1

Bill Johnson Chairman, President and CEO

Lehman Brothers CEO Energy/Power Conference

September 4, 2008

Bill JohnsonBill Johnson Chairman, President and CEOChairman, President and CEO

Lehman BrothersLehman Brothers CEO Energy/Power ConferenceCEO Energy/Power Conference

September 4, 2008September 4, 2008

Securing our Energy FutureSecuring our Energy Future

Caution Regarding Forward-Looking Statements

This presentation includes information that is forward-looking in nature. Many factors could cause the actual results to be materially different than the forward-looking information provided. These factors are discussed in more detail in the Company’s most recent Form 10-K and Form 10-Qs.

Major Discussion Topics1. Strategy overview

2. Near-term outlook

3. Nuclear expansion

Profile of who we are: Two High-Performing Electric Utilities

FloridaFlorida

North CarolinaNorth Carolina

South South CarolinaCarolina

Service Area

•• 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

Progress Energy CarolinasProgress Energy Carolinas

•• 9,400 MW capacity9,400 MW capacity•• Over 1.7M customersOver 1.7M customers•• 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•• 14 plants, 65 units14 plants, 65 units

Progress Energy FloridaProgress Energy Florida

Strategy Overview

6

Reaffirm core strategic focus: Regulated Electric Utility Business

Achieve financial objectives while excelling in fundamentals

Leverage prospects for growth

Progress Energy Florida

Progress Energy Carolinas

PGN

FoundationIntegrated Energy Company Serving the Carolinas and Florida

Customer Service

PowerDelivery

PowerTransmission

PowerGeneration

Adapt to new energy landscape and changing business model

>21,000 MW serving 3.1M customers

Power Sector’s Challenge

and creatingshareholder value

while maintaining a secure supply, reliable service and

affordable prices

Addressing both climate change and demand growth

in new era of rising costs

PGN Balanced Solution Strategy

9

Strategic Agenda and Outcomes

1) Achieve annual EPS growth of 4-5%

2) Excel in the fundamentals

3) Pursue Balanced Solution to secure energy future

4) Confront new energy realities together

5) Sustain financial strength and flexibility during Levy construction

Agenda1) Investor confidence to

enable access to capital

2) Strong financial and operational foundation for growth

3) Positioned for carbon- constrained world

4) Effectively meeting needs of customers

5) Ready to adapt to evolving business model

Outcomes

Near-Term Outlook

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

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

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

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

Retail rate base Clause-related

Ret

ail R

ate

Bas

e (x

1M

) 2001-2007 CAGR5.0%

2008-2010E CAGR

4%

2001-2007 CAGR4.1%

Ret

ail R

ate

Bas

e (x

1M

)

Progress Energy Florida²Progress Energy Carolinas¹2008-2010E

CAGR

18%

Significant Rate Base Growth Even Prior to New Nuclear

(1) PEC rate base includes Clean Smokestacks Act expenditures in excess of $813M.(2) PEF rate base excludes Levy County nuclear capital expenditures.

Major Near-Term Capital Projects

(1) Capital expenditures exclude AFUDC.(2) Replacing 444 MW of oil steam units for a net increase of 715 MW.(3) Company requesting NCUC to permit rate-basing expenditures above $569M.

13

Regulatory Update

• Current rate settlement expires end of 2009

• Aug. 29 – Filed annual fuel, nuclear and environmental costs with FPSC (Nov. 4-6 hearing)

• Sept. 11-12 – FPSC hearing on nuclear cost recovery

• No general rate case expected near-term

• Clean Smokestacks update

• Sept. 16 – NCUC hearing on annual fuel case

• Sept. 17 – NCUC hearing:- REPS cost recovery

FloridaCarolinas

Nuclear 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

Harris (1 PWR unit)1987

Crystal River (1 PWR unit) 1977

Robinson (1 PWR unit)1971

1,875 MW (1)

81.67% ownership

900 MW (1)

83.83% ownership

838 MW (1)

91.78% ownership

710 MW100%

ownership

(1) Capacities include joint owners’ share.

Strong Case for New Nuclear in U.S.

Federal climate policy expected in 2009-2010

Need for new baseload generating capacity

Need for fuel diversity and energy security

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

Even Stronger Nuclear Case in FloridaProgress Energy FloridaProgress Energy Florida

Nuclear 14%

Oil/Gas 32%

Coal 31%

Purchased 23%

Generation Output Mix in 2007Generation Output Mix in 2007

Increasing nuclear share: • reduces fuel costs• reduces price volatility• helps address carbon challenge• strengthens fuel supply security

Supportive Florida Legislation 2006: Nuclear Investment Recovery

Pre-construction and licensingCapacity cost recovery clause (CCRC)Costs are recovered dollar for dollar

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

CompletionBase rate adjustment at in-service for capital costsROE and capital structure based on last approved(currently 11.75% ROE on 57.8% equity)

Project cancellation cost recovery

Levy Nuclear Project in FloridaLevy Nuclear Project in Florida

19

Location Technology # of units Capacity (MW) In ServiceLevy County, Florida

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

Unit 2: 2017

•

8 miles NE of our Crystal River 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; safety-related construction begins 2012

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

Regulatory Timeline for Levy ProjectRegulatory Timeline for Levy Project

Filed Hearing Order

Issued

IssuedFiled (3 - 4 year review)

Filed (15 - 18 month review)

Mar. May July Sept. Oct. 2010June 20122008 Aug.

Filed Hearing Vote OrderNeed Case

Cost Recovery

Site Certification

Combined License

20

April

Conclusion

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

Leverage Growth Prospects

• Organic growth• Rate base expansion• Balanced approach

Leverage Growth Prospects

• Organic growth• Rate base expansion• Balanced approach

Maintain Constructive Regulation

• Cost recovery• Proactive proceedings• Open communications

Maintain Constructive Regulation

• Cost recovery• Proactive proceedings• Open communications

Sustain Operational Excellence

• Safety & environmental performance

• Fleet performance• Cost performance

Sustain Operational Excellence

• Safety & environmental performance

• Fleet performance• Cost performance

Achieve Long-Term Financial Objectives

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

credit rating • Annual TSR of 8 - 10% (at constant P/E)

Achieve Long-Term Financial Objectives

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

credit rating• Annual TSR of 8 - 10% (at constant P/E)

Deliver Customer Satisfaction

• Reliable and responsive service

• Affordable rates• Corporate citizenship

Deliver Customer Satisfaction

• Reliable and responsive service

• Affordable rates• Corporate citizenship

Value Proposition: A Superior Risk-Adjusted ReturnAttractive 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 strategy

A solid, low-risk, long-term holdingA solid, low-risk, long-term holding

Q&A