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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTIONS 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 18, 1998
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ATLANTIC CITY ELECTRIC COMPANY
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
New Jersey 1-3559 21-0398280
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
800 King Street, P.O. Box 231, Wilmington, Delaware 19899
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's Telephone Number, Including Area Code 302-429-3114
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None
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS
On August 19, 1998, an Administrative Law Judge (the "ALJ") from the New
Jersey Office of Administrative Law issued an initial decision on the Company's
stranded costs and unbundled rate filing. The ALJ, in reviewing the Company's
filing, recognized that the Company's stranded costs were $812 million for non
utility generation contracts and $397 million for generation. The ALJ made no
specific recommendations on rate issues. Legal briefs on exceptions to the ALJ
decision are required to be filed with the New Jersey Board of Public Utilities
("BPU") by October 2, 1998 and reply briefs must be filed by October 31, 1998. A
final BPU decision is expected in mid-December, unless an extension is permitted
and only after the necessary legislation is approved by the New Jersey
legislature and signed by the Governor.
* * *
The "Electric Discount and Energy Competition Act" was introduced into the
New Jersey legislature as Bill A-10 (the "Bill") on September 14, 1998. Among
other things, the Bill would require the BPU to provide for retail choice of
electric power suppliers; deregulation of electric power rates and other
competitive services, such as metering and billing; separation of competitive
and regulated services; unbundling of rates for electric power service; and
licensing of electric and gas suppliers. The Bill provides June 1, 1999 as the
starting date for each utility to provide retail choice of electric power
suppliers to its customers. Full implementation of retail choice is expected
within 4 months of the start date of retail competition.
In connection with the deregulation of electric power rates, the Bill would
authorize the BPU to permit electric public utilities to recover a portion of
their stranded costs through a non-bypassable market transition charge of
limited duration. In addition, the Bill would provide for the issuance of
transition bonds to finance portions of a given utility's stranded costs, as
determined by the BPU.
The Bill contains provisions which mandate reductions in rates by a minimum
of five to ten percent, relative to the aggregate level of bundled rates in
effect as of April 30, 1997. Under certain circumstances, the minimum rate
reductions may be implemented according to specified time frames. Rate
reductions in addition to the minimums prescribed may be ordered by the BPU, if
it determines that such reductions are necessary in order to achieve just and
reasonable rates. The Company believes that any rate reductions, including the
minimums required by the proposed legislation, should be made by giving
consideration to a utility's financial integrity, and should be made to result
in just and reasonable rates.
The Bill provides for immediate effectiveness of the Act. The Bill also
grants authority to the BPU, retroactive to April 1, 1997, with respect to such
matters as the holding of hearings, the issuance of orders and the establishment
of various standards in connection with deregulation. As directed by the BPU,
the Company has participated in unbundling and stranded cost proceedings before
the Office of Administrative Law, and in separate proceedings before the BPU
with respect to various restructuring issues, beginning with the Company's
deregulation filings submitted in July, 1997.
If enacted in its present form, rate reductions, as mandated in the Bill,
could have a material adverse effect upon the financial condition of the Company
and its parent, Conectiv. It is not possible to predict the form in which
industry deregulation legislation may be enacted. As a result, the Company
cannot predict the timing or the ultimate effects on the Company and Conectiv of
deregulation as it may be implemented in the State of New Jersey.
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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 City Electric Company
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(Registrant)
Date: September 18, 1998 /s/ L.M. Walters
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Treasurer
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