RALEIGH, N.C. (October 19, 2004) -- Standard and Poor's (S&P) credit rating agency announced today that it is revising its ratings outlook on Progress Energy Inc. [NYSE: PGN] to negative from stable. S&P stated that it took this action primarily due to uncertainty regarding the timing of recovery of the hurricane costs in Florida and its impact on continuing balance sheet improvement.

"We are disappointed in this action by S&P," said Geoff Chatas, executive vice president and chief financial officer, Progress Energy. "Obviously, the impact of four major hurricanes on our service territories created near-term financial challenges for us. We are working hard on several fronts to minimize these impacts on our customers and investors. We continue to be committed to improving our credit metrics in support of a stable investment-grade credit rating and have ample liquidity to meet all of our anticipated needs."

Progress Energy (NYSE: PGN), headquartered in Raleigh, N.C., is a Fortune 250 diversified energy company with more than 24,000 megawatts of generation capacity and $9 billion in annual revenues. The company's holdings include two electric utilities serving approximately 2.9 million customers in North Carolina, South Carolina and Florida. Progress Energy also includes nonregulated operations covering generation, energy marketing, natural gas production, fuel extraction, rail services and broadband capacity. For more information about Progress Energy, visit the company's Web site at www.progress-energy.com.

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Investor Relations: Bob Drennan, 919-546-7474
Corporate Communications: Garrick Francis, 919-546-6189, or toll-free 877-641-NEWS (6397)