<PAGE> 1
Page 1
As Filed with the Securities and
Exchange Commission on August 13, 1998 File No. 70-9095
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO.2 TO
APPLICATION-DECLARATION
ON FORM U-1
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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.
PETRON OIL CORPORATION VINELAND GENERAL, INC.
180 Gordon Drive ATLANTIC JERSEY THERMAL SYSTEMS, INC.
Exton, PA 19341-1328 ATS OPERATING SERVICES, INC.
THE EARTH EXCHANGE, INC.
ATLANTIC PAXTON COGENERATION, INC.
5100 Harding Highway
Mays Landing, NJ 08330
</TABLE>
- --------------------------------------------------------------------------------
(Names of companies filing this statement and
addresses of principal executive offices)
CONECTIV
- --------------------------------------------------------------------------------
(Name of top registered holding company parent)
<PAGE> 2
Page 2
Louis M. Walters
Treasurer
Conectiv
800 King Street
Wilmington, DE 19899
- --------------------------------------------------------------------------------
(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 7 Graham Court
800 King Street Newark, DE 19711
Wilmington, DE 19899
<PAGE> 3
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.
A. Background.
Conectiv, a Delaware corporation, previously filed an Application/Declaration on
Form U-1 with the Securities and Exchange Commission (the "Commission")
requesting authorization under Section 9(a)(2) of the Public Utility Holding
Company Act of 1935, as amended (the "Act"), to consummate certain transactions
resulting in the acquisition by Conectiv of all of the outstanding voting
securities of Delmarva Power & Light Company, a Delaware and Virginia
corporation and an operating public utility company ("Delmarva"), and Atlantic
City Electric Company, a New Jersey corporation and an operating public utility
company ("ACE") (File No. 70-9069)(This transaction is hereinafter referred to
as the "Merger". Conectiv and its Utility Subsidiaries and Nonutility
Subsidiaries may be referred to as the "Conectiv System" or the "System.") The
order approving the merger was issued on February 25, 1998 (Release No. 26832
(the "Merger Order"). The Order issued in this file dated February 26, 1998
(Release No. 35-26833) (the "Financing Order") provided authorization for, among
other things, (1) Conectiv to issue up to an aggregate of $500 million of
short-term debt at any one time from the date of the Financing Order through
December 31, 2000 (the "Authorization Period"), (2) Conectiv to issue up to 10
million shares of its common stock ("Common Stock") for benefit plans and a
dividend reinvestment plan and (3) the formation and operation of a money pool
(the "System Money Pool").
B. Authorizations Sought
The purpose of this filing is to: (1) increase Conectiv's short-term debt
authorization from $500 million to $800 million, (2) amend the description of
the benefit plans pursuant to which Common Stock may be issued to include a
prior Delmarva incentive plan and (3) add Petron Oil Corporation ("Petron"), an
indirect subsidiary of Conectiv, as a participant in the System Money Pool.
1. Short-Term Debt
In the Financing Order, the Commission authorized Conectiv to issue short-term
debt not to exceed, when combined with short-term debt issued by Delmarva, $500
million in aggregate at any one time during the Authorization Period. The
short-term debt was to consist of borrowings under revolving credit facilities,
the issuance of commercial paper and the sale of bid notes. The short-term debt
was to be used to refund short-term debt existing prior to the Merger, to
provide working capital for the general corporate purposes(1) of Conectiv and
its subsidiaries, including Delmarva, and to fund the capital requirements of
Conectiv's subsidiaries until long-term financing could be obtained. As of July
31, 1998, $241.8 million was borrowed by Conectiv and Delmarva under this
authorization.
In order to provide additional flexibility, Conectiv hereby requests an increase
in its short-term debt authorization to $800 million. The incremental $300
million of short-term debt will be issued by Conectiv only. Delmarva is limited
by order of the Virginia State Corporation Commission (the "VSCC Order") to a
maximum of $275 million of short-term debt at any one time through December 31,
1999. The VSCC Order was previously provided as Exhibit D-1 to this Application-
Declaration. Incremental short-term
- --------
(1) General corporate purposes could include interim funding of the repurchase
of outstanding long-term securities.
<PAGE> 4
Page 4
borrowings requested herein will be subject to all limitations (other than
amount) identified in the Financing Order.
2. Employee Benefit Plans
In the Financing Order, Conectiv was authorized to issue Common Stock pursuant
to the terms of the Conectiv Incentive Compensation Plan (the "Conectiv Plan")
and, subject to the filing of the terms of the plans, pursuant to the terms of
future compensation plans envisioning the award of common stock. However,
options had been issued under the Delmarva Long-Term Incentive Plan (the
"Delmarva Plan") that were not extinguished upon the effective date of the
Merger, but merely converted to options to buy Common Stock. Therefore, Conectiv
wishes to amend the authority under the Financing Order to include authority to
issue Common Stock under the Delmarva Plan as well as the Conectiv Plan and
future compensation plans. A copy of the Delmarva Plan is included herein as
Exhibit A-1.
3. Participation in Conectiv System Money Pool
Pursuant to the Financing Order, participation in the Conectiv System Money Pool
was authorized for all Subsidiaries listed on the cover of Amendment No. 3 to
this Application-Declaration (except for two ETC Subsidiaries and except for
Delmarva, over whose participation the Commission reserved jurisdiction pending
receipt of an order from the Virginia State Corporation Commission). Conectiv
hereby requests authorization for Petron to participate in the Conectiv System
Money Pool. Petron, a Pennsylvania corporation, was purchased by Conectiv Energy
Supply Company (previously Delmarva Energy Company) on March 2, 1998. Petron is
an oil distribution company and is an "energy-related company" as defined in
Rule 58.
C. Compliance with Rule 54
Rule 54 promulgated under the Act states that in determining whether to approve
the issue or sale of a security by a registered holding company for purposes
other than the acquisition of an Exempt Wholesale Generator ("EWG") or a Foreign
Utility Company ("FUCO"), or other transactions by such registered holding
company or its subsidiaries other than with respect to EWGs or FUCOs, the
Commission shall not consider the effect of the capitalization or earnings of
any subsidiary which is an EWG or a FUCO upon the registered holding company
system if Rules 53(a)(b)(c) are satisfied. As demonstrated below, such rules are
satisfied.
Rule 53 requires that the aggregate investment in EWGs and FUCOs not exceed 50%
of a system's consolidated retained earnings. Conectiv and its subsidiaries will
not make any investments in EWGs and FUCOs that cause it to exceed that
limitation, unless the Commission otherwise authorizes. Currently Conectiv has
one insignificant indirect interest in an EWG. DCTC-Burney, Inc., an indirect
subsidiary of Conectiv, holds a 45% direct and indirect interest in Burney
Forest Products, a Joint Venture, which is an EWG. As of March 31, 1998, the
book value of the investment was $0.
Conectiv and its subsidiaries will maintain books and records to identify the
investments in and earnings from EWGs and FUCOs in which they directly or
indirectly hold an interest, thereby satisfying Rule 53(a)(2). In addition, the
books and records of each such entity will be kept in conformity with United
States generally accepted accounting principles ("GAAP"), the financial
statements will be prepared according to GAAP, and Conectiv undertakes to
provide the Commission access to such books and records and financial statements
as it may request.
Employees of Conectiv's domestic public-utility companies will not render
services directly or indirectly to any EWGs or FUCOs in the Conectiv System,
thereby satisfying Rule 53(a)(3).
<PAGE> 5
Page 5
Conectiv, in connection with any Form U-1 seeking approval of EWG or FUCO
financing, will submit copies of such Form U-1 and every certificate filed
pursuant to Rule 24 with every federal, state or local regulator having
jurisdiction over the retail rates of the public utility companies in the
Conectiv System. Rule 53(a)(4) will be correspondingly satisfied.
None of the conditions described in Rule 53(b) exists with respect to Conectiv,
thereby satisfying Rule 53(b) and making rule 53(c).
ITEM 2. FEES, COMMISSIONS AND EXPENSES
(a) State (1) the fees, commissions and expenses paid or incurred, or to be paid
or incurred, directly or indirectly, in connection with the proposed transaction
by the applicant or declarant or any associate company thereof, and (2) if the
proposed transaction involves the sale of securities at competitive bidding, the
fees and expenses to be paid to counsel selected by applicant or declarant to
act for the successful bidder.
Estimated Legal Fees and Expenses *
Estimated Miscellaneous Expenses *
TOTAL *
*(TO BE PROVIDED BY AMENDMENT)
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.
The Commission is respectfully requested to issue and publish the requisite
notice under Rule 23 with respect to the filing of this Post-Effective Amendment
No. 2 to the Application-Declaration by August 21, 1998 and to issue a
supplemental order by September 18, 1998.
(b) State (i) whether there should be a recommended decision by a hearing
officer, (ii) whether there should be a recommended decision by any other
responsible officer of the Commission, (iii) whether the Division of Corporate
Regulation may assist in the preparation of the Commission's decision, and (iv)
whether there should be a 30-day waiting period between the issuance of the
Commission's order and the date on which it is to become effective.
It is submitted that a recommended decision by a hearing or other responsible
officer of the Commission is not needed with respect to the proposed
transactions. The Office of Public Utility Regulation of the Division of
Investment Management may assist in the preparation of the Commission's
decision. There should be no waiting period between the issuance of the
Commission's order and the date on which it is to become effective.
<PAGE> 6
Page 6
ITEM 6. EXHIBITS
(a) Exhibits
A-1 Delmarva Incentive Compensation Plan (incorporated herein by
reference to the Form S-8 filed on January 30, 1997 (File No.
33-33810)
F-3 Opinion of counsel (To be filed by amendment.)
H-3 Proposed Notice
H-4 Financial Data Schedule
(b) Financial Statements
A. Conectiv Balance Sheet as of June 30, 1998
B. Conectiv Income Statement for the Six Months Ended June 30, 1998
C. Pro Forma Entries
<PAGE> 7
Page 7
CONECTIV
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1998
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Consolidated Pro Forma Consolidated
Conectiv Adjustments Conectiv
------------- ------------ -------------
ASSETS
------
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 68,994 $ 466,061 (1) $ 535,055
Accounts receivable 355,489 - 355,489
Inventories, at average cost:
Fuel (coal, oil, and gas) 50,042 - 50,042
Materials and supplies 68,196 - 68,196
Prepaid New Jersey sales and excise taxes 62,207 - 62,207
Prepayments 9,960 - 9,960
Deferred energy costs 5,972 - 5,972
Deferred income taxes, net 1,065 - 1,065
------------- ------------ -------------
621,925 466,061 1,087,986
------------- ------------ -------------
INVESTMENTS
Investment in leveraged leases 122,608 - 122,608
Funds held by trustee 162,129 - 162,129
Other investments 71,311 - 71,311
------------- ------------ -------------
356,048 - 356,048
------------- ------------ -------------
PROPERTY, PLANT, and EQUIPMENT
Electric utility plant 5,583,487 - 5,583,487
Gas utility plant 245,644 - 245,644
Common utility plant 156,132 - 156,132
------------- ------------ -------------
5,985,263 - 5,985,263
Less: Accumulated depreciation 2,402,550 - 2,402,550
------------- ------------ -------------
Net utility plant in service 3,582,713 - 3,582,713
Construction work-in-progress 221,829 - 221,829
Leased nuclear fuel, at amortized cost 61,029 - 61,029
Nonutility property, net 179,717 - 179,717
Goodwill, net 345,337 - 345,337
------------- ------------ -------------
4,390,625 - 4,390,625
------------- ------------ -------------
DEFERRED CHARGES AND OTHER ASSETS
Unrecovered purchased power costs 57,277 - 57,277
Deferred recoverable income taxes 170,990 - 170,990
Unrecovered New Jersey state excise tax 40,374 - 40,374
Deferred debt refinancing costs 46,447 - 46,447
Deferred other postretirement benefit costs 36,227 - 36,227
Prepaid employee benefit costs 57,593 - 57,593
Unamortized debt expense 27,427 - 27,427
License fees 25,393 - 25,393
Other 76,822 - 76,822
------------- ------------ -------------
538,550 - 538,550
------------- ------------ -------------
TOTAL ASSETS $ 5,907,148 $ 466,061 $ 6,373,209
============= ============ =============
</TABLE>
<PAGE> 8
Page 8
CONECTIV
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1998
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Consolidated Pro Forma Consolidated
Conectiv Adjustments Conectiv
------------ ----------- ------------
CAPITALIZATION AND LIABILITIES
------------------------------
<S> <C> <C> <C>
CURRENT LIABILITIES
Short-term debt $ 333,939 $ 466,061 (1) $ 800,000
Long-term debt and preferred stock due within one year 78,674 - 78,674
Variable rate demand bonds 102,500 - 102,500
Accounts payable 139,080 - 139,080
Taxes accrued 19,547 (4,894)(3) 14,653
Interest accrued 42,582 13,982 (2) 56,564
Dividends payable 47,167 - 47,167
Current capital lease obligation 28,537 - 28,537
Accrued employee separation and
other merger-related costs 23,055 - 23,055
Other 57,534 - 57,534
------------------ ------------------ -----------------
872,615 475,149 1,347,764
------------------ ------------------ -----------------
DEFERRED CREDITS AND OTHER LIABILITIES
Other postretirement benefits obligation 93,887 - 93,887
Deferred income taxes, net 866,221 - 866,221
Deferred investment tax credits 81,438 - 81,438
Long-term capital lease obligation 34,504 - 34,504
Other 56,036 - 56,036
------------------ ------------------ -----------------
1,132,086 - 1,132,086
------------------ ------------------ -----------------
CAPITALIZATION
Common stock: per share par value--$0.01;
150,000,000 shares authorized; shares
outstanding--100,969,752 1,012 - 1,012
Class A common stock, $0.01 par value;
10,000,000 shares authorized; shares outstanding--
6,560,612 66 - 66
Additional paid-in capital--common stock 1,474,063 - 1,474,063
Additional paid-in capital--Class A common stock 107,095 - 107,095
Retained earnings 247,824 (9,088)(2)(3) 238,736
------------------ ------------------ -----------------
1,830,060 (9,088) 1,820,972
Treasury shares, at cost; 226,619 shares (4,675) - (4,675)
------------------ ------------------ -----------------
Total common stockholders' equity 1,825,385 (9,088) 1,816,297
Preferred stock of subsidiaries:
Not subject to mandatory redemption 119,702 - 119,702
Subject to mandatory redemption 163,950 - 163,950
Long-term debt 1,793,410 - 1,793,410
------------------ ------------------ -----------------
3,902,447 (9,088) 3,893,359
------------------ ------------------ -----------------
TOTAL CAPITALIZATION AND LIABILITIES $ 5,907,148 $ 466,061 $ 6,373,209
================== ================== =================
</TABLE>
<PAGE> 9
Page 9
CONECTIV
PRO FORMA CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Consolidated Pro Forma Consolidated
Conectiv Adjustments Conectiv
--------------- -------------- -------------
<S> <C> <C> <C>
OPERATING REVENUES
Electric $ 880,530 $ - $ 880,530
Gas 188,716 - 188,716
Other services 118,384 - 118,384
--------------- -------------- -------------
1,187,630 - 1,187,630
--------------- -------------- -------------
OPERATING EXPENSES
Electric fuel and purchased energy 329,969 - 329,969
Gas purchased 161,171 - 161,171
Other services' cost of sales 89,328 - 89,328
Purchased electric capacity 69,263 - 69,263
Employee separation and other merger-related costs 26,346 - 26,346
Operation and maintenance 238,530 - 238,530
Depreciation 109,862 - 109,862
Taxes other than income taxes 31,569 - 31,569
--------------- -------------- -------------
1,056,038 - 1,056,038
--------------- -------------- -------------
OPERATING INCOME 131,592 - 131,592
--------------- -------------- -------------
OTHER INCOME
Allowance for equity funds used
during construction 1,116 - 1,116
Other income 4,672 - 4,672
--------------- -------------- -------------
5,788 - 5,788
--------------- -------------- -------------
INTEREST EXPENSE
Interest charges 67,446 13,982 (2) 81,428
Allowance for borrowed funds used during
construction and capitalized interest (1,588) - (1,588)
--------------- -------------- -------------
65,858 13,982 79,840
--------------- -------------- -------------
PREFERRED STOCK DIVIDEND
REQUIREMENTS OF SUBSIDIARIES 8,247 - 8,247
--------------- -------------- -------------
INCOME / (LOSS) BEFORE INCOME TAXES 63,275 (13,982) 49,293
INCOME TAXES 27,909 (4,894)(3) 23,015
--------------- -------------- -------------
NET INCOME / (LOSS) $ 35,366 $ (9,088) $ 26,278
=============== ============== ===============
EARNINGS / (LOSS) APPLICABLE TO COMMON STOCK
Common stock $ 33,174 $ (9,088) $ 24,086
Class A common stock 2,192 - 2,192
--------------- -------------- -------------
$ 35,366 $ (9,088) $ 26,278
=============== ============== ===============
COMMON STOCK
Average shares outstanding (000)
Common stock 87,874 87,874
Class A common stock 6,561 6,561
Earnings / (Loss) per average share--basic and diluted
Common stock $ 0.38 $ 0.27
Class A common stock $ 0.33 $ 0.33
Dividends declared per share
Common stock $ 0.77 $ 0.77
Class A common stock $ 1.60 $ 1.60
</TABLE>
<PAGE> 10
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PRO FORMA ENTRIES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C>
(1) Dr. Cash $466,061
Cr. Short-term debt $466,061
To reflect the issuance of short-term debt necessary to bring Conectiv up
to the $800 million limit being requested.
(2) Dr. Interest expense $ 13,982
Cr. Accrued interest $ 13,982
To record six months of interest expense at 6.0%.
(3) Dr. Accrued taxes $ 4,894
Cr. Income tax expense $ 4,894
To record the tax effect at 35%.
</TABLE>
<PAGE> 11
Page 11
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. 2 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.
PETRON OIL CORPORATION
August 13, 1998 /s/ L. M. Walters
-----------------
L. M. Walters
Treasurer
<PAGE> 12
Page 12
EXHIBIT INDEX
A-1 Delmarva Incentive Compensation Plan (incorporated herein by
reference to the Form S-8 filed on January 30, 1997 (File No.
33-33810)
F-3 Opinion of counsel (To be filed by amendment.).
H-3 Proposed Notice
H-4 Financial Data Schedule
<PAGE> 1
Page 13
Exhibit H-3
SECURITIES AND EXCHANGE COMMISSION
Release No. 35-
Notice is hereby given that the following filing has been made with the
Commission pursuant to provisions of the Act and rules promulgated thereunder.
All interested persons are referred to the application(s) and/or declaration(s)
for complete statements of the proposed transaction(s) summarized below. The
application(s) and/or declaration(s) and any amendments thereto is/are available
for public inspection through the Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing on the application(s)
and/or declaration(s) should submit their views in writing by , 1998 to the
Secretary, Securities and Exchange Commission, Washington D.C. 20549, and serve
a copy on the relevant applicant(s) and/or declarant(s) at the address(es)
specified below. Proof of service (by affidavit or, in case of an attorney at
law, by certificate) should be filed with the request. Any request for hearing
shall identify specifically the issues of fact or law that are disputed. A
person who so requests will be notified or any hearing, if ordered, and will
receive a copy of any notice or in order issued in the matter. After said date,
the Application/Declaration, as filed or as amended, may be granted and/or
permitted to become effective.
Conectiv, a Delaware corporation, previously filed an Application/Declaration on
Form U-1 (the "Application") with the Commission in this matter. The Order of
the Commission dated February 26, 1998 (Release No. 35-26833) (the "Financing
Order")issued in this file provided authorization for, among other things, (1)
Conectiv and Delmarva Power & Light Company, a subsidiary utility company
("Delmarva") to issue up to an aggregate of $500 million of short-term debt at
any one time from the date of the Financing Order through December 31, 2000, (2)
Conectiv to issue up to 10 million shares of its common stock ("Common Stock")
for benefit plans and a dividend reinvestment plan and (3) the formation and
operation of a money pool (the "System Money Pool").
The purpose of this filing is to: (1) increase Conectiv's short-term debt
authorization from $500 million (less any amount issued by Delmarva) to $800
million (less any amount issued by Delmarva), (2) amend the description of the
benefit plans pursuant to which Common Stock may be issued to include a prior
Delmarva incentive plan and (3) add Petron Oil Corporation ("Petron"), an
indirect subsidiary of Conectiv, as a participant in the System Money Pool.
In order to provide additional financing flexibility, Conectiv requests an
increase in its short-term debt authorization to $800 million. Incremental
short-term borrowings requested herein will be subject to all limitations (other
than amount) identified in the Financing Order. The short-term debt will be used
to provide working capital for the general corporate purposes[1] of Conectiv
and its subsidiaries, including Delmarva, and to fund the capital requirements
of Conectiv's subsidiaries until long-term financing can be obtained.
In the Financing Order, Conectiv was authorized to issue Common Stock pursuant
to the terms of the Conectiv Incentive Compensation Plan (the "Conectiv Plan")
and, subject to the filing of the terms of the plans, pursuant to the terms of
future compensation plans envisioning the award of common stock. However,
options had been issued under the Delmarva Long-Term Incentive Plan (the
"Delmarva Plan") that were not extinguished upon the effective date of the
Merger, but merely converted to options to buy
- --------
[1] General corporate purposes could include interim funding of the repurchase
of outstanding long-term securities.
<PAGE> 2
Page 14
Common Stock. Conectiv wishes to amend the authority under the Financing Order
to include authority to issue Common Stock under the Delmarva Plan as well as
the Conectiv Plan and future plans. 1 General corporate purposes could include
interim funding of the repurchase of outstanding long-term securities.
Pursuant to the Financing Order, participation in the System Money Pool was
authorized for all companies listed on the cover of Amendment No. 3 to the
Application. Conectiv requests authorization for Petron to participate in the
Conectiv System Money Pool. Petron, was purchased by Conectiv Energy Supply
Company (previously Delmarva Energy Company) on March 2, 1998 in an exempt
acquisition of securities pursuant to Rule 58.
For the Commission, by the Division of Investment Management, pursuant to
delegated authority.
Jonathan G. Katz
Secretary
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-END> JUN-30-1998 JUN-30-1998
<BOOK-VALUE> PER BOOK PRO FORMA
<TOTAL-NET-UTILITY-PLANT> 3,582,713 3,582,713
<OTHER-PROPERTY-AND-INVEST> 535,765 535,765
<TOTAL-CURRENT-ASSETS> 621,925 1,087,986
<TOTAL-DEFERRED-CHARGES> 538,550 538,550
<OTHER-ASSETS> 628,195 628,195
<TOTAL-ASSETS> 5,907,148 6,373,209
<COMMON> 1,078 1,078
<CAPITAL-SURPLUS-PAID-IN> 1,581,158 1,581,158
<RETAINED-EARNINGS> 247,824 238,736
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,825,385 1,816,297
163,950 163,950
119,702 119,702
<LONG-TERM-DEBT-NET> 1,793,410 1,793,410
<SHORT-TERM-NOTES> 333,939 800,000
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 68,674 68,674
10,000 10,000
<CAPITAL-LEASE-OBLIGATIONS> 34,504 34,504
<LEASES-CURRENT> 28,537 28,537
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,529,047 1,538,135
<TOT-CAPITALIZATION-AND-LIAB> 5,907,148 6,373,209
<GROSS-OPERATING-REVENUE> 1,187,630 1,187,630
<INCOME-TAX-EXPENSE> 27,909 23,015
<OTHER-OPERATING-EXPENSES> 1,056,038 1,056,038
<TOTAL-OPERATING-EXPENSES> 1,083,947 1,079,053
<OPERATING-INCOME-LOSS> 103,683 108,577
<OTHER-INCOME-NET> 5,788 5,788
<INCOME-BEFORE-INTEREST-EXPEN> 109,471 114,365
<TOTAL-INTEREST-EXPENSE> 74,105 88,087
<NET-INCOME> 35,366 26,278
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 35,366 26,278
<COMMON-STOCK-DIVIDENDS> 88,299 88,299
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 0.38 0.27
<EPS-DILUTED> 0.38 0.27
</TABLE>
