Progress Energy has reported the first-quarter GAAP earnings of $182 million, or $0.66 per share, compared with GAAP earnings of $209 million, or $0.80 per share, for the same period last year. First-quarter ongoing earnings were $182 million, or $0.66 per share, compared to $148 million, or $0.56 per share, last year. The significant drivers in ongoing earnings per share were increased wholesale revenues, favorable AFUDC equity and a return to normal weather, which were partially offset by share dilution, increased interest expense and lower retail growth and usage.

In the midst of this economic slowdown, we delivered solid financial results in the first quarter by living within our means and aggressively managing our business, said Bill Johnson, chairman, president and chief executive officer. Strong residential sales in the Carolinas and favorable wholesale contracts were able to offset continued retail weakness in Florida and lower industrial demand.

We continue to secure the energy future for our customers by investing in our two utilities and working constructively with policymakers and regulators. We recently completed the first phase of the Clean Smokestacks Act emission reductions at our fossil plants in the Carolinas, and we are continuing environmental and efficiency upgrades at our Crystal River Plant in Florida. In addition, we expect to complete the repowering of our Bartow Plant from oil to natural gas in June. Meanwhile, at both utilities, we are making good progress in a wide array of energy-efficiency and renewable-energy initiatives.

In addition, we successfully raised $1.9 billion in the capital markets and made several important regulatory filings, which should position us well to execute our plan in these challenging economic times, Johnson said.

Progress Energy affirms its 2009 ongoing earnings guidance range of $2.95 to $3.15 per share. The ongoing earnings guidance excludes the impact, if any, from CVO mark-to-market adjustment, potential impairments and discontinued operations. Progress Energy is not able to provide a corresponding GAAP equivalent for the 2009 earnings guidance due to the uncertain nature and amount of these adjustments.

Recent Developments

Financial and Regulatory

– Issued $750 million of senior unsecured notes at the holding company on March 19, 2009, comprised of $300 million five-year notes at 6.05% and $450 million 10-year notes at 7.05%.

– Announced plans to shift the construction schedule for the Levy County nuclear project, which will move the commercial operation dates by a minimum of 20 months.

– Filed 2010 nuclear cost-recovery estimates with the Florida Public Service Commission, seeking approval to spread certain costs over five years.

– Received approval from the FPSC to decrease 2009 customer bills by $404 million, or about 11%, through reduced fuel cost projections and deferred nuclear pre-construction cost recovery, with new rates effective April 2009.

– Filed petitions with the FPSC for a 2010 base rate increase of about $499 million, including proposals for a portion of the rate increase, about $76 million, to be effective starting in July 2009.

– Filed a petition with the FPSC for expedited approval of the following accounting orders, which will not affect PEF’s rates:

– Deferral of $52.5 million in 2009 pension expenses.

– Authorization to charge $33.1 million in estimated 2009 storm hardening expenses against the Storm Damage Reserve.

State-of-the-Art Power Plants

– Began outage at the 720-megawatt, coal-fired Crystal River Unit 5, to improve the unit’s operational efficiency and install environmental control equipment that will reduce nitrogen oxide emissions by more than 90%.

– Placed in service the last environmental compliance project under the first phase of the Clean Smokestacks Act emission reductions, which included projects at PEC’s Asheville, Lee, Mayo and Roxboro plants.

– Selected BE&K Construction Company, a division of KBR, Inc., as provider of general construction services for a 600-megawatt, natural gas-fueled power plant to be built at PEC’s Richmond County Energy Complex. This plant is expected to be placed in service in mid-2011.

Alternative Energy & Energy Efficiency

– Placed online a 1.2-megawatt solar array, owned and operated by SunEdison, at PEC’s Sutton Plant in eastern North Carolina. PEC will purchase the electricity from SunEdison under a 20-year solar power agreement.

– Achieved 1-megawatt total capacity milestone for solar photovoltaic generation systems across PEF’s service territory.

– Announced plans to purchase renewable energy output from a new 50-megawatt biomass-fueled cogeneration plant developed by Peregrine Energy Corporation at Sonoco’s Hartsville, S.C. manufacturing complex, scheduled to begin operation in 2012.

– Announced agreement with Carolina Solar Energy to purchase the energy produced by a new 650-kilowatt solar photovoltaic plant near Roxboro, N.C., scheduled to begin operation later this year.

– Received approval from the NCUC for several energy-efficiency programs:

— Energy Efficiency for Business, available to commercial, industrial and government customers for both new construction and retrofit applications.

— Residential Home Energy Improvement Program, offers customers a variety of incentives for energy-efficiency improvements to existing homes.

— Residential Solar Water Heating Pilot, up to 150 customers will be offered a $1,000 incentive to participate in the study.

First-Quarter 2009 Business Highlights

Progress Energy Carolinas

– Reported first-quarter ongoing earnings per share of $0.47, compared with $0.46 for the same period last year; GAAP earnings per share of $0.46, compared with $0.47 for the same period last year.

– Reported primary quarter-over-quarter ongoing earnings per share favorability of:

– $0.03 weather due to prior-year unfavorability.

– $0.02 wholesale revenues primarily due to higher transmission revenues resulting from the Open Access Transmission Tariff rates that went into effect on July 1, 2008.

– $0.02 AFUDC equity primarily due to increased eligible construction project costs.

– $0.02 depreciation and amortization primarily due to lower Clean Smokestacks Act amortization, partially offset by the impact of depreciable asset base increases. PEC has ceased recording Clean Smokestacks Act amortization in accordance with a regulatory order..

– $0.02 income taxes primarily due to the deduction related to nuclear decommissioning trust funds.

– Reported primary quarter-over-quarter ongoing earnings per share unfavorability of:

– $(0.02) other retail margin.

– $(0.02) O&M primarily due to higher nuclear plant outage and maintenance costs.

– $(0.02) other primarily due to seasonal losses on a balanced billing program, lower interest income and investment losses.

– $(0.01) retail growth and usage.

– $(0.03) share dilution.

– 18,000 net increase in the average number of customers for the three months ended March 31, 2009, compared to the same period in 2008.