EXHIBIT NO. 10b(20)
                          Employment Agreement Between
              Robert B. McGehee and Carolina Power & Light Company

         This  Employment  Agreement  ("Agreement")  is made and entered into by
Robert B. McGehee  ("McGehee")  and  Carolina  Power & Light  Company  ("CP&L").
Throughout the remainder of the Agreement,  McGehee and CP&L may be collectively
referred to as "the parties."
         CP&L and McGehee wish to enter into an employment  relationship whereby
McGehee will be employed as Senior Vice President - General Counsel beginning on
May 20, 1997. The parties desire to enter into this Agreement in connection with
that employment relationship.

         In  consideration of the above and the mutual promises set forth below,
         McGehee and CP&L agree as follows:

1.       POSITION.  McGehee will be employed as Senior Vice  President - General
         Counsel beginning on May 20, 1997.

2.       SALARY.  CP&L will pay McGehee an annual salary at the rate of $245,000
         (Two   Hundred   Forty-Five    Thousand   Dollars)   (less   applicable
         withholdings) per year, subject to periodic review on or around January
         1 of each year or at the time other  executive  officers'  salaries are
         reviewed.

3.       RELOCATION  EXPENSES.  In order to assist  McGehee in his relocation to
         Raleigh, North Carolina, CP&L will provide the following benefits:

         a)   Cash Payment. CP&L will pay McGehee $100,000 (One Hundred Thousand
              Dollars) (less applicable  withholdings) to compensate McGehee for
              relocation  expenses  and to assist in the  purchase of housing in
              Raleigh,  North  Carolina.  Such payment  shall be made by CP&L by
              July 1, 1997.

         b)   Relocation  Program.  McGehee will be eligible to  participate  in
              CP&L's relocation  program in accordance with its terms.  However,
              CP&L will pay to McGehee an additional  amount to  compensate  him
              for the income taxes McGehee will incur on these benefits.

         c)   Temporary Living Expenses.  In addition to the 30 days provided by
              the CP&L  Relocation  Program,  McGehee will be reimbursed for any
              reasonable temporary living expenses until his family relocates to
              Raleigh.  McGehee  acknowledges that these  reimbursements will be
              subject to taxation to him;  however,  CP&L will pay to McGehee an
              additional  amount to compensate  him for the income taxes McGehee
              will incur on these benefits.

4.       PURCHASE OF CP&L STOCK.  CP&L will  purchase in  McGehee's  name,  1000
         shares of CP&L common  stock.  Such  purchase  shall be made by July 1,
         1997.  CP&L will pay to McGehee an additional  amount to compensate him
         for the income taxes McGehee will incur as a result of this purchase.

5.       MANAGEMENT INCENTIVE COMPENSATION PROGRAM.  McGehee will be eligible to
         participate in the  Management  Incentive  Compensation  Program (MICP)
         beginning in 1997,  for which a payment will be made on or before March
         31, 1998.  Pursuant to the terms of the MICP,  McGehee's  target payout
         will be 25  percent of annual  base  earnings.  McGehee  will be paid a
         minimum of $61,250  (Sixty-One  Thousand Two Hundred Fifty  Dollars) in
         March of 1998 for the 1997 performance year.

6.       LONG-TERM  INCENTIVES.  McGehee will be eligible to  participate in the
         1997  Performance  Share Sub-Plan under the Equity Incentive Plan, as a
         group executive in accordance with its terms.

7.       SUPPLEMENTAL  RETIREMENT PLAN.  McGehee will be eligible to participate
         in CP&L's  Supplemental  Retirement  Plan  subject  to the terms of the
         plan.

8.       SUPPLEMENTAL SENIOR EXECUTIVE RETIREMENT PLAN. McGehee will be eligible
         to participate in CP&L's Supplemental Senior Executive  Retirement Plan
         ("SERP").  In connection with McGehee's  participation in SERP, McGehee
         will be awarded ten (10) years of additional service credit,  three (3)
         years of which  will be deemed to have been in  service  on the  Senior
         Executive  Committee;  such credit will allow McGehee to be eligible to
         immediately  participate  in the SERP and to receive  full  benefits no
         later than at age 61.

9.       DEFERRED COMPENSATION PLAN FOR KEY MANAGEMENT  EMPLOYEES.  McGehee will
         be eligible to  participate in the Deferred  Compensation  Plan for Key
         Management Employees (the "Deferred Compensation Plan"), subject to its
         terms.  During  1997,  CP&L  will  contribute  $40,500  (Forty-Thousand
         Five-Hundred   Dollars)  on   McGehee's   behalf   into  the   Deferred
         Compensation Plan with the understanding that the Deferred Compensation
         Plan will be amended to allow for such contributions.

10.      EXECUTIVE PERMANENT LIFE INSURANCE PLAN. Pursuant to its terms, McGehee
         will  be  eligible  to  participate  in the  Executive  Permanent  Life
         Insurance program with a target benefit of three times projected salary
         assuming a salary growth of six percent,  but not to exceed  $1,200,000
         (One Million Two Hundred Thousand Dollars).

11.      EXECUTIVE AD&D LIFE INSURANCE.  McGehee will be eligible to participate
         in CP&L's AD&D insurance program,  subject to the terms of the program,
         up to a maximum amount of $500,000 (Five Hundred Thousand Dollars).

12.      STOCK PURCHASE SAVINGS PLAN. McGehee will be eligible to participate in
         CP&L's Stock Purchase Savings Plan, pursuant to its terms.

13.      FINANCIAL AND ESTATE  PLANNING.  Consistent  with CP&L's  practice with
         respect to other senior  executives,  McGehee will be allowed to obtain
         Company reimbursed financial planning and tax preparation services.

14.      DISABILITY  INCOME.  McGehee will be eligible to  participate in CP&L's
         Long-Term Disability Program subject to the terms of the plan.

15.      VACATION.  McGehee will be eligible for up to four weeks' paid vacation
         per year.

16.      HOLIDAYS.  McGehee will be eligible for ten (10) CP&L paid holidays, as
         provided in the CP&L Handbook.  

17.      AUTOMOBILE.  McGehee  will  be  paid a car  allowance  of  $1,350  (One
         Thousand Three Hundred Fifty Dollars)  (less  applicable  withholdings)
         per  month.  He will also be  provided  a  cellular  telephone  for his
         automobile and provided reserved parking at CP&L's expense.

18.      ANNUAL PHYSICAL.  CP&L will pay for an annual physical examination by a
         physician of McGehee's choice.

19.      OTHER  BENEFITS.  McGehee will be eligible to participate in other CP&L
         benefits, subject to the terms of the respective plans, as described in
         more detail in the Employee  Handbook.  Additionally,  upon  retirement
         from CP&L,  McGehee will be eligible to  participate in the medical and
         dental  insurance  programs  provided  other retirees at retiree rates,
         subject to the terms of those  plans;  provided,  however,  that to the
         extent any such  benefits  may not be  provided  to McGehee  because of
         statutory or regulatory limitations,  CP&L will use its best efforts to
         obtain substantially equivalent coverage on an insured basis.

20.      CAPITAL CITY CLUB. CP&L will pay an initiation fee and monthly dues for
         a membership in the Capital City Club for McGehee.

21.      AIRLINE  CLUB  MEMBERSHIP.  CP&L  will  pay the fee  for  airline  club
         membership for McGehee.

22.      COUNTRY CLUB MEMBERSHIP.  At McGehee's option, if joined, CP&L will pay
         the initiation  fees for country club  membership for McGehee.  McGehee
         will be responsible for all monthly dues.

23.      HEALTH CLUB. CP&L will pay initiation and dues for a family  membership
         in the Rex Hospital Wellness Center.

24.      PERSONAL COMPUTER.  CP&L will provide a personal computer to McGehee to
         be used at his personal residence.  

25.      TERMINATION OF EMPLOYMENT.  The employment relationship between McGehee
         and CP&L is "at will" and may be  terminated  by either CP&L or McGehee
         with or without  advance  notice and may be terminated  with or without
         cause as defined below.

         a)   Termination  Without  Cause.  Within  two (2) years of the date of
              this  Agreement,  if McGehee's  employment is  terminated  without
              cause or if McGehee's  employment  is  constructively  terminated,
              then McGehee will be provided with  severance  benefits of two (2)
              years of annual base salary. In addition, McGehee will be eligible
              to retain all  benefits  under  existing  benefit  programs to the
              extent vested within the terms of those programs.

                  1)  Termination for Cause - For purposes of this paragraph 25,
                      cause for the  termination of employment  shall be defined
                      as: (a) any act of  McGehee's  including,  but not limited
                      to, misconduct,  negligence,  unlawfulness,  dishonesty or
                      inattention  to the  business,  which  is  detrimental  to
                      CP&L's  interests  or  (b)  McGehee's  unsatisfactory  job
                      performance  or failure to comply with CP&L's  directions,
                      policies, rules or regulations.

                  2)  Constructive  Termination - For purposes of this paragraph
                      25, a constructive termination will be deemed to occur if:
                      (a)  there is a change  in the form of  ownership  of CP&L
                      (e.g.,   CP&L  is   acquired,   enters   into  a  business
                      combination with another company or otherwise changes form
                      of  ownership) or (b) there is a change in the present CEO
                      of the  Company or a material  change in his or  McGehee's
                      responsibilities.

         b)   Voluntary  Termination  - If  McGehee  terminates  his  employment
              voluntarily for any reason other than a constructive  termination,
              then he shall be eligible to retain all  benefits  under  existing
              benefit  programs which have vested pursuant to the terms of those
              programs,  but he shall  not be  entitled  to any  form of  salary
              continuance or any form of severance benefit.

         c)   Termination for Cause - If McGehee's  employment is terminated for
              cause,  then he shall be  eligible  to retain all  benefits  under
              existing  benefit programs which have vested pursuant to the terms
              of those  programs,  but he shall not be  entitled  to any form of
              salary continuance or any form of severance benefit.

29.      WAIVER  OF  BREACH.  McGehee's  or CP&L's  waiver of any  breach of any
         provision of this agreement  shall not waive any  subsequent  breach by
         the other party.

30.      ENTIRE   AGREEMENT.   The   Agreement:   (i)   supersedes   all   other
         understandings  and  agreements,  oral or written,  between the parties
         with respect to its subject matter; (ii) constitutes the sole agreement
         between the parties  with  respect to its  subject  matter.  Each party
         acknowledges that: (i) no representations,  inducements, promises, oral
         or written,  made by any party or anyone acting on behalf of the party,
         which  are not  embodied  in the  Agreement;  and  (ii)  no  agreement,
         statement,  or promise not contained in the Agreement shall be valid or
         binding on the parties unless such change or modification is in writing
         and is signed by the parties.

31.      SEVERABILITY.  If a court  of  competent  jurisdiction  holds  that any
         provision or subpart  thereof  contained  in the  Agreement is invalid,
         illegal,   or   unenforceable,   that   invalidity,    illegality,   or
         unenforceability  shall not affect any of the other  provisions  in the
         Agreement.

32.      PARTIES BOUND.  The Agreement  shall apply to, be binding upon an inure
         to the benefit of the parties'  successors,  assigns,  heirs, and other
         representatives.

33.      GOVERNING LAW. The Agreement will be governed by North Carolina law.

In witness  whereof,  the parties have entered into the Agreement on the day and
year written below.

By:      /S/  Robert B. McGehee                  Date:    June 2, 1997
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         Robert B. McGehee



By:       /S/                                    Date:    June 2, 1997
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         Carolina Power & Light Company

Title:       /S/
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