Florida Power and City of Oviedo reach new franchise agreement

OVIEDO, Fla., July 17, 2002 — Florida Power and the City of Oviedo have reached agreement on a new 30-year electric utility franchise. Florida Power has signed new franchise agreements with more than 45 cities and towns during the past six years, including 20 during 2001 – 02.

“We’re pleased to have a new franchise with the City of Oviedo,” said Billy Raley, vice president of Florida Power’s North Central Region. “It’s the result of both parties’ hard work and includes many new provisions that benefit the City of Oviedo.”

A “franchise” is an agreement between a municipality and Florida Power describing how the company will work within a city’s public rights-of-way. The new franchise agreement provides Oviedo an option to purchase Florida Power’s electric distribution system at the end of the 30-year term. The agreement also authorizes Florida Power 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.

“The city and Florida Power recognize that the best course of action is to put the litigation behind us and move forward with what has historically been a very strong relationship,” Raley said. “We have worked very hard to ensure our new agreement meets the needs of the city and our customers in Oviedo.”

In February, Florida Power launched its 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 decreasing customer bills nine percent, a $100 million plan to improve reliability by 20 percent over the next three years, and a commitment to increasing generation reserve from 15 percent to 20 percent by 2003.

Florida Power, a subsidiary of Progress Energy, 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 Florida Power, visit the company’s Web site at: http://www.fpc.com.

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