UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
October 15, 1999
(Date of earliest
event reported)
PECO ENERGY COMPANY
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-1401 23-0970240
(State or other (Commission (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
The matters discussed in this Report include forward-looking statements. The
Company's current expectations, anticipated plans and estimates set forth in
these statements are dependent on numerous factors which may change, including
transaction closing, plant operating conditions and cost structure. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date of this Report.
On October 15, 1999, the Vermont Yankee Nuclear Power Corporation (VYNPC),
owners of the Vermont Yankee Nuclear Power Station (Vermont Yankee), accepted a
bid for the plant from AmerGen Energy Company, L.L.C. (AmerGen), the joint
venture between PECO Energy Company (the Company) and British Energy. The
parties expect execution of a binding purchase and sale agreement to occur
within the next week.
According to the Agreement, and conditioned upon the receipt of necessary
regulatory approvals, at closing, AmerGen will pay $23.5 million to VYNPC for
Vermont Yankee. The purchase price of $23.5 million is based on a closing date
of July 1, 2000 and is subject to certain adjustments. Upon closing, AmerGen
will assume operating responsibility for Vermont Yankee.
Under the Agreement, AmerGen will offer employment to substantially all present
Vermont Yankee personnel employed at the time of ownership transfer and will
recognize the International Brotherhood of Electrical Workers Local 300 as the
bargaining agent for the transferred bargaining unit employees.
At closing, AmerGen will assume full responsibility for all future plant
operating and maintenance costs as well as the cost of decommissioning the
plant. As a condition of the sale, at closing, Vermont Yankee's owners will
transfer to AmerGen a decommissioning fund with a value of $313 million as of
July 1, 2000. Based on current fund return assumptions, the fund is expected to
grow to a level sufficient to decommission the plant at the expected end of
license life.
AmerGen will enter into a Power Purchase Agreement (PPA) with VYNPC under which
VYNPC will buy approximately 64% of the capacity, energy and ancillary products
of the Power Station through the end of its licensed life in 2012, and
approximately 36% of the capacity, energy and ancillary products of the Power
Station under a short-term PPA (61 months). The owners that select the
short-term PPA also have an option to buy out of the PPA.
Closing will be subject to, among other things, receipt of all necessary
federal, state and local regulatory approvals, including approvals from the U.S.
Nuclear Regulatory Commission, the Federal Energy Regulatory Commission, the
Securities and Exchange Commission and the Vermont Public Service Board.
Based on the terms of the Agreement, the Company expects the transaction to be
accretive to earnings.
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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\ Jean H. Gibson
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Vice President & Controller
October 19, 1999
