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Progress Energy not backing off growth plans

Slowed growth hasn't derailed Progress Energy Florida's plans to build more than $17-billion in new electricity projects over the coming decade, chief executive officer Jeff Lyash said.

The utility's parent company in Raleigh, N.C., announced a dip in first-quarter earnings Thursday morning, due in part to Florida's beleaguered housing market. Sluggish growth meant more vacant homes, slower customer growth and a drop in residential electricity sales.

Lyash said he expected growth to rebound, but wouldn't predict when. Despite the slowdown, the St. Petersburg-based utility says it will pursue its plans to build a $17-billion nuclear project in Levy County, as well as a large natural gas plant on the banks of the Suwannee River, Lyash said.

"We don't react when the market overheats," Lyash said. "Neither do we change our plans dramatically during the ebbs in the cycle."

Echoing Tampa Electric and Florida Power & Light, Progress Energy reported slower-than-expected customer growth. The utility has close to 1.7-million customers in Central and North Florida. Customer growth over the past decade has averaged 2.2 percent but started to fall last year. The slowdown continued into the first quarter, Lyash said.

The Florida utility managed to make up for some of its lost retail electricity sales by an increase in wholesale contracts, the addition of a natural gas plant and investments in several large construction projects, spokesman Buddy Eller said. The utility's first-quarter net income increased $6-million to nearly $67-million.

The utility reported earnings per share of 26 cents, compared with 24 cents for the same period last year.

Progress Energy

The Raleigh, N.C., parent company of two utilities, Progress Energy Florida and Progress Energy Carolinas, saw its earnings per share drop. Most of the loss stemmed from discontinued operations, but slowed growth in Florida also dented earnings.

1st Qtr Year ago

Revenue $2.066B $2.072B

Net income $209M $275M

Per share 81 cents $1.08

Progress Energy not backing off growth plans 05/08/08 [Last modified: Friday, May 9, 2008 8:23am]
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