Filed by CP&L Energy, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Florida Progress Corporation
Commission File No. 333-40836
On July 21, 2000, CP&L Energy, Inc. posted the following updated reports on its
internet web site.
FERC APPROVAL RECEIVED ON JULY 12, 2000
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[CP&L LOGO] Summary of the [FLORIDA PROGRESS
Federal Energy Regulatory Commission CORPORATION LOGO]
Application
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CPL/FPC Proposed Business Combination
Docket Nos. EC00-55
Date Filed: February 3, 2000
Overall Request
CP&L Energy, Inc. and Florida Progress Corporation, on behalf of themselves and
their subsidiaries ("the Applicants"), seek authorization and approval to merge
those susidiaries that are subject to the Federal Energy Regulatory Commission's
("FERC's") jurisdiction. The principal utilities joined through this merger are
Carolina Power & Light Company ("CP&L"), which provides wholesale and retail
electric service principally in the states of North Carolina and South Carolina,
and Florida Power Corporation ("FPC"), which provides wholesale and retail
electric service primarily in central and northern Florida. As a consequence of
the merger, the Applicants will achieve greater efficiencies through economies
of scale, derive advantages of geographic and customer diversity, and attain
greater financial strength.
Market Power
The proposed merger poses no significant market power concerns. Based upon the
FERC market power analysis, there are limited market power issues in CP&L and
FPC markets resulting from the transaction. To resolve these issues, the
Applicants commit to:
1. Sell 135 MW of generating capacity for a six year period. This sale of less
than 1% of the companies' combined generation resources is intended to
foreclose any questions related to the impact of the merger on wholesale
competition.
2. File for FERC approval to establish or join Regional Transmission
Organizations ("RTOs") in their respective regions no later then 90 days
after completing the merger. (In its recent Order No. 2000, FERC encouraged
all transmission-owning utilities to turn over operation of their
transmission systems to RTOs.)
Rates
The Applicants commit to hold all wholesale requirements and transmission
customers harmless from any adverse effect of the proposed transaction on the
FERC-jurisdictional rates.
Interventions
Petitions to intervene were filed on April 3. In all 19 intervenors, comprised
of municipalities, electric cooperatives, other utilities, customer groups and
the Florida Public Service Commission filed with the FERC. These filings can be
viewed on FERC's Web site, by clicking on the address below and typing in docket
# EC00-55 http://rimsweb1.ferc.fed.us/rims.q?rp2~DockNumIni
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[CP&L LOGO] Regulatory Approvals [FLORIDA PROGRESS
CORPORATION LOGO]
Last Updated 07/21/2000
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Summary of the North Carolina Utility Commission Application
CPL/FPC Proposed Business Combination
Docket No. E-2, Sub 760
Date Filed: February 3, 2000
Overall Request
CP&L Energy, Inc. ("CP&L Energy") seeks authorization to engage in a business
combination transaction between CP&L Energy and Florida Progress Corporation
("FPC") and in connection with that transaction, authorization to issue common
stock without par value. CP&L Energy is a corporation organized and existing
under the laws of the State of North Carolina. As part of the merger, CP&L
Energy will create CP&L Services, Inc., a service company to provide certain
administrative services to its electric utility subsidiaries and non-utility
subsidiaries.
G.S. 62-111 provides that all mergers or combinations affecting a public utility
require commission approval. The statute further provides that the standard the
commission shall use in determining whether to approve the merger is whether the
merger is "justified by public convenience and necessity."
Interventions
Petitions to intervene were due on May 25. In all, eight parties filed with the
NCUC. The group consisted of municipalities, electric cooperatives, industrial
groups, the Public Staff of the NCUC, NC Attorney General's office, NC Justice
and Community Development Center, and individuals. The primary issues raised by
the parties were generally directed at the impact of the merger on power supply
resources and pricing.
Hearings
On July 18, 2000 the NCUC held hearings concerning the CPL/FPC merger. The
Public Staff of the NCUC presented details of an agreement reached with CP&L
that proposes, among others, the following conditions:
(1) A reduction in retail rates for non-Real Time Pricing (RTP) customers of $3
million in calendar year 2002, $4.5 million in calendar year 2003, and $6
million each in calendar years 2004 and 2005.
(2) The parties will settle CP&L's 2000 Fuel case by CP&L writing off and
foregoing recovery of $10 million of its unrecovered fuel costs for the
test period April 1, 1999 through March 31, 2000 and spreading the recovery
of the remaining underrecovery over three years.
(3) CP&L will extend natural gas service to Tabor City, NC by June 30, 2001,
and increase its annual contributions to economic development projects by
$75,000 for five years.
(4) CP&L, NCNG, CP&L Energy and all affiliates shall take all such actions as
may be reasonably necessary and appropriate to hold North Carolina retail
ratepayers harmless from rate increases, foregone opportunities for rate
decreases, and/or other effects of the merger.
(5) Any acquisition adjustment that results from the business combination of
CP&L Energy and FPC shall be excluded from CP&L's and NCNG's utility
accounts and treated for regulatory reporting and ratemaking purposes so
that it does not affect CP&L's North Carolina retail electric rates and
charges and NCNG's natural gas rates and charges. This does not prohibit
CP&L from filing additional information showing the acquisition adjustment.
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[CP&L LOGO] Summary of the [FLORIDA PROGRESS
Federal Energy Regulatory Commission CORPORATION LOGO]
Application
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Commission Actions
On June 28, 2000 the Commission was scheduled to review the pending merger
application. It postponed a decision and issued a request of the parties to
address the following items regarding the applicants' commitments involving
Regional Transmission Organizations.
(A) Does each Applicant commit to join and participate in (and to transfer
operational control of its transmission facilities to) a Commission-approved
RTO?
(B) If Applicants' answer to (A) is yes, by what date does each Applicant commit
to join and participate in a Commission-approved RTO?
(C) What processes are currently underway to develop RTOs in each Applicant's
reliability council region (or the subregion in which each Applicant is
located)?
The companies responded to this request on June 30, 2000. This additional
information will allow the Commission to expedite further consideration of the
application.
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ON JULY 12, 2000 THE COMMISSION ISSUED AN ORDER
THAT APPROVED THE PROPOSED MERGER OF FLORIDA
PROGRESS CORPORATION AND CP&L ENERGY, INC.
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This document contains forward-looking statements within the meaning of the safe
harbor provisions of the Securities Exchange Act of 1934. The forward-looking
statements are subject to various risks and uncertainties. Discussion of factors
that could cause actual results to differ materially from management's
projections, forecasts, estimates and expectations may include factors that are
beyond the companies' ability to control or estimate precisely, such as
estimates of future market conditions, the behavior of other market participants
and the actions of Federal and state regulators. Other factors include, but are
not limited to, actions in the financial markets, weather conditions, economic
conditions in the two companies' service areas, fluctuations in energy-related
commodity prices, conversion activity, other marketing efforts and other
uncertainties. Other risk factors are detailed from time to time in the two
companies' SEC reports.
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[CP&L logo] Regulatory Approvals [Florida Progress
Corporation logo]
Last updated 7/21/00
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NCUC Application Timeline
February 3, 2000 Application filed
March 17, 2000 Testimony filed
July 7, 2000 Intervenor testimony due
July 11, 2000 Rebuttal testimony due
July 18, 2000 Hearings
Fall 2000 Final order
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Florida Progress Acquisition
Regulatory Approvals
Holding Company/Merger
Filings and Applications Status Report
Updated 7/21/00*
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Filing/Application Date Filed Planned Filing Order Received Order Expected
Date
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Holding Company
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NRC 09/15/99 12/29/99
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NCUC 10/15/99 05/17/00
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SEC 10/18/99 06/15/00
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SCPSC 10/19/99 03/06/00
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FCC 10/21/99 02/09/00
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FERC 10/26/99 12/23/99
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Merger
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NRC - Transfer of Control 01/31/00 05/23/00
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NCUC - Merger Approval 02/03/00 3rd Quarter
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FERC - Merger Approval 02/03/00 07/12/00
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SEC - Merger Approval* 03/14/00 4th Quarter
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FCC - Transfer of Licenses* 05/11/00 07/18/00
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FTC/DOJ (HSR) 06/09/00 07/12/00
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This document contains forward-looking statements within the meaning of the safe
harbor provisions of the Securities Exchange Act of 1934. The forward-looking
statements are subject to various risks and uncertainties. Discussion of factors
that could cause actual results to differ materially from management's
projections, forecasts, estimates and expectations may include factors that are
beyond the companies' ability to control or estimate precisely, such as
estimates of future market conditions, the behavior of other market participants
and the actions of Federal and state regulators. Other factors include, but are
not limited to, actions in the financial markets, weather conditions, economic
conditions in the two companies' service areas, fluctuations in energy-related
commodity prices, conversion activity, other marketing efforts and other
uncertainties. Other risk factors are detailed from time to time in the two
companies' SEC reports.
[End of reports posted on web site]
In connection with the share exchange between CP&L Energy and Florida Progress,
CP&L Energy has filed with the Securities and Exchange Commission (the "SEC") a
Registration Statement on Form S-4 and Florida Progress has filed with the SEC a
definitive proxy statement each of which contains the definitive joint proxy
statement/prospectus of CP&L Energy and Florida Progress. The definitive joint
proxy statement/prospectus was first mailed on or about July 11, 2000 to
shareholders of CP&L Energy and Florida Progress. We urge investors to read the
definitive joint proxy statement/prospectus and any other relevant documents to
be filed with the SEC because they contain important information. Investors will
be able to obtain the documents free of charge at the SEC's web site,
http://www.sec.gov. In addition, documents filed by CP&L Energy and Carolina
Power & Light Company with the SEC can be obtained by contacting CP&L Energy at
the following address and telephone number: Shareholder Relations, 411
Fayetteville Street, Raleigh, North Carolina 27601, telephone: (800) 662-7232.
Documents filed with the SEC by Florida Progress can be obtained by contacting
Florida Progress at the following address and telephone number: Investor
Services, P.O. Box 14042 (CX1H), St. Petersburg, Florida 33733, telephone: (800)
937-2640. Read the definitive joint proxy statement/prospectus carefully before
making a decision concerning the share exchange.