RALEIGH, N.C. (December 19, 2005) -- As Progress Energy embarks on an aggressive building campaign to meet growing electricity needs in the Carolinas and Florida, the company is also focused on future energy sources. Today, Progress Energy announced a commitment of $1 million to Microcell Corp., a Raleigh-based company working to bring commercially available fuel cell applications to industrial, commercial and consumer markets.

"The future of energy and electricity is bounding with possibilities and untapped resources, and Progress Energy will continue to be involved in researching and demonstrating promising new technologies," said Fred N. Day, Progress Energy Carolinas president and CEO. "Our company is committed to ensuring a reliable and efficient supply of electricity for our customers now and in the future." Day is a member of the Microcell Corp. board of directors.

Fuel cells are electrochemical devices that convert chemical energy directly into electrical energy. Unlike batteries, which convert chemical energy stored within the battery, fuel cells theoretically continue to deliver electrical energy as long as fuel is supplied.

The heart of a fuel cell is an electrolyte (a substance that conducts ions) sandwiched between two layers of catalyst (a chemical substance that increases the rate of a reaction without being consumed). The Microcell fuel cell is a proton-exchange membrane (PEM) converted to the form of a microfiber. It differs from other fuel-cell designs (in that all the fuel cell components are extruded into a single microfiber) and shows promise for its potential to be mass-produced more efficiently than other designs.

One potential application for fuel cells is in operating distributed generation, or power plants located on or near the customer's property. The technology also has potential applications in the automotive industry, including the ongoing development of hybrid gasoline/hydrogen vehicles.

While any widespread consumer application of fuel cell technology is likely years away, increased research and development -- as well as active pilots and demonstrations -- help to accelerate the process.

Progress Energy has long supported research and development of electrical technologies through its membership in the Electric Power Research Institute. The company has been involved in a number of hydrogen-related initiatives in Florida, including hydrogen-fueled vehicle demonstrations, fueling stations and the use of hydrogen fuel cells to provide electricity for various uses.

Microcell Corporation is a privately owned, for-profit "c" corporation incorporated in 2000. The company was initially funded by the Advanced Energy Corporation. While capable of producing the world's smallest fuel cell, Microcell's focus is currently on the production of fuel cells for distributed generation and automotive applications. The company has developed its first fuel cell cores designed for 1-kilowatt units, and testing is under way. More information is available on the Web site at http://www.microcellcorp.com.

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 more than 2.9 million customers in North Carolina, South Carolina and Florida. Progress Energy also includes nonregulated operations covering competitive generation, energy marketing, natural gas production and fuel extraction. Progress Energy is the 2005 recipient of the prestigious J.D. Power and Associates Founder's Award for dedication, commitment and sustained improvement in customer service. For more information about Progress Energy, visit the company's Web site at http://www.progress-energy.com.

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