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: January 5, 1999
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.
In a press release dated January 5, 1999, Eastern Utilities Associates (EUA)
announced that its Montaup Electric Company subsidiary has agreed to transfer
its remaining non-nuclear power purchase contracts to Constellation Power
Source, Inc. As part of the transfer, Constellation will supply a portion of
the energy needs for EUA's electric utility customers on Standard Offer service
in Massachusetts and Rhode Island. This transfer, subject to federal and state
regulatory approvals, is expected to be completed in early 1999.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
Exhibit 99a Press Release dated January 5, 1999.
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: January 5, 1999
Exhibit 99a
January 5, 1999
Upon Receipt
Financial: Clifford J. Hebert, Jr. (617) 357-9590
General: Kevin Kirby (508) 559-2000 ext. 3809
Constellation Power Source: Michael Delaney (410) 234-5466
EUA Names Constellation Power Source for Standard Offer Supply
EUA completes divestiture of non-nuclear generation assets
Constellation to acquire EUA's power purchase contracts, supply Standard Offer
power
BOSTON, Jan. 5 Eastern Utilities Associates (NYSE: EUA) today announced
agreements to transfer the remaining non-nuclear power purchase contracts of
its Montaup Electric Co. (Montaup) subsidiary to Constellation Power Source,
Inc., (CPS) of Baltimore, Md. As part of the transfer, Constellation will
supply a portion of the energy needs for EUA's electric utility customers on
Standard Offer service in Massachusetts and Rhode Island.
The companies expect to close transfer of the power purchase contracts,
including the long-term Standard Offer contracts, in early 1999, following
regulatory approvals.
CPS also won the bid to supply an additional portion of EUA customers'
Standard Offer needs, initially through Montaup, effective Jan. 1, 1999,
meaning the Baltimore firm will eventually supply 56 percent of the energy
distributed by EUA subsidiaries Blackstone Valley Electric, Eastern Edison and
Newport Electric to their Standard Offer customers. The other 44 percent had
been previously subscribed.
"This represents the final agreement for EUA to complete divestiture of its
non-nuclear generation assets under agreements negotiated with officials in
Massachusetts and Rhode Island," said Donald G. Pardus, EUA's Chairman and
Chief Executive Officer. "In addition to our non-nuclear generation, EUA has
agreed to sell its share in the Seabrook nuclear generating station and has
restructured its long-term power purchase contract from the Pilgrim nuclear
unit. Our goal now is to sell our remaining ownership shares in two other
nuclear units in New England, completing divestiture of all of EUA's generation
assets."
Charles W. Shivery, CPS President, said: "We are extremely pleased that
Constellation Power Source has been able to craft a solution that best meets
the needs of EUA and their customers in Massachusetts and Rhode Island, while
also strengthening our presence in the New England energy market.
"CPS provides wholesale power marketing and risk management services
nationwide," Shivery added, "and these long-term contracts with EUA are
consistent with our strategy to target customers in developing, competitive
energy markets."
Constellation will acquire approximately 177 megawatts of electricity
entitlements in long-term power purchase contracts held by EUA's Montaup
Electric subsidiary in these generating units:
Canal Unit 1, Sandwich, Mass.
McNeil, Burlington, Vt.
Northeast Energy Associates, Bellingham, Mass.
Blackstone Hydroelectric, North Smithfield, R. I.
In addition, Constellation will acquire EUA's entitlement in the Hydro
Quebec firm energy contract with utilities in New England.
The long-term contracts have expiration dates ranging from 2001 to 2021.
Under terms of the transfer, Constellation will supply a percentage of EUA's
Standard Offer needs through 2004 in Massachusetts and 2009 in Rhode Island, as
set by legislation deregulating the electric utility industry in the two
states.
"EUA's stranded assets, in the form of above market costs, will be reduced
by about $40 million through this transfer," Pardus said. The transition
charge paid by customers specified in Massachusetts and Rhode Island utility
deregulation legislation will be reduced, as a result.
Under deregulation legislation in both states, customers may elect to
continue purchasing energy from their current electric utility rather than
choosing a competitive supplier for a specific period under Standard Offer
rates.
Constellation Power Source (CPS), a wholly-owned subsidiary of Baltimore Gas
and Electric Co. (NYSE: BGE) was formed in February 1997. Since its inception,
CPS has established itself as a leading nationwide power marketer. CPS has
made significant capital investments in risk management systems that enable it
to structure innovative solutions to meet the energy needs of wholesale
customers. Other BGE subsidiaries include Constellation Power, Constellation
Energy Source and Constellation Operating Services.
Reed Consulting Group of Burlington, Mass., acted as EUA's adviser and
managed the process under which the transfer was arranged.
EUA is a Boston-based energy services firm whose shares are traded on the
New York and Pacific Stock Exchanges. Its Eastern Edison, Blackstone Valley
Electric and Newport Electric subsidiaries provide electric utility service to
more than 300,000 customers in southeastern Massachusetts and northern and
south coastal Rhode Island. Montaup is EUA's wholesale electric utility
subsidiary. Other subsidiaries include EUA Cogenex Corp., EUA Ocean State
Corp., EUA Energy Investment Corp. and EUA Service Corp. EUA's web site is
www.eua.com
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