Under existing accounting guidance, fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The fair value definition focuses on an exit price, which is the price that would be received to sell an asset or paid to transfer a liability versus an entry price, which would be the price paid to acquire an asset or received to assume a liability. Fair value measurements require the use of market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, corroborated by market data or generally unobservable. Valuation techniques are required to maximize the use of observable inputs and minimize the use of unobservable inputs. A midmarket pricing convention (the midpoint price between bid and ask prices) is permitted for use as a practical expedient.

The Duke Energy Registrants classify recurring and non-recurring fair value measurements based on the following fair value hierarchy, as prescribed by the accounting guidance for fair value. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels:

Level 1—unadjusted quoted prices in active markets for identical assets or liabilities the Duke Energy Registrants have the ability to access. An active market for the asset or liability is one in which transactions for the asset or liability occur with sufficient frequency and volume to provide ongoing pricing information. The Duke Energy Registrants' Level 1 primarily consists of financial instruments such as exchange-traded derivatives and listed equities.

Level 2—a fair value measurement utilizing inputs other than a quoted market price that are observable, either directly or indirectly, for the asset or liability. Level 2 inputs include, but are not limited to, quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted market prices that are observable for the asset or liability, such as interest rate curves and yield curves observable at commonly quoted intervals, volatilities, credit risk and default rates. A Level 2 measurement cannot have more than an insignificant portion of the valuation based on unobservable inputs. Instruments in this category include non-exchange-traded derivatives, such as over-the-counter forwards, swaps and options; certain marketable debt securities; and financial instruments traded in less than active markets.

Level 3—any fair value measurements which include unobservable inputs for the asset or liability for more than an insignificant portion of the valuation. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value. Level 3 instruments may include longer-term instruments that extend into periods in which quoted prices or other observable inputs are not available.

The fair value accounting guidance for financial instruments permits entities to elect to measure many financial instruments and certain other items at fair value that are not required to be accounted for at fair value under other GAAP. There are no financial assets or financial liabilities that are not required to be accounted for at fair value under GAAP for which the option to record at fair value has been elected by the Duke Energy Registrants. However, in the future, the Duke Energy Registrants may elect to measure certain financial instruments at fair value in accordance with this accounting guidance.

Transfers out of and into Levels 1, 2 or 3 represent existing assets or liabilities previously categorized as a higher level for which the inputs to the estimate became less observable or assets and liabilities that were previously classified as Level 2 or 3 for which the lowest significant input became more observable during the period, respectively. The Duke Energy Registrant's policy for the recognition of transfers between levels of the fair value hierarchy is to recognize the transfer at the end of the period. There were no transfers out of or into Levels 1, 2 and 3 during the year ended December 31, 2012.

Valuation methods of the primary fair value measurements disclosed below are as follows:

Investments in equity securities. Investments in equity securities, other than those accounted for as equity and cost method investments, are typically valued at the closing price in the principal active market as of the last business day of the quarter. Principal active markets for equity prices include published exchanges such as NASDAQ and NYSE. Foreign equity prices are translated from their trading currency using the currency exchange rate in effect at the close of the principal active market. Prices have not been adjusted to reflect for after-hours market activity. The majority of investments in equity securities are valued using Level 1 measurements. For certain investments that are valued on a net asset value per share (or its equivalent), or the net asset value basis, when the Duke Energy Registrants do not have the ability to redeem the investment in the near term at net asset value per share (or its equivalent), or the net asset value is not available as of the measurement date, the fair value measurement of the investment is categorized as Level 3.

Investments in available-for-sale auction rate securities. Duke Energy and Duke Energy Carolinas hold auction rate securities for which an active market does not currently exist. During the year ended December 31, 2012, $55 million of these investments in auction rate securities were redeemed at full par value plus accrued interest. Auction rate securities held are student loan securities for which at December 31, 2012 approximately 84% is ultimately backed by the U.S. government. At December 31, 2012, approximately 24% of these securities are AAA rated. As of December 31, 2012, and 2011 all of these auction rate securities are classified as long-term investments and are valued using Level 3 measurements. The methods and significant assumptions used to determine the fair values of the investment in auction rate debt securities represent estimations of fair value using internal discounted cash flow models which incorporate primarily management's own assumptions as to the term over which such investments will be recovered at par (ranging from 7 to 17 years), the current level of interest rates (less than 0.3%), and the appropriate risk-adjusted discount rates (up to 4.2% reflecting a tenor of up to 17 years). In preparing the valuations, all significant value drivers were considered, including the underlying collateral (primarily evaluated on the basis of credit ratings, parity ratios and the percentage of loans backed by the U.S. government).

There were no other-than-temporary impairments associated with investments in auction rate debt securities during the years ended December 31, 2012 or 2011.

Investments in debt securities. Most debt investments, including those held in the Nuclear Decommissioning Trust Funds (NDTF), are valued based on a calculation using interest rate curves and credit spreads applied to the terms of the debt instrument (maturity and coupon interest rate) and consider the counterparty credit rating. Most debt valuations are Level 2 measurements. If the market for a particular fixed income security is relatively inactive or illiquid, the measurement is a Level 3 measurement. U.S. Treasury debt is typically a Level 1 measurement.

Commodity derivatives. The pricing for commodity derivatives is primarily a calculated value which incorporates the forward price and is adjusted for liquidity (bid-ask spread), credit or non-performance risk (after reflecting credit enhancements such as collateral) and discounted to present value. The primary difference between a Level 2 and a Level 3 measurement relates to the level of activity in forward markets for the commodity. If the market is relatively inactive, the measurement is deemed to be a Level 3 measurement. Commodity derivatives with clearinghouses are classified as Level 1 measurements. For commodity derivative contracts classified as Level 3, Duke Energy utilizes internally-developed financial models based upon the income approach (discounted cash flow method) are utilized to measure the fair values. The primary inputs to these models are the forward commodity prices used to develop the forward price curves for the respective instrument. The pricing inputs are derived from published exchange transaction prices and other observable or public data sources. In the absence of observable market information that supports the pricing inputs, there is a presumption that the transaction price is equal to the last observable price for a similar period. For the commodity derivative contracts classified as Level 3, the pricing inputs for natural gas and electricity forward price curves are not observable for the full term of the related contracts. In isolation, increases (decreases) in unobservable natural gas forward prices would result in favorable (unfavorable) fair value adjustments for gas purchase contracts. In isolation, increases (decreases) in unobservable electricity forward prices would result in unfavorable (favorable) fair value adjustments for electricity sales contracts. Duke Energy regularly evaluates and validates the pricing inputs used to estimate fair value of gas purchase contracts by a market participant price verification procedure, which provides a comparison of internal forward commodity curves to market participant generated curves.

Contingent Value Obligations (CVO). Progress Energy issued CVOs, which are derivatives, in connection with the acquisition of Florida Progress Corporation (Florida Progress). In November 2011, Progress Energy commenced a public tender offer that expired on February 15, 2012. At December 31, 2012, and 2011 all CVOs not tendered, have been classified as Level 2 based on observable prices in the less-than-active market.

In connection with the acquisition of Florida Progress during 2000, the Progress Energy parent issued 98.6 million CVOs. Each CVO represents the right of the holder to receive contingent payments based on the performance of four coal-based solid synthetic fuels limited liability companies purchased by subsidiaries of Florida Progress in October 1999. All of Progress Energy's synthetic fuels businesses were abandoned and all operations ceased as of December 31, 2007. The payments are based on the net after-tax cash flows the facilities generated. Progress Energy makes deposits into a CVO trust for estimated contingent payments due to CVO holders based on the results of operations and the utilization of tax credits. The balance of the CVO trust at December 31, 2012 and 2011, was $11 million and is included in Other within Investments and Other Assets on the Consolidated Balance Sheets. Future payments from the trust to CVO holders will not be made until certain conditions are satisfied and will include principal and interest earned during the investment period, net of expenses deducted. Interest earned on the payments held in trust for 2012 and 2011 were insignificant.

In October 2011, Progress Energy entered a settlement agreement and release with a plaintiff under which the parties mutually released all claims related to the CVOs and Progress Energy purchased all of the plaintiff's CVOs at a negotiated purchase price of $0.75 per CVO. In November 2011, Progress Energy also commenced a tender offer for all remaining outstanding CVOs at the same purchase price. The tender offer expired on February 15, 2012. Progress Energy repurchased 83.4 million CVOs through the settlement agreement or through the tender offer. The CVOs are derivatives and are recorded at fair value. In 2011, pre-tax losses of $59 million from changes in fair value were recorded in Other Income and Expenses, net on the Consolidated Statements of Income. At December 31, 2012, the CVO liability included in Other within Deferred Credits and Other Liabilities on the Consolidated Balance Sheets was $4 million based on the 15.2 million outstanding CVOs not held by the Progress Energy parent. At December 31, 2011, the CVO liability included in Other within Current Liabilities on the Consolidated Balance Sheets was $14 million based on the 18.5 million CVOs outstanding not held by the Progress Energy parent.

Goodwill and Long-lived Assets. See Note 12 for a discussion of the valuation for goodwill and long-lived assets.

The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy's Consolidated Balance Sheets. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note 15. See Note 17 for additional information related to investments by major security type.

		December 31, 2012
(in millions)		Total Fair Value		Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities^(a)		$	29	$	―	$	―	$	29
Nuclear decommissioning trust fund equity securities			2,837		2,762		54		21
Nuclear decommissioning trust fund debt securities			1,405		317		1,040		48
Other trading and available-for-sale equity securities^(b)			72		63		9		―
Other trading and available-for-sale debt securities^(c)			602		40		562		―
Derivative assets^(b)			103		18		22		63
	Total assets		5,048		3,200		1,687		161
Derivative liabilities^(d)			(756)		(17)		(591)		(148)
	Net assets	$	4,292	$	3,183	$	1,096	$	13

		December 31, 2011
(in millions)		Total Fair Value		Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities^(a)		$	71	$	―	$	―	$	71
Nuclear decommissioning trust fund equity securities			1,337		1,285		46		6
Nuclear decommissioning trust fund debt securities			723		109		567		47
Other trading and available-for-sale equity securities^(b)			68		61		7		―
Other trading and available-for-sale debt securities^(c)			382		22		360		―
Derivative assets^(b)			74		43		6		25
	Total Assets		2,655		1,520		986		149
Derivative liabilities^(d)			(264)		(36)		(164)		(64)
	Net Assets	$	2,391	$	1,484	$	822	$	85

(a)	Included in Other within Investments and Other Assets on the Consolidated Balance Sheets.
(b)	Included in Other within Current Assets and Other within Investments and Other Assets on the Consolidated Balance Sheet.
(c)	Included in Other within Investments and Other Assets and Short-term Investments on the Consolidated Balance Sheets.
(d)	Included in Other within Current Liabilities and Other within Deferred Credits and Other Liabilities on the Consolidated Balance Sheets.

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value on a
recurring basis where the determination of fair value includes significant unobservable inputs (Level 3).

			Year Ended December 31, 2012
(in millions)			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Derivatives (net)		Total
Balance at December 31, 2011			$	71	$	53	$	(39)	$	85
Amounts acquired in Progress Energy Merger				―		―		(30)		(30)
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Regulated electric		―		―		23		23
		Revenue, nonregulated electric, natural gas, and other		―		―		(15)		(15)
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		13		―		―		13
	Purchases, sales, issuances and settlements:
		Purchases		―		14		22		36
		Sales		―		(2)		―		(2)
		Issuances		―		―		(15)		(15)
		Settlements		(55)		―		(32)		(87)
	Total gains included on the Consolidated Balance Sheet as regulatory asset or liability			―		4		1		5
Balance at December 31, 2012			$	29	$	69	$	(85)	$	13
Pre-tax amounts included in the Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at December 31, 2012
		Regulated electric	$	―	$	―	$	(24)		(24)
		Revenue, nonregulated electric, natural gas, and other		―		―		1		1
Total			$	―	$	―	$	(23)	$	(23)

			Year Ended December 31, 2011
(in millions)			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Derivatives (net)		Total
Balance at December 31, 2010			$	118	$	47	$	(19)	$	146
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Regulated electric		―		―		13		13
		Revenue, nonregulated electric, natural gas, and other		―		―		(27)		(27)
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		12		―		―		12
	Purchases, sales, issuances and settlements:
		Purchases		―		8		8		16
		Sales		―		(3)		―		(3)
		Settlements		(16)		―		(16)		(32)
	Total gains included on the Consolidated Balance Sheet as regulatory asset or liability			―		1		2		3
	Transfers out of Level 3			(43)		―		―		(43)
Balance at December 31, 2011			$	71	$	53	$	(39)	$	85
Pre-tax amounts included in the Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at December 31, 2011
		Revenue, nonregulated electric, natural gas, and other		―		―		(20)		(20)
Total			$	―	$	―	$	(20)	$	(20)

			Year Ended December 31, 2010
(in millions)			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Derivatives (net)		Total
Balance at December 31, 2009			$	198	$	―	$	25	$	223
	Total pre-tax realized or unrealized losses included in earnings:
		Revenue, nonregulated electric, natural gas, and other		―		―		(45)		(45)
		Fuel used in electric generation and purchased power-nonregulated		―		―		(13)		(13)
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		22		―		―		22
		Losses on commodity cash flow hedges		―		―		(1)		(1)
	Net purchases, sales, issuances and settlements:			(102)		45		(3)		(60)
	Total gains included on the Consolidated Balance Sheet as regulatory asset or liability			―		2		18		20
Balance at December 31, 2010			$	118	$	47	$	(19)	$	146
Pre-tax amounts included in the Consolidated Statement of Operations related to Level 3 measurements outstanding at December 31, 2010
		Revenue, nonregulated electric, natural gas, and other		―		―		1		1
Total				―		―		1		1

The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy Carolinas' Consolidated Balance Sheets at fair value. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note 15. See Note 17 for additional information related to investments by major security type. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

		December 31, 2011
(in millions)		Total Fair Value		Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities^(a)		$	12	$	―	$	―	$	12
Nuclear decommissioning trust fund equity securities			1,337		1,285		46		6
Nuclear decommissioning trust fund debt securities			723		109		567		47
Derivative assets^(b)			1		―		1		―
	Total assets	$	2,073	$	1,394	$	614	$	65

(a)	Included in Other within Investments and Other Assets on the Consolidated Balance Sheets.
(b)	Included in Other within Current Assets and Other within Investments and Other Assets on the Consolidated Balance Sheets.
(c)	Included in Other within Current Liabilities and Other within Deferred Credits and Other Liabilities on the Consolidated Balance Sheet.

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value on a
recurring basis where the determination of fair value includes significant unobservable inputs (Level 3).

			Year Ended December 31,2012
			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Derivatives (net)		Total
Balance at December 31, 2011			$	12	$	53	$	―	$	65
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		2		―		―		2
	Purchases, sales, issuances and settlements:
		Purchases		―		14		―		14
		Issuances		―		―		(14)		(14)
		Sales		―		(2)		―		(2)
		Settlements		(11)		―		2		(9)
	Total gains included on the Consolidated Balance Sheet as regulatory asset or liability			―		4		―		4
Balance at December 31, 2012			$	3	$	69	$	(12)	$	60
Pre-tax amounts included in the Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at December 31, 2012
		Regulated electric	$	―	$	―	$	(12)		(12)
Total			$	―	$	―	$	(12)	$	(12)

			Year Ended December 31, 2010
(in millions)			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Derivatives (net)		Total
Balance at December 31, 2009			$	66	$	―	$	―	$	66
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		12		―		―		12
	Net purchases, sales, issuances and settlements:			(66)		45		―		(21)
	Total gains included on the Consolidated Balance Sheet as regulatory asset or liability			―		2		―		2
Balance at December 31, 2010			$	12	$	47	$	―	$	59

The following tables provide the fair value measurement amounts for assets and liabilities recorded on Progress Energy's Consolidated Balance Sheets. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note 15. See Note 17 for additional information related to investments by major security type. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

		December 31, 2012
(in millions)		Total Fair Value		Level 1			Level 2		Level 3
Nuclear decommissioning trust fund equity securities		$	1,245	$	1,239	$		6	$	―
Nuclear decommissioning trust fund debt securities and other			643		162			481		―
Other trading and available-for-sale debt securities and other^(a)			57		17			40		―
Derivative assets^(b)			11		―			11		―
	Total assets		1,956		1,418			538		―
Derivative liabilities^(c)			(440)		―			(402)		(38)
	Net assets	$	1,516	$	1,418		$	136	$	(38)

		December 31, 2011
(in millions)		Total Fair Value		Level 1		Level 2		Level 3
Nuclear decommissioning trust fund equity securities		$	1,062	$	1,061	$	1	$	―
Nuclear decommissioning trust fund debt securities and other			585		87		498		―
Other trading and available-for-sale debt securities and other^(a)			20		20		―		―
Derivative assets^(b)			5		―		5		―
	Total assets		1,672		1,168		504		―
Derivative liabilities^(c)			(799)		―		(775)		(24)
	Net assets	$	873	$	1,168	$	(271)	$	(24)

(a)	Included in Other within Investments and Other Assets in the Consolidated Balance Sheets.
(b)	Included in Other Current Assets within Current Assets and Other within Investments and Other Assets in the Consolidated Balance Sheets.
(c)	Included in Derivative Liabilities within Current Liabilities and Other within Deferred Credits and Other Liabilities in the Consolidated Balance Sheets.

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value on a
recurring basis where the determination of fair value includes significant unobservable inputs (Level 3).

			Year Ended December 31, 2012
(in millions)			Derivatives (net)
Balance at December 31, 2011			$	(24)
	Total pre-tax realized or unrealized gains included in earnings:
		Regulated electric		1
	Purchases, sales, issuances and settlements:
		Issuances		(16)
		Settlements		4
	Total losses included on the Consolidated Balance Sheet as regulatory asset or liability			(3)
Balance at December 31, 2012			$	(38)
Pre-tax amounts included in the Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at December 31, 2012
		Regulated electric	$	(12)
Total			$	(12)

The following tables provide the fair value measurement amounts for assets and liabilities recorded on Progress Energy Carolinas' Consolidated Balance Sheets. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note 15. See Note 17 for additional information related to investments by major security type. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

		December 31, 2012
(in millions)		Total Fair Value		Level 1		Level 2		Level 3
Nuclear decommissioning trust fund equity securities		$	811	$	811	$	―	$	―
Nuclear decommissioning trust fund debt securities and other			448		119		329		―
Other trading and available-for-sale debt securities and other^(a)			3		3		―		―
Derivative assets^(b)			2		―		2		―
	Total assets		1,264		933		331		―
Derivative liabilities^(c)			(166)		―		(128)		(38)
	Net assets	$	1,098	$	933	$	203	$	(38)

		December 31, 2011
(in millions)		Total Fair Value		Level 1		Level 2		Level 3
Nuclear decommissioning trust fund equity securities		$	690	$	690	$	―	$	―
Nuclear decommissioning trust fund debt securities and other			398		81		317		―
Other trading and available-for-sale debt securities and other^(a)			6		6		―		―
	Total assets		1,094		777		317		―
Derivative liabilities^(c)			(248)		―		(224)		(24)
	Net assets	$	846	$	777	$	93	$	(24)

(a)	Included in Other within Investments and Other Assets in the Consolidated Balance Sheets.
(b)	Included in Other Current Assets within Current Assets and Other within Investments and Other Assets in the Consolidated Balance Sheets.
(c)	Included in Derivative Liabilities within Current Liabilities and Other within Deferred Credits and Other Liabilities in the Consolidated Balance Sheets

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value on a
recurring basis where the determination of fair value includes significant unobservable inputs (Level 3).

			Year Ended December 31, 2012
(in millions)			Derivatives (net)
Balance at December 31, 2011			$	(24)
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Regulated electric		1
	Purchases, sales, issuances and settlements:
		Issuances		(16)
		Settlements		4
	Total losses included on the Consolidated Balance Sheet as regulatory asset or liability			(3)
Balance at December 31, 2012			$	(38)
Pre-tax amounts included in the Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at December 31, 2012
		Regulated electric	$	(12)
Total			$	(12)

The following tables provide the fair value measurement amounts for assets and liabilities recorded on Progress Energy Florida's Consolidated Balance Sheets. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note 15. See Note 17 for additional information related to investments by major security type. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

		December 31, 2012
(in millions)		Total Fair Value		Level 1		Level 2		Level 3
Nuclear decommissioning trust fund equity securities		$	435	$	429	$	6	$	―
Nuclear decommissioning trust fund debt securities and other			194		43		151		―
Other trading and available-for-sale debt securities and other^(a)			43		3		40		―
Derivative assets^(b)			9		―		9		―
	Total assets		681		475		206		―
Derivative liabilities^(c)			(270)		―		(270)		―
	Net assets	$	411	$	475	$	(64)	$	―

		December 31, 2011
(in millions)		Total Fair Value		Level 1		Level 2		Level 3
Nuclear decommissioning trust fund equity securities		$	372	$	371	$	1	$	―
Nuclear decommissioning trust fund debt securities and other			187		6		181		―
Other trading and available-for-sale debt securities and other^(a)			1		1		―		―
Derivative assets^(b)			5		―		5		―
	Total assets		565		378		187		―
Derivative liabilities^(c)			(499)		―		(499)		―
	Net assets	$	66	$	378	$	(312)	$	―

(a)	Included in Other within Investments and Other Assets in the Consolidated Balance Sheets.
(b)	Included in Other Current Assets within Current Assets and Other within Investments and Other Assets in the Consolidated Balance Sheets.
(c)	Included in Derivative Liabilities within Current Liabilities and Other within Deferred Credits and Other Liabilities in the Consolidated Balance Sheets

		The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value on a
	recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):
			Year Ended December 31, 2011
(in millions)			Derivatives (net)
Balance at December 31, 2010			$	―
	Total losses included on the Consolidated Balance Sheet as regulatory asset or liability			(1)
	Transfers out of Level 3			1
Balance at December 31, 2011			$	―

The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy Ohio's Consolidated Balance Sheets. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note 15. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

		December 31, 2011
(in millions)		Total Fair Value		Level 1		Level 2		Level 3
Derivative assets^(a)		$	56	$	42	$	5	$	9
Derivative liabilities^(b)			(30)		(10)		(8)		(12)
	Net assets (liabilities)	$	26	$	32	$	(3)	$	(3)

(a)	Included in Other Current Assets within Current Assets and Other within Investments and Other Assets in the Consolidated Balance Sheets.
(b)	Included in Derivative Liabilities within Current Liabilities and Other within Deferred Credits and Other Liabilities in the Consolidated Balance Sheets.

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value on a
recurring basis where the determination of fair value includes significant unobservable inputs (Level 3).

			Year Ended December 31, 2012
(in millions)			Derivatives (net)
Balance at December 31, 2011			$	(3)
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Regulated electric		1
		Revenue, nonregulated electric, natural gas, and other		(4)
	Purchases, sales, issuances and settlements:
		Settlements		1
	Total losses included on the Consolidated Balance Sheet as regulatory asset or liability			(1)
Balance at December 31, 2012			$	(6)

			Year Ended December 31, 2010
(in millions)			Derivatives (net)
Balance at December 31, 2009			$	7
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, nonregulated electric, natural gas, and other		8
		Fuel used in electric generation and purchased power nonregulated		(12)
	Total pre-tax losses included in other comprehensive income:
		Losses on commodity cash flow hedges		(1)
	Net purchases, sales, issuances and settlements:			8
	Total gains included on the Consolidated Balance Sheet as regulatory asset or liability			3
Balance at December 31, 2010			$	13
Pre-tax amounts included in the Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at December 31, 2011:
		Revenue, nonregulated electric and other	$	17
Total			$	17

The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy Indiana's Consolidated Balance Sheets. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note 15. See Note 17 for additional information related to investments by major security type. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

		December 31, 2011
(in millions)		Total Fair Value		Level 1		Level 2		Level 3
Available-for-sale equity securities^(a)		$	46	$	46	$	―	$	―
Available-for-sale debt securities^(a)			28		―		28		―
Derivative assets^(b)			4		―		―		4
	Total assets		78		46		28	$	4
Derivative liabilities^(c)			(69)		(1)		(68)		―
	Net assets (liabilities)	$	9	$	45	$	(40)	$	4

(a)	Included in Other within Investments and Other Assets on the Consolidated Balance Sheets.
(b)	Included in Other within Current Assets on the Consolidated Balance Sheets.
(c)	Included in Other within Current Liabilities and Other within Deferred Credits and Other Liabilities on the Consolidated Balance Sheets.

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value on a
recurring basis where the determination of fair value includes significant unobservable inputs (Level 3).
			Year Ended December 31, 2012
(in millions)			Derivatives (net)
Balance at December 31, 2011			$	4
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Regulated electric		36
	Purchases, sales, issuances and settlements:
		Sales		22
		Settlements		(52)
Balance at December 31, 2012			$	10

	The following table includes quantitative information about the Duke Energy Registrants' derivatives classified as Level 3.

		December 31, 2012
Investment Type		Fair Value (in millions)		Valuation Technique	Unobservable Input	Range
Duke Energy
Commodity natural gas contracts		$	(53)	Discounted cash flow	Forward natural gas curves - price per MMBtu	$	2.33	$	9.99
FERC mitigation power sale agreements		$	(23)	Discounted cash flow	Forward electricity curves - price per MWh	$	25.83	-	48.69
Financial transmission rights (FTRs)		$	11	RTO market pricing	FTR price	$	23.63	-	39.22
Commodity power contracts		$	(8)	Discounted cash flow	Forward electricity curves - price per MWh	$	24.82	-	77.96
Commodity capacity contracts		$	(3)	Discounted cash flow	Forward capacity curves - price per MW day	$	95.16	-	105.36
Commodity capacity option contracts		$	3	Discounted cash flow	Forward capacity option curves - price per MW day	$	4.68	-	77.96
Reserves		$	(12)		Bid-ask spreads, implied volatility, probability of default
Duke Energy Carolinas
FERC mitigation power sale agreements		$	(12)	Discounted cash flow	Forward electricity curves - price per MWh	$	25.83	-	48.69
Progress Energy
Commodity natural gas contracts		$	(27)	Discounted cash flow	Forward natural gas curves - price per MMBtu	$	4.07	-	4.45
FERC mitigation power sale agreements		$	(11)	Discounted cash flow	Forward electricity curves - price per MWh	$	25.83	-	48.69
Progress Energy Carolinas
Commodity natural gas contracts		$	(27)	Discounted cash flow	Forward natural gas curves - price per MMBtu	$	4.07	-	4.45
FERC mitigation power sale agreements		$	(11)	Discounted cash flow	Forward electricity curves - price per MWh	$	25.83	-	48.69
Duke Energy Ohio
Financial transmission rights (FTRs)		$	1	RTO market pricing	FTR price	$	27.17	$	39.22
Commodity power contracts		$	(1)	Discounted cash flow	Forward electricity curves - price per MWh	$	25.90	-	57.50
Commodity natural gas contracts		$	5	Discounted cash flow	Forward natural gas curves - price per MMBtu	$	3.30	-	4.51
Reserves		$	(11)		Bid-ask spreads, implied volatility, probability of default
Duke Energy Indiana
Financial transmission rights (FTRs)		$	10	RTO market pricing	FTR price	$	23.63	$	35.43

Additional Fair Value Disclosures—Long-term debt, including current maturities:

The fair value of long-term debt, including current maturities, is summarized in the following table. Judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates determined are not necessarily indicative of the amounts the Duke Energy Registrants could have settled in current markets. The fair value of the long-term debt is determined using Level 2 measurements.

		As of December 31, 2012				As of December 31, 2011
(in millions)		Book Value		Fair Value		Book Value		Fair Value
Duke Energy ^(a)		$	39,461	$	44,001	$	20,573	$	23,053
Duke Energy Carolinas^(b)		$	8,741	$	10,096	$	9,274	$	10,629
Progress Energy		$	14,428	$	16,563	$	13,152	$	15,518
Progress Energy Carolinas		$	4,840	$	5,277	$	4,206	$	4,735
Progress Energy Florida		$	5,320	$	6,222	$	4,681	$	5,633
Duke Energy Ohio		$	1,997	$	2,117	$	2,555	$	2,688
Duke Energy Indiana		$	3,702	$	4,268	$	3,459	$	4,048

(a)	Includes book value of Non-recourse long-term debt of variable interest entities of $852 million and $949 million December 31, 2012 and December 31, 2011, respectively.
(b)	Includes book value of Non-recourse long-term debt of variable interest entities of $300 million at both December 31, 2012 and December 31, 2011, respectively.

At both December 31, 2012 and December 31, 2011, the fair value of cash and cash equivalents, accounts and notes receivable, accounts payable, notes payable and commercial paper and non-recourse notes payable of variable interest entities are not materially different from their carrying amounts because of the short-term nature of these instruments and/or because the stated rates approximate market rates.