Kentucky Public Service Commission

Order Entered: Duke Kentucky is authorized to enter into Capital Leases up to $25 million in one or more transactions through December 31 2014. 2. Duke Kentucky shall agree only to such terms and prices that are consistent with the parameters set out in its application. 3. Duke Kentucky shall, within 10 days after entering into a Capital Lease, file with the Commission a statement setting forth the starting date and period of the lease, a description of the property, the name and address of the lessor, the dollar amount of the lease, any stated or implied interest rate, all fees and expenses included in the lease and a copy of any participation agreements. In addition, Duke Kentucky shall perform an analysis comparing the cost of financing through Capital Leases to that of other forms of debt financing for any Capital Lease in excess of $1,000,000. The analysis and supporting data should be retained as documentation for establishing ratepayer benefits from Capital Leases during future rate proceedings. 4. The proceeds from the transactions authorized herein shall be used only for the lawful purposes set out in the application. 5. Any documents filed pursuant to ordering paragraph 3 of this Order shall reference the number of this case and shall be retained in the utility’s general correspondence file.

No deficiency letter

Order Entered: Duke Kentucky’s request for an extension of the Company’s existing leasing authority approved in Case No. 201 0-00370 and currently set to expire December 31, 2012, is approved pending a Final Order of the Commission in this proceeding. Pursuant to KRS 278.300, the Commission must dispose of an application for issuance of securities or indebtedness within 60 days of acceptance for filing, unless it is continued for good cause shown. Duke Kentucky’s tendered application has not yet been accepted for filing and nothing in this Order shall be construed as such.

Acknowledge Receipt of Filing

Application of Duke energy Kentucky, Inc. for an Order to Enter into up to $25,000,000 Principal Amount of Capital Lease Obligations