SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of report (date of earliest event reported): February 16, 1996
PG Energy Inc.
(Exact name of registrant as specified in its charter
Pennsylvania 1-3490 24-0717235
(State or other jurisdiction) (Commission File Number) (IRS Employer Identification No.)
Wilkes-Barre Center, 39 Public Square, Wilkes-Barre, Pennsylvania 18711-0601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (717)829-8843
Pennsylvania Gas and Water Company
(Former name or former address, if changed since last report)
Page 1 of 15 Pages
The Exhibit Index is on Page 15
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Item 2. Acquisition or Disposition of Assets.
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On February 16, 1996, PG Energy Inc. (formerly known as Pennsylvania Gas and
Water Company), a Pennsylvania corporation ("PGE"), and a wholly-owned subsidiary of
Pennsylvania Enterprises, Inc., a Pennsylvania corporation ("PEI"), consummated the sale
of its regulated water operations and certain related assets (the "Water Business") to
Pennsylvania-American Water Company, a Pennsylvania corporation ("PAWC"), a wholly-owned
subsidiary of American Water Works Company, Inc., a Delaware corporation ("AWWC"), for a
purchase price of $409,000,000 (including the assumption of indebtedness), subject to
certain adjustments (the "Sale of the Water Business"), as set forth in the Asset Purchase
Agreement dated as of April 26, 1995, among PGE, PEI, PAWC and AWWC (the "Asset Purchase
Agreement").
Page 2 of 15 Pages
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Item 7. Financial Statements and Exhibits.
(b) Pro Forma Financial Information
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The following PGE unaudited pro forma financial statements have been prepared
based on PGE's statement of income for the twelve months ended December 31, 1994, and
PGE's unaudited balance sheet as of September 30, 1995, and unaudited statement of income
for the nine months then ended, each as adjusted to reflect the Sale of the Water Business
and, based on the Initial Cash Payment (as such term is defined in the Asset Purchase
Agreement) as of September 30, 1995, of $256.3 million, PGE's use of the proceeds from the
Sale of the Water Business of $201.2 million (after the payment of an estimated $55.1
million of federal and state income taxes on the sale). PGE intends to use such proceeds,
together with $1.1 million of net tax benefits resulting from an estimated $9.3 million of
transaction costs and the $6.5 million premium over book value on the Sale of the Water
Business, to (i) repay the $50.0 million bridge loan (the "Bridge Loan"), the proceeds of
which were utilized to redeem the $50.0 million principal amount of PGE's 9.57% Series
First Mortgage Bonds on October 13, 1995, (ii) repurchase 225,000 shares of PGE's 9%
Cumulative Preferred Stock at an aggregate repurchase price of $24.3 million (equivalent
to $108.00 per share), which includes an aggregate repurchase premium of $1.8 million
(equivalent to $8.00 per share), (iii) repurchase 80,000 shares of PGE's 4.10% Cumulative
Preferred Stock at an aggregate repurchase price of $4.0 million (equivalent to $50.00 per
share, (iv) payment of a $30.0 million dividend by PGE to PEI, (v) repurchase 2,297,297
shares of PGE Common Stock from PEI at an aggregate repurchase price of $85.0 million
(equivalent to $37.00 per share), (vi) payment of an estimated $1.0 million of costs in
connection with the repurchases of preferred stock referred to in items (ii) and (iii)
above and (vii) pay an estimated $7.7 million of transaction costs relative to the Sale of
the Water Business. The repayment of the Bridge Loan referred to in item (i) above and
the repurchase of 2,297,297 shares of PGE Common Stock from PEI referred to in item (v)
above (which shares became authorized but unissued shares upon their repurchase) were made
on February 16, 1996. The $30.0 million dividend referred to in item (iv) above was paid
to PEI on February 16, 1996, in the form of a 10.125% $30.0 million principal amount
unsecured promissory note which PGE expects to pay in full on March 8, 1996, in connection
with the planned defeasance by PEI of its $30.0 million principal amount of 10.125% Senior
Notes. The repurchases of preferred stock referred to in items (ii) and (iii) are
currently expected to be made during April, 1996. Since these repurchases involve
voluntary sales to PGE by the holders of the respective securities, the number and price
of the securities purchased may vary depending on market conditions at the time of the
repurchases. The proceeds from the Sale of the Water Business which will be used for the
repurchases referred to in items (ii) and (iii) and the payment of the promissory note
which was issued in connection with the dividend referred to in item (iv) have been
temporarily invested by PGE pending their use for such purposes.
The unaudited pro forma financial statements also reflect the redemption,
primarily utilizing bank borrowings, of PGE's 8% Series First Mortgage Bonds, of which (a)
$3,325,000 principal amount of the 8% Series First Mortgage Bonds were redeemed on July
10, 1995, in connection with the Sale of the Water Business, at an aggregate redemption
price of $3,336,305, which included an aggregate redemption premium of $11,305, and (b)
$210,000 principal amount of the 8% Series First Mortgage Bonds were redeemed on each of
June 1, 1994, and June 1, 1995, pursuant to annual sinking fund requirements of such
bonds, as if such transactions had occurred at the beginning of the period of the
respective financial statements.
Additionally, the unaudited pro forma statement of income for the twelve months
ended December 31, 1994, reflects (i) the redemption of 150,000 shares of PGE's 8.90%
Cumulative Preferred Stock at an aggregate redemption price of $15,445,500 (equivalent to
$102.97 per share), which includes an aggregate redemption premium of $445,500 (equivalent
to $2.97 per share), as if it had occurred at the beginning of the period (such shares,
the proceeds from the issuance of which were used to provide capital for the Water
Page 3 of 15 Pages
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Business, were redeemed on December 16, 1994, utilizing bank borrowings and would have
been redeemed in connection with the Sale of the Water Business had such shares not been
redeemed on December 16, 1994), and (ii) the redemption of 150,000 shares of PGE's 9.50%
Cumulative Preferred Stock at an aggregate redemption price of $15,534,375 (equivalent to
$103.5625 per share), which includes an aggregate redemption premium of $534,375
(equivalent to $3.5625 per share), as if it had occurred at the beginning of the period
(such shares were redeemed on May 31, 1994, utilizing proceeds from a $20 million term
loan to PEI).
The following PGE unaudited pro forma statements of income reflect the results of
PGE's continuing operations as if the transactions described herein had occurred at the
beginning of the respective periods. The PGE unaudited pro forma balance sheet as of
September 30, 1995, reflects the financial position of PGE as if the transactions
described herein had occurred on such date. Each of the PGE unaudited pro forma
statements of income and balance sheet include estimates of transaction costs which may
differ from the costs ultimately incurred.
These PGE unaudited pro forma financial statements should be read in conjunction
with PGE's financial statements and the notes thereto included in PGE's latest annual
report on Form 10-K.
The PGE unaudited pro forma financial statements have been included herein as
required by the rules of the Securities and Exchange Commission and are provided for
comparative purposes only. The PGE unaudited pro forma financial statements do not
purport to be indicative of the results which would have been obtained if the Sale of the
Water Business had been effected on the date or dates indicated or which may be obtained
in the future. No pro forma adjustment has been made to reflect any interest income that
may be earned on the Initial Cash Payment or any interest expense on the $30.0 million
promissory note which PGE issued to PEI on February 16, 1996, and which it expects to
repay on March 8, 1996.
Page 4 of 15 Pages
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PG ENERGY INC.
Unaudited Pro Forma Statement of Income
for the Twelve Months Ended December 31, 1994
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Adjustments Pro Forma
Before Sale to Reflect After Sale
of Water Sale of Water of Water
Business Business (1) Business
(In thousands of dollars, except per share amounts)
<S> <C> <C> <C>
OPERATING REVENUES $ 167,992 $ - $ 167,992
Cost of gas 98,653 - 98,653
OPERATING MARGIN 69,339 - 69,339
OTHER OPERATING EXPENSES
Operation 22,652 - 22,652
Maintenance 4,436 - 4,436
Depreciation 6,667 - 6,667
Income taxes 5,649 339 (2) 5,988
Taxes other than income taxes 10,807 - 10,807
Total other operating expenses 50,211 339 50,550
OPERATING INCOME 19,128 (339) 18,789
OTHER INCOME, NET 72 226 (3) 298
INCOME BEFORE INTEREST CHARGES 19,200 (113) 19,087
INTEREST CHARGES:
Interest on long-term debt 8,914 (801) (2) 8,113
Other interest 1,005 8 (2) 1,013
Allowance for borrowed funds used
during construction (21) - (21)
Total interest charges 9,898 (793) 9,105
INCOME FROM CONTINUING OPERATIONS 9,302 680 9,982
DIVIDENDS ON PREFERRED STOCK 4,639 (4,224) (4) 415
INCOME FROM CONTINUING OPERATIONS
APPLICABLE TO COMMON STOCK $ 4,663 $ 4,904 $ 9,567
COMMON STOCK
Earnings per share of common stock
from continuing operations:
Before premium on redemption of
preferred stock $ .90 $ 3.31
Premium on redemption of preferred
stock (.19) - (5)
Earnings per share of common stock
from continuing operations $ .71 $ 3.31
Weighted average number of shares
outstanding 5,189,108 (2,297,297) (6) 2,891,811
Page 5 of 15 Pages
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PG ENERGY INC.
Notes to Unaudited Pro Forma Statement of Income
for the Twelve Months Ended December 31, 1994
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(1) Adjustments reflect the Sale of the Water Business as if it had taken place at the
beginning of the period.
(2) Represents the adjustments to interest on long-term debt and amortization of debt
expense, and the related income tax effect, necessary to reflect the interest on
indebtedness, including $15.4 million of bank borrowings utilized to redeem the $15.0
million principal amount of PGE's 8.90% Cumulative Preferred Stock and $15.5 million
of bank borrowings utilized to redeem the $15.0 million principal amount of PGE's
9.50% Cumulative Preferred Stock, outstanding after (a) application of proceeds from
the Sale of the Water Business to repay the Bridge Loan, the proceeds of which were
used to redeem the $50.0 million principal amount of PGE's 9.57% Series First
Mortgage Bonds on October 13, 1995, and (b) the redemption in connection with the
Sale of the Water Business and pursuant to annual sinking fund requirements of the
$3.7 million principal amount of PGE's 8% Series First Mortgage Bonds outstanding as
of January 1, 1994. The adjustments to interest on long-term debt may be summarized
as follows:
(Thousands of dollars)
<S>
Interest on long-term debt for the
twelve months ended December 31, 1994:
Allocated to continuing operations, <C>
as per accompanying unaudited pro forma
statement of income $ 8,914
Allocated to discontinued operations 12,309
21,223
<C>
Deduct:
Interest on debt assumed by PAWC $ 9,347
Interest on debt redeemed or repaid
in connection with the Sale of the
Water Business
9.57% Series First Mortgage Bonds* 4,785
8% Series First Mortgage Bonds 290 (14,422)
Add:
Interest on bank borrowings to reflect the
redemption of $15.0 million principal of PGE's
8.90% Cumulative Preferred Stock and the
payment of a $445,500 premium in connection
therewith as if it occurred at the beginning of
the period instead of December 16, 1994 780
Interest on bank borrowings to reflect the
redemption of $15.0 million principal of PGE's
9.50% Cumulative Preferred Stock and the
payment of a $534,375 premium in connection
therewith as if it occurred at the beginning of
the period instead of May 31, 1994 341
Interest on bank borrowings to reflect the
redemption of PGE's 8% Series First
Mortgage Bonds as if it occurred at the
beginning of the period 191 1,312
Pro forma interest on long-term debt,
as per accompanying unaudited pro forma
statement of income $ 8,113
* The Bridge Loan that PGE utilized for redemption of the 9.57% Series First
Mortgage Bonds on October 13, 1995, has not been reflected in this summary since
it had no effect on the net adjustment to interest on long-term debt.
Page 6 of 15 Pages
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(3) Represents elimination of the amortization of capital stock expense, net of the
related tax effect, relative to PGE's 9.50% Cumulative Preferred Stock ($90,000) and
PGE's 8.90% Cumulative Preferred Stock ($136,000).
(4) Represents elimination of preferred stock dividends of (i) $2.0 million to reflect
the repurchase of 225,000 shares of PGE's 9% Cumulative Preferred Stock, (ii)
$328,000 to reflect the repurchase of 80,000 shares of PGE's 4.10% Cumulative
Preferred Stock, (iii) $591,000 on the $15.0 million principal amount of PGE's 9.50%
Cumulative Preferred Stock from January 1, 1994 to May 31, 1994, the date of
redemption of such stock and (iv) $1.3 million on the $15.0 million principal amount
of PGE's 8.90% Cumulative Preferred Stock from January 1, 1994 to December 16, 1994,
the date of redemption of such stock.
(5) Reflects elimination of the premiums on the redemption of PGE's 8.90% Cumulative
Preferred Stock ($445,500) and PGE's 9.50% Cumulative Preferred Stock ($534,375) from
the calculation of the earnings per share of PGE Common Stock.
(6) Represents the reduction in the number of shares of PGE Common Stock outstanding
resulting from the application of $85.0 million of the proceeds from the Sale of the
Water Business to repurchase 2,297,297 shares of PGE Common Stock from PEI at an
average price of $37.00 per share.
Page 7 of 15 Pages
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PG ENERGY INC.
Unaudited Pro Forma Statement of Income
for the Nine Months Ended September 30, 1995
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Adjustments Pro Forma
Before Sale to Reflect After Sale
of Water Sale of Water of Water
Business Business (1) Business
(In thousands of dollars, except per share amounts)
<S> <C> <C> <C>
OPERATING REVENUES $ 105,540 $ - $ 105,540
Cost of gas 59,147 - 59,147
OPERATING MARGIN 46,393 - 46,393
OTHER OPERATING EXPENSES
Operation 16,342 - 16,342
Maintenance 3,732 - 3,732
Depreciation 5,361 - 5,361
Income taxes 1,659 457 (2) 2,116
Taxes other than income taxes 7,934 - 7,934
Total other operating expenses 35,028 457 35,485
OPERATING INCOME 11,365 (457) 10,908
OTHER INCOME, NET 192 - 192
INCOME BEFORE INTEREST CHARGES 11,557 (457) 11,100
INTEREST CHARGES:
Interest on long-term debt 6,954 (1,078) (2) 5,876
Other interest 1,258 (22) (2) 1,236
Allowance for borrowed funds used
during construction (40) - (40)
Total interest charges 8,172 (1,100) 7,072
INCOME FROM CONTINUING OPERATIONS 3,385 643 4,028
DIVIDENDS ON PREFERRED STOCK 2,073 (1,765) (3) 308
INCOME FROM CONTINUING OPERATIONS
APPLICABLE TO COMMON STOCK $ 1,312 $ 2,408 $ 3,720
COMMON STOCK:
Earnings per share of common stock from
continuing operations $ .24 $ 1.14
Weighted average number of shares
outstanding 5,561,257 (2,297,297) (4) 3,263,960
Page 8 of 15 Pages
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PG ENERGY INC.
Notes to Unaudited Pro Forma Statement of Income
for the Nine Months Ended September 30, 1995
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(1) Adjustments reflect the Sale of the Water Business as if it had taken place at the
beginning of the period.
(2) Represents the adjustments to interest on long-term debt and amortization of debt
expense, and the related income tax effect, necessary to reflect the interest on
indebtedness outstanding during the period after (a) application of proceeds from the
Sale of the Water Business to repay the Bridge Loan, the proceeds of which were used
to redeem the $50.0 million principal amount of PGE's 9.57% Series First Mortgage
Bonds on October 13, 1995, and (b) the redemption in connection with the Sale of the
Water Business and pursuant to annual sinking fund requirements of the $3.5 million
principal amount of PGE's 8% Series First Mortgage Bonds outstanding as of January 1,
1995. The adjustments to interest on long-term debt may be summarized as follows:
(Thousands of dollars)
Interest on long-term debt for the
nine months ended September 30, 1995:
Allocated to continuing operations, <C>
as per accompanying unaudited pro forma
statement of income $ 6,954
Allocated to discontinued operations 9,679
16,633
Deduct: <C>
Interest on debt assumed by PAWC $ 7,141
Interest on debt redeemed or repaid
in connection with the Sale of the
Water Business
9.57% Series First Mortgage Bonds* 3,589
8% Series First Mortgage Bonds 147 (10,877)
Add:
Interest on bank borrowings to
reflect the redemption of PGE's
8% Series First Mortgage Bonds as if
it occurred at the beginning of the
period 120
Pro forma interest on long-term debt,
as per accompanying unaudited pro forma
statement of income $ 5,876
* The Bridge Loan that PGE utilized for redemption of the 9.57% Series First Mortgage
Bonds on October 13, 1995, has not been reflected in this summary since it had no
effect on the net adjustment to interest on long-term debt.
(3) Represents elimination of preferred stock dividends of $1,519,000 and $246,000 to
reflect the repurchase of 225,000 shares of PGE's 9% Cumulative Preferred Stock and
80,000 shares of PGE's 4.10% Cumulative Preferred Stock, respectively, with proceeds
from the Sale of the Water Business.
(4) Represents the reduction in the number of shares of PGE Common Stock outstanding
resulting from the application of $85.0 million of the proceeds from the Sale of the
Water Business to repurchase 2,297,297 shares of PGE Common Stock from PEI at an
average price of $37.00 per share.
Page 9 of 15 Pages
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PG ENERGY INC.
Unaudited Pro Forma Balance Sheet
as of September 30, 1995
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<CAPTION>
Adjustments Pro Forma
Before Sale to Reflect After Sale
of Water Sale of Water of Water
Business Business (1) Business
(In thousands of dollars)
ASSETS
<S> <C> <C> <C>
UTILITY PLANT:
At original cost, less acquisition
adjustments of $386,000 $ 293,279 $ - $ 293,279
Accumulated depreciation (76,680) - (76,680)
216,599 - 216,599
OTHER PROPERTY AND INVESTMENTS 3,682 - 3,682
CURRENT ASSETS:
Cash 527 256,291 (2a)
(55,050) (2c)
(201,241) (3)
350 (3i) 877
Accounts receivable-
Customers 7,577 - 7,577
Others 490 - 490
Reserve for uncollectible accounts (1,071) - (1,071)
Accrued utility revenues 1,573 - 1,573
Materials and supplies, at average cost 2,926 - 2,926
Gas held by suppliers, at average cost 20,155 - 20,155
Natural gas transition costs collectible 4,350 - 4,350
Prepaid expenses and other 5,285 - 5,285
41,812 350 42,162
DEFERRED CHARGES:
Regulatory assets -
Deferred taxes collectible 30,174 - 30,174
Natural gas transition costs
collectible 1,668 - 1,668
Other 3,062 - 3,062
Unamortized debt expense 1,564 (169) (5) 1,395
Other 3,218 - 3,218
39,686 (169) 39,517
NET ASSETS OF DISCONTINUED OPERATIONS 195,595 (195,595) (2e) -
TOTAL ASSETS $ 497,374 $ (195,414) $ 301,960
Page 10 of 15 Pages
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PG ENERGY INC.
Unaudited Pro Forma Balance Sheet
as of September 30, 1995
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<CAPTION>
Adjustments Pro Forma
Before Sale to Reflect After Sale
of Water Sale of Water of Water
Business Business (1) Business
(In thousands of dollars)
CAPITALIZATION AND LIABILITIES
<S> <C> <C> <C>
CAPITALIZATION:
Common shareholder's investment $ 207,613 $ (854) (2b) $
(85,000) (3a)
(1,800) (3b)
4,000 (3c)
(30,000) (3d)
(1,000) (3e)
(722) (4)
(99) (5)
(469) (6) 91,669
Preferred stock-
Not subject to mandatory redemption, net 33,615 (22,500) (3b)
(8,000) (3c)
1,247 (4) 4,362
Subject to mandatory redemption 1,680 - 1,680
Long-term debt 105,000 (50,000) (3f) 55,000
347,908 (195,197) 152,711
CURRENT LIABILITIES:
Current portion of long-term debt and
preferred stock subject to mandatory
redemption 57,491 - 57,491
Note payable to bank 5,000 - 5,000
Accounts payable -
Suppliers 13,682 - 13,682
Affiliates 1,498 - 1,498
Deferred cost of gas and suppliers
refunds, net 2,468 - 2,468
Accrued general business and realty taxes 808 - 808
Accrued income taxes 459 (525) (4)
(70) (5) (136)
Accrued interest 2,248 - 2,248
Accrued natural gas transition costs 2,158 - 2,158
Other 2,224 6,500 (2d)
(7,682) (3g)
780 (6) 1,822
88,036 (997) 87,039
DEFERRED CREDITS:
Deferred income taxes 47,878 1,091 (3h)
(311) (6) 48,658
Accrued natural gas transition costs 1,631 - 1,631
Unamortized investment tax credits 4,982 - 4,982
Operating reserves 2,236 - 2,236
Other 4,703 - 4,703
61,430 780 62,210
TOTAL CAPITALIZATION AND LIABILITIES $ 497,374 $ (195,414) $ 301,960
Page 11 of 15 Pages
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PG ENERGY INC.
Notes to Unaudited Pro Forma Balance Sheet
as of September 30, 1995
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<CAPTION>
<S> <S> <C> <C>
(1) Adjustments reflect the Sale of the Water Business as if it had taken place as of the
date of the balance sheet.
(2) Represents (a) receipt of cash proceeds of $256.3 million from the Sale of the Water
Business, (b) elimination from common shareholder's investment of the $854,000 of
estimated income from the Water Business during the period from October 1, 1995, to
December 31, 1995 (the estimated closing date as of September 30, 1995, for the Sale
of the Water Business), that was reflected as of September 30, 1995, as an offset
against the estimated loss on the Sale of the Water Business, (c) payment of the
estimated federal and state income tax liability of $55.1 million on the Sale of the
Water Business, (d) recording of the $6.5 million premium of the purchase price over
the book value of the assets acquired by PAWC as a credit to other current
liabilities, the account to which it was charged as of September 30, 1995, as an
offset against the liability for the estimated expenses on the Sale of the Water
Business and (e) elimination of the $195.6 million of net assets of the Water
Business.
(3) Reflects the application of the proceeds from the Sale of the Water Business of
$201.2 million, after the payment of the estimated federal and state income tax
liability of $55.1 million on the Sale of the Water Business, in the following
manner: (a) the repurchase (for an aggregate consideration of $85.0 million) of
2,297,297 shares of PGE Common Stock at an average price of $37.00 per share, (b) the
repurchase (for an aggregate consideration of $24.3 million) of 225,000 shares of
PGE's 9% Cumulative Preferred Stock (having an aggregate book value of $22.5 million)
at a price of $108.00 per share, which includes a premium of $8.00 per share
($1,800,000 in the aggregate), (c) the repurchase (for an aggregate consideration of
$4.0 million of 80,000 shares of PGE's 4.10% Cumulative Preferred Stock (having an
aggregate book value of $8.0 million) at a price of $50.00 per share, which reflects
a $4.0 million aggregate ($50.00 per share) discount from book value, (d) payment of
a $30.0 million common stock dividend by PGE to PEI, (e) payment of an estimated $1.0
million of costs in connection with the repurchase of shares of PGE's preferred
stock, (f) the repayment of the Bridge Loan, the proceeds of which were used to
redeem the $50.0 million principal amount of PGE's 9.57% Series First Mortgage Bonds
on October 13, 1995, (g) payment of transaction costs of $7.7 million relative to the
Sale of the Water Business, (h) recording of the $1.1 million net tax benefit
resulting from transaction costs and the premium over book value on the Sale of the
Water Business and (i) the addition of the remaining proceeds of $350,000 to PGE's
cash accounts.
(4) Reflects the write-off of $1.2 million ($722,000 after related income tax benefits of
$525,000) of issuance costs relative to the 225,000 shares of PGE's 9% Cumulative
Preferred Stock which PGE intends to repurchase with proceeds from the Sale of the
Water Business.
(5) Reflects the write-off of $169,000 ($99,000 after related income tax benefits of
$70,000) of issuance costs relating to PGE's 9.57% Series First Mortgage Bonds which
PGE redeemed on October 13, 1995, with proceeds from the Bridge Loan.
(6) Reflects the recording of $780,000 ($469,000 after related income tax benefits of
$311,000) of additional transaction costs relative to the Sale of the Water Business,
which were not reflected on the balance sheet of PGE as of September 30, 1995.
Page 12 of 15 Pages
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Item 7. Financial Statements and Exhibits.
<TABLE>
<CAPTION>
(c) Exhibits
<S> <S> <C> <C>
1. Asset Purchase Agreement, dated as of April 26, 1995, among PGE, PEI,
PAWC and AWWC was filed as Exhibit 2-1 to Pennsylvania Gas and Water
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1995, File No. 1-3490, and is incorporated herein by reference.
Page 13 of 15 Pages
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SIGNATURE
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<CAPTION>
<S> <S> <C> <C>
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.
Dated: February 28, 1996 PG ENERGY INC.
By: /s/ John F. Kell, Jr.
Name: John F. Kell, Jr.
Title: Vice President, Finance
Page 14 of 15 Pages
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<PAGE>
Index to Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
<S> <S> <C> <C>
2-1 Asset Purchase Agreement, dated as of April 26, 1995, among Pennsylvania
Gas and Water Company, Pennsylvania Enterprises, Inc., Pennsylvania-
American Water Company and American Water Works Company, Inc., filed as
Exhibit 2-1 to Pennsylvania Gas and Water Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995, File No. 1-3490.
Page 15 of 15 Pages
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