Exhibit 99.1

POLICY AND PROCEDURES WITH RESPECT
TORELATED PERSON TRANSACTIONS

A. Policy Statement

The Companys Board of Directors (the Board) recognizes that
Related Person Transactions (as defined below) can present heightened risks of
conflicts of interest or improper valuation or the perception thereof.
Accordingly, the Companys general policy is to avoid Related Person
Transactions. Nevertheless, the Company recognizes that there are situations
where Related Person Transactions might be in, or might not be inconsistent
with, the best interests of the Company and its stockholders. These situations
could include (but are not limited to) situations where the Company might obtain
products or services of a nature, quantity or quality, or on other terms, that
are not readily available from alternative sources or when the Company provides
products or services to Related Persons (as defined below) on an arms length
basis on terms comparable to those provided to unrelated third parties or on
terms comparable to those provided to employees generally. The Company,
therefore, has adopted the procedures set forth below for the review, approval
or ratification of Related Person Transactions.

This Policy has been approved by the Board. The Corporate Governance
Committee (the Committee) will review and may recommend to the Board
amendments to this Policy from time to time.

B. Related Person Transactions

For the purposes of this Policy, a Related Person Transaction is a
transaction, arrangement or relationship, including any indebtedness or
guarantee of indebtedness, (or any series of similar transactions, arrangements
or relationships) in which the Company (including any of its subsidiaries) was,
is or will be a participant and the amount involved exceeds $120,000, and in
which any Related Person had, has or will have a direct or indirect material
interest.

For purposes of this Policy, a Related Person means:

| | 1. |  | any person who is, or
      at any time since the beginning of the Companys last fiscal year was, a
      director or executive officer (i.e. members of the Senior Management
      Committee and the Controller) of the Company, Progress Energy Carolinas,
      Inc., or Progress Energy Florida, Inc. or a nominee to become a director
      of the Company, Progress Energy Carolinas, Inc., or Progress Energy
      Florida, Inc.;                                                                     
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   
| | 2. |  | any person who is
      known to be the beneficial owner of more than 5% of any class of the
      voting securities of the Company or its subsidiaries;                                                                                                                                                                                                                                                                                                                                                         
| |   
| | 3. |  | any immediate family
      member of any of the foregoing persons, which means any child, stepchild,
      parent, stepparent, spouse, sibling, mother-in-law, father-in-law,
      son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the
      director, executive officer, nominee or more than 5% beneficial owner, and
      any person (other than a tenant or employee) sharing the household of such
      director, executive officer, nominee or more than 5% beneficial owner;
      and
| |   
| | 4. |  | any firm, corporation
      or other entity in which any of the foregoing persons is employed or is a
      general partner or principal or in a similar position or in which such
      person has a 5% or greater beneficial ownership
  interest.                                                                                                                                                                                                                                                             

C. Approval Procedures

| | 1. |  | The Board has
      determined that the Committee is best suited to review and approve Related
      Person Transactions. Accordingly, at each calendar years first regularly
      scheduled Committee meeting, management shall recommend Related Person
      Transactions to be entered into by the Company for that calendar year,
      including the proposed aggregate value of such transactions if applicable.
      After review, the Committee shall approve or disapprove such transactions
      and at each subsequently scheduled meeting, management shall update the
      Committee as to any material change to those proposed
    transactions.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---



| | 2. |  | In determining whether
      to approve or disapprove each related person transaction, the Committee
      will consider various factors, including the
  following:
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

- the identity of the related
  person;
- the nature of the related persons interest in the
  particular transaction;
- the approximate dollar amount involved in the
  transaction;
- the approximate dollar value of the related
  persons interest in the transaction;
- whether the related persons interest in the
  transaction conflicts with his obligations to the Company and its
  shareholders;
- whether the transaction will provide the related
  person with an unfair advantage in his dealings with the Company;
  and
- whether the transaction will affect the related
  persons ability to act in the best interests of the Company and its
  shareholders

| | The Committee will only approve
      those related person transactions that are in, or are not inconsistent
      with, the best interests of the Company and its shareholders.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                 
| | 3.                                                                                                                                                                              
| |                                                                                                                                                                                 
| | 4.                                                                                                                                                                              

D. Ratification Procedures

In the event the
Companys Chief Executive Officer, President and Chief Operating Officer, Chief
Financial Officer or General Counsel becomes aware of a Related Person
Transaction that has not been previously approved or previously ratified under
this Policy, said officer shall immediately notify the Committee or Chair of the
Committee, and the Committee or Chair shall consider all of the relevant facts
and circumstances regarding the Related Person Transaction. Based on the
conclusions reached, the Committee or the Chair shall evaluate all options,
including but not limited to ratification, amendment, termination or recession
of the Related Person Transaction, and determine how to proceed.

E. Review of Ongoing Transactions

At the Committees first meeting of each calendar year, the Committee
shall review any previously approved or ratified Related Person Transactions
that remain ongoing and have a remaining term of more than six months or
remaining amounts payable to or receivable from the Company of more than
$120,000. Based on all relevant facts and circumstances, taking into
consideration the Companys contractual obligations, the Committee shall
determine if it is in the best interests of the Company and its stockholders to
continue, modify or terminate the Related Person Transaction.

---



F. Disclosure

All Related Person Transactions are to be disclosed in the filings
of the Company, Progress Energy Carolinas, Inc. or Progress Energy Florida,
Inc., as applicable, with the Securities and Exchange Commission as required by
the Securities Act of 1933 and the Securities Exchange Act of 1934 and related
rules. Furthermore, all Related Person Transactions shall be disclosed to the
Corporate Governance Committee of the Board and anymaterialRelated Person Transaction
shall be disclosed to the full Board of Directors.

The material features of this Policy shall be disclosed in the Companys
annual report on Form 10-K or in the Companys proxy statement, as required by
applicable laws, rules and regulations.

---