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
September 14, 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. PECO
Energy Company's (the Company) current expectations, anticipated plans and
estimates set forth in these statements are dependent on numerous factors which
may change, including plant operating conditions, execution of a definitive
agreement and power market prices. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date of
this Report.
On September 14, 1999, GPU, Inc. (GPU) and AmerGen Energy Company (AmerGen), the
joint venture between the Company and British Energy, Inc. (British Energy),
announced that they have reached an agreement in principle for AmerGen to
acquire Oyster Creek Nuclear Generating Facility (Oyster Creek) in Lacey
Township, NJ, for $10 million. The Oyster Creek facility is a 619-megawatt,
single boiling water reactor with a license life expiring in April 2009.
AmerGen will assume full responsibility for the decommissioning of Oyster Creek.
At closing, anticipated in March 2000, GPU will provide approximately $430
million which is anticipated to be sufficient to decommission Oyster Creek at
the end of its expected license life based on the current estimates of the cost
to decommission the plant and the expected earning potential of the funds.
Under the agreement, GPU will fund, subject to certain limitations, Oyster
Creek's next refueling outage, scheduled to begin in September 2000. The cost of
the outage is currently estimated to approximate $84 million, including nuclear
fuel costs. AmerGen will reimburse GPU for the outage costs, subject to certain
limitations, in nine equal annual installments, commencing on the first
anniversary date of the transaction closing.
GPU will be responsible for severance payments to Oyster Creek employees for a
two-year period following closing and for benefits payable under GPU's
transition program. The agreement limits GPU's liability for benefits paid to
Oyster Creek employees.
AmerGen will adopt employee benefit plans that provide substantially similar
benefits to GPU's plans. AmerGen will also assume the collective bargaining
agreement covering the Oyster Creek union employees and will recognize the union
as the bargaining agent.
The agreement also calls for a power purchase agreement (PPA) under which GPU
will purchase 100% of Oyster Creek's energy output and capacity for three years
at a fixed price of $33.66/MWh, subject to certain seasonal adjustments.
Following the expiration of the PPA, AmerGen will sell all energy output and
capacity associated with Oyster Creek in the wholesale power market.
The transaction is subject to the negotiation of a definitive asset purchase
agreement which is expected by mid-October. The sale is subject to approval by
the Nuclear Regulatory Commission, the Federal Energy Regulatory Commission, the
New Jersey Board of Public Utilities, and the receipt of favorable Internal
Revenue Service rulings.
Based on the terms of the agreement in principle, the Company estimates that
this transaction will result in a reduction to earnings per share of $0.04 in
2000 and be accretive to earnings thereafter.
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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
September 16, 1999
