<PAGE> 1
As Filed with the Securities and
Exchange Commission on August 3, 1998 File No. 70-9095
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO.1 TO
APPLICATION-DECLARATION
ON FORM U-1
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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CONECTIV
DELMARVA POWER & LIGHT COMPANY
CONECTIV RESOURCE PARTNERS, INC.
CONECTIV ENERGY SUPPLY COMPANY
800 King Street
Wilmington, DE 19899
<TABLE>
<S> <C>
DELMARVA CAPITAL INVESTMENTS, INC. ATLANTIC CITY ELECTRIC COMPANY
CONECTIV SERVICES, INC. ATLANTIC ENERGY ENTERPRISES, INC.
CONECTIV COMMUNICATIONS, INC. ATLANTIC ENERGY INTERNATIONAL, INC.
DELMARVA SERVICES COMPANY 6801 Black Horse Pike
DCI I, INC. Egg Harbor Township, NJ 08234
DCI II, INC.
DCTC-BURNEY, INC. ATLANTIC GENERATION, INC.
CHRISTIANA CAPITAL MANAGEMENT, INC. ATLANTIC SOUTHERN PROPERTIES, INC.
DELMARVA OPERATING SERVICES CO. ATE INVESTMENT, INC.
CONECTIV SOLUTIONS, LLC CONECTIV THERMAL SYSTEMS, INC.
CONECTIV ENERGY, INC. COASTALCOMM, INC.
POWER CONSULTING GROUP, INC. ATLANTIC ENERGY TECHNOLOGY, INC.
CONECTIV PLUMBING LLC BINGHAMTON GENERAL, INC.
252 Chapman Road BINGHAMTON LIMITED, INC.
P.O. Box 6066 PEDRICK LTD., INC.
Newark, DE 19714 PEDRICK GEN., INC.
VINELAND LIMITED, INC.
VINELAND GENERAL, INC.
ATLANTIC JERSEY THERMAL SYSTEMS, INC.
ATS OPERATING SERVICES, INC.
THE EARTH EXCHANGE, INC.
ATLANTIC PAXTON COGENERATION, INC.
5100 Harding Highway
Mays Landing, NJ 08330
</TABLE>
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(Names of companies filing this statement and addresses of principal executive
offices)
CONECTIV
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(Name of top registered holding company parent)
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Louis M. Walters
Treasurer
Conectiv
800 King Street
Wilmington, DE 19899
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(Names and addresses of agents for service)
The Commission is requested to send copies of all notices, orders and
communications in connection with this Application-Declaration to:
Peter F. Clark, Esq. Joyce Koria Hayes, Esq.
Conectiv, Inc. 7 Graham Court
800 King Street Newark, DE 19711
Wilmington, DE 19899
<PAGE> 3
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION
(a) Furnish a reasonably detailed and precise description of the proposed
transaction, including a statement of the reasons why it is desired to
consummate the transaction and the anticipated effect thereof. If the
transaction is part of a general program, describe the program and its relation
to the proposed transaction.
In its Order dated February 26, 1998 (Release No. 35-26833; 70-9095), the
Commission reserved jurisdiction over the issuance of short-term debt to
Conectiv by Delmarva Power & Light Company ("Delmarva") and the participation
of Delmarva in the Conectiv System Money Pool pending receipt by the Commission
of an authorizing order from the Virginia State Corporation Commission
("VSCC"). The purpose of this Post-Effective Amendment No. 1 is to complete
the record with regard to these matters by filing the authorizing order of the
VSCC as Exhibit D-2 hereto.
ITEM 5. PROCEDURE
(a) State the date when Commission action is requested. If the date is less
than 40 days from the date of the original filing, set forth the reasons for
acceleration.
As the public notice requirements with regard to this matter have already been
fulfilled, the Commission is respectfully requested to issue its supplemental
order as soon as practicable after the date of filing of this Post Effective
Amendment No. 1.
ITEM 6. EXHIBITS
(a) Exhibits
D-2 Order of the Virginia State Corporation Commission related to the
issuance of short-term debt to Conectiv by Delmarva and participation
in the Conectiv System Money Pool by Delmarva
F-2 Opinion of Counsel
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SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned companies have duly caused this Post-Effective
Amendment No. 1 to Form U-1 to be signed on their behalf by the undersigned
thereunto duly authorized.
DATE: CONECTIV
DELMARVA POWER & LIGHT COMPANY
CONECTIV RESOURCE PARTNERS, INC.
CONECTIV ENERGY SUPPLY COMPANY
DELMARVA CAPITAL INVESTMENTS, INC.
CONECTIV SERVICES, INC.
DCI I, INC.
DCI II, INC.
DCTC-BURNEY, INC.
CHRISTIANA CAPITAL MANAGEMENT, INC.
DELMARVA OPERATING SERVICES COMPANY
POWER CONSULTING GROUP, INC.
CONECTIV SOLUTIONS, LLC
CONECTIV PLUMBING, LLC
ATLANTIC CITY ELECTRIC COMPANY
ATLANTIC ENERGY ENTERPRISES, INC.
ATLANTIC ENERGY INTERNATIONAL, INC.
ATLANTIC GENERATION, INC.
ATLANTIC SOUTHERN PROPERTIES, INC.
ATE INVESTMENT, INC.
CONECTIV THERMAL SYSTEMS, INC.
COASTALCOMM, INC.
ATLANTIC ENERGY TECHNOLOGY, INC.
BINGHAMTON GENERAL, INC.
BINGHAMTON LIMITED, INC.
PEDRICK LIMITED, INC.
PEDRICK GENERAL, INC.
VINELAND LIMITED, INC.
VINELAND GENERAL, INC.
ATLANTIC JERSEY THERMAL SYSTEMS, INC.
ATS OPERATING SERVICES, INC.
THE EARTH EXCHANGE, INC.
ATLANTIC PAXTON COGENERATION, INC.
August 3, 1998 /s/ L. M. Walters
-----------------
L. M. Walters
Treasurer
<PAGE> 5
EXHIBIT INDEX
D-2 Order of the Virginia State Corporation Commission related to the
issuance of short-term debt to Conectiv by Delmarva and participation
in the Conectiv System Money Pool by Delmarva
F-2 Opinion of Counsel
<PAGE> 1
EXHIBIT D-2
COMMONWEALTH OF VIRGINIA
STATE CORPORATION COMMISSION
AT RICHMOND, JUNE 29, 1998
JOINT APPLICATION OF
DELMARVA POWER & LIGHT COMPANY, CASE NO. PUA970040
CONECTIV, INC.,
ATLANTIC CITY ELECTRIC COMPANY, and
SOON-TO-BE-FORMED MUTUAL SERVICE COMPANY
For approval of transactions under
Chapter 4 of Title 56 of the Code
of Virginia
ORDER GRANTING RECONSIDERATION,
IN PART, AND MODIFYING ORDER
In its June 18, 1998 Order Granting Approval, the Commission approved,
subject to certain conditions, the supplemental application heretofore filed by
Delmarva Power & Light Company ("Delmarva") and other applicants (collectively,
the "Applicants").
On June 26, 1998, counsel for the Applicants filed a petition
requesting reconsideration (the "Petition") and modification of some of those
conditions, as detailed in Attachment A to the Petition. The Applicants state
that such modifications are necessary as "some of the conditions . . . could be
interpreted in a way that would inhibit full realization of cost savings
anticipated to be achieved by use of the service company." Petition at 2. The
Applicants request, among other things, that the Order be clarified to reflect
that "interim and incidental services referred to on page 4 of the Order are
also approved." The Applicants also request that Ordering Paragraph (7) be
modified to reflect Conectiv Resource Partners as a "regulated affiliate"(1),
and that Ordering
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(1) Conectiv Resource Partners is subject to regulation by the Securities
and Exchange Commission under the Public Utility Holding Company Act of 1935.
<PAGE> 2
Paragraph (10 ) be modified to approve the lease of real and personal property
by Delmarva to Conectiv Resource Partners for use only by that entity.
NOW THE COMMISSION, having considered the Applicants petition, is of
the opinion that the Applicants concerns should be addressed, although in a
way different than proposed in Attachment A. Consequently, we will grant
reconsideration, in part, and modify our Order of June 18, 1998, as specified
below. Accordingly,
IT IS ORDERED THAT:
(1) The Applicant's Petition for Reconsideration be, and hereby,
is granted, in part.
(2) Ordering Paragraph (1) of our Order of June 18, 1998, shall be
modified as follows:
Pursuant to Section 56-77 of the Code of Virginia, Delmarva
Power & Light Company is hereby authorized to enter
into a service agreement with the soon-to-be-formed
mutual service company (tentatively named "Conectiv
Resource Partners") and provide the interim and
incidental services described in the Supplemental
Application, subject to the terms and conditions
described herein.
(3) Ordering Paragraph (7) of our Order dated June 18, 1998, shall
be modified as follows:
Where services are not tariffed, to ensure that the
service agreement continues to be in the public interest,
Delmarva Power & Light Company shall price services that it
provides, directly or indirectly, to non-regulated affiliates
at the greater of market or cost, plus a reasonable return,
and services it receives from a non-regulated affiliate shall
be priced at the lower of market or cost, plus a reasonable
return. Services provided to Delmarva Power & Light Company
by Conectiv Resource Partners and any other regulated
affiliate and services received by a regulated affiliate from
Delmarva Power & Light Company shall be priced at cost.
<PAGE> 3
(4) Ordering Paragraph (10) of our Order dated June 18, 1998,
shall be modified as follows:
Delmarva Power & Light Company may lease, after the
Merger, real and personal property to Conectiv Resource
Partners or a property management company affiliated with
Conectiv, Inc., for use only by Conectiv Resource Partners.
The pricing provisions of any such lease shall be based on not
less than the net book value of the property being leased, and
shall otherwise reflect Delmarva Power & Light Company's
actual costs.
(5) Delmarva Power & Light Company shall file with the
Commission's Director of Public Utility Accounting a copy of any lease
agreement regarding real or personal property entered into between itself and
Conectiv Resource Partners or itself and the property management company
referenced herein; such agreement shall be filed within thirty(30) days of the
date of execution and shall include documentation detailing the calculation of
the lease fee.
(6) Delmarva Power & Light Company shall file with the
Commission's Director of Public Utility Accounting a list of all real and
personal property leased to Conectiv Resource Partners or to the property
management company referenced herein; such filing shall be made within sixty
(60) days after the effective date of the lease and shall include (a) the date
each asset was required by Delmarva, (b) the original cost of each asset, and
(c) the net book value of each asset.
(7) All other provisions of our June 18, 1998 Order shall remain
in full force and effect.
(8) This matter shall be continued until further order of the
Commission.
AN ATTESTED COPY hereof shall be sent by the Applicant, c/o Mr. Peter
F. Clark, General Counsel, Delmarva Power & Light Company, 800 King Street,
P.O. Box 231, Wilmington, DE 19899; Guy T. Tripp, III, Esquire, Hunton &
Williams, Riverfront Plaza, East
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Tower, 951 East Byrd Street, Richmond, VA 23219-4073; and the Commission's
Divisions of Public Utility Accounting and Economics and Finance.
/s/ William T. Bridge
Clerk of the
State Corporation Commission
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COMMONWEALTH OF VIRGINIA
STATE CORPORATION COMMISSION
AT RICHMOND, JUNE 18, 1998
JOINT APPLICATION OF CASE NO. PUA970040
DELMARVA POWER AND LIGHT COMPANY,
CONECTIV, INC., ATLANTIC CITY ELECTRIC COMPANY, AND
A SOON-TO-BE-FORMED MUTUAL SERVICE COMPANY
For approval of transactions under Chapter 4 of Title 56
of the Code of Virginia
ORDER GRANTING APPROVAL
On December 23, 1997, Delmarva Power & Light Company ("Delmarva,"
"Company"), Conectiv, Inc. ("Conectiv"), and Atlantic City Electric Company
("Atlantic Electric"), filed a supplemental application providing information
about, and seeking approval of merger-related transactions, including the
operation of the soon-to-be-formed mutual service company ("Conectiv Resource
Partners")(2) (hereafter referred to as the "Applicants"). The Applicants
request approval, pursuant to Section 56-77 of the Code of Virginia, of
proposed contracts or arrangements by which: (1) Conectiv Resource Partners
will provide various services to Delmarva and to other Conectiv System
companies after the merger; (2) Delmarva and Atlantic Electric may, on an
interim or incidental basis, provide services to each other or other affiliates
after the merger; (3) the System Money Pool will operate; (4) Delmarva may
issue Securities authorized by Commission Order entered May 23, 1997, in Case
No. PUF970008 to Conectiv, and (5) various subsidiaries of Delmarva will be
made subsidiaries of Conectiv after the merger.
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(2) Conectiv Resource Partners was formed on January 16, 1998.
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Delmarva is a corporation organized under the laws of the State of
Delaware and the Commonwealth of Virginia. Delmarva is engaged in the
generation, transmission, distribution, and sale of electric energy to
approximately 19,000 retail customers and one wholesale customer in Virginia's
two Eastern Shore counties. Delmarva's Virginia customers produce
approximately 3% of its annual revenues. The remainder of Delmarva's 437,500
residential, commercial, and industrial customers are located in Delaware and
ten Eastern Shore counties in Maryland. Delmarva also provides natural gas
service to approximately 101,000 customers located in northern New Castle
County, Delaware.
Conectiv is a corporation organized under the laws of the State of
Delaware and was formed in mid-1996 in connection with the proposed Merger.
After the Merger, Conectiv will own 100% of the outstanding common stock of
Delmarva and Atlantic Electric. Conectiv will also be subject to regulation by
the Securities and Exchange Commission under the Public Utility Holding Company
Act of 1935 ("PUHCA").
Atlantic Electric is a corporation organized under the laws of the
State of New Jersey. Atlantic Electric is engaged in the generation,
transmission, distribution, and sale of electric energy to approximately
473,000 residential, commercial, and industrial customers in the State of New
Jersey. Atlantic Electric s principal service territory is the southern
one-third of New Jersey and covers all or portions of eight counties.
Conectiv Resource Partners is a corporation organized pursuant to the
laws of the State of Delaware. Conectiv Resource Partners is intended to be a
mutual service company, as defined under PUHCA, and is being formed to provide
services to Delmarva and other Conectiv entities.
The Applicants are requesting approval for Conectiv Resource Partners
to provide management, administrative, support, and other services to Delmarva
and other Conectiv entities
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pursuant to one or more service agreements. The Applicants state that a major
portion of the labor savings from the merger will be achieved through
consolidation into Conectiv Resource Partners of numerous activities now
performed independently by Delmarva, Atlantic Electric, and other entities.(3)
Also, the Applicants state that the Securities and Exchange Commission will
have oversight over how Conectiv Resource Partners costs are assigned or
allocated to Conectiv System companies.
Delmarva states it is requesting approval to transfer real and
personal property or assign other rights to Conectiv Resource Partners, or to
one or more other Conectiv System companies, for use by Conectiv Resource
Partners to provide the services described in the service agreement. Delmarva
also proposes that all post-Merger transfers or assignments to Conectiv
Resource Partners or other Conectiv System companies for use by Conectiv
Resource Partners be made at the then current net book value (if any) of such
property and not to exceed an aggregate Delmarva system-wide amount of $100
million. The Applicants state that none of the property expected to be
transferred or assigned is located in the Commonwealth of Virginia. However,
Applicants state there will likely be other proposed real and personal property
transfers and assignments in connection with the establishment of the Conectiv
System that will be subject in the future to the Affiliates Act.
In addition, Delmarva and Atlantic Electric are requesting approval to
provide interim and incidental services between themselves and other Conectiv
System companies during and after the period between the closing of the Merger
and when Conectiv Resource Partners actually begins full operations.(4) The
Applicants state that the phased start-up of Conectiv Resource Partners is due
to the need to (1) establish new benefit plans and employment policies,
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(3) Such entities will be directly or indirectly owned by Conectiv after
the Merger (the Conectiv System ).
(4) Expected July 1, 1998.
<PAGE> 8
procedures, and practices for Conectiv Resource Partners; (2) complete work on
systems to be used by Conectiv Resource Partners; and (3) assign Delmarva,
Atlantic Electric, and other affiliate employees to the new company.
Conectiv Resource Partners also is seeking approval to operate a
system money pool in which Conectiv System companies will participate (the
"System Money Pool"). Through the System Money Pool, temporary surplus funds
of Conectiv and other Conectiv System companies would be available for
short-term loans to Conectiv System companies (except Conectiv itself).
Conectiv System companies would borrow from, and make loans to, the System
Money Pool which would be administered at cost by Conectiv Resource Partners
acting as agent. Interest expense or income would be charged or credited, as
appropriate, to System Money Pool participants monthly based on the daily
average investment or borrowing position of each participant.
Delmarva further requests approval to issue to Conectiv all or part of
the aggregate $250 million of secured and unsecured debt securities ("Debt
Securities"), preferred stock, and common stock (collectively, the
"Securities"), as authorized by Commission Order entered May 23, 1997, in Case
No. PUF970008.
Lastly, Delmarva is requesting approval, after consummation of the
Merger(5), to transfer its various direct and indirect non-utility subsidiaries
to Conectiv. This proposed change is expected to be accomplished through a
dividend of direct subsidiary common stock by Delmarva to Conectiv.
The Applicants state that the service agreement is a primary means by
which Conectiv Resource Partners will realize economies of scale for the
Conectiv System. The savings
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(5) The Merger was consummated on March 1, 1998.
<PAGE> 9
associated with achievement of those economies of scale will reduce Delmarva's
cost of service for Virginia jurisdictional customers. In addition, the
Applicants state that Virginia customers will have the additional protection
afforded by the Commission's ability to determine the Virginia ratemaking
treatment of costs assigned or otherwise allocated to Delmarva by Conectiv
Resource Partners and borne by Delmarva's Virginia jurisdictional customers.
The proposed service agreement will continue in force until terminated
by either party upon no less than ninety (90) days prior written notice to the
other party. Also, the service agreement will be subject to termination or
modification at any time, without notice, if and to the extent performance may
conflict with PUHCA or with any rule, regulation or order of the SEC or any
other regulatory body.
On April 17, 1998, Staff filed a report on Applicants proposed
affiliate transactions. Staff recommended, among other things, that Applicants
request for authority to transfer or assign up to $100 million of Delmarva
systems real and personal property at net book value be denied unless Delmarva
could demonstrate that such property has never been included in rate base in a
Virginia jurisdictional cost of service study. Staff also recommended that the
terms of the proposed Money Pool be modified unless Applicants could
demonstrate that Delmarva's cost to participate is less than or equal
Delmarva's stand alone cost.
Delmarva filed comments to the Staff s report on May 22, 1998. In its
comments, Delmarva provided quantitative information to demonstrate the
expected overall savings through participation in the Money Pool. Delmarva
estimated the Money Pool would produce labor savings of approximately $120,000
annually that would offset any increase in commitment fees. Delmarva also
stated that its allocable share of the $560,000 Money Pool commitment fee was
expected to be $143,360 instead of the $230,000 assumed in the Staff's Report.
<PAGE> 10
Delmarva also took exception to other recommendations made by Staff.
Delmarva objected to any inclusion of language in a final order that would
prohibit Delmarva from providing services to regulated and non-regulated
Conectiv System companies without prior Commission approval. Delmarva also
opposed Staff's proposed inclusion of language requiring that a separate
application be filed with the Commission for the transfer of property included
in rate base in a Virginia jurisdictional cost of service study to Conectiv
Resource Partners.
Delmarva objected to certain language being included that would
require Commission approval for "any" change in terms and conditions of the
proposed service agreement between Delmarva and Conectiv Resource Partners and
suggested that, if such language were included, the word "material" be inserted
after the word "any". As an alternative, Delmarva proposed that a provision be
added in the final order that would allow Delmarva to report "any" service
agreement change in its annual Affiliates Report.
Finally, Delmarva opposed Staff s comments allowing in cost of service
"only such costs that would have been incurred by Delmarva if it had not been
reorganized as part of a holding company structure." Delmarva stated that it
would be inconsistent to include a provision that would purport to limit the
Commission's discretion in future Delmarva rate cases. According to Delmarva,
the Staff and other parties would have ample opportunity in a rate case
proceeding to review all costs thought to be unreasonable.
NOW THE COMMISSION, upon consideration of the application and
representations of Applicant and having been advised by its Staff, is of the
opinion and finds that the above described transactions do not appear to be
detrimental to the public interest. We are, therefore, of the opinion that the
application should be approved subject to the conditions detailed herein.
Although we will approve the application, as modified, we note that Staff's
report states that the
<PAGE> 11
Applicants appear to have violated the prior approval requirement of the
Affiliates Act with respect to Delmarva's use of Conectiv s credit facility
for back-up support to issue commercial paper. In view of such allegation,
Delmarva should be aware that the authority granted herein does not extend to
prior use of such credit facility and that the Commission Staff may decide to
seek enforcement action with regard to this matter. Accordingly,
IT IS ORDERED THAT:
1) Pursuant to Section 56-77 of the Code of Virginia, Delmarva
Power & Light Company is hereby authorized to enter into a service agreement
with a soon to be formed mutual service company (tentatively named "Conectiv
Resource Partners"), subject to the terms and conditions described herein.
2) Commission approval shall be required for any changes in terms
and conditions of the service agreement relative to service/goods being
offered, pricing, and cost allocation methodology.
3) Delmarva Power & Light Company shall adhere to the provisions
of Section 56-77 of the Code of Virginia before executing any contracts,
agreements or amendments in the future.
4) The approval granted herein shall have no ratemaking
implications.
5) The approval granted herein shall not preclude the Commission
from exercising the provisions of Sections 56-78 and 56-80 of the Code of
Virginia hereafter.
6) The Commission, pursuant to Section 56-79 of the Code of
Virginia, reserves the right to examine the books and records of any affiliate
in connection with the authority granted herein whether or not such affiliate
is regulated by this Commission.
<PAGE> 12
7) Where services are not tariffed, to ensure that the service
agreement continues to be in the public interest, Delmarva Power & Light
Company shall price services that it provides to non-regulated affiliates at
the greater of market or cost, plus a reasonable return, and services it
receives from a non-regulated affiliate shall be priced at the lower of market
or cost, plus a reasonable return. Services provided to Delmarva Power & Light
Company from a regulated affiliate and services received by a regulated
affiliate from Delmarva Power & Light Company shall be priced at cost.
8) Delmarva Power & Light Company shall include in all general
rate proceedings and Annual Informational Filings evidence that the pricing
policy stated herein has been followed.
9) Delmarva Power & Light Company will not assert, in any future
proceeding, that the Commission's ratemaking authority is preempted by federal
law with respect to Virginia's retail ratemaking treatment of any charges from
any affiliate to Delmarva Power & Light Company or from Delmarva Power & Light
Company to any affiliate.
10) The transfer or assignment by Delmarva Power & Light Company,
after the Merger, of real and personal property to Conectiv Resource Partners
or other Conectiv System companies for use by Conectiv Resource Partners at the
then-current net book value (if any) and not exceeding an aggregate Delmarva
system-wide amount of $100 million is denied, without prejudice. If upon
subsequent showing the Company can assure the Commission that such property has
never been included in rate base in a Virginia jurisdictional cost of service
study reconsideration will be given to this request. If such property has been
included in rate base in a Virginia jurisdictional cost of service study,
Commission approval of its transfer is required in accordance with Section
56-77 of the Code of Virginia.
<PAGE> 13
11) Delmarva Power & Light Company is hereby granted authority to
issue and sell to Conectiv, Inc., the remaining unissued securities authorized
by prior Commission Order entered May 23, 1997, in Case No. PUF970008.
12) The interest rate on any Debt Securities issued to Conectiv,
Inc., under the authority in ordering paragraph 11) shall be (i) the lower of
Conectiv's rate, including issuance costs, on long-term debt issued in the
prior quarter or (ii) the yield published in Standard & Poor's Credit Week for
"A" rated long-term debt securities of similar maturities issued by U.S. Energy
and Water utility companies at the time such Debt Securities are issued.
13) Any Securities issued to Conectiv, Inc., pursuant to the
authority granted in ordering paragraph 11), shall be subject to the reporting
requirements established in Case No. PUF970008.
14) Delmarva Power & Light Company is hereby granted authority to
participate in the proposed Money Pool up to the same aggregate short-term debt
limit of $275,000,000 through the period ending December 31, 1999, as
authorized in Case No. PUF960022.
15) Delmarva Power & Light Company's authority to borrow through
the Money Pool shall be limited to borrowings that can be achieved with
interest rates equal to or lower than Delmarva Power & Light Company's own
commercial paper or bid note borrowing for the same maturity.
16) Delmarva Power & Light Company's participation in the Money
Pool shall be subject to the same reporting requirements for short-term debt in
Case No. PUF960022.
17) The transfer of Delmarva Power & Light Company's direct
subsidiaries by means of a dividend of the common stock to Conectiv, Inc.,
after the Merger appears to be reasonable.
<PAGE> 14
18) Delmarva Power & Light Company shall file an annual Report of
Affiliate Transactions Undertaken with Other Regulated Affiliates with the
Director of Public Utility Accounting of the Commission by no later than May 1
of each year, for the preceding calendar year, beginning May 1, 1999. Such
report shall include the following information: 1) affiliate's name; 2)
description of transactions; 3) total dollar value (cost) of transactions
identified by department and/or functional category; 4) component cost of each
category of transactions where service are provided to an regulated affiliate;
5) comparable market values of each category of transactions where services are
provided to an regulated affiliate; 6) comparable market values where services
are received from an regulated affiliate; 7) allocation bases/factors for
allocated costs; and 8) explanation of any variances by department/functional
group greater than 10% of the prior year s amount.
19) Delmarva Power & Light Company shall file an Annual Report of
Affiliated Transactions Undertaken with Non-Regulated Affiliates, either on a
direct basis or through Conectiv Resource Partners, with the Director of Public
Utility Accounting by no later than May 1 of each year, for the preceding year,
beginning May 1, 1999. Such report shall include the following information: 1)
non-regulated affiliate's name; 2) description of transactions; 3) total dollar
value (cost) of transactions identified by department and/or functional
category; 4) component costs of each category of transactions where services
are provided to an non-regulated affiliate; 5) profit component of each
category of transactions where services are provided to an non-regulated
affiliate; 6) comparable market values of each category of transactions where
services are provided to an non-regulated affiliate; 7) comparable market
values where services are received from an non-regulated affiliate; and 8)
explanation of any variances by department/functional group greater than 10% of
the prior year's amount.
<PAGE> 15
20) Such reports shall include all agreements with affiliates
regardless of the amount involved and shall supersede all other affiliate
reporting requirements previously ordered.
21) The Director of Public Utility Accounting may grant an
extension for filing such annual reports where deemed appropriate.
22) If Annual Informational and/or General Rate Case Filings are
not based on a calendar year, then Delmarva Power & Light Company shall include
the affiliate information contained in the Annual Report of Affiliate
Transactions in such filings.
23) The Commission reserves the right to exclude any merger costs
included in Delmarva Power & Light Company's jurisdictional cost of service
study.
24) There appearing nothing further to be done in this matter, the
same be, and it hereby is, dismissed.
AN ATTESTED COPY hereof shall be sent to Applicant, care of Mr. Peter
F. Clark, Assistant General Counsel, Delmarva Power, 800 King Street, P.O. Box
231, Wilmington, DE 19899; and to the Divisions of Public Utility Accounting
and Economics & Finance of the Commission.
/s/ William J. Bridge
Clerk of the
State Corporation Commission
<PAGE> 1
Exhibit F-2
July 31, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Conectiv
SEC File Number 70-9095
Dear Sirs:
As General Counsel for Conectiv, a Delaware corporation ("Conectiv"), I
have acted as counsel to Conectiv in connection with the Post-Effective
Amendment No. 1 ("Post-Effective Amendment No. 1") to Form U-1
Application/Declaration (File No. 70-9095), as previously amended (hereinafter
the "Declaration"), filed with the Securities and Exchange Commission (the
"Commission") jointly by Conectiv, by two subsidiaries, which are operating
utility companies, Delmarva Power & Light Company ("Delmarva") and Atlantic City
Electric Company, and by certain direct and indirect subsidiaries that are
non-utility companies.
In its Order dated February 26, 1998, the Commission reserved
jurisdiction over the issuance of short-term debt to Conectiv by
Delmarva and the participation of Delmarva in the Conectiv system money pool
(the "Money Pool"), pending issuance of an order from the Virginia State
Corporation Commission ("VSCC"). The VSCC issued an order on June 18, 1998,
which the VSCC further modified on June 29, 1998, granting Delmarva authority
to issue short term debt to Conectiv and to participate in the Money Pool (the
"VSCC Order"). The authorization requested in Post-Effective Amendment No. 1
relates to the participation by Delmarva in the Money Pool (hereinafter
referred to as the "Proposed Transaction").
In connection with this opinion, I or attorneys in whom I have
confidence have examined originals or copies, certified or otherwise identified
to my satisfaction, of such records of Conectiv and Delmarva and such other
documents, certificates and corporate or other records as I have deemed
necessary or appropriate as a basis for the opinions set forth herein. In my
examination, I have assumed the genuineness of all signatures, the legal
capacity of all persons, the authenticity of all documents submitted to me as
originals, the conformity to original documents of documents submitted to me as
certified or photostatic copies and the authenticity of the originals of such
copies. As to various questions of fact material to such opinions, I have, when
relevant facts were not independently established, relied upon statements
contained in the Declaration.
<PAGE> 2
The opinions expressed below with respect to the Proposed Transaction
are subject to the following assumptions, qualifications, limitations,
conditions and exceptions:
(a) The Commission shall have duly entered an appropriate order or
orders with respect to the Proposed Transaction, as described in
Post-Effective Amendment No. 1, removing the reservation of
jurisdiction and granting and permitting the Declaration, as
amended by Post-Effective Amendment No. 1, to become effective
under the Act and the rules and regulations thereunder and the
Proposed Transaction is consummated in accordance with
Post-Effective Amendment No. 1 and the VSCC Order.
(b) No act or event other than as described herein shall have
occurred subsequent to the date hereof which would change the
opinions expressed above.
Based on the foregoing and subject to the assumptions, qualifications,
limitations, conditions and exceptions set forth herein, I am of the opinion
that, in the event the Proposed Transaction is consummated in accordance with
the Post-Effective Amendment No. 1 and the VSCC Order:
1. All laws of the State of Delaware and of the Commonwealth of
Virginia applicable to the Proposed Transaction will have been complied with;
however, I express no opinion as to need to comply with state blue sky laws;
2. Conectiv and Delmarva are validly organized and duly existing under
the laws of their respective state and commonwealth of incorporation;
3. The various debt instruments to be issued by Delmarva as part of the
Proposed Transaction will be valid and binding obligations of Delmarva in
accordance with the terms of such instruments, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and
other similar laws relating to or affecting creditors' rights generally and
general equitable principles, whether considered in a proceeding in equity or at
law; and
4. The consummation of the Proposed Transaction will not violate the
legal rights of the holders of any securities issued by Delmarva or any
associate company thereof.
I hereby consent to the use of this opinion in connection with the
Financing Declaration.
Very truly yours,
/s/ Peter F. Clark
Peter F. Clark
