ST. PETERSBURG, Fla., April 4, 2003 — Progress Energy Florida has filed with the Federal Energy Regulatory Commission (FERC) to recover $10.6 million in “stranded costs” from the City of Casselberry if the city moves forward with a government takeover of the company’s electric distribution system within the city limits. No city in Florida has taken over an electric distribution system since 1943.
“Our goal continues to be signing a new franchise with the City of Casselberry,” said Bill Habermeyer, president & CEO of Progress Energy Florida. “We regret we have not reached that juncture with city officials. But as they continue to examine a takeover, Casselberry’s leaders and residents should have reliable information about the stranded costs that they will incur.”
Progress Energy (NYSE: PGN – News) by law must plan for and make long-term investments in electric generation and other facilities to serve its customers. If the company loses its retail customer base within a city, the investments made on behalf of the customers become “stranded,” and must be recovered from the city.
“The filing will protect customers outside of Casselberry from bearing added costs should the city choose to pursue a government takeover,” added Habermeyer. “There is a clear nationwide precedent that the primary forum for this decision is at the FERC.”
Progress Energy has been negotiating a new franchise with the City of Casselberry for roughly two years. After a series of court rulings, the city received a $22.3 million arbitration ruling on the value of Progress Energy’s electric distribution system in Casselberry in October 2002. The arbitrators did not include stranded costs, but previous court rulings recognized that FERC and/or the Florida Public Service Commission would be the final decision makers in this matter.
Progress Energy Florida, a subsidiary of Progress Energy, provides electricity and related services to more than 1.4 million customers in Florida. The company is headquartered in St. Petersburg, Fla., and serves a territory encompassing over 20,000 square miles including the cities of St. Petersburg, Clearwater, as well as the Central Florida area surrounding Orlando. For more information about Progress Energy, visit the company’s Web site at: http://www.progress-energy.com.