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Progress Energy Carolinas Files for Slight Rate Reduction in N.C.

Posted on: Thursday, 4 June 2009, 13:06 CDT

RALEIGH, N.C., June 4 /PRNewswire-FirstCall/ -- Progress Energy Carolinas' N.C. customers will pay slightly less for electricity under a proposal filed today with the N.C. Utilities Commission.

(Logo: http://www.newscom.com/cgi-bin/prnh/20020923/CHM008LOGO-c)

The company is seeking to lower the fuel component in customer rates, and to adjust other components of the customer bill that reflect the cost of energy-efficiency programs and renewable energy resources. If approved as proposed, the changes would result in a net reduction in the price of electricity. For a household using 1,000 kilowatt-hours (kWh) a month, the total bill would go from the current $106.78 to $106.68.

The reduction reflects the fact that global prices for energy have stabilized from the record highs of recent years. Each year, the N.C. Utilities Commission reviews Progress Energy Carolinas' expenses for fuel (coal, natural gas, oil and uranium), as well as power purchased from other utilities to meet the needs of 1.25 million customers in North Carolina. The fuel component of the company's rates is adjusted to reflect the cost of fuel. By law, the company does not earn a profit on the fuel component in rates.

If approved, the new rate will take effect Dec. 1. As part of its review process, the Utilities Commission will conduct hearings on the proposed changes in September.

"In these difficult economic times, we know every dollar counts, and we are very happy that we were able to meet our objective of minimizing rate impacts on our customers while keeping electricity reliable and affordable," said Lloyd Yates, president and CEO of Progress Energy Carolinas. "We will continue to be aggressive in managing our fuel costs and other expenses 24 hours a day, seven days a week, while expanding efficiency programs to meet varying customer needs and lifestyles, and while investing wisely in cost-effective renewable energy resources."

In addition to the fuel charge, today's filings also include proposed changes to the portion of customer bills used to pay for new energy-efficiency and demand-side management programs as well as investments in renewable energy sources (including solar and biomass plants) to meet the requirements of the state's energy law passed in 2007.

For the household using 1,000 kWh per month, the fuel portion of the bill will be reduced by 17 cents; the energy-efficiency portion will be reduced by 19 cents; and the renewable energy portion will rise by 26 cents (to 62 cents) to pay for increased solar and biofuel energy contracts needed to ensure compliance with the state's renewable energy targets. The net impact is an overall reduction of 10 cents on a 1,000 kWh bill.

In 2008, the price of coal and natural gas increased significantly. Progress Energy Carolinas' fuel purchasing practices shielded customers from the full impact of the higher costs. But the increases, coupled with an existing balance of about $300 million in unrecovered fuel expense from prior years, prompted an increase in fuel rates a year ago. In an effort to minimize the impact of the rate increase on customers in the midst of recession, Progress Energy Carolinas and other parties agreed to a plan in 2008 to recoup the unrecovered costs over three years, instead of one. The new fuel component proposed in today's filing is expected to pay off the deferred fuel balance by the end of 2011.

Progress Energy has developed and implemented a number of energy-efficiency and demand-side management programs to appeal to customers with varying needs and lifestyles. This week, the company announced additional incentives for customers installing solar energy technologies on their homes and businesses. For more information on efficiency, visit www.savethewatts.com.

Progress Energy (NYSE: PGN), headquartered in Raleigh, N.C., is a Fortune 500 energy company with more than 21,000 megawatts of generation capacity and $9 billion in annual revenues. Progress Energy includes two major electric utilities that serve approximately 3.1 million customers in the Carolinas and Florida. The company has earned the Edison Electric Institute's Edison Award, the industry's highest honor, in recognition of its operational excellence, and was the first utility to receive the prestigious J.D. Power and Associates Founder's Award for customer service. 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 Web site at www.progress-energy.com.

SOURCE Progress Energy Carolinas

Source: PR Newswire

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