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 (date of
earliest event reported): July 11, 1994
PENNSYLVANIA ELECTRIC COMPANY
(Exact name of registrant as specified in charter)
Pennsylvania 1-3522 25-0718085
(State or other (Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation)
1001 Broad Street, Johnstown, Pennsylvania 15907
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (814) 533-8111
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ITEM 5. OTHER EVENTS.
As has been previously reported, in March 1993, the
Pennsylvania Public Utility Commission ("PaPUC") amended a
January 1993 rate order and allowed Metropolitan Edison Company
("Met-Ed"), an electric operating affiliate of Pennsylvania
Electric Company ("Penelec"), to collect revenues it had
requested for certain decommissioning costs associated with Three
Mile Island Unit No. 2 ("TMI - 2"). In May 1993, the
Pennsylvania Office of Consumer Advocate filed a petition for
review with the Pennsylvania Commonwealth Court seeking to set
aside the portion of the PaPUC's amended rate order which allowed
Met-Ed to recover TMI-2 decommissioning costs.
On July 11, 1994, the Commonwealth Court reversed the
PaPUC's amended rate order. Met-Ed intends to seek a review of
the Commonwealth Court decision by the Pennsylvania Supreme
Court.
As a result of the Commonwealth Court decision, Met-Ed
and Penelec intend to write off, in the second quarter of 1994,
their allocable share (based on their 50% and 25% respective TMI-
2 ownership interests) of estimated TMI-2 decommissioning costs.
At December 31, 1993, such amount totalled approximately $171
million (before taxes), based on the funding target established
by the Nuclear Regulatory Commission which target is subject to
future adjustment. Management is continuing to review these
amounts, but presently expects that the write off will be
approximately $171 million. Penelec's other electric operating
1
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affiliate, Jersey Central Power & Light Company, which owns the
remaining 25% interest in TMI-2, has been permitted by the New
Jersey Board of Public Utilities to recover its share of the
estimated TMI-2 decommissioning costs from its customers and is
not affected by the Commonwealth Court decision.
General Public Utilities Corporation ("GPU"), Penelec's
parent, has previously announced that it will incur a substantial
charge to income in 1994 of between $110 and $120 million due to
its Voluntary Enhanced Retirement Program and that, as a result
of another Commonwealth Court decision involving a nonaffiliated
utility, Penelec may be required to write off an estimated $14
million of post-retirement benefit costs.
Unless the Commonwealth Court decisions are overturned,
the effect of these developments, particularly upon Met-Ed, will
severely restrict the ability of Met-Ed and Penelec to issue
senior securities, and GPU is therefore reviewing their 1994-95
operation and construction plans.
There can be no assurance as to the outcome of these
matters.
A copy of GPU's related news release is annexed as an
exhibit.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(b) Exhibits:
1. GPU News Release, dated July 11, 1994.
2
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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 OF THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED.
PENNSYLVANIA ELECTRIC COMPANY
By:
Don W. Myers, Vice President
and Treasurer
Date: July 12, 1994
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EXHIBIT TO BE FILED BY EDGAR
Exhibit:
1. GPU News Release, dated July 11, 1994.
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Exhibit 1
(GPU News Release Letterhead)
Further Information: John T. Fidler
(201) 263-6479
For release: Immediately Date: July 11, 1994
94-010
GPU REACTS TO PENNSYLVANIA COURT DECISION
Parsippany, N.J. -- General Public Utilities Corporation
(NYSE:GPU) is reviewing an order by the Pennsylvania Commonwealth
Court that reverses a 1993 Pennsylvania Public Utility Commission
order allowing GPU's Metropolitan Edison Company subsidiary to
collect decommissioning costs of Three Mile Island Unit 2.
"We are very disappointed by today's order," said James R.
Leva, GPU chairman, president and chief executive officer. "As
we said earlier this year, we will incur a substantial charge of
between $110 and $120 million to income this year for our
Voluntary Enhanced Retirement Program. In addition, we may see
an impact, as a result of another Commonwealth Court decision
involving a nonaffiliated utility, on Pennsylvania Electric
Company, which may be required to write off an estimated $14
million of post-retirement benefit costs.
"If these court decisions are not overturned, the effect of
these three developments, particularly upon Met-Ed, will severely
restrict the ability of our Pennsylvania subsidiaries to issue
senior securities. As a result, we will be reviewing their
spending plans for operations and construction for this year and
next. We are studying all of these issues now," Leva said.
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The original PaPUC decision in the TMI-2 case, which was
issued in January 1993, disallowed these decommissioning costs.
At that time, GPU announced a pre-tax charge to income of
approximately $171 million, allocated two-thirds to Met-Ed and
one-third to Penelec, reflecting their 50 percent and 25 percent
respective ownership interests in TMI-2. This charge to income
was cancelled when the PaPUC reversed its prior order in March
1993. It was that order which was overturned by the Court today.
Jersey Central has been permitted by the N.J. Board of
Public Utilities to recover its share of the estimated TMI-2
decommissioning costs from its customers. Jersey Central is not
affected by these actions today.
Met-Ed has not decided whether to appeal today's
Commonwealth Court ruling.
"We are studying it carefully to determine our next course
of action," Leva said.
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