8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

        Date of report (Date of earliest event reported): December 16, 2004

Commission File Number	Exact names of registrants as specified in their charters, state of incorporation, address of principal executive offices, and telephone number	IRS Employer Identification Number
1-15929                                 1-8349                                 1-3382                                         1-3274	PROGRESS ENERGY, INC. 410 South Wilmington Street Raleigh, North Carolina 27601-1748 Telephone: (919) 546-6111 State of Incorporation: North Carolina FLORIDA PROGRESS CORPORATION 410 South Wilmington Street Raleigh, North Carolina 27601-1748 Telephone: (919) 546-6111 State of Incorporation: Florida CAROLINA POWER & LIGHT COMPANY d/b/a Progress Energy Carolinas, Inc. 410 South Wilmington Street Raleigh, North Carolina 27601-1748 Telephone: (919) 546-6111 State of Incorporation: North Carolina FLORIDA POWER CORPORATION d/b/a Progress Energy Florida, Inc. 100 Central Avenue St. Petersburg, Florida 33701-3324 Telephone: (727) 820-5151 State of Incorporation: Florida	56-2155481 59-2147112 56-0165465 59-0247770

None

(Former Name or Former Address, if Changed Since Last Report)

        Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

        |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

        |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

        |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

        |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

This combined Form 8-K is filed separately by four registrants: Progress Energy, Inc., Florida Progress Corporation, Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. and Florida Power Corporation d/b/a Progress Energy Florida, Inc. Information contained herein relating to any individual registrant is filed by such registrant solely on its own behalf, and is not, and shall not, be deemed to be filed or disclosed by any other registrant.

Section 8 – Other Events

Item 8.01 Other Events.

On December 16, 2004, Progress Energy Carolinas, Inc. (“PEC”) filed the letters attached as Exhibits 99.1 and 99.2 with the North Carolina Utilities Commission and the South Carolina Public Service Commission and Progress Energy Florida, Inc. (“PEF”) filed the letter attached as Exhibit 99.3 with the Florida Public Service Commission.

The letters describe a change in accounting methodology that PEC and PEF intend to implement on January 1, 2005 and the background of that change. The letters were sent to apprise the commissions that have jurisdiction over PEC’s and PEF’s retail rates of the accounting change. The accounting change is described in the letters.

Neither PEF nor PEC is proposing to apply the new accounting methodology for periods prior to 2005. Further, neither PEF nor PEC is proposing to alter current rates as a result of this accounting change.

The registrants do not believe that any regulatory action is necessary or warranted as a result of this accounting change. However, as with any regulatory matter, the registrants cannot provide assurance with regard to whether any of the three commissions might take action with respect to the matters described in the letters or what form such action might take. In the event that one or more of the commissions takes some such action, the effected registrants will have to determine at that time what impact, if any, such action may have. Potential impacts could include, continuing the use of current accounting practices, deferring the adoption of the new methodology referred to in the letters, adopting a different accounting methodology, prospective adjustment of rates, modifying asset accounts or changing previously issued financial statements.

This combined report contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The matters discussed throughout this combined Form 8-K that are not historical facts are forward-looking and, accordingly, involve estimates, projections, goals, forecasts, assumptions, risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and neither Progress Energy, Inc. ("Progress Energy" or the "Company"), Florida Progress Corporation ("FPC"), PEC nor PEF undertakes any obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made.

Examples of factors that you should consider with respect to any forward-looking statements made throughout this document include, but are not limited to, the following: the impact of fluid and complex government laws and regulations, including those relating to the environment; deregulation or restructuring in the electric industry that may result in increased competition and unrecovered (stranded) costs; the uncertainty regarding the timing, creation and structure of regional transmission organizations; weather conditions that directly influence the demand for electricity; our ability to recover through the regulatory process, and the timing of, the costs associated with the four hurricanes that impacted our service territory in 2004 or other significant weather events; recurring seasonal fluctuations in demand for electricity; fluctuations in the price of energy commodities and purchased power; economic fluctuations and the corresponding impact on Progress Energy, Inc. and its subsidiaries’ commercial and industrial customers; the ability of the Company’s subsidiaries to pay upstream dividends or distributions to it; the impact on the facilities and the businesses of the Company from a terrorist attack; the inherent risks associated with the operation of nuclear facilities, including environmental, health, regulatory and financial risks; the ability to successfully access capital markets on favorable terms; the impact that increases in leverage may have on the Company; the ability of the Company to maintain its current credit ratings; the impact of derivative contracts used in the normal course of business by the Company; investment performance of pension and benefit plans; the Company’s ability to control costs, including pension and benefit expense, and achieve its cost management targets for 2007; the availability and use of Internal Revenue Code Section 29 (Section 29) tax credits by synthetic fuel producers and the Company’s continued ability to use Section 29 tax credits related to its coal and synthetic fuel businesses; the impact to our financial condition and performance in the event it is determined the Company is not entitled to previously taken Section 29 tax credits; the Company’s ability to manage the risks involved with the operation of its nonregulated plants, including dependence on third parties and related counter-party risks, and a lack of operating history; the Company’s ability to manage the risks associated with its energy marketing operations; the outcome of any ongoing or future litigation or similar disputes and the impact of any such outcome or related settlements; and unanticipated changes in operating expenses and capital expenditures. Many of these risks similarly impact the Company’s subsidiaries.

These and other risk factors are detailed from time to time in the Progress Energy, FPC, PEC and PEF United States Securities and Exchange Commission (SEC) reports. Many, but not all of the factors that may impact actual results are discussed in the Risk Factors sections of Progress Energy’s, FPC’s, PEC’s and PEF’s annual report on Form 10-K for the year ended December 31, 2003, which were filed with the SEC on March 12, 2004. These reports should be read carefully. All such factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond the control of Progress Energy, FPC, PEC and PEF. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor can it assess the effect of each such factor on Progress Energy, FPC, PEC and PEF.

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.

PROGRESS ENERGY, INC.,
FLORIDA PROGRESS CORPORATION,
CAROLINA POWER & LIGHT COMPANY
d/b/a PROGRESS ENERGY CAROLINAS, INC. and
FLORIDA POWER CORPORATION
d/b/a PROGRESS ENERGY FLORIDA, INC.
Registrants


By: /s/ Geoffrey S. Chatas
         Geoffrey S. Chatas
         Executive Vice President and
         Chief Financial Officer

Date: December 16, 2004

EXHIBIT INDEX

Exhibit No.	Exhibit Description
99.1 99.2 99.3	Letter to North Carolina Utilities Commission, dated December 16, 2004 Letter to South Carolina Public Service Commission, dated December 16, 2004 Letter to Florida Public Service Commission, dated December 16, 2004

EX-99

[Progress Energy Logo]

December 16, 2004

Chair Jo Anne Sanford
North Carolina Utilities Commission
4325 Mail Service Center
Raleigh, North Carolina 27699-4325

Dear Chair Sanford:

This letter is to inform you of a change in accounting methodology that Progress Energy Carolinas, Inc. (“PEC”) intends to implement effective January 1, 2005.

The change implements recommendations made by an independent third party hired by the Company to conduct a study of the approximately $800 million in annual O&M/capital activities for PEC’s and Progress Energy Florida’s (“PEF’s”) energy delivery businesses. The study was commissioned pursuant to a Company review of the consistency of charging practices at PEF and PEC. The study reviewed the practices applied in 2003 and 2004; prior periods were not reviewed as part of that study. The Company is also reviewing its past charging practices. As a result of the study, the independent third party developed a best-practice methodology for mapping work activities to O&M and capital within the Company’s financial system for transmission and distribution expenditures. PEF and PEC moved to the common financial system in 2002 after their merger.

The study, which was completed this month, made specific recommendations to improve the charging methodology for outage and emergency (“O&E”) activities and indirect capital accounts. A summary of those recommendations, which describe the changes PEC intends to adopt, is attached. The study indicates that, if the new methodology had been used in 2003 by PEC, approximately $20 million of costs charged to capital primarily for outage and emergency activities, could properly have been expensed. Costs for major or named tropical storms are not included in O&E costs and are tracked in separate accounts.

The Company will begin to apply the new methodology beginning January 1, 2005. The Company is not proposing to adjust amounts recorded for accounting purposes for any periods prior to January 1, 2005 as a result of the study. The Company believes there has been no adverse impact on ratepayers. Any issues associated with the effect of the new accounting methodology may be appropriately addressed in PEC’s next ratemaking proceeding.

Finally, please note that as with all accounting changes, the matters discussed in this letter have been reviewed by our Board of Directors (including the Audit Committee) and our external auditors.

Sincerely,

/s/ Len S. Anthony

Len S. Anthony
Deputy General Counsel-Regulatory Affairs

LSA:mhm
Attachment
cc:   Mr. Don Hoover
        Mr. Robert Gruber

Summary of Proposed Accounting Changes

Changes to Practices for the Outage & Emergency (O&E) Account

o
 

o

 

 

 

 

 

o
 
 
 
  Adopt a charging practice for the O&E accounts that distinguishes between replacement (i.e., capital)
and repair (i.e., expense) costs.

To implement the above, segregate Repair and Replace Activities in O&E Account for PEC and PEF as follows

       - Repair Overhead

       - Replace Overhead

       - Repair Underground

       - Replace Underground

           Note: All above activities will be further split between outage and corrective maintenance

Subsequent to segregating O&E activities as described above, PEC and PEF will update their existing charging guidelines to provide specific instructions regarding the use of repair versus replace activities. Charging guidelines will further emphasize that repair activities are used to return an existing unit of property to its intended use and replace activities are used when an existing unit of property is replaced.

Recommendations Regarding Indirect Accounts

o
  
  

o
  

  
  

  

o
  

o The Company's methodology for use of Indirect Accounts is generally appropriate, including the process
changes that the Company identified in 2003 and implemented beginning in 2004. The following steps are
intended to ensure the effectiveness of that methodology, including the recent changes.

Provide clearer instruction for line and service personnel to minimize their use of indirect capital
accounts , for example

       - Time sheet instructions that work such as pre-job meetings should be charged to the appropriate capital
                account, not to the indirect account

       - Time sheet instructions should explain that "miscellaneous items" should generally be charged to expense

Transmission planning costs related to a specific project that comes to fruition should be assigned to
that capital project.

The Company should review its practices related to indirect capital every two years.

EX-99

[Progress Energy Logo]

December 16, 2004

Chairman Randy Mitchell
Public Service Commission of South Carolina
101 Executive Center Drive, Suite 100
Columbia, South Carolina 29210

Dear Chairman Mitchell:

This letter is to inform you of a change in accounting methodology that Progress Energy Carolinas, Inc. (“PEC”) intends to implement effective January 1, 2005.

The change implements recommendations made by an independent third party hired by the Company to conduct a study of the approximately $800 million in annual O&M/capital activities for PEC’s and Progress Energy Florida’s (“PEF’s”) energy delivery businesses. The study was commissioned pursuant to a Company review of the consistency of charging practices at PEF and PEC. The study reviewed the practices applied in 2003 and 2004; prior periods were not reviewed as part of that study. The Company is also reviewing its past charging practices. As a result of the study, the independent third party developed a best-practice methodology for mapping work activities to O&M and capital within the Company’s financial system for transmission and distribution expenditures. PEF and PEC moved to the common financial system in 2002 after their merger.

The study, which was completed this month, made specific recommendations to improve the charging methodology for outage and emergency (“O&E”) activities and indirect capital accounts. A summary of those recommendations, which describe the changes PEC intends to adopt, is attached. The study indicates that, if the new methodology had been used in 2003 by PEC, approximately $3.3 million of costs charged to capital primarily for outage and emergency activities, could properly have been expensed. Costs for major or named tropical storms are not included in O&E costs and are tracked in separate accounts.

The Company will begin to apply the new methodology beginning January 1, 2005. The Company is not proposing to adjust amounts recorded for accounting purposes for any periods prior to January 1, 2005 as a result of the study. The Company believes there has been no adverse impact on ratepayers. Any issues associated with the effect of the new accounting methodology may be appropriately addressed in PEC’s next ratemaking proceeding.

Finally, please note that as with all accounting changes, the matters discussed in this letter have been reviewed by our Board of Directors (including the Audit Committee) and our external auditors.

Sincerely,

/s/ Len S. Anthony

Len S. Anthony
Deputy General Counsel-Regulatory Affairs

LSA:mhm
Attachment
cc:     Mr. James Spearman
          Mr. Charles Terreni

Summary of Proposed Accounting Changes

Changes to Practices for the Outage & Emergency (O&E) Account

o
 

o

 

 

 

 

 

o
 
 
 
  Adopt a charging practice for the O&E accounts that distinguishes between replacement (i.e., capital)
and repair (i.e., expense) costs.

To implement the above, segregate Repair and Replace Activities in O&E Account for PEC and PEF as follows

       - Repair Overhead

       - Replace Overhead

       - Repair Underground

       - Replace Underground

           Note: All above activities will be further split between outage and corrective maintenance

Subsequent to segregating O&E activities as described above, PEC and PEF will update their existing charging guidelines to provide specific instructions regarding the use of repair versus replace activities. Charging guidelines will further emphasize that repair activities are used to return an existing unit of property to its intended use and replace activities are used when an existing unit of property is replaced.

Recommendations Regarding Indirect Accounts

o
  
  

o
  

  
  

  

o
  

o The Company's methodology for use of Indirect Accounts is generally appropriate, including the process
changes that the Company identified in 2003 and implemented beginning in 2004. The following steps are
intended to ensure the effectiveness of that methodology, including the recent changes.

Provide clearer instruction for line and service personnel to minimize their use of indirect capital
accounts , for example

       - Time sheet instructions that work such as pre-job meetings should be charged to the appropriate capital
                account, not to the indirect account

       - Time sheet instructions should explain that "miscellaneous items" should generally be charged to expense

Transmission planning costs related to a specific project that comes to fruition should be assigned to
that capital project.

The Company should review its practices related to indirect capital every two years.

EX-99

[Progress Energy Logo]

December 16, 2004

Mr. Tim Devlin
Director, Division of Economic Regulation
2540 Shumard Oak Blvd.
Tallahassee, Florida 32399-0850

Dear Mr. Devlin:

This letter is to inform you of a change in accounting methodology that Progress Energy Florida, Inc. (“PEF”) intends to implement effective January 1, 2005.

The change implements recommendations made by an independent third party hired by the Company to conduct a study of the approximately $800 million in annual O&M/capital activities for PEF’s and Progress Energy Carolinas (“PEC’s”) energy delivery businesses. The study was commissioned pursuant to a Company review of the consistency of charging practices at PEF and PEC. The study reviewed the practices applied in 2003 and 2004; prior periods were not reviewed as part of that study. The Company is also reviewing its past charging practices. As a result of the study, the independent third party developed a best-practice methodology for mapping work activities to O&M and capital within the Company’s financial system for transmission and distribution expenditures. PEF and PEC moved to the common financial system in 2002 after the merger.

The study, which was completed this month, made specific recommendations to improve the charging methodology for outage and emergency (“O&E”) activities and indirect capital accounts. A summary of those recommendations, which describe the changes PEF intends to adopt, is attached. The study indicates that, if the new methodology had been used in 2003 by PEF, approximately $33 million of costs charged to capital primarily for outage and emergency activities, could properly have been expensed. Costs for major or named tropical storms are not included in O&E costs and are tracked in separate accounts in accordance with previous Commission guidance.

The Company will begin to apply the new methodology beginning January 1, 2005. The Company is not proposing to adjust amounts recorded for accounting purposes for any periods prior to January 1, 2005 as a result of the study. The Company believes there has been no adverse impact on ratepayers. Any issues associated with the effect of the new accounting methodology in future rates can be addressed next year in the process to address the expiration of PEF’s current rate stipulation.

Finally, please note that as with all accounting changes, the matters discussed in this letter have been reviewed by our Board of Directors (including the Audit Committee) and our external auditors.

Sincerely,

/s/ Javier J. Portuondo

Javier J. Portuondo
Director, Regulatory Services-Florida

Attachment

Summary of Proposed Accounting Changes

Changes to Practices for the Outage & Emergency (O&E) Account

o
 

o

 

 

 

 

 

o
 
 
 
  Adopt a charging practice for the O&E accounts that distinguishes between replacement (i.e., capital)
and repair (i.e., expense) costs.

To implement the above, segregate Repair and Replace Activities in O&E Account for PEC and PEF as follows

       - Repair Overhead

       - Replace Overhead

       - Repair Underground

       - Replace Underground

           Note: All above activities will be further split between outage and corrective maintenance

Subsequent to segregating O&E activities as described above, PEC and PEF will update their existing charging guidelines to provide specific instructions regarding the use of repair versus replace activities. Charging guidelines will further emphasize that repair activities are used to return an existing unit of property to its intended use and replace activities are used when an existing unit of property is replaced.

Recommendations Regarding Indirect Accounts

o
  
  

o
  

  
  

  

o
  

o The Company's methodology for use of Indirect Accounts is generally appropriate, including the process
changes that the Company identified in 2003 and implemented beginning in 2004. The following steps are
intended to ensure the effectiveness of that methodology, including the recent changes.

Provide clearer instruction for line and service personnel to minimize their use of indirect capital
accounts , for example

       - Time sheet instructions that work such as pre-job meetings should be charged to the appropriate capital
                account, not to the indirect account

       - Time sheet instructions should explain that "miscellaneous items" should generally be charged to expense

Transmission planning costs related to a specific project that comes to fruition should be assigned to
that capital project.

The Company should review its practices related to indirect capital every two years.