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Progress Energy Florida Names Potential Nuclear Plant Site in Levy County

December 12, 2006

LEVY COUNTY, Fla., Dec. 12 /PRNewswire-FirstCall/ — Following a comprehensive evaluation of sites for a potential nuclear power plant to meet Florida’s growing need for electricity, Progress Energy has named a site in southern Levy County as the preferred location for construction of a plant — if the decision is made in future years to move forward.

   (Photo: http://www.newscom.com/cgi-bin/prnh/20061212/CLTU057)   (Logo: http://www.newscom.com/cgi-bin/prnh/20020923/CHM008LOGO-c)  

The Levy County site, approximately 3,000 acres (see attached map), is located about seven miles inland from the Gulf of Mexico and eight miles north of the company’s Crystal River Energy Complex in Citrus County, where Progress Energy operates a nuclear plant, as well as four coal-fueled units. The Levy County location was chosen based on an assessment of the major siting criteria: land, access to sufficient quantities of water (from the Gulf) and access to the electric transmission system, as well as an overall evaluation of environmental considerations. The proximity of the site to the company’s existing nuclear plant also would provide opportunities for efficiencies in shared support functions. In the coming months, the potential site will undergo further detailed assessment.

“Our commitment is to provide reliable and affordable energy to more than 1.6 million customers every day,” said Jeff Lyash, president and CEO of Progress Energy Florida. “We expect demand for electricity in our service territory to grow by more than 25 percent in the next decade, and today’s announcement is part of our long-term, balanced approach to meeting our customers’ future needs.

“The site selection is not a decision to build a nuclear plant. That decision won’t be made for a year or longer. But it is a critical step in ensuring that nuclear power remains open and viable for future years. That flexibility is important to consumers throughout the region, because it translates to having the right resources at the right time, and that promotes continued electric system reliability and stable prices. If and when we build a new nuclear plant, it will be with our continued rock-solid commitment to safety and security and will incorporate state-of-the-art technology.”

Part of a balanced approach to meeting Florida’s future energy needs

“As Florida’s population and energy needs continue to grow, our company and state will continue to rely on increased energy efficiency initiatives and renewable energy sources to help ensure a reliable and affordable supply of electricity for everyone,” Lyash said. “But even with an emphasis on those critical components, Florida also needs new power plants.”

The state’s landmark energy plan, adopted this year, recognizes the need for new plants, as well as the critical role that nuclear power already plays in promoting reliable electricity and rate stability for Floridians.

“We agree with state and federal leaders that nuclear power must continue to be part of a balanced approach to meeting the state’s growing needs — an approach that maximizes energy independence and environmental responsibility, while bolstering the energy supply that serves us all. The importance of our state’s reliable energy supply was again made clear last summer, as an extended heat wave caused significant issues (including blackouts and brownouts) in New York and other parts of the country.”

Increased demand requires new sources of electricity (See page 4 for more Florida energy stats.)

Over the last two decades, more than 600,000 homes and businesses have been added to Progress Energy’s system in Florida. And with today’s larger homes and significantly more electronics use in homes and businesses, per- capita use of electricity among Floridians also has risen dramatically. While other types of power plants have been added in recent years (particularly natural gas-fueled plants) the significant customer and energy-usage growth have prompted the need for adding baseload generation.

Baseload power plants are considered must-run facilities that operate 24 hours a day to meet basic, constant customer demand for electricity. Nuclear and coal-fueled power plants are the most economical forms of baseload generation. The company currently operates a diverse mix of energy resources – including nuclear and coal-, natural gas- and oil-fueled power plants – to ensure reliability and affordability on behalf of customers.

Lyash said two goals in the company’s decision making about future facilities are reducing America’s reliance on foreign oil supplies and protecting the environment. Nuclear plants do not emit greenhouse gases that have been associated with global climate change.

Public involvement throughout the process

Progress Energy has made significant energy-related information available on the company’s Web site (http://www.progress-energy.com/poweringthefuture) and plans to work with local leaders, federal officials, the Florida Public Service Commission and the community to ensure a continuous exchange of information with residents and others interested in the possibility of a future nuclear plant.

“Community involvement and engagement are critical parts of this process,” Lyash said. “We have a track record of positive partnership in the communities where we operate, including the community surrounding the Crystal River plant. Levy County has been part of the significant public safety planning associated with the Crystal River nuclear plant for years, so in many regards, a decision to build there would be an extension of what we have been doing for some time. We are committed to keeping the community involved and informed every step of the way in what will be a multi-year process.”

The nuclear siting process and schedule

The Nuclear Regulatory Commission (NRC) is the federal government agency with responsibility for ensuring the safety and security of U.S. nuclear reactors. The Florida PSC and other state agencies also will have oversight in the process.

Progress Energy informed the NRC a year ago of its plan to submit a combined construction and operating license (COL) application for a potential nuclear power plant. In November 2005, the company updated those plans to include a second COL, one for the Carolinas and one for Florida. Each COL covers up to two reactors at each site.

This step is necessary to obtain a license should a new nuclear unit prove to be the best plan for meeting the needs of a growing population. The application for the Florida COL could be filed in 2008. If approved by the NRC – and if the decision is made to build a nuclear plant – clearing and construction would begin as early as 2010, and a new plant could be online around 2016. The plant footprint would comprise less than 10 percent of the site acreage, with the remaining land forming a natural boundary.

The licensing process, once completed, allows for construction and operation of units on a specific site; it does not mean a nuclear plant will be built. The final decision on building another nuclear reactor or other baseload unit will be based on many factors, including regulatory approval and forecasts for energy demand and economic conditions later this decade.

“Those conditions can change over time, so, on behalf of our customers, it is important to have as many viable alternatives open as possible,” Lyash said.

Additional background

Progress Energy operates five reactors at four nuclear plant sites – the Crystal River Nuclear Plant near Crystal River, Fla.; the two-unit Brunswick Nuclear Plant near Southport, N.C.; the Harris Nuclear Plant near New Hill, N.C.; and the Robinson Nuclear Plant near Hartsville, S.C. Together, they are capable of generating more than 4,300 megawatts of electricity. Nuclear generation accounted for 34 percent of the electricity Progress Energy produced for its customers in 2005.

Progress Energy , headquartered in Raleigh, N.C., is a Fortune 250 diversified energy company with more than 23,000 megawatts of generation capacity and $10 billion in annual revenues. The company’s holdings include two electric utilities serving approximately 3 million customers in Florida, North Carolina and South Carolina. Progress Energy’s nonregulated operations include energy marketing. Progress Energy was the 2006 recipient of the Edison Electric Institute’s highest utility honor. The company also was the 2005 recipient of the prestigious J.D. Power and Associates Founder’s Award for dedication, commitment and sustained improvement in customer service. For more information about Progress Energy, visit the company’s Web site at http://www.progress-energy.com/.

Caution regarding forward-looking statements:

This release contains forward-looking information within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Progress Energy, Inc., Florida Progress Corporation and Florida Power Corporation (collectively, the “company”) caution that the company’s decision as to whether it will ultimately add new nuclear generation is dependent on many factors, including, but not limited to, regulatory approvals, final determinations as to site capacity for such projects, electric load growth projections, changing market fuel prices, internal financial and strategic analyses, changes in legislation or regulation affecting new nuclear generation and the availability of capital financing or other capital funding mechanisms at a reasonable price. The company expressly disclaims any duty to update any of the forward-looking information.

                   Facts about electricity use in Florida    Our state is growing     - Florida added more than 400,000 residents in 2005 (more than 1,000 new      residents every day, the largest net increase in the country), and the      state's population - more than 17 million - currently ranks fourth in      the U.S.    - Between 30,000 and 40,000 new customers (homes and businesses, not      individuals) are added to Progress Energy Florida's service area every      year. That's the equivalent of a small to medium-sized city.    - The company's customer base has grown by 157 percent since 1975      (622,000 in 1975 to 1.6 million today).    We're using more electricity     - Florida's per-capita electricity use ranks third in the country. The      average Progress Energy Florida residential customer (household) uses      more than 14,000 kilowatt-hours of electricity in a year. As the role      of electronics continues to increase in our daily lives, per-capita      electricity usage among our customers in Florida has grown more than 53      percent since 1975.    - The average new home in Florida is 54 percent larger today than in 1970      and 12 percent larger than in 1990.    - Use of air conditioning in Florida and throughout the South is nearly      universal. In 1980, only about two-thirds of homes in the South had air      conditioning. Today electric air conditioning is found in 95 percent of      homes.    - Even with more energy-efficient appliances, there is more electricity      being used in the average home today than 20 years ago. For instance,      large plasma-screen TVs, which have grown in popularity, can use more      electricity than a refrigerator (which traditionally has been the      third-largest user of electricity in the home).    Energy efficiency and new energy sources are critical     - Progress Energy provides numerous options for customers to decrease      their energy usage and save money on their power bills. Through      participation in energy-efficiency programs, Progress Energy Florida      customers have saved more than $750 million in energy costs over the      last 25 years. That equates to more than 10 billion kilowatt-hours of      electricity that did not have to be generated (roughly equivalent to      the city of Orlando's power use over two years, or to removing 95,000      cars from Florida's roadways). In late 2006, the state Public Service      Commission approved a number of additional efficiency programs for      residential, commercial and industrial customers.    - Progress Energy continues to seek newer, cleaner ways to produce energy      for our customers. We have partnered with the state and federal      government and other companies and agencies in investing in hydrogen      fuel-cell projects, including Florida's first hydrogen vehicle fueling      station, as well as solar projects at schools, around the state and in      other areas.    - We've also signed a contract to purchase electricity generated by a      planned power plant in central Florida that will use a bamboo-like      grass as its fuel source. That project was approved by the Fla. Public      Service Commission in August. Renewable biomass projects can help      reduce the need to burn other fuels.    - Progress Energy Florida is investing in new natural gas-fueled      electricity generation at its Hines Energy Complex in Polk County, and      the company is repowering its Bartow Plant on Tampa Bay in Pinellas      County to burn natural gas instead of oil. Combined, the fourth unit at      Hines and the new Bartow Plant will produce about 1,200 additional      megawatts of natural gas-fueled electric generation. At full capacity,      that's enough to produce electricity to meet the needs of more than      700,000 households.    - Breakdown of electric bill for typical Florida family of four: Cooling      - 34%; water heating - 17%; refrigeration - 12%; miscellaneous - 10%;      heat pump - 8.5%; laundry - 7%; lighting - 6.5%; cooking - 5%.  

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Progress Energy

CONTACT: Progress Energy 24-hour media line, +1-866-520-NEWS *6397*

Web site: http://www.progress-energy.com/http://www.progress-energy.com/poweringthefuture




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