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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) September 30, 1999
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
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(Exact name of registrant as specified in its charter)
State of New Jersey 1-9120 22-2625848
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
80 Park Plaza, P.O. Box 1171
Newark, New Jersey 07101-1171
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 973-430-7000
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
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(Exact name of registrant as specified in its charter)
State of New Jersey 1-973 22-1212800
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
80 Park Plaza, P.O. Box 570
Newark, New Jersey 07101-0570
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 973-430-7000
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<PAGE>
Item 5. Other Events
The following information updates certain matters previously reported to
the Securities and Exchange Commission under Item 1 - Business and Item 3 -
Legal Proceedings of Part I and Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations (MD&A) and Item 8 - Financial
Statements and Supplementary Data of Part II of the Annual Reports on Form 10-K
for the year ended December 31, 1998, the Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1999 and June 30, 1999, and the Current Reports on Form
8-K filed March 18, 1999, April 26, 1999, July 21, 1999 and September 15, 1999
of Public Service Electric and Gas Company (PSE&G) and its parent, Public
Service Enterprise Group Incorporated (PSEG).
Energy Master Plan Proceedings
On August 24, 1999, the New Jersey Board of Public Utilities (BPU) issued a
Final Decision and Order (Final Order) in PSE&G's rate unbundling, stranded
costs and restructuring filings. On October 6, 1999, a Notice of Appeal was
filed with the Appellate Division of the New Jersey Superior Court on behalf of
the New Jersey Business Users (NJBUS) group. This filing appeals all issues in
these matters. PSE&G believes that NJBUS' contentions as contained in such
Notice of Appeal are without merit. PSE&G expects to file a motion with the
Court requesting expedited review of this matter.
PSEG and PSE&G can neither predict the outcome of this appeal nor whether
the appeal process itself will result in a material delay in the respective
schedules for implementing retail choice, the sale of securitization bonds and
receipt of proceeds or the transfer of PSE&G's generation-related assets to PSEG
Power LLC (PSEG Power). However, an extended appellate review and/or an
unfavorable outcome could have a material adverse impact on PSEG's and PSE&G's
financial condition, results of operations and net cash flows.
PSEG Power LLC to Purchase Conectiv's Nuclear Capacity
On September 30, 1999, PSEG Power, the newly formed wholesale energy and
trading subsidiary of PSEG, announced that it has signed an agreement to acquire
all of Conectiv's interests in the Salem Nuclear Generating Station (Salem) and
the Hope Creek Nuclear Generating Station (Hope Creek) and half of Conectiv's
interest in the Peach Bottom Atomic Power Station (Peach Bottom), for an
aggregate purchase price of $15.4 million plus the net book value of nuclear
fuel at closing.
PSEG Power will purchase Conectiv's 14.82% interest (328 megawatts) in
Salem, Conectiv's 5.0% interest (52 megawatts) in Hope Creek and half of
Conectiv's 15.02% interest (164 megawatts) in Peach Bottom. Once completed, PSEG
would own a 58% interest (1,270 megawatts) in Salem, a 100% interest (1,031
megawatts) in Hope Creek and a 50% interest (1,094 megawatts) in Peach Bottom.
The addition of the nuclear assets to PSEG Power's portfolio is in line
with its growth-oriented generation and trading strategy in the
Northeast/Mid-Atlantic region.
A copy of the news release issued jointly by Conectiv, PSEG Power and PECO
Energy Company (PECO Energy) on September 30, 1999 is filed as an exhibit to
this report and is incorporated by reference herein.
<PAGE>
PSEG Power LLC to Purchase Albany Steam Station from Niagara Mohawk
On October 6, 1999, PSEG Power announced an agreement with Niagara Mohawk,
a New York State utility, to purchase its 400 megawatt oil and gas-fired
electric generating station in Albany, New York (Albany Steam Station) for $47.5
million. Niagara Mohawk could also receive up to an additional $11.5 million if
PSEG Power chooses to pursue redevelopment of the Albany Steam Station. Under a
transition power contract in place through September 2003, Niagara Mohawk will
purchase electricity from PSEG Power at prices consistent with those established
in Niagara Mohawk's regulatory agreement with the New York Public Service
Commission. The purchase of the Albany Steam Station will provide PSEG Power
entry into the New York Power Pool.
A copy of the news release issued on October 6, 1999 is filed as an exhibit
to this report and is incorporated by reference herein.
Item 7. Financial Statements and Exhibits
Exhibit Designation Nature of Exhibit
99.1 Press Release dated September 30, 1999
99.2 Press Release dated October 6, 1999
#####
This report includes forward-looking statements. Although PSEG and its
subsidiaries believe that their expectations are based on reasonable
assumptions, they can give no assurance that these expectations will be
achieved. For further information, please refer to their reports filed with the
Securities and Exchange Commission. These documents address company business,
industry issues and other factors that could cause actual results to differ
materially from those indicated in this release.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned hereunto duly authorized.
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
(Registrant)
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(Registrant)
By: R. EDWIN SELOVER
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R. Edwin Selover
Vice President and General Counsel
Public Service Enterprise Group Incorporated
Senior Vice President and General Counsel
Public Service Electric and Gas Company
Date: October 14, 1999
EXHIBIT 99.1
September 30, 1999
For information, contact:
Conectiv: Mary Rucci, (302) 429-3334
PSEG Power: Kathy Ellis (973) 430-6618
PECO: Bill Jones (215) 841-4129
CONECTIV TO SELL INTERESTS IN NUCLEAR PLANTS TO PSEG POWER AND PECO ENERGY
Wilmington, De. - Conectiv (NYSE:CIV), an energy and vital services provider
serving the Mid-Atlantic region, today announced it has reached agreements to
sell ownership interests in three nuclear plants to PSEG Power LLC (PSEG Power)
and PECO Energy Company (PECO). The ownership interests will be sold for
approximately $20 million, plus reimbursement of actual fuel inventory at
closing, subject to receipt of various federal and state regulatory approvals.
All of Conectiv's nuclear interests will be sold as a result of the agreements:
o A 15-percent interest (328 megawatts) in the Peach Bottom Atomic Power
Station Units 2 and 3 will be sold in equal shares to co-owners PSEG and
PECO, each of which presently owns about 43%. PECO is the operator of that
facility.
o A 14.8-percent interest (328 megawatts) in the Salem Nuclear Generation
Station Units 1 and 2 will be sold to PSEG Power, a subsidiary of Public
Service Enterprise Group Incorporated (PSEG), which presently owns about
43% interest in and is operator of that facility.
o A five-percent interest (52 megawatts) in the Hope Creek Nuclear Generating
Station also will be sold to PSEG Power. PSEG presently owns the other 95
percent of Hope Creek and operates the facility.
According to the agreements, PSEG Power and PECO will assume full responsibility
for the ultimate decommissioning of Peach Bottom, Salem and Hope Creek. The
sales are expected to close by mid-2000.
"This sale moves Conectiv closer to its goal of focusing on a mid-merit
generation strategy," said Tom Shaw, Executive Vice President of Energy Supply,
who noted that the electricity produced from the three stations will continue to
be available for customers in the region that the companies serve. Shaw
continued, "A long-term benefit of these sales to Conectiv is reducing the
financial risk associated with a minority ownership in nuclear plants. As the
industry restructures, larger utilities strategically focused on nuclear
generation will be better positioned to assume these risks."
<PAGE>
Shaw noted that in keeping with its mid-merit generation strategy, Conectiv
plans to announce the buyers of its baseload fossil fuel plants later this year.
Conectiv is developing a generation portfolio of mid-merit plants that are able
to follow the market peaks, he noted, and recently announced its plans to build
a new 500-megawatt combustion turbine/combined cycle plant at its Hay Road/Edge
Moor complex in New Castle County, Delaware.
"This is one in a series of growth steps on the road to further positioning PSEG
Power as a player in the regional energy market," said Frank Cassidy, president
PSEG Power "The opportunities are out there and, as we did in this case, we
intend to evaluate and acquire additional generation that enhances our portfolio
and adds value to our bottom line."
Jerry Rainey, president of PECO Nuclear, said the purchase of 7.5 percent
ownership of Peach Bottom, bringing PECO Energy's ownership share to 50 percent,
fits well with the company's strategic business objective to increase its
nuclear generation portfolio. "Peach Bottom is an excellent, high capacity
plant," Rainey said. "We welcome ownership of the additional energy from the
facility."
Conectiv (NYSE:CIV) was formed in March 1998 through a merger involving Atlantic
Energy and Delmarva Power & Light Company. The company, headquartered in
Wilmington, DE, provides regulated electric and gas utility services and is also
engaged in telecommunications and other non-regulated activities. Conectiv
serves more than one million customers in New Jersey, Delaware, Maryland,
Virginia, and Pennsylvania.
PSEG Power LLC (PSEG Power) is a wholesale electric generation and trading
company operating in the northeastern United States. PSEG Power is an
unregulated subsidiary of PSEG (NYSE:PEG), a diversified energy company. At the
completion of this transaction, PSEG Power will own 10,816 megawatts of capacity
in the northeast. Other subsidiaries of PSEG include: PSE&G, a regulated gas and
electric delivery utility; PSEG Energy Technologies, an unregulated marketer of
energy and energy services; PSEG Resources, which makes passive, energy related
investments; and PSEG Global, which owns, develops and operates power plants and
electric distribution systems throughout the world.
PECO Energy (NYSE: PE) is an electric and gas utility serving 1.5 million
electric customers in the five-county Philadelphia area and 400,000 natural gas
customers in four suburban counties. It is one of the nation's largest nuclear
utilities, producing more than 33 billion kilowatt-hours of electricity in 1998
at its Limerick and Peach Bottom generating stations. PECO Energy has set new
nuclear performance standards in safety, availability and capacity factors,
efficient refueling outages, and low operating and maintenance costs.
PECO Energy also owns and operates coal, natural gas, oil, landfill gas and
hydro power plants. PECO Energy's Team operates a 24-hour energy trading floor
with transactions in 47 states and Canada.
Navigant Consulting, Inc. and Credit Suisse First Boston advised Conectiv on
the sale.
<PAGE>
Navigant Consulting, Inc./Reed Consulting Group (NYSE: NCI) is a global
management consulting firm that provides strategic, financial, management, and
expert services to energy-based, network, and other regulated industries.
In 1997, Reed Consulting Group merged with the Metzler Group, Inc., a
publicly-traded holding company for firms providing consulting services to
energy-related businesses. In 1999, the Metzler Group and its subsidiaries,
including Reed Consulting Group, became Navigant Consulting, Inc.
Credit Suisse First Boston, a leading global investment banking firm that
provides comprehensive financial advisory, capital raising, and financial
products for users and suppliers of capital around the world, is also advising
Conectiv in the sales process. The firm is wholly-owned by the Zurich,
Switzerland-based Credit Suisse Group.
#####
This news release includes forward-looking statements. Although PSEG and its
subsidiaries believe that their expectations are based on reasonable
assumptions, they can give no assurance that these expectations will be
achieved. For further information, please refer to their reports filed with the
Securities and Exchange Commission. These documents address company business,
industry issues and other factors that could cause actual results to differ
materially from those indicated in this release.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Statements in this press release regarding PSEG's business which are not
historical facts are "forward-looking statements" that involve risks and
uncertainties. For a discussion of such risks and uncertainties which could
cause actual results to differ from those contained in the forward-looking
statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for
the most recently ended fiscal year.
EXHIBIT 99.2
October 6, 1999
PSEG POWER LLC TO PURCHASE ALBANY STEAM STATION FROM NIAGARA MOHAWK
Second Acquisition Within a Week for the Newark-Based Power Company
NEWARK, N.J., Oct. 6 /PRNewswire/ -- PSEG Power today announced an agreement
with Niagara Mohawk (NYSE: NMK) to purchase the 400 megawatt Albany oil and
gas-fired electric generating station for $47.5 million. Niagara Mohawk could
also receive up to an additional $11.5 million if PSEG Power chooses to pursue
redevelopment of the Albany Steam Station.
Under a transition power contract in place through September 2003, Niagara
Mohawk will purchase electricity from PSEG Power at prices consistent with those
negotiated in its PowerChoice regulatory agreement.
As part of the agreement, PSEG Power will accept the current collective
bargaining agreement with the International Brotherhood of Electrical Workers
Local 97 and will offer to continue employment for employees at the Albany Steam
Station.
"The Purchase of the Albany plant, similar in design and operation to our own
Sewaren plant, gives PSEG Power its first entry into a new and important power
pool," said Frank Cassidy, president, PSEG Power. "Our plant operation and
electric trading experience will allow us to both maximize the operation of the
plant and participate in the ongoing development of the power pool (New York
Power Pool).
"We look forward to working with the employees as we integrate the Albany plant
into PSEG Power's portfolio and consider future expansion at the site," added
Cassidy.
"We're pleased that PSEG Power is the successful bidder," said William E. Davis,
Niagara Mohawk's chairman and chief executive officer. "We believe their
commitment to invest in the competitive electric generation business offers the
best opportunity for the Albany Steam Station to continue as a power producer,
employer and taxpayer."
The sale is subject to approval by the New York Public Service Commission and
various federal agencies. The parties expect to complete the transaction in the
first quarter of 2000.
Albany Steam Station is a 400-megawatt plant on the west shore of the Hudson
River in the town of Bethlehem, N.Y., three miles south of Albany. In operation
since 1952, the plant was originally built to burn coal. It was converted to oil
in 1970, and natural gas capability was added in 1981.
<PAGE>
Last November, Niagara Mohawk filed an application with the New York State Board
on Electric Generation Siting and the Environment to redevelop the Albany Steam
Station. Niagara Mohawk proposed to increase the plant's generating capacity to
750 megawatts, while substantially reducing air emissions and Hudson River water
usage. A "Certification of Completeness" of the application is currently pending
at the Siting Board. PSEG Power will consider continuation of the redevelopment
efforts.
The agreement to purchase the Albany Steam Station is the latest step in
positioning PSEG Power as a player in the regional energy market and follows
last week's purchase from Conectiv of 544 megawatts of capacity to add to the
10,272 PSEG Power already owned in the northeast. This purchase will increase
that capacity to 11,216 megawatts.
PSEG Power LLC (PSEG Power) is a wholesale electric generation and trading
company operating in the northeastern United States. PSEG Power is an
unregulated subsidiary of Public Service Enterprise Group Incorporated (PSEG)
(NYSE: PEG), a diversified energy company. At the completion of this
transaction, PSEG Power will own 11,216 megawatts of capacity in the northeast.
Other subsidiaries of PSEG include: Public Service Electric and Gas Company
(PSE&G), a regulated gas and electric delivery utility; PSEG Energy
Technologies, an unregulated marketer of energy and energy services; PSEG
Resources, which makes passive, energy related investments; and PSEG Global,
which owns, develops and operates power plants and electric and gas distribution
systems throughout the world.
SOURCE PSEG Power LLC
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"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Statements in this press release regarding PSEG's business which are not
historical facts are "forward-looking statements" that involve risks and
uncertainties. For a discussion of such risks and uncertainties, which could
cause actual results to differ from those contained in the forward-looking
statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for
the most recently ended fiscal year.
