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 (Date of earliest event reported): January 13, 1994
CENTRAL MAINE POWER COMPANY
(Exact name of registrant as specified in its charter)
Maine 1-5139 01-0042740
(State of Incorporation) (Commission (IRS Employer
File Number) Identification Number)
Edison Drive, Augusta, Maine 04336
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (207) 623-3521 <PAGE>
Item 1 through Item 3. Not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
On January 19, 1994, on recommendation of the Company's Audit
Committee, which had requested proposals from major accounting
firms consistent with its policy of periodically reviewing
accounting services, the Board of Directors of the Company
engaged Coopers & Lybrand as the Company's principal accountant
to audit the Company's 1994 financial statements.
During 1991, the Company was investigating a possible change in
the accounting treatment associated with deferred investment tax
credits. After discussion with the predecessor auditors, Arthur
Andersen & Co., who disagreed with the proposed accounting, and
with the Office of the Chief Accountant of the Securities and
Exchange Commission, the Company abandoned any plans to make such
a proposed change.
During such period neither the Company nor anyone on its behalf
consulted Coopers & Lybrand regarding any matter described in
Item 304(a)(2) of Regulation S-K.
Item 5. Other Events.
(a) Debt and preferred stock ratings. On January 13, 1994,
Moody's Investor Service ("Moody's") lowered its rating on the
Company's preferred stock to "ba2" from "baa3" and its short-term
debt rating for the Company's commercial paper to "Prime-3" from
"Prime-2". At the same time Moody's confirmed its rating on the
Company's General and Refunding Mortgage Bonds at "Baa2",
unsecured medium-term notes and pollution-control revenue bonds
at "Baa3", and the Company's Securities and Exchange Commission
"shelf" registration for $150,000,000 of General and Refunding
Mortgage Bonds at "(P)Baa2".
Moody's stated that the downgrades reflect its "concerns about
declines in Central Maine's cash position and financial
flexibility and uncertainty about the extent to which legislative
and regulatory efforts will result in more stable and predictable
prices for electricity". Moody's added that its rating actions
also reflect "expectations that Central Maine's strategic
response to an unsupportive rate order last November will allow
the company to maintain an acceptable level of financial
integrity".
(b) Power purchase contract suit. As previously reported, the
Company and Caithness King of Maine Limited Partnership
("Caithness") have been engaged in a lawsuit in the United States
District Court for the District of Maine over the Company's
termination of a contract for the purchase of approximately 80
megawatts of electric power from a cogeneration project proposed
for construction by Caithness at Topsham, Maine. In the suit
Caithness denied the validity of the termination and sought
damages estimated by Caithness to be in excess of $100 million
for breach of contract or, in the alternative, reformation of the
contract, and other legal relief.
On January 14, 1994, the Company and Caithness entered into a
<PAGE>
Termination and Settlement Agreement under which the Company paid
Caithness a total of $5 million, and the parties agreed to the
termination of the power-purchase contract and to dismiss the
suit and counterclaims. The contract would have required
payments by the Company over the life of the contract that were
projected to be significantly higher than the Company's estimated
avoided costs and was therefore inconsistent with the Company's
program of pursuing terminations or other restructurings of high-
cost power-purchase contracts.
Item 6 through Item 8. Not applicable.
<PAGE>
SIGNATURE
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.
CENTRAL MAINE POWER COMPANY
By
David E. Marsh
Senior Vice President, Finance,
and Chief Financial Officer
Dated: January 27, 1994 <PAGE>
