f,.l...:r. ~LIM$ J~hn T. Burnett,

Transcription

1 :,-:, :;.;, '.., - ~"O t~: April 1, 2010, - :;t.1 ",... :Ti,, -u -,,' I t -- ~;;: " '~" :::= ~ I...,' "' ry ~~... r'l ()"\ ~.' VIA HAND DELIVERY t) Ms. Ann Cole, Commission Clerk Florida Publi Serve Commission 2540 Shumard Oak Boulevard loooc)() - 0-,- Tallabassee, Florida Re: Ten-Year Site Plari as ofdeember 31, 2009 Dear Ms. Cole: Pursuant to Rule 25~ F.A.C., please find enlosed for filing the original and twenty-five (25) opies ofprogress Energy Florida, In. 's 2010 Ten-Year Site Plan. Thank you for your assistane in this matter. Please feel free to all me at (727) should you have any questions. JTB:hns Enlosure COM APA _ ECR GeL J&: RAD~ sse ADM ope CLK"X Sinerely, f,.l...:r. ~LIM$ J~hn T. Burnett, D24 I 9 l\,pr -I ~

2 P h m n n n P. h * n P+ h r\ n n h n m n n m n /4 m F n h P+ P+ n e n n h n n n n n Progress Energy Florida, In. Ten-Year Site Plan April Submitted to: Florida Publi Servie Commission pl n /r

3 TABLE OF CONTENTS List of Required Shedules.... List of Tables and Figures... Code Identifiation Sheet... Introdution..... Page iv V 1 CHAPTER 1 DESCRIPTION OF EXISTING FACILITIES Existing Failities Overview Servie Area Map (Figure 1.1).... Existing Generating Failities (Shedule 1) CHAPTER 2 FORECAST OF ELECTRIC POWER DEMAND AND ENERGY CONSUMPTION... Energy Consumption and Demand Foreast Shedules..... History and Foreast of Energy Consumption and Number of Customers by Customer Class (Sh )... History and Foreast of Base Summer Peak Demand (MW) (Sh. 3. I) History and Foreast of Base Winter Peak Demand (MW) (Sh. 3.2)... History and Foreast of Base Annual Net Energy for Load (GWh) (Sh. 3.3)... Previous Year Atual and Two-Year Foreast of Peak Demand and Net Energy for Load by Month (Sh. 4)... Fuel Requirements and Energy Soures..... Fuel Requirements (Sh. 5 )... Energy Soures (GWh) (Sh. 6.1)... Energy Soures (Perent) (Sh. 6. Foreasting Methods and Proedures... Introdution.... Foreast Assumptions..... Customer, Energy, and Demand Foreast (Figure 2.1).... General Assumptions Short-Term Eonomi Assumptions..... Long-Tern Eonomi Assumptions.. Foreast Methodology..... Energy and Customer Foreast... Peak Demand Foreast o,,.: -:,, 2-16.? -i-.... > 2-1$1, F; : : u- ~ v: 2-19 S,?.. ar :: :. Progress Energy Florida, In, I

4 Levy TABLE OF CONTENTS (Continued) Conservation Residential Programs CommeriaVIndustrial (Cil) Programs Researh and Development Programs CHAPTER 3 FORECAST OF FACILITIES REQUIREMENTS Resoure Planning Foreast Overview of Current Foreast..... Total Capaity Resoures Of Power Plants and Purhased Power Contrats (Table 3.1)... Qualifying Faility Generation Contrats (Table 3.2) Foreast of Capaity, Demand and Sheduled Maintenane at Time of Summer Peak (Sh. 7. I).... Foreast of Capaity, Demand and Sheduled Maintenane at Time of Winter Peak (Sh. 7.2).... Planned and Prospetive Generating Faility Additions and Changes (Sh. 8)... Status Report and Speifiations of Proposed Generating Failities (Sh. 9).... Status Report and Speifiations of Proposed Diretly Assoiated Transmission Lines (Sh. IO).... Integrated Resoure Planning Overview..... lntegrated Resoure Planning (IRP) Proess Overview (Figure 3. I).... The lntegrated Resoure Planning (IRP) Proess..... Key Corporate Foreasts.., Ten-year Site Plan (TYSP) Resoure Additions Renewable Energy. Plan Considerations Transmission Planning. List of Proposed Bulk Transmission Line Additions (Table 3.3) CHAPTER 4 ENVIRONMENTAL AND LAND USE INFORMATION Preferred Sites Levy County Nulear Power Plant ~ County Levy County Nulear Power Plant (Levy County) (Figure 4.1) I:_ - Progress Energy Florida, In.

5 LIST OF REOUIRED SCHEDULES Shedule I Existing Generating Failities History and Foreast of Energy Consumption and Number of Customers by Customer Class (Rural and.. Residential and Commerial) History and Foreast of Energy Consumption and Number of Customers by Customer Class (Industrial and Other) History and Foreast of Energy Consumption and Number of Customers by Customer Class (Net Energy for Load) History and Foreast of Summer Peak Demand (MW)-Base Case History and Foreast of Winter Peak Demand (MW) - Base Case... History and Foreast of Annual Net Energy for Load (GWh) - Base Case... Previous Year Atual and Two-Year Foreast of Peak Demand and Net Energy for Load by Month Fuel Requirements Energy Soures (GWh) Energy Soures (Perent) Foreast of Capaity, Demand, and Sheduled Maintenane at Time of Summer Peak Foreast of Capaity, Demand, and Sheduled Maintenane at Time of Winter Peak Planned and Prospetive Generating Faility Additions and Changes Slatus Report and Speifiations of Proposed Generating Failities Status Report and Speifiations of Proposed Diretly Assoiated Transmission Lines Progress Energy Florida, In

6 Aerial - e r LIST OF TABLES AND FIGURES - Tables 3.1 Total Capaity Resoures of Power Plants and Purhased Power Contrats... & Qualifying Faility Generation Contrats List of Proposed Bulk Transmission Line Additions e 1. I Servie Area Map... & 1-3 r- 2.1 Customer, Energy, and Demand Foreast Integrated Resoure Planning (IRP) Proess Overview a. Levy County Nulear Power Plant (Levy County) b. Levy County Nulear Power Plant (Levy County) ~ View r - - h e - e.. 0. I-..? - - Progress Energy Florida, In. iv

7 CODE IDENTIFICATION SHEET Generatine Unit Type ST - Steam Turbine - Non-Nulear NP - Steam Power - Nulear GT - Gas Turbine CT - Combustion Turbine CC - Combined yle SPP - Small Power Produer COG - Cogeneration Faility Fuel Tvpe NUC - Nulear (Uranium) NG - Natural Gas RFO - No, 6 Residual Fuel Oil DFO - No. 2 Distillate Fuel Oil BIT - Bituminous Coal MSW - Muniipal Solid Waste WH - Waste Heat BIO - Biomass Fuel TransDortation WA - Water TK - Truk RR - Railroad PL - Pipeline UN - unknown Future Generating Unit Status Progress Energy Florida, In. A - Generating unit apability inreased D - Generating unit apability dereased.: FC - Existing generator planned for onversion to another fuel or energy soure ~-; 0, il!2 I>-' P - Planned for installation but not authorized; not under onstrution -, - _.i I 3 RF' - Proposed for repowering or life extension.., C. : :.,..> RT - Existing generator sheduled for retirement I..EL - ili,i T - Regulatory approval reeived but not under onstrution,. fl.--, - U - Under onstrution, less than or equal to 50% omplete.- ~. V - Under onstrution, more than 50% omplete.~ V,... 3' ; 1 (-XI (;, :> I :., i:> 0.. LL

8 e e e * P r r- r- e - * r- h r- e P /- r- e e e e e e - - P - - INTRODUCTION Setion of the Florida Statutes requires eletri generating utilities to submit a Ten-Year Site Plan (TYSP) to the Florida Publi Servie Commission (FPSC). The TYSP inludes historial and projeted data pertaining to the utility s load and resoure needs as well as a review of those needs. Florida Power Corporation d/b/a Progress Energy Florida, In. s TYSP is ompiled in aordane with FPSC Rules through , Florida Administrative Code. Progress Energy Florida, In. s (PEF) TYSP is based on the projetions of long-term planning requirements that are dynami in nature and subjet to hange. These planning douments should be used for general guidane onerning PEF s planning assumptions and projetions, and should not be taken as an assurane that partiular events disussed in the TYSP will materialize or that partiular plans will be implemented. Information and projetions pertinent to periods further out in time are inherently subjet to greater unertainty. This TYSP doument ontains four hapters as indiated below: CHAPTER 1 - DESCRIPTION OF EXlSTING FACILITIES This hapter provides an overview of PEF s generating resoures as well as the transmission and distribution system. CHAPTER 2 - FORECAST OF ELECTRICAL POWER DEMAND AND ENERGY CONSUMPTION Chapter 2 presents the history and foreast for load and peak demand as well as the foreast methodology used. DSM savings and fuel requirement projetions are also inluded. CHAPTER 3 - FORECAST OF FACILITIES REQUIREMENTS The resoure planning foreast, transmission planning foreast as well as the proposed 01 i :. t ~. _- generating failities and bulk transmission line additions status are disussed in Chapter 3. I,. ~.- L_ 1..~.-,. CHAPTER 4 - ENVIRONMENTAL AND LAND USE INFORMATION *-- : 1 II,, Preferred and potential site loations along with any environmental and land use informationdt m L are presented in this hapter.,j... f & 1. N (1) Progress Energy Florida, In. 1 -> -.> I 1 m > a r> LL

9 m m n h m /r A A m A r\ A n n n n n n n h e n n *4 rn n P n n r* rn m rn r* CHAPTER 1 DESCRIPTION OF EXISTING FACILITIES

10 CHAPTER 1 DESCRIPTION OF EXISTING FACILITIES EXISTING FACILITIES OVERVIEW OWNERSHIP Florida Power Corporation d/b/a Progress Energy Florida, In. (PEF or the Company) is a wholly owned subsidiary of Progress Energy, In. (Progress Energy). Congress enated legislation in 2005 repealing the Publi Utilities Holding Company At of 1935 (PUHCA) effetive February 8, Subsequent to that date, Progress Energy is no longer subjet to regulation by the Seurities and Exhange Commission as a publi utility holding ompany. AREA OF SERVICE PEF has an obligation to serve approximately 1.6 million ustomers in Florida. Its servie area overs approximately 20,000 square miles in west entral Florida and inludes the densely populated areas around Orlando, as well as the ities of Saint Petersburg and Cleanvater. PEF is interonneted with 22 muniipal and nine rural eletri ooperative systems. PEF is subjet to the rules and regulations of the Federal Energy Regulatory Commission (FERC), the Nulear Regulatory Commission (NRC), and the Florida Publi Servie Commission (FPSC). PEF s Servie Area is shown in Figure 1.1. TRANSMISSIONiDISTRIBUTION The Company is part of a nationwide interonneted power network that enables power to be exhanged between utilities. The PEF transmission system inludes approximately 5,000 iruit miles of transmission lines. The distribution system inludes approximately 18,000 iruit miles of overhead distribution ondutors and approximately 13,000 iruit miles of underground distribution able. ENERGY MANAGEMENT and ENERGY EFFICIENCY PEF ustomers partiipating in the Company s residential Energy Management program help to manage future growth and osts. Approximately 393,000 ustomers partiipated in the Energy Progress Energy Florida, In. 1-1

11 Management program at the end of 2009, ontributing about 770 MW of winter peak-shaving apaity for use during high load periods. PEF s Demand-Side Management (DSM) plan urrently onsists of seven residential programs, seven ommerial and industrial programs, and one researh and development program. The FPSC issued Final Order PSC FOF-EG on Deember 30, This Order requires PEF to adopt DSM goals based on an Enhaned Total Resoure Cost test (E-TRC) plus the addition of PEF s top-ten less than two year paybak effiieny measures based on energy savings. PEF will be expeted to submit a new plan designed to meet the approved goals for the ten-year period on Marh 30,2010 or as modified by further FPSC ation. TOTAL CAPACITY RESOURCE As of Deember 31,2009, PEF had total summer apaity resoures of 11,587 MW onsisting of installed apaity of 9,942 MW (exluding Crystal River Unit 3 joint ownership) and 1,645 MW of firm purhased power. Additional information on PEF s existing generating resoures an be found in Shedule 1 and Table 3.1. Progress Energy Florida, In. 1-2

12 U U U J J J Ll J J u u v W u J \J W U W J W \J J 4 u v U U v b d W W U 3 i CJ u J J J U J W W J J

13 3 an SI0 N O N O SG?L?L '(G?L?L Tx xi RK 13 '1 10-' j 7-1: 82 i 81 I Progress Energy Florida, In. 1-4

14 CHAPTER 2 FORECAST OF ELECTRIC POWER DEMAND AND ENERGY CONSUMPTION

15 P P - - P CHAPTER 2 FORECAST OF ELECTRIC POWER DEMAND AND ENERGY CONSUMPTION OVERVIEW The information presented in the following Shedules 2, 3, and 4 represents PEF s history and foreast of ustomers, energy sales (GWh), and peak demand (MW). Assumptions were made to predit a foreast with a 50/50 probability, or the most likely senario. PEF s ustomer growth is expeted to average 1.4 perent between 2010 and 2019, whih is less than the ten-year historial average of 1.7 perent. Slower population growth, based on the latest projetion from the University of Florida s Bureau of Eonomi and Business Researh (BEBR), and weak near-term eonomi onditions less favorable for in-migrating and job growth, results in a lower ustomer projetion when ompared to the higher historial growth rate. This translates into lower projeted energy and demand growth rates from histori rate levels. Net energy for load (NEL), whih had grown at an average of 0.8 perent between 2000 and 2009, is expeted to inrease by 1.0 perent per year from 2010 to The value dereased signifiantly from an average of 1.8 perent growth from due to the statewide reession and lower wholesale jurisditional energy sales in 2009 (-44.2%). Going forward, projeted NEL growth reflets aggressive DSM energy savings targets and the lower ustomer growth rate referened above. Retail billed energy, whih grew at a reessionweakened 0.9 perent average rate historially, is expeted to grow at only a 1.1 perent over the next ten-year period. Summer net firm demand is expeted to grow at an average of 0.9 perent per year during the next ten years. This is lower than the 2.4 perent growth rate experiened throughout the last ten years. Again, slower retail ustomer growth and no summer demand growth from the wholesale jurisdition are expeted going forward. Also, higher DSM demand savings during the projeted period holds down growth in peak demand. Progress Energy Florida, In. 2-1

16 Summer net firm retail demand is expeted to grow at an average of 0.6 perent per year during the next ten years; this is lower than the 2.4 perent average annual growth rate experiened throughout the last ten-year period. The reasons for the slower growth going forward are the same as those indiated above. ENERGY CONSUMPTION AND DEMAND FORECAST SCHEDULES SCHEDULE DESCRIPTION 2.1,2.2 and 2.3 History and Foreast of Energy Consumption and Number of Customers by Customer Class 3.1 History and Foreast of Summer Peak Demand (MW) 3.2 History and Foreast of Winter Peak Demand (MW) 3.3 History and Foreast of Annual Net Energy for Load (GWh) 4 Previous Year Atual and Two-Year Foreast of Peak Demand and Net Energy for Load by Month Progress Energy Florida, In 2-2

17 PROGRESS EITRGT norid.4? ' : 200% 3WY 2 46: J ;601 18,Yi 19w9 19,s- 19,$91 20,021 19,912 19,325 19, ' 13,s:o 14~ ' so SI? 11,061 11~ I L IS ~ E3 150, Iss~-So 161~ L,S3; 16L :i : : 301s ' A ,637 1S,!S! IS.209!E,IS is~19i :s.434 1s.539 1s.-C m2e : ~SLi 11~79s 11~695 11~635 ll.5s ,080 13,233 1; is s: 160,'90 162, , ;8I6 its~lt9 lx I84 60s Progress Energy Florida, In. 2-3

18 PROGRESS EbTRGY FLORIDA SCHEDLIE 2.1 HISTOR\- iz)d FORECAST OF E3ERGY COSSUXPTIOX.&YD \?;LIBER OF CUSTOMERS BY CL'ST04IER CLASS il) (1 'TAR..... OTHER SALES TO PL%LIC ALTHORLTIES G\lI !00L LO03!OW LOO io ,s-2 3.s31 4~001 1~069 4.ll S ' , ~x s 7 q- 2~4E ;1?4 1, ,512.S21 1,511,810 1,48B:SM ,43l.+W 1,463.4'1 l.32il~s O s s 2~ s4i %S32 35, %I94 39.:-6 19,132 $ , :0lD 2011 loll '013 :011!015!016!017!016!01? ~ ' ~150 2~450?.+SO % 2.450?:a , ~'55 1,JS1,6?? 1,657,14? : l~5m~190 1, ;+89,3SS 1,4SO.S ?C :,a ,636 3;' $6~ ,911 38~ , ,020 10;189 Progress Energy Florida, In. 2-4

19 PROGRESS E\TRGY FLORID.* SCHEDLZE 2 3 HISTORY 3sD FORECAST OF EhZRGY COXSLWTIOK AhD X3IIBER OF CUSTOMERS BY CUSTOlER CLASS (1) (1) (3 1 (4) (5) (61 SALES FOR RESALE \.EAR GW'h.~~~~.. LTILIn USE &LOSSES G.vh htt ElTRGY FORLOAD GU%... ~... OTHER CCSTOSERS (A'v'ERGE KO )... TOTAL KO OF CCSTO\ERS ' 200; 200; 3:732 3.s39 3~1'3 3.? '8 LS? , ' :268 20,004 20:-5: :43-1,100~299 1~444~9% 1.4-5;-s3 1;510;516 1, ~195 4;? :619 2 m :'53 2, PiS 16, , ,738 1~5S ;620,396 1,632,368 1,638, ,124 11,993 1,630; :478?:9S '? ,392 2, ?:'50 44, '- 24~891 2A191',< , :u :620 2: % 46, hi313 26,194 26, ? s , ~. 46;932 47,922 2S.362?S,FS? Progress Energy Florida, In, 2-5

20 16) Y ik io0li Progress Energy Florida, In. 2-6

21 L-2 aii tlt'll

22 ~... PROGRESS EYERGI FLORIIA SCHEDLXE 3 3 HISTOR'r.C\D FORECAST OF A\XTAL LTT E\XRGY FOR LOAD (GVb) SASE CASE (7j (8i (9) S ,833 4S~1'4 4-~ ' OTHER msmexm ows C\D rn RG.i L711ITS CSE LTT EXRGl I= TOTAL COSERSATIOS COSSERVATIOX REDCCTlOi\'S' RETAIL UHOLESALE 6: LOSSES FORLOAD (?d ** ~ ~ ~.~~~~~... ~ ~ ~ 565 >._ , !-* JS4 51% s39 :~l , Il 31 2~53' 2, , ' s ~493 2, : , ,S7S 46~ ~121 Long FACTO : : ' T S , Ll ,706 2,035 2~ ,095 3,101 3~6S1 s40 SI0 Si2 s40 s40 S SI0 4.47s ,910 5,07-5, ~S37 1, : , ': 1 'W -_ 43.S19 42 ' : 45.S:' ElS '.92> I ' I Progress Energy Florida, In. 2-8

23 ~ PROGRESS EhTRGI- FLORIDA (1) \LOXTH J AlT ARI- FEBRLARY!dARCH APPRR. MAY nw nx> A'GUST SEPTFSBER OCTOBER lo\xmber DECEMBER T0T.X 11) (3) A C T C A L 2009 PEAK DEZK\D?EL SW GWh 11:2G1 3:595 11~31s 3J-5 :E33 3, ,-11 3,622 10:2?4 4,375 9;300 1;450 9;59s 4;49s S:953 3:s s,9>- &~ - -:lc6 3,151 44:121 i4 j (3 FORECAST 2010 PFAK DE>k\D h L Mu GU% S.764 X S s7 3; , :x :WO 8:38S 3,608 6~963 2:995 :.so1 32% 43, PEAK DEWSD 3TL :SZ -, ,129 -' ,108 9, ,404 S,996 4:03 8,332 3,549 6~ q,. -. ~ 3;179 42:750 \OIE Reorded N?t Peak demands and System requirements inluding off-system r*holesale ~ntia~ts Progress Energy Florida, In. 2-9

24 FUEL REOUIREMENTS AND ENERGY SOURCES PEF s atual and projeted nulear, oal, oil, and gas requirements (by fuel unit) are shown in Shedule 5. PEF s two-year atual and ten-year projeted energy soures by fuel type are presented in Shedules 6.1 and 6.2, in GWh and perent (%) respetively. PEF s fuel requirements and energy soures reflet a diverse fuel supply system that is not dependent on any one fuel soure. Near term natural gas onsumption is projeted to inrease as plants and purhases with tolling agreements are added to meet future load growth. However, a derease in future fossil fuel onsumption is projeted with the addition of planned new, advaned design nulear generation. Progress Energy Florida, In. 2-10

25 PROGRfSS ENE RGY FLORUI SCHEDL'LE 5 f LEI REQL IRL\ESTS Progress Energy Florida, In

26 ZI-z -03

27 PROGRESS EZXRGY FLORID4 31 COU SI O m R 2 Qf PLRCFASES RZ\EI\ABLES IMF'ORT FROM O X OF STAn E-WORT TO OLT OF STATE Progress Energy Florida, In, 2-13

28 FORECASTING METHODS AND PROCEDURES INTRODUCTION Aurate foreasts of long-range eletri energy onsumption, ustomer growth, and peak demand are essential elements in eletri utility planning. Aurate projetions of a utility s future load growth require a foreasting methodology with the ability to aount for a variety of fators influening eletri energy usage over the planning horizon. PEF s foreasting framework utilizes a set of eonometri models to ahieve this end. This setion will desribe the underlying methodology of the ustomer, energy, and peak demand foreasts inluding the prinipal assumptions inorporated within eah. Also inluded is a desription of how DSM impats the foreast, the development of high and low foreast senarios, and a review of DSM programs. Figure 2.1, entitled Customer, Energy and Demand Foreast, gives a general desription of PEF s foreasting proess. Highlighted in the diagram is a disaggregated modeling approah that blends the impats of average lass usage, as well as ustomer growth, based on a speifi set of assumptions for eah lass. Also aounted for is some diret ontat with large ustomers. These inputs provide the tools needed to frame the most likely senario of the Company s future demand. FORECAST ASSUMPTIONS The first step in any foreasting effort is the development of assumptions upon whih the foreast is based. The Finanial Servies Department develops these assumptions based on disussions with a number of departments within PEF, as well as through the researh efforts of a number of external soures. These assumptions speify major fators that influene the level of ustomers, energy sales, or peak demand over the foreast horizon. The following set of assumptions forms the basis for the foreast presented in this doument. Progress Energy Florida, In. 2-14

29 ~ FIGURE 2.1 Customer, Energy, and Demand Foreast Customer Models I Energy Peak Demand Models Model I w I EVALUATION Diret Contat with Large Customers I Preliminary Customer, Energy, and Demand Foreast Reviw and Approval Senior Management OFFICIAL Customer, Energy, and Demand Foreast Demand and System Requirements Generation Planning Transmission, Distribution Planning Progress Energy Florida, In. 2-15

30 GENERAL ASSUMPTlONS 1. Normal weather onditions for energy sales are assumed over the foreast horizon using a salesweighted "modified" 20-year average of onditions at seven weather stations aross Florida (Saint Petersburg, Tampa, Orlando, Winter Haven, Gainesville, Daytona Beah, and Tallahassee). For kilowatt-hour (kwh) sales projetions, the normal weather alulation begins with a historial 20-year average of the servie area weighted billing month degree-days then removes the two largest outliers from this average for eah of the 12 months for both the heating season and ooling season. Seasonal peak demand projetions are based on a 30-year historial average of system-weighted temperatures at time of seasonal peak at the Tampa, Orlando, and Tallahassee weather stations; the other weather stations are not used in developing the histori average beause they lak the histori hourly data needed for peak-weather normalization. 2. The population projetions produed by the Bureau of Eonomi and Business Researh (BEBR) at the University of Florida as published in "Florida Population Studies" Bulletin No. 153 (Marh 2009) provide the basis for development of the ustomer foreast. An update to inlude a downward revision to state-wide growth made by the Florida Legislature's Offie of Eonomi and Demographi Researh in Otober 2009 was inorporated to apture the latest trends being witnessed in the PEF servie area. State and national eonomi assumptions produed by Eonomy.Com in their national and Florida foreasts (November 2009) are also inluded. 3. Within the PEF servie area, the phosphate mining industry is the dominant setor in the industrial sales lass. Four major ustomers aounted for 33 perent of the industrial lass MWh sales in These energy intensive ustomers mine and proess phosphate-based fertilizer produts for the global marketplae. The supply and demand for their produts are ditated by global onditions that inlude, but are not limited to, foreign ompetition, nationavinternational agriultural industry onditions, exhange-rate flutuations, and international trade pats. Load and energy onsumption at the PEF-served mining or hemial proessing sites depend heavily on plant operations, whih are heavily influened by these global as well as the loal onditions. Going forward, a weaker U.S. urreny value on the Progress Energy Florida, In. 2-16

31 r- r- e - foreign exhange is expeted to help the industry in two ways. First, Amerian farm ommodities have beome more ompetitive overseas whih has ontributed to higher rop prodution at home. Seond, a weak US. dollar results in U.S. fertilizer produers to beome more prie ompetitive relative to foreign produers. The PEF foreast reflets an inrease in eletri energy onsumption as a new mine operation is expeted to open in the medium term. A signifiant risk to this projetion lies in the volatile prie of energy, whih is a major ost of both mining and produing phosphori fertilizers. The fuel mix embedded in PEF's rates versus ompetitors' rates play a signifiant role as to where a produer direts the output from selfowned generation failities, whih remove load from PEF generation failities. 4. PEF supplies load and energy servie to wholesale ustomers on a "full," "partial," and "supplemental" requirement basis. Full requirements (FR) ustomers' demand and energy is assumed to grow at a rate that approximates their historial trend. However, the impat of the urrent reession has redued short term growth expetations. Contrats for this servie inlude the ities of Bartow, Chattahoohee, Mt. Dora, Quiny, Williston, and Winter Park. Partial requirements (PR) ustomer load is assumed to reflet the urrent ontratual obligations refleted by the nature of the stratified load they have ontrated for, plus their ability to reeive dispathed energy from power marketers any time it is more eonomial for them to do so. Contrats for PR servie inluded in this foreast are with the Florida Muniipal Power Ageny (FMPA), Reedy Creek Utilities, Seminole Eletri Cooperative, In. (SECI), and the ities of New Smyma Beah, Tallahassee, Gainesville, and Homestead. PEF has negotiated several power sales agreements with SECl beginning in various years over the ten-year horizon. An existing ontratual arrangement is a "supplemental" servie ontrat (1983 ontrat) providing energy over and above stated levels they ommit to supply themselves. This ontrat has been renegotiated and will hange from a supplemental nature sale to a "stratified apaity" sale onsisting of a base, peaking, and system average piees beginning in 2014 when the term of this ontrat expires in Deember A firm ontrat with SECI for stratified intermediate servie (Otober 1995 ontrat), whih inludes an additional 150 MW stratified base servie in 2012, is ontained in this projetion. Another load following ontrat ommening in 2010 and lasting through the foreast horizon is also Progress Energy Florida, In. 2-17

32 ontained in this foreast. Finally, an agreement to provide interruptible servie at a SECI metering site has also been inluded in this projetion. 5. This foreast assumes that PEF will suessfully renew all future franhise agreements. 6. This foreast inorporates demand and energy redutions from PEF's dispathable and non- dispathable DSM programs required to meet the approved goals set in Deember 2009, by the FPSC. 7. Expeted energy and demand redutions from ustomer-owned self-servie ogeneration failities are also inluded in this foreast. PEF will supply the supplemental load of selfservie ogeneration ustomers. While PEF offers "standby" servie to all ogeneration ustomers, the foreast does not assume an unplanned need for power at time of peak. 8. This foreast assumes that the regulatory environment and the obligation to serve our retail ustomers will ontinue throughout the foreast horizon. Regarding wholesale ustomers, the Company does not plan for generation resoures unless a long-term ontrat is in plae. Current FR ustomers are assumed to renew their ontrats with PEF exept those who have given notie to terminate. Current PR ontrats are projeted to terminate as terms reah their expiration date. Deviation from these assumptions an our, based on information provided by the Portfolio Management Department. - e - Progress + SHORT-TERM ECONOMIC ASSUMPTIONS The eonomi outlook for this foreast was developed in late-2009 as the national reession neared its seond anniversary. This reession has had a signifiant negative effet upon the Florida eonomy, espeially in the homebuilding and affiliated industries. While the nation's eonomy showed signs of leveling off, the Florida eonomy ontinued to show a derease in jobs and an inrease in forelosure rates. By Deember 2009, PEF was expeting to report its eighteenth straight month of year-over-year deline in ustomer growth. Energy Florida, In. 2-18

33 As the foreast was being developed, signifiant gains in onfidene and value had returned to the stok market. Improvement had begun in the US. manufaturing setor as inventories needed to he replenished. Initial laims for unemployment insurane had dereased to where positive employment growth was expeted nationally in the near future. Federal Reserve Board poliies to prevent a severe depression appeared to be working but omplaints that bank redit remained unavailable impated onfidene. In Florida, the rising home forelosures and falling home values as well as a large inventory of unsold homes worsened throughout Constrution employment ontinued to deline ontributing to the unusually high unemployment levels in Florida. The short term outlook expets a slow reovery as population mobility returns to previous rates. The slow job growth in Florida, as well as the inability for potential new residents to sell their homes and move south, stunted the State s population growth. Due to a large inventory of homes for sale in the State, the short term prospet for residential onstrution employment remains unhanged. Shuttered manufaturing apaity in the homebuilding industries - stone, lay, glass, and lumber produts - will remain weak for another year or two. The signifiant deline in home values aross Florida has improved affordability for many home seekers previously pried out of the market. One bank s lending levels return to normal, onditions will favor a return to strong growth for the FIorida housing market and support industries. LONG-TERM ECONOMIC ASSUMPTIONS The long term eonomi outlook assumes that hanges in eonomi and demographi onditions, as well as tehnologial hange in the eletri utility industry, will follow a trended behavior pattern. The main fous involves identifying these trends. No attempt is made to predit business yle flutuations or rapid penetration of a signifiant tehnologial breakthrough impating eletri utility energy sales during this period. Population Growth Trends This foreast assumes Florida will experiene slower new resident migration and population growth over parts of the long term, as refleted in the BEBR projetions. Florida s limate and low ost of living have historially attrated a major share of the retirement population from the eastern half of the United States. This will ontinue to our primarily beause the retiring baby- Progress Energy Florida, In. 2-19

34 boom generation will inrease the number of available retirees apable of moving to the South. Working against this signifiant trend will he several aestheti and eonomi fators. First, the enormous growth in population and orresponding development of the 198Os, 199Os, and early 2000s made portions of Florida less desirable and less affordable for retirement living. This pereived diminished quality of retiree life, along with inreasing ompetition from neighboring states, will ause a slight deline in Florida's share of these prospetive new residents over the long term. Seond, and to a lesser extent, there is a lingering fear for safety and expense from hurriane damage. Eonomi Growth Trends Sine the beginning of the post period, Florida experiened a 1980s-style population explosion and rapid servie-setor job reation. The State has benefited greatly from generational lows in interest rates, whih, along with investors' unfriendly attitude toward the equity markets, set the stage for a tremendous surge in home onstrution. The national level of homebuilding in , set an all-time reord. This growth produed strong gains in both the onstrution industry and servie-produing setors of the Florida eonomy. As observed in reent years, however, a lower rate of inome growth is expeted going forward, indiating a slow pae of overall eonomi growth until the banking setor strength returns to levels observed in the past. Many national and state poliy deisions will have an impat on the prie of eletriity over the long term. This will play a major role in the amount of eletriity projeted to be onsumed in the foreast. While most historial flutuations in prie have been fuel prie driven, future hanges will also inorporate deisions to provide for possible limate hange legislation, the purhase or ownership of renewable energy generation, and the impats of more aggressive demand-side management goals. Eah may ontribute to an upward trend on the prie per kwh paid by the onsumer. PEF has witnessed a signifiant drop off in the average kwh per residential ustomer sine its peak in Muh an he attributed to an average annual inrease of 5.3 perent in real residential prie per kwh between 2003 and 2009 when fuel pries Progress Energy Florida, In. 2-20

35 inreased. The projetion for real eletri pries is muh flatter, but future poliy deisions will have an impat on the Company's pass-through harges. FORECAST METHODOLOGY The PEF foreast of ustomers, energy sales, and peak demand is developed using ustomer lass-speifi eonometri models. These models are expressly designed to apture lassspeifi variation over time. By modeling ustomer growth and average energy usage individually, subtle hanges in existing ustomer usage are better aptured as well as growth from new ustomers. Peak demand models are projeted on a disaggregated basis as well. This allows for appropriate handling of individual assumptions in the areas of wholesale ontrats, load management, and interruptible servie. ENERGY AND CUSTOMER FORECAST In the retail jurisdition, ustomer lass models have been speified showing a historial relationship to weather and eonomi/demographi indiators using monthly data for sales models and annual data for ustomer models. Sales are regressed against "driver" variables that best explain monthly flutuations over the historial sample period. Foreasts of these input variables are either derived internally or ome from a review of the latest projetions made by several independent foreasting onerns. The external soures of data inlude Moody's Eonomy.Com and the University of Florida's Bureau of Eonomi and Business Researh (BEBR). Internal ompany foreasts are used for projetions of eletriity prie, weather onditions, and the length of the billing month. Normal weather, whih is assumed throughout the foreast horizon, is based on a twenty-year modified average of heating and ooling degree-days by month as measured at several weather stations throughout Florida for energy projetions and temperatures around the hour of peak for the firm retail demand foreast. Projetions of PEF's demand-side management (onservation) programs are also inorporated as redutions to the foreast. Speifi setors are modeled as follows: Residential Setor Residential kwh usage per ustomer is modeled as a funtion of real personal inome, ooling degree-days, heating degree-days, the real prie of eletriity to the residential lass and the average Progress Energy Florida, In

36 number of billing days in eah sales month. This equation aptures signifiant variation in residential usage aused by eonomi yles, weather flutuations, eletri prie movements, and sales month duration. Projetions of kwh usage per ustomer ombined with the ustomer foreast provide the foreast of total residential energy sales. The residential ustomer foreast is developed by orrelating annual ustomer growth with PEF servie area population growth. County level population projetions for the 29 ounties in whih PEF serves residential ustomers are provided by the BEBR. Commerial Setor Commerial MWh energy sales are foreast based on ommerial setor (non-agriultural, nonmanufaturing and non-governmental) employment, the real prie of eletriity to the ommerial lass, the average number of billing days in eah sales month and heating and ooling degree-days. The measure of ooling degree-days utilized here differs slightly from that used in the residential setor refleting different temperature base sensitivities, when heating and ooling load beome observable. Commerial ustomers are projeted as a funtion of the number of residential ustomers served. Industrial Setor Energy sales to this setor are separated into two sub-setors. A signifiant portion of industrial energy use is onsumed by the phosphate mining industry. Beause this one industry is a 33 perent share of the total industrial lass, it is separated and modeled apart from the rest of the lass. The term "non-phosphate industrial" is used to refer to those ustomers who omprise the remaining portion of total industrial lass sales. Both groups are impated signifiantly by hanges in eonomi ativity. However, adequately explaining sales levels requires separate explanatory variables. Non-phosphate industrial energy sales are modeled using Florida manufaturing employment and a Florida industrial prodution index, the real prie of eletriity to the industrial lass, and the average number of sales month billing days. The industrial phosphate mining industry is modeled using ustomer-speifi information with respet to expeted market onditions. Sine this sub-setor is omprised of only four ustomers, the foreast is dependent upon information reeived from diret ustomer ontat. PEF industrial Progress Energy Florida, In. 2-22

37 r- r- e ustomer representatives provide speifi phosphate ustomer information regarding ustomer prodution shedules, inventory levels, area mine-out, and start-up preditions, and hanges in selfservie generation or energy supply situations over the foreast horizon. Street Lighting Eletriity sales to the street and highway lighting lass has varied up and down but overall has remained flat for the past 15 years. A slight deline is expeted as improvements in lighting effiieny are projeted. The number of aounts, whih has dropped by two-thirds in the past 14 years due to most transfemng to publi authority ownership, is expeted to deline further before leveling off in the intermediate term. A simple time-trend was used to projet energy onsumption and ustomer growth in this lass. Publi Authorities Energy sales to publi authorities (SPA), omprised mostly of government operated servies, is also projeted to grow with the size of the servie area. The level of government servies, and thus energy use per ustomer, an be tied to the population base, as well as to the state of the eonomy. Fators affeting population growth will affet the need for additional governmental servies (i.e. publi shools, ity servies, et.) thereby inreasing SPA energy usage per ustomer. Government employment has been determined to be the best indiator of the level of government servies provided. This variable, along with heating and ooling degree-days (lass speifi), the real prie of eletriity and the average number of sales month billing days, results in a signifiant level of explained variation over the historial sample period. Interept shift variables are also inluded in this model to aount for the large hange in shool-related energy use in the billing months of January, July, and August. The SPA ustomer foreast is projeted linearly as a funtion of a timetrend. Sales for Resale Setor The Sales for Resale setor enompasses all firm sales to other eletri power entities. This inludes sales to other utilities (muniipal or investor-owned) as well as power agenies (rural eletri authority or muniipal). Progress Energy Florida, In. 2-23

38 Seminole Eletri Cooperative, In. (SECI) is a wholesale, or sales for resale, ustomer of PEF on both a supplemental ontrat basis and ontrat demand basis. Under the supplemental ontrat, PEF provides servie for those energy requirements above the level of generation apaity served by either SECI s own failities or its firm purhase obligations. Monthly supplemental energy is developed using an average historial load shape of total SECI load in the PEF ontrol area, subtrating out the level of SECI ommitted apaity from eah hour. Beyond supplemental servie, PEF has several agreements with SECI to serve various types of stratified demand levels deemed by their resoure planners as neessary. The muniipal sales for resale lass inludes a number of ustomers, divergent not only in sope of servie, (i.e. full or partial requirement), but also in omposition of ultimate onsumers. Eah ustomer is modeled separately in order to aurately reflet its individual profile. Several of the ustomers in this lass are muniipalities whose full energy requirements are supplied by PEF. The full requirement ustomers energy projetions grow at a rate that approximates their historial trend with additional information oming from the respetive ity offiials. PEF serves partial requirement servie (PR) to muniipalities suh as New Smyrna Beah (NSB), Homestead, Gainesville, and Tallahassee, and other power providers like FMPA and Reedy Creek Utilities. In eah ase, these ustomers ontrat with PEF for a speifi level and type of demand needed to provide their partiular eletrial system with an appropriate level of reliability. The energy foreast for eah ontrat is derived using its historial load fators where enough history exists, or typial load fators for a given type of ontrated stratified load. The energy projetions for FMPA also inlude a losses servie ontrat for energy PEF supplies to FMPA for transmission losses inurred when delivering power to their ultimate ustomers in PEF s transmission area. This projetion is based on the projeted requirements of the aggregated needs of the ities of Oala, Leesburg, Bushnell, Havana, and Newbeny. PEAK DEMAND FORECAST The foreast of peak demand also employs a disaggregated eonometri methodology. For seasonal (winter and summer) peak demands, as well as eah month of the year, PEF s oinident system peak is separated into five major omponents. These omponents onsist of potential firm retail - r Progress Energy Florida, ln. 2-24

39 load, onservation and load management program apability, wholesale demand, ompany use demand, and interruptible demand. Potential firm retail load refers to projetions of PEF retail hourly seasonal net peak demand (exluding the non-firm intermptible/urtailahle/standhy servies) before the umulative effets of any onservation ativity or the ativation of PEF's General Load Redution Plan. The historial values of this series are onstruted to show the size of PEF's firm retail net peak demand assuming no utility indued onservation or load ontrol had taken plae. The value of onstruting suh a "lean" series enables the foreaster to observe and orrelate the underlying trend in retail peak demand to total system ustomer levels and oinident weather onditions at the time of the peak without the impats of year-to-year variation in onservation ativity or load ontrol redutions. Seasonal peaks are projeted using historial seasonal peak data regardless of whih month the peak ourred. The projetions beome the potential retail demand projetion for the months of January (winter) and August (summer) sine this is typially when the seasonal peaks our. The nonseasonal peak months are projeted the same as the seasonal peaks, but the analysis is limited to the speifi month being projeted. Energy onservation and diret load ontrol estimates are onsistent with PEF's DSM goals that have been established by the FPSC. These estimates are inorporated into the MW foreast. Projetions of dispathahle and umulative non-dispathable DSM impats are subtrated from the projetion of potential firm retail demand resulting in a projeted series of retail monthly peak demand figures. Sales for Resale demand projetions represent load supplied by PEF to other eletri suppliers suh as SECI, FMPA, and other eletri transmission and distribution entities. The SECI supplemental demand projetion is based on a trend of their historial demand within the PEF ontrol area. The level of MW to be served by PEF is dependent upon the amount of generation resoures SECI supplies itself or ontrats from others. An assumption is made that SECI will shift their level of self-serve resoures to meet their base and intermediate load needs. For Partial Requirement demand projetions, ontrat levels ditate the level of monthly demands. The Full Requirement Progress Energy Florida, In, 2-25

40 - e e e r- e e - m - r- muniipal demand foreast is estimated for individual ities using historially trended growth rates adjusted for urrent eonomi onditions. PEF "ompany use" at the time of system peak is estimated using load researh metering studies and is assumed to remain stable over the foreast horizon as it has historially. The interruptible and urtailable servie (1s and CS) load omponent is developed from histori trends, as well as the inorporation of speifi information obtained from PEF's large industrial aounts by aount exeutives. Eah of the peak demand omponents desribed above is a positive value exept for the DSM progam MW impats and IS and CS load. These impats represent a redution in peak demand and are assigned a negative value. Total system firm peak demand is then alulated as the arithmeti sum of the five omponents. CONSERVATION PEF's DSM performane is presented in the following tables, whih ompare the onservation savings atually ahieved through PEF's DSM programs for the reporting years of 2005 through 2009 with the Commission approved onservation goals. r- e e e e - e On August 9, 2004, the FPSC issued a Proposed Ageny Ation (PAA) Order approving new onservation goals for PEF that span the ten-year period from 2005 through 2014, as well as a new DSM Plan for PEF that was speifially designed to meet the new onservation goals (Doket EG, Order No. PSC PAA-EG). On January 5, 2007, the FPSC issued a PAA Order approving 39 additional DSM measures and two residential programs, whih will serve to inrease the demand and energy savings available through PEF's DSM Plan (Doket : Consummating Order PSC CO-EG making Order PSC TRF-EG effetive and final). Progress Energy Florida, In. 2-26

41 Residentia I1 Conservation Savings Goals and Ahievements 2009 Summer MW Winter MW Goal Ahieved Goal Ahieved hievements Ahieved The foreasts ontained in this TYSP are based on Final Order PSC FOF-EG. This Deember 30, 2009 Order requires PEF to adopt DSM goals based on an Enhaned Total Resoure Cost test (E-TRC) plus the addition of PEF s top ten less than two year paybak effiieny measures based on energy savings. This deision represents a departure from the FPSC s traditional use of the Rate Impat Measure (RIM), resulting in signifiantly higher goals. PEF s goals over the next ten years are: 1,183 summer MW, 1,072 winter MW, and 3,488 GWh. PEF has filed a Motion for Reonsideration with the FPSC to orret what it believes are apparent oversights or errors. If aepted by the FPSC, PEF s motion would adjust goals over the next ten years to: 808 summer MW, 933 winter MW, and 1,792 GWh. PEF will file a DSM Plan designed to meet the goals ontained within this order on Marh 30, 2010 or as modified by further FPSC ation. Inluded in the Deember 30, 2009 Commission s Order was a diretive for PEF to file pilot programs fousing on enouraging solar water heating and solar PV Progress Energy Florida, In. 2-27

42 tehnologies in its DSM Program Plan. Expenditures for reovery for these pilots are limited to $6,467,592 annually. PEF's urrent DSM Plan onsists of seven residential programs, seven ommerial and industrial programs, and one researh and development program. The programs are subjet to periodi monitoring and evaluation for the purpose of ensuring that all DSM resoures are aquired in a ost-effetive manner and that the program savings are durable. The following is a brief desription of these programs. e r r- RESIDENTIAL PROGRAMS Home Energy Chek Program This energy audit program provides ustomers with an analysis of their urrent energy use and reommendations on how they an save on their eletriity bills through low-ost or no-ost energy-saving praties and measures. The Home Energy Chek program offers PEF ustomers the following types of audits: Type 1: Free Walk-Through Audit (Home Energy Chek); Type 2: Customer-Completed Mail In Audit (Do It Yourself Home Energy Chek); Type 3: Online Home Energy Chek (Internet Option)-a ustomer-ompleted audit; Type 4: Phone Assisted Audit - a ustomer assisted survey of struture and appliane use; Type 5: Computer Assisted Audit; Type 6: Home Energy Rating Audit (Class I, 11, 111); Type 7: Student Mail In Audit - a student-ompleted audit. The Home Energy Chek Program serves as the foundation of the Home Energy Improvement Program in that the audit is a prerequisite for partiipation in the energy saving measures offered in the Home Energy Improvement Program. Home Energy Improvement Program This is the umbrella program to inrease energy effiieny for existing residential homes. It ombines effiieny improvements to the thermal envelope with upgraded eletri applianes. The program provides inentives for atti insulation upgrades, dut testing and repair, and high effiieny eletri heat pumps. Additional measures within this program inlude spray-in wall insulation, entral AC 14 SEER non-eletri heat, and supply and return plenum dut seal, proper sizing of high effiieny HVAC, HVAC ommissioning, refletive roof oating for - Progress Energy Florida, In 2-28

43 manufatured homes, refletive roof for single-family homes, window film or sreen, and replaement windows. Residential New Constrution Program This program promotes energy effiient new home onstrution in order to provide ustomers with more effiient dwellings ombined with improved environmental omfort. The program provides eduation and information to the design and building ommunity on energy effiient equipment and onstrution. It also failitates the design and onstrution of energy effiient homes by working diretly with the builders to omply with program requirements. The program provides inentives to the builder for high effiieny eletri heat pumps and high performane windows. The highest level of the program inorporates the US. Environmental Protetion Ageny s Energy Star Homes Program and qualifies partiipants for ooperative advertising. Additional measures within the Residential New Constrution Program inlude HVAC ommissioning, window film or sreen, refletive roof for single-family homes, atti spray-on foam insulation, onditioned spae air handler, and energy reovery ventilation. Low Inome Weatherization Assistane Program This umbrella program seeks to improve energy effiieny for low-inome ustomers in existing residential dwellings. It ombines effiieny improvements to the thermal envelope with upgraded eletri applianes. The program provides inentives for atti insulation upgrades, dut testing and repair, redued air infiltration, water heater wrap, HVAC maintenane, high effiieny heat pumps, heat reovery units, and dediated heat pump water heaters. Neighborhood Energy Saver Program The Neighborhood Energy Saver (NES) Program onsists of 12 measures inluding ompat fluoresent bulb replaement, water heater wrap and insulation for water pipes, water heater temperature hek and adjustment, low-flow fauet aerator, low-flow showerhead, refrigerator oil brush, HVAC filters, and weatherization measures (Le. weather stripping, door sweeps, et.). In addition to the installation of new onservation measures, an important omponent of this program is eduating families on energy effiieny tehniques and the promotion of behavioral hanges to help ustomers ontrol their energy usage. Progress Energy Florida, In. 2-29

44 Residential Energy Management Program (Energy Wise) This is a voluntary ustomer program that allows PEF to redue peak demand and thus defer generation onstrution. Peak demand is redued by interrupting servie to seleted eletrial equipment with radio-ontrolled swithes installed on the ustomer's premises. These interruptions are at PEF's option, during speified time periods, and oinident with hours of peak demand. Partiipating ustomers reeive a monthly redit on their eletriity bills prorated above 600 kwh per month. Renewable Energy Program The Renewable Energy Program is designed to redue system peak demand and inrease renewable energy generation on the PEF grid. The program seeks to meet the following overall goals: 1. Obtain energy and demand redutions that are signifiant and measurable. 2. Enhane ustomerkontrator awareness of the apabilities of renewable energy tehnologies. 3. Eduate ustomerkontrator about additional opportunities to generate and use renewable energy. 4. Develop and offer renewable energy measures to the marketplae. 5. Minimize "lost opportunities" in the renewable energy market. 6. Inrease partiipation in the PEF Load Management program. The Renewable Energy Program onsists of two measures: Solar Water Heater with EnergyWise - This measure enourages residential ustomers to install a solar thermal water heating system. The ustomer must have whole house eletri ooling, eletri water heating, and eletri heating to be eligible for this program. Pool heaters and photovoltai systems would not qualify. In order to qualify for this inentive, the heating, air onditioning, and water heating systems must be on the Energy Management Program (EnergyWise) and the solar thermal system must provide a minimum of 50 perent of the water-heating load. Solar Photovoltais with Energy Wise (Solarwise for Shools) - This measure promotes environmental stewardship and renewable energy eduation through the installation of solar Progress Energy Florida, In. 2-30

45 energy systems at shools within PEF s servie territory. Customers partiipating in the Winter-Only Energy Management or Year-Round Energy Management plan an elet to donate their monthly redit toward the Solarwise for Shools. The program will aumulate assoiated partiipant redits in a separate fund for a period of two years, at whih time the ustomer may elet to renew for an additional two years. All proeeds olleted from partiipating ustomers, and their assoiated monthly redits, will be used to promote photovoltais and renewable energy eduation opportunities. COMMERCIAL/INDUSTRIAL (C/I) PROGRAMS Business Energy Chek Program This energy audit program provides ommerial and industrial ustomers with an assessment of the urrent energy usage at their failities, reommendations on how they an improve the environmental onditions of their failities while saving on their eletriity bills, and information on low-ost energy effiieny measures. The Business Energy Chek onsists of a free walkthrough audit and a paid walk-through audit. Small business ustomers also have the option to omplete a Business Energy Chek online at Progress Energy s website. In most ases, this program is a prerequisite for partiipation in the other CII programs. Better Business Program This is the umbrella effiieny program for existing ommerial and industrial ustomers. The program provides ustomers with information, eduation, and advie on energy-related issues as well as inentives on effiieny measures that are ost-effetive to PEF and its ustomers. The Better Business Program promotes energy effiient heating, ventilation, air onditioning (HVAC), building retrofit measures (in partiular, eiling insulation upgrade, dut leakage test and repair, energy-reovery ventilation, and Energy Star ool roof oating produts), demandontrol ventilation, effiient ompressed air systems, effiient motors, effiient indoor lighting, green roof, oupany sensors, pakaged AC steam leaning, roof insulation, roof-top unit reommissioning, thermal energy storage, and window film or sreen. Progress Energy Florida, In

46 CommeriaUIndustriaI New Constrution Program The primary goal of this program is to foster the design and onstrution of energy effiient buildings. The new onstrution program: 1) provides eduation and information to the design ommunity on all aspets of energy effiient building design; 2)requires that the building design, at a minimum, surpass the State of Florida energy ode; 3) provides finanial inentives for speifi energy effiient equipment; and 4) provides energy design awards to building design teams. Inentives will be provided for high effiieny HVAC equipment, energy reovery ventilation, Energy Star ool roof oating produts, demand-ontrol ventilation, effiient ompressed air systems, effiient motors, effiient indoor lighting, green roof, oupany sensors, roof insulation, thermal energy storage and window film or sreen. Innovation Inentive Program This program promotes a redution in demand and energy by subsidizing energy onservation projets for ustomers in PEF s servie territory. The intent of the program is to enourage legitimate energy effiieny measures that redue kw demand and or kwh energy, but are not addressed by other programs. Energy effiieny opportunities are identified by PEF representatives during a Business Energy Chek audit. If a andidate projet meets program speifiations, it will be eligible for an inentive payment, subjet to PEF approval. Commerial Energy Management Program (Rate Shedule GSLM-I) This diret load ontrol program redues PEF s demand during peak or emergeny onditions. As desribed in PEF s DSM Plan, this program is urrently losed to new partiipants. It is appliable to existing program partiipants who have eletri spae ooling equipment suitable for interruptible operation and are eligible for servie under the Rate Shedule GS-I, GST-1, GSD-I, or GSDT-1. The program is also appliable to existing partiipants who have any of the following eletrial equipment installed on permanent residential strutures and utilized for domesti (household) purposes: 1) water heater(s), 2) entral eletri heating systems(s), 3) entral eletri ooling system(s), and or 4) swimming pool pump(s). Customers reeive a monthly redit on their bills depending on the type of equipment in the program and the interruption shedule. Progress Energy Florida, In. 2-32

47 Standby Generation Program This demand ontrol program redues PEF s demand based upon the indiret ontrol of ustomer generation equipment. This is a voluntary program available to all ommerial, industrial, and agriultural ustomers who have on-site generation apability of at least 50 kw, and are willing to redue their PEF demand when PEF deems it neessary. The ustomers partiipating in the Standby Generation program reeive a monthly redit on their eletriity bills aording to the demonstrated ability of the ustomer to redue demand at PEF s request. Interruptible Servie Program This diret load ontrol program redues PEF s demand at times of apaity shortage during peak or emergeny onditions. The program is available to qualified non-residential ustomers with an average billing demand of 500 kw or more, who are willing to have their power interrupted. PEF will have remote ontrol of the iruit breaker or disonnet swith supplying the ustomer s equipment. In return for this ability to interrupt load, ustomers partiipating in the Interruptible Servie program reeive a monthly interruptible demand redit applied to their eletri bills. Curtailable Servie This diret load ontrol program redues PEF s demand at times of peak or emergeny onditions. The program is available to qualified non-residential ustomers with an average billing demand of 500 kw or more, who are willing to urtail 25 perent of their average monthly billing demand. Customers partiipating in the Curtailable Servie program reeive a monthly urtailable demand redit applied to their eletri bills. RESEARCH AND DEVELOPMENT PROGRAMS Tehnology Development Progrum The primary purpose of this program is to establish a system to aggressively pursue researh, development and demonstration projets jointly with others as well as individual projets (Rule (5)(0, Florida Administration Code). In aordane with rule, the Tehnology Development Program failitates the researh of innovative tehnologies and the ontinued advanes within the energy industry. PEF will undertake ertain development, eduational, and Progress Energy Florida, In, 2-33

48 -. - demonstration projets that have potential to beome DSM Programs. Examples of suh projets inlude the evaluation of Premise Area Networks (PAN) to provide inreasing ustomer awareness to use energy more effiiently while advaning demand response apabilities. Additional projets inlude the evaluation of off-peak generation with energy storage for on-peak demand onsumption, small-sale wind, and smart harging for Plug-In Hybrid Eletri Vehiles. In most ases, eah demand redution and energy effiieny projet that is proposed and investigated under this program requires field-testing with ustomers. Progress Energy Florida, In 2-34

49 CHAPTER 3 FORECAST OF FACILITIES REQL1TRE1WEiVTS - ~ Progress Energy

50 ~~ CHAPTER 3 FORECAST OF FACILITIES REQUIREMENTS RESOURCE PLANNING FORECAST OVERVIEW OF CURRENT FORECAST Supply-Side Resoures PEF has a summer total apaity resoure of 11,587 MW (see Table 3.1). This apaity resoure inludes nulear (789 MW), fossil steam (3,409 MW), ombined-yle plants (3,250 MW), ombustion turbines (2,494 MW; 143 MW of whih is owned by Georgia Power for the months June through September), utility purhased power (484 MW), independent power purhases (478 MW), and non-utility purhased power (683 MW). Table 3.2 presents PEF s firm apaity ontrats with Qualifying Failities (QF s). Demand-Side Programs Total DSM resoures are presented in Shedules 3.1 and 3.2 of Chapter 2. These programs inlude Non-Dispathable DSM, Interruptible Load, and Dispathable Load Control resoures. Capaity and Demand Foreast PEF s foreasts of apaity and demand for the projeted summer and winter peaks an been found in Shedules 7.1 and 7.2, respetively. PEF s foreasts of apaity and demand are based on serving expeted growth in retail requirements in its regulated servie area and meeting ommitments to wholesale power ustomers who have entered into supply ontrats with PEF. In its planning proess, PEF balanes its supply plan for the needs of retail and wholesale ustomers and endeavors to ensure that ost-effetive resoures are available to meet the needs aross the ustomer base. Progress Energy Florida, In. 3-1

51 Base Expansion Plan PEF s planned supply resoure additions and hanges are shown in Shedule 8 and are referred to as PEF s Base Expansion Plan. This Plan results in a net gain in summer apaity of 1,054 MW. Planned installations of ombustion turbine tehnology in 2018 at an undesignated existing plant loation and new nulear generation at the Company s Levy County site in 2019 are inluded. These additions depend, in part, on projeted load growth, and obtaining all neessary state and federal permits under urrent shedules. Changes in these or other fators ould impat PEF s base expansion plan. PEF s Base Expansion Plan projets the need for additional units with proposed in-servie dates during the ten-year period from 2010 through These units, together with purhases from Qualifying Failities (QF), Investor Owned Utilities, and Independent Power Produers help the PEF system meet the energy requirements of its ustomer base. The apaity needs identified in this plan may be impated by PEF s ability to extend or replae existing purhase power ogenerator and QF ontrats and to seure the new renewable purhased power resoures in their respetive projeted timeframes. Status reports and speifiations for the planned new generation failities are inluded in Shedule 9. The planned transmission lines assoiated with the Levy County nulear generation projet are shown in Shedule 10. e r- e e - e - - e e Progress Energy Florida, In, 3-2

52 TABLE 3.1 PROGRESS E3TRGY FLORIDA TOTAL CAPACm RESOXRCES OF POWER PLXSTS -XTD PLRCHASED PO\\ R COSTK4CTS AS OF DECEXBER 31, m Progress Energy Florida, In. 3-3

53 T-XBLE 3.2 PROGRESS EXERGY FLORIDA AS OF DECEMBER 31,2009 Failiq Xame I I Firm Capaiq nnn Dade County Resoure Reovery El Dorado Lake Counn- Resoure Reoven. LFC Madison Mulberry Orange Cogen (CFIi-Biogen) Orlando Cogen Paso Corn? Resoure ReovT; Pinenas County Resoure Reovery 1 Pinenas County Resoure Reovery 2 Ridge Generating Station TOTAL 12 8 S l4.s Progress Energy Florida, In. 3-4

54 Progress Energy Florida, In. 3-5

55 PROGREYS ESERG) F WRXA Progress Energy Florida, In. 3-6

56 L-E,_;, Ti

57 (1: PlantXame andkmtxumb.er izi.. Capaity a. Summer: b. \vinter: (3; Tehnolo9 TlTe:.Antiipated Consttuxion liming a. Field onstmtion stan date: b. Commerial ir-sen.ie date: (j; Fuel a. Pfimaq fuel: h..%itemate fuel (5,:.Lr Pollution Conaol Saatee: {?; Coolin_e Method: [S: Total Site Area: {9: Consrmtion Status: Underignrted CT :lo) Cediation Status: '1 1) Status u<th Federal Agenies: :I?: Rojetedfnit Performane Data a. Planned Outage Fator (POQ: h. Fored Outage Fator FOQ:. Equivalent Avadability Faaor.$U}: d. Resulting Capaiy Fator pb): e. Ayerage Zet Operating &at Rate (.&XOIiR): '13; RojetedCnit FinandalData a. Book We (Tears): b. TotallnstanedCostiln-zen~eyearS. DirenConstrurionCost (S k\\:i: d. -4mount {S k\\>: e. Esalation (5liU3: f. Fixed O&Lf (5 kw-yr): g. Vatiabie Jn\%): r;n?: Progress Energy Florida, he.

58 PROGRESS EXRGY FLORIDA (1; Plant Same and Unit Sumber [2: Capaity a. Sme b. \\'her: [<> Tehnolop Type: (4;.htiipared Conzmtion Timing a. Field onstrution stm date: b. Commerial it-senie date: Fuel a. Piimq fael b. ;Utemate fuel: (6; Air Pollution Control Stratem: (7) Cooling Xethod: is) Total Sife -&ea: (9 Constrution Status: :14. Cenifiation Status: :li: Status nlthfederal.4senaes: Projeted Cnit Pelfonnane Data a. PlannedOutase fator.;pof): b. Fored Outage Equivalent -4xdaMiq Fator EX') d. Resultins Capaity Fator (00.): e. Average Set Operating Heat Rate (XYOmj: _. ~,,I>; PrnjetedUnitFinanialData a. Book Life (Tears): b. Total Installed year 5 kv,;i2:. Diret ~onsmuon Cost (~'Iw)': d..wlx.amount (SkW): I e. ~sdation (S I\\$: f. Fixed O&AS (5 ktx-yr): 5. Yaiable obr?rl (S MWh]: h. I; Fator ' Carrying osts per F.S and Ruie , F.A.C. 'These estlmates are under review. Progress Energy Florida, In. 3-9

59 PROGRESS EhTRGY FLORIDA SCHEDLXE 10 STATIS REPORT AhD SPEClFICATIONS OF PROPOSED DIRECTLYASSOCL4IED TRAh&MlSSIOXLn\TS Progress Energy Florida, In 3-10

60 (9) PAXTICIPATIOS 'ATTH OTHER LTILITIES x.4 Progress Energy Florida, In, 3-1 1

61 PROGRESS E3TRGY FLORIDA SCWDLXE 10 ST&TLX REPORT AI\?) SPECIFICATIOKS OF PROPOSED DIRECTLY ASSOCLATED TRCYSMISSIOX LWXS 7.L\TICIP.ATED CAPITAL AT SIlEI\T SCO GOO 000 * 3 SLBSTATIOSS Le0 Eah of there projrts is pm of one or m t~mnrmirrion optio~ * the 6 d option b yet to be horn d h r Uiir kt ofprojets is mbjt to hange. In &on. ma? \? dwkg onsbutioo of the Ley C&. for the Lmy I\i&sr projet. out of several oph imdn onrideraim the projeted apital estkae for this projet Progress Energy Florida, In. 3-12

62 PROGRESS EhiRG'r FLORIDA SCIIEDLLE 10 STATL-s REPORT fi~ SPECIFICATIOSS OF PROPOSED DIRECTLY ASSOCLUED TR~SS.WSSIOX Ln2s LEI1 COK3T htcle.u7 PO\\+R PL.&YI - Progress Energy Florida, In. 3-13

63 PROGRESS EXERG\ FLORIDA STATL-S REPORT SCHEDLXE 10 SPECIFICATIONS OF PROPOSED DIRFCTLY ASSOCIATED m-smss~o~ LmTs LE\- COZ3m 3T-CLEAR PO\tFR PL.ASI I) POKT OF ORIGI"; AIiD TER\.UKATlOX L)?;LMBER OF LCUZS. 3) RIGHT-OF~WAY. 4) LEE LESGTK 5) VOLTAGE 5) AKTICIPAm COXSTRVCTIOK TL\IISG- ') A?TICIPATED CAF'ITAL IXTISTM XT\T: j) SLBSTATIONS. I) PARTICIPATION RTTH OTHER LTLITIES. Progress Energy Florida, In. 3-14

64 PROGRESS EXERGY FLORID4 SCHEDLIE 10 STAKS REPORT LID SPECIFICATIONS OF PROPOSED DIRECTLY ASSOCKED TRA?GMISSIOS LhXS LEI1 COX17T ITCLEAR POWERPL.&YI i 1) POKI OF ORIGIS.&XJ TER\lIX.&TlOS K&en - Lak 1-n Substanon Progress Energy Florida, In. 3-15

65 INTEGRATED RESOURCE PLANNING OVERVIEW PEF employs an Integrated Resoure Planning (IRP) proess to determine the most ost-effetive mix of supply- and demand-side alternatives that will reliably satisfy our ustomers' future demand and energy needs. PEF's IRP proess inorporates state-of-the-art omputer models used to evaluate a wide range of future generation alternatives and ost-effetive onservation and dispathable demand-side management programs on a onsistent and integrated basis. An overview of PEF's IRP Proess is shown in Figure 3.1. The proess begins with the development of various foreasts, inluding demand and energy, fuel pries, and eonomi assumptions. Future supply- and demand-side resoure alternatives are identified and extensive ost and operating data are olleted to enable these to be modeled in detail. These alternatives are optimized together to determine the most ost-effetive plan for PEF to pursue over the next ten years to meet the Company's reliability riteria. The resulting ten-year plan, the Integrated Optimal Plan, is then tested under different relevant sensitivity senarios to identify varianes, if any, whih would warrant reonsideration of any of the base plan assumptions. If the plan is judged robust and works within the orporate framework, it evolves as the Base Expansion Plan. This proess is disussed in more detail in the following setion titled "The Integrated Resoure Planning (IRP) Proess". The IRP provides PEF with substantial guidane in assessing and optimizing the Company's overall resoure mix on both the supply side and the demand side. When a deision supporting a signifiant resoure ommitment is being developed (e.g. plant onstrution, power purhase, DSM program implementation), the Company will move forward with diretional guidane kom the IRP and delve muh further into the speifi levels of examination required. This more detailed assessment will typially address very speifi tehnial requirements and ost estimates, detailed orporate finanial onsiderations, and the most urrent dynamis of the business and regulatory environments. Progress Energy Florida, In. 3-16

66 FIGURE 3.1 Integrated Resoure Planning (IRP) Proess Overview STRATEGIST + I I Base Optimal Supply-Side Plan Best Supply-Side Resoures Demand-Side Sreening STRATEGIST Progress Energy Florida, In. 3-17

67 THE INTEGRATED RESOURCE PLANNING (IRP) PROCESS Foreasts and Assumptions The evaluation of possible supply- and demand-side alternatives, and development of the optimal plan, is an integral part of the IRP proess. These steps together omprise the integration proess that begins with the development of foreasts and olletion of input data. Base foreasts that reflet PEF s view of the most likely future senarios are developed, along with high and low foreasts that reflet alternative future senarios. Computer models used in the proess are brought up-to-date to reflet this data, along with the latest operating parameters and maintenane shedules for PEF s existing generating units. This establishes a onsistent starting point for all further analysis. Reliability Criteria Utilities require a margin of generating apaity above the firm demands of their ustomers in order to provide reliable servie. Periodi sheduled outages are required to perform maintenane and inspetions of generating plant equipment and to refuel nulear plants. At any given time during the year, some apaity may be out of servie due to unantiipated equipment failures resulting in fored outages of generation units. Adequate reserve apaity must be available to aommodate these outages and to ompensate for higher than projeted peak demand due to foreast unertainty and abnormal weather. In addition, some apaity must be available for operating reserves to maintain the balane between supply and demand on a moment-to-moment basis. PEF plans its resoures in a manner onsistent with utility industry planning praties, and employs both deterministi and probabilisti reliability riteria in the resoure planning proess. A Reserve Margin riterion is used as a deterministi measure of PEF s ability to meet its foreasted seasonal peak load with firm apaity. PEF plans its resoures to satisfy a 20 perent Reserve Margin riterion. Loss of Load Probability (LOLP) is a probabilisti riterion that measures the probability that a ompany will be unable to meet its load throughout the year. While Reserve Margin onsiders the peak load and amount of installed resoures, LOLP takes into aount generating unit sizes, apaity mix, maintenane sheduling, unit availabilities, and apaity assistane available from other utilities. A standard probabilisti reliability threshold ommonly used in the eletri utility Progress Energy Florida, In. 3-18

68 industry, and the riterion employed by PEF, is a maximum of one day in ten years loss of load probability. PEF has based its resoure planning on the use of dual reliability riteria sine the early 1990s, a pratie that has been aepted by the FPSC. PEF s resoure portfolio is designed to satisfy the 20perent Reserve Margin requirement and probabilisti analyses are periodially onduted to ensure that the one day in ten years LOLP riterion is also satisfied. By using both the Reserve Margin and LOLP planning riteria, PEF s resoure portfolio is designed to have suffiient apaity available to meet ustomer peak demand, and to provide reliable generation servie under expeted load onditions. PEF has found that resoure additions are typially triggered to meet the 20 perent Reserve Margin thresholds before LOLP beomes a fator. Supply-Side Sreening Potential supply-side resoures are sreened to determine those that are the most ost-effetive. Data used for the sreening analysis is ompiled from various industry soures and PEF s experienes. The wide range of resoure options is pre-sreened to set aside those that do not warrant a detailed ost-effetiveness analysis. Typial sreening riteria are osts, fuel soure, tehnology maturity, environmental parameters (e.g. possible limate legislation), and overall resoure feasibility. Eonomi evaluation of generation alternatives is performed using the Strategist@ optimization program. This optimization tool evaluates revenue requirements for speifi resoure plans generated from multiple ombinations of future resoure additions that meet system reliability riteria and other system onstraints. All resoure plans are then ranked by system revenue requirements. Demand-Side Sreening Like supply-side resoures, data for large numbers of potential demand-side resoures are also olleted. These resoures are pre-sreened to eliminate those alternatives that are still in researh and development, addressed by other regulations (e.g. building ode), or not appliable to PEF s ustomers. StrategistB is updated with ost data and load impat parameters for eah potential DSM measure to be evaluated. Progress Energy Florida, In. 3-19

69 The Base Optimal Supply-side Plan is used to establish avoidable units for sreening future demand-side resoures. Eah future demand-side alternative is individually tested in this plan over the ten-year planning horizon to determine the benefit or detriment that the addition of this demandside resoure provides to the overall system. alulates the benefits and osts for eah demand-side measure evaluated and reports the appropriate ratios for the Rate Impat Measure (RIM), the Total Resoure Cost Test (TRC), and the Partiipant Test. Resoure Integration and the Integrated Optimal Plan The ost-effetive generation alternatives and the demand-side portfolios developed in the sreening proess an then be optimized together to formulate integrated optimal plans. The optimization program onsiders all possible future ombinations of supply- and demand-side alternatives that meet the Company's reliability riteria in eah year of the ten-year study period and reports those that provide both flexibility and low revenue requirements (rates) for PEF's ratepayers. Developing the Base Expansion Plan The integrated optimized plan that provides the lowest revenue requirements may then be further tested using sensitivity analysis. The eonomis of the plan may be evaluated under high and low foreast senarios for fuel, load and finanial assumptions, or any other sensitivities whih the planner deems relevant. From the sensitivity assessment, the plan that is identified as ahieving the best balane of flexibility and ost is then reviewed within the orporate framework to determine how the plan potentially impats or is impated by many other fators. If the plan is judged robust under this review, it would then be onsidered the Base Expansion Plan. KEY CORPORATE FORECASTS Load Foreeast The assumptions and methodology used to develop the base ase load and energy foreast are desribed in Chapter 2 of this TYSP. Fuel Foreeast The base ase fuel prie foreast was developed using short-term and long-term spot market prie projetions from industry-reognized soures. Coal pries are expeted to be relatively stable Progress Energy Florida, In. 3-20

70 month-to-month; however, oil and natural gas pries are expeted to be more volatile on a day-to- day and month-to-month basis. In the short term, the base ost for oal is based on the existing ontrats and spot market oal pries and transportation arrangements between PEF and its various suppliers. For the longer term, the pries are based on spot market foreasts refletive of expeted market onditions. Oil and natural gas pries are estimated based on urrent and expeted ontrats and spot purhase arrangements as well as near-term and long-term market foreasts. Oil and natural gas ommodity pries are driven primarily by open market fores of supply and demand. Natural gas firm transportation ost is determined primarily by pipeline tariff rates and tends to hange less fiequently than ommodity pries. Finanial Foreast The key finanial assumptions used in PEF s most reent planning studies were 50 perent debt and 50 perent equity apital struture, projeted ost of debt of 5.83 perent, and an equity return of perent. The assumptions resulted on a weighted average ost of apital of 9.2 perent and an after-tax disount rate of 8.1 perent. TEN-YEAR SITE PLAN (TYSP) RESOURCE ADDITIONS In this TYSP, PEF s supply-side resoures inlude the repowering of the P.L. Bartow Plant with F-Class ombined-yle tehnology whih was brought on-line in summer The planned units in this TYSP inlude the installation of ombustion turbine tehnology at a loation that has not yet been hosen, as well as nulear generation tehnology at a greenfield site in Levy County. In 2008, the FPSC approved PEF s petition for a Determination of Need for the two nulear units in Levy County. The Company seleted Levy Unit 1 for projeted ommerial servie in 2019, to meet its generation apaity needs in the period 2019 and beyond after arefully evaluating planning options through the Company s on-going IRP proess outlined herein. Nulear generation was identified as the most ost-effetive option to meet the need, taking into aount the need to improve fuel diversity, redue Florida s dependene on fuel oil and natural gas, redue urrent and potential future air emission ompliane osts, and ontribute to the long-term Progress Energy Florida, In. 3-2 I

71 stability of the eletri grid. Sine nulear generation units involve very long liensing and onstrution lead times, PEF plans to ontinue with the design and development of the infrastruture and transmission requirements, negotiations for prourement and onstrution ontrats and permitting and liensing to support the urrent planned in-servie dates. However hanges in fators suh as the projeted load growth and the timeline to obtain all the neessary state and federal permits ould impat PEF s base expansion plan. Through its ongoing planning proess, PEF will ontinue to evaluate the timetables for all projeted resoure additions and assess alternatives for the future onsidering, among other things, projeted load growth, fuel pries, and lead times in the onstrution marketplae, projet development timelines for new fuels, and tehnologies, and environmental ompliane onsiderations. The Company will ontinue to examine the merits of new generation alternatives and adjust its resoure plans aordingly to ensure optimal seletion of resoure additions based on the best information available. RENEWABLE ENERGY PEF ontinues to make purhases from the following failities listed by fuel type: Muniipal Solid Waste Failities: Lake County Resoure Reovery (12.8 MW) Metro-Dade County Resoure Reovery (43 MW) Paso County Resoure Reovery (23 MW) Pinellas County Resoure Reovery (54.8 MW) Waste Heat from Exothermi Proesses: PCS Phosphate (As Available) Waste Wood, Tires, and Landfill Gas: Ridge Generating Station (39.6 MW) Photovoltais Various ustomer and PEF owned installations (approximately 930 kw) PEF s Net Metering Tariff inludes over 2 MW of roof-top solar PV In addition, PEF has ontrats with BG&E (120 MW), Vision Power (40 MW), Horizon Energy (up to 60 MW) and FB Energy (60 MW). One BG&E faility, the Vision Power faility, and the Progress Energy Florida, In. 3-22

72 FB Energy faility will utilize an energy rop, the seond BG&E unit will utilize wood produts, and Horizon Energy will gasify muniipal solid waste. PEF ontinues to seek out renewable suppliers that an provide reliable apaity and energy at eonomi rates. PEF ontinues to keep an open Request for Renewables (RFR) soliiting proposals for renewable energy projets. PEF s open RFR ontinues to reeive interest and to date has logged over 190 responses. PEF will ontinue to submit renewable ontrats in ompliane with FPSC rules. PLAN CONSIDERATIONS Load Foreast In general, higher-than-projeted load growth would shift the need for new apaity to an earlier year and lower-than-projeted load growth would delay the need for new resoures. PEF s TYSP inludes additions of ombustion turbine and nulear units in the long term. The Company s resoure plan provides the flexibility to shift ertain resoures to earlier or later inservie dates should a signifiant hange in projeted ustomer demand begin to materialize. Fuel Foreast PEF s urrent TYSP inludes new natural gas fueled resoures in The plan also inludes uprates to the Crystal River nulear unit No. 3 in 2010 and 201 I, and a new nulear unit in Higher gas pries would improve the eonomis for non gas-fueled resoures and lower gas pries would benefit gas-fueled resoures. Unertainty over future environmental regulation, partiularly as it relates to arbon, as well as fuel seurity and reliability onsiderations, favors pursuit of the nulear option. Finanial Foreeast PEF s urrent TYSP inludes a ombustion turbine in 2018 and a nulear unit addition in Lower ost of apital and esalation rates would favor options with longer onstrution lead times and higher apital osts suh as the nulear addition. However, PEF does not expet these assumptions to go muh lower than the urrent base ase foreast and nulear generation is not projeted to be feasible before PEF will ontinue to assess the eonomis of future generation alternatives inluding onsideration of the unertainties in planning assumptions. Progress Energy Florida, In. 3-23

73 TRANSMISSION PLANNING PEF s transmission planning assessment praties are developed to test the ability of the planned system to meet the reliability riteria as outlined in the FERC Form 715 filing, and to assure the system meets PEF, Florida Reliability Coordinating Counil, In. (FRCC), and NERC riteria. This involves the use of load flow and transient stability programs to model various ontingeny situations that may our, and determining if the system response meets the reliability riteria. In general, this involves running simulations for the loss of any single line, generator, or transformer. PEF normally runs this analysis for system peak and off-peak load levels for possible ontingenies, and for both summer and winter. Additional studies are performed to determine the system response to redible, but less probable riteria. These studies inlude the loss of multiple generators or lines, ombinations of eah, and some load loss is permissible under these more severe disturbanes. These redible, but less probable senarios are also evaluated at various load levels, sine some of the more severe situations our at average or minimum load onditions. In partiular, ritial fault learing times are typially the shortest (most severe) at minimum load onditions, with just a few large base load units supplying the system needs. As noted in the PEF reliability riteria, some remedial ations are allowed to redue system loadings, in partiular, setionalizing is allowed to redue loading on lower voltage lines for bulk system ontingenies, but the risk to load on the setionalized system must be reasonable (it would not be onsidered prudent to operate for long periods with a setionalized system). In addition, the number of remedial ation steps and the overall omplexity of the sheme are evaluated to determine overall aeptability. Presently, PEF uses the following referene douments to alulate Available Transfer Capability (ATC) for required transmission path postings on the Florida Open Aess Same- Time Information System (OASIS): FRCC: FRCC ATC Calulation and Coordination Proedures, April 4,2006, whih an be found on the FRCC s website: n%020proedures.pdf Progress Energy Florida, In. 3-24

74 NERC: Transmission Transfer Capability, May I, 1995, NERC: Available Transfer Capability - Definitions and Determination, July 30, PEF uses the FRCC Capaity Benefit Margin (CBM) methodology to assess its CBM needs. This methodology is summarized as follows: FRCC Transmission Providers make an assessment of the CBM needed on their respetive systems by using either deterministi or probabilisti generation reliability analysis. The appropriate amount of transmission interfae apability is then reserved for CBM on a per interfae basis, taking into aount the amount of generation available on other interonneted systems, the respetive load peaking diversities of those systems, and Transmission Reliability Margin (TRM). Operating reserves may be inluded if appropriate in TRM and subsequently subtrated from the CBM if needed. PEF urrently has zero CBM reserved on eah of its interfaes (posted paths). PEF s CBM on eah path is urrently established through the transmission provider funtions within PEF using deterministi and probabilisti generation reliability analysis. Currently, PEF proposes several bulk transmission additions that must be ertified under either the Florida Transmission Line Siting At (TLSA) or the Power Plant Siting At (PPSA). PEF proposed bulk transmission line additions are summarized in the following Table 3.3. PEF has listed only the larger transmission projets. These projets may hange depending upon the outome of PEF s final onidor and speifi route seletion proess. 3-25

75 CHAPTER 4 EiVJ1RONAIEIVTAL.4 'VD LAiVD USE INFORft1ATJ01V ~ Progress Energy

76 CHAPTER 4 ENVIRONMENTAL AND LAND USE INFORMATION PREFERRED SITES PEF s base expansion plan inludes the potential installation of ombustion turbine tehnology at an undesignated existing loation, and the installation of a nulear power unit at the Levy County greenfield site. PEF ontinues to evaluate available options for future supply alternatives. Appropriate permitting requirements for PEF s preferred site are disussed in the following site desription LEVY COUNTY NUCLEAR POWER PLANT - LEVY COUNTY PEF reently named a site in southern Levy County as the preferred loation for onstrution of new generation. In this TYSP, the Company is planning the onstrution of nulear generation at this plant site with planned operation to begin in The Levy County site (see Figure 4.1) is approximately 3,100 ares and loated eight miles inland from the Gulf of Mexio and roughly ten miles north of the existing PEF Crystal River Energy Complex. The site is about 2.5 miles from the Cross Florida Barge Canal, from whih the Levy units may draw their makeup water to supply the on-site ooling water system. The Levy County Plant, together with the neessary assoiated site failities, will oupy approximately ten perent of the 3,100 are site and the remaining areage will be preserved as an exlusionary boundary around the developed plant site and a buffer preserve. PEF purhased an additional 2,100 are trat ontiguous with the southern boundary of the Levy site that seures aess to a water supply for the site from the Cross Florida Barge Canal as well as transmission orridors from the plant site. The property for many years had been used for silviulture and was designated as Forestry/Rural Residential. The surrounding area land use is predominantly vaant, ommerial forestry lands. Progress Energy Florida, In 4-1

77 This site was hosen based on several onsiderations inluding availability of land and water resoures, aess to the eletri transmission system, and environmental onsiderations. First, the Levy County site had aess to an adequate water supply. Seond, the site is at a relatively high elevation, whih provides additional protetion from wind damage and flooding. Third, unlike a number of other sites onsidered, the Levy site has more favorable geotehnial qualities, whih are ritial to siting a nulear power plant. Fourth, the Levy site provides geographial separation from other eletrial generating failities. Even though the Crystal River Energy Complex site has many favorable qualities, adding new nulear generating apaity to the Crystal River Energy Complex at this time would result in a signifiant onentration of PEF s generating assets in one geographial loation. This inreases the likelihood of a signifiant generation loss from a single event and a potential large-sale impat on the PEF system. The Levy County loation also would assist in avoiding a potential loss from a single signifiant transmission system event that might result in a large-sale impat on the PEF system. PEF s assessment of the Levy County site addressed whether any threatened and endangered speies or arheologial and ultural resoures would be adversely impated by the development of the site for nulear generation units and related failities. No signifiant issues were identified in PEF s evaluations of the property. The proximity of the Levy County site to the PEF s existing Crystal River Unit 3 nulear plant provides opportunities for effiienies in shared support funtions. The Levy unit will be loated on a greenfield site where site and transmission infrastruture must he onstruted along with the buildings neessary for the power units. The site will inlude ooling towers, intake and disharge strutures, ontainment buildings, auxiliary buildings, turbine buildings, diesel generators, warehouses, related site work and infrastruture, inluding roads, transmission lines, and a transmission substation. The Company submitted a Site Certifiation Appliation (SCA) to the Florida Department of Environmental Protetion (FDEP) on June 2, 2008 for the entire site, inluding planks and assoiated failities for the units. Site ertifiation hearings were ompleted in Marh 2009, and the Siting Board approved the final ertifiation in August Progress Energy Florida, In. 4-2

78 Nulear power is a lean soure of eletri power generation. Eletri power generation from nulear fuel produes no sulfur dioxide (SOz), nitrogen oxide (NO,), green house gases (GHG), or other emissions. Therefore, it will have a positive effet on the surrounding air quality. Water disharged from nulear plants must meet federal Clean Water At requirements and state water-quality standards. Before operating, a nulear plant's liensing proess requires an environmental impat statement that arefully examines and resolves all potential impats to water quality from the operation of the plant. These issues inlude onerns about the disharge of waste water and the impats on aquati life in ooling water used by the plant. Transmission modifiations will be required to aommodate the Levy County Nulear Power Plant. Progress Energy Florida, In. 4-3

79 FIGURE 4.1.a. Levy County Nulear Power Plant (Levy County)."" Uompo - llold~ B~VlU Iy Hills L~anto fiomosa fiomosi1gsa Spllng Progress Energy Florida, In. 4-4

80 - FIGURE 4.1.b. Levy County Nulear Power Plant (Levy County) - Aerial View Progress Energy Florida, In. 4-5