Progress Energy Carolinas Lloyd Yates President & CEO Progress - - PowerPoint PPT Presentation

Progress Energy Carolinas

Lloyd Yates President & CEO Progress Energy Carolinas Progress Energy Carolinas

Di i T i Discussion Topics

Overview 2008 Accomplishments Results & Outlook Results & Outlook Performance and Operations

M j C it l P j t R i

Major Capital Projects Review Legislative and Regulatory Environment 2009 Initiatives

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PEC O ti O i PEC – Operations Overview

12 400 MW it

Progress Energy Carolinas

• 12,400 MW capacity
• ~1.5M customers
• 2% cust. growth (8-yr. CGR)
• $4.4B total revenue
• $13.2B assets

$

• 6,000 employees
• 34,000 sq. mile service area
• 18 plants, 82 units

Service Area 3

PEC 2008 A li h t PEC – 2008 Accomplishments

Financial Performance Financial Performance

• Achieved $531M in net income

Operational Excellence Operational Excellence

• Implemented cost management efforts across the utility
• Top decile safety performance
• Successful start up of two scrubbers at Roxboro

p

• Launched new Fleet Alignment Model in our Nuclear Generation Group
• Completion of SERC Compliance Audit with no non-compliances

Growth Growth

• Signed long-term contract with NC Electric Membership Corporation

(NCEMC)

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PEC 2008 A li h t ( t ) PEC – 2008 Accomplishments (cont.)

Customer Satisfaction

• Achieved ranking of #1 in the South and #2 Nationally for Business

Customer Satisfaction and #3 in the South for Residential Customer Satisfaction in J.D. Power Study

Regulatory and Legislative

• Successfully executed amortization strategy and NC and SC fuel

fili hil d l i iti l ti hi ith l i d t i l filings while developing a positive relationship with large industrial customers

• Transmission rate case successfully settled and OATT formula rates

implemented implemented

• Developed scenario-based Integrated Resource Plan that included

DSM, EE and Renewables

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PEC R lt d O tl k PEC – Results and Outlook

2008 MWH Sales

2008 Class Base Revenue* MWHs

24% 25%

2008 MWH Sales (percent of total)

Class Base Revenue* MWHs Residential 1,166,395 17,081,010 Commercial 747,382 13,926,093 Industrial 413,491 11,314,661 Governmental 64,310 1,465,082

24% 19% 25%

Governmental 64,310 1,465,082 Total Retail 2,391,578 43,786,846 Wholesale/Other 310,314 14,328,971 Total System 2,701,892 58,115,817

• Balanced customer base
• Strong performance in 2008

given the financial and

3% 29%

g economic environment

• Opportunities and challenges in

each customer class

3% Commercial Industrial Governmental Residential 6 Wholesale/Other

* $ in 000’s

PEC R id ti l O tl k PEC – Residential Outlook

Residential Overview and O tl k Outlook

• Largest single customer class
• Recent migration trends

2008 MWH Sales (percent of total)

• Recent migration trends

impacting growth forecast

• Favorable geography and
• pportunities expected to

24% 19% 25%

• pportunities expected to

continue to drive future growth

• Focused management to limit

uncollectibles/write offs

3% 29%

uncollectibles/write-offs

• Customer growth and usage

trends factored into forecast

Commercial Industrial Governmental Residential 7 Wholesale/Other

PEC R id ti l G th d U PEC – Residential Growth and Usage

Residential Growth and Usage

25000 30000 14.5 15

(billing cycle data ‐ weather adjusted)

20000 13 13.5 14

customer Residential

10000 15000 11.5 12 12.5

MWHs per Customers

5000 10 10.5 11

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PEC CIG O tl k PEC – CIG Outlook

Commercial, Industrial and G t l (CIG) O i d 2008 MWH Sales Governmental (CIG) Overview and Outlook

• 2nd half of 2008 showed signs that

commercial and industrial sectors in

24%

2008 MWH Sales (percent of total) commercial and industrial sectors in the Carolinas are not immune to the national recession

• Expect increasing net base revenue

24% 19% 29% 25%

p g growth into 2010/2011, primarily in commercial and governmental

• Military expansion and growth in

C

3% 29%

service territory with minimal BRAC implications

• Overall industrial steadily declining

and becoming smaller share of

3% Commercial Industrial Governmental Residential

and becoming smaller share of

• verall portfolio

9 Wholesale/Other

PEC CIG O tl k ( ti d) PEC – CIG Outlook (continued)

Industrial Analysis

% of total Industrial MWHs

• Chemicals now largest segment

and continues to expand

PET production growth

% of total Industrial MWHs Industry Classification 2004 Growth 2008

SIC 22 TEXTILES

22 5% 16 9%

PET production growth

• Food segment growth
• Textiles less than 17% of overall

SIC 22 - TEXTILES

22.5% 16.9%

SIC 28 - CHEMICALS

20.5% 24.9%

SIC 26 - PAPER PRODUCTS

10.5% 9.6%

SIC 33/34 PRIMARY & FAB

MWH sales and continues to decline

• Construction related segments

SIC 33/34 - PRIMARY & FAB. METALS

8.8% 9.2%

SIC 20 - FOOD

6.9% 8.6%

SIC 30 - RUBBER & PLASTICS

5.6% 5.3%

g impacted by recession

• Successful economic

development efforts

ALL OTHER SIC CODES COMBINED*

25.2% 25.5%

development efforts

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* Other SIC codes include SIC 24 – Lumber, SIC 32 – Stone/Clay/Glass, SIC 36 – Electrical Mach., SIC 37 – Trans. Equip., SIC 35 – Non-Elec. Mach., SIC 25 – Furniture, SIC 23 – Apparel, SIC 27 – Printing & Publishing and SIC OM.

PEC T Wh l l O tl k PEC – Term Wholesale Outlook

Wholesale Overview and Outlook 2008 MWH Sales

• Factors into the overall PEC growth

strategy

• Recent contract signed with

25%

2008 MWH Sales (percent of total) NCEMC for 2013-2032

Strengthens relationship and

allows for improved long-term planning opportunities

24% 19% 29% 25%

planning opportunities

• Largest term wholesale customers

include NCEMC, Power Agency and Fayetteville

3% 29%

• Marginal opportunities for excess

generation sales primarily into PJM market

Commercial Industrial Governmental Residential Wholesale/Other 11

PEC P f d O ti PEC – Performance and Operations

Transmission and

Distribution

Coal fleet

Distribution

Top quartile reliability Excellent operating Top decile in key metrics

Nuclear fleet

St f t d p g record

High level of customer

satisfaction

Strong safety record Record setting year in

2008 satisfaction Strong cost management across the enterprise driven by efficiency and productivity

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driven by efficiency and productivity

PGN B l d S l ti St t PGN Balanced Solution Strategy

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PEC B l d S l ti St t PEC Balanced Solution Strategy

Energy Efficiency

• 1,000 incremental MWs announced
• Significant component of the resource plan
• 4 programs approved by the NCUC in 2008

Alternative

• SAS and Sutton solar projects online
• Announced contract for 1 MW solar near Asheville

Alternative Energy

Announced contract for 1 MW solar near Asheville

• Coastal Carolina Clean Power – 25 MW biomass
• Well positioned to meet REPS requirements

State-of-the- Art Plants

• COLA filed for 2 additional units at Harris site
• Richmond CC online in 2011
• Fast start CTs in 2012
• Fossil fleet environmental retrofits on target

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• Fossil fleet environmental retrofits on target

PEC Major Capital Projects PEC - Major Capital Projects

(in millions)

Capital Expenditures * Balance to Estimated Project Description Balance to Spend Completion Date Recovery Method 2008A 2009E 2010E 2011E PEC Environmental Environmental Compliance Equipment $115 $85 $150 $120 $45 2013 Recovered through CSA to $584M; rate base thereafter Wayne 157 MW CT $70 $15

• 2009

Rate base County Richmond County 600 MW CCGT & Transmission $65 $220 $250 $65

• 2011

Rate base Fast Start CTs 3 CT's totaling129 MW

• $15

$45 $90 2012 Rate base PEC Smart Grid Distribution System Demand Response $10 $50 $55 $45 $50 2012 DSM/EE Rider ( di l) PEC Smart Grid Demand Response (DSDR) Program $10 $50 $55 $45 $50 2012 (pending approval) Nuclear Uprates Harris (HNP) and Robinson (RNP) Plants $20 $50 $90 $25 $145 HNP: 2015 RNP: 2010 Rate base PEC Subtotal $280 $420 $560 $300 $330 % of Total PEC Capital Expenditures ~35% ~50% ~50% ~35% N/A * Totals are net of joint owner and exclude AFUDC, nuclear fuel, nuclear decommissioning trust funding, and potential nuclear construction.

PEC C t ti R l t E i t PEC - Constructive Regulatory Environment

Execution of NC amortization strategy Successful NC and SC fuel filings Approval of request to terminate accelerated Harris

amortization and defer depreciation on environmental control facilities until next rate case in SC

Settlement of transmission rate case and OATT rates Settlement of transmission rate case and OATT rates

implemented

Completion of SERC Compliance Audit with no non-

li compliances

Development of scenario-based IRP including demand-side

management, energy efficiency and renewables management, energy efficiency and renewables

Commission turnover

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PEC K 2009 I iti ti PEC – Key 2009 Initiatives

• Cost management and Continuous Business Excellence
• Cost management and Continuous Business Excellence

(CBE)

• Cash flow and capital management
• Integrated scenario-based resource plan
• Execute wholesale strategy
• Environmental compliance
• Renewables, energy efficiency & DSM plan execution and

gy y p compliance

• Emerging technology: PHEV, Battery Storage, Smart Grid

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PEC S PEC - Summary

Focused utility with an attractive service territory Balanced customer portfolio Strong history of effective cost management Strong history of effective cost management Fleet performance among the best in the industry

C t ti l t d l i l ti i t

Constructive regulatory and legislative environment

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