SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
December 16, 1997
Commission Registrants; State of Incorporation; IRS Employer
File Number Address; and Telephone Company Identification
No.
1-11327 Illinova Corporation 37-1319890
(an Illinois Corporation)
500 S. 27th Street
Decatur, IL 62525
(217) 424-6600
1-3004 Illinois Power Company 37-0344645
(an Illinois Corporation)
500 S. 27th Street
Decatur, IL 62525
(217) 424-6600
Total number of sequentially numbered pages is 4.
PAGE>
Item 5. Other Events
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Illinois Power selects PECO Nuclear to manage Clinton Power Station
Illinois Power has selected PECO Energy Company of Philadelphia, Pennsylvania to
provide management services for Clinton Power Station. The new management team
initially will consist of about six to eight people in key positions, including
chief nuclear officer and plant manager.
Effective January 5, 1998, Walter G. MacFarland IV, vice president at PECO's
Limerick Generating Station, is Illinois Power's chief nuclear officer and
reports to Larry Haab.
Although a contracted team will manage the plant, Illinois Power will continue
to maintain the license for Clinton Power Station's operation and retain
ultimate oversight of the plant. The plant will remain staffed primarily by
Illinois Power employees.
PECO operates the Limerick and Peach Bottom nuclear generating stations. Each
station has two boiling water reactors, similar to the one at Clinton. Both
plants have set performance records for long operating runs and short refueling
outages, and both plants have currently received excellent performance ratings
from the NRC and Institute of Nuclear Power Operations (INPO.)
PECO also has experienced the rebuilding process. In 1987, the NRC ordered the
Peach Bottom station shut down because of operator inattention to duty. Bringing
the plant back on-line took almost two years, but the turn-around was dramatic.
Peach Bottom and Limerick now are recognized as among the best-performing
nuclear facilities in the world.
Illinois Power believes that bringing in PECO's experienced management team is
the quickest, most efficient and most effective way to get Clinton back on line
and operating at a superior level.
Regulatory and Accounting Matters
For additional regulatory reform legislation discussion, see Illinova's third
quarter 10-Q under "Open Access and Competition" in "Regulatory and Legal
Matters" of the "Notes to Consolidated Financial Statements."
On December 16, 1997, Governor Jim Edgar signed Illinois House Bill 362.
Illinova has been studying the impacts of Illinois House Bill 362 and the
efforts required to return the Clinton Power Station to full operation.
Management expects that these matters will result in a fourth quarter 1997
charge of up to $260 million (net of income taxes) or $3.51 per share. The
amount is made up of the following items:
Writing off generation-related regulatory and other assets of approximately
$195 million (net of income taxes) due to the enactment of Illinois
regulatory reform legislation.
Accruing up to $40 million (net of income taxes) in expenses to reflect the
currently estimable incremental costs necessary to achieve a return to full
operation and implementation of a recovery plan at the Clinton Power
Station.
Recording operational accruals of approximately $25 million (net of income
taxes).
Without the recognition of the aforementioned charges, Illinova would have
expected its 1997 earnings per share to be no greater than $1.85.
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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 thereunto duly authorized.
ILLINOVA CORPORATION
(Registrant)
By/s/Leah Manning Stetzner
---------------------------
Leah Manning Stetzner
General Counsel and
Corporate Secretary
on behalf of
Illinova Corporation
Date: January 7, 1998
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 thereunto duly authorized.
ILLINOIS POWER COMPANY
(Registrant)
By/s/Leah Manning Stetzner
---------------------------
Leah Manning Stetzner
Vice President, General
Counsel, and Corporate
Secretary on behalf of
Illinois Power Company
Date: January 7, 1998
