At Progress Energy, two scripts emerge: Talking to Wall Street or speaking to customers
Wake up and good morning. I had to chuckle. On Wednesday, the very same day that Progress Energy Florida spokeswoman Suzanne Grant (photo, below) was set to speak on the timely topic -- Sharing Negative News: A Progress Energy Case Study-- before the IABC at the Tampa Club, Grant found herself stamping out more public relations fires. (Photo, left, Progress Energy CEO Bill Johnson.)
It seems a short item in Wednesday's Tampa Tribune went too far when it said Progress Energy would "scrap spending on nuclear power plants" in the wake of an unusual base rate rejection last week by the Florida Public Service Commission. The Tribune item sparked a protest from state Sen. Mike Fasano (photo, below, right) to the PSC demanding that Progress Energy should rebate to customers funds it had collected earlier to help build those same planned nuclear plants. Grant was busy denying the Tribune item and seeking a correction while asserting the nuclear plants are still expected to be built. Here's more on this dust-up.
Let's just say Grant earned her paycheck yesterday. But the bigger picture remains. What will Progress Energy Florida, and its corporate parent Progress Energy in Raleigh, N.C., do now that the once docile Florida PSC has taken away Progress Energy Florida's easy access to that Free ATM known as Florida ratepayers?
Events are moving fast and so is the rhetoric by Progress Energy executives and Wall Street observers who, of course, are viewing the PSC rate denial as some sort of mano a mano loss of face for Progress Energy.
Remember this, above all: Big public corporations often say different things and articulate different goals when talking to stock-price, investor-driven Wall Street audiences than they do when speaking to state regulators and, above all, their rate-paying customers.
Here's a quick roundup of what's happening, with some added thoughts on the corporate spin to Wall Street:
1. From Raleigh's News & Observer coverage, we learn that top Progress Energy executives in a special conference call with Wall Street analysts said Tuesday that the utility will cut operating expenses in Florida and delay two nuclear reactors. CEO Bill Johnson (above in photo with red tie) warned that Florida regulators have created a scenario in which Progress will not have sufficient money to maintain service quality for Florida customers.
(Translation? Don't blame us if those trees don't get trimmed like they used to, or it takes longer to get the electricity back on after a power loss.)
2. Any setback in Florida will affect the company's overall financial performance and affect all shareholders. Johnson told the analysts that the failed rate case in Florida will likely prevent the company from increasing its dividend to shareholders.
(Translation? By jacking up rates in Florida, the company could pass some of that money from Florida customers on to its investors, which suggests Progress Energy would have extra dough it was not going to use in improving the operations of Progress Energy Florida, right?)
3. The utility cut 300 Florida positions in 2008 and says it faces "declining revenue" in a state that was the epicenter of the real-estate meltdown that triggered the nation's deep recession. Johnson said Progress may be forced to try again by filing for another rate request this year. "The revenue level approved last week does not cover the necessary costs of reliably serving the customers today and responsibly preparing for their future needs," Johnson said Tuesday. "There was no consideration given to our declining revenues in a recession economy."
(Translation? Progress Energy Florida is a monopoly that wanted the Florida PSC to give it a 12.54 percent profit margin, perhaps the best indicator that the company is clueless that the Florida recession is not just about making up utility expense constraints but actually trying to keep electricity rates affordable for state residents already struggling to pay bills. The PSC ultimately gave the utility at 10.5 percent profit margin -- hardly a figure to cry corporate poverty over.)
4. Progress has offered investors a dividend for 250 consecutive quarters and increased the payment in 50 of the past 56 years.
(Translation? It won't be the end of the world if the company keeps the dividend steady rather than increases as we climb out of the worst recession since the Great Depression. There's way too much company ego in all this based on a long history of pushing the Florida PSC around.)
5. Johnson told Wall Street analysts that the future of two planned reactors at the Florida nuclear site is under review. "At a minimum it will be on a slower schedule and on a much lower spending trajectory," he said. "There are projects that will have to be put on hold, given the circumstances and environment."
(Translation? Is this saber rattling to unsettle Florida or just more intended ambiguity? Maybe the Tampa Tribune item was not so far off the mark as is suggested.)
-- Robert Trigaux, Times Business Columnist