Duke Energy hopes to raise up to $500 million

Duke's PremierNotes will pay a floating interest rate at least a quarter of a percentage point higher than the average rate of taxable U.S. money-market mutual funds. Investors will have to make at least a $1,000 investment.

Duke Energy said today it hopes to raise up to $500 million by selling debt directly to small investors.Some other U.S. companies, including Caterpillar, Ford and General Electric, offer similar notes but Duke said it is believed to be the first utility to do so.

"It's a low-cost, efficient way to raise funding from a diversified source of capital," said Stephen De May, Duke's senior vice president of investor relations. "What we're really competing for is cash that investors would otherwise put in money market funds."

The company spent $4.9 billion on capital projects in 2010, including four power plants, and expects to invest another $4.5 billion to $5 billion this year, officials said in February. Meeting new environmental standards could cost another $5 billion over the next decade, Duke said.

Duke has 4 million customers in the Carolinas and Midwest, and plans to merge with Raleigh-based Progress Energy by the end of the year.

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