CP&L shareholders meet.

WILMINGTON, N.C.--(BUSINESS WIRE)--May 8, 1996--CP&L posted a record year for operating performance, earnings and reduced costs for customers, chairman and chief executive officer Sherwood H. Smith Jr. told shareholders at the company's 1996 annual meeting May 8.

In addition, Smith announced that he plans to recommend to the board of directors that William Cavanaugh III, CP&L's president and chief operating officer, succeed him as CEO, effective Oct. 1.

CP&L shareholders, gathered on the campus of the University of North Carolina at Wilmington, where Smith also spoke to the Wilmington Chamber of Commerce.

In his remarks to shareholders, Smith cited the performance of the company's generating plants, increased efficiencies and cost-reduction efforts throughout the company, benchmarking initiatives and stragetic plans for the future as reasons why CP&L's long-term financial outlook remains strong.

"These accomplishments didn't happen by chance," Smith said. "They're the result of careful planning and hard work on the part of all of CP&L's employees in a challenging and changing business and regulatory environment."

Smith pointed to several highlights of CP&L's performance during 1995:

-- Nuclear plant performance: The Brunswick Plant near Southport, N.C., earned a superior rating in all areas assessed by the Nuclear Regulatory Commission(NRC) in June, joining the Harris Plant in Wake County in achieving a performance level attained by only one in five U.S. nuclear plants. The Harris Plant's superior assessment was reaffirmed last month by the NRC.

Brunswick Unit 2 set an industry record for continuous operation by a boiling-water reactor. The unit operated for 581 days before being taken out of service for a refueling and maintenance outage in February.

CP&L's nuclear plants also generated a company-record 23 billion kilowatt hours of electricity, helping lower its cost of producing electricity.

The company's three nuclear plants achieved a combined capacity factor -- a measure of the plant's production as compared to potential -- of 86 percent, a company record, during the year and met the company's goals for safe performance.

-- Lowering costs: The company continues to look for ways to lower generation costs in other areas as well, such as renegotiating coal contracts and sharing resources among power plants.

CP&L's success, Smith said, is linked to eight corporate values that enable the company to create strong partnerships with its customers, with business associates and with one another. During 1995, CP&L build on those values to strenghen its work force of 7,000 employees.

CP&L in 1995 adopted a five-year Strategic Plan to guide the company in its quest to remain a leader in the electric utility industry -- a leader in cost, reliability and quality of operations, service to customers, success for employees and returns to investors.

The company continued in 1995 to identify best industry practices, and to reassess staffing needs. By combining these initiatives with information technology projects in transmission, marketing, customer service and human resources, CP&L expects to further reduce operating costs in 1996.

CP&L has a number of initiatives in place and being developed to further reduce costs across the company. CP&L customers pay less for electricity today than they did in 1990, despite an overall increase in the cost of living of more than 25% during that period.

-- Financial: CP&L earnings in 1995 totaled about $3.0 billion, and earnings per share of common stock were $2.48, compared to earnings of $2.9 billion and earnings per share of $2.03 in 1994. Net income and earnings per share were driven by increased electricity sales, as the Carolinas returned to more normal weather patterns after a mild 1994.

Also in 1995, CP&L increased its shareholder dividend for the 13th time in the last 14 years.

-- Commitment to safety: CP&L remains committed to safety in all its operations, Smith said. Working safely saves the company money that would be lost to employee sicktime, property and equipment damage, work delays and interruptions. CP&L is recognized as a leader in the electric utility industry in the area of safety. In fact, during 1995, CP&L employees set an industry record by working more than 13.5 million continuous hours without a lost-time injury.

These initiatives and others combine to foretell a bright future, Smith told shareholders. "This year, we will build upon our recent good performance," Smith said. "We will change as necessary to remain competitive, and we'll stretch to reach ambitious goals and achieve our objectives. We intend to continue to be recognized as an industry leader and to remain a preferred investment for our shareholders. To do so, we'll depend on upon a team of talented, skilled and highly motivated people and the support of our shareholders, as evidenced here today."

Industry structure

However, Smith warned of attempts by some associations of large electricty customers and independent power producers to change the structure of the electric utility industry without concern for how those changes might affect others.

"CP&L and its shareholders have invested billions of dollars to build an electrical system to provide customers with adequate, reliable electric power at the push of a button," Smith said. "This system was built under the premise that we have the obligation to provide all our customers with reliable service at reasonable cost, now and in the future."

Allowing large customers to take electric service from other suppliers could leave remaining electricity customers and utility shareholders faced with the responsibility of paying for the facilities -- the generating plants, transmission lines and other infrastructure -- built to serve all customers. Thus, the majority of customers could see their electricity rates increase.

"CP&L opposes deregulation proposals that favor a few at the expense of many," Smith said. "Rather, we support regulatory and competitive rules that are fair to all customers, treat investors justly and maintain state -- as opposed to federal -- regulatory controls."

Recommendation of new CEO

In announcing his intention to recommend Cavanaugh as his successor as the company's CEO, Smith, who will be 62 in September, said he plans to remain active with CP&L and will continue as chairman of the board of directors. The formal recommendation and election will be presented at the Sept. 18 meeting of the company's board of directors as a component of CP&L's overall management succession plan.

Cavanaugh, 57, joined CP&L as president and chief operating officer in 1992.

"Bill Cavanaugh is one of the most respected executives in the utility industry today and his management skill has been a driving force in CP&L's success. We will benefit from his vision, energy and leadership as chief executive officer," Smith commented. -0-

CP&L provides electric service to 1.1 million customers -- representing a population of about 3.75 million people -- in a 30,000-square-mile area that includes much of central and eastern North Carolina, the Asheville area and northeastern South Carolina.

CONTACT: Carolina Power & Light, Raleigh

Mike Hughes, 919/546-6189

KEYWORDS: NORTH CAROLINA SOUTH CAROLINA

INDUSTRY KEYWORD: ENERGY REPEATS: New York 212-575-8822 or 800-221-2462; Boston 617-236-4266 or

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