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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 27, 1998
COMMONWEALTH ENERGY SYSTEM
(Exact name of registrant as specified in its Declaration of Trust)
1-7316
(Commission File Number)
Massachusetts 04-1662010
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Main Street, Cambridge, Massachusetts 02142-9150
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 225-4000
(Not Applicable)
(Former name, address and fiscal year, if changed since last report)
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COMMONWEALTH ENERGY SYSTEM
Item 5. Other Events
On May 27, 1998, Commonwealth Energy System announced that three of its
subsidiary companies (Commonwealth Electric Company, Cambridge Electric Light
Company and Canal Electric Company) have selected Southern Energy Inc., a
subsidiary of Southern Company, to buy their non-nuclear electric generation
assets for approximately $462 million. These facilities represent 984
megawatts (mw) of electric capacity and have an approximate book value of $79
million. This event is an integral part of the system's comprehensive
electric restructuring plan that was substantially approved by the
Massachusetts Department of Telecommunications and Energy (the DTE) in
February 1998 and is consistent with the Electric Industry Restructuring Act
(the Act) that was passed by the Massachusetts legislature in November 1997.
The successful completion of this transaction will allow the retail electric
companies to mitigate transition costs currently being billed to customers as
a result of the Act, thereby permitting Cambridge Electric and Commonwealth
Electric to increase the discount beyond the 10 percent that their customers
began receiving effective March 1, 1998, toward a state-mandated 15 percent
discount that is required to take effect on September 1, 1999.
The plants being sold include: Canal Unit 1 (566 mw) and a one-half
interest in Canal Unit 2 (282.5 mw) located in Sandwich, MA and owned by Canal
Electric; the Kendall Station facility (67 mw) and the adjacent Kendall Jets
(46 mw), located in Cambridge, MA and owned by Cambridge Electric; five diesel
generators (13.8 mw) in Oak Bluffs and West Tisbury on the island of Martha's
Vineyard that are owned by Commonwealth Electric, and a 1.4 percent joint-
ownership interest (8.9 mw) in Wyman Unit No. 4 located in Yarmouth, ME, also
owned by Commonwealth Electric.
The sale is expected to close by year-end 1998 following the required
approvals of the Federal Energy Regulatory Commission and the DTE.
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COMMONWEALTH ENERGY SYSTEM
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 hereunto duly authorized.
COMMONWEALTH ENERGY SYSTEM
(Registrant)
JAMES D. RAPPOLI
James D. Rappoli,
Financial Vice President
and Treasurer
Date: June 5, 1998
