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) January 18, 1996
PUBLIC SERVICE COMPANY OF COLORADO
________________________________________
(exact name of registrant as specified in charter)
Colorado
____________________
(State or other jurisdiction
of incorporation)
1-3280 84-0296600
________________ _________________
(Commission File No.) (IRS Employer
Identification No.)
1225 Seventeenth Street, Denver, Colorado 80202
__________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 571-7511
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ITEM 5. Other Events
In April 1992, the Company acquired interests in the two
generating units at the Hayden Steam Electric Generating Station located
near Hayden, Colorado. The Company currently is the operator of the
Hayden station and owns an undivided interest in each of the two
generating units at the station which in total average approximately 53%.
On August 18, 1993, a conservation organization filed a
complaint in the U.S. District Court for the District of Colorado ("U.S.
District Court"), pursuant to Section 304 of the Federal Clean Air Act,
against the Company and the other joint owners of the Hayden station. The
plaintiff alleges that: 1) the station exceeded the 20% opacity
limitations in excess of 19,000 six-minute intervals during the period
extending from the last quarter of 1988 through mid-1993 based on the data
and reports obtained from the station's continuous opacity monitors
("COMs"), which measure average emission stream opacity in six-minute
intervals on a continuous basis, 2) the station was operated for over two
weeks in late 1992 without a functioning electrostatic precipitator which
constituted a "modification" of the station without the requisite permit
from the Colorado Department of Public Health and Environment, and 3) the
owners failed to operate the station in a manner consistent with good air
pollution control practices. The complaint seeks, among other things,
civil monetary penalties and injunctive relief. The joint owners of the
station contest all of these claims and contend that there were no
violations of the opacity limitation, because pursuant to the Colorado
state implementation plan ("SIP"), visual emissions are to be measured by
qualified personnel using the Environmental Protection Agency's ("EPA")
visual test known as "Method 9" and not by any measurements from the
station's COMs as alleged by the plaintiff.
Discovery was completed and oral arguments on summary judgment
motions were heard in mid-May 1995. On July 21, 1995, the U.S. District
Court entered partial summary judgment on liability issues in favor of the
plaintiff in regards to the claims described in items 1) and 3) above and
denied the plaintiff's motion in regards to the claims described in item
2) above. On July 31, 1995, the joint owners filed a petition for an
interlocutory appeal with the 10th Circuit Court of Appeals. On August
21, 1995, the joint owners' petition for permission to appeal was denied.
Subsequent to the denial of the joint owners' petition, the U.S. District
Court dismissed the plaintiffs claims described in item 2) above. The
joint owners are pursuing a settlement with the conservation organization,
the Colorado Department of Public Health and Environment and the EPA. If
settlement is not reached, court hearings for injunctive relief, scheduled
for May 1996, and the determination of penalties in connection with the
litigation, not yet scheduled, will be held. Further appeals could be
pursued by the joint owners if settlement is not achieved.
In December 1995, the conservation organization filed a motion
for summary judgment which would require the joint owners to come into
compliance with the opacity requirements identified in the August 1993
complaint within 60 days or submit a plan for the installation of
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additional pollution control equipment. On January 26, 1996, the joint
owners and the conservation organization reached an agreement providing
for a stay of such litigation for 30 days to allow the parties to
concentrate their efforts on settlement.
Additionally, the Company had received and responded to a
request from the EPA for information related to the plant and, on January
18, 1996, the EPA issued a notice of violation stating the plant had
exceeded the 20% opacity limitations in excess of 10,000 additional six-
minute intervals during the period extending from mid-1993 to mid-1995.
It is expected that the joint owners will be able to resolve the issues
related to this notice of violation as part of the settlement discussions
previously mentioned.
At this time, the Company is not able to estimate the amount,
if any, of its potential liability for penalties. The plaintiff has
requested, among other things, that the joint owners "pay to the EPA to
finance air compliance and enforcement activities, as provided for by 42
U.S.C. section 7604(g) (1), a penalty of $25,000 per day for each of their
violations of the Clean Air Act." The statute provides for penalties of up
to $25,000 per day per violation, but the level of penalties imposed in
any particular instance is discretionary. In setting penalties in its own
enforcement actions, the EPA relies, in part, on such factors as the
economic benefit of noncompliance, the actual or possible harm of
noncompliance, the size of the violator, the willfulness or negligence of
the violator and its degree of cooperation in resolving the matter. The
Company cannot predict the level of penalties, if any, or the remedies
that the court or the EPA may impose if settlement is not reached or if
the joint owners are unsuccessful in a subsequent appeal.
It is expected additional pollution control equipment and
practices will be required at the station. The additional equipment and
practices would be designed to address particulate matter, sulfur dioxide
and nitrogen oxide emission concerns raised by this litigation and by the
Mt. Zirkel Wilderness Area Reasonable Attribution Study previously
reported, which is not yet complete. The Company is evaluating the
economic impact of adding such pollution control equipment and practices
on future plant operations.
The Company believes that, consistent with historical
regulatory treatment, any costs for pollution control equipment to comply
with pollution control regulations would be recovered from its customers.
However, no assurance can be given that this practice will continue in the
future.
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SIGNATURE
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, thereunto duly authorized.
PUBLIC SERVICE COMPANY OF COLORADO
/s/ R. C. Kelly
_____________________________________
R. C. Kelly
Senior Vice President, Finance,
Treasurer and Chief Financial Officer
Dated: January 29, 1996
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