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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 9, 1998
NRG Generating (U.S.) Inc.
(Exact name of Registrant as Specified in Charter)
Delaware 1-9208 59-2076187
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification Number)
incorporation)
___________
1221 Nicollet Mall, Minneapolis, Minnesota 55403
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 373-8834
(Former name or former address, if changed since last report)
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ITEM 5. Other Events.
On March 9, 1998, NRG Generating (U.S.) Inc. (the "Company")
announced that it has received notice from PECO Energy, the producer of
electric power from the Grays Ferry Cogeneration Partnership, that PECO
Energy believes that the applicable power purchase agreements between
PECO Energy and the Grays Ferry Cogeneration Partnership are no longer
in effect. PECO Energy has claimed that recovery from its ratepayers of
the costs of its agreements with the Grays Ferry partnership is
precluded by recent Pennsylvania legislation and a recent order of the
Pennsylvania Public Utility Commission, and that this purported
circumstance has caused the power purchase agreements to no longer
remain in effect. PECO Energy has further taken the position that it is
willing to continue purchasing electricity from the 150MW cogeneration
project owned by the Grays Ferry partnership only at market-based rates,
and that it is obligated to pay for electricity already provided to PECO
Energy only at market-based rates. As a result, PECO Energy has paid
the Grays Ferry partnership an amount in response to its initial invoice
for electric power (for the January 1998 billing period) at
substantially less than the contracted.
The Grays Ferry project is a 150 MW natural gas-fired cogeneration
project located in Philadelphia, Pennsylvania. The Company, Trigen
Energy and an affiliate of PECO Energy each own one-third of the Grays
Ferry project through their respective subsidiaries. The Company
indicated in its announcement that its preliminary assessment was that
the Grays Ferry project would not generate cash flow sufficient to meet
its obligations on a continuing basis if the partnership were to sell
electric power at the rates PECO Energy proposed to pay.
In addition, the Company announced that its subsidiary, NRGG
(Schuylkill) Cogeneration Inc., had filed a lawsuit on March 9, 1998
against PECO Energy Company seeking to enjoin PECO Energy from
terminating its power purchase agreements with the Grays Ferry
Cogeneration Partnership and to compel PECO Energy to pay the
electricity rates set forth in the agreements. Also named as defendants
in the lawsuit are Adwin (Schuylkill) Cogeneration, Inc., which is an
indirect, wholly-owned subsidiary of PECO Energy and a one-third owner
of the Grays Ferry Cogeneration Partnership, and the Pennsylvania Public
Utility Commission. The Company's subsidiary has joined with the Grays
Ferry Cogeneration Partnership and two affiliates of Trigen Energy in
initiating the litigation. In addition to declaratory and injunctive
relief, the litigation seeks damages against PECO Energy to be proven at
trial in an amount in excess of $200 million, punitive damages and
attorneys' fees and costs. The lawsuit asserts claims against PECO
Energy and its affiliate which include breach of contract, breach of the
implied covenant of good faith and fair dealing, breach of fiduciary
duties and tortious interference with a long term contract which a
Trigen Energy affiliate has entered into for the sale of steam which is
to be produced predominantly by the Grays Ferry project. The lawsuit
was filed in the United States District Court for the Eastern District
of Pennsylvania. Among other things, this lawsuit seeks to establish,
as quickly and conclusively as possible, that PECO Energy's position is
groundless. The lawsuit further seeks to compel PECO Energy to take the
necessary actions before the Pennsylvania Public Utility Commission to
seek recovery of its costs under the power purchase agreements and seeks
a declaratory judgment that such costs are recoverable under applicable
law.
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The Company's statement of its preliminary assessment of the
ability of the Grays Ferry project to meet its continuing obligations if
it were to sell electric power at market-based rates is a forward-
looking statement within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which
involves risks and uncertainties, including the uncertainties inherent
in projecting many of the project's future costs and future market-based
rates for the purchase of electricity, which may vary due to regulatory
changes, changes in market conditions and other factors which are
outside the control of the Company.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
NRG GENERATING (US.) INC.
/s/ Timothy P. Hunstad
By: Timothy P. Hunstad
Vice President and Chief Executive Officer
Date: March 9, 1998
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