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Growth Slows At Progress Energy Florida

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By RUSSELL RAY | The Tampa Tribune

Published: August 7, 2008

TAMPA - With layoffs looming, Progress Energy Florida said today electricity consumption and sales have fallen well below expectations, a byproduct of Florida's distressed housing market.

The St. Petersburg-based electric utility, which released its second-quarter results, has added just 2,000 customers during the past year. Second-quarter results from 2007 show the utility adding 29,000 customers during the same 12-month period.

Mark Mulhern, chief financial officer of Raleigh, N.C.-based Progress Energy, said the slowdown in usage and customer growth in Florida stems from a glut of empty, unsold homes.

"Our growth in usage was down about $6 million," Mulhern said during a conference call with investors. "We have a fair amount of empty units with no kilowatt hours being sold to the meter."

Progress Energy Florida plans to cut an undisclosed number of jobs this summer in its Energy Delivery Unit, which employs about 1,600 people. The ailing economy and the struggling housing market are to blame, the company said.

The Florida utility recorded earnings of 48 cents a share in the second quarter, up from 27 cents a share in the same quarter last year.

Revenue rose 5.8 percent to $1.2 billion and electricity sales grew 4.7 percent, though lower than expected. The Florida utility said it boosted wholesale revenue after picking up two new supply contracts from a major customer during the quarter.

Parent company Progress Energy earned $205 million, or 79 cents a share, in the second quarter, versus a loss of $193 million, or 75 cents a share, during the same period last year.

The company, which provides electricity to 3.1 million customers in Florida and the Carolinas, said it still expects to earn between $2.95 and $3.15 a share this year.

Reporter Russell Ray can be reached at (813) 259-7870 or rray@tampatrib.com.

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