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Press Release

05/09/2012

Progress Energy Carolinas seeks to lower fuel portion of S.C. retail rates

FLORENCE, S.C.  (May 9, 2012) – Progress Energy Carolinas today filed a request to lower the fuel rate charged to its South Carolina customers. Coupled with a proposed slight increase in the portion of rates that pays for energy-efficiency programs, the net impact of the changes would bring a reduction of 2-5 percent for customers.

If approved by the Public Service Commission of South Carolina, the request will result in a decreased monthly fuel charge of $3.53 for a residential customer using 1,000 kilowatt-hours (kWh).

The proposed reduction reflects a decrease in the cost of fuels used to generate electricity for the company’s 175,000 customers in South Carolina. In light of increased domestic U.S. production of natural gas, the price of that fuel has dropped significantly in the last year. Progress Energy Carolinas has used more natural gas and less coal to generate electricity, resulting in lower overall costs. Progress Energy Carolinas continues to work to mitigate cost increases by negotiating the lowest possible cost for fuels on behalf of customers.

The fuel portion of the company’s rates is adjusted annually by the PSC to reflect the actual cost of fuel the utility uses to produce electricity to meet customer demand. By law, Progress Energy does not make a profit from the fuel charge. The company also files annually to recover the costs of implementing programs designed to help reduce energy consumption and save customers money on their energy bills. 

In March, the company filed for an increase in the portion of customer bills used to pay for energy-efficiency and demand-side management programs. That increase, an additional $1.37 per month for a residential customer using 1,000 kilowatt-hours, reflects an increased number of efficiency programs and measures made available to South Carolina customers in the last year.

The net impact of the two changes is a decrease of $2.16 per month on a residential 1,000-kWh bill. For the residential customer using 1,000 kWh, the total monthly bill will decrease to $101.69 from the current $103.85, if the request is approved by the PSC. The changes are scheduled to take effect July 1. 

If both requests are approved as requested, the average decrease would be about 2.1 percent for residential customers using 1,000 kWh, 3.2 percent for commercial customers and about 5.3 percent for industrial customers.

The other main component of retail rates, the base rate, has not increased since 1988. Progress Energy Carolinas has announced plans to seek a base rate increase in 2013 to pay for significant fleet modernization under way. Among other initiatives, the company is retiring older, less efficient coal-fired plants and replacing them with cleaner-burning natural gas-fueled plants to meet customer needs reliably into the future.

Progress Energy maintains a diverse mix of power plant resources – including nuclear, coal, natural gas, oil, hydroelectric energy and renewable energy, including solar and biofuels – to maintain a reliable supply of electricity for the utility’s customers while keeping fuel expenses as low as possible.

“We are working hard to drive efficiency and hold down costs for our customers,” said  Melody Birmingham-Byrd, vice president of Progress Energy Carolina’s Southern Region, which includes all of the company’s South Carolina service area. “The costs of modernizing the power system are significant, but we will continue to do all we can to minimize the impact of future increases by managing the costs we can control. We know our customers depend on us to deliver reliable, affordable and environmentally sound energy.”

Progress Energy encourages customers to learn all they can about using energy wisely – to save energy and money. Customers can save up to 20 percent on their energy costs by making simple changes at home. Cleaning air filters, replacing incandescent light bulbs with compact-fluorescent bulbs, adjusting the thermostat and sealing windows and doors can result in noticeable savings. For more energy-efficiency tips, visit www.savethewatts.com. Customers also can learn about energy-efficiency programs and incentives at www.progress-energy.com.

Progress Energy (NYSE: PGN), headquartered in Raleigh, N.C., is a Fortune 500 energy company with more than 23,000 megawatts of generation capacity and approximately $9 billion in annual revenues. Progress Energy includes two major electric utilities that serve about 3.1 million customers in the Carolinas and Florida. The company is pursuing a balanced strategy for a secure energy future, which includes aggressive energy-efficiency programs, investments in renewable energy technologies and a state-of-the-art electricity system. Progress Energy celebrated a century of service in 2008. Visit the company’s website at www.progress-energy.com.

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