A variable interest entity (VIE) is an entity that is evaluated for consolidation using more than a simple analysis of voting control. The analysis to determine whether an entity is a VIE considers contracts with an entity, credit support for an entity, the adequacy of the equity investment of an entity and the relationship of voting power to the amount of equity invested in an entity. This analysis is performed either upon the creation of a legal entity or upon the occurrence of an event requiring reevaluation, such as a significant change in the entity's assets or activities. If an entity is determined to be a VIE, a qualitative analysis of control determines the party that consolidates a VIE based on what party has the power to direct the most significant activities of the VIE that impact its economic performance as well as what party has rights to receive benefits or is obligated to absorb losses that are significant to the VIE. The analysis of the party that consolidates a VIE is a continual reassessment.

The following table shows the VIE that Progress Energy, through its subsidiary PEC consolidates and how the entity impacts Progress Energy's and PEC's respective Consolidated Balance Sheets. No financial support was provided to the consolidated VIE during the nine months ended September 30, 2012 and the year ended 2011, or is expected to be provided in the future, that was not previously contractually required.

(in millions)		September 30, 2012		December 31, 2011
Net property, plant and equipment^(a)		$	12	$	12
Prepayments and other current assets^(a)			2		1
Net assets of consolidated VIEs		$	14	$	13

^(a)	Progress Energy, through its subsidiary PEC, is the primary beneficiary of, and consolidates, an entity that qualifies for rehabilitation tax credits under Section 47 of the Internal Revenue Code. Our variable interests are debt and equity investments in the VIE. The assets of the VIE are collateral for, and can only be used to settle, its obligations. The creditors of the VIE do not have recourse to our general credit or the general credit of PEC, and there are no other arrangements that could expose us to losses.

Progress Energy has variable interests in the FPC Capital I Trust (the Trust), which is a VIE of which we are not the primary beneficiary (See Note 17). Amounts reflected in the Consolidated Balance Sheets of Progress Energy related to the Trust are a $9 million equity investment (included in investments and other assets, other) at September 30, 2012 and December 31, 2011, and long-term debt, affiliate of $274 million and $273 million at September 30, 2012 and December 31, 2011, respectively. Our maximum exposure to loss that could potentially be recorded through earnings in future periods is the $9 million equity investment in the Trust.