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 29, 1997
CENTRAL MAINE POWER COMPANY
(Exact name of registrant as specified in its charter)
Maine 1-5139 01-0042740
(State of Incorporation) (Commission (IRS Employer Identification
File Number) Number)
83 Edison Drive, Augusta, Maine 04336
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (207) 623-3521
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Item 1 through Item 4. Not applicable.
Item 5. Other Events.
Maine Yankee Atomic Power Company. (a) The Company is the owner of 38
percent of the common stock of Maine Yankee Atomic Power Company ("Maine
Yankee") and is responsible for an equal percentage of its costs. As previously
reported, the Maine Yankee nuclear generating plant at Wiscasset, Maine (the
"Plant") has been limited to operating at 90 percent of capacity since early
1996 pending the resolution of issues relating to investigations initiated by
the United States Nuclear Regulatory Commission ("NRC") and has been off line
since December 6, 1996, to resolve cable-separation and associated issues. While
the Plant has been out of service Maine Yankee, having previously detected
indications of minor leakage in a small number of the Plant's 38,000 fuel rods,
used the opportunity to inspect the Plant's 217 fuel assemblies. As a result of
the inspection Maine Yankee determined that several fuel assemblies that
contained leaking rods should be replaced and has commenced that process.
On January 29, 1997, the NRC announced that it had placed the Plant on its
"watch list," in "Category 2," which includes plants that display "weaknesses
that warrant increased NRC attention," but which are not severe enough to
warrant a shut-down order. The NRC has indicated that its watch list reserves
Category 1 for plants that are no longer "problem facilities," but are still
being monitored, and Category 3 for plants that have been ordered to shut down
and demonstrate "substantial improvement" before the NRC permits a restart.
Plants in Category 2 remain in that category "until the licensee demonstrates a
period of improved performance." The Plant is one of 14 nuclear units on the
watch list released by the NRC on January 29 and one of six listed there for the
first time.
The Company expects the Plant to remain out of service until the
fuel-assembly replacement and a thorough inspection of the Plant's electrical
cabling are completed and associated issues resolved, and restarting the Plant
is approved by the NRC. The Company cannot now predict how long it will take to
complete those processes. As a result, the Company has made contingency
replacement-power plans for an outage that could last several months.
The Company's indexed Alternative Rate Plan ("ARP") limits its price
increases under a formula based on the rate of inflation adjusted by other
factors, and includes provisions for additional cost recovery in extraordinary
situations such as low earnings or the incurring of extraordinary costs by the
Company. To be eligible for recovery, such extraordinary costs must exceed $3
million in annual revenue requirements, have a disproportionate effect on the
Company or the electric utility industry, and must not be adequately accounted
for in the ARP's price index.
The Company has been incurring incremental replacement-power costs of
approximately $1 million per week while the Plant has been out of service and
expects such costs to continue at approximately the same rate until the Plant
returns to service, as well as when the Plant is off line during the refueling
outage that has been planned for the fall of 1997. In addition, the Company is
responsible for 38 percent of an estimated $30 million in 1997 additional costs
announced by Maine Yankee, or approximately $11 million. Those costs are
expected to increase when Entergy Corporation, as previously reported, starts
providing management services to Maine Yankee, and if the complexity of the
cable-separation and associated issues require an extended period for their
resolution. The Company expects to charge such costs to operations in 1997. The
Company is taking action to mitigate the financial impact of those additional
costs on its 1997 earnings, but does not expect such actions to offset the
additional costs and therefore expects a significant adverse impact on its 1997
financial results.
For a detailed discussion of a comprehensive Independent Safety Assessment
of the Plant by the NRC and investigations of Maine Yankee by the NRC and the
United States Department of Justice, see the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 30, 1996, and subsequent Current
Reports on Form 8-K filed with the Securities and Exchange Commission on
December 11 and December 20, 1996.
(b) A Maine-based group has announced its intention to start gathering
signatures aimed at a new referendum to force a permanent shutdown of the Plant
by January 1, 2000. The group indicated that it hoped to collect enough
signatures to put the question before the Maine electorate in November of 1998.
Maine voters rejected generally similar proposals in 1980, 1982 and 1987. The
Company cannot predict whether such a referendum will be held or its outcome.
Item 6 through Item 8.
Not applicable.
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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.
CENTRAL MAINE POWER COMPANY
By: _________________________________
D. E. Marsh
Vice President, Corporate Services,
Treasurer, and Chief Financial
Officer
Dated: January 30, 1997
