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) November 25, 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
1. New Hampshire Electric Cooperative Inc. Purchase Offer
On November 12, 1997, Public Service Company of New Hampshire (PSNH), a
wholly owned subsidiary of Northeast Utilities (NU), received an unsolicited
offer from New Hampshire Electric Cooperative Inc. (NHEC) to purchase PSNH's
transmission and distribution facilities, as well as PSNH's claims for
recovery of stranded costs, for $1.4 billion. The NHEC proposal also
addressed the possible settlement of outstanding disputes among PSNH, NHEC
and/or the New Hampshire Public Utilities Commission, called for PSNH to
purchase NHEC's ownership shares in the Seabrook and Maine Yankee nuclear
plants and mentioned the possibility of a 22 percent rate reduction for
customers in 1998.
After a meeting between representatives of PSNH and NHEC and further
review of the proposal, PSNH responded on November 25, 1997 to NHEC that the
lack of certain information in the proposal made it impossible for PSNH to
respond in a definitive manner at this time. In particular, PSNH asked NHEC
to address the following deficiencies in the proposal in order to allow PSNH
to give it further consideration:
FINANCING - The terms of NHEC's financing were unclear and had to be
made specific, including whether funds from National Rural Utilities
Cooperative Finance Corporation and through a $1 billion guarantee from
the State of New Hampshire were available.
TAX CONSEQUENCES - The proposal did not address the hundreds of millions
of dollars of federal tax liabilities that PNSH would incur as a result
of the sale.
NUCLEAR REGULATORY COMMISSION (NRC) - The proposal did not address the
NRC regulatory issues related to decoupling the Seabrook Power Contract
and Millstone 3 obligations from the distribution company.
OPERATIONS AND RELIABILITY - The proposal did not include sufficient
detail on how NHEC would be able to meet the operational needs of a
significantly increased service territory.
TIMING - The proposal did not take into account the impact that the
regulatory approval process would have on effecting the sale, and the
consequent delay in implementing retail competition in New Hampshire.
ECONOMIC ADEQUACY - Based on PSNH's preliminary analysis, NHEC's
proposal would leave PSNH with around $1 billion of unfunded liabilities
and other costs.
PROPOSED RATE REDUCTION - NHEC has not demonstrated how a 22 percent
rate reduction for its customers can be achieved in 1998 in light of the
deficiencies set forth above.
Until NHEC adequately addresses these and a number of other issues, PSNH
cannot proceed any further.
For more information regarding restructuring issues in New Hampshire and
the Seabrook Power Contract, see NU's current reports on Form 8-K dated March
19, 1997, June 26, 1997 and September 2, 1997, quarterly reports on Form 10-Q
for the quarters ending March 31, 1997, June 30, 1997 and September 30, 1997
and "Item 1. Business-Rates-New Hampshire Retail Rates" in NU'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 November 26, 1997 By /s/John B. Keane
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John B. Keane
Vice President and Treasurer