As filed with the Securities and Exchange Commission on April 4, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 28, 1997
<TABLE>
<CAPTION>
Exact name of Registrant as
Commission specified in its charter, address State of I.R.S. Employer
File No. of principal executive offices, telephone Incorporation Identification No.
<S> <C> <C> <C>
1-8349 FLORIDA PROGRESS CORPORATION Florida 59-2147112
One Progress Plaza
St. Petersburg, Florida 33701
Telephone (813) 824-6400
1-3274 FLORIDA POWER CORPORATION Florida 59-0247770
3201 34th Street South
St. Petersburg, Florida 33711
Telephone (813) 866-5151
</TABLE>
The address of neither registrant has changed since the last report.
This combined Form 8-K represents separate filings by Florida Progress
Corporation and Florida Power Corporation. Information contained herein relating
to an individual registrant is filed by that registrant on its own behalf.
Florida Power makes no representations as to the information relating to Florida
Progress' diversified operations.
<PAGE>
Item 5. Other Events
In light of ongoing securities offerings by Florida Progress Corporation
("Florida Progress") and its subsidiaries, including Florida Power Corporation
("Florida Power") and Progress Capital Holdings, Inc., the following information
is being presented pending distribution of the combined Florida Progress and
Florida Power Quarterly Report on Form 10-Q for the quarter ended March 31,
1997:
Nuclear update. Florida Progress issued an Investor News report dated
March 31, 1997, regarding an update on the Crystal River nuclear unit restart
plan. A copy of the Investor News report is being filed herewith as Exhibit
99.(a).
Legal proceedings. Reference is made to paragraph 2 under Item 3 "Legal
Proceedings" in the combined Florida Progress and Florida Power Form 10-K for
the year ended December 31, 1996. Florida Progress issued an Investor News
report dated April 2, 1997, regarding the Florida Public Service Commission
("FPSC") approval of the settlement agreement between Florida Power and Pasco
Cogen, Ltd. A copy of the Investor News report is being filed herewith as
Exhibit 99.(b).
In addition, the following new case has been filed:
Crist v. Florida Power Corporation, Circuit Court of the Sixth Judicial
Circuit, Pinellas County Florida, Case No. 97-2251-CI-013
On March 28, 1997, Charlie Crist, a Florida legislator and Republican
candidate for the United States Senate, filed a petition to enjoin Florida
Power's increase in its fuel adjustment clause charges that was approved by the
FPSC in February 1997. Petitioner contended that the FPSC had no basis in the
record on which to approve the increase. At a hearing on March 31, 1997, the
court refused to grant the injunction, citing a lack of subject matter
jurisdiction, but allowed petitioner to amend his petition to attempt to allege
a basis for such jurisdiction. Crist has indicated that he intends to continue
to press his case against the increase. Florida Power believes that the
petition is without merit based upon, among other things, extensive precedent in
cases very similar to this petition that established that the FPSC has exclusive
jurisdiction over Florida Power's rates.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
Exhibit Number (by
reference to Item 601
of Regulation S-K) Description of Exhibit
99.(a) Florida Progress Corporation Investor News report dated
March 31, 1997 regarding an update on the Crystal River
Nuclear unit restart plan.
99.(b) Florida Progress Corporation Investor News report dated
April 2, 1997 regarding the FPSC approval of the Pasco
Cogen settlement.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FLORIDA PROGRESS CORPORATION
FLORIDA POWER CORPORATION
/s/Jeffrey R. Heinicka
By:____________________________
Jeffrey R. Heinicka
Senior Vice President and
Chief Financial Officer
of each Registrant
Date: April 4, 1997
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
99.(a) Florida Progress Corporation Investor News report dated
March 31, 1997 regarding an update on the Crystal River
Nuclear unit restart plan.
99.(b) Florida Progress Corporation Investor News report dated
April 2, 1997 regarding the FPSC approval of the Pasco
Cogen settlement.
<PAGE>
EXHIBIT 99.(a)
Florida Progress Corporation
Investor News
Analyst Contacts:
Mark A. Myers (813) 866-4245
Greg Beuris (813) 866-4442
[CORPORATE LOGO OMITTED]
Florida Power Files Report with Florida Public Service
Commission on Crystal River Nuclear Unit Outage
Update on Crystal River Nuclear Unit Restart Plan
ST. PETERSBURG, Florida, March 31, 1997 -- On February 20, 1997, the Florida
Public Service Commission (FPSC) established a separate docket to review the
extended outage at the Crystal River Nuclear Plant. The FPSC subsequently
established a schedule of key events and deadlines that begins with a
preliminary report on the outage and concludes with the issuance of a written
order from the FPSC containing its decision on this matter.
FPSC SCHEDULE FOR REVIEW OF CR-3 OUTAGE
March 19 Preliminary report on current outage at CR-3.
March 26 FPSC staff workshop on CR-3 outage.
April - June Florida Power and other parties file testimony.
July 10 Legal briefs filed.
July 24 FPSC's staff recommendation to the FPSC.
August 5 Agenda Conference - Decision by FPSC.
August 25 Written order issued by FPSC.
PRELIMINARY REPORT ON CURRENT OUTAGE AT CR-3
The report filed on March 19 was in response to the FPSC's request that Florida
Power explain the specific actions and circumstances that led to the shutdown of
the unit and why Florida Power determined that it was necessary to keep the unit
shut down for an extended period. The report, excluding certain appendices, is
available on the internet on Florida Progress Corporation's homepage. The
address of the homepage is www.fpc.com. The following is a summary of the report
filed with the FPSC.
On September 2, 1997, the nuclear unit was taken out of service to repair a
rupture of an oil pipe in CR-3's main turbine lubricating oil system. The unit
would have returned to service in early October were it not for the discovery of
certain design basis issues related to the unit's emergency core cooling system.
-- more --
<PAGE>
- -Page 2-
Florida Progress Corporation
Investor News -- Florida Power's
Crystal River Nuclear Plant
Florida Power determined that the unit must remain down to allow time to make
other equipment modifications to ensure that CR-3 is in compliance with
regulatory requirements governing emergency equipment safety margins under
hypothetical accident scenarios. One of the equipment modifications includes
increasing the electrical capacity of two diesel generators that are used in
emergencies to power equipment that would pump water into the reactor and the
steam generators in the event of a break in the reactor coolant system. Another
modification requires installation of equipment called cavitating venturis, that
are needed to ensure proper regulation of the flow of water under emergency
conditions.
As safety standards evolved over the last twenty years, all nuclear plants were
faced with decisions on how to meet NRC regulatory requirements. While some
utilities made extensive modifications, including significant upgrading of
emergency diesel generator capacity, Florida Power made less extensive changes
to CR-3's safety systems. Florida Power chose engineering approaches that
satisfied NRC regulatory requirements while minimizing both shutdown periods and
costs to its customers.
This approach worked satisfactorily until 1996 when it was determined that some
of the changes made by Florida Power in 1996 could not fully meet prescribed
safety margins under certain postulated emergency situations. Florida Power has
determined that the only way to meet the required safety margins under all
circumstances is to make the significant equipment modifications that were
started in October 1996 and are expected to be complete by the end of 1997.
Florida Power and CR-3 have received much adverse publicity regarding actions
and evaluations by the NRC, including placement of CR-3 on the NRC's "Watch
List". Florida Power has developed and implemented a management corrective
action plan which addresses all of the concerns expressed by the NRC through its
assessments. Placement on the NRC's "Watch List", which occurred on January 27,
1997, is not the reason for the outage and is not expected to lengthen the
shutdown.
FPSC STAFF WORKSHOP MEETING
On March 26, 1997, Florida Power management participated in a workshop scheduled
by the FPSC to allow its staff and any other interested parties the opportunity
to more fully understand the events which led to the current outage of the
nuclear unit. Florida Power discussed, among other things, the events which led
to the current outage and the decision to keep the unit shutdown.
-- more --
<PAGE>
- -Page 3-
Florida Progress Corporation
Investor News -- Florida Power's
Crystal River Nuclear Plant
RESTART PANEL MEETING WITH NRC
On March 21, 1997, Florida Power met with the NRC restart panel and presented
its current plan for restarting the nuclear unit. The NRC was complementary of
the plan and indicated that if Florida Power adheres to the plan, regulatory
approvals will not prevent Florida Power from returning the unit to service by
the end of 1997. The St. Petersburg Times quoted NRC Regional Administrator Luis
Reyes as saying, "It's a very good plan," and told reporters that "The team you
saw out there today is very experienced and very knowledgeable."
CR-3 RESTART PLAN
Attached is a schedule which summarizes the restart plan presented to the NRC
restart panel on March 21, 1997. The critical path shown on the restart schedule
represents the estimated time requirement for work related to modifying the
emergency feedwater system and upgrading the emergency diesel generators.
Additional plant modifications related to other design basis issues are not
shown on the timetable since completion of these modifications will occur before
modifications to the emergency feedwater system and diesel generators are
complete.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: this news release contains forward looking statements related to the
restart of Florida Power's Crystal River nuclear unit by the end of 1997. These
statements involve risks and uncertainties that could cause actual results or
outcomes to differ materially from expectations. Key factors that have a direct
impact on the company's ability to return the unit to service before the end of
1997 include successful execution of the restart plan, actions of regulatory
bodies, absence of new plant modifications which extend the outage beyond 1997
and other factors described in the company's Securities and Exchange Commission
filings.
Florida Progress (NYSE:FPC) is a Fortune 500 diversified utility holding company
with assets of $5.3 billion. Its principal subsidiary is Florida Power, the
state's second-largest electric utility with about 1.3 million customers.
Diversified operations include coal mining, marine operations, rail services and
life insurance.
####
<PAGE>
<TABLE>
<CAPTION>
Florida Power Corporation
Crystal River Nuclear Plant
1997 Restart Activities
<S> <C> <C> <C> <C>
Activities 1st Quarter 1997 2nd Quarter 1997 3rd Quarter 1997 4th Quarter 1997
Design & Licensing
Basis Review
Level 1 reviews XXXXXXXXXXXXXXXXXXXXXXX
Level 2 reviews XXXXXXXXXXXXXXXXXXXXX
Level 3 reviews XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Emrg. Feedwater
& Diesel Generator
(Critical Path)
Engineering XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Construction XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Testing XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Regulatory Review
and Approval
License Amendments XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
NRC Restart XXXX
Startup
System lineups, heatup
& reactor startup XXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Power escalation XXX
</TABLE>
EXHIBIT 99.(b)
Florida Progress Corporation
Investor News
Analyst Contacts:
Mark A. Myers (813) 866-4245
Greg Beuris (813) 866-4442
[CORPORATE LOGO OMITTED]
Florida Public Service Commission Approves
Pasco Cogen, Ltd. Settlement Agreement
ST. PETERSBURG, Florida, April 3, 1997 - On April 1, 1997, the Florida Public
Service Commission (FPSC) voted 3-2 to approve the negotiated settlement
agreement between Florida Power Corporation and Pasco Cogen, Ltd. (Pasco Cogen).
During the hearing several commissioners, including one of the commissioners who
dissented, recognized and applauded the initiative Florida Power has taken to
address the issue of high-cost cogeneration contracts.
Florida Power has been seeking ways to mitigate the impact of escalating
payments from cogeneration contracts. One strategy the company is pursuing is
to buy down certain contracts to reduce the impact of escalating payments.
In March 1991, Florida Power and Pasco Cogen entered into a 20-year contract for
purchase power. Committed capacity under the contract is 109 megawatts. In
October 1996 Florida Power and Pasco Cogen entered into a settlement agreement,
subject to approval by the FPSC, that resolved a dispute over a pricing
provision in the original contract. The negotiated settlement agreement also
contained a provision for Florida Power to buy-out of the last four years and
seven months of the contract.
The negotiated settlement agreement is expected to result in long-term savings
of $183 million due to the buy-out of the last four years and seven months of
the contract. Other benefits of the settlement include a curtailment of energy
during off-peak hours from 109 megawatts to 96 megawatts and a revised energy
pricing mechanism.
OTHER COGENERATION CONTRACTS
Florida Power has two other cogeneration contracts that are before the FPSC that
involve buy-out proposals similar to those in the Pasco settlement. In
addition, Florida Power has agreed, subject to FPSC approval, to acquire the
220-megawatt Tiger Bay cogeneration facility near Ft. Meade, Florida. Tiger Bay
is Florida Power's largest cogeneration power supplier, representing more than
20 percent of the 1,050 megawatts of total capacity it receives from 16
cogenerators. The FPSC has scheduled hearings on Tiger Bay for April 17 and 18.
The FPSC is expected to vote on whether to approve Florida Power's purchase of
the Tiger Bay facility at its June 10 Agenda Conference.
Florida Progress (NYSE:FPC) is a Fortune 500 diversified utility holding company
with assets of $5.3 billion. Its principal subsidiary is Florida Power, the
state's second-largest electric utility with about 1.3 million customers.
Diversified operations include coal mining, marine operations, rail services and
life insurance.
####
