Holding Company Act Release 27568

SECURITIES AND EXCHANGE COMMISSION

(Release No. 35-27568)

Filings Under the Public Utility Holding Company Act of 1935, as amended ("Act")

September 13, 2002

Notice is hereby given that the following filing(s) has/have been made with the Commission pursuant to provisions of the Act and rules promulgated under the Act. All interested persons are referred to the application(s) and/or declaration(s) for complete statements of the proposed transaction(s) summarized below. The application(s) and/or declaration(s) and any amendment(s) is/are available for public inspection through the Commission's Branch of Public Reference.

Interested persons wishing to comment or request a hearing on the application(s) and/or declaration(s) should submit their views in writing by October 8, 2002, to the Secretary, Securities and Exchange Commission, Washington, D.C. 20549-0609, and serve a copy on the relevant applicant(s) and/or declarant(s) at the address(es) specified below. Proof of service (by affidavit or, in the case of an attorney at law, by certificate) should be filed with the request. Any request for hearing should identify specifically the issues of facts or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in the matter. After October 8, 2002, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective.

Progress Energy, Inc. et al. (70-9659)

Progress Energy, Inc. ("Progress Energy"), a registered holding company, and its indirect wholly-owned nonutility subsidiary, Progress Ventures, Inc. ("Progress Ventures")(together, "Applicants"), both of 410 South Wilmington Street, Raleigh, NC 27602, have filed a post-effective amendment to their application-declaration in this filing under sections 9(a) and 10 of the Act and rule 54 under the Act.

Progress Energy owns, directly or indirectly, all of the issued and outstanding common stock of three public-utility subsidiaries: Carolina Power & Light Company ("CP&L"), which generates, transmits, purchases and sells electricity in parts of North Carolina and South Carolina; Florida Power Corporation ("Florida Power"), which generates, transmits, purchases and sells electricity in parts of Florida; and North Carolina Natural Gas Corporation ("NCNG"), which distributes gas at retail in parts of North Carolina. Collectively, CP&L, Florida Power and NCNG are referred to as the "Utility Subsidiaries." Together, the Utility Subsidiaries provide electric service and natural gas or gas transportation service to approximately 2.9 million wholesale and retail customers in parts of North Carolina, South Carolina and Florida. Progress Ventures is an intermediate nonutility holding company that holds interests in several "exempt wholesale generators" ("EWGs"), as defined in section 32 of the Act, and energy-related companies within the meaning of rule 58 that are engaged in synthetic fuels production.

By order dated December 12, 2000, in this filing ("December 2000 Order"),¹ the Commission authorized Progress Energy, the Utility Subsidiaries and Progress Energy's direct and indirect nonutility subsidiaries, among other things, to engage in a program of external and intrasystem financing and to organize and acquire the equity securities of specified types of new subsidiaries through September 30, 2003 ("Authorization Period"). Among other specific authorization granted by the December 2000 Order, the Commission authorized Progress Energy, through its nonutility subsidiaries, to invest up to $500 million ("Investment Limitation") in connection with the acquisition or construction of certain types of nonutility energy-related assets in the United States that are incidental to their energy marketing activities ("Energy-Related Assets") or in the equity securities of existing or new companies substantially all of whose physical properties consist or will consist of Energy-Related Assets.²

Applicants state that Progress Ventures entered into a letter of intent with Westchester Gas Company, a nonassociate company, to acquire approximately 215 producing gas wells, 52 miles of intrastate pipeline and 170 miles of gas gathering lines located in Texas and Louisiana. The transaction closed on April 29, 2002. Progress Ventures paid a total consideration of $148 million, which includes $128 million in Progress Energy common stock and $20 million in cash.

Applicants now request a supplemental order of the Commission to increase the Investment Limitation from $500 million to $1 billion. Progress Energy, through Progress Ventures, states that it is actively considering several other investments in Energy-Related Assets similar to the Westchester Gas assets. Applicants state that investment in Energy-Related Assets represent an important component of Progress Ventures' overall strategy to diversify its portfolio of assets and earnings. In addition, Applicants state investments in Energy-Related Assets are intended to provide a fuel hedge for Progress Ventures' merchant generation plants.³

Applicants further state that, although Progress Ventures has not identified any additional investments in Energy-Related Assets at this time, its current business plan contemplates additional investments of this type that would, in the aggregate, exceed the remaining authorized amount under the Investment Limitation (approximately $350 million following the Westchester Gas transaction). Applicants assert that the proposed increase is reasonable and would represent a prudent use of capital for a company the size of Progress Energy.

All other terms, conditions and limitations contained in the December 2000 Order, as modified by the September 20, 2001 and March 15, 2002 orders, shall remain the same.

For the Commission, by the Division of Investment Management, pursuant to delegated authority.

¹ See Progress Energy, Inc. et al., Holding Co. Act Release No. 27297. The December 2000 order was modified by orders dated September 20, 2001 and March 15, 2002, Holding Co. Act Release Nos. 27440 and 27500, respectively.

² Energy-Related Assets are defined under the December 2000 Order to include natural gas production, gathering, processing, storage and transportation facilities and equipment, liquid oil reserves and storage facilities, and associated facilities.

³ Progress Ventures states that it currently has approximately 3,100 MW of gas and oil fired merchant generation in operation or under construction and may expand its merchant generation portfolio by another 2,800 MW over the next few years through acquisitions or new installations.

http://www.sec.gov/divisions/investment/opur/filing/35-27568.htm