UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                                 FORM 10-Q

 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 1997

                                         OR

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

For the transition period from _______ to  _______

                 Exact name of Registrant as specified in       I.R.S. Employer
  Commission     its charter, state of incorporation, address   Identification
   File No.      of principal executive offices, telephone           Number
 ------------    --------------------------------------------   ---------------

   1-8349        FLORIDA PROGRESS CORPORATION                     59-2147112    

                 A Florida Corporation
                 One Progress Plaza
                 St. Petersburg, Florida 33701
                 Telephone (813) 824-6400

   1-3274        FLORIDA POWER CORPORATION                        59-0247770
                 A Florida Corporation
                 3201 34th Street South
                 St. Petersburg, Florida 33711
                 Telephone (813) 866-5151

Indicate by check mark whether each registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ___X___ No ______

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                                   Description of        Shares Outstanding
         Registrant                    Class              at June 30, 1997
         ----------                --------------        ------------------

Florida Progress Corporation      Common Stock,
                                  without par value           97,061,524

Florida Power Corporation         Common Stock,
                                  without par value      100 (all of which were
                                                         held by Florida
                                                         Progress Corporation)

This combined Form 10-Q represents separate filings by Florida Progress
Corporation and Florida Power Corporation. Florida Power makes no
representations as to the information relating to Florida Progress' diversified
operations.
<PAGE>
                         PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                          FLORIDA PROGRESS CORPORATION
                        CONSOLIDATED FINANCIAL STATEMENTS

FLORIDA PROGRESS CORPORATION
Consolidated Statements of Income
(In millions, except per share amounts)
                                        Three Months Ended   Six Months Ended
                                             June 30,            June 30,
                                          1997     1996       1997       1996
                                        -------- --------   --------   --------
                                            (Unaudited)          (Unaudited)
REVENUES:
  Electric utility                       $597.2   $588.7    $1,151.0   $1,136.0
  Diversified                             200.1    184.9       393.8      368.0
                                        -------- --------    --------  --------
                                          797.3    773.6     1,544.8    1,504.0
EXPENSES:                               -------- --------    --------  --------
  Electric utility:
    Fuel                                  118.8     90.7       213.7      175.6
    Purchased power                       116.8    137.7       244.0      260.6
    Energy conservation cost               16.6     17.1        27.6       36.8
    Operations and maintenance            110.7     97.8       213.1      198.2
    Extended nuclear outage - O&M
      and replacement fuel costs          162.3       -        170.2       -
    Depreciation                           74.2     89.2       148.5      166.8
    Taxes other than income taxes          48.6     45.2        96.7       92.4
                                        -------- --------   ---------  ---------
                                          648.0    477.7     1,113.8      930.4
                                        -------- --------   ---------  ---------
  Diversified:
    Cost of sales                         169.1    154.3       340.9      309.4
    Other                                  14.8     16.6        29.7       32.0
                                        -------- --------   ---------  ---------
                                          183.9    170.9       370.6      341.4
                                        -------- --------   ---------  ---------
INCOME (LOSS) FROM OPERATIONS             (34.6)   125.0        60.4      232.2
                                        -------- --------   ---------  ---------
INTEREST EXPENSE AND OTHER:
  Interest expense                         35.8     34.2        70.1       68.8
  Allowance for funds used during
    construction                           (2.3)    (1.9)       (4.4)      (3.6)
  Preferred dividend requirements of
    Florida Power                           0.4      2.1         0.8        4.4
  Other expense (income), net              (0.7)    (1.4)       (0.3)      (4.7)
                                        -------- --------   ---------  ---------
                                           33.2     33.0        66.2       64.9
                                        -------- --------   ---------  ---------
INCOME (LOSS) FROM CONTINUING OPERATIONS
  BEFORE INCOME TAXES                     (67.8)    92.0        (5.8)     167.3
  Income Taxes                            (29.6)    33.2        (9.6)      60.3
                                        -------- --------   ---------  ---------
NET INCOME (LOSS) FROM CONTINUING
  OPERATIONS                              (38.2)    58.8         3.8      107.0

DISCONTINUED OPERATIONS, NET
  OF INCOME TAXES                            -     (25.0)       -         (25.0)
                                        -------- --------   ---------  ---------

NET INCOME (LOSS)                        ($38.2)   $33.8        $3.8      $82.0
                                        ======== ========   =========  =========
AVERAGE SHARES OF COMMON STOCK
  OUTSTANDING                              97.1     96.8        97.0       96.6
                                        ======== ========   =========  =========
EARNINGS (LOSS) PER AVERAGE COMMON SHARE
  CONTINUING OPERATIONS                  ($0.39)   $0.61       $0.04      $1.11
DISCONTINUED OPERATIONS                      -    ( 0.26)       -        ( 0.26)
                                        -------- --------   ---------  ---------
EARNINGS (LOSS) PER AVERAGE COMMON SHARE ($0.39)   $0.35       $0.04      $0.85
                                        ======== ========   =========  =========

DIVIDENDS PER COMMON SHARE               $0.525   $0.515      $1.050     $1.030
                                        ======== ========   =========  =========

Prior periods reflect the recapitalization of the spin-off company, Echelon
International, and its associated treatment as discontinued operations.  The
accompanying notes are an integral part of these financial statements.


                                          1
                                          <PAGE>
FLORIDA PROGRESS CORPORATION
Consolidated Balance Sheets
(In millions)

                                                        June 30,    December 31,
                                                           1997         1996
                                                        -----------  -----------
ASSETS                                                  (Unaudited)

PROPERTY, PLANT AND EQUIPMENT:
  Electric utility plant in service and held
    for future use                                       $5,994.8     $5,965.6
  Less - Accumulated depreciation                         2,440.2      2,335.8
         Accumulated decommissioning for nuclear plant      207.1        193.3
         Accumulated dismantlement for fossil plants        127.9        119.6
                                                        ----------   ----------
                                                          3,219.6      3,316.9
  Construction work in progress                             240.6        140.3
  Nuclear fuel, net of amortization of $356.7
    in 1997 and $356.7 in 1996                               63.7         59.9
                                                        ----------   ----------
        Net electric utility property                     3,523.9      3,517.1
  Other property, net of depreciation of $186.7
    in 1997 and $173.8 in 1996                              332.5        309.3
                                                        ----------   ----------
                                                          3,856.4      3,826.4
                                                        ----------   ----------
CURRENT ASSETS:
  Cash and equivalents                                       19.1          5.2
  Accounts receivable, net                                  326.7        265.0
  Inventories at average cost:
    Fuel                                                     87.1         67.1
    Materials and supplies                                   95.0         95.4
    Diversified materials                                   138.1        125.5
  Underrecovery of fuel cost                                 59.0         82.6
  Deferred income taxes                                      60.8         35.6
  Other                                                      18.0         12.6
                                                        ----------   ----------
                                                            803.8        689.0
                                                        ----------   ----------
OTHER ASSETS:
  Investments:
    Loans receivable, net                                    35.0         68.1
    Marketable securities                                   238.6        217.9
    Nuclear plant decommissioning fund                      232.5        207.8
    Joint ventures and partnerships                          53.2         41.9
  Deferred insurance policy acquisition costs               123.9        120.9
  Other                                                     185.7        176.4
                                                        ----------   ----------
                                                            868.9        833.0
                                                        ----------   ----------
                                                         $5,529.1     $5,348.4
                                                        ==========   ==========

   The accompanying notes are an integral part of these financial statements.





                                          2<PAGE>
FLORIDA PROGRESS CORPORATION
Consolidated Balance Sheets
(In millions)

                                                       June 30,    December 31,
                                                         1997         1996
                                                      -----------  -----------
CAPITAL AND LIABILITIES                               (Unaudited)

COMMON STOCK EQUITY:
  Common stock                                          $1,209.0     $1,208.3
  Retained earnings                                        618.4        716.5
  Unrealized loss on securities available for sale          (1.2)        (0.6)
                                                       ----------   ----------
                                                         1,826.2      1,924.2
CUMULATIVE PREFERRED STOCK OF FLORIDA POWER:
    Without sinking funds                                   33.5         33.5

LONG-TERM DEBT                                           1,826.5      1,776.9
                                                       ----------   ----------
TOTAL CAPITAL                                            3,686.2      3,734.6
                                                       ----------   ----------
CURRENT LIABILITIES:
  Accounts payable                                         216.1        193.2
  Customers' deposits                                       95.1         81.8
  Income taxes payable                                      10.5         27.8
  Accrued other taxes                                       51.6         13.4
  Accrued interest                                          37.2         48.3
  Accrued nuclear outage operation and maintenance cost     72.4          -
  Other                                                     68.8         78.5
                                                       ----------   ----------
                                                           551.7        443.0
  Notes payable                                             94.2          4.1
  Current portion of long-term debt                         25.0         34.9
                                                       ----------   ----------
                                                           670.9        482.0
                                                       ----------   ----------
DEFERRED CREDITS AND OTHER LIABILITIES:
  Deferred income taxes                                    462.7        475.4
  Unamortized investment tax credits                        89.5         93.5
  Insurance policy benefit reserves                        356.1        325.3
  Other postretirement benefit costs                       103.9        100.0
  Other                                                    159.8        137.6
                                                       ----------   ----------
                                                         1,172.0      1,131.8
                                                       ----------   ----------
                                                        $5,529.1     $5,348.4
                                                       ==========   ==========

   The accompanying notes are an integral part of these financial statements.











                                          3<PAGE>
FLORIDA PROGRESS CORPORATION
Consolidated Statements of Cash Flows
(In millions)
                                                            Six Months Ended
                                                                June 30,
                                                            1997        1996
                                                        ----------- -----------
                                                              (Unaudited)
OPERATING ACTIVITIES:
   Income from continuing operations                        $3.8      $107.0
   Adjustments for noncash items:
     Depreciation and amortization                         166.3       187.6
     Extended nuclear outage - O&M and
       replacement fuel costs                              142.6          -
     Deferred income taxes and
       investment tax credits, net                         (48.8)      (26.3)
     Increase in accrued other postretirement
       benefit costs                                         3.9         3.4
     Net change in deferred insurance policy 
       acquisition costs                                    (3.0)       (8.6)
     Net change in insurance policy
       benefit reserves                                     30.8        30.7
   Changes in working capital, net of effects
    from acquisition or sale of businesses:
        Accounts receivable                                (59.4)        8.5
        Inventories                                        (30.0)      (31.5)
        Underrecovery of fuel cost                         (46.6)      (57.3)
        Accounts payable                                    21.8        21.4
        Income taxes payable                               (16.9)       21.2
        Accrued other taxes                                 38.2        38.2
        Other                                              (13.1)      (12.3)
   Other operating activities                                5.8        23.1
                                                        ---------   ---------
        Cash provided by continuing operations             195.4       305.1
                                                        ---------   ---------
    Loss from discontinued operations                         -        (25.0)
    Adjustments for non-cash items                            -          7.4
                                                        ---------   ---------
        Cash used by discontinued operations                  -        (17.6)
                                                        ---------   ---------
                                                           195.4       287.5
                                                        ---------   ---------
INVESTING ACTIVITIES:
  Property additions (including allowance for
    borrowed funds used during construction)              (188.5)     (135.4)
  Purchase of loans and securities, net (including
    repayment of Echelon note)                              11.8       (14.2)
  Proceeds from sale of properties                           4.2         6.1
  Acquisition of businesses                                (14.3)       (3.2)
  Investing activities of discontinued operations             -         12.0
  Other investing activities                               (22.3)      (19.2)
                                                        ---------   ---------
                                                          (209.1)     (153.9)
                                                        ---------   ---------
FINANCING ACTIVITIES:
  Repayment of long-term debt                              (22.2)       (2.1)
  Increase in commercial paper with long-term support       61.7        46.7
  Redemption of preferred stock                               -        (80.9)
  Sale of common stock                                        -         18.6
  Dividends paid on common stock                          (101.9)      (99.7)
  Increase in short-term debt                               90.1          -
  Financing activities of discontinued operations             -        (10.2)
  Other financing activities                                (0.1)       (1.5)
                                                        ---------   ---------
                                                            27.6      (129.1)
                                                        ---------   ---------
NET INCREASE IN CASH AND EQUIVALENTS                        13.9         4.5
   Beginning cash and equivalents                            5.2         4.3
                                                        ---------   ---------
ENDING CASH AND EQUIVALENTS                                $19.1        $8.8
                                                        =========   =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 Cash paid during the period for:
  Interest (net of amount capitalized)                     $78.0       $66.4
  Income taxes (net of refunds)                            $56.5       $61.0

Prior periods reflect the recapitalization of the spin-off company, Echelon
International, and its associated treatment as discontinued operations.  The
accompanying notes are an integral part of these financial statements.

                                          4<PAGE>
                          
FLORIDA POWER CORPORATION
                             FINANCIAL STATEMENTS

FLORIDA POWER CORPORATION
Statements of Income
(In millions)                            Three Months Ended   Six Months Ended
                                              June 30,            June 30,
                                           1997     1996       1997      1996
                                         -------- --------   --------  --------
                                             (Unaudited)        (Unaudited)
OPERATING REVENUES:
    Residential                          $ 306.3  $ 296.3    $ 597.0   $ 612.3
    Commercial                             145.4    131.7      269.6     246.8
    Industrial                              55.1     51.9      107.0      99.7
    Sales for resale                        20.3     37.1       57.4      80.1
    Other                                   70.1     71.7      120.0      97.1
                                         -------- --------  --------- ---------
                                           597.2    588.7    1,151.0   1,136.0
                                         -------- --------  --------- ---------
OPERATING EXPENSES:
 Operation:
    Fuel                                   118.8     90.7      213.7     175.6
    Purchased power                        116.8    137.7      244.0     260.6
    Energy conservation cost                16.6     17.1       27.6      36.8
    Operations and maintenance             110.7     97.8      213.1     198.2
    Extended nuclear outage - O&M
     and replacement fuel costs            162.3      -        170.2      -
    Depreciation                            74.2     89.2      148.5     166.8
    Taxes other than income taxes           48.6     45.2       96.7      92.4
 Income taxes:
    Currently payable                        3.8     43.8       36.0      74.0
    Deferred, net                          (33.2)    (9.9)     (41.2)    (12.9)
    Investment tax credits, net             (1.9)    (2.0)      (3.9)     (4.0)
                                         -------- --------  --------- ---------
                                           (31.3)    31.9       (9.1)     57.1
                                         -------- --------  --------- ---------
                                           616.7    509.6    1,104.7     987.5
                                         -------- --------  --------- ---------
OPERATING INCOME (LOSS)                    (19.5)    79.1       46.3     148.5
                                         -------- --------  --------- ---------
OTHER INCOME AND DEDUCTIONS:
 Allowance for equity funds used
    during construction                      1.4      1.0        2.7       1.9
 Miscellaneous other expense, net            0.1     (0.4)      (0.9)     (1.0)
                                         -------- --------  --------- ---------
                                             1.5      0.6        1.8       0.9
                                         -------- --------  --------- ---------
INTEREST CHARGES
 Interest on long-term debt                 22.4     21.8       44.7      43.9
 Other interest expense                      3.7      2.8        6.7       6.1
                                         -------- --------  --------- ---------
                                            26.1     24.6       51.4      50.0
 Allowance for borrowed funds used
    during construction                     (0.9)    (0.9)      (1.7)     (1.7)
                                         -------- --------  --------- ---------
                                            25.2     23.7       49.7      48.3
                                         -------- --------  --------- ---------
NET INCOME (LOSS)                          (43.2)    56.0       (1.6)    101.1
DIVIDENDS ON PREFERRED STOCK                 0.4      2.1        0.8       4.4
                                         -------- --------  --------- ---------
NET INCOME (LOSS) AFTER DIVIDENDS
  ON PREFERRED STOCK                      ($43.6)   $53.9      ($2.4)    $96.7
                                         ======== ========  ========= =========

The accompanying notes are an integral part of these financial statements.
                                          5<PAGE>
FLORIDA POWER CORPORATION
Balance Sheets
(In millions)

                                                        June 30,    December 31,
                                                          1997         1996
                                                       -----------  -----------
ASSETS                                                 (Unaudited)

PROPERTY, PLANT AND EQUIPMENT:
  Electric utility plant in service and held
    for future use                                       $5,994.8     $5,965.6
  Less - Accumulated depreciation                         2,440.2      2,335.8
         Accumulated decommissioning for nuclear plant      207.1        193.3
         Accumulated dismantlement for fossil plants        127.9        119.6
                                                        ----------   ----------
                                                          3,219.6      3,316.9
  Construction work in progress                             240.6        140.3
  Nuclear fuel, net of amortization of $356.7
    in 1997 and $356.7 in 1996                               63.7         59.9
                                                        ----------   ----------
                                                          3,523.9      3,517.1

  Other property, net                                        12.3         13.3
                                                        ----------   ----------
                                                          3,536.2      3,530.4
                                                        ----------   ----------
CURRENT ASSETS:
  Cash and equivalents                                       14.1          -
  Accounts receivable, less reserve of $4.3
    in 1997 and $4.1 in 1996                                218.6        174.7
  Inventories at average cost:
    Fuel                                                     53.4         47.2
    Materials and supplies                                   95.0         95.4
  Underrecovery of fuel cost                                 59.0         82.6
  Deferred income taxes                                      60.8         35.6
  Other                                                       8.6          6.2
                                                        ----------   ----------
                                                            509.5        441.7
                                                        ----------   ----------
OTHER ASSETS:
  Nuclear plant decommissioning fund                        232.5        207.8
  Unamortized debt expense, being amortized
    over term of debt                                        23.9         25.0
  Other                                                      60.2         59.1
                                                        ----------   ----------
                                                            316.6        291.9
                                                        ----------   ----------
                                                         $4,362.3     $4,264.0
                                                        ==========   ==========

The accompanying notes are an integral part of these financial statements.









                                          6<PAGE>
FLORIDA POWER CORPORATION
Balance Sheets
(In millions)

                                                        June 30,    December 31,
                                                          1997         1996
                                                       -----------  -----------
CAPITALIZATION AND LIABILITIES                         (Unaudited)

CAPITALIZATION:
  Common stock                                          $1,004.4     $1,004.4
  Retained earnings                                        722.4        821.1
                                                       ----------   ----------
                                                         1,726.8      1,825.5
CUMULATIVE PREFERRED STOCK:
    Without sinking funds                                   33.5         33.5

LONG-TERM DEBT                                           1,295.9      1,296.4
                                                       ----------   ----------
TOTAL CAPITAL                                            3,056.2      3,155.4
                                                       ----------   ----------
CURRENT LIABILITIES:
  Accounts payable                                         121.0        115.5
  Accounts payable to associated companies                  23.4         21.2
  Customers' deposits                                       95.1         81.7
  Income taxes payable                                      13.2         10.4
  Accrued other taxes                                       48.1         10.0
  Accrued interest                                          27.2         34.8
  Accrued nuclear outage operation and
   and maintenance costs                                    72.4          -
  Other                                                     39.9         47.3
                                                       ----------   ----------
                                                           440.3        320.9
  Notes payable                                             94.2          4.1
  Current portion of long-term debt                          1.4         21.3
                                                       ----------   ----------
                                                           535.9        346.3
                                                       ----------   ----------
DEFERRED CREDITS AND OTHER LIABILITIES:
  Deferred income taxes                                    463.8        472.3
  Unamortized investment tax credits                        88.9         92.8
  Other postretirement benefit costs                       100.2         96.5
  Other                                                    117.3        100.7
                                                       ----------   ----------
                                                           770.2        762.3
                                                       ----------   ----------
                                                        $4,362.3     $4,264.0
                                                       ==========   ==========

The accompanying notes are an integral part of these financial statements.











                                          7<PAGE>
FLORIDA POWER CORPORATION
Statements of Cash Flows
(In millions)
                                                            Six Months Ended
                                                                June 30,
                                                            1997        1996
                                                         ----------  ----------
                                                               (Unaudited)
OPERATING ACTIVITIES:
 Net income (loss) after dividends on preferred stock      ($2.4)      $96.7
  Adjustments for noncash items:
   Depreciation and amortization                           152.3       175.4
   Extended nuclear outage - O&M and replacement
    fuel costs                                             142.6          -
   Deferred income taxes and investment
    tax credits, net                                       (45.1)      (16.9)
   Increase in accrued other postretirement
    benefit costs                                            3.7         3.0
   Allowance for equity funds used during construction      (2.7)       (1.9)
  Changes in working capital:
        Accounts receivable                                (43.9)      (10.7)
        Inventories                                         (5.8)       (4.3)
        Underrecovery of fuel cost                         (46.6)      (57.3)
        Accounts payable                                     5.6         6.3
        Accounts payable to associated companies             2.2        (2.0)
        Income taxes payable                                 2.8        11.3
        Accrued other taxes                                 38.1        37.9
        Other                                               (4.0)       (9.7)
  Other operating activities                                 5.8        25.8
                                                        ---------   ---------
                                                           202.6       253.6
                                                        ---------   ---------
INVESTING ACTIVITIES:
  Construction expenditures                               (151.8)     (111.3)
  Allowance for borrowed funds used during construction     (1.7)       (1.7)
  Additions to non-utility property                         (1.7)       (1.1)
  Proceeds from sale of properties                           3.2         3.8
  Other investing activities                                (9.7)      (18.1)
                                                        ---------   ---------
                                                          (161.7)     (128.4)
                                                        ---------   ---------
FINANCING ACTIVITIES:
  Repayment of long-term debt                              (20.6)       (0.4)
  Increase in commercial paper with
    long term support                                         -         29.4
  Redemption of preferred stock                               -        (80.9)
  Dividends paid on common stock                           (96.3)      (81.4)
  Equity contributions from parent                            -         12.5
  Increase in short-term debt                               90.1          -
                                                        ---------   ---------
                                                           (26.8)     (120.8)
                                                        ---------   ---------
NET INCREASE IN CASH AND EQUIVALENTS                        14.1         4.4
   Beginning cash and equivalents                             -          0.8
                                                        ---------   ---------
ENDING CASH AND EQUIVALENTS                                $14.1        $5.2
                                                        =========   =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 Cash paid during the period for:
  Interest (net of amount capitalized)                     $55.8       $47.9
  Income taxes (net of refunds)                            $32.4       $62.4

The accompanying notes are an integral part of these financial statements.

                                          8<PAGE>
FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION
NOTES TO FINANCIAL STATEMENTS

1)     On November 21, 1996, the Board of Directors of Florida Progress
       Corporation ("Florida Progress") declared a spin-off distribution to    
       common shareholders of record on December 5, 1996, of the common shares 
       of Echelon International Corporation ("Echelon"). Echelon comprised     
       Florida Progress' lending, leasing and real estate operations. As a     
       result of the spin-off, the former operations of Echelon are shown as   
       discontinued operations in the accompanying Consolidated Statements of  
       Income for the three and six months ended June 30,1996. Net assets of   
       Echelon as of December 18, 1996, the date of the spin-off, were $194.5  
       million. This amount has been charged against Florida Progress' retained
       earnings in the accompanying December 31, 1996 Consolidated Balance Sheet
       to reflect the distribution of Echelon common shares. As used in this   
       Form 10-Q, the term Florida Progress includes its consolidated          
       subsidiaries unless otherwise indicated.

2)     As ordered by the Florida Public Service Commission ("FPSC"), Florida    
       Power Corporation ("Florida Power") is in its third year of conducting a
       three-year test for residential revenue decoupling which began in January
       1995. The difference between target revenues and actual revenues is
       included as a current asset or current liability on the balance sheet.
       Revenue decoupling increased residential revenues by $4.7 million and    
       $12.2 million for the three and six months ended June 30, 1997. For the  
       three and six month periods ended June 30, 1996, revenue decoupling      
       decreased residential revenues by $.8 million and $13.3 million,         
       respectively.

       On June 26, 1997, the FPSC approved a settlement agreement between       
       Florida Power and all parties who intervened in Florida Power's request  
       to collect replacement fuel and purchased power costs ("replacement power
       costs") resulting from the extended outage of its Crystal River Nuclear 
       Plant ("CR3").  CR3 has been off-line since September 1996 to address   
       certain design issues related to its safety systems. In accordance with 
       the terms of the agreement, Florida Power recorded $70 million in       
       replacement power costs in the second quarter of 1997 which will not be 
       collected from retail customers through the fuel adjustment clause.

3)     In June 1997, the Financial Accounting Standards Board ("FASB") issued  
       Financial Accounting Standard ("FAS") No. 130, "Reporting Comprehensive 
       Income" which establishes standards for reporting comprehensive income. 
       The standard defines comprehensive income as the change in equity of an 
       enterprise except those changes resulting from shareholder transactions.
       All components of comprehensive income are required to be reported in a 
       new financial statement that is displayed with equal prominence as      
       existing financial statements.  Florida Progress will be required to    
       adopt this statement January 1, 1998.  As the standard addresses        
       reporting and presentation issues only, there will be no impact on      
       earnings from the adoption of this standard.

       Also in June 1997, the FASB issued FAS No. 131, "Disclosure about       
       Segments of an Enterprise and Related Information" which establishes    
       standards for additional disclosure about operating segments for interim
       and annual financial statements.  The standard requires financial and   
       descriptive information to be disclosed for segments whose operating    
       results are reviewed by the chief operating officer for decisions on    
       resource allocation.  It also establishes standards for related         
       disclosures about products and services, geographic areas, and major    
       customers.  Florida Progress will be required to adopt this statement for
       financial statements for the fiscal year ending December 31, 1998.  As  
       the standard addresses reporting and disclosure issues only, there will 
       be no impact on earnings from the adoption of this standard.

                                          9
<PAGE>
4)    CONTINGENCIES

       PURCHASED POWER COMMITMENTS

       The purchased power contracts between Florida Power and qualifying      
       facilities employ separate pricing methodologies for capacity payments  
       and energy payments. Florida Power has interpreted the pricing provision
       in these contracts to allow it to pay an as-available energy price rather
       than a higher firm energy price when the avoided unit upon which the    
       contract is based would not have been operated.

       Four cogenerators, Pasco Cogen, Ltd. ("Pasco"), Lake Cogen, Ltd,        
       ("Lake"), Orlando Cogen, Limited ("Orlando"), and Metropolitan Dade     
       County and Montenay Power Corp. ("Metro-Dade"), filed separate suits    
       against Florida Power in disputes over the contract payment terms.      
       Florida Power entered into settlement agreements with Pasco, Lake and   
       Orlando.  As of June 30, 1997, the agreements with Pasco and Orlando had
       been approved by the FPSC and the litigation terminated, while the Lake 
       agreement was awaiting completion of the FPSC approval process.

       In July 1997, the FPSC decided to review its approval of the Pasco      
       settlement agreement.  The FPSC action was precipitated as a result of  
       the disclosure by Florida Power to the FPSC, that a Florida Power       
       employee who had been involved in cogeneration matters before the FPSC  
       had recently become engaged to be married to a former FPSC staff attorney
       who had participated in the same matters on behalf of the FPSC.  The FPSC
       decided to review the Pasco settlement and the pending buyout of the last
       ten years of a contract with Orlando in a docket separate from the      
       Orlando settlement agreement, to determine whether there was any bias in
       the information that was presented by the staff attorney to the FPSC.   
       The FPSC also will reconsider the Lake settlement agreement on a number 
       of issues, including the conflict of interest issue discussed above.

       An investigation by an outside law firm hired by Florida Power found no 
       evidence that the relationship between the Florida Power employee and the
       FPSC staff attorney had any influence on regulatory proceedings involving
       Florida Power.  An FPSC staff investigation found no evidence of bias in
       the information presented by staff.  An FPSC hearing on the matter is   
       scheduled to be held in August 1997.

       Management does not expect that the results of these FPSC proceedings   
       will have a material impact on Florida Power's financial position,      
       operations, or liquidity.

       OFF-BALANCE SHEET RISK - Several of Florida Progress' subsidiaries are
       general partners in unconsolidated partnerships and joint ventures.
       Florida Progress or its subsidiaries have agreed to support certain loan
       agreements of the partnerships and joint ventures. Those credit risks are
       not material to the financial statements.  Florida Progress considers
       those credit risks to be minimal, based upon the asset values supporting
       the liabilities of these entities.

       INSURANCE - Florida Progress and its subsidiaries utilize various risk
       management techniques to protect assets from risk of loss, including the
       purchase of insurance. Risk avoidance, risk transfer and self-insurance
       techniques are utilized depending on Florida Progress' ability to assume
       risk, the relative cost and availability of methods for transferring risk
       to third parties, and the requirements of applicable regulatory bodies.



                                          10
      <PAGE>
Florida Power self-insures its transmission and distribution lines      
       against loss due to storm damage and other natural disasters. Pursuant to
       an FPSC order, Florida Power is accruing $6 million annually to a storm 
       damage reserve and may defer any losses in excess of the reserve.

       Under the provisions of the Price Anderson Act, which limits liability  
       for accidents at nuclear power plants, Florida Power, as an owner of a  
       nuclear plant, can be assessed for a portion of any third-party liability
       claims arising from an accident at any commercial nuclear power plant in
       the United States. If total third-party claims relating to a single     
       nuclear incident exceed $200 million (the amount of currently available 
       commercial liability insurance), Florida Power could be assessed up to  
       $79.3 million per incident, with a maximum assessment of $10 million per
       year.

       Florida Power is a member of the Nuclear Electric Insurance, Ltd.       
       ("NEIL"), an industry mutual insurer, which provides business           
       interruption and extra expense coverage in the event of a major         
       accidental outage at a covered nuclear power plant. Florida Power is    
       subject to a retroactive premium assessment by NEIL under this policy in
       the event of adverse loss experience. Florida Power's present maximum   
       share of any such retroactive assessment is $2.5 million per policy year.

       Florida Power also maintains nuclear property damage insurance and
       decontamination and decommissioning liability insurance totaling $2.1
       billion. The first layer of $500 million is purchased in the commercial
       insurance market with the remaining excess coverage purchased from NEIL.
       Florida Power is self-insured for any losses that are in excess of this
       coverage. Under the terms of the NEIL policy, Florida Power could be    
       assessed up to a maximum of $10.3 million in any policy year if losses in
       excess of NEIL's available surplus are incurred.

       Florida Power has never been assessed under these nuclear indemnities or
       insurance policies. 

       CONTAMINATED SITE CLEANUP - Florida Progress is subject to regulation   
       with respect to the environmental effects of its operations. Florida    
       Progress' disposal of hazardous waste through third-party vendors can   
       result in costs to clean up facilities found to be contaminated.  Federal
       and state statutes authorize governmental agencies to compel responsible
       parties to pay for cleanup of these hazardous waste sites.

       Florida Power and former subsidiaries of Florida Progress, whose        
       properties were sold in prior years, have been identified by the        
       Environmental Protection Agency ("EPA") as potentially responsible      
       parties ("PRPs") at certain sites, including a coal gasification plant  
       site in Sanford, Florida ("the Sanford site") that Florida Power        
       previously owned and operated. Four other parties have also been        
       identified as PRPs for the Sanford site. On July 11, 1997, the EPA sent a
       general and special notice letter which advised Florida Power and others
       that the EPA has documented the release or threatened release of        
       hazardous substances, pollutants, or contaminants from the Sanford site.
       The EPA investigation concluded that such release or threatened release 
       includes the site itself and downgradient contamination in sediment     
       through an unnamed tributary for storm water drainage flowing through   
       Cloud Branch Creek into Lake Monroe at the confluence of the Creek and  
       Lake Monroe.  Further, the EPA advised Florida Power of its potential   
       liability for clean-up under the Comprehensive Environmental Response,  
       Compensation and Liability Act ("CERCLA"). The EPA established a 60-day 
       moratorium beginning July 18, 1997 on further response activities,     
       pending the PRPs' submission of a good faith offer to conduct a 
       remedial investigation and feasibility study ("RI/FS").  If accepted by
       the 
                                          11
<PAGE>
       EPA, this study will be embodied in an administrative order on consent  
       and allow the PRPs to perform and finance clean-up activities at the site
       under the guidance of the EPA.  Liability for the cleanup costs of those
       sites is joint and several.  

       In addition to those designated sites, there are other sites where      
       affiliates may be responsible for additional environmental cleanup.     
 
       Florida Progress believes that its subsidiaries will not be required to 
       pay a disproportionate share of the costs for cleanup of any of these   
       sites.  Florida Progress' best estimates indicate that its proportionate
       share of liability for cleaning up all sites, including the Sanford site,
       ranges from $3.7 million to $5.4 million. Florida Progress has reserved 
       $3.7 million against these potential costs.  

       AGE DISCRIMINATION SUIT - Florida Power and Florida Progress have been
       named defendants in an age discrimination lawsuit involving 116 former
       Florida Power employees and one current employee.  While no dollar amount
       was requested, each plaintiff seeks back pay, reinstatement or front pay
       through their projected dates of normal retirement, costs and attorneys'
       fees. In October 1996, the court approved an agreement to provisionally 
       certify this case as a class action suit under the Age Discrimination in
       Employment Act.  The opportunity to opt into the provisional class      
       expired on May 28, 1997.  Estimates of the potential liability associated
       with this lawsuit cannot be determined until the final decision on      
       whether to certify the case as a class action suit has been made.

       MID-CONTINENT LIFE INSURANCE COMPANY - On April 14, 1997, the Insurance
       Commissioner of the State of Oklahoma (the "Insurance Commissioner")    
       received approval from the Oklahoma County District Court to temporarily
       seize control of the operations of Mid-Continent Life Insurance Company 
       ("Mid-Continent"), a wholly owned subsidiary of Florida Progress. On May
       23, 1997, the Oklahoma County District Court granted the application of 
       the Insurance Commissioner to place Mid-Continent into receivership. The
       Insurance Commissioner had alleged that Mid-Continent's reserves were   
       understated by more than $125 million, thus causing Mid-Continent to be 
       statutorily impaired, and further alleged that Mid-Continent had violated
       Oklahoma law relating to deceptive trade practices in connection with the
       sale of its "Extra Life" insurance policies.  Mid-Continent believes it
       is not statutorily impaired because the court ruled that it could raise 
       premiums on the insurance policies at issue.  On June 18, 1997, Florida 
       Progress filed an appeal with the Oklahoma Supreme Court regarding the  
       decision that Mid-Continent remain in receivership.  On June 30, 1997,
       the Insurance Commissioner filed an appeal with the Oklahoma Supreme  
       Court regarding the district court's decision that Mid-Continent is  
       entitled to raise premiums.  A decision from the Oklahoma Supreme Court
       is not expected before the fourth quarter of 1997.  On July 10, 1997, the
       Commissioner of Insurance of the State of Texas entered a cease and     
       desist order prohibiting Mid-Continent from writing any new policies in 
       Texas. The Texas Commissioner cited the lack of permanent management at,
       and plan of rehabilitation for, Mid-Continent and the alleged reserve   
       deficiency as reasons for the action.  Texas currently has the largest  
       number of Mid-Continent policy holders.  

       Florida Progress believes that its investment in Mid-Continent has been 
       impaired by these proceedings and associated developments, but the amount
       of impairment cannot currently be estimated.  Given that the receivership
       and the cease and desist order in Texas has resulted in significant     
       adverse publicity for Mid-Continent and has disrupted its business plan 
       for addressing its projected reserve deficiency on its "Extra Life"     
       policies, it is likely that Florida Progress will realize a loss of some
       or all of its investment in Mid-Continent. Mid-Continent's earnings were
       $1.9 million 
                                          12
       for the year ended December 31, 1996, and $.2 million for the six months
       ended June 30, 1997.  As of June 30, 1997, Florida Progress' equity     
       investment in Mid-Continent was approximately $85 million, and its tax  
       basis is significantly less.  The Consolidated Balance Sheet at June 30,
       1997 includes $238.6 million of marketable securities, $123.9 million
       of deferred policy acquisition costs and $356.1 million of insurance    
       policy benefit reserves attributable to Mid-Continent Life.

       REPLACEMENT POWER COST SETTLEMENT - On June 26, 1997, the FPSC          
       unanimously approved a settlement agreement between Florida Power and all
       parties who intervened in Florida Power's request to recover replacement
       power costs resulting from the extended outage of CR3. This settlement  
       supersedes the February 1997 FPSC approved rate increase described under
       the heading "Contingencies - Rate Increase Investigation" in Note 4 to  
       the Financial Statements, in the combined Form 10-Q of Florida Progress 
       and Florida Power for the quarter ended March 31, 1997 (the "first      
       quarter 1997 Form 10-Q").

       In accordance with the settlement agreement, effective July 1997, Florida
       Power ceased any further recovery through its fuel clause of replacement
       power costs related to the nuclear outage, except as described below.   
       Florida Power has completed a refund of the $16 million of replacement  
       power costs already collected through the fuel clause for the period    
       commencing April 1997 through June 1997, when rates reflected higher    
       replacement power costs.

       Florida Power estimates that it will have incurred approximately $172   
       million in replacement power costs through the end of 1997.  In the     
       second quarter of 1997, Florida Power recorded a charge of approximately
       $70 million for replacement power costs incurred from December 1996     
       through June 1997 that will not be recovered through its fuel adjustment
       clause.  Of the remaining $102 million, Florida Power will recover      
       approximately $39 million through its fuel adjustment clause.  The      
       remaining $63 million of replacement power costs for the period July    
       through December 1997 will be recorded as a regulatory asset and        
       amortized for a period of up to four years beginning in July 1997.  The 
       effect of the amortization on the results of operations is expected to be
       offset by the suspension of fossil plant dismantlement accruals during 
       the amortization period. 

       This accounting treatment is consistent with the terms of the above     
       mentioned settlement agreement.  The parties to the settlement agreement
       have agreed not to seek or support any reduction in Florida Power's base
       rates or the authorized range of its return on equity during the        
       four-year amortization period.  The agreement resolves all present and  
       future disputed issues between the parties regarding the extended outage
       of CR3.

       Florida Power reported a loss, for the second quarter of 1997, as a     
       result of recording charges (for replacement power cost and operation and
       maintenance costs) associated with the extended outage of CR3.  Through 
       June 30, 1997, Florida Power has recognized all of the additional $100  
       million of operation and maintenance costs it expects to incur in       
       connection with the outage through the end of 1997, when CR3 is expected
       to be returned to service.

5)     In the opinion of management, the accompanying financial statements
       include all adjustments deemed necessary to summarize fairly and reflect
       the financial position and results of operations of Florida Progress and
       Florida Power for the interim periods presented. Results for these      
       interim periods are not necessarily indicative of results for the full  
       year. It is suggested that these financial statements be read in        
       conjunction with the financial statements and notes thereto in the      
       combined Form 10-K of Florida Progress and Florida Power for the year   
       ended December 31, 1996 (the "1996 Form 10-K") and the first quarter 1997
       Form 10-Q.

                                          13
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations


OPERATING RESULTS

Florida Progress' loss from continuing operations for the three month period
ended June 30, 1997, was $.39 per share compared to earnings of $.61 cents per
share for the same period in 1996. The loss resulted from Florida Power, Florida
Progress' largest operating unit, reporting a loss of $.45 per share compared to
earnings of $.56 per share for the same period last year. Earnings per share
from continuing operations for the six month period ended June 30, 1997, were
$.04 compared to $1.11 for the same period last year. The decrease for both the
three and six month periods is primarily due to one-time charges recorded by
Florida Power related to the extended outage of CR3. 

Diversified earnings per share from continuing operations were $.06 for the
second quarter of 1997, $.01 higher than the same quarter last year, due to
higher earnings at Electric Fuels Corporation ("Electric Fuels") which were
partially offset by lower earnings at Mid-Continent. For the six months ended
June 30, 1997, earnings per share from continuing diversified operations of $.06
were $.05 lower than the same period in 1996 primarily due to lower earnings
from Mid-Continent and costs associated with its receivership as well as lower
earnings from Electric Fuels due primarily to severe flooding conditions in the
first quarter of 1997. As a result of Florida Progress' announcement, on July 1,
1996, of its plan for a spin-off distribution to common shareholders of the
common shares of Echelon, Florida Progress recorded a loss from discontinued
operations of $.26 per share for the three and six months ended June 30, 1996.

Diversified gross margin percentages were lower for both the three and six
months ended June 30, 1997, due to higher reserve provisions at Mid-Continent,
and to higher diesel fuel costs and increased operating expenses at Electric
Fuels associated with flood conditions during the first quarter of 1997.

Florida Power - Operating Revenues

Florida Power's operating revenues were $8.5 million (1.4%) and $15.0 million
(1.3%) higher for the three and six month periods ended June 30, 1997, compared
to the same periods in 1996. Recoverable fuel revenues, including deferred fuel
revenue, were $7.0 million and $26.2 million higher for the three and six months
ended June 30, 1997 as a result of the corresponding increase in fuel and
purchased power expenses discussed below. Continued customer growth combined
with the increase in residential revenue decoupling adjustments largely offset
the effect of mild weather on operating revenues. Residential revenue decoupling
eliminates the earnings impact abnormal weather has on residential sales. (See
Note 2 to the Financial Statements.)

Florida Power - Operating Expenses

Fuel and purchased power costs were $7.2 million (3.2%) and $21.5 million (4.9%)
higher for the quarter and six months ended June 30, 1997 compared to the same
periods in 1996 due primarily to increased capacity payments.

Generally, Florida Power recovers substantially all of its fuel and purchased
power costs through an FPSC ordered fuel adjustment clause, thereby eliminating
any significant impact on net income. However, in June 1997, Florida Power
recorded a $70.2 million charge for replacement power costs incurred from
December 1996 through June 1997 in accordance with the above mentioned FPSC
approved settlement agreement. This treatment is consistent with the terms of
the settlement agreement between Florida Power and all parties who intervened in


                                          14
<PAGE>
Florida Power's earlier request to recover replacement power costs resulting
from the extended outage of CR3. In the second quarter of 1997, Florida Power
also recorded the remaining $92.1 million of the total $100 million of nuclear
outage operation and maintenance costs it expects to incur in connection with
the outage. This brings the total extended nuclear outage expenses to $162.3
million for the second quarter of 1997, and $170.2 for the six months ended June
30, 1997.

Florida Power estimates that it will have incurred approximately $172 million in
replacement power costs through the end of 1997.  As mentioned above, in the
second quarter of 1997, Florida Power recorded a charge of approximately $70
million for replacement power costs incurred from December 1996 through June
1997 that will not be recovered through its fuel adjustment clause.  Of the
remaining $102 million, Florida Power will recover approximately $39 million
through its fuel adjustment clause.  The remaining $63 million of replacement
power costs for the period July through December 1997 will be recorded as a
regulatory asset and amortized for a period of up to four years beginning in
July 1997.  The effect of the amortization on the results of operations is
expected to be offset by the suspension of fossil plant dismantlement accruals
during the amortization period.

Other operation and maintenance expenses, excluding the impact of the extended
outage, for the three and six months ended June 30, 1997, were $12.9 million
(13.2%) and $14.9 million (7.5%) higher than the same period last year due
primarily to planned fossil plant outages, a lump-sum payment resulting from a
new union contract and additional expenditures for service reliability programs.

Depreciation expense was $15.0 million ($16.8%) and $18.3 (11.0%) lower for the
three and six months ended June 30, 1997 compared to the same periods last year.
These decreases were due primarily to the write-off of two oil-fired plants
(Higgins and Turner) in 1996 and the amortization in 1996 of a transmission line
project.

Florida Power - Purchased Power

Costs associated with purchased power contracts with qualifying facilities
raised Florida Power's system average cost for generation in 1996 and 1997. As
previously discussed, Florida Power has been seeking ways to mitigate the impact
of these escalating payments. Florida Power had negotiated settlements with
three cogenerators, Pasco, Lake, and Orlando. In July 1997, the FPSC decided to
review the Pasco, Lake and Orlando buyout, a docket separate from the Orlando
settlement agreement, cogeneration proceedings regarding a conflict of interest
on the part of a former FPSC staff attorney involved with the cases. See Note 4
to the Financial Statements entitled "Contingencies - Purchased Power
Commitments" and Part II, Item 1 "Legal Proceedings".

As discussed in the first quarter 1997 Form 10-Q, the purchase of the Tiger Bay
cogeneration plant by Florida Power was approved by the FPSC on May 19, 1997.
Tiger Bay was Florida Power's largest cogeneration power supplier, representing
more than 20% of the capacity received from qualifying facilities. The purchase
of the Tiger Bay facility was completed on July 15, 1997.  The purchase was
financed initially by bank loans, which were repaid from the proceeds of the
sale of $450 million of medium-term notes (see Liquidity and Capital Resources
herein).  The purchase is expected to result in an estimated total savings
between $2.0 billion and $2.4 billion for the period 2008 through 2025 to
Florida Power and its customers. Unlike its reopening of the Lake, Pasco and
Orlando cogeneration proceedings discussed above, the FPSC did not order a
review of the Tiger Bay cogeneration facility buyout docket, given that the case
was stipulated by all parties and the possibility of bias appeared unlikely.

Florida Power - Nuclear Operations

In September 1996, Florida Power shut down its CR3 nuclear plant to fix a broken
oil pipe in the main turbine. CR3 has remained offline to address certain design
issues related to the plant's safety systems.

                                          15
<PAGE>
While CR3 remains on the NRC's Watch List, progress has been made on major
restart activities. Major accomplishments this quarter included completion of
the system readiness reviews, timely filing of license submittals for several
plant modifications and progress in reducing the backlog of maintenance
requests.  Florida Power believes it is on schedule to return CR3 to service by
the end of 1997.  See discussion in Note 4 to the Financial Statements entitled
"Contingencies - Replacement Power Cost Settlement".

Florida Progress Diversified Operations

Florida Progress' diversified revenues were $15.2 million and $25.8 million
higher for the three and six months ended June 30, 1997 compared to the same
period last year due primarily to a third quarter 1996 acquisition at Electric
Fuels.  Gross margins were down for both the three and six month period ended
June 30, 1997 compared to last year due to higher reserve provisions at
Mid-Continent, and to higher diesel fuel costs and increased operating expenses
at Electric Fuels associated with flood conditions in the first quarter of 1997.

On April 14, 1997, the Insurance Commissioner of the State of Oklahoma received
approval from the Oklahoma County District Court to temporarily seize control of
the operations of Mid-Continent. On May 23, 1997, the District Court of Oklahoma
granted the application of the Insurance Commissioner of the State of Oklahoma
to place Mid-Continent into receivership. Mid-Continent is appealing the
decision to the Supreme Court of Oklahoma. See Note 4 to the Financial
Statements under the heading "Contingencies - Mid-Continent Life Insurance
Company" and paragraph 8 under Part II, Item 1 "Legal Proceedings" herein.


LIQUIDITY AND CAPITAL RESOURCES

Florida Power budgeted $372 million, excluding allowance for funds used during
construction, for its 1997 construction program, of which $148.1 million was
spent during the first six months of the year. Those expenditures were
financed primarily with funds from operations.  Nuclear capital expenditures for
1997 could range between $30 to $45 million higher than the original budget
because of CR3 modifications.  Florida Power anticipates using debt financing to
fund those additional capital expenditures.

On June 24, 1997, Florida Power filed a shelf registration statement with the
Securities and Exchange Commission to register an additional $550 million of
Medium-Term Notes, Series B, bringing the total amount of registered notes to
$850 million.  On July 22, 1997, $450 million of these notes were sold to repay
bank loans obtained to finance the acquisition of the Tiger Bay cogeneration
facility. The notes were sold with nine different maturities ranging from two to
ten years, and bear interest at rates ranging from 6.21% to 6.81% per annum. 
The issuance of the remaining registered but unissued notes ($400 million) will
depend upon capital requirements and on market conditions.

Florida Power's ratio of earnings to fixed charges was 3.05 for the twelve
months ended June 30, 1997. (See Exhibit 12 filed herewith).

"SAFE HARBOR" STATEMENT UNDER
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report contains certain forward looking statements, including projections
regarding the date by which CR3 is expected to be returned to service; the total
operating and maintenance costs that will be attributable to the nuclear outage;
the future treatment of replacement power costs associated with the outage; the
impact of FPSC reviews of the settlement agreements with cogenerators; the
proportionate liability for cleaning up certain environmental sites; the savings
to Florida Power and its customers resulting from the purchase of the Tiger Bay
facility; and the effect of certain legal proceedings on the operations of
Mid-Continent.
                                          16
Risk Factors

These statements, and any other statements contained in this report that are not
historical facts, are forward-looking statements that are based on a series of
projections and estimates regarding the economy, the electric utility business
and Florida Progress' other businesses in general, and on factors which impact
Florida Progress directly. The projections and estimates relate to the pricing
of services, the actions of regulatory bodies, and the effects of competition.

Key factors that have a direct impact on the ability to attain these projections
include various factors that could impact the successful execution of Florida
Power's nuclear plant restart plan, such as regulatory approvals, timely
completion of scheduled work by Florida Power and outside contractors and the
timely delivery of parts and materials; the actions of the FPSC and other
regulatory bodies; the success of cost containment efforts; and the efficient
operation of Florida Power's existing and future generating units.  In addition,
in developing certain forward-looking statements, Florida Progress and Florida
Power have made certain assumptions relating to productivity improvements, the
lack of unforeseen new nuclear plant modifications that could extend the outage
beyond 1997, and the lack of disruption to markets.

If Florida Progress' and Florida Power's projections and estimates regarding the
economy, the electric utility business and other factors differ materially from
what actually occurs, or if various proceedings have unfavorable outcomes, then
actual results could vary significantly from the performance projected in the
forward-looking statements.


                          PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

1.     In re: Petition for Expedited Approval of Settlement with Pasco Cogen,  
       Ltd., Florida Public Service Commission, Docket No. 961407-EI.
       In re: Petition for Expedited Approval of Settlement with Lake Cogen,   
       Ltd., Florida Public Service Commission, Docket No. 961477-EQ.

       In re: Petition for approval of early termination amendment to negotiated
       qualifying facility contract with Orlando Cogen, Limited, Ltd., Florida
       Public Service Commission, Docket No. 961184-EQ.

       See prior discussion of these matters in the first quarter 1997 Form    
       10-Q, Part II, Item 1, paragraph 1, and in the 1996 Form 10-K, Item 3,  
       paragraphs 2, 3 and 4.  On July 8, 1997, Florida Power filed a Notice of
       Conflict of Interest in Docket No. 961477-EQ, notifying the FPSC of a   
       possible conflict of interest involving a Florida Power employee and a  
       former FPSC staff attorney ("staff attorney") who both worked on this   
       docket during a period in which they had a personal relationship.  After
       the notice was filed, the FPSC initiated a review of the various Florida
       Power cases on which the staff attorney had worked.  On July 15, 1997,  
       the FPSC decided to review the Pasco and Orlando buyout dockets to      
       determine if any bias had occurred. Also on July 15, the FPSC determined
       to reconsider the Lake cogeneration matter on the merits, including a   
       review with respect to the conflict of interest issue.  An investigation
       by an outside law firm hired by Florida Power found no evidence that the
       relationship between the Florida Power employee and the FPSC staff      
       attorney had any influence on regulatory proceedings involving Florida  
       Power.  An FPSC staff investigation found no evidence of bias in the    
       information presented by staff.  An FPSC hearing on the matter is       
       scheduled to be held in August 1997.


                                          17
<PAGE>
2.    In re: Lake Interest Holdings, Inc. v. Lake Cogen, Ltd., NCP Lake Power,
       Inc., Lake Investment, LP. and Florida Power Corporation.  Circuit Court
       of the Fifth Judicial Court for Lake County, Florida, Case No. 97-549-
       CA-01.

       See prior discussion of this matter in the 1996 Form 10-K, Item 3, para-
       graph 3.  On June 25, 1997, the plaintiff, Lake Interest Holdings, Inc.
       and three of the defendants, Lake Cogen, Inc., NCP Lake Power           
       Incorporated, and Lake Investment, L.P., filed a stipulation of dismissal
       with prejudice.  Florida Power has not opposed this stipulation.  The   
       court is expected to dismiss the case in the near future.

3.     In re: Petition for expedited approval of an agreement to purchase the  
       Tiger Bay cogeneration facility and terminate the related purchased power
       contracts, FPSC Docket No. 970096-EQ.

       See prior discussion of this matter in the 1996 Form 10-K, Item 3,      
       paragraph 8 and the first quarter 1997 Form 10-Q.  On June 9, 1997, the 
       FPSC issued a final order approving the April 14, 1997 stipulations     
       entered into by the parties in the case.  The purchase by Florida Power 
       of the Tiger Bay facility closed on July 15, 1997.  In connection with  
       its investigation (see paragraph 1 above), the FPSC did not order a     
       review of the Tiger Bay cogeneration docket.  This report concludes this
       matter for reporting purposes.

4.     In re: Fuel and Purchased Power Cost Recovery Clause and Generating
       Performance Incentive Factor, Florida Public Service Commission, Docket
       No. 970001-EI.

       See prior discussion in the 1996 Form 10-K, Item 3, paragraph 1.  On June
       26, 1997, the FPSC approved the settlement agreement between Florida    
       Power and all intervenors involved in Florida Power's request to collect
       replacement fuel and purchased power costs associated with the extended 
       outage of CR3.  The parties to the stipulation agreement will not seek or
       support any reduction in Florida Power's base rates or the authorized   
       range of its return on equity during the four-year amortization period. 
       See Note 4 to the Financial Statements entitled "Contingencies -        
       Replacement Power Cost Settlement".

       The agreement resolves all present and future disputed issues between the
       parties regarding the extended outage of CR3.

       This report concludes this matter for reporting purposes.

5.     Wanda L. Adams, et al v. Florida Power Corporation and Florida Progress 
       Corporation, U.S. District Court, Middle District of Florida, Ocala     
       Division; Case No. 95-123-CIV-OC-10.
 
       See prior discussion of this matter in the 1996 Form 10-K, Item 3,      
       paragraph 11 and the first quarter 1997 Form 10-Q, Item 1, paragraph 4. 
       The period for potential class members to opt into the conditionally    
       certified class expired on May 28, 1997.  The class now is comprised of 
       116 former employees and 1 current employee.

6.     Charlie Crist, Jr. v. Julia Johnson, et al and Florida Power Corporation,
       Florida Supreme Court, Case No. 90,346.

       See prior discussion of this matter in the first quarter 1997 Form 10-Q,
       Part II, Item 1, paragraph 3.  On June 18, 1997, all parties entered into
       a stipulation which resolves all present and future disputed issues     
       regarding the current extended outage of CR3.  On June 26, the FPSC     
       unanimously 
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       approved the settlement agreement.  The financial impact and details of 
       this agreement are discussed in Note 4 to the Financial Statement under  

       the heading "Replacement Power Cost Settlement". On July 21,  
       1997, the Court granted the motions to dismiss filed by Florida Power and
       the FPSC, resulting in dismissal of Charlie Crist's Notice of Petition  
       For Review Of Florida Public Service Commission Order No.               
       PSC-97-0859-FOF-EI.  This report concludes this matter for reporting    
       purposes.

7.     In re: Standard Offer Contract for the purchase of firm capacity and
       energy from a qualifying facility between Panda-Kathleen, L.P. and 
       Florida Power Corporation, FPSC Docket No. 950110-EI.  

       See prior discussion of this matter in the 1996 Form 10-K, Item 3,      
       paragraph 7.  A decision is now not expected until the second half of   
       1997.

8.     State of Oklahoma, ex rel. John P. Crawford, Insurance Commissioner v.  
       Mid-Continent Life Insurance Company, District Court of Oklahoma County,
       State of Oklahoma, Case No. CJ-97-2518-62

       See prior discussion in the first quarter 1997 Form 10-Q, Part II, Item 
       1, paragraph 6. On May 23, 1997, the District Court of Oklahoma County, 
       State of Oklahoma, granted the application of the Insurance Commissioner
       of the State of Oklahoma ("Commissioner") to place Mid-Continent into   
       receivership and ordered the Commissioner to develop a plan of          
       rehabilitation for Mid-Continent. The Commissioner had alleged that     
       Mid-Continent's reserves were understated by more than $125 million, thus
       causing Mid-Continent to be statutorily impaired, and further alleged   
       that Mid-Continent had violated Oklahoma law relating to deceptive trade
       practices, in connection with the sale of its "Extra Life" insurance    
       policies.  Mid-Continent is appealing the decision to the Supreme Court 
       of Oklahoma.  Mid-Continent believes it is not statutorily impaired     
       because the court ruled that it could raise premiums on the insurance   
       policies at issue.  See Note 4 to the Financial Statements under        
       "Contingencies - Mid-Continent Life Insurance Company".

       In connection with this matter, the Commissioner of Insurance of the    
       State of Texas entered a cease and desist order on July 10, 1997,       
       prohibiting Mid-Continent from writing any new policies in the State of 
       Texas.  The Texas Commissioner cited the lack of permanent management at,
       and plan of rehabilitation for, Mid-Continent and the alleged reserve   
       deficiency as reasons for the action.

9.     Northern States Power Company, et al., v. United States Department of   
       Energy, Case Number 97-1064, U.S. Court of Appeals, D.C. Circuit.

       See prior discussion in the 1996 Form 10-K, Item 3, paragraph 9. On April
       30, 1997,  the court ordered the petitioners to file petitions for      
       mandamus. In their petitions, the utilities request, among other items, 
       that the court require the United States Department of Energy ("DOE") to
       begin disposing of spent nuclear fuel ("SNF") on January 31, 1998 and   
       that the court find that the utilities be relieved of their reciprocal  
       obligation to pay fees into the Nuclear Waste Fund and be authorized to 
       place those fees into escrow accounts unless and until DOE commences    
       disposing of SNF. Failure of DOE to accept SNF will not immediately
       affect the continued operation of Florida Power's CR3, which has        
       sufficient on-site temporary storage capacity for SNF through the year  
       2010.

10.    Florida Power Corp. v. United States, United States Court of Federal    
       Claims, Case No. 96-702C.

       See prior discussion in the 1996 Form 10-K, Item 3, paragraph 10.  On May
       6, 1997, the U.S. Court of Appeals for the Federal Circuit ruled against
 

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       Yankee Atomic.  Yankee Atomic has since requested rehearing "en banc" of
       the court's decision. A decision on whether to grant rehearing in the   
       Yankee Atomic Electric matter is expected in the fourth quarter of 1997.
 
11.    Sanford Gasification Plant Site, Sanford, Florida
 
       See prior discussion in this matter in the 1996 Form 10-K, Item 3,      
       paragraph 13.  The EPA completed the Expanded Site Investigation on June
       27, 1997.  On July 11, 1997 the EPA sent a general and special notice   
       letter which advised Florida Power and others that the EPA has documented
       the release or threatened release of hazardous substances, pollutants, or
       contaminants from the Sanford site.  The EPA investigation concluded that
       such release or threatened release includes the site itself and         
       downgradient contamination in sediment through an unnamed tributary
       for storm water drainage flowing through Cloud Branch Creek into Lake   
       Monroe at the confluence of the Creek and Lake Monroe.  Further, the EPA
       advised Florida Power of its potential liability for clean-up under     
       CERCLA. The EPA established a 60-day moratorium beginning July 18, 1997 
       on further response activities, pending the PRPs submission of a good   
       faith offer to conduct a RI/FS.  If accepted by the EPA, this study will
       be embodied in an administrative order on consent and allow the PRPs to 
       perform and finance clean-up activities at the site under the guidance of
       the EPA.

Item 5.  Other Information.

1.     UNION CONTRACT.  As previously reported in Item 1 "Business - Utility   
       Operations - Florida Power - Employees"  in the 1996 Form 10-K, and Item
       5 "Other" in the first quarter 1997 Form 10-Q, the union contract with  
       the International Brotherhood of Electrical Workers ("IBEW") was to have
       expired in December 1996. Both the IBEW and Florida Power agreed to     
       continue working beyond that date under the terms of the existing       
       contract while negotiations, which began in September 1996, proceeded. On
       April 30, 1997, Florida Power and IBEW committees agreed on a new three 
       year contract. On May 19, 1997, the members of the IBEW voted to accept a
       new contract with Florida Power. The new contract is effective from     
       December 9, 1996 through December 5, 1999.

2.     EXECUTIVE OFFICER AND DIRECTOR CHANGES.

       During the second quarter of 1997, Florida Progress and Florida Power   
       announced certain executive officer and director changes.  At Florida   
       Progress, effective June 1, 1997, Richard Korpan was promoted to Chief  
       Executive Officer.  Jack B. Critchfield, who held the position of Chief 
       Executive Officer, remains Chairman of the Board.  Also effective June 1,
       Stanley I. Garnett was named Executive Vice President of Florida Progress
       and will be responsible for financial services, legal, human resources  
       and corporate development.  Garnett was previously a senior adviser with
       Putnam, Hayes & Bartlett, an economic and management consulting firm, and
       the chief legal officer and then chief financial officer at Allegheny   
       Power System, Inc.  At Florida Power, effective June 1, 1997, Joseph H. 
       Richardson became Chief Executive Officer, and Janice B. Case was       
       promoted to Senior Vice President.  Richard Korpan who held the position
       of Chief Executive Officer, remains Chairman of the Board of Florida    
       Power.  In other Board action, it was decided that both Florida Progress
       and Florida Power should have the same outside directors serving on their
       boards.  As a result, effective May 15, 1997, W.D. "Bill" Frederick, Jr.,
       Michael P. Graney, Vincent J. Naimoli, Richard A. Nunis, Charles B. Reed
       and Robert T.Stuart, Jr., members of the Florida Progress Board, were  
       elected as 
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<PAGE>
      members of the Florida Power Board, and Frank C. Logan, a member of the 
       Florida Power Board, was appointed as a member of the Florida Progress  
       Board.  In addition, Allen J.Keesler, Jr. and R. Mark Bostick resigned
       as members of the Florida Power Board.  Florida Progress now has a total
       of twelve directors, each of whom also serves as a director of Florida  
       Power. Florida Power has a total of thirteen directors, the additional  
       director being Joseph H. Richardson, Florida Power's Chief Executive    
       Officer.

Item 6.  Exhibits and Reports on Form 8-K.

     (a)  Exhibits:
                                                               Florida  Florida
         Number               Exhibit                          Progress  Power
         ------               -------                          -------- -------

           12           Statement Regarding Computation of Ratio            X
                        of Earnings to Fixed Charges for Florida
                        Power.

         27.(a)         Florida Progress Financial Data Schedule.  X

         27.(b)         Florida Power Financial Data Schedule.              X

       X = Exhibit is filed for that respective company.

     (b)  Reports on Form 8-K:

          During the second quarter 1997, Florida Progress and Florida
          Power filed the following reports on Form 8-K:

                Form 8-K dated April 15, 1997, reporting under Item
                5 "Other Events" first quarter 1997 earnings, the 
                Tiger Bay cogeneration plant joint motion and the 
                temporary seizure of Mid-Continent by the Insurance
                Commissioner of the state of Oklahoma.

                Form 8-K dated May 12, 1997, reporting under Item
                5 "Other Events" an update on the CR3 restart plan.

                Form 8-K dated May 27, 1997, reporting under Item
                5 "Other Events" Board action regarding changes in
                officers and directors, and that the Oklahoma District
                Judge placed Mid-Continent into receivership.

                Form 8-K dated June 19, 1997, reporting under Item
                5 "Other Events" an update to the CR3 outage and the
                proposed settlement on replacement fuel costs due to
                the CR3 outage.

                Form 8-K dated June 25, 1997, reporting under Item
                5 "Other Events" the FPSC's approval of a buy-down
                of another Florida Power cogen contract and the FPSC's
                approval of the fuel settlement agreement.

         In addition, Florida Progress and Florida Power filed the
         following report on Form 8-K subsequent to the second quarter
         1997:

                Form 8-K dated July 15, 1997, reporting under Item
                5 "Other Events" the second quarter earnings for 1997.

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<PAGE>
                                  SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, each
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.  The signature of each of the undersigned
on behalf of each listed company shall be deemed to relate only to matters
having reference to such company.

                                    FLORIDA PROGRESS CORPORATION

                                    FLORIDA POWER CORPORATION


Date: August 13, 1997                        /s/ John Scardino, Jr.
                                          -----------------------------
                                          John Scardino, Jr.
                                          Vice President and Controller




Date: August 13, 1997                        /s/ Jeffrey R. Heinicka
                                          -----------------------------
                                          Jeffrey R. Heinicka
                                          Senior Vice President and
                                          Chief Financial Officer
                                                                                




<PAGE>
                                 Exhibit Index


                                                                Florida  Florida
        Number               Exhibit                            Progress  Power
        ------               -------                            -------- -------

           12           Statement Regarding Computation of Ratio            X
                        of Earnings to Fixed Charges for Florida
                        Power.

         27.(a)         Florida Progress Financial Data Schedule.    X

         27.(b)         Florida Power Financial Data Schedule.              X

       X = Exhibit is filed for that respective company.