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, 1999
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, 1999
Item 5(a) Other Material Events
(a) Company Subsidiary Designated Standard Offer Service Provider for
Central Maine Power Company Customers.
Beginning on March 1, 2000, all Maine consumers will have the
right to purchase generation services from competitive electricity
providers. Customers who are unable or unwilling to do so, will
obtain their generation services from Standard Offer Service (SOS).
On November 29, 1999, the MPUC designated Energy Atlantic (EA), the
Company's wholly-owned subsidiary, as the Standard Offer Service (SOS)
provider for all residential and small non-residential customers in
Central Maine Power's (CMP) service territory. The designation is for
two years beginning March 1, 2000 and permits EA to be the exclusive
provider of SOS to approximately 525,000 residential and small
commercial customers in southern and central Maine. Based on
historical data, EA estimates a total annual load of approximately
3,200,000 MWH from these sales. EA will provide CMP's residential and
small commercial customers for a price of $0.04089 per kwh for SOS.
The Company does not know what other suppliers bid on CMP's SOS nor
the content of their bids.
As reported in the Company's Form 10-K for the fiscal year 1998, EA's
formation was approved by the MPUC on August 24, 1998 as an
unregulated subsidiary. EA began formal operations on January 1,
1999, to function as a competitive supplier of generation services in
the retail market for electricity when that market opens on March 1,
2000. EA has also sold generation on a wholesale basis.
Although the experience in other states shows that few small
customers leave SOS-type service for the competitive market, the
Company cannot predict the precise number of customers EA will serve
as the SOS provider nor the exact amount of annual sales during its
tenure as SOS provider. At a minimum, the Company believes that
revenues from these SOS sales will be sufficient to make EA
self-supporting during the next two years while it is attempting to
establish itself in the competitive retail electricity market.
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Current Report, Form 8-K for Date of Report
Maine Public Service Company December, 1999
Item 5(b) Other Material Events - Maine Public Utilities Commission Approves
Stipulation.
Reference is made to the Company's Form 10-Q, Part II, Legal
Proceedings, Item 1(d), in which the Company reported that a
Stipulation resolving the revenue requirement and rate design issues
for the Company's Transmission and Distribution (T&D) utility was
filed with the Maine Public Utilities Commission (MPUC).
On October 14, 1998, and subsequently amended on February 9, 1999 and
August 11, 1999, the Company filed its determination of stranded
costs, transmission and distribution costs and rate design with the
MPUC. The Company's amended testimony supported its $76.5 million
estimate of stranded costs, net of available value from the sale of
the generating assets, when deregulation occurs on March 1, 2000. The
major components include the remaining investment in Seabrook, the
above market costs of the amended power purchase agreement and
recovery of fuel expense deferrals related to Wheelabrator-Sherman,
the obligation for remaining operating expenses and recovery of the
Company's remaining investment in Maine Yankee, and the recovery of
several other regulatory assets.
On October 15, 1999, the Company filed with the MPUC a Stipulation
resolving the revenue requirement and rate design issues for the
Company's Transmission and Distribution (T&D) utility. This
Stipulation has been signed by the Public Advocate and approval was
recommended by the MPUC Staff. Under the Stipulation, the Company's
total annual T&D revenue requirement will be $16,640,000, effective
March 1, 2000. This revenue requirement includes a 10.7% return on
equity with a capital structure based on 51% common equity. The
Stipulation further provides that the precise level of stranded cost
recovery cannot be determined until final determination of all costs
associated with the sale of the Company's generating assets, but does
set forth some general principles concerning the Company's ultimate
stranded costs recovery, including agreement that the major components
of the Company's stranded costs are legitimate, verifiable and
unmitigable, and therefore subject to recovery in rates. Furthermore,
the Stipulation allows the 3.66% foregone revenue increase as a
result of a rate plan Stipulation approved by the MPUC in its April 6,
1999 Order in Docket 98-865 to be added to stranded cost recovery in
the manner specified in the stipulation in that Docket. The
Stipulation also provides that the Company's recovery of unamortized
investment tax credits and excess deferred income taxes associated
with the Company's generating assets must await a final
determination ruling from the IRS, which ruling has been sought by
Central Maine Power Company.
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Current Report, Form 8-K for Date of Report
Maine Public Service Company December, 1999
On December 1, 1999, the MPUC approved the October 15, 1999
Stipulation, as described above. Although the elements of stranded
costs have been agreed to, the MPUC has not determined the amount of
stranded cost revenue requirements to be included in customer rates
starting March 1, 2000, nor the recovery period of the stranded costs,
but is expected to do so prior to February 1, 2000. At this
time, the Company cannot predict the nature of the MPUC's final
decision in this matter.
MAINE PUBLIC SERVICE COMPANY
Registrant
Dated: December 1, 1999 /s/ Larry E. LaPlante
Larry E. LaPlante, Vice President,
Treasurer and Chief Financial Officer
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