Agreement with the Department of Environmental Protection will reduce carbon and other air emissions

ST. PETERSBURG, Fla. (Dec. 18, 2008) -- Progress Energy Florida (NYSE: PGN) and the Florida Department of Environmental Protection (DEP) announced a landmark agreement today that will protect the environment, continue investments in air emission-reduction equipment and cost-effectively manage a significant reduction in the company's use of coal-fired power generation.

As part of the agreement, the company will retire the two oldest coal-fired units at the Crystal River Energy Complex in Citrus County after a new, advanced-design nuclear plant is built in Levy County. Doing so will reduce the company's carbon dioxide (CO2) emissions by more than 5 million tons per year, which is the equivalent of removing more than 830,000 vehicles from Florida's roads. The company is also aggressively pursuing energy efficiency, investing in renewable energy resources and developing advanced transportation technologies, such as plug-in hybrid electric vehicles, to help reduce greenhouse gas emissions.

"We are committed to providing our customers with clean, reliable and affordable electricity now and in the future," said Jeff Lyash, president and CEO of Progress Energy Florida. "As a significant player in an industry critical to addressing global climate change, we are taking action to significantly reduce our carbon emissions. This agreement will help us deliver on our promise to reduce emissions without sacrificing reliable and affordable electric service."

Under the agreement, Progress Energy Florida will retire its Crystal River Units 1 and 2 after the second unit at the Levy County site completes its first fuel cycle. Current plans call for the second unit to come online in the 2017 time frame and the first fuel cycle to be complete around 2020. A fuel cycle is the operating time between plant refueling outages, typically 18 to 24 months.

The agreement with the DEP also allows the company's $1.3 billion investment in air emission-reduction equipment to stay on track despite uncertainty surrounding the federal Clean Air Interstate Rule. Progress Energy Florida will complete and operate the state-of-the-art air emission controls already under construction at its Crystal River Units 4 and 5. This equipment will reduce sulfur dioxide (SO2) and nitrogen oxides (NOx) emissions by 90 percent and mercury emissions by 80 percent.

The company's Crystal River Energy Complex, which includes four coal-fired units and one nuclear unit, is one of the largest generating facilities in the country. Located near Crystal River, Fla., the complex is capable of producing 3,148 megawatts (MW) and serves the daily needs of more than half of the utility's customers. Units 1 and 2 are coal-fired power plants that began operation in 1966 and 1969, respectively. They have a combined generating capacity of approximately 866 MW. Unit 3 is an 838-MW nuclear unit that began operation in 1977. Units 4 and 5 are coal-fired plants built in 1982 and 1984, respectively. They have a combined generating capacity of 1,444 MW.

The first unit at the Levy County site is expected to come online in 2016 and be capable to generate approximately 1,100 MW. The second unit is expected to be complete in 2017 and also be capable to generate approximately 1,100 MW.

Progress Energy Florida, a subsidiary of Progress Energy (NYSE: PGN), provides electricity and related services to about 1.7 million customers in Florida. The company is headquartered in St. Petersburg, Fla., and serves a territory encompassing more than 20,000 square miles including the cities of St. Petersburg and Clearwater, as well as the Central Florida area surrounding Orlando. Progress Energy Florida is pursuing a balanced approach to meeting the future energy needs of the region. That balance includes increased energy-efficiency programs, investments in renewable energy technologies and a state-of-the-art electricity system. For more information, visit www.progress-energy.com.

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