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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTIONS 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 22, 1996
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DELMARVA POWER & LIGHT COMPANY
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(Exact Name of Registrant as Specified in Charter)
Delaware and Virginia I-1405 51-0084283
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
800 King Street, P.O. Box 231, Wilmington, Delaware 19899
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code 302-429-3448
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None
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
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The following information updates matters related to Salem Units 1 and
2 previously reported under "Item 1--Business" of Part I of Delmarva Power &
Light Company's (the Company) 1994 Annual Report on Form 10-K, "Item 5--
Other Information" of Part II of the Company's Report on Form 10-Q for the
quarter ended March 31, 1995, "Item 5--Other Events" of the Company's
Current Report on Form 8-K dated June 14, 1995, "Item 5--Other Information"
of Part II of the Company's Report on Form 10-Q for the quarter ended June
30, 1995, "Item 5--Other Events" of the Company's Current Report on Form 8-K
dated July 20, 1995, "Item 5--Other Information" of Part II of the Company's
Report on Form 10-Q for the quarter ended September 30, 1995, "Item 5--Other
Events" of the Company's Current Report on Form 8-K dated October 20, 1995,
and "Item 5--Other Events" of the Company's Current Report on Form 8-K dated
December 15, 1995. The following is excerpted from information reported in
the Annual Report on Form 10-K for the year ended December 31, 1995, by
Public Service Electric and Gas Company (PSE&G), the operator of the
facility referred to below.
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Salem Generating Station consists of two 1100 MW pressurized
water nuclear reactors (PWR) located in southern New Jersey on
the Delaware River. PSE&G owns 42.59% of the Salem units and
operates them on behalf of itself and three other owners; PECO -
42.59%; Atlantic Electric Company - 7.41%; and Delmarva Power and
Light Company - 7.41%. As of January 31, 1996, PSE&G's net book
value for Salem is approximately $285 million for Salem 1, $250
million for Salem 2 and $93 million in common plant between the
two units. Each Salem unit represents approximately 4% of
PSE&G's installed electric generating capacity and approximately
2% of its total assets.
Salem 1 and 2 have been out of service since May 16, 1995 and
June 7, 1995, respectively. Since that time, PSE&G has been engaged
in a thorough assessment of each unit to identify and complete the
work necessary to achieve safe, sustained, reliable and economic
operation. PSE&G has stated that it will keep each unit off line
until it is satisfied that the unit is ready to return to service
and to operate reliably over the long term and the NRC has agreed
that the unit is sufficiently prepared to restart. On June 9,
1995, the NRC issued a Confirmatory Action Letter documenting
these commitments of PSE&G.
On December 11, 1995, PSE&G presented its restart plan for
both units to NRC at a public meeting. On February 13, 1996, the
NRC staff issued a letter to PSE&G indicating that it had
concluded that PSE&G's overall restart plan, if implemented
effectively, should adequately address the numerous Salem issues
to support a safe plant restart, and describing further actions
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the NRC will undertake to confirm that PSE&G's actions have
resulted in the necessary performance improvements to support
safe plant restart.
As a part of PSE&G's comprehensive review, an extensive
examination is being performed on the steam generators, which are
large heat exchangers used to produce steam to drive the
turbines. Within the industry, certain pressurized water nuclear
units other than Salem have experienced cracking in a sufficient
number of the steam generator tubes to require various
modifications to these tubes and replacement of the steam
generators in some cases. Until the current outage, regular
periodic inspections of the steam generators for each Salem unit
have resulted in repairs of a small number of tubes well within
NRC limits. As a result of the experience of other utilities
with cracking in steam generator tubes, in April 1995 the NRC
issued a generic letter to all utilities with pressurized water
reactors. This generic letter requested utilities with
pressurized water reactors to conduct steam generator
examinations with inspection devices capable of detecting
evidence of degradation. Subsequently, PSE&G conducted steam
generator inspections of the Salem units using the latest
technology available, including a new, more sensitive, eddy
current testing device.
With respect to Salem 1, the most recent inspection of the
steam generators is not complete, but partial results from eddy
current inspections in February 1996 using this new technology
show indications of degradation in a significant number of tubes.
The inspections are continuing and PSE&G has decided to remove
several tubes for laboratory examination to confirm the results
of the inspections. Removal of the tubes should be completed in
March and preliminary results of the state of the Salem 1 tubes
from the subsequent laboratory examinations should be known in
April. However, based on the results of inspections to date,
PSE&G has concluded that the Salem 1 outage, which was expected
to be completed in the second quarter of 1996, will be required
to be extended for a substantial additional period to evaluate
the state of the steam generators and to subsequently determine
an appropriate course of action. Degradation of steam generators
in PWRs has become of increasing concern for the nuclear
industry. Nationally and internationally, utilities have
undertaken actions to repair or replace steam generators. In the
extreme, degradation of steam generators has contributed to the
retirement of several American nuclear power reactors. After the
Salem 1 tubes are fully examined, PSE&G will be able to evaluate
its course of action in light of NRC and other industry
requirements.
The examination of the Salem 2 steam generators was
completed in January 1996 using the same testing device as used
in Salem 1. The results of the Salem 2 inspection are being
reviewed again to confirm their results in light of the
experience with Salem 1. Although this review has not yet been
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completed, results to date appear to confirm that the condition
of the Salem 2 steam generators is well within current repair
limits at the present time. PSE&G will also remove tubes from
the Salem 2 steam generators for laboratory analysis to further
confirm the results of this testing.
PSE&G had planned to return Salem 1 to service in the second
quarter of 1996 and Salem 2 in the third quarter of 1996. As a
result of the extent of the recently discovered degradation in
the Salem 1 steam generators, PSE&G is focusing its efforts on
the return of Salem 2 to service in the third quarter. The
conduct of the additional steam generator inspections and testing
on Salem 2 is not expected to adversely affect the timing of its
restart. However, the timing of the restart is subject to
completion of the requirements of the restart plan to the
satisfaction of PSE&G and the NRC as well as to the normal
uncertainties associated with such a substantial review and
improvement of the systems of a large nuclear unit, so that no
assurance can be given that the projected return date will be
met.
PSE&G's share of the additional operating and maintenance
expenses associated with Salem restart activities in 1995 was $16
million, and capital was $1.9 million. PSE&G's share of total
operating and maintenance expenses for both Salem units for the
year was $111 million and capital costs were $50.8 million. For
1996, PSE&G does not presently expect its share of operating and
maintenance expenses or capital costs for Salem station to exceed
1995 amounts; however this could change as a result of the steam
generator inspection results referred to above. The outage of a
Salem unit causes PSE&G to incur replacement power costs of
approximately $4 to $6 million per month. Such amounts vary,
however, depending on the availability of other generation, the
cost of purchased energy and other factors, including
modifications to maintenance schedules of other units.
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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 hereunto duly authorized.
Delmarva Power & Light Company
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(Registrant)
Date: February 22, 1996 /s/ Barbara S. Graham
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Barbara S. Graham
Senior Vice President,
Treasurer and
Chief Financial Officer
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