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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OF 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 18, 2000
Commission Registrant, State of Incorporation I.R.S. Employer
File Number Address and Telephone Number Identification Number
1-1405 Delmarva Power & Light Company 51-0084283
(a Delaware and Virginia Corporation)
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
Telephone: (302) 429-3114
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ITEM 5. OTHER EVENTS.
Sale of Fossil Fuel-Fired Electric Generating Plants
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As previously reported, Delmarva Power & Light Company (DPL) conducted an
auction for the sale of non-strategic baseload fossil fuel-fired electric
generating plants. On January 19, 2000, DPL's parent company, Conectiv,
announced that DPL had reached agreement to sell its interests in two
wholly-owned and two-jointly owned fossil fuel-fired generating plants to NRG
Energy, Inc., together with related assets and properties, for aggregate cash
consideration of $621,599,000, subject to adjustment based on variances in the
value of fuel and material inventories at the closing and certain capital
expenditures.
As a result of the agreement, subject to satisfaction of certain conditions,
DPL's interest in the following fossil-fuel fired generating plants will be
sold:
o Indian River Station, a wholly owned 784 MW coal- and oil-fired
generating plant located in Sussex County, Delaware;
o Vienna Station, a wholly owned 170 MW oil-fired generating plant
located in Vienna, Maryland;
o 3.7 % interest in Keystone Station, a jointly-owned coal-fired
generating plant located in Shelocta, Pennsylvania; and
o 3.72 % interest in Conemaugh Station, a jointly-owned coal-fired
generating plant located in New Florence, Pennsylvania.
Consummation of the sale is subject to the satisfaction of certain conditions,
including expiration of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and receipt of
other required regulatory approvals. The sale is expected to be completed during
the third quarter of 2000.
On January 19, 2000, Conectiv issued a press release related to the sale of the
generating plants, a copy of which has been filed as an exhibit to this report
and is incorporated by reference herein.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
o Exhibits.
99.1 Press release issued by Conectiv dated January 19, 2000, related to the
sale of fossil fuel-fired electric generating plants.
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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
By: /s/ PHILIP S. REESE
--------------------------------
Philip S. Reese
Vice President and Treasurer
January 31, 2000
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EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
NUMBER
99.1 Press Release issued by Conectiv dated
January 19, 2000, related to the sale of
DPL's fossil fuel-fired electric generating
plants.
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
January 19, 2000
For information, contact:
Tim Brown, Conectiv, (302) 452-6496
Investor Contact:
Bob Marshall, Conectiv (302) 429-3114
CONECTIV TO SELL POWER PLANTS TO NRG ENERGY,
REPURCHASE SHARES
Conectiv Expands `Mid-Merit' Investment
WILMINGTON, DE -- Conectiv (NYSE: CIV), an energy and vital services provider
serving the Mid-Atlantic region, today announced that it has signed an agreement
to sell 1,875 megawatts of fossil-fired generation and related assets to NRG
Energy of Minneapolis, a subsidiary of Northern States Power Company, for $800
million.
"Conectiv will continue to provide safe and reliable electric service to our
customers," said Howard E. Cosgrove, Conectiv CEO. "We will do so by generating
electricity from power plants we continue to own and by purchasing power as we
have always done. We have taken steps to ensure that electricity will continue
to be available to our customers." Cosgrove also noted that, at closing, a power
purchase agreement between Delmarva Power & Light Company (DPL), a Conectiv
subsidiary, and NRG will commence. The agreement will help DPL satisfy its
obligation to provide electricity under Delaware and Maryland restructuring
laws.
Conectiv will use proceeds from the sale for debt repayment, repurchases of
common stock and new investments that are in line with the company's corporate
growth objectives, including further expanding its mid-merit generation
business.
Separately, Conectiv announced the Board of Directors' approval on January 17 of
an additional 5 million share, open market common stock repurchase program.
"As we execute growth opportunities in the merchant generation business, we will
also have the opportunity to repurchase shares from time to time," said
Cosgrove.
"The sale takes Conectiv closer to achieving its goal of exiting baseload and
nuclear generation and focusing on more growth-oriented areas of the energy
markets," said Cosgrove. Conectiv continues to own about 2,000 megawatts of
mid-merit and peaking capacity with an additional 650 megawatts of mid-merit
generation expected to be phased into service over the next few years. Conectiv
is also evaluating other opportunities to add capacity to its already strong
position in the regional merchant generation market, Cosgrove said.
(more)
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Cosgrove said, "The new $300 million gas-fired Hay Road plant that Conectiv
plans to build in New Castle County, Delaware is a tangible sign of the fact
that Conectiv intends to stay in the generation business. We are simply going to
participate in the segment of the electric generation market in which we believe
we can be most successful as greater competition takes hold in the industry," he
said.
Specifically, the sale reflects Conectiv's previously announced business
strategy to concentrate on the "mid merit" segment of the generation industry.
The mid-merit market is composed of power plants that can come on line quickly
and produce electricity when demand is high, then turn off quickly when demand
drops. In addition, the majority of the Conectiv units can use multiple fuels,
which can be selected for use based on price and availability. Typically,
mid-merit plants have fixed non-fuel operating and maintenance costs that are
less than baseload units. Concentrating on such flexible power plants is
expected to give Conectiv a competitive advantage in this niche segment of the
burgeoning wholesale power market.
Last year, the company also announced that it has entered into agreements for
the sale of its interests in nuclear generating facilities, thereby
substantially eliminating all of its nuclear liability. Conectiv will retain
ownership of generation plants it considers to be strategic. The generating
facilities included in today's sale announcement are:
o B.L. England, a 447 MW coal- and oil-fired facility located in Cape
May County, N.J.;
o Deepwater, a 239 MW coal-, oil-, and natural gas-fired station located
in Salem County, N.J.;
o Indian River, a 784 MW coal-and oil-fired station located in Sussex
County, Del.;
o Vienna Station, a 170 MW oil-fired facility located in Vienna, Md.;
o 6.17 percent interest (106 MW) in the coal-fired Keystone Station
located in Shelocta, Pa.; and
o 7.55 percent interest (129 MW) in the coal-fired Conemaugh Station
located in New Florence, Pa.
Subject to the receipt of required regulatory approvals, including expiration of
the applicable waiting period under the Hart-Scott-Rodino Act, the sale is
expected to close during the third quarter of 2000. "We will be working with
state and federal regulators to obtain their approvals so that we can complete
the sale in a timely manner," Cosgrove said.
"NRG is a proven performer in the operation, both domestically and abroad, of
electric generation assets," Cosgrove said. "We will be working closely with
them in the coming months to maximize opportunities for our employees, and also
to ensure a smooth transition for the communities in which our power plants are
located. Industry-wide, incumbent employees have fared well when electric power
plants are sold. A skilled workforce was a key selling point in this
transaction," he said.
(more)
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Conectiv, headquartered in Wilmington, Del., provides regulated electric and
natural gas utility services and is also engaged in telecommunications and other
non-regulated activities. Conectiv serves more than one million customers in New
Jersey, Delaware, Maryland, Virginia and Pennsylvania.
NAVIGANT CONSULTING, INC. AND CREDIT SUISSE FIRST BOSTON
ADVISED CONECTIV ON THE SALE.
Navigant Consulting, Inc. (NYSE: NCI) is a global management consulting firm
that provides strategic, financial, management, and expert services to
energy-based, network, and other regulated industries.
Credit Suisse First Boston, a leading global investment banking firm that
provides comprehensive financial advisory, capital raising, and financial
products for users and suppliers of capital around the world, also advised
Conectiv in the sales process. The firm is wholly owned by the Zurich,
Switzerland-based Credit Suisse Group.
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 (the "Litigation
Reform Act") provides a "safe harbor" for forward-looking statements to
encourage such disclosures without the threat of litigation, provided those
statements are identified as forward-looking and are accompanied by meaningful,
cautionary statements identifying important factors that could cause the actual
results to differ materially from those projected in the statement.
Forward-looking statements have been made in this Press Release. Such statements
are based on beliefs of Conectiv's (the "Company's") management ("Management")
as well as assumptions made by and information currently available to
Management. When used herein, the words "will," "anticipate," "estimate,"
"expect," "objective," and similar expressions are intended to identify
forward-looking statements. In addition to any assumptions and other factors
referred to specifically in connection with such forward-looking statements,
factors that could cause actual results to differ materially from those
contemplated in any forward-looking statements include, among others, the
following: deregulation of energy supply and telecommunications; the unbundling
of delivery services; and increasingly competitive energy and telecommunications
marketplace; results of any asset dispositions; sales retention and growth;
federal and state regulatory actions; future litigation results; cost of
construction; operating restrictions; increased costs and construction delays
attributable to environmental regulations; nuclear decommissioning and the
availability of reprocessing and storage facilities for spent nuclear fuel; and
credit market concerns. The Company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. The foregoing list of factors pursuant
to the Litigation Reform Act should not be construed as exhaustive or as
admission regarding the adequacy of disclosures made prior to the effective date
of the Litigation Reform Act.
###www.conectiv.com###
