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 February 27, 1998
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
On February 25, 1998, the Securities and Exchange Commission
(the "Commission") issued an order approving the Application-
Declaration on Form U-1 previously filed by Conectiv, Inc.
("Conectiv") under Section 9(a)(2) of the Public Utility Holding
Company Act of 1935, as amended (the "Act"). The order approved
the combination of Delmarva Power & Light Company ("Delmarva")
and Atlantic Energy, Inc., ("Atlantic") pursuant to which
Delmarva and its direct subsidiaries and the direct subsidiaries
of Atlantic will become direct subsidiaries of Conectiv a
Delaware holding company. The merger will be effective on March
1, 1998. The Company also received an order from the Commission
on February 26, 1998 authorizing Conectiv to engage in certain
financing activities under the Act. Attached hereto as exhibit 99
is a News Release of the Company announcing the receipt of the
Commission orders.
As previously reported by Atlantic on Form 8-K on January 6,
1998, the New Jersey Board of Public Utilities ("BPU"), on
January 7, 1998, issued an order to finalize its December 30,
1997 ruling approving the petition of Atlantic City Electric
Company ("ACE") and Conectiv for a transfer on Atlantic's books
and records of all of the issued and outstanding shares of its
common stock, which will result in the change ownership and
control of ACE. Atlantic is the parent of ACE and the sole
common shareholder of ACE. Pursuant to the change in control,
ACE will become a wholly owned subsidiary of Conectiv. Under the
terms of the order, the BPU ordered that approximately 75 percent
of the total average projected $21.12 million annual merger
savings for New Jersey ratepayers, or $15.75 million, be returned
to customers, for an overall merger-related rate reduction of 1.7
percent. The net result of the merger related-decrease in rates,
combined with the effect of a previously approved rate increase,
was an annual net decrease in customers rates of approximately
$10.75 million or 1.2 percent. The BPU order concluded that this
entire 1.2 percent decrease should be credited towards the 5 to
10 percent rate reduction required pursuant to the BPU
Restructuring Report.
On January 21, 1998, the Division of the Ratepayer Advocate
("DRA") filed a Motion for Reconsideration and Clarification of
Certain Issues regarding the BPU s January 7, 1998 order. The
DRA seeks clarification and reconsideration regarding (1) the
BPU s determination to employ the "no harm" standard of review,
rather than the "positive benefit to the public interest"
standard; (2) the BPU s adoption of the Administrative Law
Judge s "rounding down" in calculating 75% of the net annual
merger savings; (3) the BPU s approval of the 1.2% rate decrease
resulting from merger as a credit towards Atlantic s 5-10 percent
rate reduction required pursuant to the BPU Restructuring Report.
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The DRA motion also seeks clarification from the BPU on how it
calculated the requirement that Atlantic decrease its rates by an
additional $9.88 million on the effective date of the merger.
The Motion for Reconsideration and Clarification of Certain
Issues does not request, as an item of relief, that the approval
of the merger be denied. No stay of the BPU order issued January
7, 1998 has been requested or issued. The appeal period for the
BPU order, however, has not expired. The Company does not expect
that the outcome from this proceeding will have a material
adverse impact.
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EXHIBIT INDEX
Exhibit No.
99 News Release dated February 26, 1998.
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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/J. E. Franklin II
J. E. Franklin II
Vice President, Secretary and
General Counsel of Atlantic Energy, Inc.
Senior Vice President, Secretary and
General Counsel of Atlantic City
Electric Company
Date: February 27, 1998
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Exhibit 99
Contact: Conectiv Investor Relations
Bob Marshall 302-429-3114
Media Relations
Ted Caddell, Delmarva 302-429-3264
Mary Rucci, Atlantic 609-645-4714
For Immediate Release Feb. 26, 1998
Delmarva/Atlantic Merger approved by SEC, Merger expected to
close March 1
Wilmington, DE and Egg Harbor Township, NJ - The merger involving
Delmarva Power & Light Company and Atlantic Energy, Inc. has
cleared the final regulatory hurdle in the companies plan to
combine under a common holding company named Conectiv.
The federal Securities and Exchange Commission approved the
merger under the Public Utility Holding Company Act in a written
order dated February 25, 1998. With the SEC approval, the merger
is expected to be effective March 1. The approval by the SEC
follows numerous federal and state regulatory approvals,
including the Federal Energy Regulatory Commission and the
Nuclear Regulatory Commission, and the public utility commissions
of Delaware, New Jersey, Maryland, Pennsylvania and Virginia.
The merger was originally announced August 1996.
With the completion of the merger, it is expected that shares of
Conectiv Common Stock and Conectiv Class A Common Stock will
begin trading on the New York Stock Exchange on March 2. The
ticker symbol for Conectiv Common Stock is CIV, and CIV.A will be
the symbol for Conectiv Class A stock. The merger will have no
effect on Delmarva Power and Atlantic City Electric Company
preferred stock, or on either company s debt securities.
"Completion of the merger will allow Conectiv to reduce its rates
upon closing by over 1 percent to more than 1 million customers
in our region," said Howard E. Cosgrove, Conectiv s Chairman and
Chief Executive Officer. "These accomplishments will be made
while continuing to provide superior customer care and service
reliability. The shareholders of Conectiv will also realize
long-term benefits from a larger, competitively well-positioned
provider of energy, telecommunications and related products for
homes and businesses in the Mid-Atlantic region. Conectiv will
continue the tradition of building and maintaining community
partnerships which Delmarva Power and Atlantic Electric are known
for."
While the parent company will be named "Conectiv", for the time
being the regulated utilities will be operated under their
traditional names Delmarva Power and Atlantic Electric.
(more)<PAGE>
Conectiv will have operating revenues of over $2.5 billion and
serve more than 1 million electric customers and over 100,000 gas
customers in Delaware, Maryland and New Jersey. Following the
merger and other internal restructuring, Conectiv will have about
3,400 employees in its core businesses. Corporate headquarters
will be located in Wilmington, Delaware. A major operations
facility will be constructed in Salem County, New Jersey.
Operations that will carry the "Conectiv" name include Conectiv
Energy (retail energy), Conectiv Communications
(telecommunications), Conectiv Solutions (energy services) and
Conectiv Services (HVAC). A district heating/cooling company
named Atlantic Thermal Systems will soon change to Conectiv
Thermal Systems. These five operations have nearly 100,000
customers.
Conectiv Officers and Directors
As previously announced, the chairman and CEO of Conectiv will be
Howard E. Cosgrove. Jerrold L. Jacobs will serve as Vice
Chairman. Other key officers are Meredith I. Harlacher, Jr.,
President of Conectiv and head of the Energy Delivery group;
Thomas S. Shaw, Executive Vice President of Conectiv and head of
the Energy Supply group, Barry R. Elson, Executive Vice President
of Conectiv and head of the Enterprises group, and Barbara S.
Graham, Senior Vice President and Chief Financial Officer of
Conectiv .
The Board of Directors of Conectiv is made up of six directors
from Atlantic Energy and eight directors from Delmarva Power.
The directors are: Howard E. Cosgrove, Jerrold L. Jacobs, Bernard
J. Morgan, Cyrus T. Holley, Richard B. McGlynn, Dr. Harold J.
Raveche, Kathleen MacDonnell, Michael G. Abercrombie, R. Franklin
Ballotti, Robert D. Burris, Audrey K. Doberstein, Michael B.
Emery, Sarah I. Gore and Weston E. Nellius.
Dividend information
It is anticipated that Conectiv initially will pay an annual
dividend of $1.54 per share on its Common Stock and $3.20 per
share annually on the Class A Common Stock, subject to final
determination by the Conectiv Board of Directors. The Board s
determination will be based upon Conectiv s results of
operations, financial condition, capital requirements and other
relevant considerations.
The Bank of New York has been selected as transfer agent and
registrar for Conectiv stock.
Conectiv s internet address is http://www.conectiv.com
