SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
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) September 2, 1997
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Commission File Number 33-43508
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NORTH ATLANTIC ENERGY CORPORATION
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(Exact name of registrant as specified in its charter)
NEW HAMPSHIRE 06-1339460
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 ELM STREET, MANCHESTER, NEW HAMPSHIRE 03105
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(Address of principal executive officers) (Zip Code)
(603) 669-4000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events
a. PSNH Mediation Proceedings
On September 2, 1997, Public Service Company of New Hampshire (PSNH)
announced that the mediation involving its court challenge to the February
28, 1997 restructuring orders of the New Hampshire Public Utilities
Commission (NHPUC) had ended without a resolution. The parties are waiting
for a new procedural schedule from the U. S. District Court for Rhode Island.
The NHPUC also reopened its proceeding to reconsider certain limited matters
in its restructuring orders.
b. PSNH Temporary Rate Proceeding
As part of the mediation process, discussed above, PSNH filed a motion
for NHPUC approval consenting to the establishment of temporary rates until
permanent base rates are approved by the NHPUC. Permanent rates are not
expected to be determined until mid-1998. On September 11, 1997, PSNH filed
testimony of John Forsgren, Executive Vice President and Chief Financial
Officer of PSNH, with the NHPUC in connection with PSNH's temporary rate
proceeding. Mr Forsgren's testimony sets forth the significant negative
consequences to PSNH's financial condition if the NHPUC implements a one year
rate reduction of 11.41 percent, effective July 1, 1997. This amount is the
largest rate reduction of several alternatives proposed by the Staff of the
NHPUC but less than those advocated by the Office of Consumer Advocate and an
intervenor, Cabletron Systems, Inc.
Mr. Forsgren stated that such a rate reduction would "have an extremely
serious, even disabling effect on PSNH's ability to meet its financial
obligations" and "would cause a significant reduction of earnings and cash
flow."
In particular, in this scenario PSNH could have difficulty drawing from
existing credit lines or arranging alternative financing to meet a May 15,
1998, $170 million bond maturity and a $25 million preferred stock sinking
fund payment, and ongoing interest and preferred dividend obligations
required to be paid prior to July 1, 1998. Furthermore, PSNH could have
difficulty extending on May 1, 1998, $229 million of bank letters of credit
which currently support very low cost pollution control revenue bond
financing.
North Atlantic Energy Corporation's (NAEC) financial viability is
dependent upon that of PSNH and some or all of the consequences to PSNH
discussed above could also result in acceleration of NAEC's indebtedness.
Hearings on this matter will be held on September 16th and 18th, and,
while the procedural schedule does not have a date fixed for a decision, PSNH
estimates that a decision could be rendered by October 1. PSNH cannot
predict what action the NHPUC will take.
PSNH and NAEC are wholly owned subsidiaries of Northeast Utilities.
For more information regarding these matters, see the Company's current
reports on Form 8-K dated March 19, 1997 and June 28, 1997, quarterly reports
on Form 10-Q for the quarters ending March 31, 1997 and June 30, 1997 and
"Item 1. Business - Rates - New Hampshire Retail Rates" in the Company's 1996
Form 10-K.
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.
NORTH ATLANTIC ENERGY CORPORATION
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Registrant
Date September 16, 1997 By /s/John B. Keane
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John B. Keane
Vice President and Treasurer