FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December, 1996
MAINE PUBLIC SERVICE COMPANY
(Exact name of registrant as specified in its charter)
Maine 1-3429 01-0113635
(State, or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
209 State Street, Presque Isle, Maine 04769
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code 207-768-5811
Current Report, Form 8-K for Date of Report:
Maine Public Service Company December, 1996
Item 5. Other Material Events
Increased Maine Yankee Operating Expenses
The Company owns 5% of the Common Stock of the Maine Yankee Atomic
Power Company (Maine Yankee), which entitles it to purchase
approximately 4.9% of the energy produced by the plant, approximately
35% of the Company's requirements in 1996. As reported in the
Company's Form 10-Q dated November 12, 1996, the Nuclear Regulatory
Commission conducted an Independent Safety Assessment (ISA) at Maine
Yankee. The results of the ISA were released on October 7, 1996 and
concluded that although Maine Yankee was in general conformance with
its licensing basis, several items of deficient or weak performance
existed.
The ISA report further concluded that the two principal causes for
these deficiencies were (1) that economic pressures to be a low-cost
power producer had limited resources for taking corrective actions
and some improvements; and (2) that lack of a questioning culture
resulted in failures to identify or properly correct significant
problems in areas Maine Yankee considered of limited safety
importance.
On December 10, 1996, Maine Yankee filed its formal response to the
ISA report. In this report, Maine Yankee promised to substantially
increase expenditures to address the course of the deficiencies noted
in the ISA report, and that the improvements would include physical
and operating changes to the Plant, as well as increased staffing,
primarily in the engineering and maintenance areas, and other changes.
Consequently, at a Meeting on December 13, 1996, Maine Yankee's Board
of Directors voted to increase the plant's 1997 Operating Budget by
approximately $29.8 million for additional employees, training and
equipment in order to address the root causes of the deficiencies
identified in the ISA. The Company's share of this additional amount
will be approximately $1.5 million. As reported in the Company's
Form 10-Q dated November 12, 1996, the Company has had in effect
since January 1, 1996 a multi-year rate plan under which it has the
right to receive specified rate increases through 1999. This plan
also includes provisions for additional cost recovery in
extraordinary situations such as low earnings or other specifically
described circumstances. The Company will continue to access
whatever options it may have to recover these additional costs,
but, in addition, intends to review during 1997 all cash
expenditures, including the level of dividends on the Company's
Common Stock.
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Current Report, Form 8-K for Date of Report:
Maine Public Service Company December, 1996
Item 5. Other Material Events - Continued
Peoples Heritage Bank v. Maine Public Service Company, U.S. District
Court (D. ME) Civil Action No. 95-0180-B
Reference is made to the Company's Form 10-Q dated November 12, 1996
in which the Company reported that Peoples Heritage Bank had brought
civil action against the Company seeking recovery for clean-up costs,
damages and attorney's fees incurred because of the release of a
hazardous substance (polychlorinated biphenyls) at a site in Presque
Isle, Maine. The matter went to hearing on July 22, 1996.
On December 2, 1996, the Court issued its judgment in this proceeding
for the Company and against Peoples Heritage. The Court concluded
that Peoples Heritage failed to prove the Company had caused a
release of a hazardous substance at the site and credible expert
testimony pointed to other causes of contamination.
MAINE PUBLIC SERVICE COMPANY
Registrant
Dated: December 18, 1996 Larry E. LaPlante
Larry E. LaPlante, Vice President
Finance, Administration and Treasurer
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