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 (Date of earliest event reported) May 30, 2000
Exact name of registrant as specified in its
charter, State or other jurisdiction of
incorporation or organization, Address of
Commission principal executive offices and Registrant's IRS Employer
File Number Telephone Number, including area code Identification No.
----------- -------------------------------------------- ------------------
1-12927 NEW CENTURY ENERGIES, INC. 84-1334327
(a Delaware Corporation)
1225 17th Street
Denver, Colorado 80202
Telephone (303) 571-7511
1-3789 SOUTHWESTERN PUBLIC SERVICE COMPANY 75-0575400
(a New Mexico Corporation)
Tyler at Sixth
Amarillo, Texas 79101
Telephone (303) 571-7511
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This combined Form 8-K is separately filed by New Century Energies Inc.
("NCE") and Southwestern Public Service Company ("SPS"). Information contained
herein relating to any individual company is filed by such company on its own
behalf. Each registrant makes representations only as to itself and makes no
other representations whatsoever as to information relating to the other
registrant.
Item 5. OTHER EVENTS
On May 30, 2000, the Public Utility Commission of Texas ("PUCT") issued a
rate order which approved the Stipulation dated April 18, 2000, that was
entered into with the staff of the PUCT and other significant parties. The
Stipulation specifically addressed SPS' implementation plans to meet the
requirements of the Texas restructuring legislation enacted in June 1999. In
summary, the Stipulation provides for the implementation of full retail customer
choice by SPS in its Texas service region, including the future divestiture of
approximately 64-71% of the generation capacity owned by SPS and its affiliates
(for additional discussion, refer to the combined NCE and SPS Form 10-Q for the
quarter ended March 31, 2000).
With the issuance of a final written order by the PUCT addressing the
implementation of electric utility restructuring for SPS, management believes
that sufficient details of a transition plan to competition now exist allowing
for a reasonable determination of the impacts of the deregulation of SPS'
generation business. Accordingly, SPS will discontinue the application of
Statement of Financial Accounting Standards ("SFAS") No. 71, "Accounting for the
Effects of Certain Types of Regulation", for that portion of its business during
the second quarter of 2000. SPS will apply the provisions of SFAS No. 101,
"Regulated Enterprises - Accounting for the Discontinuation of SFAS 71" and
Emerging Issues Task Force Consensus No. 97-4, "Deregulation of the Pricing of
Electricity - Issues Related to the Application of FASB Statements No. 71 and
101 for SPS' electric generation business. While the above rate order only
addresses Texas operations, SPS plans to pursue a similar strategy to implement
the restructuring legislation enacted in New Mexico and believes that all of its
generation will ultimately be deregulated. Accordingly, SPS will apply SFAS 101
to all jurisdictions of its generation business. SPS' transmission and
distribution business continues to meet the requirements of SFAS 71, as that
business remains regulated. Additionally, other regulated utilities within the
NCE system are not affected by this change.
SPS will perform a complete analysis of the impacts of the deregulation
of its generation business during the remainder of the second quarter of 2000.
Based on the analysis completed to date, it is currently estimated that SPS will
be required to write-off certain regulatory assets and other deferred costs
totaling approximately $22-27 million. This would result in an after-tax
extraordinary charge of approximately $18 to $21 million against earnings of SPS
and NCE during the second quarter. The total impacts of deregulation may be
affected by the results of future state and Federal regulatory proceedings prior
to actual implementation of full competition, estimated to begin on January 1,
2002.
Additionally, there may be other significant financial implications of
implementing electric restructuring in Texas and New Mexico. These implications
include, but are not limited to, the refinancing of securities (see discussion
below), investments in information technology, establishing an independent
operation of the electric transmission systems, implementing the procedures to
govern affiliate transactions, the pricing of unbundled energy services and the
regulatory recovery of incurred costs related to these issues. SPS is diligently
working to satisfy the legislative and regulatory requirements in developing and
implementing its transition to competition plans. Based on current estimates,
these incurred costs could be as much as $150 million before income taxes and
any regulatory recovery.
SPS will likely legally separate into distinct businesses by January 1,
2001, prior to the divestiture of any generation assets. In order to accomplish
this business separation, SPS will be required to address the provisions
limiting or otherwise affecting such activities contained in its first mortgage
bond indenture. Consequently, SPS intends to continue repurchasing its first
mortgage bonds through open market purchases and currently plans to tender for
and/or defease its outstanding first mortgage bonds prior to December 31, 2000.
The resolution of these matters may have a significant financial impact
on the financial position, results of operations and cash flows of SPS and NCE.
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FORWARD LOOKING INFORMATION
The above discussions include "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Investors and prospective investors are cautioned that the
forward-looking statements contained herein with respect to the revenues,
earnings, capital expenditures, resolution and impact of litigation and
regulatory matters, competitive performance, or other prospects for the business
of New Century Energies, Inc., and/or Southwestern Public Service Company or
their affiliated companies, including any and all underlying assumptions and
other statements that are other than statements of historical fact, may be
influenced by factors that could cause actual outcomes and results to be
materially different than projected. Such factors include, but are not limited
to, the effects of weather, future economic conditions, the performance of
generating units, fuel prices and availability, regulatory decisions and the
effects of changes in state and federal laws, the pace of deregulation of
domestic retail natural gas and electricity markets, the timing and extent of
change in commodity prices for all forms of energy, capital spending
requirements, the evolution of competition, earnings retention and dividend
payout policies, changes in accounting standards, the implementation of the
stipulation, the consummation of the proposed merger with Northern States Power
Company and/or other factors. From time to time, New Century Energies, Inc. and
Southwestern Public Service Company may publish or otherwise make available
forward-looking statements. All such subsequent forward-looking statements,
whether written or oral and whether made by or on behalf of each company, are
also expressly qualified by these cautionary statements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NEW CENTURY ENERGIES, INC.
/s/Richard C. Kelly
-----------------------------
Richard C. Kelly
Executive Vice President and
Chief Financial Officer
SOUTHWESTERN PUBLIC SERVICE COMPANY
/s/Richard C. Kelly
-----------------------------
Richard C. Kelly
Executive Vice President,
Chief Financial Officer and Treasurer
Dated: June 1, 2000
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