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Progress Energy Florida and Lake Mary agree on new franchise

LAKE MARY, Fla., June 6, 2003 — Progress Energy Florida and the City of Lake Mary have agreed to a new electric utility franchise.

Progress Energy has signed new franchise agreements with more than 27 cities and towns during the past two years. This agreement renews a partnership between Lake Mary and Progress Energy Florida that has spanned half a century.

“We are proud to be a part of this community,” said Billy Raley, vice president of Progress Energy Florida’s North Central Region that includes Seminole County. “Progress Energy Florida has a strong corporate presence in Lake Mary and we’re pleased to have been able to work with Mayor Greene, the city commission and staff on an agreement that works for the city, our customers and our company.”

Progress Energy serves more than 3,700 customers in Lake Mary. A “franchise” is an agreement between a municipality and Progress Energy describing how the company will work within city-owned rights-of-way. The agreement authorizes Progress Energy to collect and remit to the city six- percent of revenues, often referred to as a “franchise fee,” which the city may use for a variety of purposes.

“Progress Energy has always been a committed partner,” said Lake Mary Mayor Thom Greene. “And there’s no question that our new franchise agreement with Progress Energy is in the best interests of this community.”

In February 2002, Progress Energy Florida launched a three-year Commitment to Excellence plan aimed at reducing rates, increasing customer satisfaction, improving operational performance, and better preparing the company for stability in the fast-changing energy industry. The company has since announced a $500 million rate reduction that resulted in a nine percent rate cut for customers, a $115 million plan to improve reliability by 20 percent over the next three years, and a commitment to increasing generation reserves from 15 percent to 20 percent by 2003.

Progress Energy Florida, a subsidiary of Progress Energy (NYSE: PGN – News), provides electricity and related services to more than 1.4 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, Clearwater, as well as the Central Florida area surrounding Orlando. For more information about Progress Energy, visit the company’s Web site at: http://www.progress-energy.com .