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): December 4,
1995
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)
83 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 4. Not applicable.
Item 5. Other Events.
Maine Yankee Atomic Power Company Plant Outage. The
Company, through its equity investment totaling approximately
$26.8 million at September 30, 1995, owns a 38-percent stock
interest in Maine Yankee Atomic Power Company ("Maine Yankee"),
which owns and operates an 860-megawatt nuclear generating plant
in Wiscasset, Maine (the "Maine Yankee Plant" or the "Plant"),
and is entitled under a cost-based power contract to an
approximately equal percentage of the Plant's output. The Maine
Yankee Plant, like other pressurized water reactors, experienced
degradation of its steam generator tubes, principally in the form
of circumferential cracking, which, until early 1995, was
believed to be limited to a relatively small number of tubes.
During the refueling-and-maintenance shutdown that commenced in
early February 1995, Maine Yankee detected through new inspection
methods increased degradation of the Plant's steam generator
tubes to the extent that approximately 60 percent of the Plant's
17,000 steam generator tubes appeared to have defects to some
degree. Because of the large number of affected tubes, the
remedy of plugging the degraded tubes to take them out of service
was no longer a viable option.
Following a detailed analysis of the safety, technical and
financial considerations associated with the degraded steam
generator tubes, Maine Yankee elected to repair the tubes by
inserting and welding short reinforcing sleeves of an improved
material in substantially all of the Plant's steam generator
tubes. Similar repairs have been completed at other nuclear
plants in the United States and abroad, but not on the scale of
the Maine Yankee project. With Westinghouse Electric Corporation
as the general contractor, the sleeving project started in early
June of 1995, after approval of the Westinghouse sleeving process
by the Nuclear Regulatory Commission ("NRC"), and was essentially
complete in early December. The project caused Maine Yankee to
incur additional costs during 1995, with the Company being
responsible for its pro-rata share. The Company has also been
incurring substantial incremental costs for replacement power.
With the termination of the reconcilable fuel-and-
purchased-power adjustment under the Company's indexed
Alternative Rate Plan ("ARP"), which became effective January 1,
1995, the Company's costs of replacement power during the Maine
Yankee outage have in general been treated like other Company
expenses, i.e., recoverable only to the extent permitted by the
ARP's price-index mechanism, and are not being deferred and
collected through a specific fuel-rate adjustment, as under pre-
1995 ratemaking. Under the ARP no additional price increase
other than the 2.43 percent increase that was effective July 1,
1995, associated with the price index could take effect in 1995
as a result of the Maine Yankee outage. Although the ARP
contains provisions that could result in rate adjustments based<PAGE>
on low earnings or the incurring of extraordinary costs by the
Company, neither provision affected the Company's prices in 1995.
Maine Yankee is recording the costs of the sleeving project
as maintenance expense. In mid-1995 the Company estimated its
share of such costs to be $15.0 million and recorded a one-time
charge for that amount to Purchased Power--Capacity expense in
the second quarter of 1995. Maine Yankee has billed the Company
$9.6 million as of November 30, 1995, for costs incurred. Both
the Company and Maine Yankee implemented significant cost-
reduction measures to partially offset the additional costs. The
Company's incremental replacement-power costs totaled
approximately $25 million for the eleven months ended November
30, 1995.
On December 4, 1995, when the sleeving project was
substantially complete, Maine Yankee obtained a copy of a letter
from an organization with a history of opposing nuclear power
development to a State of Maine nuclear safety official based on
documentation from an anonymous employee or former employee of
Yankee Atomic Electric Company ("Yankee"), an affiliate of both
the Company and Maine Yankee that has regularly performed nuclear
engineering and related services for Maine Yankee and other
nuclear plant operators. The letter contained allegations that
Yankee knowingly performed inadequate analyses to support two
license amendments to increase the rated thermal power at which
the Maine Yankee Plant could operate. It was further alleged in
the letter that Maine Yankee deliberately misrepresented the
analyses to the NRC in seeking the license amendments. The
allegedly inadequate analyses related to the operation of the
Plant's emergency core cooling system ("ECCS") and the
calculation of the Plant containment's peak postulated accident
pressure, both under certain assumed accident conditions. The
analyses were used in support of license amendments that
authorized Plant power uprates from 2440 megawatts thermal, a
level equal to approximately 90 percent of the maximum electrical
capability of the Plant, to its current 100-percent rated level.
In response to technical issues raised by the allegations,
the NRC initiated a special technical review of the safety
analyses performed by Yankee relating to Maine Yankee's license
amendment applications for the power uprates. At the same time,
Maine Yankee and Yankee initiated intensive internal
investigations of the allegations and provided responsive
information and documentation to the NRC.
On December 18, 1995, a public meeting was held at the NRC
to discuss the findings resulting from the NRC's technical
review. At the meeting the NRC informed Maine Yankee that it had
concerns regarding the adequacy of a proprietary computer code
used in ECCS safety analyses supporting Maine Yankee's last two
applications for license amendments that authorized power uprates
to levels above 90 percent of its current maximum capacity. At
the meeting the NRC also indicated that operation of the Plant at<PAGE>
a level up to 90 percent could be acceptable if operation was
based on methods previously found acceptable by the NRC staff and
not on the computer code that is currently under review by the
NRC, and further informed Maine Yankee of the terms and
conditions under which Maine Yankee could resume power operation
of the Plant. Subsequently, the NRC informed Maine Yankee that
the allegations would be the subject of investigations by the
NRC's Office of Investigations and the Office of the Inspector
General.
On January 3, 1996, the NRC issued a "Confirmatory Order
Suspending Authority For And Limiting Power Operation And
Containment Pressure (Effective Immediately) And Demand For
Information" (the "Order") confirming the conclusions of the NRC
from the public meeting and follow-up communications with Maine
Yankee. The Order limited the power output of the Maine Yankee
Plant to approximately 90 percent of its rated maximum until the
NRC shall have reviewed and approved Plant-specific analyses
meeting the NRC's criteria for operation of the ECCS under
certain postulated accident conditions, in lieu of the analyses
based on the questioned computer code. The Order further
required that prior to operating the Plant at any level Maine
Yankee should submit under oath specified information relating to
operating the Plant at up to the 90-percent level and
descriptions of measures taken to assure compliance with the
limitations on operating level and containment pressure.
With respect to subsequently returning the Plant to its
100-percent operating level, the Order required Maine Yankee to
submit a Plant-specific analysis meeting the NRC's requirements
for ECCS operation under specified conditions at Plant power
levels up to 100 percent of its maximum rated capability. The
Order also required an integrated containment analysis
demonstrating that the maximum calculated containment pressure
under certain postulated accident conditions does not exceed the
design pressure of the Plant's containment. In addition, the
Order required Maine Yankee to submit a schedule for providing
the requested analyses and related information to the NRC. The
Order is subject to the limited rights of any person "adversely
affected" by the Order to request a hearing or to seek a stay of
the effectiveness of the Order.
On January 10, 1996, Maine Yankee filed with the NRC
information specified in the Order that it believes supports
operation of the Plant at up to 90 percent of the Plant's
capability. In its submittal Maine Yankee also notified the NRC
that it expected to proceed with initial operation of the Plant
on January 11, 1996, and the Plant commenced operation on that
day. Under ordinary circumstances, raising the operating level
of the Plant incrementally to the 90-percent level could be
accomplished in as short a period as approximately a week, but
Maine Yankee believes that after the eleven-month shutdown the
Plant has experienced the process could take longer. The Company
estimates that its incremental replacement power costs at the 90-<PAGE>
percent level of operation would range, depending on overall
energy requirements and market conditions, from approximately
$300,000 to $500,000 per month as a result of the reduced energy
output of the Plant.
The Company cannot predict when the Plant will attain a 90-
or 100-percent operating level, the results of the internal and
external investigations of the allegations brought to Maine
Yankee's attention on December 4, 1995, or whether any party will
seek an NRC hearing or any appeal with respect to the Order.
Maine Yankee has stated, however, that it intends to pursue its
internal investigation diligently and cooperate with the
governmental investigations, and that it believes that after it
develops the information requested by the NRC for operation of
the Plant at full capacity it will be able to operate the Plant
at that level while meeting all applicable NRC safety
requirements.
Item 6 through Item 8. Not applicable.
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:
D. E. Marsh
Vice President, Corporate
Services, Treasurer and Chief
Financial Officer
Dated: January 12, 1996 <PAGE>
