SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report: December 20, 1999
(Date of earliest event reported)
Commission Registrant; State of Incorporation; I.R.S. Employer
File Number Address and Telephone Number Identification No.
333-47925 Yorkshire Power Group Limited 84-1393785
(England & Wales)
Wetherby Road
Scarcroft
Leeds LS14 3HS
United Kingdom
011-44-113-289-2123
ITEM 5. OTHER EVENTS
Reference is made to the Quarterly Report on Form 10-Q of
Yorkshire Power Group Limited ("Yorkshire Group") for the
quarter ended September 30, 1999, Part II. Item 5. "Other
Information" (the "September 10-Q") for a discussion of
price control reviews by the Office of Gas and Electricity
Markets ("Ofgem"). In December 1999, Ofgem issued its final
proposals in both the distribution price control review and
the supply price control review. The final distribution
price control proposals with respect to Yorkshire
Electricity Group plc ("Yorkshire") are substantially the
same as Ofgem's prior proposals. The final supply price
control proposals differ principally from Ofgem's prior
proposals, as disclosed in the September 10-Q, in that the
real price reduction in Yorkshire's standard domestic tariff
will be 3.6%. While these final proposals somewhat mitigate
the supply revenue reductions previously proposed by Ofgem,
they still result in a significant decline in allowed
revenues for Yorkshire. On December 20, 1999, Yorkshire
indicated to Ofgem its intention to accept the final
proposals.
Yorkshire believes that supply prices established in the
competitive market may require Yorkshire to charge supply
prices for customers Yorkshire wishes to retain who are
subject to supply price controls which are lower than the
maximum prices established by Ofgem. If Yorkshire charges
such lower prices, the result will be a further reduction in
supply revenues beyond that mandated by Ofgem. As noted in
the September 10-Q, Yorkshire's supply business is under
competitive and regulatory pressure to lower supply prices
for classes of customers other than those subject to Ofgem's
final supply price proposals.
In response to Ofgem's final proposals and increasing
competition, Yorkshire has adopted an aggressive program of
reducing controllable costs. Significant features of this
program include reductions in capital expenditures, staff
reductions, outsourcing of certain functions and
consolidation of facilities. Yorkshire intends to
aggressively pursue this cost reduction program and is
evaluating additional cost reduction measures to further
mitigate the effects of Ofgem's final proposals and
increasing competition in the supply business. Yorkshire
Group expects that the net result of Ofgem's supply and
distribution price reductions and competitive demands in the
supply business and Yorkshire's mitigation efforts will be a
decline in Yorkshire Group's results of operations and a
reduction in its cash flows, which, in each case, may be
significant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
YORKSHIRE POWER GROUP LIMITED
Registrant
By: /s/ Armando A. Pena
Armando A. Pena
Chief Financial Officer and Director
Date: January 18, 2000
