FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report: July 17, 1998
PECO ENERGY COMPANY
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-1401 23-0970240
(State or other (SEC (IRS Employer
jurisdiction of file number) Identification
incorporation) Number)
230l Market Street, Philadelphia, Pennsylvania 19101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(215) 841-4000
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Item 5. Other Events
On July 17, 1998, AmerGen Energy Company, LLC (AmerGen), the joint venture
between PECO Energy and British Energy, entered into a Letter of Intent to
purchase the Three Mile Island Unit 1 Nuclear Generating Station (TMI-1),
currently owned and operated by GPU Inc.'s electric operating subsidiaries -
Jersey Central Power & Light Company, Metropolitan Edison Company and
Pennsylvania Electric Company.
- Following execution of a Definitive Agreement and subject to regulatory
approval, at financial closing AmerGen will pay GPU $23.0 million for the
plant. For the nuclear fuel in the reactor, AmerGen will pay $77.6
million in five equal annual installments of $15.52 million beginning
December 31, 2000.
- GPU will provide sufficient funds to decommission the plant, at the
expected end of life on the basis of the currently approved
decommissioning cost estimates.
- GPU will make, at closing, additional deposits to decommissioning
trust funds so that at financial closing the qualified fund will have
a balance of $138 million and the non-qualified fund a balance of
$182 million.
- The parties prefer that GPU transfer the decommissioning funds to
AmerGen at closing so that responsibility and ownership of the funds
would be with the owner of TMI-1. This alternative may require
changes to current tax laws and regulations relating to such funds or
IRS rulings. The parties will work together to bring about such
changes and to obtain such rulings to accomplish the transfer of the
funds in the most efficient manner.
- If the decommissioning trust funds cannot be transferred to AmerGen,
GPU will manage the funds with AmerGen's concurrence to assure the
availability of sufficient funds to decommission TMI Unit 1 after the
end of its operations.
- Closing is anticipated in the fourth quarter of 1999.
- The Definitive Agreement will provide for GPU Energy's purchase of
capacity and energy from TMI-1 for the two-year period January 1, 2000
through December 31, 2001, assuming a financial closing on December 31,
1999.
- AmerGen expects to sell energy into the wholesale market beyond 2001.
- A price adjustment formula will allow GPU to share in market price
benefits for the period 2002 to 2010.
- The Definitive Agreement will contain provisions which make the financial
closing subject to, among other things, receipt of all necessary federal
and state regulatory approvals including approvals from the Nuclear
Regulatory Commission, the Federal Energy Regulatory Commission, the
Securities and Exchange Commission, the Pennsylvania Public Utility
Commission and the New Jersey Board of Public Utilities and appropriate
rulings from the Internal Revenue Service. In addition, the parties shall
make all necessary filings under the Hart-Scott-Rodino Antitrust
Improvements Act.
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- GPU shall continue to be the owner and licensee of Three Mile Island Unit
2 (TMI-2) and no responsibilities or liabilities relating to TMI-2 shall
be transferred to AmerGen. AmerGen will provide certain monitoring and
maintenance services for TMI-2 and will be compensated by GPU for such
services.
- AmerGen will employ all GPU nuclear employees located at TMI-1, except
those assigned to the dismantlement of TMI-2, at financial closing.
AmerGen will also have the opportunity to offer positions to GPU
Nuclear's Parsippany headquarters staff. AmerGen will accept the current
collective bargaining agreement covering TMI-1 union employees and will
recognize the union as the bargaining agent for these employees.
<PAGE>
SIGNATURES
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.
PECO ENERGY COMPANY
\S\ J. Barry Mitchell
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Vice President, Finance
and Treasurer
July 17, 1998
