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 June 15, 1995
Registrant;State of
Commission 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
Item 5. Other Events
The following information updates certain matters previously
reported under Part 1, Item 1 - Business in the Annual Report on
Form 10-K for the year ended December 31, 1995 and Part II of the
Report on Form 10-Q for the quarter ended March 31, 1995 for
Atlantic Energy, Inc. (the Company) and Atlantic City Electric
Company (ACE).
Salem
ACE is a 7.41% owner in the Salem Nuclear Generating Station
(Salem) and has been advised by Public Service Electric & Gas
Company (PS), operator of the Salem station, that on May 16,
1995, Salem Unit 1 was shut down, as required by its technical
specifications, due to the inoperability of certain switch gear
room supply fans. On June 7, 1995, Salem Unit 2 was also shut
down, as required by its technical specifications, due to both
trains of its residual heat removal system being inoperable.
During the shutdown process, Unit 2 tripped due to loss of
electrical power to certain equipment within the station. As a
result of these shutdowns, and of PS's continued discovery of
equipment deficiencies at Salem, PS informed the Nuclear
Regulatory Commission (NRC) that it had determined to keep both
Salem units shut down pending completion of:
a Significant Event Response Team (SERT) review of the
circumstances leading to, and causing the Unit 2 reactor
trip;
a special team review of long standing equipment reliability
and operability issues, including corrective maintenance and
operator work arounds; the effectiveness and quality of the
management oversight and review of such matters;
a meeting with the NRC to describe, discuss and gain NRC
agreement on PS's plan for the performance of an operational
readiness review (ORR) in support of startup of each Salem
unit;
performance of the ORR at each unit; and
meetings with the NRC staff to describe the outcome and
conclusions of each ORR and to reach agreement with the NRC
staff that each unit is sufficiently prepared to restart.
ACE has further been advised by PS that on June 9, 1995, the
NRC issued a Confirmatory Action Letter documenting these
commitments by PS. In its Confirmatory Action Letter, the NRC
noted that while Unit 2 was stabilized and shut down, its
operators experienced several challenges that required their
intervention due to the unexpected loss of power and long
standing equipment performance issues. The NRC further noted
that operator performance relative to timely recognition and
resolution of the specific safety and technical concerns, prior
to PS's decision to shut down the units, was deficient.
PS has advised ACE that PS is in the process of developing a
work plan to meet the requirements for restart of the units, and
accordingly, it is presently unable to predict when either unit
will return to service. Although PS presently expects that both
units will be in outage status for at least several months, it
does not presently foresee any shortage in available capacity to
satisfy customer demands for energy.
PS has advised ACE that also on June 9, 1995, the NRC
reported the results of a NRC Special Inspection Team (SIT) it
formed to assess how effectively Salem is currently performing
from a safety perspective in conducting daily activities in the
areas of problem identification, prioritizing and conducting work
on plant equipment, and management oversight of plant
performance. While the SIT identified some areas of strength at
Salem as well as areas where improvements are being made, the
team also identified a number of findings that performance in the
areas of configuration control, operator work-arounds and
equipment operability determinations have not substantially
improved and constitute a burden on the plant operators to safely
operate the units, especially during plant events.
In addition, PS has advised ACE that the NRC has informed PS
that the enforcement conference relating to certain incorrectly
positioned valves at the station, previously scheduled for June
1, 1995 has been rescheduled for June 23, 1995. The NRC has
informed PS that this conference will also address five
additional apparent violations relating to the NRC's quality
assurance criteria. PS cannot predict what, if any, action the
NRC may take with respect to these apparent violations.
PS advised ACE that PS is committed to safe and conservative
operations before production and is fully committed to take
whatever action is necessary to return Salem to reliable and
event free operation.
As a non-operating owner, ACE believes that the safe and
expeditious restart of the Salem units is of utmost importance to
the customers of ACE and the shareholders of the Company.
Management of the Company and ACE have actively encouraged PS to
take whatever steps are necessary for it, as the operator, to
effectively and properly respond to concerns expressed by the NRC
for the safe and proper operation of the plant. The Company has
conveyed its concerns directly to the management of PS.
It is not possible to currently predict what further actions
may be taken by PS or by the NRC or when authorization for
restart will be given. Therefore, it is not possible to predict
when the Salem units may return to service.
Under the nuclear performance standard established by the
Board of Public Utilities, aggregate capacity factors below 65%
result in graduated penalties, amounting to nonrecovery of a
percentage of replacement power costs. ACE believes that the
penalty incurred under the nuclear performance standard for 1995,
if any, would not be material, based on the expected operation of
the other nuclear units in which ACE has an ownership interest.
As a result of the unavailability of these units, ACE does
not foresee any energy shortage that would prevent satisfying
customer demands for energy.
Hope Creek
ACE is a 5% owner in the Hope Creek Nuclear Generating
Statement (Hope Creek) and has been advised by PS, operator of
Hope Creek, that the NRC has scheduled an enforcement conference
on June 16, 1995 relating to the previously reported release of a
small amount of low-level radioactive materials to the atmosphere
on April 5, 1995 at Hope Creek. The release did not exceed any
Federal limits nor pose any danger to the public or plant
employees; however, a trailer was driven offsite which exceeded
PS's offsite release limits. PS cannot predict what action, if
any, the NRC may take with regard to the proposed notice of
violation.
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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 hereunto duly
authorized.
Atlantic Energy, Inc.
Atlantic City Electric Company
(Registrant)
Date: June 15, 1995 By: /s/ L. M. Walters
L. M. Walters
Treasurer of Atlantic Energy, Inc.
Vice President, Treasurer and
Assistant Secretary of Atlantic
City Electric Company
