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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: November 25, 1997
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(Date of earliest event reported)
BOSTON EDISON COMPANY
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(Exact name of registrant as specified in its charter)
Massachusetts 1-2301 04-1278810
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation File Number) Identification No.)
800 Boylston Street, Boston, Massachusetts 02199
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(Address of principal executive offices) (Zip Code)
617-424-2000
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(Registrant's telephone number, including area code)
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Item 5. Other Events
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Divestiture of Fossil Fuel Generating Plants
On December 10, 1997, Boston Edison Company (the Company) announced that Sithe
Energies, Inc., a privately held company headquartered in New York, won the
bid to purchase the Company's non-nuclear generating assets. The purchase
price of the Company's almost 2000 megawatts of generating capacity is $536
million. The book value of the plants is approximately $450 million. As part
of the agreement Sithe Energies will also pay the Company additional
consideration of $121 million for a six-month transitional power sales
agreement under which the Company will continue to buy power from the
generating plants. In addition, Sithe Energies will be responsible for
obligations resulting from the recently enacted electric utility industry
restructuring legislation described below for property tax payments to
communities with power plants and for employees working at the plants.
Under the Company's restructuring settlement agreement which is pending
approval at the Massachusetts Department of Public Utilities (MDPU), the net
proceeds from the divestiture will be used to offset stranded costs to be
recovered through the Company's distribution access charge.
Implementation of the divestiture plan is subject to certain regulatory
approvals including those of the MDPU and the Federal Energy Regulatory
Commission.
Industry Restructuring Legislature
A Massachusetts electric utility industry restructuring bill was signed into
law on November 25, 1997. The legislation establishes a comprehensive
framework for the restructuring of the electric utility industry. Major
provisions of the legislation include the ability of retail electric customers
to choose their electricity supplier (referred to as retail access) by
March 1, 1998. At that time customers that continue to buy electricity from
the Company under the standard offer will realize a combined 10% rate savings.
By September 1, 1999, after divestiture of the Company's fossil generating
assets and securitization or refinancing of its stranded costs, the Company's
standard offer customers will realize another 5% savings in electricity rates
after an adjustment for inflation. The legislation also provides opportunity
for the full recovery of the Company's stranded costs. Under the legislation,
the same broad objectives apply to all Massachusetts utilities. However, the
legislation also enables the MDPU to approve previously filed restructuring
plans, including negotiated settlements which reflect the unique
characteristics of each company. The Company believes that the provisions of
the electric utility industry restructuring legislation are substantially
consistent with those included in its settlement agreement that was filed with
the MDPU in July 1997.
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Safe Harbor Cautionary Statement
The Company occasionally makes forward-looking statements as defined under
securities laws. These forward-looking statements may be contained in filings
with the Securities and Exchange Commission, press releases and oral
statements. Actual results could potentially differ materially from these
statements. Therefore, no assurances can be given that the outcomes stated in
such forward-looking statements will be achieved. This filing on Form 8-K
includes forward-looking statements about the electric utility industry
restructuring legislation and the Company's related settlement agreement. The
effects of the industry restructuring process underway at the MDPU could
differ from the Company's expectation as regulatory decisions are finalized.
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SIGNATURE
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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.
BOSTON EDISON COMPANY
By: /s/ Robert J. Weafer, Jr.
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Robert J. Weafer, Jr.
Vice President-Finance,
Controller and Chief
Accounting Officer
Date: December 11, 1997
