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): March 29, 1999
THE POTOMAC EDISON COMPANY
(Exact name of registrant as specified in its charter)
Maryland & Virginia 1-3376-2 13-5323955
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
10435 Downsville Pike
Hagerstown, Maryland 21740-1766
(Address of principal executive offices)
Registrant's telephone number,
including area code: (301) 790-3400
Item 5. Other Events.
VIRGINIA
As previously reported by the Company, the
Virginia General Assembly has been studying
electric utility restructuring. Legislation
concerning restructuring was introduced in the
Virginia General Assembly on January 21, 1999.
The Virginia General Assembly passed the Virginia
Electric Utility Restructuring Act (the
"Restructuring Act") on March 25, 1999. On March
29, 1999, Governor Jim Gilmore of Virginia signed
the Restructuring Act. Major provisions of the
Restructuring Act include:
- Customer choice of electric energy supply begins
January 1, 2002, to be phased in by January 1, 2004, a
schedule which is subject to acceleration or delay under
certain conditions;
- Incumbent utilities are required to join a regional
transmission entity by January 1, 2001;
- The State Corporation Commission ("SCC") is to develop
rules and regulations to implement customer choice;
- Utilities are required to unbundle rates, functionally
separate generation, transmission, and distribution, and
separate regulated and unregulated functions;
- Utilities are permitted but not required to sell
generation;
- Retail rates for generation, transmission and
distribution are capped from January 1, 2001 through January
1, 2007, although after January 1, 2004 a utility may
petition the SCC for termination of capped rates under
certain circumstances or petition for a one-time change in
the nongeneration component or rates;
- A wires charge mechanism is set forth for recovery of
stranded costs and other costs associated with the
transition to retail choice; and
- The utility may be designated in its service territory
as default service provider at regulated rates.
MARYLAND
On April 2, 1999, the Maryland General Assembly
passed legislation to restructure the electric
utility industry. On April 8, 1999, Governor
Parris N. Glendening of Maryland signed the
legislation that will bring competition to
Maryland's electric generation market. Major
provisions of the restructuring legislation
include:
- Phase-in of retail choice begins July 1, 2000, with all
customers being able to shop for electricity by July 1,
2002, a schedule subject to acceleration or delay under
certain conditions;
- A methodology is set forth to provide an opportunity to
recover certain net costs associated with the transition to
retail choice;
- Retail rates are capped from July 1, 2000, through July
1, 2004, with residential rate reductions of between 3% and
7.5% during the cap period, and certain flexibility in price
protection matters if approved as part of a settlement;
- Generation, supply and pricing of electricity are
deregulated and the legislation provides for the transfer of
generating assets to an affiliate;
- Voluntary sales of generating assets are permitted but
not mandated;
- Costs of purchased power contracts may remain regulated
or be recovered through the distribution function as part of
a settlement;
- Functional, operational, structural or legal separation
between regulated and unregulated utility businesses is
required, and utilities must unbundle their electric rate
components into separate charges;
- Creates a Universal Service fund and program to benefit
low-income customers; and
- Requires utilities to provide Standard Offer Service at
regulated rates through July 1, 2003, with certain
provisions for extension thereafter.
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.
THE POTOMAC EDISON COMPANY
(Registrant)
/s/ Thomas K. Henderson
Thomas K. Henderson
Vice President
Date: April 19, 1999