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): June 30, 1998
PSI Energy, Inc.
(Exact name of registrant as specified in its charter)
Indiana 1-3543 35-0594457
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
1000 East Main Street, Plainfield, IN 46168
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (317) 839-9611
ITEM 5. OTHER EVENTS.
PSI Energy, Inc. (Company), a subsidiary of Cinergy Corp., will take a one-time
charge against second quarter 1998 earnings of $80 million ($50 million after
tax), reflecting implementation of a 1989 settlement of a dispute with the
Wabash Valley Power Association, Inc. (WVPA).
The dispute with WVPA resulted from the cancellation of the Marble Hill nuclear
power station in 1984. The Company has assumed WVPA's liability to Rural
Utilities Service and the National Rural Utilities Cooperative Finance
Corporation and will repay the obligation with interest over a 35-year term. The
Company will use the net proceeds from a 35-year power sales agreement with WVPA
to fund the principal amount of and interest on the obligation.
The Company also announced that it will provide additional reserves of $7
million ($4 million after tax) in the second quarter of 1998 for its electric
trading business. These additional reserves reflect the results of the Company's
reassessment of the basis upon which it provides reserves, including those for
credit exposure, on its existing contracts.
The Company expects no realized loss from its trading operations in the second
quarter of 1998, despite dramatic swings in the electricity market caused by
unseasonably hot weather in June, scheduled and unplanned generating unit
outages in the region and defaults by several power marketers on their supply
obligations. The Company considered the effects of these events in estimating
the value of its existing contract positions.
SIGNATURES
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.
PSI Energy, Inc.
(Registrant)
Date: July 15, 1998 By: /s/ John P. Steffen
-----------------------------
John P. Steffen,
Vice President and Comptroller
(Signature)