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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report
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Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: May 27, 1994
LONG ISLAND LIGHTING COMPANY
(Exact name of registrant as specified in charter)
New York 1-3571 11-1019782
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
175 East Old Country Road, Hicksville, New York 11801
516-755-6650
(Address and telephone number of Principal Executive Offices)
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Item 1. Changes in Control of Registrant
Not applicable.
Item 2. Acquisition or Disposition of Assets
Not applicable.
Item 3. Bankruptcy or Receivership
Not applicable.
Item 4. Changes in Registrant's Certifying Accountant
Not applicable.
Item 5. Other Information
a. Electric Rate Case
In December 1993, the Company filed a three-year electric rate plan
with the Public Service Commission of the State of New York ("PSC") for the
period beginning December 1, 1994 (the "Rate Proposal"). The Rate Proposal
requests an allowed rate of return on common equity of 11.0% and provides for
zero percent base rate increases in years one and two of the plan and an
overall rate increase of 4.3% in the third year. Although base electric rates
would be frozen during the first two years of the Rate Proposal, annual rate
increases of approximately 1% to 2% are expected to result in these years from
the operation of a fuel cost adjustment ("FCA") mechanism. The FCA captures,
among other amounts, any increases in the cost of fuel above the level
recovered in base rates, and any amounts to be recovered or refunded to
ratepayers in excess of $15 million which result from the reconciliation of
revenue, certain expenses and earned performance incentive components.
On May 19, 1994, the staff of the PSC ("Staff") and other
intervening parties filed testimony in response to the Rate Proposal. Staff
concurs with the Company's proposal for an 11.0% return on common equity in
each of the three years. However, Staff has recommended an overall zero
percent rate increase for the first two years, contrasted with the Company's
proposal for a zero percent base rate increase and FCA adjustments of 1% to 2%
in each of these years as described above. Staff has not yet made a firm
recommendation for the level of rate relief in the third year, but has
reaffirmed its commitment to the principles
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of the Rate Moderation Agreement including the full recovery of the Rate
Moderation Component.
In addition, Staff supports both the Company's proposed
continuation of its current FCA mechanism and the continuation of the Long
Island Lighting Company Ratemaking and Performance Plan mechanisms and proposes
to continue the performance incentives, with some modifications. Staff is also
recommending demand side management ("DSM") expenditures that exceed those
proposed by the Company. The Company is reviewing the proposals submitted by
Staff and the intervenors, discussed below, in preparation for hearings
expected to commence in mid-June.
The Consumer Protection Board and Long Island Power Authority
("CPB/LIPA") jointly filed testimony in which they proposed that total electric
bills be cut by 2.6% for the first rate year, 1.2% for the second rate year,
and 1.2% for the third rate year. CPB/LIPA also proposed higher sales
forecasts, reductions in forecasted expenses, and a reduction in return on
common equity from the Company's proposed 11.0% to 10.6%. Other intervenors
proposed various adjustments to the Rate Proposal, including increasing DSM
expenditures and reducing the authorized return on common equity. The CPB/LIPA
response to the Company's Rate Proposal is unrelated to a CPB/LIPA petition
filed in December 1993 also seeking to reduce the Company's electric rates.
The Commission has not acted upon this prior CPB/LIPA petition.
The Commission is expected to issue a final order in the Company's
rate proceeding in November 1994. The Company is unable to predict the
ultimate outcome of this rate proceeding.
b. Long Island Lighting Company v. County of Suffolk
The Company and Suffolk County have reached a settlement, in
principle, in the matter of Long Island Lighting Company v. County of Suffolk.
The settlement will not have a material impact on the Company's financial
condition and is contingent upon the parties agreeing to definitive terms and
to ratification by the Suffolk County Legislature. The Company began this
lawsuit in Suffolk County Supreme Court on February 11, 1988, against Suffolk
County, seeking the recovery of damages for Suffolk County's breach of a
contract to prepare an offsite emergency response plan for the Shoreham nuclear
power station.
Item 6. Resignations of Registrant's Directors
Not applicable.
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Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
Not applicable.
Item 8. Change in Fiscal Year
Not applicable.
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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 thereunto duly authorized.
LONG ISLAND LIGHTING COMPANY
Registrant
By ANTHONY NOZZOLILLO
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ANTHONY NOZZOLILLO
Senior Vice President - Finance
Dated: May 27, 1994
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