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Progress Energy Carolinas Announces Site for Potential New Nuclear Plant in North Carolina

Posted on: Monday, 23 January 2006, 09:00 CST

RALEIGH, N.C., Jan. 23 /PRNewswire-FirstCall/ -- Progress Energy announced today that its Progress Energy Carolinas subsidiary has selected its Harris Nuclear Plant site near New Hill, N.C. (located approximately 20 miles southwest of Raleigh in western Wake County), to evaluate for possible future nuclear generation expansion.

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

The company also announced it has selected Westinghouse Electric Company to supply the reactors for the potential future expansion of Progress Energy's nuclear generation in the Carolinas. These announcements are important next steps in the process as the company continues to evaluate options to meet the demands of its rapidly growing customer base.

"Since Progress Energy last added baseload generation in the mid-1980s in North Carolina, we have grown by about 500,000 total customers. In North Carolina and South Carolina, we have added about 29,000 new customers just in the last year -- that's more than 550 new customers every week. And we expect to add more than 300,000 new customers over the next 10 years," said Bob McGehee, chairman and CEO, Progress Energy.

"A renewed emphasis on conservation and energy efficiency is an important factor in planning for the future," McGehee said. "However, even with more conservation and energy-efficiency programs, energy use will continue to grow as more people move to this region. To meet that growing demand for electricity, we'll need to add significant new power generation.

"Our customers expect reliable service and that's a responsibility we take seriously," McGehee said. "That's why we're putting our expertise and experience to work now, planning the power plants and other facilities necessary to continue to provide the same level of reliability tomorrow that our customers enjoy today."

Application and licensing process

The company informed the Nuclear Regulatory Commission (NRC) in August 2005 of its plans to submit a combined operating license (COL) application for a nuclear power plant. It updated those plans Nov. 1, 2005, to include a second COL, one for Florida and one for the Carolinas. Each COL covers up to two reactors at each site.

This step is necessary to obtain a license should the company decide that a new nuclear unit is the best option for meeting the need for additional generation. The application for the COL could be filed in late 2007 or early 2008. If approved by the NRC -- and if the decision to build is made -- construction could begin as early as 2010, and a new plant could be online around 2016.

The licensing process, once completed, gives the permit holder the option to construct and operate units on a specific site; it does not obligate the company to build.

A final decision to build another nuclear plant is still several years away. It will be based on many factors, including public and political support, regulatory approval and forecasts for energy demand and economic conditions later this decade. In order to provide the most reliable, safe and efficient mix of energy resources for its customers, Progress Energy is taking steps now to keep the option for nuclear open and viable in the future.

"We are carefully evaluating our options to meet our region's growing electricity needs. The company's long-term energy strategy focuses on generating power from a combination of plant technologies that rely on different fuels," McGehee said. "Balancing the types of plants we build using different fuels helps us provide affordable and reliable electricity to customers. Selecting a site for possible nuclear generation expansion, first in North Carolina and later in Florida, is part of our planning process to ensure we have the energy our customers need in the future.

"An important part of that planning process is community engagement," McGehee said. "We are committed to keeping our communities involved and informed every step of the way."

Site selection

Progress Energy chose the Harris site, after evaluating several sites in the Carolinas, based on its available transmission lines and proximity to cooling water and to Progress Energy Carolinas' largest area of customer concentration.

The Harris Plant site was originally planned for four nuclear reactors, but due to changing economic conditions in the 1970s and 1980s, only one reactor was built. The Harris site offers a large amount of available land -- approximately 35 square miles -- and has an ample water supply. Water is one of the most important factors in determining the suitability for a plant. The Cape Fear River and Harris Lake provide a reliable and sustainable water supply.

The Harris site also has transmission capacity that can accommodate the additional electricity generated. This capability reduces the need to build more transmission lines for a single new unit and would ultimately reduce the overall project costs.

"We evaluated multiple sites for this initial application, including all three existing Carolinas reactor sites and several new sites," said McGehee. "We are very grateful to the communities that were extremely supportive throughout the process. At the end of the initial evaluation process, we determined that the Harris site offered a unique combination of transmission infrastructure, water and proximity to a high-demand area that makes it the best location for further consideration for a new nuclear unit."

Benefits of nuclear power

"Progress Energy believes strongly that nuclear power must be an integral part of our nation's energy future," said McGehee. "Nuclear power is clean energy that produces no greenhouse gas emissions and has the lowest fuel cost of any large-scale electricity option we have today. While we still need to determine exactly where nuclear expansion fits in our plans to meet our region's growing energy needs, there is no question the country needs to move forward with new nuclear generation to address fuel price volatility and concerns about global warming."

Additional nuclear generation also helps the company comply with stringent rules to protect the environment, including the Clean Smokestacks Act in North Carolina and the federal Clean Air Interstate Rule and the Clean Air Mercury Rule that affect all three states where Progress Energy has retail utility operations.

Technology

Progress Energy has selected Westinghouse to supply the reactors for possible future expansion of its nuclear generating fleet in the Carolinas. The AP1000 is an advanced 1,100-megawatt nuclear power plant that uses passive safety system designs and engineering simplicity to enhance plant reliability and reduce construction costs. The AP1000 has 87 percent less cable, 83 percent less pipe, 50 percent fewer valves and 35 percent fewer pumps than the generation of reactors in operation today. More information can be found at http://www.ap1000.westinghousenuclear.com/

Next steps

The company estimates it will take approximately 24 months to complete the COL application. During this period, the company plans to hold several open- house meetings and forums throughout the area to keep the public informed and to encourage public participation.

Prior to construction, the company would have to obtain a certificate of public convenience and necessity from the North Carolina Utilities Commission (NCUC). This would take approximately 10 months, during which the commission would hold a hearing to determine whether the plant is needed to meet the electricity needs of Progress Energy's customers.

Regularly updated information will be available on the company's Web site at http://www.progress-energy.com/poweringthefuture. Once the COL application is submitted, the NRC could take up to 36 months to review.

In Florida, the company continues to evaluate several sites for potential nuclear expansion. Just like the COL process in North Carolina, the selection of a site in Florida only begins the application process and does not commit the company to building a new nuclear unit. The company wants to keep the option open to expand its nuclear generating capacity in both states while it continues to evaluate energy demand and economic conditions and works with key leaders, regulators and the communities to determine the best options to meet the needs of its growing customer base.

Progress Energy operates five reactors at four nuclear plant sites -- the two-unit Brunswick Nuclear Plant near Southport, N.C.; the Crystal River Nuclear Plant near Crystal River, Fla.; 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.

Progress Energy , headquartered in Raleigh, N.C., is a Fortune 250 diversified energy company with more than 24,500 megawatts of generation capacity and $9 billion in annual revenues. The company's holdings include two electric utilities serving more than 2.9 million customers in North Carolina, South Carolina and Florida. Progress Energy also includes nonregulated operations covering merchant generation, energy marketing and natural gas exploration. Progress Energy 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, political and public support, final determinations as to site capacity for such projects, electric load growth projections, changing market fuel prices, internal financial and strategic analyses, the Company's ability to utilize various legislative incentives for building 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.

First Call Analyst: FCMN Contact:

Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20020923/CHM008LOGO-cAP Archive: http://photoarchive.ap.org/PRN Photo Desk, photodesk@prnewswire.com

Progress Energy

CONTACT: Corporate Communications, +1-919-546-6189, or toll-free+1-877-641-NEWS (6397)

Web site: http://www.progress-energy.com/http://www.ap1000.westinghousenuclear.com/http://www.progress-energy.com/poweringthefuture

Source: PRNewswire-FirstCall

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