Progress Energy Florida Signs Contract for New, Advanced-Design Nuclear Plant

Takes steps to secure carbon-free energy for Floridians

ST. PETERSBURG, Fla., Jan. 5 /PRNewswire-FirstCall/ -- Progress Energy
Florida (PEF) has signed a contract with Westinghouse Electric Company LLC and
The Shaw Group Inc.'s Power Group for the engineering, procurement and
construction of two nuclear units for a proposed nuclear power plant in Levy
County, Fla.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020923/CHM008LOGO-c )
The contract provides equipment, engineering and construction services for
two 1,105-net megawatt (MWe) AP1000(TM) reactors and is the next step in
ensuring that the option of advanced, carbon-free nuclear power remains viable
for Progress Energy Florida customers. The next significant steps in the
project are to finalize joint ownership agreements and to receive the Nuclear
Regulatory Commission (NRC) schedule for review and approval of the company's
combined license application (COLA). Current plans would be for the units to
be operational in the 2016 to 2018 time frame.
A "Determination of Need" petition was unanimously approved by the Florida
Public Service Commission (PSC) in July 2008, supporting the need to meet
future energy needs in Florida with nuclear power. A second filing, a Site
Certification Application (SCA), was filed with the Florida Department of
Environmental Protection in June 2008, with a decision on the SCA filing
expected this year.
"Along with energy efficiency and alternative energy, advanced, carbon-
free nuclear power is an important part of the balanced solution we use to
meet the needs of homes and businesses that depend on us," said Bill Johnson,
chairman, president and CEO of Progress Energy, Inc. "As we work to address
the effects of global climate change, emission-free nuclear energy is the best
large-scale means for making a positive difference."
"Our investment in state-of-the-art nuclear power is an investment in our
state's energy future," said Jeff Lyash, president and CEO of Progress Energy
Florida. "Expanding our nuclear capacity will ensure our customers will
continue to have a reliable supply of energy, while reducing reliance on
fossil fuels and helping to eliminate greenhouse gas from our environment.
This contract is a major step to implement the policy direction set by the
governor and the legislature in Florida to secure safe, carbon-free nuclear
power for our customers."
As recently announced, the company will retire the two oldest coal-fired
units at the Crystal River Energy Complex in Citrus County after the new,
advanced-design nuclear units are 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 or meeting nearly 60 percent of the company's responsibility
toward achieving Florida Governor Charlie Crist's 2025 emission-reduction
target. 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.
The need for additional, carbon-free electricity in the future is clear.
Florida is the fourth-largest state and ranks third nationally in per-capita
energy consumption. Compared to 30 years ago, the average new home today is 50
percent larger and uses 30 percent more electricity. Since the Crystal River
nuclear plant came online in the mid-1970s, the company's customer base has
more than doubled.
The cost of the two new nuclear units is based on a contract price of
$7.65 billion, plus forecasted inflation, owner costs and contingencies. The
company estimates the total cost for the two generating units to be
approximately $14 billion. This estimate includes land price, plant
components, financing costs, construction, labor, regulatory fees and reactor
fuel for two units. An additional $3 billion is estimated for the necessary
transmission equipment and about 200 miles of transmission lines associated
with the project. The final cost of the project will depend on the completion
dates, which will be determined in large part by the NRC review schedule.
The majority of the project's costs will be invested by the company and
its shareholders and will not be recovered from customers through rates until
the plant goes in service. However, starting this month, customers will begin
paying for a portion of the costs of the project as approved by the PSC. This
cost-recovery provision will ultimately save customers approximately $13
billion over the life of the plant by paying for the initial stages of
infrastructure improvement and the interest on the loans to build the units as
costs are incurred, rather than letting these costs accrue and escalate until
the units are in service. Florida's nuclear cost recovery legislation
implements state energy policy by saving consumers money and providing annual
oversight of all nuclear project expenses. This approach allows Progress
Energy to move forward with this important solution to meet Florida's future
energy needs with clean, carbon-free electricity.
In addition to planning for future energy needs, additional nuclear
generation will further improve Progress Energy's fuel diversity, which is an
important aspect of providing a reliable, stable supply of electricity for
customers. Progress Energy Florida has the most diverse fuel mix of any
utility in the state, and is committed to a balanced mix of power generation
alternatives, including natural gas, coal, oil, nuclear and renewable sources.
This is the best way to continue to ensure a safe, reliable and economical
source of electricity, free from the volatile fuel prices and supply
constraints seen in recent years, particularly related to oil and natural gas.
Floridians will benefit from up to $1 billion per year in estimated fuel cost
savings once the units are in operation.
Building the new plant will generate employment for at least 3,000 people
at the peak of construction. Once the units are in operation, they will employ
a minimum of 800 full-time, high-wage positions that Governor Crist calls
"green jobs," as well as an additional 1,200 indirect jobs. The positive
economic impact of a two-unit nuclear site to the state and local communities
is estimated to be hundreds of millions of dollars annually over the planned
60-year plant life.
Progress Energy Florida purchased about 5,100 acres in southern Levy
County for the potential construction of two nuclear reactors and other
related facilities. If approved and built, the project will be among the first
nuclear plants in the country to be constructed on a new site in more than 30
years, and it will involve development of one of the single largest
transmission infrastructure projects in Florida's history.
Progress Energy Florida has developed and implemented some of the most
innovative and aggressive energy-efficiency programs in the country. The
programs encourage customers, businesses, contractors and builders to use
electricity more wisely and to adopt renewable-energy technology. Since 1981,
Progress Energy Florida customers have saved more than $900 million in energy
costs and eliminated more than 7.5 million tons of carbon dioxide through
participation in these programs. Customers may visit
http://www.savethewatts.com for more information and tips on how to save
energy today.
Progress Energy Florida also leads the state's utilities in using cost-
effective, renewable-energy sources within the state. The company continually
seeks cleaner, newer ways to produce energy for its customers. Today, Progress
Energy Florida's alternative and renewable projects include multiple biomass
projects, several solar photovoltaic initiatives, residential solar thermal
water heating and hydrogen fuel cell technology.
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 strategy for a secure
energy future. That balance includes aggressive energy-efficiency programs,
investments in renewable energy technologies and a state-of-the-art
electricity system. For more information about Progress Energy, visit the
company's Web site at http://www.progress-energy.com .
Caution Regarding Forward-Looking Information:
This release contains forward-looking statements within the meaning of the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements, by their very nature, involve assumptions,
risks and uncertainties that could cause actual results or outcomes to differ
materially from those expressed in the forward-looking statements. For
example, the company's decision on whether to move forward with nuclear
generation construction will depend on a variety of factors that are each
subject to change, such as the political and regulatory environments,
financing options available to fund construction and the overall cost of
nuclear generation construction and the associated transmission facilities.
Any forward-looking statement speaks only as of the date such statement is
made, and we undertake no obligation to update any forward-looking statement
or statements to reflect events or circumstances after the date on which such
statement is made.
SOURCE Progress Energy Florida

Progress Energy Florida 24-hour media line, +1-866-520-6397; Westinghouse
media contact: Vaughn Gilbert, +1-412-374-3896; Shaw media contact: Craig
Pierce, +1-225-987-7051