GreyStone signs contract with new power supplier

RALEIGH, N.C ( May 17, 2004) - Progress Energy, Inc. [NYSE: PGN] today announced that its subsidiary, Progress Energy Ventures, Inc., has executed a power supply agreement with 12 Georgia Electric Membership Cooperatives (EMC) to serve their wholesale electricity needs.

"We are extremely pleased to be working with Georgia Energy Cooperative and GreyStone Power Corporation," said Tom Kilgore, president of Progress Energy Ventures. "This builds on our existing generation and load in Georgia, giving us a very balanced portfolio. Combined with our existing agreement with Jackson EMC, Progress Energy will be serving approximately 30% of the cooperative load in Georgia."

Completion of this deal increases Progress Energy competitive generation under contract for 2005 to 74 percent. Progress Energy Ventures’ growing Southeast supply portfolio, including over 1,850 MW of generation capacity, will serve as support for the new EMCs’ load contracts.

Georgia Energy Cooperative is a group of 11 Electric Membership Cooperatives located across Georgia. GreyStone Power Corporation is the fifth largest electric cooperative in Georgia. Combined, the 12 EMC’s serve more than 330,000 residential, commercial and industrial customers in 85 Georgia counties.

The power supply agreement runs through 2010 and includes the use of approximately 1,600 megawatts of Georgia system generation comprised of nuclear, coal, gas and pumped-storage hydro resources. Progress Energy expects to supplement the use of the EMC’s resources with its own intermediate and peaking assets in Georgia to serve the EMCs’ forecasted 1,600 megawatt peak demand in 2005 growing to a 2,200 megawatt demand by 2010.

"This power supply contract with Progress Energy Ventures provides our members with stable rates and power reliability in a highly unpredictable energy market," said Buddy White, President and Chief Executive Officer of the Georgia Energy Cooperative.

"We considered other alternatives to meet an increased demand for power, including the possibility of building additional power generation facilities. After evaluating the cost, benefits and risks associated with all of these plans, we felt Progress Energy Ventures was best positioned to provide the most benefits to our members," said Gary Miller, President and Chief Executive Officer of GreyStone Power Corporation. "This agreement is the result of years of research, negotiations and study nationwide for the most reliable and most economical source of wholesale power. It signifies our pledge to continue to keep rates as competitive as possible for our members, following our tradition of 12 years with no rate increase. We are very pleased with the agreement and its terms."

Progress Energy (NYSE: PGN), headquartered in Raleigh, N.C., is a Fortune 250 diversified energy company with more than 24,000 megawatts of generation capacity and $9 billion in annual revenues. The company’s holdings include two electric utilities serving more than 2.8 million customers in North Carolina, South Carolina and Florida. Progress Energy also includes nonregulated operations covering competitive generation, energy marketing, natural gas production, fuel extraction, rail services and broadband capacity. For more information about Progress Energy, visit the company’s Web site at www.progress-energy.com.