SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
Form 10-Q
(x) Quarterly Report Pursuant to Section 13 OR 15 (d)
of The Securities Exchange Act of 1934
For Quarter ended March 31, 1995
( ) Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission Registrant; State of Incorporation; IRS Employer
File No. Address; and Telephone No. Identification No.
1-9760 Atlantic Energy, Inc. 22-2871471
(New Jersey)
6801 Black Horse Pike
Pleasantville, NJ 08232
(609) 645-4500
1-3559 Atlantic City Electric Company 21-0398280
(New Jersey)
P.O. Box 1264
6801 Black Horse Pike
Pleasantville, NJ 08232
(609) 645-4100
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuers'
classes of common stock, as of the latest practicable date:
Atlantic Energy, Inc. 52,739,385 (as of May 10, 1995)
All of the outstanding shares of Common Stock of Atlantic City
Electric Company are owned by Atlantic Energy, Inc.
Part I. Financial Information
Item 1. Financial Statements
CONSOLIDATED STATEMENT OF INCOME
Thousands of Dollars
Quarter and Year-to-Date
Ended March 31,
1995 1994
(unaudited)
Operating Revenues-Electric $218,626 $232,098
Operating Expenses:
Energy 47,225 55,432
Purchased Capacity 46,145 30,858
Operations 37,638 35,535
Maintenance 6,823 9,092
Depreciation and Amortization 19,457 18,321
State Excise Taxes 24,759 26,396
Federal Income Taxes 6,197 12,640
Other Taxes 2,798 4,112
Total Operating Expenses 191,042 192,386
Operating Income 27,584 39,712
Other Income:
Allowance for Equity Funds Used During
Construction 484 909
Other-Net 1,611 1,729
Total Other Income 2,095 2,638
Interest Charges:
Interest on Long Term Debt 14,597 15,879
Other Interest Expense 203 (75)
Total Interest Charges 14,800 15,804
Allowance for Borrowed Funds Used
During Construction (377) (625)
Net Interest Charges 14,423 15,179
Less Preferred Stock Dividend
Requirements of Subsidiary 3,787 4,309
Net Income $ 11,469 $ 22,862
Average Number of Shares of Common 53,475 53,743
Stock Outstanding (in thousands)
Per Common Share:
Earnings $ .21 $ .43
Dividends Declared $ .385 $ .385
Dividends Paid $ .385 $ .385
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
Thousands of Dollars
Quarter and Year-to-Date
Ended March 31,
1995 1994
(unaudited)
Cash Flows Of Operating Activities:
Net Income $ 11,469 $ 22,862
Deferred Purchased Power Costs 3,921 3,645
Deferred Energy Costs (362) (6,266)
Preferred Stock Dividend Requirements
of Subsidiary 3,787 4,309
Depreciation and Amortization 19,457 18,321
Deferred Income Taxes-Net 1,582 16,123
Prepaid State Excise Taxes (73,958) (111,114)
Employee Separation Costs (6,779) -
Net Increase in Other Working Capital (12,526) (35,591)
Other-Net (595) (1,031)
Net Cash Used in Operating Activities (54,004) (88,742)
Cash Flows Of Investing Activities:
Utility Cash Construction Expenditures (19,502) (22,332)
Leased Property (1,623) (1,308)
Nuclear Decommissioning Trust Fund
Deposits (1,606) (1,606)
Other-Net 891 (1,099)
Net Cash Used in Investing Activities (21,840) (26,345)
Cash Flows Of Financing Activities:
Proceeds from Long Term Debt 14,900 -
Increase in Short Term Debt 101,550 72,900
Proceeds from Common Stock Issued - 3,348
Repurchases of Common Stock (18,381) -
Dividends Declared on Preferred Stock (3,787) (4,309)
Dividends Declared on Common Stock (20,391) (16,990)
Other-Net 1,425 1,236
Net Cash Provided by Financing
Activities 75,316 56,185
Net Decrease in Cash and Temporary
Investments (528) (58,902)
Cash and Temporary Investments,
beginning of period 5,114 73,635
Cash and Temporary Investments,
end of period $ 4,586 $ 14,733
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
CONSOLIDATED BALANCE SHEET
Thousands of Dollars
March 31, December 31,
1995 1994
(unaudited)
ASSETS
Electric Utility Plant:
In Service $2,369,792 $2,348,873
Less Accumulated Depreciation 742,229 725,999
Net 1,627,563 1,622,874
Construction Work in Progress 106,636 110,078
Land Held for Future Use 6,941 6,941
Leased Property-Net 40,174 42,030
Electric Utility Plant-Net 1,781,314 1,781,923
Investments and Nonutility Property:
Investment in Leveraged Leases 78,429 78,216
Nuclear Decommissioning Trust Fund 54,306 52,004
Nonutility Property and Equipment-Net 18,870 18,163
Other Investments and Funds 29,907 28,940
Total Investments and Non-
Utility Property 181,512 177,323
Current Assets:
Cash and Temporary Investments 4,586 5,114
Accounts Receivable:
Utility Service 55,677 54,554
Miscellaneous 12,874 14,067
Allowance for Doubtful Accounts (3,300) (3,300)
Unbilled Revenues 29,513 32,070
Fuel (at average cost) 23,857 28,030
Materials and Supplies (at average cost) 27,209 27,823
Working Funds 14,695 14,475
Deferred Energy Costs 11,361 10,999
Deferred Income Taxes 11,589 12,264
Prepaid State Excise Tax 81,635 5,287
Other 5,921 6,596
Total Current Assets 275,617 207,979
Deferred Debits:
Unrecovered Purchased Power Costs 111,617 115,538
Recoverable Future Federal Income Taxes 85,854 85,854
Unrecovered State Excise Taxes 71,444 73,834
Unamortized Debt Costs 37,296 38,184
Other Regulatory Assets 50,729 47,055
Other 16,135 17,865
Total Deferred Debits 373,075 378,330
Total Assets $2,611,518 $2,545,555
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
CONSOLIDATED BALANCE SHEET
Thousands of Dollars
March 31, December 31,
1995 1994
(unaudited)
LIABILITIES AND CAPITALIZATION
Capitalization:
Common Shareholders' Equity:
Common Stock $ 575,108 $ 593,475
Retained Earnings 240,192 249,181
Total Common Shareholders' Equity 815,300 842,656
Preferred Stock of Atlantic Electric:
Not Subject to Mandatory Redemption 40,000 40,000
Subject to Mandatory Redemption 149,250 149,250
Long Term Debt 766,071 778,288
Total Capitalization
(excluding current portion) 1,770,621 1,810,194
Current Liabilities:
Cumulative Preferred Stock Redemption
Requirement 12,250 12,250
Long Term Debt - Current Portion 28,147 1,000
Short Term Debt 110,150 8,600
Accounts Payable 51,150 66,080
Taxes Accrued 13,482 10,409
Interest Accrued 15,506 19,168
Dividends Declared 24,245 24,681
Accrued Employee Separation Costs 19,821 26,600
Other 15,388 19,813
Total Current Liabilities 290,139 188,601
Deferred Credits and Other Liabilities:
Deferred Income Taxes 414,115 412,574
Deferred Investment Tax Credits 51,013 51,646
Capital Lease Obligations 39,240 41,111
Other 46,390 41,429
Total Deferred Credits and
Other Liabilities 550,758 546,760
Total Liabilities and Capitalization $2,611,518 $2,545,555
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1. Atlantic Energy, Inc. (the Company or AEI) is a public
utility holding company. Its principal subsidiary is
Atlantic City Electric Company (ACE), an electric utility.
On January 1, 1995, AEI transferred direct ownership of its
nonutility companies to a new subsidiary, Atlantic Energy
Enterprises, Inc. (AEE). AEE will serve as the holding
company for the following nonutility companies: Atlantic
Generation, Inc. (AGI), ATE Investment, Inc. (ATE), Atlantic
Southern Properties, Inc. (ASP), Atlantic Energy Technology,
Inc. (AET), and Atlantic Thermal Systems, Inc., (ATS). The
consolidated financial statements include the accounts of
the Company and its subsidiaries, all of which are wholly-
owned. All significant intercompany accounts and
transactions have been eliminated in consolidation. The
results of operations of the nonutility companies are not
significant and are classified under Other Income in the
Consolidated Statement of Income. These consolidated
financial statements reflect all normal, recurring
adjustments and accruals which, in the opinion of
management, are necessary for a fair presentation of the
consolidated financial statements presented. The notes to
the consolidated financial statements accompanying the
Company's 1994 Annual Report to Shareholders and on Form
10-K filed with the Securities and Exchange Commission
should be read in conjunction with this report. Note 1 of
these annual reports specifically identifies the significant
accounting policies of the Company. The consolidated
balance sheet contained in the financial statements
presented herein that is labeled December 31, 1994 was
derived from the audited consolidated balance sheet
presented in the 1994 Annual Report to Shareholders and Form
10-K. Certain prior year amounts have been reclassified to
conform to the current year reporting.
2. Components of Federal Income Tax expense are as follows (in
thousands of dollars):
Quarter and Year-to-Date
Ended March 31,
1995 1994
(unaudited)
Current $ 5,151 $(3,123)
Deferred 1,534 16,086
Total Federal Income Tax Expense 6,685 12,963
Less Amounts Included in Other Income 488 323
Federal Income Taxes Included
in Operating Expenses $ 6,197 $12,640
A reconciliation of the expected Federal income taxes
compared to the reported Federal Income Tax expense computed
by applying the statutory rate follows:
Tax Computed at the Statutory Rate
of 35% $ 7,680 $14,047
Utility Plant Basis Differences 362 1,110
Investment Tax Credits (637) (634)
Other-Net (720) (1,560)
Total Federal Income Tax Expense $ 6,685 $12,963
Effective Federal Income Tax Rate 30% 32%
The Internal Revenue Service has proposed certain adjustments in
taxes for 1984 through 1986 which would increase the Federal
income tax liability by approximately $5 million. The Company is
protesting certain of the proposed adjustments, and in the
opinion of management, the ultimate outcome will not have a
material effect on the Company's financial position.
3. On April 17, 1995, ACE filed a petition with the New Jersey
Board of Public Utilities (BPU) requesting a $37.0 million
increase in annual levelized energy clause (LEC) revenues.
The petition requests that the proposed LEC rates be made
effective for service rendered on and after June 1, 1995.
The requested LEC increase is due primarily to increased
costs associated with the purchase of energy and capacity
from Independent Power Producers (IPP's). ACE has BPU
approved contracts with four IPP's. This LEC request
represents the first filing that includes a full year of
contract costs for all four IPP's. Though ACE's petition
supports a $67.6 million increase in LEC revenues, ACE has
voluntarily reduced its request by $30.6 million in order to
keep its rates competitive. This reduction was accomplished
by offering to forego the recovery of $10 million in LEC
revenues under the Southern New Jersey Economic Initiative
tariff rider and to defer recovery of $20.6 million of LEC
costs. ACE will seek full recovery of the $20.6 million
deferred LEC costs in its next LEC filing.
On November 1, 1994, ACE filed a Motion with the BPU for
reconsideration of its order in the matter of the Generic
Proceeding on the double recovery of Capacity Costs. By its
order the BPU found that the Ratepayer Advocate had reserved
its right to argue for an adjustment to the LEC rates
approved in the 1992,1993 and 1994 LEC proceedings. ACE's
Motion argues that the Stipulation settling the 1992 LEC and
the BPU's order approving that Stipulation did not include
language granting such rights to the Ratepayer Advocate. On
March 22, 1995, ACE's Motion was denied by the BPU on the
grounds that this issue was previously addressed in its
initial order. At this time ACE has not determined if it
will appeal the BPU's decision in this matter. As to the
Generic Proceeding, evidentiary hearings are scheduled
throughout 1995 and a final decision is expected in 1996.
ACE cannot predict the outcome of that decision at this
time.
4. At March 31, 1995, ACE had outstanding $110.2 million of
short term debt with maturities of one to four months.
ACE's Cumulative Preferred Stock and long term debt
securities are not widely held and generally trade
infrequently. Their estimated aggregate fair market values
at March 31, 1995 is approximately $193 million and $725
million, respectively. At March 31, 1995, ATE had
outstanding $14.9 million from its revolving credit and term
loan facility. The estimated aggregate fair market value at
March 31, 1995 of ATE's Senior Notes was approximately $15
million.
5. As of March 31, 1995 and December 31, 1994, 53,138,311 and
54,155,245 shares of common stock were outstanding,
respectively. During the first quarter of 1995, the Company
reacquired and retired 1,018,600 shares of its common stock.
The prices paid for these shares ranged from $17.625 to
$18.875 per share, for a total cost of $18.4 million.
Funding for the stock acquisition has been provided in part
by advances in the form of notes payable from subsidiary
companies. As of March 31, 1995 notes payable from
subsidiaries amounted to $12.0 million. Shares issued
during 1995 were through the Company's Equity Incentive
Plan.<PAGE>
CONSOLIDATED STATEMENT OF INCOME
Thousands of Dollars
Quarter and Year-to-Date
Ended March 31,
1995 1994
(unaudited)
Operating Revenues-Electric $218,666 $232,134
Operating Expenses:
Energy 47,225 55,432
Purchased Capacity 46,145 30,858
Operations 37,690 35,681
Maintenance 6,830 9,114
Depreciation and Amortization 19,457 18,321
State Excise Taxes 24,759 26,396
Federal Income Taxes 6,197 12,640
Other Taxes 2,798 4,112
Total Operating Expenses 191,101 192,554
Operating Income 27,565 39,580
Other Income:
Allowance for Equity Funds Used During
Construction 484 909
Miscellaneous Income-Net 2,153 1,820
Total Other Income 2,637 2,729
Interest Charges:
Interest on Long Term Debt 14,597 15,879
Other Interest Expense 203 (75)
Total Interest Charges 14,800 15,804
Allowance for Borrowed Funds Used
During Construction (377) (625)
Net Interest Charges 14,423 15,179
Net Income 15,779 27,130
Less Preferred Dividend Requirements 3,787 4,309
Balance Available for Common Shareholder $ 11,992 $ 22,821
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
Thousands of Dollars
Quarter and Year-to-Date
Ended March 31,
1995 1994
(unaudited)
Cash Flows Of Operating Activities:
Net Income $ 15,779 $ 27,130
Deferred Purchased Power Costs 3,921 3,645
Deferred Energy Costs (362) (6,266)
Depreciation and Amortization 19,457 18,321
Deferred Federal Income Taxes-Net 833 15,600
Prepaid State Excise Taxes (73,958) (111,114)
Employee Separation Costs (6,779) -
Net Increase in Other Working Capital (12,533) (36,640)
Other-Net 666 (455)
Net Cash Used in Operating Activities (52,976) (89,779)
Cash Flows Of Investing Activities:
Cash Construction Expenditures (19,502) (22,332)
Leased Property (1,624) (1,308)
Nuclear Decommissioning Trust Fund
Deposits (1,606) (1,606)
Notes Receivable - Affiliates (6,685) -
Other-Net 2,452 (1,073)
Net Cash Used in Investing Activities (26,965) (26,319)
Cash Flows Of Financing Activities:
Increase in Short Term Debt 101,550 72,900
Capital Contributions 328 19,000
Dividends Declared on Preferred Stock (3,787) (4,309)
Dividends Declared on Common Stock (20,458) (20,729)
Other-Net 1,478 1,236
Net Cash Provided by Financing Activities 79,111 68,098
Net Decrease in Cash and
Temporary Investments (830) (48,000)
Cash and Temporary Investments,
beginning of period 3,459 60,243
Cash and Temporary Investments,
end of period $ 2,629 $ 12,243
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
CONSOLIDATED BALANCE SHEET
Thousands of Dollars
March 31, December 31,
1995 1994
(unaudited)
ASSETS
Electric Utility Plant:
In Service $2,369,792 $2,348,873
Less Accumulated Depreciation 742,229 725,999
Net 1,627,563 1,622,874
Construction Work in Progress 106,636 110,078
Land Held for Future Use 6,941 6,941
Leased Property-Net 40,174 42,030
Electric Utility Plant-Net 1,781,314 1,781,923
Investments and Nonutility Property
Nuclear Decommissioning Trust Fund 54,306 52,004
Other Property, Investments and Funds 1,883 3,139
Total Investments and Nonutility
Property 56,189 55,143
Current Assets:
Cash and Temporary Investments 2,629 3,459
Accounts Receivable:
Utility Service 55,677 54,554
Miscellaneous 14,964 15,804
Allowance for Doubtful Accounts (3,300) (3,300)
Unbilled Revenues 29,513 32,070
Fuel (at average cost) 23,857 28,030
Materials and Supplies (at average cost) 27,209 27,823
Working Funds 14,695 14,475
Deferred Energy Costs 11,361 10,999
Deferred Income Taxes 11,484 12,141
Prepaid State Excise Taxes 81,635 5,287
Notes Receivable from Affiliates 6,685 -
Other 4,914 6,473
Total Current Assets 281,323 207,815
Deferred Debits:
Unrecovered Purchased Power Costs 111,617 115,538
Recoverable Future Federal Income Taxes 85,854 85,854
Unrecovered State Excise Taxes 71,444 73,834
Unamortized Debt Costs 37,201 38,083
Other Regulatory Assets 50,729 47,055
Other 14,713 16,071
Total Deferred Debits 371,558 376,435
Total Assets $2,490,384 $2,421,316
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
CONSOLIDATED BALANCE SHEET
Thousands of Dollars
March 31, December 31,
1995 1994
(unaudited)
LIABILITIES AND CAPITALIZATION
Capitalization:
Common Shareholder's Equity:
Common Stock $ 54,963 $ 54,963
Premium on Capital Stock 231,081 231,081
Contributed Capital 263,077 262,749
Capital Stock Expense (2,300) (2,300)
Retained Earnings 241,301 249,767
Total Common Shareholder's Equity 788,122 796,260
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption 40,000 40,000
Subject to Mandatory Redemption 149,250 149,250
Long Term Debt 751,071 763,288
Total Capitalization
(excluding current portion) 1,728,443 1,748,798
Current Liabilities:
Cumulative Preferred Stock Redemption
Requirement 12,250 12,250
Long Term Debt - Current Portion 12,247 -
Short Term Debt 110,150 8,600
Accounts Payable 51,098 65,632
Federal Income Taxes Payable-Affiliate 10,960 9,537
Other Taxes Accrued 4,404 3,490
Interest Accrued 15,108 19,048
Dividends Declared 24,245 24,681
Accrued Employee Separation Costs 19,821 26,600
Other 14,791 19,134
Total Current Liabilities 275,074 188,972
Deferred Credits and Other Liabilities:
Deferred Income Taxes 351,506 350,697
Deferred Investment Tax Credits 51,013 51,646
Capital Lease Obligations 39,228 41,102
Other 45,120 40,101
Total Deferred Credits and
Other Liabilities 486,867 483,546
Total Liabilities and Capitalization $2,490,384 $2,421,316
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1. Atlantic City Electric Company (the Company) is a wholly-
owned subsidiary of Atlantic Energy, Inc. The consolidated
financial statements include the accounts of the Company and
its subsidiary, which is wholly-owned. All significant
intercompany accounts and transactions have been eliminated
in consolidation. These consolidated financial statements
reflect all normal, recurring adjustments and accruals
which, in the opinion of management, are necessary for a
fair presentation of the consolidated financial statements
presented. The notes to the consolidated financial
statements accompanying the Company's 1994 Annual Report on
Form 10-K filed with the Securities and Exchange Commission
should be read in conjunction with this report. Note 1 of
these annual reports specifically identifies the significant
accounting policies of the Company. The consolidated
balance sheet contained in the financial statements
presented herein that is labeled December 31, 1994 was
derived from the audited consolidated balance sheet
presented in the 1994 Form 10-K. Certain prior year amounts
have been reclassified to conform to the current year
reporting.
2. The components of Federal Income Tax expense are as follows
(in thousands of dollars):
Quarter and Year-to-Date
Ended March 31,
1995 1994
(unaudited)
Current $ 6,071 $(2,541)
Deferred 833 15,600
Total Federal Income Tax Expense 6,904 13,059
Less Amounts Included in Other Income 707 419
Federal Income Taxes Included
in Operating Expenses $ 6,197 $12,640
A reconciliation of the expected Federal income taxes
compared to the reported Federal Income Tax expense computed
by applying the statutory rate follows:
Tax Computed at the Statutory Rate
of 35% $ 7,939 $14,067
Utility Plant Basis Differences 362 1,110
Investment Tax Credits (634) (634)
Other-Net (763) (1,484)
Total Federal Income Tax Expense $ 6,904 $13,059
Effective Federal Income Tax Rate 30% 32%
<PAGE>
The Internal Revenue Service has proposed certain adjustments in
taxes for 1984 through 1986 which would increase the Federal
income tax liability by approximately $5 million. The Company is
protesting certain of the proposed adjustments, and in the
opinion of management, the ultimate outcome will not have a
material effect on the Company's financial position.
3. On April 17, 1995, the Company filed a petition with the New
Jersey Board of Public Utilities (BPU) requesting a $37.0
million increase in annual levelized energy clause (LEC)
revenues. The petition requests that the proposed LEC rates
be made effective for service rendered on and after June 1,
1995. The requested LEC increase is due primarily to
increased costs associated with the purchase of energy and
capacity from Independent Power Producers (IPP's). The
Company has BPU approved contracts with four IPP's. This
LEC request represents the first filing that includes a full
year of contract costs for all four IPP's. Though the
Company's petition supports a $67.6 million increase in LEC
revenues, the Company has voluntarily reduced its request by
$30.6 million in order to keep its rates competitive. This
reduction was accomplished by offering to forego the
recovery of $10 million in LEC revenues under the Southern
New Jersey Economic Initiative tariff rider and to defer
recovery of $20.6 million of LEC costs. The Company will
seek full recovery of the $20.6 million deferred LEC costs
in its next LEC filing.
On November 1, 1994, the Company filed a Motion with the BPU
for reconsideration of its order in the matter of the
Generic Proceeding on the double recovery of Capacity Costs.
By its order the BPU found that the Ratepayer Advocate had
reserved its right to argue for an adjustment to the LEC
rates approved in the 1992,1993 and 1994 LEC proceedings.
The Company's Motion argues that the Stipulation settling
the 1992 LEC and the BPU's order approving that Stipulation
did not include language granting such rights to the
Ratepayer Advocate. On March 22, 1995, the Company's Motion
was denied by the BPU on the grounds that this issue was
previously addressed in its initial order. At this time the
Company has not determined if it will appeal the BPU's
decision in this matter. As to the Generic Proceeding,
evidentiary hearings are scheduled throughout 1995 and a
final decision is expected in 1996. The Company cannot
predict the outcome of that decision at this time.
4. At March 31, 1995, the Company had outstanding $110.2
million of short term debt with maturities of one to four
months. The Company's Cumulative Preferred Stock and long
term debt securities are not widely held and generally trade
infrequently. Their estimated aggregate fair market values
at March 31, 1995 is approximately $193 million and $725
million, respectively.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (unaudited)
The following is management's discussion and analysis of
significant factors which affected the Company's interim
financial condition and results of operations. To properly
assess and evaluate the Company's performance one should read, in
conjunction with this report, the Management's Discussion and
Analysis of Financial Condition and Results of Operations
included in the Company's 1994 Annual Report to Shareholders
(pages 25-33). ACE is the principal subsidiary of the Company
and the following discussion focuses primarily on ACE.
LIQUIDITY AND CAPITAL RESOURCES
The operating needs of the Company, representing those of the
consolidated group, are dependent upon the results of its
subsidiaries, principally those of ACE.
The Company reacquired and retired 1,018,600 shares of its common
stock during the first quarter of 1995 for a total cost of $18.4
million. Funding for the stock acquisition has been provided in
part by notes payable from its subsidiary companies. As of March
31, 1995 notes payables by AEI to subsidiaries amounted to $12.0
million.
In the first quarter of 1995, ACE issued $101.6 million in short
term debt, all of which consisted of notes payable to banks.
Proceeds were largely used for the remittance of the annual state
excise tax payment as discussed below. During the same period
ATE increased the debt outstanding from its revolving credit and
term loan facility by $13.9 million to $14.9 million. Proceeds
were used to support the activities of affiliated companies.
In March 1995, ACE made its annual payment to the State of New
Jersey in the amount of $98.7 million for state excise taxes.
This payment was responsible for causing a net cash usage in
operating activities, as indicated on the Consolidated Statement
of Cash Flows.
RESULTS OF OPERATIONS
Net income and earnings per share decreased for the quarter and
year-to-date ended March 31, 1995 by 49.8% and 51.2%,
respectively. The decrease in year-to-date net income is
primarily due to the decline in sales of electricity when
compared to the same period of 1994. ACE's Southern New Jersey
Economic Initiative has also contributed to the reduction in the
current year earnings because recovery of otherwise eligible
energy costs were foregone.
<PAGE>
Significant factors contributing to these changes are
explained below. Unless otherwise specified, changes are in
terms of the current year period compared to the corresponding
prior year period.
Utility Revenues
Changes in Operating Revenues-Electric are disclosed in the
following table:
Quarter and Year-To-Date
Ended March 31, 1995
(Thousands of Dollars)
Base Revenues $ (1,263)
Levelized Energy Clauses 13,521
Kilowatt-hour Sales (19,365)
Unbilled Revenues 5,654
Sales for Resale (12,056)
Other Revenues 37
Total $(13,472)
Levelized Energy Clause (LEC) Revenues for the period increased
due to rate increases in July 1994 of $55 million on an annual
basis. Changes in Kilowatt-hour Sales are explained in the
following section 'Billed Sales to Ultimate Utility Customers'.
The changes in Unbilled Revenues are a result of the amount of
kilowatt-hours consumed but not yet billed by ultimate customers
at the end of the respective periods, which are affected by
weather and economic conditions and the corresponding price per
kilowatt-hour. The changes in Sales for Resale to wholesale
customers are a function of ACE's energy mix strategy, which in
turn is dependent upon ACE's needs for energy, the energy needs
of other utilities participating in the regional power pool of
which ACE is a member, and the sources and prices of energy
available. The drop in Sales for Resale reflects the decrease in
the demands of the regional power pool due to the mild winter
conditions during the current year when compared to the extreme
weather conditions of 1994.
Billed Sales to Ultimate Utility Customers
Changes in billed kilowatt-hour sales are generally due to
changes in the average number of customers and average customer
use, which is affected by economic and weather conditions.
Energy sales statistics, stated as percentage changes from the
corresponding periods of the prior year, are shown below.
Quarter and Year-To-Date
Ended March 31, 1995
Average
Customer Class Sales Cust Use
Residential (12.7)% 1.2% (13.7)%
Commercial (3.2) 1.9 ( 5.0)
Industrial (11.4) 1.3 (12.6)
Total ( 9.0) 1.3 (10.1)
<PAGE>
The large decreases in Residential sales and average use for the
period is due to significantly above normal temperatures
experienced in the current period in contrast to the well below
normal temperatures in the same period of 1994. Commercial sales
also decreased due to the temperature contrast noted above.
Approximately one-half of the increase in the number of
commercial customers is due to the continuing popularity of ACE's
night lighting programs. Industrial sales were down primarily as
a result of a former customer taking energy service from an
independent power producer.
Expenses
Total Operating Expenses for the current period decreased by
0.7%. Excluding depreciation and taxes, Total Operating Expenses
increased by 5.3%.
Energy expense reflects the amount of energy needed to meet load
requirements, as well as the various fuel and purchased energy
sources used and the operation of the LEC. Changes in costs
reflect the varying availability of low-cost generation from ACE-
owned and purchased energy sources and in the unit prices of the
energy sources used, as well as changes in the needs of other
utilities participating in the regional power pool. The cost of
energy is recovered from customers primarily through the
operation of the LEC. Until 1994, earnings were generally not
affected by Energy costs because these costs are adjusted to
match the associated LEC revenues. In any period, the actual
amount of LEC revenue recovered from customers will be greater or
less than the actual amount of energy cost incurred and eligible
for recovery in that period. Such respective overrecovery or
underrecovery of energy costs is recorded on the consolidated
balance sheet as a liability or asset as appropriate. Amounts in
the balance sheet are recognized in the consolidated statement of
income within Energy expense during the period in which they are
subsequently recovered through the LECs. ACE was underrecovered
by $11.4 million at March 31, 1995 as compared to $11 million at
December 31, 1994.
Energy expense decreased by 14.8% for the current period.
Production-related energy costs decreased by 22.1% mostly due to
the reduction in the generation of ACE's wholly-owned stations
because of the extreme mild weather conditions in 1995 compared
to 1994. This decrease was offset by the effects of ACE's
Southern New Jersey Economic Initiative which foregoes recovery
of otherwise eligible energy costs. The Southern New Jersey
Economic Initiative reduced after tax income by $5.0 million in
the first quarter of 1995.
Purchased Capacity expense reflects contract payments for
generating capacity owned by others. The 49.5% increase in
Purchased Capacity expense reflects the current period charges
for capacity supplied by a cogeneration facility which became
operational in the last quarter of 1994.
Sources of Energy by Fuel Source for the current period are as
follows:
Quarter and Year-to-Date
Ended March 31, 1995
Coal 36%
Nuclear 24
Interchanged and Purchased 16
Nonutility Purchased 23
Oil and Natural Gas 1
Total 100%
Operations expense increased 5.5% due to the annual billing for
the settlement of prior year administrative and general costs
from ACE's jointly owned nuclear facilities. The 1994 settlement
of this annual billing resulted in a reduction in Operations
expense.
Maintenance expense decreased 25.1% for the period from the
previous year due to cost saving measures in maintenance
activities.
The 6.2% increase in Depreciation Expense is the result of an
increase in ACE's electric plant in service.
The decrease in State Excise Tax Expense of 6.2% from the
previous year reflects the decrease in energy sales for the
current period.
Federal Income Tax Expense decreased 51% due to the reduction in
pretax income for the current quarter.
In December 1994, ACE recorded the expected costs for a voluntary
employee separation program. A total of 319 ACE employees
volunteered for the separation package. A majority of the
employee separations occurred as of March 1, 1995, with the
remaining separations to take place by December 1995. The
balance of the accrued separation costs on the Consolidated
Balance Sheet at March 31, 1995 is $19.8 million compared to
$26.6 million at December 31, 1994. Settlement of this
obligation is not expected to be completed until the latter part
of 1996.
<PAGE>
NONUTILITY ACTIVITIES
On January 1, 1995, AEI transferred direct ownership of its
nonutility companies to a new subsidiary, Atlantic Energy
Enterprises, Inc. (AEE). AEE will serve as the holding company
for all of the Company's nonutility subsidiaries.
Nonutility operations, which include AEI parent, for the quarter
and year-to-date March 31, 1995 and 1994 resulted in a net loss
of $523 thousand and net income of $41 thousand, respectively.
Operations of AEE and subsidiaries for the period resulted in a
net loss of $196 thousand for 1995 and net income of $98 thousand
in 1994. The 1995 loss is largely due to administrative and
general costs incurred for the development of nonutility
businesses, offset in part by increased revenues of cogeneration
facilities.
On March 15, 1995, AEE joined with a previously unaffiliated
company to form Atlantic CNRGY LLC (Limited Liability
Corporation). This joint venture will develop natural gas
marketing opportunities with commercial and industrial users.
AEE's initial investment was not significant. Operating
activities are expected to begin during the second quarter of
1995.
<PAGE>
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (unaudited)
The following is management's discussion and analysis of
significant factors which affected the Company's interim
financial condition and results of operations. To properly
assess and evaluate the Company's performance one should read, in
conjunction with this report, the Management's Discussion and
Analysis of Financial Condition and Results of Operations
included in the Company's 1994 Annual Report on Form 10-K filed
with the Securities and Exchange Commission.
LIQUIDITY AND CAPITAL RESOURCES
In the first quarter of 1995, the Company issued $101.6 million
in short term debt, all of which consisted of notes payable to
banks. Proceeds were used largely for the remittance of the
annual state excise tax payment as discussed below.
During the first quarter of 1995, the Company advanced its parent
company $6.7 million in the form of notes receivable.
In March 1995, the Company made its annual payment to the State
of New Jersey in the amount of $98.7 million for state excise
taxes. This payment was responsible for causing a net cash usage
in operating activities, as indicated on the Consolidated
Statement of Cash Flows.
RESULTS OF OPERATIONS
Net Income decreased for the quarter by 41.8% from the
corresponding period of 1994 due to the decline in sales of
electricity. The Company's Southern New Jersey Economic
Initiative has also contributed to the reduction in the current
year earnings because recovery of otherwise eligible energy costs
were foregone.
Significant factors contributing to these changes are explained
below. Unless otherwise specified, changes are in terms of the
current year period compared to the corresponding prior year
period.
<PAGE>
Revenues
Changes in Operating Revenues-Electric are disclosed in the
following table:
Quarter and Year-To-Date
Ended March 31, 1995
(Thousands of Dollars)
Base Revenues $ (1,259)
Levelized Energy Clauses 13,521
Kilowatt-hour Sales (19,365)
Unbilled Revenues 5,654
Sales for Resale (12,056)
Other Revenues 37
Total $(13,468)
Levelized Energy Clause (LEC) Revenues for the period increased
due to rate increases in July 1994 of $55 million on an annual
basis. Changes in Kilowatt-hour Sales are explained in the
following section 'Billed Sales to Ultimate Customers'. The
change in Unbilled Revenues are a result of the amount of
kilowatt-hours consumed but not yet billed by ultimate customers
at the end of the respective periods, which are affected by
weather and economic conditions and the price per kilowatt-hour
in effect. The changes in Sales for Resale to wholesale
customers are a function of the Company's energy mix strategy,
which in turn is dependent upon its needs for energy, the energy
needs of other utilities participating in the regional power pool
of which the Company is a member, and the sources and prices of
energy available. The drop in Sales for Resale reflects the
decrease in the demands of the regional power pool due to the
mild winter conditions during the current year when compared to
the extreme weather conditions of 1994.
Billed Sales to Ultimate Customers
Changes in billed kilowatt-hour sales are generally due to
changes in the average number of customers and average customer
use, which is affected by economic and weather conditions.
Energy sales statistics, stated as percentage changes from the
corresponding period of the prior year, are shown below.
Quarter and Year-To-Date
Ended March 31, 1995
Average
Customer Class Sales Cust Use
Residential (12.7)% 1.2% (13.7)%
Commercial ( 3.2) 1.9 ( 5.0)
Industrial (11.4) 1.3 (12.6)
Total ( 9.0) 1.3 (10.1)
The large decreases in Residential sales and average use for the
period ended is due to significantly above normal temperatures
experienced in the current period in contrast to the well below
normal temperatures in the same period of 1994. Commercial sales
also decreased due to the temperature contrast noted above.
Approximately one-half of the increase in the number of
commercial customers is due to the continuing popularity of ACE's
night lighting programs. Industrial sales were down primarily as
a result of a former customer taking energy service from an
independent power producer.
Expenses
Total Operating Expenses for the current period ended March 31,
1995 decreased by 0.8% compared to the same period of the prior
year. Excluding depreciation and taxes, Total Operating Expenses
increased by 5.2%.
Energy expense reflects the amount of energy needed to meet load
requirements, as well as the various fuel and purchased energy
sources used and the operation of the LEC. Changes in costs
reflect the varying availability of low-cost generation from
Company-owned and purchased energy sources and in the unit prices
of the energy sources used, as well as changes in the needs of
other utilities participating in the regional power pool. The
cost of energy is recovered from customers primarily through the
operation of the LEC. Until 1994, earnings were generally not
affected by Energy expense because these costs are adjusted to
match the associated LEC revenues. In any period, the actual
amount of LEC revenue recovered from customers will be greater or
less than the actual amount of energy cost incurred and eligible
for recovery in that period. Such respective overrecovery or
underrecovery of energy costs is recorded on the consolidated
balance sheet as a liability or asset as appropriate. Amounts in
the balance sheet are recognized in the consolidated statement of
income within Energy expense during the period in which they are
subsequently recovered through the LEC. The Company was
underrecovered by $11.4 million at March 31, 1995 as compared to
$11 million at December 31, 1994.
Energy expense decreased by 14.8% for the current period.
Production-related energy costs decreased by 22.1% mostly due to
the reduction in the generation of the Company's wholly-owned
stations because of the extreme mild weather conditions in 1995
compared to 1994. This decrease was offset by the effects of the
Company's Southern New Jersey Economic Initiative which forgoes
recovery of otherwise eligible energy costs. The Southern New
Jersey Economic Initiative reduced after tax income by $5.0
million in the first quarter of 1995.
Purchased Capacity expense reflects contract payments for
generating capacity owned by others. The 49.5% increase in
Purchased Capacity expense reflects the current period charges
for capacity supplied by a cogeneration facility which became
operational in the last quarter of 1994.
Sources of Energy by Fuel Source for the current period are as
follows:
<PAGE>
Quarter and Year-to-Date
Ended March 31, 1995
Coal 36%
Nuclear 24
Interchanged and Purchased 16
Nonutility Purchased 23
Oil and Natural Gas 1
100%
Operations expense increased 5.6% due to the annual billing for
the settlement of prior year administrative and general costs
from the Company's jointly owned nuclear facilities. The 1994
settlement of this annual billing resulted in a reduction of
Operations expense.
Maintenance expense decreased 25.1% for the period from the
previous year due to cost saving measures in maintenance
activities.
The 6.2% increase in Depreciation Expense is the result of an
increase in the Company's electric plant in service.
The decrease in State Excise Tax Expense of 6.2% from the
previous year reflects the decrease in energy sales for the
current period.
Federal Income Tax Expense decreased 51% due to the reduction in
pretax income for the current quarter.
In December 1994, the Company recorded the expected costs for a
voluntary employee separation program. A total of 319 of the
Company's employees volunteered for the separation package. A
majority of the employee separations occurred as of March 1,
1995, with the remaining separations to take place by December
31, 1995. The balance of the accrued separation costs on the
Consolidated Balance Sheet at March 31, 1995 is $19.8 million
compared to $26.6 million at December 31, 1994. Settlement of
this obligation is not expected to be completed until the latter
part of 1996.<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
Certain developments have occurred in connection with matters
previously reported under Part I, Item 1-Business in the Annual
Report on Form 10-K for the fiscal year ended December 31, 1994
for Atlantic Energy, Inc. (AEI) and Atlantic City Electric
Company (ACE). In addition, certain new information is contained
herein.
Rate Matters
ACE's rates for electric service at retail are subject to the
approval of the New Jersey Board of Public Utilities (BPU).
Reference is made to Note 3 of the Notes to Financial Statements
for AEI and ACE filed herewith for information pertaining to the
petition filed with the New Jersey Board of Public Utilities
(BPU) for changes in the Levelized Energy Clause (LEC) revenues,
and the issue of the double recovery of capacity costs.
On March 27, 1995, the BPU approved a one-year extension in
the enrollment period of the Company's Redevelopment Program
Service (RPS). The RPS, approved by the BPU in May 1994,
provides incentive pricing for new or expanding commercial
customer load. In its order, the BPU found that the RPS has been
a valuable incentive for expanding and attracting businesses to
the region. The enrollment deadline, set to expire on April 30,
1995, was extended to April 30, 1996 for service commencing on or
before April 30, 1998.
On March 30, 1995, legislation (S-1940) was introduced in the
New Jersey State Senate that would permit natural gas and
electric utility companies to offer discounts and alternate
ratemaking to businesses that are considering buying power from
independent energy producers or moving their operations from the
State of New Jersey because of high energy costs. Under S-1940,
the BPU would set standards for the maximum term of a discount,
minimum prices and filing requirements. Once an agreement is
reached between a business and an electric utility, a discount in
electric rates would go into effect unless rejected by the BPU.
The legislation would not permit recovery of lost revenues from
other ratepayers until the next base-rate case filing, and then
only under two conditions: 1) if the utility can demonstrate
that the business discount benefitted all ratepayers, that is,
the business would have left the utility's system and caused a
rate hike for the remaining ratepayers; and 2) if the discount
provides some other tangible economic benefit to the State, such
as creating or maintaining jobs. The legislation was referred to
the Senate Natural Resources, Trade and Economic Development
Committee; ACE cannot predict the Committee's timing or action
with regard to S-1940. ACE supports S-1940 as a way to retain
and expand business in the State and to encourage an equitable
transition to a restructured industry which includes competition
between utilities, IPPs and power marketers.
<PAGE>
Item 5. Other Information
On March 29, 1995, the Federal Energy Regulatory Commission
issued a Notice of Proposed Rulemaking (NOPR) regarding several
key electric utility industry issues such as transmission access,
transmission pricing and recovery guidelines for stranded costs
stemming from wholesale transactions. According to the NOPR,
within 60 days of passage of a final rule, which is expected
before year-end 1995, utilities must file nondiscriminatory open-
access transmission tariffs that may be utilized by any
participant in the wholesale market, such as utilities,
nonutility generators, power marketers, municipalities and/or
cooperatives. The NOPR further includes the requirement that
utilities take service under the tariffs for their own wholesale
sales and purchases of electric energy. The NOPR would permit
utilities to recover stranded costs that may be incurred when a
customer stops buying power from the utility and, instead, uses
the utility's transmission service to obtain power from another
source. Initially, the Company is required to file two generic
pro-forma tariffs which would take effect under rates established
by the NOPR; one tariff will represent network service, while a
second tariff will provide point-to-point service. Utilities,
and others may then file for modified tariffs. ACE is currently
reviewing the NOPR and intends to provide comments during the
appropriate comment period. At this time, pro-forma tariffs are
being developed and it is not known what effect open access will
have on ACE's customer base.
By letter dated March 16, 1995, the Company has notified
Pennsylvania Power & Light Company (PP&L) that the capacity and
energy sales agreement dated June 1983 will be terminated
effective March 1998. The agreement, for the purchase of 125
megawatts (MW), was originally scheduled through September 30,
2000. For the years 1998 through 2000, the expected capacity
costs under the agreement were $12.6 million, $14.2 million and
$12.3 million, respectively. To replace the PP&L arrangement for
capacity and energy, the Company has signed a letter of intent
with PECO Energy (PECO) for the period beginning March 1, 1998
through May 31, 2000. Preliminary savings estimates are
approximately $7 million based on lower payments for capacity and
higher availability of energy.
Nonutility Generation
The Pedricktown Cogeneration Limited Partnership (PCLP), in
which Atlantic Generation, Inc. owns a 50% interest, operates a
116 megawatt gas-fired cogeneration facility located in
Pedricktown, New Jersey. This facility began commercial
operation in March 1992 supplying 10 MW of electricity and
byproduct steam to GEON (formerly B.F.Goodrich). Under the terms
of a BPU-approved purchase power agreement, 106 MW of capacity
and energy is being supplied to ACE. An amendment to the
agreement, designed to reduce contract costs and increase
operating efficiencies, was executed in July 1994 and approved by
the BPU in March 1995. The contract amendment reduces the energy
component of the contract payment resulting in a more marketable
commodity, increases the available capacity of the facility to
ACE from 106 MW to 116 MW and returns GEON to ACE as a retail
electric customer. The Company estimates that GEON will account
for approximately $6.5 million in annual electric revenue and is
expected to return to ACE's system in the beginning of the third
quarter of 1995.
Nuclear
Salem
ACE has been advised by Public Service Electric & Gas Company
(PS), operator of the Salem Nuclear Generating Station (Salem),
that on March 21, 1995, representatives of the Nuclear Regulatory
Commission (NRC) staff met with the Boards of Directors of Public
Service Enterprise Group and PS to reiterate the previously
expressed concerns with regard to Salem's operations, including:
plant materiel conditions that required operators to operate
various systems manually, maintenance backlog, root cause
analysis, quality assurance, engineering, repeat equipment
failures, procedure adherence, four events over the past four
years causing the NRC to conduct four Augmented Inspection Team
reviews, leadership, employee concerns, attention to balance of
plant, management oversight and vertical communication with
employees and oversight of contractors. The NRC staff
acknowledged that PS had made efforts to improve Salem's
operations, including making senior management changes, but
indicated that demonstrated sustained results have not yet been
achieved.
PS also advised that in March 1995, the Institute of Nuclear
Power Operations (INPO) reported an assessment of Salem's
operations that indicated that improvement was needed in a wide
range of areas, with significant improvement required in areas
such as equipment performance and plant materiel conditions,
management and supervision, engineering activities and training.
ACE has been advised that on April 21, 1995, the NRC commenced
an inspection, expected to take about four weeks, to assess how
effectively Salem is currently performing from a safety
perspective in the areas of problem identification; prioritizing
and conducting work on plant equipment; and management oversight
of plant performance. This inspection is currently ongoing.
PS advised ACE that PS is in agreement with the assessment of
the NRC staff, as well as that of the INPO, that Salem's
operations must be further improved in order to assure continued
reliable operation. PS is fully committed to take the actions
needed to improve Salem's operations and is committed to safe and
conservative operations before production.
PS cannot predict what further action, if any, the NRC may take
with respect to Salem's operations. ACE owns a 7.41% interest in
the Salem station.
ACE has been advised that on April 12, 1995, PS received
notification of a Level II violation including an $80,000 civil
penalty for an incident that occurred in December 1992 in which
two former Salem station managers did not properly respond to
safety concerns raised by two employees. The incident was
thoroughly investigated and brought to the NRC's attention by PS
at that time. PS has agreed to pay the penalty and has
instituted several measures to reinforce to personnel that their
concerns about safety and all issues relating to the operation of
the nuclear facilities can be openly brought to management's
attention.
ACE has been advised by PS that PS has been notified of an NRC
enforcement conference to be held on June 1, 1995 pertaining to
valves that were incorrectly positioned after a plant
modification was installed in May 1993 and several examples of
inadequate root cause determination of events, which led to
insufficient corrective actions at Salem. During this
enforcement conference, PS will address the issues identified and
ensure they are clearly understood, establish the safety
significance of the issues and discuss the mitigating factors
related to these issues. PS cannot predict what action, if any,
the NRC may take as a result of this meeting.
ACE has been advised by PS that in March 1995, the State of
Delaware agreed to withdraw its hearing request related to
Salem's NJPDES permit in return for PS funding a number of
environmental projects in Delaware, similar to and including
certain NJPDES permit conservation measures, which will not
materially increase the cost of compliance with the permit. In
May 1995, PS resolved all issues with the remaining intervenors,
thus eliminating a hearing and any further challenge to the Salem
permit.
Hope Creek
ACE, a 5% owner of the Hope Creek Nuclear Generating Station
(Hope Creek) has been advised by PS, operator of Hope Creek, that
on April 5, 1995 a small amount of low-level radioactive
materials was released to the atmosphere at Hope Creek. The
release did not exceed federal limits nor pose any danger to the
public or plant employees; however, a trailer driven offsite had
exceeded the limit for releasing materials. The trailer was
later cleaned. PS and the NRC have investigated the event and
met on this issue. An enforcement conference is currently
scheduled for the end of June 1995. The equipment responsible
for generating the release has been secured until the NRC has had
the opportunity to review corrective actions. Additionally,
similar equipment will be reviewed for deficiencies. PS will
also be holding meetings with New Jersey and local government
officials to address any concerns relating to the incident. PS
cannot predict what actions, if any, the NRC will take as a
result of this incident.
Item 6. Exhibits and Reports on 8-K
Exhibits: See Exhibit Index Attached
Reports on Form 8-K: None.
<PAGE>
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.
Atlantic Energy, Inc.
Atlantic City Electric Company
(Registrant)
Date: May 12, 1995 By: /s/ J. L. Jacobs
J. L. Jacobs
President and Chief Executive
Officer of Atlantic Energy, Inc.
Chairman and Chief Executive
Officer of Atlantic City Electric
Company
Date: May 12, 1995 By: /s/ L. M. Walters
L. M. Walters
Treasurer of Atlantic Energy,Inc.
and Vice President, Treasurer and
Assistant Secretary of Atlantic
City Electric Company
<PAGE>
EXHIBIT INDEX
27 Financial Data Schedules for Atlantic Energy, Inc. and
Atlantic City Electric Company for periods ended
March 31, 1995.
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