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CP&L AGREES TO ABSORB HIGHER FUEL COSTS

 RALEIGH, N.C., July 29 /PRNewswire/ -- Carolina Power & Light (NYSE: CPL) announced today it will absorb millions of dollars in higher fuel costs and thus not raise rates to its North Carolina retail customers.
 CP&L reached this agreement with the Public Staff of the N.C. Utilities Commission and other parties in the Commission's annual review of the utility's fuel costs. The net effect of the agreement will be a reduction of two cents per 1,000 kilowatt-hours and customers' bills. CP&L's typical residential customer averages using about 1,000 kilowatt- hours of electricity each month. If approved by the Commission, the reduced charge for fuel will go into effect on Sept. 15.
 As part of the agreement, CP&L will absorb $25.5 million in higher fuel expenses largely resulting from the Brunswick plant outage. The Brunswick plant, near Southport, N.C., was out of service during most of the 12-month period (ending March 31, 1993) being reviewed by the Utilities Commission.
 The Brunswick plant outage began on April 21, 1992. CP&L took the plant out of service after finding some anchor bolts that had been improperly installed in the diesel generator building during original construction of the plant in the early 1970s. The diesel generators provide backup power to the plant.
 Also during the outage, CP&L performed extensive inspections, modifications and maintenance throughout the plant. One generating unit of the two-unit plant resumed power production on May 15, 1993. The other unit is currently being refueled and is expected to return to service in early fall.
 Pending approval by the N.C. Utilities Commission, the agreement announced today resolves all issues related to the Brunswick plant outage.
 During the 12-month period ending March 31, 1993, CP&L recovered through its N.C. retail rates $31.2 million less than its actual fuel expenses. As part of today's agreement, CP&L will recover only $5.7 million of that amount. And that $5.7 million is subject to refund at the end of three years if the Brunswick plant does not achieve a specified operating performance level.
 CP&L also agreed that if the Brunswick plant's three-year performance ending March 31, 1996, falls below the five-year average capacity factor for similar plants, it would lose an additional $2 million in fuel expenses for every percentage point the plant falls below that level -- up to a total of $10 million.
 The N.C. Utilities Commission annually reviews and approves the fuel component of electric rates separately from general rates. This fuel portion of rates reflects actual fuel costs incurred by utilities to provide electricity to customers. It includes the cost of fuel used in the utility's own power plants as well as the fuel cost of power purchased from other utilities. Utilities earn no profit on the fuel component in rates.
 The U.S. Nuclear Regulatory Commission noted in late June that "... CP&L has made extensive changes in management (and) in organizational structure. Senior executives with extensive nuclear operations experience in diverse corporate backgrounds have been placed in key positions, both at the corporate office and at the station (the Brunswick plant). The organization has been realigned to provide enhanced support to the station ... The Unit 2 restart was well managed ...."
 -0- 7/29/93
 /CONTACT: Wade Pridgen, Carolina Power & Light, 919-546-6189 (24-Hour Media Line)/
 (CPL)


CO: Carolina Power & Light ST: North Carolina IN: UTI SU:

SB -- CH006 -- 7504 07/29/93 12:08 EDT
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Publication:PR Newswire
Date:Jul 29, 1993
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