lee Peeler & Company, Inc. ................................................ 25,000
Prudential Securities Incorporated............................................ 225,000
Pryor, McClendon, Counts & Co., Inc. ......................................... 100,000
Samuel A. Ramirez & Co., Inc. ................................................ 100,000
Rauscher Pierce Refsnes, Inc. ................................................ 160,000
The Robinson-Humphrey Company, Inc. .......................................... 160,000
</TABLE>

13
<PAGE> 14

Under the terms and conditions of the Underwriting Agreement, the U.S.
Underwriters are committed to take and pay for all of the shares offered hereby,
if any are taken.

The U.S. Underwriters propose to offer the shares of Common Stock in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus, and in part to certain securities dealers at such
price less a concession of $.55 per share. The U.S. Underwriters may allow, and
such dealers may reallow, a concession not in excess of $.10 per share to
certain brokers and dealers. After the shares of Common Stock are released for
sale to the public, the offering price and other selling terms may from time to
time be varied by the representatives.

The Company and the Selling Shareholder have entered into an underwriting
agreement (the "International Underwriting Agreement") with the underwriters of
the International Offering (the "International Underwriters") providing for the
concurrent offer and sale of 2,800,000 shares of Common Stock in an
international offering outside the United States. The offering price and
aggregate underwriting discount per share for the two offerings are identical.
The closing of the offering made hereby is a condition to the closing of the
international offering, and vice versa. The representatives of the International
Underwriters are Goldman Sachs International, Merrill Lynch International
Limited and Morgan Stanley & Co. International Limited.

Pursuant to an agreement between the U.S. and International Underwriting
Syndicates (the "Agreement Between") relating to the Offerings, each of the U.S.
Underwriters named herein has agreed that, as a part of the distribution of the
shares offered hereby and subject to certain exceptions, it will offer, sell or
deliver the shares offered hereby and other shares of Common Stock, directly or
indirectly, only in the United States of America (including the States and the
District of Columbia), its territories, possessions and other areas subject to
its jurisdiction (as used in this paragraph, the "United States") and to U.S.
persons, which term shall mean for purposes of this paragraph (a) individuals
resident in the United States and (b) corporations, partnerships or other
entities organized in or under the laws of the United States or any political
subdivision thereof and whose office most directly involved with the purchase is
located in the United States. Each of the International Underwriters has agreed
pursuant to the Agreement Between that, as part of the distribution of the
shares offered as part of the International Offering and subject to certain
exceptions, it (i) will not offer, sell or deliver shares of Common Stock,
directly or indirectly, (a) in the United States or to any U.S. persons or (b)
to any person whom it believes intends to reoffer, resell or deliver the shares
in the United States or to any U.S. persons and (ii) will cause any dealer to
whom it may sell such shares at any concession to agree to observe a similar
restriction.

14
<PAGE> 15

Pursuant to the Agreement Between, sales may be made between the U.S.
Underwriters and the International Underwriters of such number of shares of
Common Stock as may be mutually agreed. The price of any shares so sold shall be
the initial public offering price, less an amount not greater than the selling
concession.

The Selling Shareholder has granted the U.S. Underwriters an option
exercisable for 30 days after the date of this Prospectus to purchase up to an
aggregate of 1,600,000 additional shares of Common Stock solely to cover
over-allotments, if any. If the U.S. Underwriters exercise their over-allotment
option, the U.S. Underwriters have severally agreed, subject to certain
conditions, to purchase approximately the same percentage thereof that the
number of shares to be purchased by each of them, as shown in the foregoing
table, bears to the 11,200,000 shares of Common Stock offered hereby. The
Selling Shareholder has granted the International Underwriters an option
exercisable for 30 days after the date of this Prospectus to purchase up to an
aggregate of 400,000 additional shares of Common Stock solely to cover
over-allotments, if any. Any shares of Common Stock purchased pursuant to such
over-allotment options will be purchased at the initial public offering price
per share less the underwriting discount, as set forth on the cover page of this
Prospectus.

The Selling Shareholder has agreed not to offer, sell or otherwise dispose
of any Common Stock, except for the shares of Common Stock offered in connection
with the Offerings, for a period of 180 days after the date of this Prospectus
without the prior written consent of the representatives of the Underwriters.
The Company has agreed with the Underwriters not to offer, sell, contract to
sell or otherwise dispose of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, except
pursuant to employee benefit plans and the Stock Purchase and Dividend
Reinvestment Plan, for a period of 90 days after the date of this Prospectus
without the prior written consent of the representatives of the Underwriters.

The Underwriters and certain affiliates thereof engage in transactions with
and perform services for the Company and its affiliates in the ordinary course
of business.

The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933.

EXPERTS

The financial statements included in the Company's current report on Form
8-K dated February 18, 1994, which are incorporated herein by reference, have
been audited by Deloitte & Touche, as stated in their report appearing therein,
and are incorporated herein in reliance upon such report given upon the
authority of that firm as experts in accounting and auditing.

LEGAL MATTERS

The validity of the Common Stock offered in the Offerings will be passed
upon for the Company by Steve C. Griffith, Jr., Esq., Charlotte, North Carolina,
and by Dewey Ballantine, New York, New York, and for the Underwriters by Willkie
Farr & Gallagher, New York, New York. In giving their opinions, Dewey Ballantine
and Willkie Farr & Gallagher may rely as to matters of local law upon the
opinion of Mr. Griffith, who is a Director and Executive Vice President and the
General Counsel of the Company. Mr. Griffith owns 36,904 shares of Common Stock
of the Company, including 36,854 shares held under the Stock Purchase-Savings
Program for Employees and the Employees' Stock Ownership Plan. Certain legal
matters in connection with the Offerings will be passed upon for the Selling
Shareholder by Dewey Ballantine.

15
<PAGE> 16

- ------------------------------------------------------
- ------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN
THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT
THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Available Information.................. 2
Documents Incorporated by Reference.... 2
Prospectus Summary..................... 3
The Company............................ 5
Recent Developments.................... 6
Selected Financial Data................ 7
Non-Utility Subsidiary Data............ 7
Selected Operating Statistics.......... 8
Common Stock Price Range
and Dividends........................ 9
Use of Proceeds........................ 10
Selling Shareholder.................... 10
Description of Capital Stock........... 11
Underwriting........................... 13
Experts................................ 15
Legal Matters.......................... 15
</TABLE>

- ------------------------------------------------------
- ------------------------------------------------------

14,000,000 SHARES

DUKE POWER COMPANY

COMMON STOCK
(WITHOUT PAR VALUE)
---------------------------

[LOGO]

---------------------------

GOLDMAN, SACHS & CO.

MERRILL LYNCH & CO.

MORGAN STANLEY & CO.
INCORPORATED

REPRESENTATIVES OF THE UNDERWRITERS

- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 17
Filed pursuant to Rule 424(b)(1)
Registration No. 33-52479

14,000,000 SHARES

DUKE POWER COMPANY
COMMON STOCK
(WITHOUT PAR VALUE)
------------------------

Of the 14,000,000 shares of Common Stock offered, 2,800,000 shares are
being offered hereby in an international offering outside the United States and
11,200,000 shares are being offered in a concurrent offering in the United
States. The initial public offering price and the aggregate underwriting
discount per share are identical for both offerings. See "Underwriting."

The Common Stock is listed on the New York Stock Exchange under the symbol
"DUK." The last sale price of the Common Stock on March 29, 1994 as reported on
the New York Stock Exchange Composite Tape was $36.875 per share. See "Common
Stock Price Range and Dividends."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------

- ---------------

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."
(2) Before deducting estimated expenses of $440,000 payable by the Selling
Shareholder. Expenses payable by the Company are estimated to be $20,000.
(3) The Selling Shareholder has granted the Underwriters options for 30 days to
purchase in the aggregate up to an additional 2,000,000 shares at the
initial public offering price per share, less the underwriting discount,
solely to cover over-allotments. If such options are exercised in full, the
total initial public offering price, underwriting discount and proceeds to
the Selling Shareholder will be $588,000,000, $15,680,000 and $572,320,000,
respectively. See "Underwriting."
------------------------
The shares offered hereby are offered severally by the International
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that certificates for the shares will be ready for delivery in New York, New
York, on or about April 6, 1994.

GOLDMAN SACHS INTERNATIONAL

MERRILL LYNCH INTERNATIONAL LIMITED
MORGAN STANLEY & CO.
INTERNATIONAL

CAZENOVE & CO. CREDIT LYONNAIS SECURITIES UBS LIMITED

ABN AMRO BANK N.V. DAIWA EUROPE LIMITED DRESDNER BANK
AKTIENGESELLSCHAFT

NATWEST SECURITIES LIMITED SWISS BANK CORPORATION UNIBANK
------------------------
The date of this Prospectus is March 29, 1994
<PAGE> 18

AVAILABLE INFORMATION

DOCUMENTS INCORPORATED BY REFERENCE

The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:

(1) Annual report on Form 10-K for the year ended December 31, 1992.

(2) Amendment to Form 10-K on Form 8 dated March 12, 1993.

(3) Quarterly reports on Form 10-Q for the quarters ended March 31,
1993, June 30, 1993 and September 30, 1993.

(4) Current report on Form 8-K dated February 18, 1994.

2
<PAGE> 19

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and consolidated financial data incorporated by reference herein.

THE OFFERINGS

- ---------------
(1) Assumes that the Underwriters' over-allotment options are exercised in full.
See "Underwriting."

(2) Based upon the number of shares of Common Stock outstanding as of February
28, 1994.

THE COMPANY

3
<PAGE> 20

SUMMARY FINANCIAL DATA
(Amounts In Thousands Except Per Share Data)

4
<PAGE> 21

THE COMPANY

SERVICE AREA

RATE MATTERS

CONSTRUCTION PROGRAM

5
<PAGE> 22

The Company anticipates that approximately 86% of the projected
construction and nuclear fuel costs for the three-year period 1994-1996 will be
financed through internally generated funds.

RECENT DEVELOPMENTS

6
<PAGE> 23

SELECTED FINANCIAL DATA

(b) All common stock data reflects the two-for-one split of common stock on
September 28, 1990.

NON-UTILITY SUBSIDIARY DATA

- ---------------

(a) 1991 excludes the cumulative effect of an accounting change of $6,727,000
after tax.

7
<PAGE> 24

SELECTED OPERATING STATISTICS

- ---------------
(a) Includes 100% of generation from the Catawba Nuclear Station.

(b) 1991 includes KWH of the Bad Creek Hydroelectric Station prior to commercial
operation.

(d) Does not reflect operating statistics, kilowatt-hour sales and revenues of
Nantahala Power and Light Company.

(e) Includes sales to Nantahala Power and Light Company.

(f) 1991 restated to eliminate certain duplicate customers.

8
<PAGE> 25

COMMON STOCK PRICE RANGE AND DIVIDENDS

For a recent reported price for the Common Stock, see the cover page of
this Prospectus.

9
<PAGE> 26

USE OF PROCEEDS

All of the shares of Common Stock offered hereby are being sold by the
Selling Shareholder. The Company will not receive any of the proceeds of the
Offerings.

SELLING SHAREHOLDER

The foregoing statements with respect to the Selling Shareholder are based
upon information furnished to the Company by the Selling Shareholder.

10
<PAGE> 27

DESCRIPTION OF CAPITAL STOCK

GENERAL

COMMON STOCK

The holders of the Common Stock have exclusive voting rights, except as
otherwise provided by law, on the basis of one vote per share.

The holders of the Common Stock are entitled in liquidation to share
ratably in the assets of the Company after required preferential payments to the
holders of the Preferred Stocks.

The Company serves as transfer agent and First Union National Bank of North
Carolina, Charlotte, N.C. serves as registrar for the Common Stock.

PREFERRED STOCKS

11
<PAGE> 28

CHANGE OF CONTROL

12
<PAGE> 29

CERTAIN UNITED STATES TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS

The following is a general discussion of certain United States federal
income and estate tax consequences to a holder of Common Stock who is not a
United States person (a "Foreign Holder") of the acquisition, ownership and
disposition of the Common Stock. For these purposes, "United States person"
means a citizen or resident (as specifically defined for United States federal
income and estate tax purposes) of the United States, a corporation, partnership
or other entity created or organized in or under the laws of the United States
or any political subdivision thereof or an estate or trust the income of which
is subject to United States federal income taxation regardless of its source.
The discussion does not address the particular facts and circumstances of each
Foreign Holder's situation. Foreign Holders are urged to consult their own tax
advisors with respect to the United States federal income and estate tax
consequences of acquiring, holding and disposing of the Common Stock, as well as
any tax consequences arising under the laws of any state, municipality or other
taxing jurisdiction.

DIVIDENDS

In general, dividends paid to a Foreign Holder will be subject to United
States withholding tax at a 30% rate, or a lower rate prescribed by an
applicable tax treaty, unless the dividends are effectively connected with a
trade or business carried on by the Foreign Holder within the United States. To
determine the applicability of a tax treaty providing for a lower rate of
withholding, dividends paid to an address in a foreign country are presumed
under current Treasury regulations to be paid to a resident of that country.
Treasury regulations proposed in 1984 would, if adopted in final form, require
Foreign Holders to file certain forms to obtain the benefit of any applicable
tax treaty providing for a lower rate of withholding tax on dividends. Such
forms would have to contain the name and address of the holder and an official
statement by the competent authority of the holder's country of residence
attesting to the holder's status as a resident thereof. Dividends effectively
connected with a trade or business carried on by the Foreign Holder within the
United States generally will not be subject to withholding if the Foreign Holder
files Internal Revenue Service Form 4224 with the payor of the dividend and will
generally be subject to United States federal income tax at regular rates. In
the case of a Foreign Holder that is a corporation, such effectively connected
income may be subject to the branch profits tax which is generally imposed on a
foreign corporation on the repatriation from the United States of effectively
connected earnings and profits. The branch profits tax may not apply if the
recipient is a qualified resident of one of certain countries with which the
United States has an income tax treaty.

GAIN ON DISPOSITION

Generally, a Foreign Holder will not be subject to United States federal
income tax on any gain realized upon the disposition of shares of Common Stock
unless (i) the Company is or has been during certain periods a "U.S. real
property holding corporation" for federal income tax purposes and, assuming that
the Common Stock is "regularly traded on an established securities market" for
tax purposes, the Foreign Holder held, directly or indirectly at any time during
the five-year period ending on the date of disposition (or such shorter period
that such shares were held), more than 5% of the Common Stock of the Company;
(ii) the gain is effectively connected with a trade or business carried on by
the Foreign Holder within the United States; (iii) the Foreign Holder is an
individual who has a tax home (as specifically defined for United States federal
income tax purposes) in the United States, holds the Common Stock as a capital
asset and is present in the United States for 183 days or more in the taxable
year of the disposition; or (iv) the Foreign Holder is subject to tax pursuant
to the provisions of United States tax law applicable to certain United States
expatriates.

13
<PAGE> 30

FEDERAL ESTATE TAX

Shares of Common Stock owned or treated as owned by an individual who is
not a citizen or resident of the United States at the time of death will be
includable in the individual's gross estate for United States federal estate tax
purposes, unless an applicable tax treaty provides otherwise, and may be subject
to United States federal estate tax. Estates of non-resident aliens are
generally allowed a statutory credit which has the effect of offsetting the
United States federal estate tax imposed on the first $60,000 of the taxable
estate.

DIVIDEND REPORTING AND BACKUP WITHHOLDING REQUIREMENTS

The Company must report annually to the Internal Revenue Service and to
each Foreign Holder the amount of dividends paid to, and the tax withheld with
respect to, each Foreign Holder. These reporting requirements apply regardless
of whether withholding was reduced by an applicable tax treaty. Under the
provisions of a specific treaty or agreement, copies of these information
returns may also be made available to the tax authorities in the country in
which the Foreign Holder resides. United States backup withholding tax (which
generally is a withholding tax imposed at the rate of 31% on certain payments to
persons that fail to furnish the information required under the United States
information reporting requirements) will generally not apply to dividends paid
on the Common Stock to a Foreign Holder at an address outside the United States.

The payment of the proceeds from the disposition of shares of Common Stock
to or through a United States office of a broker will be subject to information
reporting and backup withholding unless the owner certifies under penalties of
perjury its status as a Foreign Holder, or otherwise establishes an exemption.
The payment of the proceeds from the disposition of shares of Common Stock to or
through a non-U.S. office of a non-U.S. broker will generally not be subject to
backup withholding and information reporting. However, in the case of the
payment of proceeds from the disposition of shares of Common Stock through a
non-U.S. office of a broker that is a United States person or a "U.S. related
person," existing regulations require information reporting on the payment
unless the broker has documentary evidence in its files that the owner is a
Foreign Holder and the broker has no actual knowledge to the contrary. For this
purpose, a "U.S. related person" is (i) a "controlled foreign corporation" for
United States federal income tax purposes, or (ii) a foreign person 50% or more
of whose gross income from all sources for the three-year period ending with the
close of its taxable year preceding the payment is derived from activities that
are effectively connected with the conduct of a United States trade or business.
Proposed regulations contain a similar rule with respect to information
reporting by a non-U.S. office of a broker that is a United States person or a
U.S. related person. However, under the proposed regulations, such a person may
rely on documentary evidence to avoid information reporting only if the foreign
office "effects" the sale at such foreign office. The existing regulations
reserve on the question of whether reportable payments made through foreign
offices of a broker that is a United States person or a U.S. related person will
be subject to backup withholding, but proposed regulations state that backup
withholding will not apply to such payments (absent actual knowledge that the
payee is a United States person) where the foreign office "effects" the sale at
such foreign office. Any amounts withheld under the backup withholding rules
from a payment to a Foreign Holder will be refunded (or credited against that
Foreign Holder's United States federal income tax liability, if any) provided
that the required information is furnished to the Internal Revenue Service.

14
<PAGE> 31

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Selling Shareholder has agreed to sell to each of the International Underwriters
named below, and each of the International Underwriters, for whom Goldman Sachs
International, Merrill Lynch International Limited and Morgan Stanley & Co.
International Limited are acting as representatives, has severally agreed to
purchase from the Selling Shareholder, the respective number of shares of Common
Stock set forth opposite its name below:

<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
INTERNATIONAL UNDERWRITER COMMON STOCK
- ------------------------------------------------------------------------------ ------------
<S> <C>
Goldman Sachs International................................................... 714,000
Merrill Lynch International Limited........................................... 713,000
Morgan Stanley & Co. International Limited.................................... 713,000
Cazenove & Co. ............................................................... 140,000
Credit Lyonnais Securities.................................................... 140,000
UBS Limited................................................................... 140,000
ABN AMRO Bank N.V............................................................. 40,000
Daiwa Europe Limited.......................................................... 40,000
Dresdner Bank Aktiengesellschaft.............................................. 40,000
NatWest Securities Limited.................................................... 40,000
Swiss Bank Corporation........................................................ 40,000
Unibank A/S................................................................... 40,000
------------
Total....................................................................... 2,800,000
------------
------------
</TABLE>

Under the terms and conditions of the Underwriting Agreement, the
International Underwriters are committed to take and pay for all of the shares
offered hereby, if any are taken.

The International Underwriters propose to offer the shares of Common Stock
in part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus, and in part to certain securities dealers at
such price less a concession of $.55 per share. The International Underwriters
may allow, and such dealers may reallow, a concession not in excess of $.10 per
share to certain brokers and dealers. After the shares of Common Stock are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the representatives.

The Company and the Selling Shareholder have entered into an underwriting
agreement (the "U.S. Underwriting Agreement") with the underwriters of the
United States Offering (the "U.S. Underwriters") providing for the concurrent
offer and sale of 11,200,000 shares of Common Stock in the United States. The
offering price and aggregate underwriting discount per share for the two
offerings are identical. The closing of the offering made hereby is a condition
to the closing of the United States offering, and vice versa. The
representatives of the U.S. Underwriters are Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co.
Incorporated.

Pursuant to an Agreement between the U.S. and International Underwriting
Syndicates (the "Agreement Between") relating to the Offerings, each of the
International Underwriters named herein has agreed that, as a part of the
distribution of the shares offered hereby and subject to certain exceptions, it
(i) will not, directly or indirectly, offer, sell or deliver the shares offered
hereby

15
<PAGE> 32

and other shares of Common Stock (a) in the United States (including the States
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction (as used in this paragraph, the "United States") or
to any U.S. Persons (which term shall mean, for purposes of this paragraph: (I)
any individual who is a resident of the United States or (II) any corporation,
partnership or other entity organized in or under the laws of the United States
or any political subdivision thereof and whose office most directly involved
with the purchase is located in the United States) or (b) to any person who it
believes intends to reoffer, resell or deliver the shares in the United States
or to any U.S. Persons, and (ii) cause any dealer to whom it may sell such
shares at any concession to agree to observe a similar restriction. Each of the
U.S. Underwriters has agreed pursuant to the Agreement Between that, as a part
of the distribution of the shares offered as a part of the United States
offering, and subject to certain exceptions, it will offer, sell and deliver
shares of Common Stock, directly or indirectly, only in the United States and to
U.S. Persons.

Pursuant to the Agreement Between, sales may be made between the
International Underwriters and the U.S. Underwriters of such number of shares of
Common Stock as may be mutually agreed. The price of any shares so sold will be
the initial public offering price, less an amount not greater than the selling
concession.

The Selling Shareholder has granted the International Underwriters an
option exercisable for 30 days after the date of this Prospectus to purchase up
to an aggregate of 400,000 additional shares of Common Stock solely to cover
over-allotments, if any. If the International Underwriters exercise their
over-allotment option, the International Underwriters have severally agreed,
subject to certain conditions, to purchase approximately the same percentage
thereof that the number of shares to be purchased by each of them, as shown in
the foregoing table, bears to the 2,800,000 shares of Common Stock offered
hereby. The Selling Shareholder has granted the U.S. Underwriters an option
exercisable for 30 days after the date of this Prospectus to purchase up to an
aggregate of 1,600,000 additional shares of Common Stock solely to cover
over-allotments, if any. Any shares of Common Stock purchased pursuant to such
over-allotment options will be purchased at the initial public offering price
per share less the underwriting discount, as set forth on the cover page of this
Prospectus.

Each International Underwriter has agreed that (i) it has not offered or
sold, and it will not offer or sell, in the United Kingdom by means of any
document any shares of Common Stock other than to persons whose ordinary
business it is to buy or sell shares or debentures, whether as principal or
agent, or in circumstances which do not constitute an offer to the public within
the meaning of the Companies Act of 1985 of Great Britain, (ii) it has complied,
and will comply, with all applicable provisions of the Financial Services Act of
1986 of Great Britain with respect to anything done by it in relation to the
Common Stock in, from or otherwise involving the United Kingdom and (iii) it has
only issued or passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issuance of the shares of
Common Stock to a person who is of a kind described in Article 9(3) of the
Financial Services Act of 1986 (Investment Advertisements) (Exemptions) Order
1989 of Great Britain or is a person to whom the document may otherwise lawfully
be issued or passed on.

16
<PAGE> 33

Purchasers of the shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the offering price set forth on the cover page hereof.

The Underwriters and certain affiliates thereof engage in transactions with
and perform services for the Company and its affiliates in the ordinary course
of business.

The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933.

EXPERTS

LEGAL MATTERS

17
<PAGE> 34

- ------------------------------------------------------
- ------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Available Information.................. 2
Documents Incorporated by Reference.... 2
Prospectus Summary..................... 3
The Company............................ 5
Recent Developments.................... 6
Selected Financial Data................ 7
Non-Utility Subsidiary Data............ 7
Selected Operating Statistics.......... 8
Common Stock Price Range
and Dividends........................ 9
Use of Proceeds........................ 10
Selling Shareholder.................... 10
Description of Capital Stock........... 11
Certain United States Tax Consequences
to Non-United States Holders......... 13
Underwriting........................... 15
Experts................................ 17
Legal Matters.......................... 17
</TABLE>

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- ------------------------------------------------------

14,000,000 SHARES

DUKE POWER COMPANY

COMMON STOCK
(WITHOUT PAR VALUE)
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[LOGO]

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GOLDMAN SACHS INTERNATIONAL
MERRILL LYNCH INTERNATIONAL LIMITED
MORGAN STANLEY & CO.
INTERNATIONAL

REPRESENTATIVES OF THE UNDERWRITERS

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