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 27, 2000
Exact Name of
Commission Registrant as State of IRS Employer Registrants'
File Specified in its Incorporation Identification Number Telephone
Number Charter Number
- --------------------------------------------------------------------------------
001-14786 CMP Group, Inc. Maine 01-0519429 207 623-3521
1-5139 Central Maine Power Company Maine 01-0042740 207 623-3521
83 Edison Drive, Augusta,
Maine 04336 (Address of principal
executive offices) (zip code)
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Item 1 through Item 4. Not applicable.
Item 5. Other Events.
On January 28, 2000, CMP Group, Inc., issued a release reporting on (a) its
1999 operating results and a related January 27, 2000, settlement of a Maine
Public Utilities Commission regulatory proceeding involving several ratemaking
issues, and (b) progress in obtaining regulatory approvals for its planned
merger with Energy East Corp., the relevant parts of which are quoted below:
(A) 1999 RESULTS AND RELATED REGULATORY SETTLEMENT
"CMP Group, Inc., has reported earnings of $1.69 per share of common
stock for calendar-year 1999, including earnings of $0.27 per share in the
fourth quarter.
CMP Group is a Maine holding company established Sept. 1, 1998. Its
principal subsidiary is the Central Maine Power electric utility, which provided
96 percent of CMP Group's revenues in 1999.
Comparable year-ago figures reported by CMP Group were $1.63 per share
for calendar-year 1998, and $0.57 for the fourth quarter of 1998.
CMP Group reported revenues of $992.7 million for 1999, and net income
of $54.9 million. CMP Group's reported net income was reduced by $8.35 million
through the combined, after-tax impacts of elements in a ratemaking settlement
discussed below.
Central Maine Power provided $954.5 million in revenue, $68.7 million
in net income, and $65.4 million in common-equity earnings after paying
dividends on CMP preferred stock. Other CMP Group subsidiaries, most in early
stages of development, collectively accounted for $38.2 million of revenue and
$6.7 million of net losses in the Group results. The subsidiaries' combined loss
was driven by equity-method reporting of CMP Group's imputed 37.9 percent share
of losses at NorthEast Optic Network (NEON), a fiber-optic communications
business in the midst of a major construction program.
The Group's 1999 net income represents a return of 10.32 percent on
common shareholders' average investment of $531.5 million. CMP Group earned
10.51 percent on common equity in 1998.
Energy sales within Central Maine Power's service-area were 2.28
billion kilowatt-hours in the fourth quarter of 1999, compared to 2.27 billion
kwh a year before. Twelve-month energy sales were 9.21 billion kwh, up 1.8
percent from 1998 levels.
Service-area residential sales were 2.9 billion kwh, up 3.6 percent for
the year; commercial sales were up 5.4 percent to 2.7 billion kwh; industrial
sales were up 2.3 percent to 3.6 billion kwh. Wholesale energy sales to other
utilities declined.
A negotiated settlement approved Jan. 27 by the Maine Public Utilities
Commission resolved several ratemaking issues in the final phase of the current
CMP rate case. The proceeding was needed to set CMP's revenue requirements and
prices for operating as a non-generating transmission-and-distribution utility
once retail customer choice of energy supplier begins on March 1, 2000.
As part of the settlement, CMP agreed to a one-time earnings cap for
1999. Earnings above the cap will fund a $20 million sharing pool to mitigate
stranded costs and increases in CMP operating expenses over the next two years.
The combined after-tax effect of the earnings cap and other provisions in the
ratemaking agreement was to reduce CMP Group's net income for 1999 by $8.35
million.
In addition, the agreement confirmed that $18.2 million of unamortized
investment tax credits and excess deferred income taxes related to CMP's
power-plant sale would flow through to shareholders pursuant to normalization
rules. This was partly offset by reversal of gains of $2.7 million on sale of
easements recorded in 1998 and 1999, and by disallowance of $4.7 million in
employee-transition costs from the power-plant sale.
The settlement also allows CMP to charge off on March 1, 2000, $88
million, representing its entire remaining investment in a Connecticut nuclear
plant, against the regulatory Asset Sale Gain Account created to recognize the
above-book value realized through the CMP power-plant sale. The provision
reflects a rate settlement and resolution of CMP's litigation against Northeast
Utilities for NU's alleged lead-owner mismanagement of the jointly owned
Millstone 3 nuclear unit, in which CMP holds a 2.5 percent interest.
The PUC solicited bids in 1999 for default Standard Offer energy
service to medium and large commercial and industrial customers (MGS and LGS
rate classes) who do not select a competitive energy supplier after March 1,
2000. After two rounds of bids were judged unsatisfactory, the Commission asked
CMP to arrange the service. The PUC has approved CMP's one-year contract for
this purpose as prudent.
Thursday's PUC decision included fixing default Standard Offer service
prices for medium and large commercial and industrial customers that are
intended to reflect current market pricing and avoid under-collection of CMP's
costs. The PUC selected an independent energy marketer last fall as Standard
Offer supplier to residential and small commercial customers at a lower price,
and administratively set MGS and LGS Standard Offer rates at the same level.
Commissioners on Thursday granted CMP's request to raise those prices."
(B) PLANNED MERGER REGULATORY APPROVALS
"CMP Group and Energy East Corp. of New York announced a plan of merger
on June 15, 1999, whereby Energy East would effect a merger by exchanging $29.50
cash for each outstanding share of CMP Group common stock. The Maine Public
Utilities Commission, CMP Group shareholders, the U.S. Department of Justice,
the Federal Trade Commission, and Connecticut utility regulators have approved
the merger. Other required approvals are pending from the Federal Energy
Regulatory Commission, the Nuclear Regulatory Commission, and the Securities and
Exchange Commission. If all approvals are granted, CMP Group estimates that the
merger could be completed some time around mid-year."
Item 6 through Item 9. Not applicable.
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Pursuant to the requirements of the Securities Exchange Act of 1934,
each Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CMP GROUP, INC.
By: _______________________
Arthur W. Adelberg
Executive Vice President
and Chief Financial Officer
CENTRAL MAINE POWER COMPANY
By: _______________________
Curtis I. Call
Treasurer
Dated: January 31, 2000
