SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report: June 9, 1999
Providence Energy Corporation
_______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Rhode Island 001-10032 05-0389170
_______________________________________________________________________________
(State of incorporation (Commission (IRS Employer
or organization) File Number) Identification No.)
100 Weybosset Street, Providence, Rhode Island 02903
_______________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (401) 272-5040
_______________________________________________________________________________
N/A
_______________________________________________________________________________
(Former name or former address, if changed since last report)
Providence Energy Corporation (the "Registrant ") and its subsidiaries and
their representatives may from time to time make written or oral statements,
including statements contained in the Registrant's filings with the Securities
and Exchange Commission ("SEC"), which constitute or contain "forward-looking"
statements as that term is defined in the Private Securities Litigation Reform
Act of 1995 or by the SEC in its rules, regulations, and releases.
All statements other than statements of historical facts included in this
Form 8-K regarding the Registrant's financial position and strategic initiatives
and addressing industry developments, are forward-looking statements. Where, in
any forward-looking statement, the Registrant or its management expresses an
expectation or belief as to future results, such expectation or belief is
expressed in good faith and believed to have a reasonable basis, but there can
be no assurance that the statement of expectation or belief will result or be
achieved or accomplished. The following are some of the factors which could
cause actual results to differ materially from those anticipated: general
economic, financial and business conditions; changes in government regulations;
competition in the energy services sector; regional weather conditions; the
availability and cost of natural gas and oil; development and operating costs;
the success and costs of advertising and promotional efforts; the availability
and terms of capital; the business abilities and judgment of personnel; the
ability of the Registrant and its suppliers and customers to modify or redesign
their computer systems to work properly in the Year 2000; unanticipated
environmental liabilities; the Registrant's ability to grow its business through
acquisitions and/or significant customer growth; the costs and effects of
unanticipated legal proceedings; the impact of unusual items resulting from
ongoing evaluations of business strategies and asset valuations; and changes in
business strategy.
Item 5. Other events.
Attached to this report as Exhibit A is a copy of a release dated May 28,
1999 by the Registrant with respect to the matters referred to therein.
SIGNATURES
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.
PROVIDENCE ENERGY CORPORATION
By:________________________________________
Vice President, Chief Financial Officer
and Treasurer
Date: June 9, 1999
<PAGE>
Exhibit A
INVESTOR CONTACT: MEDIA CONTACT:
Timothy D. Green James A. Grasso
Director of Investor Relations Vice President, Public and Government Affairs
(401) 272-5040 ext. 2224 (401) 272-5040 ext. 2340
FOR IMMEDIATE RELEASE
PROVGAS ANNOUNCES NEXT STEP IN IMPLEMENTATION OF "ENERIZE RI"
Recovery Provisions of Innovative Regulatory Plan Affirmed
PROVIDENCE, RI: May 28, 1999: Providence Energy Corporation (NYSE: PVY) today
announced that the Public Utilities Commission (RIPUC) has reviewed and affirmed
the previously announced settlement agreement, dated March 3, 1999, between its
subsidiary, Providence Gas Company (ProvGas, or the Company) and the Division of
Public Utilities and Carriers (the Division). The settlement agreement was
reached after extensive discovery and discussions and allows ProvGas to recover
up to $2.45 million in revenue losses attributable to exogenous changes
experienced by the Company.
The mechanism for the recovery is provided for under the terms of Energize RI,
an innovative three-year regulatory plan commenced in 1997 that is designed to
provide price stability to customers, improve system reliability and enhance
economic development while stabilizing earnings. As an integral component of
Energize RI, ProvGas committed to undertaking a major capital expenditure
program that includes expanding its gas service into key growth areas in Rhode
Island, updating and computerizing infrastructure records and replacing and
upgrading existing mains and services. Because this capital expenditure program
requires substantial forward commitments, Energize RI reduces the extreme
variability in the Company's revenues resulting from anomalies and other
unforeseen events. By defining as "exogenous changes" those "significant
increases or decreases in the Company's costs or revenues which are beyond the
Company's reasonable control" and allowing ProvGas to account for their impact,
Energize RI recognizes that the Company does not have the option of suspending
capital expenditures to offset unanticipated revenue shortfalls.
ProvGas sought recovery for two exogenous changes that significantly reduced
revenues: (1) severe warmer-than-normal temperatures; and (2) significantly
lower-than-expected non-firm margins. The impact of warmer-than-normal weather
in fiscal year 1998 (year ended September 30, 1998) was $4.0 million. The level
of relative market pricing of natural gas versus alternative fuels, primarily
oil, resulted in a non-firm margin shortfall of $1.6 million in fiscal year
1998.
"The winter weather in the northeast, combined with the precipitous drop in oil
prices, was far outside the norm we generally experience in New England," said
James H. Dodge, Chairman, President and CEO, of ProvGas and ProvEnergy. "The
implementation of this latest step and the settlement agreement by the parties
to Energize RI address the stabilization goals of the program--recall that we
lowered rates by four percent initially and froze rates at those levels for
three years--and demonstrates that the program functions for the benefit of all
constituencies. This recovery of the impact of exogenous changes will not result
in any rate increase during Energize RI."
ProvGas is Rhode Island's largest natural gas distribution company, serving
160,000 homes and businesses in 25 Rhode Island cities and towns. Its parent,
ProvEnergy, is a distributor and marketer of natural gas, heating oil, and
petroleum products, as well as a marketer of electricity and energy services.
ProvEnergy's goal is to provide complete and competitive energy services to
homes and businesses throughout New England. In addition to ProvGas, its
principal subsidiaries include ProvEnergy Services, Super Service Oil, and North
Attleboro Gas.
ProvEnergy has paid cash dividends for 149 years, an achievement unmatched by
any other gas-distribution company in the United States.
