8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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):  January 20, 2012

(Commission File Number)	Exact names of registrants as specified in their charters, address of principal executive offices, telephone number and state of incorporation	(IRS Employer Identification No.)
1-15929	PROGRESS ENERGY, INC.	56-2155481
	410 S. Wilmington Street
	Raleigh, North Carolina 27601-1748
	Telephone: (919) 546-6111
	State of Incorporation: North Carolina
1-3274	FLORIDA POWER CORPORATION d/b/a Progress Energy Florida, Inc. 299 First Avenue North St. Petersburg, Florida 33701 Telephone: (727) 820-5151 State of Incorporation: Florida	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:

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

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

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

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

Section 8 – OTHER EVENTS

Item 8.01  Other Events.

 Progress Energy, Inc. issued a press release on January 20, 2012 regarding a settlement agreement filed with the Florida Public Service Commission concerning the Crystal River Nuclear Plant outage, the proposed Levy County nuclear project and related rate issues. A copy of this release is being filed as Exhibit 99.1 to this Form 8-K. The Company also distributed a communication to analysts providing further details of the settlement agreement. A copy of this communication is being filed as Exhibit 99.2 to this Form 8-K.

Section 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01  Financial Statements and Exhibits.

(d)          EXHIBITS.

99.1 Press Release dated January 20, 2012 with respect to a settlement agreement filed with the Florida Public Service Commission.

99.2 Communication distributed to analysts with respect to a settlement agreement filed with the Florida Public Service Commission.

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. and FLORIDA POWER CORPORATION d/b/a PROGRESS ENERGY FLORIDA, INC.
	Registrants
By:	/s/ David B. Fountain
	David B. Fountain
	Assistant Secretary Progress Energy, Inc. Corporate Secretary Florida Power Corporation d/b/a Progress Energy Florida, Inc.

Date:  January 23, 2012

INDEX TO EXHIBITS

Exhibit No. Description

99.1 Press Release dated January 20, 2012 with respect to a settlement agreement filed with the Florida Public Service Commission.

99.2 Communication distributed to analysts with respect to a settlement agreement filed with the Florida Public Service Commission.

EX-99.1

EXHIBIT 99.1

Progress Energy Florida reaches multi-year agreement with consumer advocates regarding Crystal River nuclear outage, Levy County nuclear project and related rate issues

Company schedules conference call for analysts on Jan. 23 at 11 a.m.

ST. PETERSBURG, Fla. (Jan. 20, 2012) – Today, Progress Energy filed a comprehensive settlement agreement with the Florida Public Service Commission (FPSC) that will help moderate electricity costs for customers in the coming years.

Developed collaboratively with the Office of Public Counsel and other consumer advocates, the agreement provides customers a refund of a portion of Crystal River Nuclear Plant (CR3) replacement fuel costs and rate certainty related to the company’s proposed Levy County nuclear project and base rates.

“This agreement reflects the hard work of numerous organizations and individuals who recognize that the lingering slow economy continues to affect many of our customers,” said Vincent Dolan, Progress Energy Florida president and CEO. “The agreement helps to ensure the continued safe, reliable and environmentally sound operation of the electric system that serves more than 1.6 million Florida families and businesses.”

The agreement:

● Provides for a $288 million refund to customers of replacement power costs associated with the ongoing CR3 outage;

● Removes CR3 from base rates while the company continues to analyze options for the plant;

● Limits costs customers will be charged through 2017 for the proposed Levy County nuclear project; and

● Allows for base rates to adjust in 2013, better reflecting the true costs for the company to maintain and improve the electric system.

If approved by the FPSC, the settlement will take effect with the first billing cycle of January 2013.

Crystal River Nuclear Plant

As a resolution of the CR3 outage issues pending in the current docket before the FPSC, Progress Energy Florida will remove its existing nuclear plant from base rates starting in 2013 while the company continues to evaluate options for the plant. In addition, the company will refund customers $288 million for replacement power costs associated with the ongoing outage.

Discussions are continuing with Nuclear Electric Insurance Limited (NEIL) related to insurance coverage. The outer portion of the concrete containment structure delaminated, or separated, during work to replace CR3’s steam generators.

Proposed Levy County nuclear project

Under the settlement, the portion of the nuclear cost-recovery monthly fee (part of customers’ monthly bills) for the proposed Levy County nuclear project, including funding to complete the license application process with the Nuclear Regulatory Commission (NRC), will be fixed from 2013 through 2017.

“We continue to believe additional carbon-free nuclear energy should be a part of our future, particularly as the cost of environmental regulations on other forms of electricity generation become increasingly stringent and expensive,” Dolan said. “This approach helps customers in the short term while we all press through these difficult economic times.”

The company’s application for the combined license for the proposed Levy County nuclear project remains on track before the NRC and the combined license is expected to be issued in early 2013.

Base rates

Base rates cover a regulated electric company’s cost of producing and delivering electricity to customers’ homes and businesses, including maintenance expenses for power plants, power lines and similar costs. Progress Energy’s current base rate agreement expires at the end of 2012.

Under the settlement, starting in 2013 base rates will increase $150 million to cover the cost to continue to provide safe, reliable and environmentally sound energy to Progress Energy’s more than 1.6 million homes and businesses in Florida. This increase will be largely offset in 2013 and 2014 by the fuel refund. The new base rates exclude the CR3 plant costs until the unit returns to service.

When all the agreement provisions are factored in, the estimated 2013 total adjustment for the average residential bill is approximately $4.93, or 4 percent, over current rates.

The total customer bill for 2013 and beyond will change as additional components of the bill, such as fuel, energy efficiency and environmental investments, rise and fall with changes in costs. Those expenses are filed and reviewed with the FPSC each year separate from the base rate.

Progress Energy will hold a conference call with the investment community on Monday, Jan. 23, 2012, at 11 a.m. ET (8 a.m. PT). Investors, media and the public may listen to the conference call by dialing (913) 312-0648, confirmation code 1051274. If you encounter problems, please contact Investor Relations at (919) 546-6057.

About Progress Energy

Progress Energy (NYSE: PGN), headquartered in Raleigh, N.C., is a Fortune 500 energy company with more than 22,000 megawatts of generation capacity and approximately $10 billion in annual revenues. Progress Energy includes two major electric utilities that serve about 3.1 million customers in the Carolinas and Florida. The company has earned the Edison Electric Institute's Edison Award, the industry's highest honor, in recognition of its operational excellence, and was the first utility to receive the prestigious J.D. Power and Associates Founder's Award for customer service. The company is pursuing a balanced strategy for a secure energy future, which includes aggressive energy-efficiency programs, investments in renewable energy technologies and a state-of-the-art electricity system. Progress Energy celebrated a century of service in 2008. Visit the company’s website at www.progress-energy.com.

#  #  #

Media contact: Progress Energy Florida 24-hour media line, 866.520.6397

Follow Progress Energy on Twitter: www.twitter.com/ProgressEnergy

Follow Progress Energy Florida on Facebook: www.facebook.com/ProgressEnergyFlorida

EX-99.2

EXHIBIT 99.2

PROGRESS ENERGY FLORIDA SUMMARY OF SETTLEMENT AGREEMENT

Base Rates:

●  Term of Rate Freeze:  2013 – 2016 (Except as provided elsewhere)

●  Revenue Requirement increase:  $150M

o   % impact on Total Base Revenues   1.23% (Net of Base Increase & Clause Decreases)

●  Customer Bill Impacts (Based on Projected 2012 Factors & Adj. only for Settlement Provisions):

o   Approx. Impact on 2013 Residential Customer total bill $4.93/4.0% (including fuel refund)

o   Total Bill impact on 2013 Commercial Customers 4-5% & Industrial (Excluding IS/CS Rate Schedules) Customers  3.5-4.5% (including fuel refund)

●  Efective Date:  First billing cycle for January 2013

●  Return on Equity: 10.5%; with increase to 10.7% upon CR3 commercial operation

●  CR3 Assets placed in extended cold shutdown (ECS) and removed from rate base in 2013; carrying cost allowed on ECS assets until returned to commercial operation

Replacement Fuel and Purchase Power:

●  Refund $288 million (satisfies the period of 2009 – 2014 and parties waive right to challenge replacement fuel and purchase power regardless of final NEIL decision on replacement power coverage and resolves all CR3 outage prudence issues through March 2011.)

o   PEF shall refund through the Fuel Clause 50% of $258 million in 2013, and the remaining 50% through the Fuel Clause in 2014.

o   The remaining balance of $30 million will be refunded through the Fuel Clause solely to residential & general service customers at an annual rate of $10 million per in years 2014, 2015 and 2016.

●  Refunds in 2015 & 2016

1.   If repairs begin prior to 12/31/2012 then no refund required in 2015 & 2016.

2.   If repairs don’t begin prior to 12/31/2012; then PEF will refund (pro-rated to date of in-service) a not to exceed $40 million in 2015 & a not to exceed $60 million in 2016.

CR3 Repair:

●  If repairs begin prior to 12/31/2012; parties waive rights to challenge repair decision, repair plan and recovery of expenditures incurred up to the final resolution of NEIL coverage (through arbitration or settlement).

●  If repairs don’t begin prior to 12/31/2012; parties retain all rights to challenge recovery of expenditures.

●  Parties agree to discuss treatment of any gap between NEIL coverage and project budget less CWIP spent prior to final resolution of NEIL coverage.

●  PEF is allowed to increase Base Rates upon the commercial operation of the unit.

●  Sharing on any budget overruns – 50/50 on first $400M in overruns; will discuss anything above $400M and if unable to resolve will take to Commission.

CR3 Retirement:

●  No Challenge to full recovery of and on all CR3 Investments.

o   Ability to apply deferral accounting:

§   Ability to defer all CR3 related costs (depreciation, O&M, property taxes, etc.)

§   Ability to accrue a non-cash return on all deferred costs

§   Parties are credited for O&M/Property taxes which are obviated due to retirement or are otherwise funded by Nuclear Decommissioning Trust or cease altogether at some point, such as property taxes.

o   Carrying Cost set at 70% of the Commission authorized ROE plus cost of debt.

Levy Nuclear Plant (LNP):

●  Parties agree to allow full recovery of all costs approx. $350M (including EPC cancellation costs) based on a fixed rate per kWh until balance is fully recovered (approx. 5-yrs w/ true-up).

●  Parties allow full recovery of COL costs.

●  Parties allow wholesale allocated LNP spending accumulated through this period to be amortized against retail rates, fully by 2016.

CR3 Uprate Project:

●  Parties allow for continued recovery of project carrying costs through NCRC.

●  Parties require that base rate in-service increase occur at least nine months after in-service (deferral accounting is approved).

Environmental Cost Recovery Clause (ECRC):

●  Parties agree to allow the reclass CAIR investments from ECRC to Base Rates beginning in 2014.

●  O&M costs associated with the above environmental regulations will remain recoverable in ECRC.