Progress Energy Florida takes next step to secure region, state's energy future
Company asks Public Service Commission to approve need for Levy County nuclear generating plants

ST. PETERSBURG, Fla. (March 11, 2008) -- Progress Energy Florida, a subsidiary of Progress Energy (NYSE: PGN), today took a significant step toward securing Florida's energy future with carbon-free nuclear power. The company submitted a filing with the Florida Public Service Commission (PSC) that outlines its need for additional electricity and proposes to meet that need with two nuclear units in Levy County.

Nuclear power is one of three critical components of the company's balanced solution to meeting its customers' energy needs over the long term, which also includes the use of renewable energy sources, and one of the nation's best energy efficiency programs.

If approved and built, the project would be among the first nuclear plants in the country to be constructed on a greenfield site in more than 30 years, and would involve development of one of the single largest transmission infrastructure projects in Florida's history. The filing is one step in a lengthy process to ensure that nuclear energy remains a viable resource option for the future.

"Our investment in carbon-free nuclear power is an investment in our state's energy future," said Jeff Lyash, president and CEO of Progress Energy Florida. "Customer demand for electricity continues to grow, and we have an obligation to ensure that our supply remains as reliable in the future as it is today. Nuclear power, along with our ongoing investments in energy efficiency and renewable technologies, is a strategic asset in our statewide effort to become energy independent, to reduce our reliance on more volatile fossil fuels, and to providing a balanced approach to meeting the challenges of growth and climate change."

Energy to power a growing region
Progress Energy Florida serves one of the fastest-growing regions in the country. As the fourth-largest state, Florida ranks third nationally in per-capita energy consumption. Over the past three decades, the size of the average home has grown by 50 percent and uses 30 percent more electricity. Since the Crystal River nuclear plant came online in the mid-1970s the company's customer base has more than doubled.

Even after customers take advantage of the company's numerous energy-efficiency programs -- considered one of the best of any utility in the nation -- energy demand is expected to grow 25 percent in Progress Energy Florida's 35-county service area over the next decade.

"Florida's growth is driving the demand for more of everything -- from roads to schools to electricity," said Lyash. "In the same way that our state plans for more roads and schools to accommodate growth, we must also plan to meet the rising demand for electricity. Nuclear power represents the best option we have for baseload generation -- operating safely and efficiently, day and night -- to meet our customers' steady demand for electricity."

Nuclear power is part of a balanced solution strategy to secure our state's energy future
Carbon-free nuclear power is an important part of Progress Energy's balanced solution strategy to deliver clean, reliable energy at stable prices to our growing customer base, and to secure our state's and our region's energy future over the long term.

"Advanced technology nuclear power is just one component of our strategy," said Lyash. "We continually seek newer, cleaner ways to produce energy. Our balanced solution also includes innovative energy-efficiency programs, and continued expansion of alternative-energy sources such as hydrogen and solar. This approach will result in clean, reliable power at stable prices, with greater fuel security and less dependence on more volatile fossil fuel sources."

Progress Energy Florida provides its customers with one of the nations most innovative and successful energy efficiency programs. Since 1981, customers have saved nearly $870 million in energy costs and approximately 10 billion kilowatt hours, enough to power the city of St. Petersburg for more than three years. Customer participation in these programs has eliminated 7.5 million tons of carbon from the air -- the equivalent of taking 1.9 million cars off Florida roads each year. Customers can learn more about how to do their part at www.savethewatts.com.

The company also leads Florida in the in-state development and expansion of renewable technology, including biomass, solar, hydrogen fuel cells, and several others. In 2006, the company partnered with Biomass Investment Group to purchase the energy output from the nation's largest biomass plant to be built in central Florida. The project would reduce carbon emissions by more than 20 million tons over the life of the contract.

The company is also making significant investments in its existing plants to reduce emissions and increase generation output. Progress Energy Florida operates the most diverse mix of power plants in Florida to provide long-term cost stability and to meet the growing energy needs of its customers.

A significant investment with significant benefits
As outlined in the filing, the company estimates the total cost of the project to be approximately $14 billion for the two units and an additional $3 billion for the necessary transmission facilities. This estimate includes land price, plant components, financing costs, construction, labor, regulatory fees and reactor fuel for two units. It also includes the cost of the approximately 200 miles of transmission lines and associated facilities necessary to interconnect and integrate the plants on to the company's existing transmission system.

The estimated average annual customer cost increase is expected to be between 3 -- 4 percent from 2009 to 2018.  When the plants begin commercial operation in 20176-17, fuel savings -- a direct cost savings benefit to customers -- is estimated to be approximately $1 billion annually.
"This is a significant financial investment for our company and our customers, but the benefits are also significant," said Lyash. "Customers are playing a role in helping to secure a reliable supply of energy, stabilize costs over the long-term, and protect the environment with a clean energy source."

"We believe that new nuclear generation is a critical hedge against the future risk of volatile and increasing fossil-fuel prices, and the likely significant future costs of emissions regulation," added Lyash.

Potential new site to have positive economic impacts for Levy County
In 2006, Progress Energy Florida announced it selected about 3,100 acres in southern Levy County for the potential construction of two nuclear reactors. The company has been a longstanding partner in the county's growth and development. The site's proximity to the company's existing Crystal River nuclear plant will provide opportunities for efficiencies in shared support functions at both facilities.

In the filing, Progress Energy Florida also estimated the significant benefits of new nuclear facilities to the regional and statewide economy. If built, the new plants would employ approximately 800 full-time, high-paying positions, generate another 1,000 to 2,000 indirect jobs and employ about 3,000 people at the height of construction.

The state and federal regulatory process
The company's filing -- known as a Petition for Determination of Need -- with the Florida PSC is the next required, critical step in a comprehensive regulatory process that closely reviews the company's proposal for new nuclear power. The PSC will schedule public hearings on the petition later this year.

The next steps to be taken at the state and federal levels include the filings of a Site Certification Application with the Florida Department of Environmental Protection and a Combined Operating License (COL) application with the U.S. Nuclear Regulatory Commission (NRC). Progress Energy Florida expects to submit both applications later this year. In today's filing, the company said that gaining these and other regulatory approvals in a timely manner are critical to moving the project forward.

If plans continue to move forward and are approved by state and federal regulators, the two new advanced technology reactors could enter service in 2016 and 2017, respectively. 

State-of-the-art nuclear technology
For purposes of preparing a PSC filing and COL application for the Levy County site, the company has selected the Westinghouse AP-1000 design for the two proposed nuclear units. The AP-1000 is a standardized, advanced passive-pressurized water reactor. As state-of-the-art nuclear technology, it employs "passive" rather than traditional "active" safety systems.

Passive designs use gravity and natural recirculation of air and water in emergency situations, resulting in an extremely safe and efficient design that requires significantly less equipment than existing reactors. The two proposed reactors will each generate up to 1,100 megawatts of electricity (one megawatt can power up to 615 homes and businesses) and use less than 300 acres of the 3,100-acre site, with the remaining portion to be used as a buffer preserve.

Progress Energy has a proven track record of performance among its five-reactor nuclear fleet in Florida and the Carolinas. The company has operated its nuclear plants safely and cost-efficiently for more than 35 years. Nuclear energy has the lowest production costs of any major source of electricity, including coal and natural gas-fired power plants. The nuclear industry's average production -- encompassing fuel, operations, and maintenance -- set a record low in 2007 of 1.68 cents per/kWh. The company's Crystal River nuclear plant is currently the lowest cost energy provider among all of Progress Energy Florida's generating plants.

More information about the Westinghouse reactor design can be found at: http://ap1000.westinghousenuclear.com/index.html

Progress Energy Florida, a subsidiary of Progress Energy (NYSE: PGN), provides electricity and related services to 1.7 million customers in Florida. The company is headquartered in St. Petersburg, Fla., and serves a territory encompassing more than 20,000 square miles including the cities of St. Petersburg and Clearwater, as well as the Central Florida area surrounding Orlando. Progress Energy Florida is pursuing a balanced approach to meeting the future energy needs of the region. That balance includes increased energy-efficiency programs, investments in renewable energy technologies and a state-of-the-art electricity system. For more information about Progress Energy, visit the company's Web site at www.progress-energy.com.

Caution Regarding Forward-Looking Information:

This release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, by their very nature, involve assumptions, risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. For example, the company's decision on whether to move forward with nuclear generation construction will depend on a variety of factors that are each subject to change, such as the political and regulatory environments, financing options available to fund construction and the overall cost of nuclear generation construction and the associated transmission facilities.  Any forward-looking statement speaks only as of the date such statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made.

Media contact: Progress Energy Florida 24-hour media line (866) 520-6397