Progress Energy Florida Files Annual Fuel-Cost Request With PSC

ST. PETERSBURG, Fla., Sept. 1 /PRNewswire/ -- Progress Energy Florida (PEF) today asked state regulators to approve a cost adjustment to reflect the rising costs of fuel used to generate electricity, as well as increased costs to comply with environmental regulations. If approved, residential electric bills would rise by about 3.4 percent per 1,000-kilowatt hours (kWh) next year.

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The requests filed today with the Florida Public Service Commission (PSC) include fuel and environmental compliance costs for 2006 through 2007 and seek a total increase of $161.4 million. If approved by the PSC, residential customer bills would increase with the January 2007 billing cycle by approximately $3.72 per 1,000-kWh to $113.28.

PEF makes no profit on these increased charges to customers, which are different from the utility's base rate, which includes the non-fuel costs of providing electricity to customers. PEF's base rates have remained stable for more than two decades, while the number of customers has grown by 316,000 in the past 10 years to more than 1.6 million.

"The same pressures driving up the cost of gas for your car are driving up the cost of fuels to generate electricity," said Jeff Lyash, president and CEO of Progress Energy Florida. "Our balanced approach to the challenges of growth and high fuel costs has helped minimize the financial impact to our customers. In the short term, customers can manage their expenses by taking advantage of our innovative and free energy-efficiency options and Budget Billing program. In the long term, we will continue to invest in a diverse fuel mix and support evolving technologies that offer opportunities for increased cost stability for our customers."

PEF uses coal, oil, natural gas and nuclear power to maintain the most diverse fuel mix of any utility in the state, which helps mitigate the impact of increases in any one fuel. Nevertheless, oil costs are expected to increase by almost 35 percent over 2006 levels, while natural gas prices are expected to go up by 12 percent.

To further encourage the efficient use of energy, a two-tiered fuel rate for residential customers charges a lower rate for the first 1,000 kWh and a higher one for additional usage.

PEF offers a variety of energy-efficiency tips to help customers save money on their bills, including:

- Set the air conditioning system thermostat to the highest comfortable setting. In warm weather, each degree above 78 can save between 7 percent and 10 percent on electric bills - Inspect air conditioning system filters monthly and clean or replace them as needed - Reduce the temperature setting on the electric water heater to 120 degrees - Use ceiling and portable fans to keep air circulating, but turn them off in unoccupied rooms - Close blinds, drapes and shades during the hottest part of the day. This keeps the sun's rays from heating your house Other PEF programs designed to assist customers include:

Home Energy Check: PEF offers a free home-energy inspection that surveys household insulation, duct work, water heating, cooling and heating systems and overall efficiency. Customers can complete a home-energy check online, or by mail, phone or through a visit by a PEF representative. For more details on this and other energy-efficiency programs, visit http://www.progress-energy.com/save or call 888-302-8348.

Budget Billing: Customers on fixed incomes or others who need a bill that is a consistent amount are encouraged to take advantage of Budget Billing. The program is free and helps customers forecast monthly energy costs and better plan their finances. Customers pay an average amount that is approximately the same each month. The difference between the budget billing amount and the actual amount also appears on the bill.

Energy Neighbor Fund: Customers who need assistance paying their electric bills can receive help through the Energy Neighbor Fund. All funds collected from participating PEF customers and employees are distributed locally through social service agencies to neighbors in need. The fund was established in 1988 to assist customers who are experiencing temporary financial difficulties.

For more information, visit http://www.progress-energy.com/ or call 800-700-8744.

Progress Energy Florida, a subsidiary of Progress Energy , provides electricity and related services to more than 1.6 million customers in Florida. The company is headquartered in St. Petersburg, Fla., and serves a territory encompassing over 20,000 square miles including the cities of St. Petersburg and Clearwater, as well as the Central Florida area surrounding Orlando. Progress Energy is the 2006 recipient of the Edison Electric Institute's Edison Award, the industry's highest honor, in recognition of its operational excellence. In 2005, the company also received 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 prospective rates are dependant on a number of factors that are not within the control of the Company. These factors include the cost of fuel, adverse weather, energy demand, the costs to comply with environmental and other regulations, taxes and other factors. Additionally, regulatory approval of requested fuel price cost adjustments cannot be guaranteed by the Company. The Company expressly disclaims any duty to update any of the forward-looking information.