Company intends to build new nuclear plants and retire coal plants
– By Stephen Heiser –
Progress Energy [NYSE: PGN] has announced fourth-quarter reported GAAP earnings of $107 million, or $0.41 per share, compared with reported GAAP earnings of $103 million, or $0.40 per share, for the same period last year. Fourth-quarter ongoing earnings were $123 million, or $0.47 per share, compared to $104 million, or $0.40 per share, last year.The significant drivers in ongoing earnings were favorable AFUDC equity, lower depreciation and amortization and higher other retail margin, which were partially offset by lower excess generation revenues and increased interest expense.
"Despite the global financial crisis and economic slowdown, we successfully delivered on our 2008 financial goals with full-year ongoing earnings of $2.98," said Bill Johnson, chairman, president and CEO. "We know that 2009 will be a challenging year for our company and our customers. We are aggressively controlling costs to effectively manage our business, maintain high levels of reliability and minimize the impact of rising costs of fuels and new energy policies on our customers."
Report Highlights:
* Filed proposal with Florida Public Service Commission (FPSC) to decrease customer bills in 2009 by approximately 11 percent through reduced fuel cost projections and deferred nuclear pre-construction cost recovery.
* Signed a contract with Westinghouse Electric Company LLC and Stone & Webster, Inc., a subsidiary of The Shaw Group, Inc., for the engineering, procurement and construction of two 1,105-net megawatt nuclear reactors for a proposed advanced-design nuclear power plant in Levy County, Fla. (Levy).
* Announced agreement with the Florida Department of Environmental Protection (FDEP) to retire the two oldest coal-fired units at the Crystal River Energy Complex in Citrus County (approximately 866 megawatts) if the Levy County nuclear plant is built. The coal units would be retired after the second new nuclear unit at Levy completes its first fuel cycle, which the company estimates to be around 2020.
- Received recommendation from the FDEP staff to receive a site certification for Levy.
- Received notice that the U.S. Court of Appeals for the D.C. Circuit remanded the 2005 Clean Air Interstate Rule (CAIR) without vacatur to the Environmental Protection Agency (EPA), which leaves the existing rule in effect while the EPA remedies CAIR's existing flaws, as identified by the court.
- Submitted Crystal River Nuclear Plant's (CR 3) license-renewal application to the U.S. Nuclear Regulatory Commission (NRC), requesting 20 additional years of operation through 2036, with a decision expected in 2011.
- Received approval from the NRC for the renewal of the Harris Nuclear Plant's operating license for 20 additional years through 2046.
- Signed a contract for PEC to continue to supply power to the N.C. Electric Membership Corporation (NCEMC) for a 20-year period beginning in 2013, increasing supply up to a total of approximately 2,750 megawatts by the end of the contract term. Current contracts from PEC supply NCEMC with approximately 1,245 megawatts.
- Received from the North Carolina Utilities Commission (NCUC) a certificate of environmental compatibility and public convenience and necessity to construct approximately 64 miles of 230-kilovolt transmission line in eastern North Carolina.
- Met a new peak-demand record set by PEC's customers in Western N.C. in January 2009.
- Received final order from the NCUC to spread the recovery of PEC's deferred fuel and fuel-related cost balance over three years with interest.
- Made a number of announcements relating to energy conservation, demand-side management (DSM) / energy efficiency (EE), and renewable energy:
- Received approval from the NCUC for recovery of costs associated with compliance with renewable energy portfolio standards in North Carolina.
- Entered into a settlement agreement with several interveners, which was filed with the NCUC, to recover all DSM/EE program and measure costs with a potential return, net lost revenues for three years and performance incentives.
- Filed with South Carolina Public Service Commission a settlement agreement with interveners to recover all DSM/EE program and measure costs, net lost revenues for three years and performance incentives.
- Filed three new energy-efficiency programs with the NCUC, including a residential solar water heating program.
- Partnered with Ford Motor Company and Electric Power Research Institute to test a Ford Escape plug-in hybrid vehicle (PHEV) as part of a national PHEV demonstration program.
- Successfully completed negotiations on a new three-year contract with the International Brotherhood of Electrical Workers, which represents approximately 2,000 craft and technical employees at PEF.
- Progress Energy's two utilities achieved top-quartile ranking in the latest business customer satisfaction survey from J.D. Power & Associates. PEC was ranked highest in the competitive South region.
Press releases regarding various announcements are available on the company's Web site at http://progress-energy.com.