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
August 8, 2000
(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 (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.
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 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 August 8, 2000, AmerGen Energy Company (AmerGen), the Company's joint venture
with British Energy plc, and GPU, Inc. (GPU), announced they have completed the
sale of GPU's Oyster Creek Nuclear Generating Facility (Oyster Creek) in Lacey
Township, NJ, to AmerGen for $10 million. The sale includes the 619-megawatt,
single unit boiling water reactor and adjacent former farm property. AmerGen now
holds the license for Oyster Creek's operation and has full responsibility and
authority over the nuclear station.
An agreement on the sale was reached in September, 1999. The U.S. Nuclear
Regulatory Commission approved transfer of the operating license to AmerGen on
June 6, 2000. The New Jersey Board of Public Utilities approved the sale on July
20, 2000.
"The sale of Oyster Creek is the final significant step in GPU's exiting the
merchant generation business," said Fred D. Hafer, chairman, president and chief
executive officer of GPU. "We are now sharply focused on the transmission and
distribution of electricity, as well as new, non-regulated businesses, which we
believe hold the key to our future growth."
The sale will provide the Oyster Creek employees with an opportunity to join an
organization that is becoming a major operator and owner of nuclear generating
facilities.
The purchase of Oyster Creek marks another acquisition in AmerGen's business
plan to become one of the nation's leading nuclear power generators. In 1999,
AmerGen purchased the Clinton Nuclear Power Station (Clinton) in Illinois and
Three Mile Island Unit No. 1 Nuclear Generating Facility (TMI) in Pennsylvania.
AmerGen also signed an asset purchase agreement for the Vermont Yankee Nuclear
Power Station in Vermont.
Gerald R. Rainey, AmerGen CEO, said, "We are pleased to be acquiring another
quality nuclear plant, and at the same time maintaining electric reliability,
jobs and economic benefits for New Jersey. Oyster Creek is a good fit for our
growing generation portfolio."
Dr. Robin Jeffrey, British Energy's executive director North America and
president of AmerGen, said, "The Oyster Creek acquisition demonstrates AmerGen's
ongoing commitment to developing a premier fleet of U.S. nuclear plants. This
transaction will help to secure the future of the facility and will provide
staff with an opportunity to be part of a company which has nuclear power
generation as a central part of its strategy."
With the transfer of ownership, Ronald J. DeGregorio, a veteran of PECO Nuclear
operations who led the AmerGen Oyster Creek Transition Team, became the plant's
site vice president. "This is an exciting day," he said. "We have a good plant,
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fine operating staff and the potential to be an excellent nuclear generator for
the next decade. Safety and reliable power production are the foundation of
AmerGen's operating principles."
The ownership transfer places Oyster Creek in a Mid-Atlantic Regional Operating
Group consisting of the Company's Limerick Generating Station and Peach Bottom
Atomic Power Station, and AmerGen's TMI, under the supervision of Joseph J.
Hagan, PECO Energy's senior vice president for Nuclear Operations.
The sale provides for AmerGen to assume full responsibility for the ultimate
decommissioning of Oyster Creek. At the closing of the sale, GPU provided
funding for the decommissioning trust of $440 million. The transaction will
reduce by more than $150 million the costs GPU customers would bear for
decommissioning and for other plant-related transitional costs if the plant were
shut down rather than sold to AmerGen.
GPU will purchase the electricity generated by Oyster Creek at a fixed price
through March, 2003. Also, GPU will fund outage costs, including the cost of
fuel, for a refueling outage scheduled for October, 2000. AmerGen will repay
these costs to GPU in nine equal annual installments beginning in August, 2001.
Based on the terms of the agreement, the Company estimates that this transaction
will result in a reduction to earnings per share of approximately $0.10 in 2000.
This acquisition is expected to be accretive to the Company's stand-alone
earnings by approximately $0.08-$0.10 per share for the years 2001-2003.
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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
---------------------------
Vice President & Controller
August 10, 2000
