SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report October 10, 1997
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(Date of earliest event reported)
New York State Electric & Gas Corporation
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(Exact name of registrant as specified in its charter)
New York 1-3103-2 15-0398550
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
P.O. Box 3287, Ithaca, NY 14852-3287
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(Address of principal executive offices) (Zip Code)
607-347-4131
Registrant's telephone number, including area code . . . . . .
NA
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(Former name or former address, if changed since last report)
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Item 5. Other Matters
Competitive Conditions (See Form 10-Q for the quarter ended June
30, 1997, Item 2(a) - Liquidity and Capital Resources -
Competitive Conditions - Electric Industry, Electric Rate and
Restructuring Plan.)
On October 10, 1997, New York State Electric & Gas
Corporation issued the following news release regarding the
filing of its electric rate and restructuring plan with the
Public Service Commission of the State of New York.
INNOVATIVE RESTRUCTURING PLAN FILED
FOR IMMEDIATE RELEASE
Ithaca, NY, October 10, 1997 - An innovative and
aggressive restructuring plan jointly developed by the
New York State Public Service Commission (PSC) staff,
NYSEG, the New York Power Authority, the New York State
Department of Economic Development, the National
Association of Energy Services Companies, and The Joint
Supporters, a coalition of energy service companies and
consumers in favor of competition, has been filed with
the PSC. The plan will bring competition to the NYSEG
electric service area.
The restructuring plan will reduce electric
prices, provide an economic development boost and
enable all NYSEG electric customers to begin choosing
their electricity supplier by August 1, 1999. Approval
of the plan is expected by the end of the year.
Highlights of the plan include:
Price Cuts
- Eliminating a 7% increase in electric prices
already approved by the PSC.
- Capping overall, average electric prices for
residential and commercial customers for four
years.
- Cutting prices an additional 5% for
residential and commercial customers at the
beginning of the fifth year of the plan.
- Reducing prices 5% in each of the next five
years for eligible industrial, commercial and
public authority customers who are heavy
users of electricity.
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- Cutting prices further by working diligently
to reduce the onerous burden of nonutility
generator (NUG) contracts, reduce the state
gross receipts tax and encourage the passage
of securitization legislation.
"We will forego $725 million in electric revenues
to help reduce the price of electricity," said Wes von
Schack, NYSEG's chairman, president and chief executive
officer.
NUG Contracts
"While these revenue reductions are a major
contribution to bringing down electric prices, our job
is not done until the onerous burden placed upon our
customers by the CalEnergy and Lockport Energy
Associates NUG contracts is reduced. Our customers are
paying almost $200 million per year in above-market
energy costs because of these two contracts," von
Schack said. "Renegotiation of these contracts is
crucial to gaining further price reductions for our
customers."
Securitization and the Gross Receipts Tax
Should the New York State legislature decide to
adopt securitization legislation or additional
reductions in the gross receipts tax, these savings
will further reduce electric prices.
Economic Development Boost
"NYSEG has a long and enviable track record in
economic development," von Schack said. "Under this
plan, the eligibility criteria for attractive economic
development and flexible electric prices for commercial
and industrial customers will be broadened. These
measures will give our recovering economy another
boost."
Customer Choice of Electricity Supplier
All NYSEG electric customers will be able to
choose their electricity supplier beginning August 1,
1999. "This is one of the most aggressive plans for
customer choice in the country. Regardless of which
supplier customers choose, we will continue to deliver
electricity safely and reliably, just like we've been
doing for over a century. Competition won't change our
record for providing superior customer satisfaction,"
von Schack said.
<PAGE>
New Corporate Structure
Consistent with its recent application to the
Federal Energy Regulatory Commission, the company's
restructuring plan calls for the formation of a holding
company. "The holding company structure is necessary
for organizational flexibility in order to meet the
demands of the competitive marketplace," von Schack
said. Subsidiaries under the holding company will
include an electric and natural gas delivery company, a
power generation company and an energy services
company.
Generating Station Auction
NYSEG will auction its seven coal-fired generating
stations and its 18% interest in the Nine Mile Point 2
(NMP2) nuclear generating station to establish the fair
market value for the benefit of investors and
customers. The company intends to bid on some or all
of the coal-fired plants.
Natural Gas Prices Remain Among the Lowest in the
Northeast
NYSEG's natural gas prices are among the lowest
and most stable in the Northeast, and are currently
frozen. While not part of this specific agreement, it
is expected that these prices will continue to be
frozen through the next five years following further
negotiations with the PSC staff.
"This plan for the transition to competition is
the result of extensive discussions over the last year
with many parties," von Schack said. "It's a plan that
provides a clear road map to a vibrant, competitive
marketplace. Competition is coming, we embrace it and
look forward to the opportunities it will provide for
our customers and New York State."
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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.
NEW YORK STATE ELECTRIC & GAS CORPORATION
(Registrant)
By Gary J. Turton
Gary J. Turton
Vice President and Controller
(Chief Accounting Officer)
Date: October 14, 1997
