As filed with the Securities and Exchange Commission on June 25, 1999
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 - JUNE 25, 1999
Commission Registrant, State of Incorporation I.R.S. Employer
File Number Address and Telephone Number Identification No.
- ----------- ------------------------------------- ------------------
0-25595 NIAGARA MOHAWK HOLDINGS, INC. 16-1549726
(a New York corporation)
300 Erie Boulevard West
Syracuse, New York 13202
Telephone 315-474-1511
1-2987 NIAGARA MOHAWK POWER CORPORATION 15-0265555
(a New York corporation)
300 Erie Boulevard West
Syracuse, New York 13202
Telephone 315-474-1511
<PAGE>
Item 5. Other Events
- -------------------------
(a) On June 24, 1999, Niagara Mohawk Power Corporation issued a press
release regarding an agreement to sell its ownership of the Nine Mile
Point Units 1 and 2 nuclear plants. See press release attached
(Exhibit No. 99).
(b) On June 24, 1999, Niagara Mohawk Power Corporation issued a press
release regarding the automatic shutdown of Nine Mile Point Unit 2 due
to a malfunction in a device that controls water levels in the plant.
See press release attached (Exhibit No. 99-1).
(c) On June 11, 1999, Niagara Mohawk Power Corporation issued a press
release regarding the closing of the sale of its Huntley and Dunkirk
coal-fired electric generating stations. See press release attached
(Exhibit No. 99-2).
(d) On June 14, 1999, Niagara Mohawk Power Corporation issued a press
release regarding the early redemption of $150 million 9.5% series
first mortgage bonds due March 1, 2021. See press release attached
(Exhibit No. 99-3).
Item 7. Financial Statements and Exhibits
- ------------------------------------------------
Exhibits - Following is the list of Exhibits furnished in accordance with
the provisions of Item 601 of Regulation S-K, filed as part of this current
report on Form 8-K.
Exhibit No. 99 - Press release issued on June 24, 1999 relating to Niagara
Mohawk Power Corporation's agreement to sell its ownership of the Nine Mile
Point Units 1 and 2 nuclear plants.
Exhibit No. 99-1 - Press release issued June 24, 1999 relating to the automatic
shutdown of Nine Mile Point Unit 2 due to a malfunction in a device that
controls water levels in the plant.
Exhibit No. 99-2 - Press release issued June 11, 1999 relating to Niagara Mohawk
Power Corporation's sale of its Huntley and Dunkirk coal-fired electric
generating stations.
Exhibit No. 99-3 - Press release issued June 14, 1999 relating to Niagara Mohawk
Power Corporation's early redemption of $150 million 9.5% series first mortgage
bonds due March 1, 2021.
<PAGE>
NIAGARA MOHAWK HOLDINGS, INC. AND SUBSIDIARY COMPANIES
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
NIAGARA MOHAWK HOLDINGS, INC.
-----------------------------
(Registrant)
Date: June 25, 1999 By /s/Steven W. Tasker
===================
Steven W. Tasker
Vice President-Controller and
Principal Accounting Officer,
in his respective capacities
as such
NIAGARA MOHAWK POWER CORPORATION
-------------------------------
(Registrant)
Date: June 25, 1999 By /s/Steven W. Tasker
===================
Steven W. Tasker
Vice President-Controller and
Principal Accounting Officer,
in his respective capacities
as such
<PAGE>
EXHIBIT INDEX
-------------
Following is the index of Exhibits furnished in accordance with the provisions
of Item 601 of Regulation S-K, filed as part of this current report on Form 8-K.
Exhibit No. 99 - Press release issued on June 24, 1999, relating to Niagara
Mohawk Power Corporation's agreement to sell its ownership of the Nine Mile
Point Units 1 and 2 nuclear plants.
Exhibit No. 99-1 - Press release issued June 24, 1999 relating to the automatic
shutdown of Nine Mile Point Unit 2 due to a malfunction in a device that
controls water levels in the plant.
Exhibit No. 99-2 - Press release issued June 11, 1999 relating to Niagara Mohawk
Power Corporation's sale of its Huntley and Dunkirk coal-fired electric
generating stations.
Exhibit No. 99-3 - Press release issued June 14, 1999 relating to Niagara Mohawk
Power Corporation's early redemption of $150 million 9.5% series first mortgage
bonds due March 1, 2021.
EXHIBIT NO. 99
NIAGARA MOHAWK AND NEW YORK STATE ELECTRIC & GAS CORPORATION TO SELL NUCLEAR
ASSETS TO AMERGEN ENERGY
SYRACUSE and BINGHAMTON - June 24 - Niagara Mohawk Power Corporation will sell
its ownership of the Nine Mile Point 1 and 2 nuclear plants and New York State
Electric & Gas Corporation (NYSEG) will sell its ownership of the Nine Mile 2
nuclear plant, to AmerGen Energy Company, a joint venture of PECO Energy Company
and British Energy, under an agreement announced today.
Niagara Mohawk is a wholly owned subsidiary of Niagara Mohawk Holdings, Inc.
(NYSE:NMK). NYSEG is a wholly owned subsidiary of Energy East Inc. (NYSE: NEG).
At closing, Niagara Mohawk will receive $63.55 million in proceeds based on its
41 percent ownership share of Nine Mile 2 and NYSEG will receive $27.9 million
in proceeds based on its 18 percent ownership share. Niagara Mohawk will also
receive $71.7 million for Nine Mile 1. Niagara Mohawk and NYSEG may receive
additional payments through a financial sharing agreement based on actual market
prices through 2012.
The sale furthers Niagara Mohawk's and NYSEG's strategies to exit the generation
business and advances AmerGen's efforts to become a premier operator of nuclear
plants in the United States.
"The sale of our nuclear assets is another step toward creating a competitive
generation market, a key component of our POWERCHOICE plan to reduce rates and
provide customer choice," said William E. Davis, Niagara Mohawk's Chief
Executive Officer. "This sale will also protect customers and shareholders from
unforeseen operating and decommissioning costs. In addition, the sale to
AmerGen puts the plants in the hands of a proven operator committed to pursuing
growth in the nuclear generation business. That is good news for the plants'
employees and the region's economy."
Michael I. German, President and Chief Operating Officer of NYSEG said, "This
sale is in the best long-term interest of NYSEG's customers and the state of New
York. It helps insulate our customers from further rate increases and brings a
world-class operator of nuclear plants into New York State."
AmerGen was formed in 1997 as a joint venture by PECO Energy of Philadelphia and
British Energy of Edinburgh, Scotland, to purchase and operate nuclear plants in
the United States. Both companies have a strong commitment to the future of
nuclear power and share similar operational cultures involving people,
processes, safety and reliability.
"We are pleased to announce an agreement to add Nine Mile Point and its
excellent operating staff to our portfolio of AmerGen generation assets," said
Dickinson M. Smith, Chief Executive Officer of AmerGen. "When the sale is
completed, our business goals will be to operate the units with a total
commitment to safety, to provide reliable, efficient energy for the region for
many years to come, and to continue Niagara Mohawk's tradition of being a good,
involved neighbor in the community."
Dr. Robin Jeffrey, AmerGen President and Executive Director of British Energy's
North American ventures said, "Nine Mile Point will be our largest potential
acquisition to date, and it marks real progress in our North American strategy.
We are committed to delivering shareholder value and growth, and we are
confident both units at Nine Mile Point will play a significant role as AmerGen
realizes its commercial potential in North America's electricity market."
As part of the agreement, AmerGen will offer to continue employment to the
approximately 1,330 employees at the two plants and will accept the current
collective bargaining agreement with the International Brotherhood of Electrical
Workers Local 97.
The agreement also calls for Niagara Mohawk and NYSEG to purchase electricity
from AmerGen at negotiated prices for three years from Nine Mile 2. A similar
five-year agreement is in place between Niagara Mohawk and AmerGen for
electricity from Nine Mile 1.
The Nuclear Regulatory Commission, Federal Energy Regulatory Commission, New
York State Public Service Commission, and other regulatory bodies must approve
the sale. Completion of the sale is expected early next year.
AmerGen will assume full responsibility for the decommissioning of Nine Mile 1
and its eventual ownership share of Nine Mile 2. The decommissioning fund will
be pre-funded to a fixed amount by the sellers, with all potential costs above
the fixed amount paid by AmerGen.
Nine Mile Point is a two-unit boiling water reactor site. Nine Mile 1, a
614-megawatt unit, began producing electricity in 1969. Nine Mile 2, a
1,140-megawatt unit, began producing electricity in 1988. Niagara Mohawk
operates both plants. The plants are located in Scriba, New York, approximately
40 miles north of Syracuse.
In addition to Niagara Mohawk and NYSEG, the other Nine Mile 2 co-owners are:
Long Island Power Authority (18 percent), Rochester Gas and Electric Corporation
(14 percent), and Central Hudson Gas & Electric Corporation (9 percent). Their
ownership shares of the plant are not included in the sale. Options available
to the co-owners include matching the AmerGen offer, participating in the sale,
or retaining their ownership interest. Niagara Mohawk is the operator and sole
owner of Nine Mile 1.
Niagara Mohawk, a subsidiary of Niagara Mohawk Holdings Inc., is a regulated
energy delivery company with the largest service territory in New York State.
The company serves more than 1.5 million electricity customers and more than
540,000 natural gas customers across 24,000 square miles.
NYSEG is a subsidiary of Energy East Corporation, an energy delivery, products
and services company doing business in New York, Massachusetts, Maine and New
Hampshire. NYSEG supplies, markets and delivers electricity to 817,000
customers and natural gas to 243,000 customers across more than 40 percent of
upstate New York.
PECO Energy is an electric and gas utility serving 1.5 million electric
customers in the five county Philadelphia area and 400,000 natural gas customers
in four suburban counties. It is one of the nation's largest nuclear utilities,
producing more than 33.5 billion kilowatt-hours of electricity in 1998 at its
Limerick and Peach Bottom generating stations. PECO Energy has set new nuclear
performance standards in safety, availability and capacity factors, efficient
refueling outages, and low operating and maintenance costs.
PECO Energy also owns and operates coal, natural gas, oil, landfill gas and
hydro power plants. PECO Energy's Power Team operates a 24-hour energy trading
floor with transactions in 47 states and Canada.
British Energy provides more than 20 percent of Britain's electricity and is the
United Kingdom's largest generator. It owns and operates 15 nuclear power
reactors in the United Kingdom, with 9,600 megawatts of generation, including
seven advanced gas-cooled nuclear stations and one pressurized water reactor
station. In July 1996, British Energy was successfully privatized through a
public offering of stock. The company has distinguished itself on nuclear
operations through its outstanding safety record and by reducing costs and
increasing output and profit following privatization, it has market
capitalization equivalent to $5.9 billion (U.S.) and has approximately 5,100
employees.
J. P. Morgan & Co. Inc. acted as financial advisor to the sellers.
EXHIBIT NO. 99-1
AUTOMATIC SHUTDOWN AT NINE MILE TWO NUCLEAR PLANT
SYRACUSE - June 24 - The Nine Mile Point Unit Two nuclear plant automatically
shut down today at 3:41 p.m. due to a malfunction in a device that controls
water levels in the plant, according to officials at Niagara Mohawk Power
Corporation (NYSE:NMK).
An estimated restart date will be determined after a complete assessment of the
cause of the shutdown.
Niagara Mohawk operates and is a 41 percent co-owner of Nine Mile Two, a
1,140-megawatt plant. Other owners are: New York State Electric & Gas
Corporation (18 percent), Long Island Power Authority (18 percent), Rochester
Gas and Electric Corporation (14 percent), and Central Hudson Gas & Electric
Corporation (9 percent). The plant is located in Scriba, New York,
approximately 40 miles north of Syracuse.
Niagara Mohawk is an investor-owned energy services company that provides
electricity to more than 1.5 million customers across 24,000 square miles of
upstate New York. The company also delivers natural gas to more than 500,000
customers over 4,500 square miles of eastern, central and northern New York.
EXHIBIT NO. 99-2
NIAGARA MOHAWK COMPLETES SALE OF HUNTLEY AND DUNKIRK COAL STATIONS
SYRACUSE - June 11 - Niagara Mohawk Power Corporation, a wholly owned subsidiary
of Niagara Mohawk Holdings, Inc. (NYSE: NMK) today announced the closing of the
sale of its Huntley and Dunkirk coal-fired electric generating stations. NRG
Energy, Inc., a wholly owned subsidiary of Northern States Power Company (NYSE:
NSP), has acquired the plants for $355 million. The sale of the coal stations,
with a combined capacity of 1,360 megawatts, as announced last December.
"Completion of the sale of the Huntley and Dunkirk stations represents a major
step in the divestiture of our generating assets and allows us to make progress
on our strategy to restore shareholder value," said William E. Davis, Chairman
and CEO of Niagara Mohawk Holdings, Inc. "We will use the proceeds from the
sale to retire debt as we seek to optimize our capital structure."
The Huntley Station is located on the Niagara River, just north of the city of
Buffalo. The Dunkirk Station is located on the shores of Lake Erie in Dunkirk,
New York. Under a transition power contract in place through June 2003, Niagara
Mohawk will purchase electricity generated by the coal stations at negotiated
prices.
The divestiture of Niagara Mohawk's generating assets was one of the key
elements of the company's POWERCHOICE plan to reduce prices and promote
competition.
EXHIBIT NO. 99-3
NIAGARA MOHAWK CALLS BONDS FOR EARLY REDEMPTION
SYRACUSE - June 14 - Niagara Mohawk Power Corporation today announced that all
outstanding 9.5 percent series first mortgage bonds due March 1, 2021, would be
redeemed on July 14. Bonds outstanding total $150 million.
The bonds are being redeemed at the applicable optional redemption price of
105.87 percent, plus accrued interest to July 14. On and after that date,
interest on the bonds will cease to accrue. A Notice of Redemption was mailed
on behalf of the company by HSBC Bank USA, as trustee, to holders of these
bonds.
The bonds are being redeemed as part of Niagara Mohawk's plan to retire more
than $1 billion in debt in 1999. "We are committed to follow through on our
strategy to retire capital and rebuild shareholder value," said William E.
Davis, Chairman and Chief Executive Officer of Niagara Mohawk Holdings.
Niagara Mohawk Power Corporation, a subsidiary of Niagara Mohawk Holdings, Inc.
(NYSE: NMK), is a regulated energy delivery company providing energy and energy
services to the largest customer service area in New York State.
