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: May 16, 1997
EASTERN UTILITIES ASSOCIATES
(Exact name of registrant as specified in this charter)
Massachusetts 1-5366 04-1271872
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
One Liberty Square, Boston, Massachusetts 02109
(Address of principal executive offices) (Zip Code)
Item 5. Other Events.
On May 16, 1997, Eastern Utilities Associates (EUA) announced that its
subsidiaries, Eastern Edison Company and Montaup Electric Company, along with
the Massachusetts attorney general, the state's Division of Energy Resources
(DOER) and several other signatories filed with the Department of Public
Utilities (DPU) details of their settlement agreement to bring competition to
the electric utility industry in Massachusetts, which are included in the May
16, 1997 press release filed herewith as Exhibit 99.
Eastern Edison provides electric service to about 180,000 customers in
the Greater Brockton and Fall River areas of southeastern Massachusetts. It
is a subsidiary of Eastern Utilities Associates, a Boston-based diversified
energy services company. Montaup is EUA's wholesale generation and
transmission utility.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(* indicated filed herewith)
Exhibit 99* Press Release dated May 16, 1997.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EASTERN UTILITIES ASSOCIATES
(Registrant)
By: /s/ John R. Stevens
----------------------
John R. Stevens
President
Date: May 19, 1997
EXHIBIT 99
Eastern Utilities, Attorney General, DOER
File Electricity Competition Agreement
With Massachusetts DPU
BOSTON, May 16 Eastern Edison Co., Montaup Electric Co., the
Massachusetts attorney general and the state's Division of Energy Resources
(DOER) today filed with the Department of Public Utilities (DPU) details of
their settlement agreement to bring competition to the electric utility
industry in Massachusetts.
Eastern Edison customers would receive a 10 percent reduction from
today's rates in their electric bills when competition among suppliers of
electricity starts, under terms of the agreement. Additional savings may be
possible in the competitive marketplace.
The target date to open the Massachusetts electricity market to
competition is Jan. 1, 1998.
Eastern Edison and Montaup are subsidiaries of Eastern Utilities
Associates (EUA). Joining EUA, the attorney general and the DOER in sponsoring
the proposal before the DPU are the Northeast Energy and Commerce Association,
Competitive Power Coalition, Northeast Energy Efficiency Council, Conservation
Law Foundation, Retailers Association of Massachusetts, The Energy Consortium,
American National Power and Intercontinental Energy Corporation.
"We are optimistic the DPU will view our agreement favorably, says
Donald G. Pardus, EUA's chairman and chief executive officer. "We're truly
excited to be at the forefront of moving to competition with customer choice of
suppliers of electricity."
"This settlement agreement enables us to provide a price break to the
180,000 customers of Eastern Edison in the Brockton and Fall River areas," he
continued. "At the same time, it treats EUA's shareholders fairly by taking
the uncertainty out of stranded cost recovery."
The settlement agreement provides EUA full recovery of 100 percent of
its above-market generation investment, often referred to as 'stranded costs.'
The agreement requires EUA to divest itself of Montaup's power
generation assets by selling them on the open market, and to functionally
separate Montaup's transmission facilities from Eastern Edison's distribution
system to meet the competitive market objectives of the attorney general's
Consumers First plan and DOER's restructuring proposal.
The Eastern Edison settlement agreement includes these factors in
addition to the 10 percent rate reduction:
The retail distribution component of rates is frozen until Dec. 31,
2000.
Periodic adjustments to Eastern Edison's rates for such things as
purchased power and conservation costs are eliminated, and rolled
into base rates.
Existing discounts for low-income customers are preserved.
Rates for generation, transmission and distribution are separated,
or "unbundled."
While all customers have the option of choosing their electricity
supplier as early as Jan. 1, 1998, Eastern Edison would continue to
supply energy for customers who choose not to choose at a standard
offer price, which starts at 2.8 cents per kilowatthour (kWh) and
gradually rises, until it ceases to exist at the end of 2004.
An access charge starting at 3.04 cents per kWh and declining over
time will recover stranded cost investments.
Performance measures to ensure that historic levels of reliability
and customer satisfaction are maintained under performance-based
rates taking effect Jan. 1, 1998.
EUA continues its commitment to environmental stewardship under the
agreement by these terms:
Additional reductions in the emission of nitrogen oxides (NOx) and
sulfur dioxide (SO2) from Montaup's Somerset, Mass., generating
station and from its share in the Canal generating station at
Sandwich.
Continued funding by Eastern Edison of its demand-side management
and conservation programs and a continued commitment to the
development of clean renewable sources of energy.
"Our settlement agreement demonstrates that EUA is ready for
competition to begin," Pardus concluded. "We look forward to serving our
customers in this new environment."
Eastern Edison provides electric service to about 180,000 customers in
the Greater Brockton and Fall River areas of southeastern Massachusetts. It is
a subsidiary of EUA, a Boston-based diversified energy services company.
Montaup is EUA's wholesale generation and transmission utility. Information
about EUA is available on the world wide web at http://www.eua.com.
