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 July 25, 1996
Registrant;
Commission 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
Egg Harbor Township, NJ 08234
(609) 645-4500
1-3559 Atlantic City Electric Company 21-0398280
(New Jersey)
6801 Black Horse Pike
Egg Harbor Township, NJ 08234
(609) 645-4100
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Item 5. Other Events.
The following information updates certain matters previously
reported to the Securities and Exchange Commission under Part I,
Item 1 - Business of the Annual Report on Form 10-K for 1995,
under Part I - Note 3 and Part II, Item 5 - Other Information of
the Quarterly Report on Form 10-Q for the quarter ended March 31,
1996, and under Item 5-Other Events in the Current Reports on
Form 8-K dated May 29, 1996 and June 26, 1996 of Atlantic Energy,
Inc. and Atlantic City Electric Company (ACE).
Salem Nuclear Generating Station
As previously reported, Salem Units 1 and 2 have been out of
service since May 16, 1995 and June 7, 1995, respectively, and
Public Service Electric & Gas Company (PS) has advised ACE that
their return dates are subject to completion of testing,
analysis, repair activity and Nuclear Regulatory Commission (NRC)
concurrence that they are prepared to restart. PS had previously
advised ACE that PS expected Salem Unit 2 to return to service on
or about August 27, 1996.
On July 22, 1996, PS advised ACE that refurbishment and
comprehensive testing of Salem Unit 2 will continue well into the
fourth quarter of this year. PS has advised that while
substantial progress has been made in upgrading the unit's 46
major systems, some originally identified work remains to be
done. As some components in the systems were restored, PS
advised that a need for additional work and testing not
anticipated in the original schedule was determined. ACE has
been advised that as refurbishment is being completed, PS will
conduct comprehensive integrated testing of plant systems prior
to loading fuel.
ACE has been advised by PS that no revised target date for
Salem Unit 2's restart has been established.
On June 19, 1996, the New Jersey Board of Public Utilities
(BPU) issued an oral decision declaring Salem Unit 2 rates
interim and subject to refund as of such date. In its decision,
the BPU indicated that it may rescind the decision if Salem Unit
2 is restarted within a reasonable time of its estimated August
27, 1996 restart date. Hearings are to be held by the BPU
regarding the issue as to whether the Salem units continue to be
used and useful and the actual level of any appropriate rate
reduction. The dates for hearings related to Salem Unit 1 have
been scheduled to begin in September 1996. Hearings related to
Salem Unit 2 have not been scheduled.
PS has also advised ACE that the delay in the Unit 2 restart
should not impact the projected restart of Salem Unit 1. PS
anticipates that Salem Unit 1 will be ready for operation by mid-
1997 after completion of refurbishment, including replacement of
its steam generators. PS has advised ACE that acquisition of the
unused steam generators from the unfinished Seabrook 2 nuclear
unit in New Hampshire for installation at Salem Unit 1 has been
completed, and removal of the replacement steam generators began
last week.
Based on the information provided by PS regarding the return
of Salem Units 1 and 2 and the expected operation of the other
nuclear units in which ACE has an ownership interest, ACE
presently estimates that its aggregate nuclear capacity factor
for 1996 will be approximately 45%. Such capacity factor would
result in an estimated penalty of $4.1 million, based on
estimated replacement power costs.
The outage of each Salem unit causes ACE to incur
replacement power costs of approximately $700 thousand per month
per unit. ACE believes that in the event of a unit's removal
from base rates, ACE would be entitled to recover replacement
power costs attributable to such unit through its Levelized
Energy Clause (LEC) and that the estimated $4.1 million nuclear
performance standard penalty for 1996 would be substantially
reduced.
ACE expects that its share of the operations and maintenance
expenses incurred in connection with restart activities, will
exceed its previous 1996 estimate of $5.8 million. The extent of
such increase is not presently determinable.
Levelized Energy Clause
On March 29, 1996, ACE filed a petition with the BPU
requesting an increase in annual LEC revenues of $49.7 million,
including a $14.7 million deferral, effective June 1, 1996. On
July 17, 1996, the BPU approved a stipulation and granted ACE a
provisional increase in annual LEC revenues of $27.6 million.
The increase is effective on and after July 17, 1996 through May
31, 1997. The parties to the stipulation have agreed that the
stipulated amount is for provisional rate purposes only and
subject to evidentiary hearings scheduled for August 1996. The
outcome of any BPU decision regarding LEC rates and the ultimate
recovery of replacement power costs cannot currently be
predicted.
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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)
By: /s/ L. M. Walters
L. M. Walters
Treasurer of Atlantic Energy, Inc.
Vice President, Treasurer and Assistant Secretary of
Atlantic City Electric Company
Date: July 25, 1996
