Progress CEO: We're not Enron

Shareholders' meetings usually give CEOs a chance to trumpet their recent accomplishments and forecast the future.

But William Cavanaugh, Progress Energy Inc.'s chief executive, used Wednesday's annual meeting to explain what the parent company of Florida Power is not: Enron.

"We would not tolerate the conflicts of interest you've heard about with Enron and some others," he said. "That's simply not how we do business."

With the dramatic collapse of the Houston energy trading giant casting a pall over the entire industry, Progress became the latest electric utility company to distance itself from Enron and the thicket of accounting irregularities that brought the bankrupt company down.

Cavanaugh went so far as to provide a tutorial on the structure of the energy industry, explaining at length that Progress is a more diversified company than Enron and arguing that it is more conservative in its accounting and disclosure practices.

"In the months since Enron's collapse, and with revelations at other companies, there has been intense focus on how corporations report financial data," he observed, stressing that Progress has "no unusual off-balance-sheet financing or improper bookkeeping."

Even this last reassurance wasn't enough for one alert shareholder, who asked the Progress chairman to explain why he seemed to clarify his statement with the term, "unusual."

That drew an ice-breaking chuckle from Cavanaugh, who asked chief financial officer Peter Scott to step in.

"We don't have anything that would show up and surprise you (or) us with those types of issues that have confronted some of the other high-flying energy traders who have lost their credibility," Scott said.

Wednesday's shareholders meeting was the Raleigh, N.C., company's first to be held in St. Petersburg since the company was formed through Carolina Power & Light's November 2000 acquisition of Florida Power's parent Florida Progress.

In tacit acknowledgement of Florida Power's past struggles with service reliability, Cavanaugh said that Progress intends to raise its local subsidiary's performance to the "top tier of power companies," while adding that, "it's not there yet, but it's headed in the right direction."

Cavanaugh said after the meeting that Progress is also working to improve communication within Florida Power to address what he said had historically been a climate of "misunderstanding and lack of trust" toward senior management.

Scott reaffirmed that Progress expects 2002 net income to come in at between $3.90 and $4.10 a share, up from net income last year of $2.65 a share, or $3.40 excluding one-time charges.

Progress' shares closed Wednesday at $51.96, up 82 cents, or 1.6 percent.

-- Louis Hau can be reached at hau@sptimes.com or (813) 226-3404.

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