As filed with the Securities and Exchange Commission on June 23, 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):
June 19, 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 June 30, 1997:
Florida Progress issued an Investor News report dated June 18, 1997 regarding
the Crystal River Nuclear unit update. A copy of this report is being filed
herewith as Exhibit 99.(a).
Florida Progress also issued an Investor News report and Florida Power issued a
News Release, each dated June 19, 1997, regarding a proposed settlement on the
replacement fuel costs due to the nuclear outage, which are filed herewith as
Exhibits 99.(b) and 99.(c), respectively.
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
June 18, 1997 regarding the Crystal River Nuclear plant
update.
99.(b) Florida Progress Corporation Investor News report dated
June 19, 1997 regarding a settlement on replacement
fuel costs due to the nuclear outage.
99.(c) Florida Power Corporation News Release dated June 19,
1997, regarding a settlement on replacement fuel costs
due to the nuclear outage.
<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. The signature of the undersigned on
behalf of each listed company shall be deemed to relate only to matters having
reference to such company.
FLORIDA PROGRESS CORPORATION
FLORIDA POWER CORPORATION
/s/Pamela A. Saari
By:____________________________
Pamela A. Saari
Assistant Treasurer
of each Registrant
Date: June 19, 1997
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
99.(a) Florida Progress Corporation Investor News report dated
June 18, 1997 regarding the Crystal River Nuclear plant
update.
99.(b) Florida Progress Corporation Investor News report dated
June 19, 1997 regarding a settlement on replacement
fuel costs due to the nuclear outage.
99.(c) Florida Power Corporation News Release dated June 19,
1997, regarding a settlement on replacement fuel costs
due to the nuclear outage.
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 Corporation's Crystal River Nuclear Plant Update
ST. PETERSBURG, Florida, June 18, 1997 -- Florida Power Corporation's Crystal
River nuclear plant has been down since September 2, 1996 to address design
issues involving the unit's engineered safeguards system.
Florida Power expects to return the unit to service by the end of 1997. The
restart plan reflects commitments made by Florida Power to the Nuclear
Regulatory Commission (NRC) regarding issues to be resolved prior to returning
the unit to service. Attached is a schedule that provides additional information
concerning key restart activities.
Florida Power has committed to resolving eight design issues, many of which
involve physical modifications to the plant and, in some cases, amendments to
its license. The attached schedule lists the eight design issues and the
expected time periods in which the field work will be done along with targeted
dates for restart submittals to the NRC. During the next several months, Florida
Power will be filing restart submittals with the NRC.
The expected critical path of the current restart plan remains the upgrades to
the emergency feedwater system and the emergency diesel generators. Some of the
modifications completed thus far include increasing load capacity to both diesel
generators, and modifications to the emergency feedwater system and high
pressure injection system. These modifications are part of the work necessary to
resolve the diesel loading issue and related emergency feedwater system issues.
Florida Power's "System Readiness & Review Program" was established to assess
"extent of condition." Level 2 reviews are approximately 60 percent complete and
Level 3 reviews have just begun. The attached schedule indicates that the
discovery phase of this activity should conclude in July. As a result of these
reviews, Florida Power has identified various issues, some of which must be
addressed prior to restarting the plant.
Starting in July, Florida Power expects to begin the "System Lineups, Heatup and
Testing" phase of the restart plan. During this phase, various systems will be
reviewed and checked to evaluate their condition. Also during this phase,
Florida Power will be developing its "Startup and Power Ascension Plan." This
plan, scheduled for implementation in December, will focus on managing a
comprehensive controlled startup of the plant.
Other significant restart activities include full inspection of the unit's steam
generator tubes. The purpose of the inspection is to identify and repair tube
degradation. This task began June 9 and will involve contractors from Framatome,
which designed the steam generators, as well as Florida Power personnel. The
project is expected to be complete by mid-July.
-- more --
<PAGE>
Throughout the restart effort, NRC inspectors will be performing various
inspections in the operations, maintenance, engineering and plant support areas.
In addition to these inspections, Florida Power will notify the NRC when it is
ready for final inspections including an inspection performed by the NRC's
"Operational Readiness Assessment Team." These inspections have not been
scheduled at this time.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: this news release contains forward looking statements, including
statements regarding the restart of the nuclear plant 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 could have a
direct impact on actual results include successful execution of the restart
plan, actions of regulatory bodies, potential new plant modifications not
foreseen at this time 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 $5.5 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>
Florida Power Corporation
Crystal River Nuclear Plant
Key Restart Activities
<TABLE>
<CAPTION>
LICENSE COMPLETION PERCENTAGE
Physical Modifications - (8) design issues. SUBMITTALS FIELD WORK TARGET COMPLETE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Emergency feedwater system upgrades and diesel generator
load impact. JUN - JUL MAY - AUG SEP 60%
2. Emergency diesel generator loading. JUN - JUL MAR - SEP SEP 60%
3. Low pressure injection mission time. COMPLETE NONE JUN 90%
4. Reactor building spray pump net positive suction head. AUG APR - AUG AUG 70%
5. High pressure injection pump recirculation JUNE 30 SEP - OCT NOV 10%
to the reactor building sump.
6. High pressure injection system modifications to JUNE 30 MAY - NOV NOV 40%
improve small break loss of coolant accident margins.
7. Failure modes and effects of Loss of DC Power JUL - AUG NONE SEP 90%
8. Generic Letter 96-06 - Containment Penetrations JUL APR - SEP SEP 60%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DISCOVERY
" System Readiness & Review - "Extent of condition" PHASE
- --------------------------------------------------------------------------------------------------------
<S> <C>
Level 1 reviews ( 8 systems) COMPLETE
Level 2 reviews (18 systems) JUN
Level 3 reviews (79 systems) JUL
- --------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
System Checks and Power Ascension START FINISH
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
System Lineups, Heatup & Testing" JUL DEC
Secondary Systems Testing SEP SEP
Startup & Power Escalation DEC DEC
- -------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Other Significant Activities START FINISH
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Steam generator testing JUN JUL
Reduce maintenance backlog to less than 200 items JAN DEC
- -------------------------------------------------------------------------------------------------------
</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 Power Corporation Announces Proposed Settlement On Replacement Fuel
Costs Due to Nuclear Outage
ST. PETERSBURG, Florida, June 19, 1997 -- Florida Progress Corporation's
principal subsidiary, Florida Power Corporation, announced today that it has
reached an agreement with all intervenors involved in the company's request to
collect replacement fuel and purchased power costs associated with the extended
outage of the Crystal River nuclear plant. Florida Power has asked the Florida
Public Service Commission (FPSC) to vote on the proposed settlement at the
earliest date possible.
KEY PROVISIONS OF THE STIPULATION AGREEMENT
Effective July 1997 or as soon thereafter as approval of the stipulation
is received, Florida Power would cease any further recovery through its
fuel clause of replacement power costs, except as described below. Florida
Power would refund immediately the money collected since April 1 when its
rates were adjusted to reflect higher replacement power costs.
Florida Power expects to incur approximately $170 million in replacement
power costs through the end of 1997, when the unit is expected to be
returned to service. Florida Power would be allowed to recover
approximately $35 million over a 12-month period after the unit is returned
to service. The remaining $135 million will be considered a regulatory
asset that would be amortized over a four-year period, commencing when the
nuclear unit is returned to service. Florida Power may, at its option,
accelerate the write-off of the regulatory asset.
Florida Power will temporarily suspend accruals to its retail reserve for
fossil plant dismantlement costs during the four-year amortization period.
Over this period, suspension of the accrual would offset approximately $60
million of amortization expenses related to the regulatory asset arising
from replacement power costs.
In order to not distort Florida Power's future financial performance
indicators to the FPSC, the effect of the amortization of the regulatory
asset and the write-off of the additional operating and maintenance
expenses would be excluded in calculating the company's regulatory return
on equity.
Florida Power's base rates will remain at their current levels during the
four-year amortization period. The planned addition of Florida Power's new
natural gas-fired combined cycle generating unit in October 1998 would be
subject to the base-rate freeze.
-- more --
<PAGE>
The parties to the stipulation agreement will not seek or support any
reduction in Florida Power's base rates or the authorized range of its
return on equity during the four-year amortization period.
This agreement resolves all present and future disputed issues between the
parties regarding the extended outage of the nuclear plant.
The nuclear plant was taken out of service September 2, 1996, to
repair an oil pipe in the main turbine. The unit would have returned to service
in early October but Florida Power decided to keep the unit shut down to address
design issues involving the unit's engineered safeguards system.
In February 1997, the FPSC approved, subject to refund, Florida Power's request
to recover a portion of the replacement power costs. The FPSC also decided at
that time to establish a special docket to review those replacement power costs
as a result of the extended outage at the nuclear plant.
Since the FPSC's approval in February, several parties have intervened in this
matter including the Office of the Public Counsel, Florida Industrial Power
Users Group, Office of the Attorney General of the State of Florida and the
Florida State Legislative Committee for the American Association of Retired
Persons.
While Florida Power remains firm in its claim that the actions taken to address
design issues at its nuclear plant were prudent, the company also recognizes the
potential negative effect this matter can have on its customers as well as the
distraction it creates by diverting key resources away from efforts needed to
return the plant to service in a safe and economical manner.
"Safe Harbor" Statements under the Private Securities Litigation Reform Act of
1995: This news release contains forward looking statements, including
statements regarding the restart of the nuclear plant by the end of 1997 and the
financial impact of the stipulation agreement. These statements involve risks
and uncertainties that could cause actual results or outcomes to differ
materially from expectations. Key factors that could have a direct impact on
actual results include successful execution of the restart plan, actions of
regulatory bodies, potential new plant modifications not foreseen at this time
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 $5.5 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.
####
EXHIBIT 99.(c)
FLORIDA POWER CORPORATION
NEWS RELEASE
Corporate Relations Department, St. Petersburg, Florida
Media Contact:
Melanie Forbrick 813/866-5023
Parties Reach Agreement In Florida Power's Request For Fuel Cost Recovery
St. Petersburg, Fla. (June 19, 1997) -- Florida Power Corporation, the Attorney
General of the State of Florida, the Office of Public Counsel, the Florida
Industrial Power Users Group, the Florida Consumers Action Network, State
Senator Charlie Crist, the Lake Dora Harbour Homeowners Association, Inc., and
the American Association of Retired Persons have reached an agreement that
resolves all disputed issues in a case involving Florida Power's request to
collect replacement fuel and purchased power costs associated with the extended
outage of its Crystal River nuclear unit.
The Florida Public Service Commission (FPSC) is expected to vote on the
proposed settlement at the earliest possible date. If the agreement is approved,
Florida Power will stop recovery of the portion of fuel charge associated with
the outage and immediately refund, with interest, money collected since the
increase went into effect on April 1. The company had been given permission to
collect approximately $2.22 per 1,000 kilowatt-hours on an interim basis. The
refund will be made as a one-time credit to the customer's electric bill.
The agreement will allow the company to recover $33.8 million, plus
interest, of the estimated $170 million in replacement fuel costs expected to be
incurred during the outage that began in September 1996. The $33.8 million
represents replacement fuel costs from September, October and November of 1996.
The company will begin recovery of this money after the plant returns to
service, which is expected to be by the end of the year. In order to minimize
the impact on customers, the cost will be spread over 12 months as part of the
fuel charge on electric bills. The remaining unrecovered replacement fuel costs
will be deferred and amortized for up to 48 months and will not result in an
increase in customer bills.
In order to offset a portion of the amortization, Florida Power will
temporarily suspend accruing its reserve for fossil plant dismantlement costs
for a period of four years. Prior to the end of the amortization period the
company will submit a study for use by the FPSC in establishing a revised
accrual to the dismantlement reserve. Any increase due to a deficiency in the
reserve will be absorbed by Florida Power.
Florida Power Corporation President and CEO Joseph H. Richardson said,
"We are sensitive to the concerns our customers have expressed about paying
higher electricity prices while our nuclear plant is out of service. This
agreement is a positive step that addresses those concerns. It also gives us the
opportunity to focus our full attention on bringing the plant back into service
as soon as possible."
(page 1 of 2)
<PAGE>
Page 2
Florida Power Corporation
Parties Reach Agreement
In addition to the refund, the company will maintain its current base
rates for the next four years. And as previously announced by Florida Power, its
customers will not bear additional costs related to the capital and non-fuel
operating and maintenance expenses associated with the nuclear plant outage. The
capital costs of the outage are estimated to be between $30 million and $45
million. The operating and maintenance expenses are estimated to be from $80
million to $100 million. The total cost of the outage, including capital,
operating and maintenance and replacement fuel, is expected to be between $280
million and $315 million.
Florida Power Corporation is the principal subsidiary of St.
Petersburg-based Florida Progress Corporation (NYSE:FPC) and serves 1.2 million
customers in central and northern Florida.
###
