EEI Financial ConferenceEEI Financial ConferenceEEI Financial ConferencePhoenix, Arizona

EEI Financial ConferencePhoenix, Arizona

November 10-11, 2008November 10-11, 2008

Safe Harbor for Forward-Looking Information

This document contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Thematters discussed in this document involve estimates, projections, goals, forecasts, assumptions, risks and uncertainties that could cause actual results or outcomesto differ materially from those expressed in the forward-looking statements.

Any forward-looking statement is based on information current as of the date of this document and speaks only as of the date on which such statement is made, andwe 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.

Examples of factors that you should consider with respect to any forward-looking statements made throughout this document include, but are not limited to, thefollowing: the impact of fluid and complex laws and regulations, including those relating to the environment and the Energy Policy Act of 2005; the anticipated futureneed for additional baseload generation and associated transmission facilities in our regulated service territories and the accompanying regulatory and financial risks;the financial resources and capital needed to comply with environmental laws and renewable energy portfolio standards and our ability to recover related eligiblep p y gy p y gcosts under cost-recovery clauses or base rates; our ability to meet current and future renewable energy requirements; the inherent risks associated with theoperation of nuclear facilities, including environmental, health, regulatory and financial risks; the impact on our facilities and businesses from a terrorist attack;weather and drought conditions that directly influence the production, delivery and demand for electricity; recurring seasonal fluctuations in demand for electricity; theability to recover in a timely manner, if at all, costs associated with future significant weather events through the regulatory process; economic fluctuations and thecorresponding impact on our customers, including downturns in the housing and consumer credit markets; fluctuations in the price of energy commodities andpurchased power and our ability to recover such costs through the regulatory process; our ability to control costs, including operation and maintenance expense(O&M) and large construction projects; the ability of our subsidiaries to pay upstream dividends or distributions to Progress Energy; the length and severity of thecurrent financial market distress that began in September 2008; the ability to successfully access capital markets on favorable terms; the stability of commercial creditmarkets and our access to short-term and long-term credit; the impact that increases in leverage may have on us; our ability to maintain our current credit ratings andthe impact on our financial condition and ability to meet our cash and other financial obligations in the event our credit ratings are downgraded; our ability to fullyutilize tax credits generated from the previous production and sale of qualifying synthetic fuels under Internal Revenue Code Section 29/45K; the investmentperformance of our nuclear decommissioning trust funds and the assets of our pension and benefit plans; the outcome of any ongoing or future litigation or similardisputes and the impact of any such outcome or related settlements; and unanticipated changes in operating expenses and capital expenditures. Many of these riskssimilarly impact our nonreporting subsidiaries. These and other risk factors are detailed from time to time in our filings with the United States Securities and ExchangeC i i All h f t diffi lt t di t t i t i ti th t t i ll ff t t l lt d b b d t l N f tCommission. All such factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control. New factorsemerge from time to time, and it is not possible for management to predict all such factors, nor can management assess the effect of each such factor on us.

These and other risk factors are detailed from time to time in our filings with the United States Securities and Exchange Commission (SEC). All such factors aredifficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control. New factors emerge from time to time, and it is notpossible for management to predict all such factors, nor can management assess the effect of each such factor on us.

For questions or comments contact:Bob DrennanVice President, Investor RelationsTel: 919-546-7474Email: bob.drennan@pgnmail.com

Bryan KimzeyLead Analyst, Investor RelationsTel: 919-546-6931Email: bryan.kimzey@pgnmail.com

Major Discussion Topicsj p1. Company overview

2. Financial update

3. Regulatory updateg y p

4. Growth strategy

5 Nuclear expansion5. Nuclear expansion

Company OverviewCompany Overview

Profile of who we are:Two High-Performing Electric Utilitiesg g

•• 12 400 MW capacity12 400 MW capacityProgress Energy CarolinasProgress Energy Carolinas

North CarolinaNorth Carolina

•• 12,400 MW capacity12,400 MW capacity•• Over 1.4M customersOver 1.4M customers•• 2.2% cust. growth (72.2% cust. growth (7--yr CGR)yr CGR)•• $4.4B total revenue$4.4B total revenue•• $12B total assets$12B total assets•• 5,000 employees5,000 employees•• 34,000 sq. mile service area34,000 sq. mile service area•• 18 plants, 82 units18 plants, 82 units

South South CarolinaCarolina

•• 9,400 MW capacity9,400 MW capacity•• ~1.7M customers~1.7M customers

2 2% t th (72 2% t th (7 CGR)CGR)

Progress Energy FloridaProgress Energy Florida

FloridaFlorida•• 2.2% cust. growth (72.2% cust. growth (7--yr CGR)yr CGR)•• $4.7B total revenue$4.7B total revenue•• $13B total assets$13B total assets•• 4,000 employees4,000 employees•• 20,000 sq. mile service area20,000 sq. mile service area

Service Areaqq

•• 14 plants, 65 units14 plants, 65 units

Strategic Focusg

What

● An integrated energy company focused on end-use electricity marketsC b i P EWhat ● Core businesses: Progress Energy Carolinas and Progress Energy Florida

● High growth regulated markets in the Carolinas and FloridaWhere Carolinas and Florida

● Access to attractive wholesale marketsWhere

● 80% regulated retailT t Mi

● Buy-and-hold stock

g● 20% wholesaleTarget Mix

Investment Thesis ● Good value with modest business risk, low volatility and dividend growth

Th l t l l t d l t i tilit i th U SThe largest pure-play regulated electric utility in the U.S.

Financial UpdateFinancial Update

Our Long-Term Financial Objectivesg j

• Achieve our 4-5% EPS growth objective

• Preserve an investment grade credit rating

• Maintain dividend growthMaintain dividend growth

• Keep rate increases reasonable to customers

• Fund Levy and capital investments in the rest of the business

Financial Update: Challenges/OpportunitiesChallenges/Opportunities• Weaker than expected Florida revenues mitigated by

Wh l lWholesaleCost management

• Regulatory depreciation/amortization at PECReceived Clean Smokestacks order from NCUC on 9/5/2008$27M of Harris depreciation by end of 2009

• 2009-2010 capital expenditure program under review

Liquidity Overview *q y(in millions)

Issue 2009 2010 2011 2012

Program Term Amount Expiration

PGN Revolving Credit Facilities Debt Maturity Profile

PGN -$ 100$ 700$ 450$

PEC 400 6 - 500

PEF - 300 300 -

Progress Energy 5-Year $1,130 5/3/12

Progress Energy Carolinas 5-Year 450 6/28/11

PEF 300 300

Total 400$ 406$ 1,000$ 950$

Progress Energy Florida 5-Year 450 3/28/11

$2,030

* * As of September 30, 2008.

Strong Liquidity Positiong q y

As of September 30, 2008($ in millions)($ in millions)

Expiration Commitment DrawnCP / LCs

Outstanding AvailableCash on

HandTotal

LiquidityPGN 2012 $1 130 * $526 $604 $35 $638

Credit Facilities

PGN 2012 $1,130 - * $526 $604 $35 $638PEC 2011 450 - - 450 145 595PEF 2011 450 - - 450 223 673

Total $2,030 - $526 $1,504 $403 $1,907$

Near-Term MaturityPlanned debt issuance by February 2009 at PEC to refinance $400M

* Recently borrowed $600 million under Progress Energy’s revolving credit agreement to reduce rollover risk in the commercial paper markets.

Planned debt issuance by February 2009 at PEC to refinance $400M maturity on March 1, 2009

11

Approximately $1.9 billion of total liquidity

Credit Facilities Consortium *Bank TotalJ.P. Morgan Chase $ 225.0

$ in millions

g $Bank Tokyo-Mitsubishi 200.0 Barclays Capital 190.5 Bank of America 190.0 Citigroup 180 0Citigroup 180.0 Wachovia 175.5 Royal Bank of Scotland 169.0 Bank of New York Mellon 120.0 SunTrust 115 0SunTrust 115.0 Morgan Stanley 100.0 Goldman Sachs 100.0 Deutsche Bank 95.0 UBS 80 0UBS 80.0 BNP Paribas 50.0 BB&T 25.0 First Tennessee 15.0

$

* * As of September 30, 2008.

Total $ 2,030.0

Current Credit Ratings *g

Progress EnergyMoody’s Investors

Standard & Poor’s

Fitch Ratings

Outlook Stable Stable StableOutlook Stable Stable StableCorporate Credit Rating -- BBB+ BBBSenior Unsecured Debt Baa2 BBB BBBCommercial Paper P-2 A-2 F-2Progress Energy CarolinasC t C dit R ti A3 BBB ACorporate Credit Rating A3 BBB+ A-Commercial Paper P-2 A-2 F-1Senior Secured Debt A2 A- A+Senior Unsecured Debt A3 BBB+ APreferred Stock Baa2 BBB- A-Progress Energy FloridaCorporate Credit Rating A3 BBB+ A-Commercial Paper P-2 A-2 F-1Senior Secured Debt A2 A- A+Senior Unsecured Debt A3 BBB+ AP f d S k B 2 BBB APreferred Stock Baa2 BBB- A-FPC Capital IPreferred Stock** Baa2 BBB- --Progress Capital HoldingsSenior Unsecured Debt*** Baa1 BBB --Senior Unsecured Debt Baa1 BBB

* As of November 5, 2008.** Guaranteed by Progress Energy, Inc. and Florida Progress Corporation.

*** Guaranteed by Florida Progress Corporation.

Regulatory UpdateRegulatory Update

Carolinas Cost Recovery Filingsy g• South Carolina fuel filing

PSC approved $39M increaseEffective July 1 2008Effective July 1, 2008

• North Carolina fuel filingReached a proposed settlement with interveners for $275M increaseR t 3 ( ith i t t) f $200M d f d f lRepresents a 3-year recovery (with interest) of ~$200M deferred fuel balance at July 31, 2008, plus projected fuel costsHearing held Sept 16; awaiting order; rates effective Dec 1, 2008

• North Carolina REPS cost recovery• North Carolina REPS cost recoveryFiled for ~$12M actual and projected incremental cost of complianceAvoided costs will flow through fuel clause proceedingsHearing held Sept 17; awaiting order; rates effective Dec 1, 2008Hearing held Sept 17; awaiting order; rates effective Dec 1, 2008

• North Carolina DSM/EE rider and DSDR* programFiled for ~$42M actual and projected cost recoveryR t ff ti D 1 2008 (h i h d l d f D 17 2008)Rates effective Dec 1, 2008 (hearing scheduled for Dec 17, 2008)

* Distribution System Demand Response.

NC Clean Smokestacks Updatep$1.5B-$1.6B: current estimate of total costs

~$700M remaining expenditures

$15M amortization in Q1-08

$229M balance into rate base

$584M: cumulative

$813M: original estimate of compliance costs

$569M – 70% of original estimate amortized by

$15M amortization in Q1-08 $584M: cumulative amortization to date

y12/31/07

Received favorable order from NCUC on Sept 5: PEC allowed to accrueReceived favorable order from NCUC on Sept 5: PEC allowed to accrue AFUDC above $813M; eliminates any further accelerated amortization

Florida Cost Recovery Filingsy g• Storm damage reserve ended July 31

• 2008 mid-year fuel cost adjustment$213M request for full recovery from Aug-Dec ’08FPSC approved half for recovery Aug Dec ’08;FPSC approved half for recovery Aug-Dec 08; remaining half in ’09

• 2009 cost recovery filings on Aug 29y g gLevy nuclearCR3 uprate

Approved on Oct 14; rates effective Jan 1, 2009

FuelCapacityEnvironmentalEnergy conservation

Hearings held Nov 4-6; rates effective Jan 1, 2009

Energy conservation

Florida Environmental Cost Recoveryy• Environmental Cost Recovery Clause (ECRC)

Annual ECRC filingAnnual ECRC filingAccrue AFUDC based on existing rate settlementReturn-of and return-on capital invested whenReturn of and return on capital invested when placed-in serviceDollar-for-dollar recovery of

R l t d O&M• Related O&M expenses• Emission allowances

E ti t d t t l d f $1 2B th h 2010• Estimated total spend of $1.2B through 2010Crystal River 4 & 5$745M spent through September 30 2008$745M spent through September 30, 2008

Growth StrategyGrowth Strategy

Significant Rate Base GrowthEven Prior to New Nuclear

2008-2010E

Progress Energy Florida²Progress Energy Carolinas¹ 2008-2010E

e o to e uc ea

$8 000

$9,000

$8 000

$9,000

M) 2001-2007 CAGR

5 0%

2008 2010E CAGR

5%

)

2008 2010E CAGR

18%

$5 000

$6,000

$7,000

$8,000

$5 000

$6,000

$7,000

$8,000

Bas

e (x

1M 5.0%

2001-2007 CAGR4.1%

Bas

e (x

1M

$2,000

$3,000

$4,000

$5,000

$2,000

$3,000

$4,000

$5,000

Ret

ail R

ate

Ret

ail R

ate

B

$0

$1,000

$2,000

2001 2002 2003 2004 2005 2006 2007 2008E 2009E 2010E$0

$1,000

$ ,

2001 2002 2003 2004 2005 2006 2007 2008E 2009E 2010E

R t il t b Cl l t d

R R

Retail rate base Clause-related

(1) PEC rate base includes Clean Smokestacks Act expenditures in excess of $584M.(2) PEF rate base excludes Levy County nuclear capital expenditures.

CapEx Driving Earnings Growth – On Trackp g g

Major Generation ProjectsTotal

Project CapExCumulative Spentthrough 9/30/08

ExpectedCompletion Date

Carolinas

Clean Smokestacks $1.5-1.6B $986M 2013

W C t CT $90M $1 M J 09Wayne County CT $90M $17M Jun-09

Richmond County CCGT (incl Transmission) $600M $45M Jun-11

Florida

Environmental $1.2B $745M May-10

Bartow Repowering $690M $602M J 09p g(incl Transmission) $690M $602M Jun-09

CR3 Nuclear Uprate $365M $73M Dec-11

CR3 Steam Generator $245M $110M D 09

21

Replacement $245M $110M Dec-09

Note: Total project capital expenditures based on current estimates and exclude AFUDC.

Allowance for Funds Used During Construction (AFUDC)( )

CarolinasPEC capital projects lasting more than PEC capital projects lasting more than one month are forecast to earn 8one month are forecast to earn 8--9% 9% AFUDC rate.AFUDC rate.($15M in 2007 growing to ~$35M in 2008)($15M in 2007 growing to ~$35M in 2008)

FloridaPEF capital projects greater than $45 PEF capital projects greater than $45 million and lasting more than one yearmillion and lasting more than one yearFlorida million and lasting more than one year million and lasting more than one year earn an 8.848% AFUDC rate. *earn an 8.848% AFUDC rate. *($53M in 2007 growing to ~$125M in 2008)($53M in 2007 growing to ~$125M in 2008)

* PEF has a base level of CWIP embedded in its rate base.

Nuclear ExpansionNuclear Expansion

A WellA Well--Established, HighEstablished, High--Performing Performing Nuclear Generation Fleet: 4,323 MWNuclear Generation Fleet: 4,323 MW,,

Brunswick (2 BWR units) 1975-1977

Crystal River (1 PWR unit) 1977

1,875 MW (1)

81.67% ownership

838 MW (1)

91.78% ownership

Harris (1 PWR unit)1987

Robinson (1 PWR unit)1971

900 MW (1)

83.83% ownership

710 MW100%

ownershipo e s p

(1) Facilities are jointly owned. The capacities shown include joint owners’ share.

Strong Case for New Nuclear in U.S.g

Federal climate policy expected in 2009-2010y

Need for new baseload generating capacity

Need for fuel diversity and energy security

Nuclear is the only proven carbon-free, y p ,baseload option that can be delivered at scale

Even Stronger Nuclear Case in FloridagProgress Energy FloridaProgress Energy Florida

Increasing nuclear share: • reduces fuel costs

Oil/Gas 32%Purchased23%• reduces price volatility

• helps address carbon challenge• strengthens fuel supply security

Nuclear14% Coal

31%

• strengthens fuel supply security

Generation Output Mix in 2007Generation Output Mix in 2007Generation Output Mix in 2007Generation Output Mix in 2007

Supportive Florida Legislation 2006:Nuclear Investment RecoveryNuclear Investment Recovery• Pre-construction and licensing

Capacity cost recovery clause (CCRC)Capacity cost recovery clause (CCRC)Costs are recovered dollar for dollar

• During constructiongAFUDC is recovered through CCRC8.848% AFUDC rate is locked until commercial operationAnnual prudence reviewsAnnual prudence reviews

• CompletionBase rate adjustment at in-service for capital costsBase rate adjustment at in service for capital costsROE and capital structure based on last approved(currently 11.75% ROE on 57.83% common equity)

P j t ll ti t• Project cancellation cost recovery

Levy Nuclear Project in FloridaLevy Nuclear Project in Floriday jy jLocation Technology # of units Capacity (MW) In ServiceLevy County Westinghouse 2 2 200 t t l Unit 1: 2016Levy County, Florida

Westinghouse AP1000 2 ~2,200 total Unit 1: 2016

Unit 2: 2017

• 8 miles NE of our Crystal CRiver Energy Complex

• Negotiating joint ownership with multiple parties (1)

• Negotiating engineering, procurement & construction (EPC) agreement with Westinghouse and Shaw

• Site prep & pre-construction begin ~2010/11; safety-related construction begins 2012/132012/13

(1) Confidentiality obligations preclude us from discussing this further until the negotiations are completed.

Regulatory Timeline for Levy ProjectRegulatory Timeline for Levy Projectg y y jg y y j

Mar. May July Sept. Oct. 2010June 2012/132008 Aug.April y y p 2010 2012/132008 g

Filed Hearing Vote OrderNeed Case

p

Filed Hearing Order

Filed Hearing Vote OrderNeed Case

Cost Recovery

IssuedFiled (18 month review)Site Certification

IssuedFiled (3 - 4 year review)Combined License

ConclusionConclusion

Value Proposition:A Superior Risk-Adjusted ReturnA Superior Risk Adjusted Return

• Attractive dividend yield with growth commitment

• Long-term earnings growth supported by sales and rate base growth

• Clear business model with successful execution history

• Balance sheet and credit metrics support strategypp gy

A lid l i k l t h ldiA solid, low-risk, long-term holding

Business Model for a “Pure Play” Regulated Integrated Electric UtilityRegulated Integrated Electric Utility

Sustain Operational Excellence

Deliver Customer Satisfaction

• Safety & environmental performance

• Fleet performanceC t f

Achieve Long-Term Financial Objectives

• Reliable service• Affordable rates• Corporate citizenship

• Cost performance • Annual EPS growth ~ 4 - 5%• Continue dividend growth• Preserve investment-grade

di i

Leverage Growth Prospects

Maintain Constructive Regulation

credit rating• Annual TSR of 8 - 10%

(at constant P/E)Prospects

• Organic growth• Rate base expansion• Balanced approach

Regulation• Cost recovery• Proactive proceedings• Open communicationsBalanced approach Open communications

AppendixAppendix

NC Recovery Clausesy

Clause Description Timeframe Recovery

Recovery of fuel costs, Fuel portion of purchased

power and reagent costsAnnual Filing $ for $

Efficiency and Conservation

Rider

Recovery of qualified efficiency and

conservation costsAnnual Filing

$ for $ (O&M),

Return on/of capital

* Subject to final rulemaking related to the 2007 NC Energy Bill.

SC Recovery ClausesSC Recovery Clauses

Clause Description Timeframe Recovery

Recovery of fuel costs, energy portion of

Fuel purchased power, emissions allowances

and reagent costs

Annual filing $ for $

New Nuclear Construction

Recovery of financing costs for pre-construction and construction capital

No more often than annually

Return on capital during construction

period

Note: SC law grants the Commission the authority to establish an efficiency and conservation rider.

FL Recovery Clausesy

Clause Description Timeframe Recovery

FuelRecovery of the energy

component (fuel) of purchased power and

fuel costsAnnual filing $ for $

Capacity

Nuclear cost recovery

Annual filing $ for $ (O&M); Return of/on capitalRecovery of capacity

portion of purchasedportion of purchased power; etc.

Environmental(ECRC)

Recovery of qualified environmental

compliance costsAnnual filing $ for $ (O&M);

Return of/on capitalcompliance costsEnergy

Conservation(ECCR)

Recovery of efficiency and conservation

program costs etc.Annual filing $ for $ (O&M);

Return of/on capital

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