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 June 26, 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
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 and
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 of Atlantic Energy, Inc. and Atlantic City Electric Company
(ACE).
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 NRC concurrence that they are
prepared to restart. PS has advised ACE that PS expects to
return Salem Unit 1 to operation in the second quarter of 1997
upon installation of new steam generators being purchased from
the unfinished Seabrook Nuclear Unit 2 in New Hampshire. Salem
Unit 2 is currently estimated to return to service on or about
August 27, 1996.
Also as previously reported, by Order dated March 14, 1996,
the BPU ordered both ACE and PS's base rates related to Salem
Unit 1 interim and subject to refund, effective immediately,
pending a full hearing as to whether Salem I is currently used
and useful. The BPU ordered ACE and PS to file briefs with
regard to why the BPU should not, after hearings, immediately
declare base rates related to Salem Unit 2 interim and subject to
refund pending hearings to determine if Salem Unit 2 is used and
useful. ACE and PS were also ordered to furnish for each unit,
based on each utility's last base rate case, the level of net
plant investment and the amount of operating and maintenance
expenses currently included in base rates. Also, ACE and PS were
ordered to identify the level of replacement power costs incurred
by each utility to date, as well as the projected monthly
replacement power costs for the duration of the outage.
Hearings are to be held by the BPU regarding the issue as to
whether Salem Unit 1 and Salem Unit 2 continue to be used and
useful and the actual level of any appropriate rate reduction.
Also as previously reported, ACE filed plant investment and
cost information relating to Salem Station on April 4, 1996.
Such information was based on the test year ending May 31, 1991,
utilized in ACE's last base rate proceeding and other
information provided by station operator PS, for determining the
allocation of plant investment among Salem Unit 1, Salem Unit 2
and common facilities. The total revenue requirements estimate
is $12.5 million for Salem Unit 1, $10.8 million for Salem Unit 2
and $11.3 million for facilities that are common to both Salem
Units 1 and 2.
On June 19, 1996, the BPU issued an oral decision declaring
Salem Unit 2 rates interim and subject to refund as of such date.
The BPU, in rendering such oral decision, 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.
The issue of whether or not Salem Unit 1 and Salem Unit 2
are no longer used and useful will be addressed in hearings
before the BPU. The dates for such hearings have yet to be
determined; however, if Salem Unit 2 returns to commercial
operation as scheduled, ACE expects that the used and useful
determination related to Unit 2 will be negated. 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 Adjustment Clause and that
the estimated $3.3 million Nuclear Performance Standard penalty
for 1996 would be substantially reduced. ACE cannot predict the
outcome of these proceedings.
ACE expects that its share of the operations and maintenance
expenses incurred in connection with restart activities to date,
will exceed its previous 1996 estimate of $5.8 million. The
extent of such increase is not presently determinable.
PS has advised ACE that on June 11, 1996, the NRC advised PS
that it expects to conclude its Final Safety Analysis Report
(FSAR) Project with regard to Salem Station shortly before the
August 27, 1996 estimated restart of Salem Unit 2. The FSAR
Project is designed to provide reasonable assurance that Salem
Units will be operated within their licensing and design basis.
The FSAR Project includes various levels of review of 46 major
systems in the Salem Station, depending on their risk
significance. While some safety systems will receive the most
comprehensive review, all 46 systems will receive a configuration
walkdown, a system readiness review, and maintenance rule
implementation and Significant Event Report reviews before
restart. PS has advised ACE that while PS does not expect that
the FSAR Project will adversely affect the scheduled restart of
Salem Unit 2, no assurances can be given.
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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: June 26, 1996