AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 22, 1996
REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3

REGISTRATION STATEMENT
UNDER
THE SECURITIES EXCHANGE ACT OF 1933
PUBLIC SERVICE COMPANY
OF NORTH CAROLINA, INCORPORATED

(Exact name of Registrant as specified in its charter)

NORTH CAROLINA 56-0233140
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

400 COX ROAD
POST OFFICE BOX 1398
GASTONIA, NORTH CAROLINA 28053-1398
(704) 864-6731

(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)

JACK G. MASON
400 COX ROAD
POST OFFICE BOX 1398
GASTONIA, NORTH CAROLINA 28053-1398
(704) 834-6422

(Name, address, including zip code, and telephone number,
including area code, of agent for service)

COPIES TO:

JEFFREY S. HAY, ESQ. J. PAUL DOUGLAS
FENNEBRESQUE, CLARK, SWINDELL & HAY 400 COX ROAD
NATIONSBANK CORPORATE CENTER POST OFFICE BOX 1398
100 NORTH TRYON STREET, SUITE 2900 GASTONIA, NORTH CAROLINA 28053-1398
CHARLOTTE, NORTH CAROLINA 28202 (704) 834-6446
(704) 347-3800

APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of the Registration Statement as
determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is used to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act of 1933 registration statement number
of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, please check the following box and list the
Securities Act of 1933 registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

[CAPTION]

TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING
BE REGISTERED REGISTERED PER UNIT (1) PRICE (1)

Common Stock,
$1 par value.......... 1,000,000 $17.6875 $17,687,500

TITLE OF EACH CLASS
OF SECURITIES TO AMOUNT OF
BE REGISTERED REGISTRATION FEE

Common Stock,
$1 par value.......... $6,099.14

(1) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 429, the Prospectus included in this Registration
Statement is a combined prospectus and relates to the registrant's Registration
Statement No. 33-48911 as previously filed by the registrant on August 18, 1992,
on Form S-3, and the 675,631 shares of the registrant's Common Stock remaining
for sale thereunder. This Registration Statement, which is a new registration
statement, also constitutes Post-Effective Amendment No. 2 to the Registration
Statement No. 33-48911 and such Post-Effective Amendment No. 2 shall hereafter
become effective concurrently with the effectiveness of this registration
statement and in accordance with Section 8(c) of the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

(A redherring appears on the left-hand side of this page, rotated 90
degrees. Text is as follows:)

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

PROSPECTUS
(SUBJECT TO COMPLETION, ISSUED , 1996)

1,675,631 SHARES

PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
INCORPORATED

STOCK PURCHASE AND
AUTOMATIC DIVIDEND REINVESTMENT PLAN

COMMON STOCK
(PAR VALUE $1.00 PER SHARE)

Public Service Company of North Carolina, Incorporated (the "Company")
hereby offers to eligible persons, even if they are currently shareholders of
the Company, the opportunity to make an initial purchase of its Common Stock,
par value $1.00 per share (the "Common Stock"), by purchasing shares directly
from the Company and thereafter to participate in the automatic dividend
reinvestment and optional stock purchase portions of the Plan. No service fees
or brokerage commissions will be charged to participants in the Plan
("Participants") for purchases made under this Stock Purchase and Automatic
Dividend Reinvestment Plan (the "Plan").

Shares acquired through the Plan generally will be purchased directly from
the Company from authorized but unissued shares rather than being purchased on
the open market. However, from time to time shares may be acquired through open
market purchases. The price of shares acquired with initial or optional cash
payments will be purchased at 100% of market value, determined as provided in
the Plan. Shares acquired with reinvested dividends will be purchased at a 5%
discount from such market value. See "Description of the Plan -- Purchases."
Further information concerning the provisions of the Plan is set forth elsewhere
in this Prospectus.

This Prospectus relates to 1,000,000 authorized and unissued shares of
Common Stock being registered for sale under the Plan pursuant to a registration
statement to which this Prospectus is a part and 675,631 shares previously
registered, and is being provided both to present and prospective Participants.
For present Participants, this Prospectus (including the materials incorporated
by reference) provides more current information concerning the Plan and is
intended to amend the Prospectus dated March 31, 1993. Persons already
participating in the Plan need not submit a new Authorization Form unless they
are making an initial cash purchase or are changing their type of participation.
THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE REGARDING THE DETAILS OF
THE PLAN.

The outstanding shares of the Company's Common Stock are, and the
additional shares offered hereby, will be listed on the New York Stock Exchange.

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

The date of this Prospectus is September , 1996.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities of
the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549; and at the
Commission's following regional office: 1401 Brickell Avenue, Suite 200, Miami,
Florida 33131. Copies of this material can also be obtained at prescribed rates
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, reports, proxy statements and other
information regarding the Company made through the Electronic Data Gathering,
Analysis, and Retrieval System are publicly available through the following web
site maintained by the Commission: http://www.sec.gov. The Company's Common
Stock, par value $1.00 per share, trading symbol "PGS," (the "Common Stock"), is
listed on the New York Stock Exchange (the "NYSE"). Reports, proxy statements
and other information concerning the Company can be inspected at the offices of
the NYSE, 20 Broad Street, New York, New York 10005.

The Company has filed with the Commission a Registration Statement with
respect to the Common Stock offered hereby. This Prospectus does not contain all
the information in the Registration Statement and in the exhibits and schedules
thereto. For further information, reference is made to the Registration
Statement and to the exhibits and schedules therewith. These documents may be
inspected without charge at the Office of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 and copies may be obtained from the Commission at
prescribed rates.

The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated herein by reference (other than
exhibits to such documents which are not specifically incorporated by reference
in such documents). Such a written or oral request should be directed to Jack G.
Mason, Treasurer, Public Service Company of North Carolina, Incorporated, Post
Office Box 1398, Gastonia, North Carolina 28053-1398, telephone number (704)
834-6422.

MATERIAL INCORPORATED BY REFERENCE

The following documents filed by the Company with the Commission pursuant
to the Exchange Act are hereby incorporated by reference into this Prospectus:

(1) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995;

(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1995, March 31, 1996 and June 30, 1996; and

(3) The description of the Common Stock contained in the Company's Form 8-A
dated February 22, 1995.

In addition, all documents subsequently filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
prior to termination of the offering of the shares of Common Stock covered by
this Prospectus shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing of such documents.

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

THE COMPANY

The Company is engaged primarily in distributing natural gas to
approximately 300,000 residential, commercial and industrial customers in 90
cities and communities in North Carolina. The Company's 26-county service area,
covering approximately 10,000 square miles, has a population of approximately
2,300,000 and includes the fast-growing areas of Raleigh, Durham and Chapel
Hill; Concord and Gastonia near Charlotte; Asheville and Hendersonville. The
Company's utility operations are subject to regulation by the North Carolina
Utilities Commission. PSNC, through various subsidiaries, also participates in
nonregulated businesses such as natural gas and pipeline capacity brokering, and
the conversion and fueling of natural gas vehicles.

The Company was organized as a North Carolina corporation in 1938. The
Company's corporate office is located at 400 Cox Road, Post Office Box 1398,
Gastonia, North Carolina 28053-1398, telephone (704) 864-6731.

DESCRIPTION OF THE PLAN

In 1980, the Board of Directors of the Company approved the original
Automatic Dividend Reinvestment and Stock Purchase Plan which was previously
amended and is now amended to be known as the "Stock Purchase and Automatic
Dividend Reinvestment Plan" (the "Plan"). The Plan, as amended, now allows all
eligible persons, even if they are currently shareholders of the Company, to
make an initial purchase of the Company's Common Stock and thereafter to
participate in the automatic dividend reinvestment and optional stock purchase
portions of the Plan. The Company, however, reserves the right to limit the
amount of a Participant's initial investment or reinvestment if it determines
that the investment or reinvestment of the designated amount may jeopardize the
Plan or the rights of other Participants thereunder. The Plan presently consists
of the following 28 questions and answers. As of June 10, 1996, 7,297
shareholders were participating in the Plan, representing approximately 63% of
the eligible shareholders. As of June 30, 1996, 2,948,709 shares of the
Company's Common Stock had been issued under the Plan since its inception. The
Company's Common Stock began trading on the NYSE on March 1, 1995 under the
symbol "PGS." Prior to that date, the Company's stock was traded on the NASDAQ
National Market System under the symbol "PSNC."

The following is a question-and-answer statement of the provisions of the
Plan:

1. WHAT IS THE PLAN?

The Plan provides that (a) Eligible Investors (as defined in Question 3)
may make an initial purchase of shares of Common Stock and (b) all holders of
record of shares of the Company's Common Stock ("Shareholders") may reinvest all
or a portion of their cash dividends on the Company's Common Stock in shares of
Common Stock and may also make additional purchases of Common Stock through
optional cash payments. The following questions and answers explain how an
Eligible Investor may make an initial payment to purchase shares of the
Company's Common Stock and how a Shareholder may have cash dividends reinvested
in Common Stock and make optional cash payments to purchase additional shares of
Common Stock.

2. WHAT IS THE PURPOSE OF THE PLAN AND WHAT ARE ITS ADVANTAGES?

The Plan offers a convenient and economical way for Eligible Investors to
make an initial purchase of shares of Common Stock and for existing holders of
Common Stock to increase their ownership of shares of Common Stock. The price of
shares of Common Stock purchased with initial or optional cash payments under
the Plan will be made at 100% of market value (determined as provided in the
answer to Question 10). The price of shares of Common Stock purchased with
reinvested dividends will be made at a 5% discount from market value (determined
as provided in the answer to Question 10). Participants in the Plan pay no
brokerage commissions or service charges for purchases made under the Plan. Full
investment of funds is possible under the Plan because the Plan permits
fractions of shares, rounded to at least three decimal places, as well as full
shares, to be credited to a Participant's account. Participants will be credited
with dividends on full and fractions of shares held under the Plan. The net
proceeds realized by the Company from the shares sold will be added to working
capital primarily for application toward the Company's construction program. See
"Use of Proceeds."

PARTICIPATION

3. WHO IS ELIGIBLE TO PARTICIPATE?

Any person or entity, whether or not a holder of record of shares of Common
Stock ("Eligible Investors"), is eligible to participate in the Plan.
Shareholders whose shares are registered in names other than their own (e.g., in
the name of a broker or bank nominee) must become holders of record by having
their shares transferred into their own names (see the answer to Question 5 for
information about stock transfers) in order to participate. Eligible Investors
who make an initial purchase of Common Stock may then participate in the
automatic dividend reinvestment and optional cash purchase portions of the Plan.

4. HOW DOES AN ELIGIBLE INVESTOR BECOME A PARTICIPANT?

Eligible Investors may become Participants in the Plan by signing an
Authorization Form and returning it to the Company's Stock Transfer Agent,
Registrar and Dividend Disbursing Agent identified in Question 5. An Eligible
Investor's initial cash payment must be enclosed with the Authorization Form.
Authorization Forms may be obtained at any time by written

request to the Stock Transfer Agent at the same address. Authorization Forms
previously filed by Participants related to the automatic dividend reinvestment
and optional cash purchase portions of the Plan will continue to be effective
until revoked.

5. WHO IS THE STOCK TRANSFER AGENT AND REGISTRAR?

First Union National Bank of North Carolina (the "Bank") is the Company's
Stock Transfer Agent, Registrar and Dividend Disbursing Agent. All physical
changes in registration of shares owned or shares transferred between parties
are made by the Bank and requests therefor should be sent directly to the Bank
addressed as follows:

First Union National Bank of North Carolina
Dividend Reinvestment Department
230 South Tryon Street, 11th Floor
Charlotte, North Carolina 28288-1153

6. WHEN MAY AN ELIGIBLE INVESTOR JOIN THE PLAN?

An Eligible Investor may join the Plan at any time. An Eligible Investor
who is not currently a Shareholder will become a Participant when the Bank
receives the signed Authorization Form along with the initial cash payment. If
an Authorization Form is received by the Bank on or before the record date
established for payment of a particular dividend, the reinvestment of dividends
under the Plan will commence with that dividend. If an Authorization Form is
received after the record date established for a particular dividend, the
reinvestment of dividends under the Plan will begin with the next succeeding
dividend. For example, in order to have the dividend expected to be paid on
October 1, 1996 reinvested under the Plan, an Authorization Form must be
received by the Bank on or before September 10, 1996, the expected record date
for the dividend. (See Question 14 for information concerning initial cash
payments by Eligible Investors and optional cash payments by Shareholders).

Quarterly dividend payment dates ordinarily occur on the first day of
January, April, July and October. Dividend record dates for determining
shareholders who will receive dividends are usually set for the 10th day of the
preceding month if a regular business day, or if the 10th day is on a Saturday,
Sunday or legal holiday, the record date shall be the last business day
preceding the 10th day. Although the Plan contemplates the continuation of
quarterly dividend payments, the payment of dividends will depend upon future
earnings, the financial condition of the Company and other factors.

ADMINISTRATION

7. WHO ADMINISTERS THE PLAN FOR PARTICIPANTS?

The Bank administers the Plan for Participants, maintains records, sends
statements of account activity to Participants and performs other duties
relating to the Plan.

COSTS

8. ARE THERE ANY EXPENSES TO PARTICIPANTS IN CONNECTION WITH PURCHASES MADE
UNDER THE PLAN?

All costs of administration of the Plan are paid by the Company.
Participants incur no brokerage commissions or service charges for purchases
made under the Plan. (See Question 20 for information relating to the sale of
shares under the Plan).

PURCHASES

9. WHEN WILL THE SHARES OF COMMON STOCK BE PURCHASED UNDER THE PLAN?

Cash dividends on shares of Common Stock will be applied to the purchase of
additional shares of Common Stock on dividend payment dates. Initial cash
payments by Eligible Investors and optional cash payments by existing
Shareholders will be applied to the purchase of shares of Common Stock on the
next Investment Date (as defined in the answer to Question 10). Purchases from
the Company of authorized but unissued shares of Common Stock will be made on
the relevant Investment Date. Purchases on the open market may begin no earlier
than five business days prior to the Investment Date and will be completed no
later than 30 days from such date except where completion at a later date is
necessary or advisable under any applicable federal securities laws. Such
purchases may be made on any securities exchange (currently, the NYSE) where
shares of the Company's Common Stock are traded or may be negotiated
transactions and may be subject to such terms with respect to price, delivery
and other matters as to which the underwriter purchasing the same may agree.
Neither the Company nor any Participant shall have any authority or power to
direct the time or price at which such shares may be purchased or the selection
of the broker or dealer through or from whom such purchases are to be made.

10. AT WHAT PRICE WILL SHARES OF COMMON STOCK BE PURCHASED?

The price of shares purchased by Eligible Investors with initial cash
payments or by Shareholders with optional cash payments will be 100% of the
average of the high and low sale prices of the Common Stock as published in the
NYSE report in the Eastern Edition of The Wall Street Journal for the first day
of the month in which invested (the "Investment Date"). If there is no trading
on that day, the business day immediately preceding the first day of that month
will be the Investment Date.

The price of shares of Common Stock purchased with reinvested dividends
will be 95% of the average of the high and low sale prices of the Common Stock
on the dividend payment date as published in the NYSE report in the Eastern
Edition of The Wall Street Journal. If there is no trading on that date, the
business day immediately preceding the dividend payment date will be the
Investment Date.

11. HOW MANY SHARES OF COMMON STOCK WILL BE PURCHASED FOR PARTICIPANTS?

Each Participant's account will be credited with that number of shares,
including fractions computed to at least three decimal places, equal to the
amount to be invested divided by the applicable purchase price. The number of
shares purchased cannot be determined until the day of purchase since the
purchase price is not determinable before that day.

The Plan does not allow Participants to specify the number of shares to be
purchased with their reinvested dividends or optional cash payments nor does it
allow Participants to specify the number of shares to be purchased with their
initial cash payments.

12. CAN A PARTICIPANT CHANGE THE METHOD OF PARTICIPATION?

Yes. A Participant may change the method of participation, i.e., dividends
fully reinvested, dividends partially reinvested or optional cash payments, at
any time and from time to time by completing and signing a new Authorization
Form and returning it to the Bank. Any change with respect to reinvestment of
dividends must be received by the Bank on or before the record date for the
dividend as to which it is to be effective.

13. WILL CERTIFICATES BE ISSUED FOR SHARES OF COMMON STOCK PURCHASED UNDER THE
PLAN?

Unless requested by a Participant, certificates for shares of Common Stock
purchased under the Plan will not be issued in a Participant's name.
Certificates for any number of full shares credited to a Participant's account
under the Plan will be issued in the Participant's name without charge upon
receipt by the Bank of a written request therefor from the Participant. Any
request for issuance of certificates received by the Bank between a dividend
record date and payment date will not be effective until after the dividend is
reinvested under the Plan. Certificates representing fractional share interests
will not be issued under any circumstances. (See Question 22 concerning payments
for fractional share interests).

INITIAL CASH PAYMENTS AND OPTIONAL CASH PAYMENTS

14. HOW MAY INITIAL CASH PAYMENTS AND ADDITIONAL OPTIONAL CASH PAYMENTS BE MADE?

Initial cash payments by Eligible Investors and optional cash payments by
existing Shareholders may be made by enclosing a check or money order payable to
"First Union National Bank of North Carolina" with an Authorization Form or, in
the case of optional cash payments, with the optional cash payment form at the
top portion of the statement of account referred to in Question 16. Checks or
money orders should be mailed to the following address:

First Union National Bank of North Carolina
Dividend Reinvestment Department
230 South Tryon Street, 11th Floor
Charlotte, North Carolina 28288-1153

While initial cash payments by Eligible Investors and optional cash
payments by Shareholders may be made at any time, such payments must be received
by the Bank three business days before the Investment Date. Cash payments which
are received by the Bank on or after the cut-off date will be held by the Bank
and will be invested on the next Investment Date. No interest will be paid by
the Bank to any Participant on any cash payment. A Participant may obtain the
return of any cash payment at any time upon written request received by the Bank
before the next Investment Date.

In addition, optional cash payments may be drafted from a Participant's
savings or checking account on a monthly basis. Participants who want optional
cash payments drafted from their bank account should return the completed and
signed Authorization Form, along with a voided check or deposit slip for the
Bank's use in identifying the exact checking or savings

account to be drafted, to the address set forth above. Bank accounts cannot be
drafted if a Participant's financial institution is not a member of the
Automated Clearing House. Drafts may be terminated by delivering written notice
to the Bank at the address set forth above.

15. WHAT ARE THE LIMITATIONS ON MAKING INITIAL AND OPTIONAL CASH PAYMENTS?

Initial cash payments by Eligible Investors may not be less than $250 nor
more than $25,000. Participants can make optional cash payments at any time.
Optional cash payments may not be less than $25 per payment nor total more than
$15,000 in any calendar quarter. The same amount of money need not be sent each
month or quarter and a Participant is under no obligation to make an optional
cash payment in any month or quarter. For Participants who have optional cash
payments drafted from their bank accounts, the minimum optional cash payment
that may be drafted is $25 per month and the maximum optional cash payment that
may be drafted is $5,000 per month.

REPORTS TO PARTICIPANTS

16. WHAT KIND OF REPORTS WILL BE SENT TO PARTICIPANTS IN THE PLAN?

As soon as practicable after each purchase is made under the Plan on behalf
of a Participant, such Participant will receive a statement of his or her
account, which will include information regarding the number of full and
fractional shares purchased, price at which the shares were purchased and other
information regarding the status of the Participant's account as of the date of
such statement. PARTICIPANTS SHOULD RETAIN SUCH STATEMENTS FOR INCOME TAX
REPORTING PURPOSES. (See Question 26).

DIVIDENDS

17. WILL DIVIDENDS BE PAID ON SHARES HELD IN A PARTICIPANT'S ACCOUNT UNDER THE
PLAN?

Yes. Dividends will be paid on full and fractional shares held in a
Participant's account as of the record dates for such dividends. (See Question 6
for quarterly dividend payment dates). Such dividends will automatically be
reinvested in additional shares of Common Stock.

SAFEKEEPING OF STOCK CERTIFICATES

18. CAN PARTICIPANTS SAFEKEEP THEIR STOCK CERTIFICATES?

Participants in the Plan that have stock certificates in their possession
can return them to the Bank for safekeeping. The Participant should send the
UNSIGNED stock certificates to the address in Question 5. The method of
returning the certificates is at the Participant's option and risk. If
certificates are returned through the United States Postal Service, registered
and insured is suggested. On the Participant's next account statement, these
shares will be shown as shares "HELD FOR YOU" instead of shares "HELD BY YOU."
Certificates received by the Bank after an Investment Date will be shown on a
subsequent statement. There is no charge to Participants for this service.

WITHDRAWAL OF SHARES IN PLAN ACCOUNTS

19. HOW MAY A PARTICIPANT WITHDRAW SHARES PURCHASED UNDER THE PLAN?

A Participant may withdraw all or any portion of the full shares held in
the Participant's account by notifying the Bank in writing to that effect. A
certificate for the number of full shares so withdrawn will be issued in the
name of and mailed to the Participant by the Bank. In no case will certificates
for fractional shares be issued. (See Question 22 concerning payments for
fractional share interests). Any written notice of withdrawal received by the
Bank after the record date for a particular dividend will not be effective until
the dividend is reinvested for that period under the Plan.

20. CAN A PARTICIPANT SELL SHARES HELD IN THE PLAN?

Instead of withdrawing shares held in the Plan, a Participant may sell all
or any portion of such shares held in the Participant's account by notifying the
Bank in writing. The first Friday after receipt of the written notice or, if
there is no trading on that date, the following business day, the Bank will sell
such shares through First Union Brokerage Services. First Union Brokerage
Services will process all sales of shares pursuant to the Plan on a nonprofit
basis and will charge fees only to the extent necessary to cover its cost in
effecting a given sale. In addition, no minimum fee will be applied to any sale
transaction.

TERMINATION OF PARTICIPATION

21. HOW MAY PARTICIPATION IN THE PLAN BE TERMINATED?

A Participant may terminate participation in the Plan at any time by
notifying the Bank in writing to that effect; provided, however, that any notice
of termination received by the Bank between a dividend record date and payment
date will not be effective until after such dividend is reinvested under the
Plan. The Company may also terminate a Participant's participation in the Plan
by giving written notice to that effect to such Participant at any time;
provided, however, that if such notice is given between a dividend record date
and payment date, such termination shall not be effective until after such
dividend is reinvested under the Plan.

A Participant's participation in the Plan will automatically be terminated
if a Participant no longer has certificates representing shares of Common Stock
of the Company and no full shares are held under the Plan.

22. WHAT HAPPENS TO THE FULL SHARES AND ANY FRACTIONAL SHARE INTEREST IN A
PARTICIPANT'S ACCOUNT WHEN A PARTICIPANT'S PARTICIPATION IN THE PLAN IS
TERMINATED?

Upon termination of a Participant's participation in the Plan, a
certificate for the number of full shares in the Participant's account on the
effective date of such termination will be issued in the name of and mailed to
the Participant by the Bank.

In lieu of issuing a certificate for fractional shares, the fractional
share interest will be sold and a payment check for the proceeds resulting from
such sale will be issued in the name of and mailed to the Participant by the
Bank. First Union Brokerage Services will process all sales of fractional shares
pursuant to the Plan on a nonprofit basis and will charge fees only to the
extent necessary to cover its cost in effecting a given sale. In addition, no
minimum fee will be applied to any sale transaction.

OTHER INFORMATION

23. WHAT HAPPENS TO A PARTICIPANT'S PLAN ACCOUNT IF ALL FULL SHARES REGISTERED
IN THE PARTICIPANT'S NAME ARE TRANSFERRED OR SOLD?

If a Participant disposes of all full shares of Common Stock registered in
the Participant's name on the shareholder records of the Company without
terminating participation in the Plan, the Company will continue to reinvest
dividends payable on the full and fractional shares of Common Stock held in the
Participant's Plan account until such time as the Participant's participation in
the Plan is terminated.

24. WHAT HAPPENS IF THE COMPANY PAYS A COMMON STOCK DIVIDEND, DECLARES A COMMON
STOCK SPLIT OR ISSUES A COMMON STOCK RIGHTS OFFERING?

Any Common Stock dividend paid or split declared by the Company will be
credited to the accounts of Participants based on the number of shares
(including fractional share interests) held in such accounts on the record date
for such dividend or split. In the event the Company makes available to holders
of Common Stock, rights or warrants to purchase additional shares of Common
Stock or other securities, such rights or warrants will be made available to
Participants based on the number of full shares (including fractional share
interests to the extent applicable) held in their accounts on the record date
established for determining the holders of Common Stock entitled to such rights
or warrants. The Bank will attempt to sell any fractional rights or warrants
applicable and reinvest the proceeds in Common Stock on the next Investment
Date. If such fractional rights or warrants have no market value, the fractional
rights or warrants will expire.

In the event of a stock dividend, stock split or similar change to the
Common Stock registered hereby, the number of securities will be proportionately
adjusted, subject to any required action by the Company's shareholders.

25. HOW WILL A PARTICIPANT'S PLAN SHARES BE VOTED AT A MEETING OF SHAREHOLDERS?

If, on the record date for a meeting of shareholders, any full or
fractional shares are held in a Participant's account under the Plan, such
shares will be added to the shares registered in the Participant's name on the
shareholder records of the Company, and the Participant will receive one proxy
voting card covering the total of such shares. If a Participant so elects, the
Participant may vote all of such shares in person at the shareholders' meeting.

26. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN?

The Internal Revenue Service has ruled on plans similar to the Company's
Plan, which provide for purchases of stock at a discount, that a Participant
will be treated, for federal income tax purposes, as having received on the
dividend payment date a dividend in an amount equal to the fair market value on
such date of the shares acquired with the reinvested dividends. For purposes of
this paragraph, the "fair market value" of shares on any date will be the
average of the high and low sale prices of the shares reported through the NYSE.
For shares acquired prior to April 1, 1995, the fair market value of shares on
any date will be the average of the high and low sale prices of the shares
reported through the NASDAQ National Market System. Shares acquired with
reinvested dividends will have a tax basis equal to their fair market value on
the dividend payment date. Shares purchased with initial or optional cash
payments will have a tax basis equal to the amount paid for them. (See Question
10).

In the case of a Participant who is subject to backup withholding tax on
dividends under the Plan, or a foreign shareholder whose dividends are subject
to United States income tax withholding, the amount of the tax to be withheld
will be deducted from the amount of the dividends and only the net amount will
be reinvested in Common Stock.

A Participant will not realize any taxable income when such Participant
receives a certificate for full shares credited to such Participant's account,
either upon request for certain of those shares or upon withdrawal from or
termination of the Plan. A Participant will realize a gain or loss when shares
purchased under the Plan are withdrawn and sold or exchanged, and, in the case
of a fractional share, when the Participant receives a cash payment for
fractional shares.

Under section 305(e) of the Internal Revenue Code of 1986, which section is
no longer in effect, certain individual Participants may have elected to exclude
up to $750 annually ($1,500 in the case of a joint return) of reinvested
dividends from their taxable income for each year 1982 through 1985. The
election to exclude the dividends would have been made on the Participant's
federal income tax return. If a Participant did so elect to defer taxes on
reinvested dividends, the stock received has a zero tax basis to the Participant
so that upon sale thereof the full amount of the sale proceeds will be taxable.

All Participants are urged to consult their own tax advisors to determine
the particular tax consequences that may result from their participation in the
Plan and the subsequent disposal by them of shares purchased pursuant to the
Plan. The income tax consequences for Participants who do not reside in the
United States will vary from jurisdiction to jurisdiction.

27. WHAT IS THE RESPONSIBILITY OF THE COMPANY UNDER THE PLAN?

Neither the Company nor the Bank will be liable for any act done in good
faith or for any good faith omission to act, including, without limitation, any
claim or liability arising out of failure to terminate a Participant's account
upon such Participant's death or dissolution, nor shall it have any duties,
responsibilities or liabilities except such as are expressly set forth in the
Plan.

Participants should recognize that the Company cannot provide any assurance
of profit or protection against loss on any shares purchased under the Plan.

28. MAY THE PLAN BE CHANGED OR DISCONTINUED?

The Company reserves the right to modify, suspend or terminate the Plan at
any time. Participants will be notified of any such modification, suspension or
termination.

PLAN OF DISTRIBUTION

The Common Stock acquired under the Plan may be sold directly by the
Company or purchased on the open market. Broker-dealers and other financial
intermediaries may engage in positioning transactions in order to benefit from
the 5% discount upon the reinvestment of dividends. The Company may sell Common
Stock at the 5% discount to Shareholders, including financial intermediaries,
who may thereafter resell the shares to capture the discount ("Resale Activity")
in market transactions (including coverage of short positions) on the NYSE or in
privately negotiated transactions. Shareholders participating in Resale Activity
may be deemed underwriters with the difference between the discounted price such
Shareholders pay to the Company for shares of Common Stock acquired under the
Plan and the price at which such shares are resold being deemed underwriting
commissions. The maximum investment limit minimizes the profit potential for
Resale Activity after accounting for transactional costs and the Company does
not expect any Resale Activity by financial intermediaries.

USE OF PROCEEDS

The Company does not know precisely the number of shares of Common Stock
that will ultimately be purchased under the Plan or the prices at which such
shares will be purchased. The net proceeds realized by the Company from the
purchase of shares by Participants in the Plan will be added to working capital
primarily for application toward the Company's construction program.

The Company has a continuing construction program, the nature and extent of
which are based upon current and estimated future natural gas system load growth
and balancing. The program is subject to continuous review and has been and will
be modified as necessary for adaptation to changing business conditions,
variations in prices, availability of natural gas, new laws, requirements of
regulatory authorities relating to energy use and environmental control, and
orders in natural gas rate proceedings. The construction program for the fiscal
year ending September 30, 1996 calls for plant and equipment expenditures of
approximately $61 million.

LEGAL MATTERS

Certain matters with respect to the legality of the issuance of the Common
Stock offered hereby will be passed upon for the Company by Fennebresque, Clark,
Swindell & Hay, Charlotte, North Carolina.

EXPERTS

The consolidated financial statements and schedules for each of the three
fiscal years in the period ended September 30, 1995 incorporated by reference in
this Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, and are included herein in
reliance upon the authority of said firm as experts in giving such reports.

INDEMNIFICATION OF OFFICERS AND DIRECTORS

The Company's Articles of Incorporation provide that a director of the
Company shall not be personally liable for monetary damages for breach of his or
her duties as a director except and only to the extent applicable law restricts
the effectiveness of such provision. Under applicable law, this provision
precludes any claim of the Company's shareholders for monetary damages based on
a breach of duty of directors, with the following exceptions under the North
Carolina Business Corporation Act: (i) acts or omissions that such director at
the time of such breach knew or believed were clearly in conflict with the best
interests of the corporation, (ii) certain unlawful distributions, including
unlawful redemptions of shares, (iii) any transaction from which such director
derived an improper personal benefit, or (iv) acts or omissions occurring prior
to the effectiveness of the provision on April 27, 1988.

The By-laws of the Company contain provisions which require the Company to
indemnify current or former directors and officers to the fullest extent
permitted by law against claims and liabilities, including reasonable costs of
defense attendant thereto, imposed upon such persons by reason of his or her
status as a director or officer of the Company unless such claims, liabilities
and expenses are attributable to the negligence or misconduct of such director
or officer. The North Carolina Business Corporation Act contains provisions
which mandate in some instances and permit in other instances such
indemnification.

The Company has an insurance policy covering its directors and officers
against certain personal liability, which may include liabilities under the
Securities Act of 1933, as amended (the "Securities Act"). Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling the Company pursuant to
the provisions described above, the Company has been informed that in the
opinion of the Commission, such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.

ADDRESS FOR CORRESPONDENCE

All correspondence concerning the Plan should be addressed to:

First Union National Bank of North Carolina
Dividend Reinvestment Department
230 South Tryon Street, 11th Floor
Charlotte, North Carolina 28288-1153

NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. 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 OF THIS PROSPECTUS
OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

CONTENTS

PAGE

Available Information................................ 2
Material Incorporated by Reference................... 2
The Company.......................................... 2
Description of the Plan.............................. 3
Participation...................................... 3
Administration..................................... 4
Costs.............................................. 4
Purchases.......................................... 4
Initial Cash Payments and Optional Cash Payments... 5
Reports to Participants............................ 6
Dividends.......................................... 6
Safekeeping of Stock Certificates.................. 6
Withdrawal of Shares in Plan Accounts.............. 6
Termination of Participation....................... 7
Other Information.................................. 7
Plan of Distribution................................. 8
Use of Proceeds...................................... 9
Legal Matters........................................ 9
Experts.............................................. 9
Indemnification of Officers and Directors............ 9
Address for Correspondence........................... 9

(Public Service logo appears here)

1,675,631 SHARES
COMMON STOCK

($1 PAR VALUE)

PROSPECTUS
SEPTEMBER , 1996

PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The estimated expenses payable by the Company in connection with the
issuance and distribution of the shares being registered hereby are:

Registration Fee........................................................................... $ 6,099
Printing................................................................................... 12,000
Legal Fees and Expenses.................................................................... 7,500
New York Stock Exchange Fees............................................................... 1,500
Accounting Fees and Expenses............................................................... 3,000
Blue Sky Fees and Expenses................................................................. 5,000
North Carolina Utilities Commission........................................................ 250
Postage and Miscellaneous.................................................................. 4,651
Total................................................................................. $40,000

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The By-laws of the Company contain provisions that require the Company to
indemnify current or former directors or officers to the fullest extent allowed
by law. Sections 55-8-50 through 55-8-58 of the North Carolina Business
Corporation Act provide for the indemnification of officers and directors under
certain circumstances against expenses incurred in successfully defending
against a claim and authorize North Carolina corporations to indemnify their
officers and directors under certain circumstances against expenses and
liabilities incurred in legal proceedings involving such persons because of
their being or having been an officer or director.

The registrant maintains insurance to protect itself and its directors and
officers against expense or loss arising from any action, suit or proceeding
brought by reason of the fact that any person is a director or officer of the
registrant. The policy provides for the payment on behalf of its directors and
officers of losses that arise from claims against the directors and officers for
a wrongful act while acting in that capacity. The policy also provides for
payment of losses that the registrant may be required or permitted to pay as
indemnity due the directors or officers for claims against them for wrongful
acts.

ITEM 16. EXHIBITS

EXHIBIT NO. DESCRIPTION OF EXHIBIT

4(a) Amended and Restated Charter*
4(b) By-Laws as Amended to Date**
5 Opinion of Fennebresque, Clark, Swindell & Hay
23(a) Consent of Arthur Andersen LLP (reference is made to page II-5)
23(b) Consent of Fennebresque, Clark, Swindell & Hay (included in Exhibit 5)
99(a) Form of Authorization Form
99(b) Form of letter from Company to new shareholders enclosing Prospectus
99(c) Form of letter from Company to current shareholders enclosing Prospectus

*Filed as Exhibit 3-A-4 to Registrant's 1992 Annual Report on Form 10-K, File
No. 0-1218.
**Filed as Exhibit 3-G to Registrant's Quarterly Report on Form 10-Q for the
quarter ended December 31, 1992.

ITEM 17. UNDERTAKINGS

(a) The undersigned registrant hereby undertakes:

1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total dollar value of
securities offered would not exceed that which was

II-1

registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;

PROVIDED, HOWEVER, that the undertakings set forth in paragraphs
(a)(1)(i) and (a)(1)(ii) above do not apply if the information required to
be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the Registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this registration statement.

2. That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

3. To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

II-2

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Gastonia, and the State of North Carolina, on the
22nd day of August, 1996.

PUBLIC SERVICE COMPANY OF
NORTH CAROLINA, INCORPORATED

By: /s/ CHARLES E. ZEIGLER, JR.
CHARLES E. ZEIGLER, JR.
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Exchange Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
hereby appoints Charles E. Zeigler, Jr., Robert D. Voigt, Jack G. Mason and J.
Paul Douglas, and each of them singly, as such person's true and lawful
attorneys, with full power to them and each of them to sign, for such person and
in such person's name and capacity indicated below, any and all amendments to
this Registration Statement, hereby ratifying and confirming such person's
signature as it may be signed by said attorney to any and all amendments.

SIGNATURE TITLE DATE

/s/ CHARLES E. ZEIGLER, JR. Chairman, President and August 22, 1996
CHARLES E. ZEIGLER, JR. Chief Executive Officer
(Principal Executive Officer)

/s/ ROBERT D. VOIGT Senior Vice President -- Corporate August 22, 1996
ROBERT D. VOIGT Development and Chief Financial
Officer (Principal Financial and
Accounting Officer)

/s/ WILLIAM C. BURKHARDT Director August 22, 1996
WILLIAM C. BURKHARDT

/s/ WILLIAM A.V. CECIL Director August 22, 1996
WILLIAM A.V. CECIL

/s/ BERT COLLINS Director August 22, 1996
BERT COLLINS

/s/ JOHN W. COPELAND Director August 22, 1996
JOHN W. COPELAND

/s/ H. MAX CRAIG, JR. Director August 22, 1996
H. MAX CRAIG, JR.

/s/ VAN E. EURE Director August 22, 1996
VAN E. EURE

II-3

SIGNATURE TITLE DATE

/s/ B. FRANK MATTHEWS, II Director August 22, 1996
B. FRANK MATTHEWS, II

/s/ WILLIAM L. O'BRIEN, JR. Director August 22, 1996
WILLIAM L. O'BRIEN, JR.

/s/ D. WAYNE PETERSON Director August 22, 1996
D. WAYNE PETERSON

/s/ BEN R. RUDISILL, II Director August 22, 1996
BEN R. RUDISILL, II

/s/ G. SMEDES YORK Director August 22, 1996
G. SMEDES YORK

II-4

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our reports dated November 2,
1995, included in the Public Service Company of North Carolina, Incorporated
Form 10-K for the fiscal year ended September 30, 1995 and to all references to
our Firm included in this Registration Statement.

/s/ ARTHUR ANDERSEN LLP

Charlotte, North Carolina
August 22, 1996

II-5

INDEX TO EXHIBITS

EXHIBIT NO. DESCRIPTION OF EXHIBITS

4 (a) Amended and Restated Charter*
4 (b) By-Laws as Amended to Date**
5 Opinion of Fennebresque, Clark, Swindell & Hay
23 (a) Consent of Arthur Andersen LLP (reference is made to page II-5)
23 (b) Consent of Fennebresque, Clark, Swindell & Hay (included in Exhibit 5)
99 (a) Form of Authorization Form
99 (b) Form of letter from Company to new shareholders enclosing Prospectus
99 (c) Form of letter from Company to current shareholders enclosing Prospectus

*Filed as Exhibit 3-A-4 to Registrant's 1992 Annual Report on Form 10-K, File
No. 0-1218.
**Filed as Exhibit 3-G to Registrant's Quarterly Report on Form 10-Q for the
quarter ended December 31, 1992.