• Reports first-quarter GAAP earnings of$0.81 per share, compared to earnings of $1.08 per share for the same period last year
• Reports ongoing earnings of $0.57 per share, compared to $0.59 per share for the same period last year
• Reaffirms 2008 ongoing earnings guidance of $3.05 per share, with a range of 10 cents above and below the target

RALEIGH, N.C. (May 8, 2008) -- Progress Energy [NYSE: PGN] announced first-quarter GAAP earnings of $209 million, or $0.81 per share, compared with GAAP earnings of $275 million, or $1.08 per share, for the same period last year. First-quarter ongoing earnings were $148 million, or $0.57 per share, compared to $149 million, or $0.59 per share, last year.(See the discussion later in this release for a reconciliation of GAAP earnings per share to ongoing earnings per share.)

"During the first quarter of 2008, our utility assets performed well and we took aggressive steps to mitigate the impact of weakness in the general economy," said Bill Johnson, chairman, president and CEO. "Retail revenues have been negatively impacted by milder weather in the Southeast and by lower than forecasted customer growth in Florida. Consequently, we expect lower retail revenues in Florida for 2008. In response to this retail weakness, we have successfully secured additional wholesale revenues in Florida and begun realizing savings through the implementation of an aggressive cost management plan. As a result of these actions, we are reaffirming our 2008 ongoing earnings guidance of $3.05 per share, with a range of 10 cents above and below that target," Johnson said.

The 2008 ongoing earnings guidance excludes any impact from CVO mark-to-market adjustment, potential impairments and discontinued operations. Progress Energy is not able to provide a corresponding GAAP equivalent for the 2008 earnings guidance due to the uncertain nature and amount of these adjustments.

See pages 2-3 for a detailed first-quarter earnings variance analysis for the Progress Energy Carolinas, Progress Energy Florida and Corporate and Other Businesses segments.

RECENT DEVELOPMENTS

• Completed sale of remaining coal mines and river terminals associated with the synthetic fuels business for $94 million, marking the final divestiture of the company's restructuring plan.
• Submitted a combined license application with the Nuclear Regulatory Commission for two possible new reactors at the existing Harris Nuclear Plant site.
• Filed a Petition for Determination of Need with the Florida Public Service Commission (FPSC) for two possible new nuclear reactors in Levy County, Florida.
• Signed a letter of intent with Westinghouse Electric Company and The Shaw Group Inc.'s Power Group for the purchase of long lead-time materials for up to two Westinghouse AP1000 reactors at the Levy County, Florida, site.
• Filed a petition for recovery of Crystal River Unit 3 nuclear plant uprate costs under Florida's comprehensive energy bill and the FPSC's nuclear cost-recovery rule.
  • Comprehensive energy legislation passed in Floridaand presented to governor to sign into law.
  • Received final implementation rules related to the comprehensive energy bill enacted in North Carolina in 2007.
  • Filed with North Carolina Utilities Commission (NCUC) for approval of initial demand-side management and energy-efficiency programs, including distribution system demand response program.
  • Submitted revised Open Access Transmission Tariff filing, including a settlement agreement, with the Federal Energy Regulatory Commission requesting an increase in transmission rates for Progress Energy Carolinas.
  • Filed Petition for Determination of Need with the NCUC for a new 600 MW combined-cycle plant at the company's existing Richmond County Energy Complex in North Carolina.
  • Achieved top-quartile ranking among energy providers in the latest business customer satisfaction survey from J.D. Power & Associates.
• Issued second corporate responsibility report, reflecting the company's commitment to transparent communication.
• Joined The Climate Registry as a founding reporter, thus committing to transparency regarding greenhouse gas emissions from the company's operations.
• Ranked number 16 in Corporate Responsibility Officer's 100 Best Corporate Citizens 2008.
• Won first place in Chartwell's Best Practices for Marketing Energy Efficiency competition for the company's Save The Watts campaign.

Press releases regarding various announcements are available on the company's Web site at www.progress-energy.com/aboutus/news.

FIRST-QUARTER 2008 BUSINESS HIGHLIGHTS

Below are the first-quarter 2008 highlights for the company's business units. See the reconciliation tables on pages 3-4 and on page S-1 of the supplemental data for a reconciliation of GAAP earnings per share to ongoing earnings per share. Also see the attached supplemental data schedules for additional information on Progress Energy Carolinas and Progress Energy Florida electric revenues, energy sales, energy supply, weather impacts and other information.

Progress Energy Carolinas

• Reported ongoing earnings per share of $0.46, compared with $0.48 for the same period last year; GAAP earnings per share of $0.47, compared with $0.48 for the same period last year.
• Reported primary quarter-over-quarter ongoing earnings per share favorability of:
  • $0.03 growth and usage
  • $0.02 purchased power related to the expiration of a power buyback agreement
  • $0.02 impact of the comprehensive energy bill implementation
  • $0.01 AFUDC equity related to an increase in large construction projects
• Reported primary quarter-over-quarter ongoing earnings per share unfavorability of:
  • $(0.03) wholesale margins as a result of lower margins on excess generation sales
  • $(0.03) changes in income tax estimates
  • $(0.02) Clean Smokestacks amortization
  • $(0.02) weather
• Added 26,000 customers (net) during the last 12 months.

Progress Energy Florida

• Reported ongoing earnings per share of $0.26, compared with $0.24 for the same period last year; GAAP earnings per share of $0.26, compared with $0.24 for the same period last year.
• Reported primary quarter-over-quarter ongoing earnings per share favorability of:
  • $0.04 AFUDC equity related to an increase in large construction projects
  • $0.03 net retail rate increase related to the Hines Energy Complex
  • $0.02 wholesale sales primarily due to new and amended contracts
• Reported primary quarter-over-quarter ongoing earnings per share unfavorability of:
  • $(0.02) growth and usage
  • $(0.01) interest expense primarily due to higher average debt outstanding
  • $(0.01) O&M primarily due to outage and maintenance costs
  • $(0.01) depreciation due to higher depreciable base
  • $(0.02) other
• Added 7,000 customers (net) during the last 12 months.

Corporate and Other Businesses (includes primarily Holding Company Debt)

• Reported ongoing after-tax expenses of $0.15 per share compared with ongoing after-tax expenses of $0.12 per share for the same period last year; GAAP after-tax expenses of $0.15 per share, compared with after-tax expenses of $0.12 per share for the same period last year.
• Reported primary quarter-over-quarter ongoing after-tax expenses per share unfavorability of:
  • $(0.02) changes in income tax estimates
  • $(0.01) interest expense primarily due to a decrease in interest allocated to discontinued operations

ONGOING EARNINGS ADJUSTMENTS

Progress Energy's management uses ongoing earnings per share to evaluate the operations of the company and to establish goals for management and employees. Management believes this presentation is appropriate and enables investors to more accurately compare the company's ongoing financial performance over the periods presented. Ongoing earnings as presented here may not be comparable to similarly titled measures used by other companies. The following table provides a reconciliation of ongoing earnings per share to reported GAAP earnings per share.

* Previously reported 2007 results have been restated to reflect discontinued operations. See page S-1 of the supplemental data for information regarding 2007's core and non-core earnings.

Reconciling adjustments from ongoing earnings to GAAP earnings are as follows:

Tax Levelization

Generally accepted accounting principles require companies to apply an effective tax rate to interim periods that is consistent with a company's estimated annual tax rate. The company projects the effective tax rate for the year and, then, based upon projected operating income for each quarter, raises or lowers the tax expense recorded in that quarter to reflect the projected tax rate. The resulting tax adjustment increased earnings per share by $0.01 for the quarter and decreased earnings per share by $0.01 for the same period last year, but has no impact on the company's annual earnings. Because this adjustment varies by quarter but has no impact on annual earnings, management believes this adjustment is not representative of the company's ongoing quarterly earnings.

Discontinued Operations

The company has reduced its business risk by exiting nonregulated businesses to focus on the core operations of the utilities. The discontinued operations of these nonregulated businesses increased earnings per share by $0.23 for the first quarter of 2008 and by $0.49 for the same period last year. See page S-3 of the supplemental data for further information on the impact of discontinued operations. Due to disposition of these assets, management does not view this activity as representative of the ongoing operations of the company.

Contingent Value Obligation (CVO) Mark-to-Market

In connection with the acquisition of Florida Progress Corporation, Progress Energy issued 98.6 million CVOs. Each CVO represents the right of the holder to receive contingent payments based on after-tax cash flows above certain levels of four synthetic fuels facilities purchased by subsidiaries of Florida Progress Corporation in October 1999. The CVO liability is valued at fair value, and unrealized gains and losses from changes in fair value are recognized in earnings each quarter. The CVO mark-to-market had no impact on earnings for the first quarter of 2008 and increased earnings per share by $0.01 for the same period last year. Progress Energy is unable to predict the changes in the fair value of the CVOs, and management does not consider the adjustment to be a component of ongoing earnings.

* * * *

This earnings announcement, as well as a package of detailed financial information, is available on the company's Web site at www.progress-energy.com. Additionally, the slides accompanying the presentation may be downloaded beginning at 9:30 a.m. ET today at www.progress-energy.com/webcast.

Progress Energy's conference call with the investment community will be held May 8, 2008, at 10 a.m. ET, 7 a.m. PT. Investors, media and the public may listen to the conference call by dialing 913-312-0694, confirmation code 6840811. If you encounter problems, please contact Investor Relations at (919) 546-2233. A playback of the call will be available from 1 p.m. EST May 8 through midnight May 22. To listen to the recorded call, dial 719-457-0820 and enter confirmation code 6840811.

A webcast of the live conference call will be available at www.progress-energy.com/webcast. The webcast will be available in Windows Media format. The webcast will be archived on the site for at least 30 days following the call for those unable to listen in real time.

Progress Energy, headquartered in Raleigh, N.C., is a Fortune 250 energy company with more than 21,000 megawatts of generation capacity and $9 billion in annual revenues. The company will observe its 100th anniversary in 2008. Progress Energy includes two major utilities that serve 3.1 million customers in the Carolinas and Florida. The company is the 2006 recipient of the Edison Electric Institute's Edison Award, the industry's highest honor, in recognition of its operational excellence. The company also is the first utility to receive the prestigious J.D. Power and Associates Founder's Award for customer service. Progress Energy serves two growing areas of the country, and the company is pursuing a balanced strategy for a secure energy future. That balance includes aggressive 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. The matters discussed in this document involve estimates, projections, goals, forecasts, assumptions, risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.

Examples of factors that you should consider with respect to any forward-looking statements made throughout this document include, but are not limited to, the following: the impact of fluid and complex laws and regulations, including those relating to the environment and the Energy Policy Act of 2005; the anticipated future need for additional baseload generation and associated transmission facilities in our regulated service territories and the accompanying regulatory and financial risks; the financial resources and capital needed to comply with environmental laws and renewable energy portfolio standards and our ability to recover related eligible costs under cost-recovery clauses or base rates; our ability to meet current and future renewable energy requirements; the inherent risks associated with the operation of nuclear facilities, including environmental, health, regulatory and financial risks; the impact on our facilities and businesses from a terrorist attack; weather and drought conditions that directly influence the production, delivery and demand for electricity; recurring seasonal fluctuations in demand for electricity; the ability to recover in a timely manner, if at all, costs associated with future significant weather events through the regulatory process; economic fluctuations and the corresponding impact on our customers, including downturns in the housing and consumer credit markets; fluctuations in the price of energy commodities and purchased power and our ability to recover such costs through the regulatory process; our ability to control costs, including operation and maintenance expense (O&M) and large construction projects; the ability of our subsidiaries to pay upstream dividends or distributions to the Parent; the ability to successfully access capital markets on favorable terms; the impact that increases in leverage may have on us; our ability to maintain our current credit ratings and the impact on our financial condition and ability to meet our cash and other financial obligations in the event our credit ratings are downgraded; our ability to fully utilize tax credits generated from the previous production and sale of qualifying synthetic fuels under Internal Revenue Code Section 29/45K; the investment performance of our nuclear decommissioning trust funds and the assets of our pension and benefit plans; the outcome of any ongoing or future litigation or similar disputes and the impact of any such outcome or related settlements; and unanticipated changes in operating expenses and capital expenditures. Many of these risks similarly impact our nonreporting subsidiaries. These and other risk factors are detailed from time to time in our filings with the United States Securities and Exchange Commission. All such factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor can management assess the effect of each such factor on us.

Any forward-looking statement is based on information current as of the date of this document and speaks only as of the date on which 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.

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Contacts: Corporate Communications -- (919) 546-6189 or toll-free (877) 641-NEWS (6397)