Progress Energy is sensitive to the impact of rates on our customers and strives to keep rates as low as possible. We're doing all we can to control costs while meeting our responsibility to provide reliable electricity to the nearly 1.7 million households and businesses that depend on us - today and in the future. Although we can’t control the global factors that affect fuel costs, we can and do control how efficiently we run our power plants, delivery systems and customer service. We are focused on operating as efficiently as possible without compromising service and reliability.

Our energy comes from coal (36.7 percent), oil (10.2 percent), natural gas (36.7 percent), nuclear (13.9 percent) and alternative or renewable energy (2.5 percent). The cost of fossil fuels (coal, oil, and natural gas) is fluctuating greatly due to a variety of factors, including weather, market conditions and geopolitical uncertainties.  As natural gas has decreased from summer highs, for example, coal prices remain more than 30 percent higher today than at this time last year.

During the summer, prices at the pump rose dramatically – almost doubling the price for a gallon of gas - then came down in the fall. Throughout 2008, Progress Energy Florida’s industrial and commercial rates increased just slightly, averaging 4.5 percent.  

This is why prices at the pump do not paint an accurate picture of the prices we pay for the types of fuel we use.  Prices at the pump reflect the petroleum market. While Progress Energy does use petroleum-based fuels to generate electricity (although not the same type of gasoline used in cars), the use of fuel oil represents a comparatively small portion of our fuel mix as noted above. In addition, the fuel component in the company's rates reflects the actual cost of fuels used to produce electricity.

Progress Energy makes no profit on the fuel portion of its rates. We will continue to closely monitor fuel prices and will notify the FPSC when estimated fuel costs are lower or greater than 10 percent of annual fuel revenue.  Any savings that the company realizes due to lower fuel prices will be passed on to our customers, with interest.