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): October 17, 1995
PENNSYLVANIA ELECTRIC COMPANY
(Exact name of registrant as specified in charter)
Pennsylvania 1-3522 25-0718085
(State or other (Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation)
2800 Pottsville Pike, Reading, Muhlenberg Township, Berks County,
PA 19640-0001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 929-
3601
ITEM 5. OTHER EVENTS
As previously reported, as a result of the 1979
accident at Unit No.2 of the Three Mile Island Nuclear Generating
Station (TMI-2) and its aftermath, individual claims for alleged
personal injury (including claims for punitive damages), which
are material in amount, have been asserted against the
Corporation and its Subsidiaries. Approximately 2,100 of such
claims are pending in the United States District Court for the
Middle District of Pennsylvania. At the time of the accident, as
provided for in the Price-Anderson Act (which, among other
things, provides liability limitations for accidents involving
commercial nuclear reactors), the Subsidiaries had (i) primary
financial protection in the form of insurance policies with
groups of insurance companies providing an aggregate of $140
million of primary coverage, (ii) secondary financial protection
in the form of private liability insurance under an industry
retrospective rating plan providing for up to an aggregate of
$335 million in premium charges under such plan and (iii) an
indemnity agreement with the NRC for up to an aggregate of $85
million, bringing the total primary, secondary and tertiary
financial protection up to an aggregate of $560 million. Under
the secondary level, the Subsidiaries are subject to a
retrospective premium charge on a pro rata basis, which in the
aggregate will not exceed $15 million, as their portion of this
level of financial protection. In March 1994, the defendants in
the TMI-2 litigation and the insurers agreed that the insurers
would withdraw their reservation of rights with respect to any
award of punitive damages.
1
On October 17, 1995, the U. S. Court of Appeals for the
Third Circuit ruled that the federal Price-Anderson Act provides
coverage under its primary and secondary levels for punitive as
well as compensatory damages, but that punitive damages could not
be recovered against the Federal Government which, as described
above, provides the third level of financial protection. In so
doing, the Court referred to the "finite fund" to which
plaintiffs must resort to get compensatory as well as punitive
damages.
The Court of Appeals, in a related action, also found that
the standard of care owed by the defendants to a plaintiff was
determined by the specific level of radiation which was released
into the environment, as measured at the site boundary, rather
than as measured (as the GPU defendants proposed) at the specific
site where the plaintiff was located at the time of the accident.
The Court also held, however, that each plaintiff still must
demonstrate exposure to radiation released during the TMI
accident and that such exposure had resulted in their injuries.
The GPU defendants believe that any liability to which they
might be subject by reason of the TMI-2 accident and these Third
Circuit decisions will not exceed the sum of their primary and
secondary financial protection under the Price-Anderson Act. A
trial of ten allegedly representative cases is scheduled to begin
in June 1996.
A copy of a related news release is annexed as an
exhibit hereto.
ITEM 6. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(c) Exhibits
2
1. GPU News Release, dated October 17, 1995
3
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 THEREUNTO DULY
AUTHORIZED.
PENNSYLVANIA ELECTRIC COMPANY
By:______________________________
T. G. Howson, Vice President
and Treasurer
Date: October 20, 1995