HINES ENERGY COMPLEX A PARTNERSHIP IN WATER RESOURCE CONSERVATION

1. HINES ENERGY COMPLEX A PARTNERSHIP IN WATER RESOURCE CONSERVATION

2. Headquarters: Raleigh, N.C. • Employees: 17,355 • Customers: 2.8 million • Primary Subsidiaries: CP&L, Florida Power, NCNG, Progress Telecom, SRS • Operating Revenues: $4.1 billion • Electric Sales: 59.6 billion KWh • Total Assets: $19.0 billion • Corporate Philanthropy: $13.9 million

3. FLORIDA POWER CORPORATION 1.4 million customers 4.5 million residents in growing 32-county service territory Growth rate of 2 % or about 25,000 new customers each year Approximately 90 percent of our customers by count are residential and small business 27,000 miles of Distribution lines; and 4700 miles of Transmission lines Approximately 5000 employees SUWANNEE RIVER COGENERATION AT UF DEBARY TURNER CRYSTAL RIVER ANCLOTE RIO PINAR INTER- CESSION CITY HIGGINS BARTOW AVON PARK BAYBORRO HINES ENERGY COMPLEX TIGER BAY

4. Meeting Regional Demand • Increase in generation reserve margin • From 15% to 20% • Changes to Load Management Program • Becoming primarily a winter peak shaving tool • Growth in retail market • 1.6% per year increase in customer base • Flexible operation • Ability to change load quickly • Clean efficient energy source

5. LATE 80'S SITING EFFORT

6. HINES LOCATION

7. Site Location

8. HINES SITE CHARACTERISTICS

9. REGULATORY SETTING • SITE CERTIFICATION PA 92-33 AND PSC DETERMINATION OF NEED FOR 1ST 500 MW ISSUED JANUARY 1993. • SUPPLEMENTAL CERTIFICATION AND DETERMINATION OF NEED ISSUED JUNE 2001 • LOCATED WITHIN MINED OUT PHOSPHATE LANDS W/ RECLAMATION REQUIREMENTS. • LOCATED WITHIN SOUTHERN WATER USE CAUTION AREA (SWUCA).

10. Hines Energy Complex Environmental Highlights • Enhancements to Previously Impacted Site • Remote Location with substantial buffer zone. • Designed for Zero Discharge to Waters of U.S. • Clean Natural Gas with Advanced Emission Controls • Reclamation of Extensive Wildlife Habitat and Drainage Enhancement Projects • Permanent Conservation Easements donated to State of Florida

11. RECLAMATION/ MITIGATION PROGRAMS • RECLAMATION OF 3,000+ AC. AS WILDLIFE HABITAT AND WATERSHED ENHANCEMENT. • DONATION OF RECLAIMED LANDS AS CONSERVATION EASEMENT TO STATE.

12. Reclamation/ConservationEasement

13. WILDLIFE HABITAT RESTORATION

14. DISCHARGE FROM RECLAIMED WATERSHED TO PEACE RIVER

15. HINES ENERGY COMPLEX

16. HINES ENERGY COMPLEX

17. HINES ENERGY COMPLEX

18. Generator Heat Recovery Steam Generators Gas Turbines Generators Steam Turbine COMBINED CYCLE

19. Water Supply Need • 32 million gallons per day maximum if site built out • 7.9 million gallons per day for power blocks 1 and 2 • all non-groundwater sources

20. Hines Energy Complex(Closed Cycle Cooling Pond in Foreground)

21. AUTHORIZED WATER SOURCES • Bartow Reclaimed Effluent = 1.86 MGD (actual) • Plant Island Stormwater = 0.67 MGD (actual) • Direct Precipitation to Cooling Pond = 2.87 MGD (approx. normal average) • Additional Offsite Non-Potable Water = Planned • Water Cropping = Up to 4.37 MGD (expected average) • Groundwater • = 0 MGD for Power Blocks 1 and 2 • = 17.5 MGD* for Remaining Generation * 12.5 MGD requires offset

22. ALTERNATIVE SOURCES ALREADY IN USE • City of Bartow Reclaimed Effluent • Plant Island Stormwater • Direct Precipitation to Cooling Pond • Additional Offsite Non-Potable Sources • Water Cropping

23. TREATED EFFLUENT

24. USE OF BARTOW TREATED EFFLUENT THE BARTOW TREATED EFFLUENT PIPELINE IS A COOPERATIVE FUNDING PROJECT, A JOINT PARTNERSHIP BETWEEN THE PEACE RIVER BASIN BOARD AND FPC.

25. WATERCROP

26. OFFSET REQUIREMENT* • 12.5 MGD OF THE PROJECTED 17.5 MGD NEEDED MUST BE OFFSET BY AN APPROVED METHOD. • APPROVED OFFSETS ARE EITHER RETIREMENT OF OTHER USAGE OR NEGOTIATED METHOD APPROVED BY SWFWMD.

27. HINES WATER RESOURCE DEVELOPMENT PROGRAM The Hines Water Resource Development Program is an innovative partnership between Florida Power and the Public. This Program is a major component of FPC’s efforts to conserve valuable state and regional natural resources.

28. FUTURE WATER SUPPLY INITIATIVES • Aquifer Recharge and Recovery Project • Tiger Bay Groundwater Transfer • Peace River Water Supply Project

29. FUTURE WATER SUPPLY ARRP The Hines Aquifer Recharge & Recovery Project (ARRP) is the linchpin in Progress Energy’s future plans both to provide water supply for its power generation needs and to augment regional water resources.

30. FUTURE WATER SUPPLY ARRP The fullscale ARRP is being implemented as a joint research project under a contract between FPC and the Southwest Florida Water Management District. The demonstration phase is a joint project between the Florida Institute of Phosphate Research and SWFWMD. Land and facilities provided by FPC.

31. ARRP CONCEPT

32. ARRP IMPLEMENTATION

33. WETLAND TREATMENT

34. WETLAND TREATMENT

35. FILTER BASIN

36. EXAMPLE OFFSET • 150 MG - Amount of water recharged • Meeting primary & secondary drinking water standards • Providing additional recharge that would not occur • 127.5 MG - Amount of groundwater available for withdrawal • 85% of total amount recharged into aquifer • Not to exceed a rate of 17.5 MGD (determined not to impact legal existing users)

37. ARRP Benefits • Augments groundwater resources • Regional applicability (e.g. can be done on mine lands and state lands in addition to private property) • An actual project that implements the SWFWMD Water Supply Plan • Creative project implemented through a cooperative public/private partnership

38. Additional Sources Under Consideration • Polk County Treated Effluent • Lakeland Treated Effluent • Mulberry Treated Effluent • Plant City Treated Effluent • Lower Floridan Aquifer • Various Industrial Wastewater Sources

39. Closing Thought “Ever wonder about those people who spend $2.00 apiece on those little bottles of Evian water? Try spelling Evian backwards.“ -George Carlin

40. THE END