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) November 2, 1998
PP&L Resources, Inc.
___________________________________________________________________________
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-11459 23-2758192
___________________________________________________________________________
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
No.)
PP&L, Inc.
___________________________________________________________________________
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-905 23-0959590
___________________________________________________________________________
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
No.)
TWO NORTH NINTH STREET, ALLENTOWN, PA. 18101-1179
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 610-774-5151
___________________________________________________________________________
(Former name or former address, if changed since last report.)
5. Other Events
The following text is from a Company news release of
November 2, 1998:
PP&L Global to Acquire Montana Generating Assets
PP&L Global, Inc., a subsidiary of PP&L Resources, Inc.
(NYSE:PPL), announced Monday (11/2) that it has signed
definitive agreements to acquire 13 Montana power plants, with
more than 2,600 megawatts of generating capacity, for a purchase
price of $1.586 billion. The acquisition is the largest in the
history of PP&L Resources.
Under the terms of the agreements, PP&L Global will acquire
one coal-fired plant and 11 hydroelectric facilities from
Montana Power Company. It also will acquire the controlling
interest in a large four-unit, coal-fired power plant from
Montana Power, Portland General Electric Company and Puget Sound
Energy, Inc. The acquisition will provide PP&L Global with
2,614 megawatts of capacity in Montana.
"This acquisition provides us with a solid strategic entry
into an entirely new region of the country, consistent with our
objective of becoming a major supplier of electricity in key
markets throughout the United States," said Bill Hecht,
chairman, president and chief executive officer of PP&L
Resources. "We are very much looking forward to providing the
people of the Northwest with reliable supplies of electricity,
just as we have done for the people of Pennsylvania for nearly
eight decades, and for the people of Latin America, Europe and
England in recent years."
"The company expects that the necessary regulatory
approvals for the acquisition will be obtained by the end of
1999 and that the first year of operation will be break-even
from an earnings per share perspective," said Hecht.
"Thereafter, the acquisition is expected to improve earnings per
share in increasing amounts with the passage of time."
Hecht said that about 65 percent of the acquisition cost is
expected to be financed on a project credit basis, which will be
non-recourse to PP&L Global and PP&L Resources. The balance of
the acquisition cost is expected to be financed through a
combination of debt and equity issued by PP&L Resources, or with
funds that PP&L Resources derives from PP&L, Inc.'s
securitization of transition costs.
Hecht said that, "after giving effect to the debt service
associated with the project financing and projected capital
expenditures, the acquisition is expected to result in strong
cash flows for PP&L Resources immediately following closing."
Chase Securities Inc. has been retained by PP&L Global as
financial adviser for the acquisition.
"Because the PP&L Resources family of companies has the
expertise and experience to successfully operate world-class
power plants, we have targeted the electricity generation
business as an important growth area for us," said Hecht. "The
acquisition of these important Western U.S. power plants is a
significant step in our efforts to acquire low-cost,
environmentally friendly generation facilities."
A month ago, PP&L Global reached an agreement to acquire
the generation facilities of Bangor Hydro-Electric Company,
providing the company with important assets in the growing New
England energy market. Over the past year, PP&L Global has
announced plans to develop new power plants in Arizona,
Connecticut and Pennsylvania.
With the addition of the Montana assets, PP&L Global now
has specific commitments to purchase or develop more than 4,000
megawatts of generating capacity in key U.S. markets over the
next several years. "Through its family of companies, PP&L
Resources is well on its way to becoming a major supplier of
electricity throughout the United States. The projects in which
PP&L Global has invested or is developing will increase PP&L
Resources' U.S. generation portfolio to more than 12,000
megawatts," said Hecht.
Montana Power is selling its generating assets as part of
the deregulation of the electricity business in the state.
Bob Fagan, president of PP&L Global, will oversee the
operation of the Montana Power facilities once appropriate
regulatory approvals are secured. Roger Petersen, PP&L Global's
vice president and chief operating officer, said in Butte,
Montana, Monday that PP&L Global will form a Montana subsidiary
to manage operation of the power plants.
The Montana power plants employ about 500 people. Petersen
said that PP&L Global does not anticipate any layoffs as a
result of the acquisition.
"Montana Power and its employees have done an excellent job
in preparing these power plants for the more competitive
electricity business and in operating them in a way that
protects the environment and water resources while providing
recreational opportunities for area residents," said Petersen.
"We plan to operate these facilities with the same care and
community commitment that Montana Power has exhibited over the
years."
PP&L Global is purchasing Montana Power's interest in the
four-unit Colstrip coal-fired power plant, as well as the
interests of Portland General and Puget Sound, totaling 1,874
megawatts. Washington Water Power and Pacific Power & Light
will retain their interests in Colstrip Units 3 and 4 -- a total
of 402 megawatts. PP&L Global will have operational
responsibility for all four units at the facility. Located in
southeastern Montana, Colstrip is the second-largest coal-fired
power plant west of the Mississippi River.
PP&L Global also is purchasing the Corette coal-fired
plant, a 163-megawatt facility located near Billings. And, the
agreement also includes PP&L Global's purchase of 577 megawatts
of capacity in hydroelectric facilities located in the Columbia
and Missouri-Madison river basins and a storage reservoir at
Hebgen Lake.
"The Montana facilities are among the best operating in the
United States and are consistently among the 10 lowest fuel cost
plants in the Western Systems Coordinating Council, which
includes all the western states and the Canadian provinces of
Alberta and British Columbia," said Petersen.
He said that recent productivity improvements have made the
operations even more attractive. "We also have been very
impressed with the experienced personnel at all of these
facilities, and with their superior work ethic. Given PP&L
Resources' history of excellent operational performance, we see
this acquisition as a perfect fit -- for the people in Montana
and for the investors of PP&L Resources," said Petersen.
Petersen pointed out that several western states --
California, Nevada and Montana -- already provide retail
electricity customers with the opportunity to choose their
supplier and additional states are moving in that direction. He
said the Montana power plants provide PP&L Global with an
excellent presence in this huge market, which is opening up to
competition.
PP&L Global may also purchase various transmission
interests related to Colstrip, which are valued at $182 million.
With this acquisition, PP&L Global now has investments and
commitments totaling more than $2.3 billion. In addition to the
acquisition of the Maine power plants, PP&L Global also is
developing power plants near Kingman, Arizona, in Wallingford,
Connecticut., and in eastern Pennsylvania, with a combined
generating capacity of more than 1,500 megawatts.
Photos of some of the Montana facilities will be available
on PP&L Resources' Internet home page Tuesday (11/3), at
www.pplresources.com. You'll find them in the news release
titled "PP&L Global to Acquire Montana Generating Assets."
Certain statements contained in this news release
concerning expectations, beliefs, plans, objectives, goals,
strategies, future events or performance and underlying
assumptions and other statements that are other than statements
of historical facts, are "forward-looking statements" within the
meaning of the federal securities laws. Although PP&L Resources
believes that the expectations and assumptions reflected in
these statements are reasonable, there can be no assurance that
these expectations and assumptions will prove to have been
correct. These statements involve a number of risks and
uncertainties, and actual results may differ materially from the
results discussed in these statements. The following are among
the factors that could cause actual results to differ materially
from these forward-looking statements: state and federal
regulatory treatment; new state or federal legislation; national
or regional economic conditions; market demand and prices for
energy and capacity; weather variations affecting customer
usage; competition in retail and wholesale power markets; the
need for and effect of any business or industry restructuring;
new accounting requirements or new interpretations or
applications of existing requirements; operating performance of
plants and other facilities; environmental conditions and
requirements; and system conditions and operating costs. Any
such forward-looking statements should be considered in light of
these factors and in conjunction with PP&L Resources' documents
on file with the Securities and Exchange Commission. New
factors that could cause actual results to differ materially
from those described in forward-looking statements emerge from
time to time, and it is not possible for PP&L Resources to
predict all of such factors, or the extent to which any such
factor or combination of factors may cause actual results to
differ from those contained in any forward-looking statement.
Any forward-looking statement speaks only as of the date on
which such statement is made, and PP&L Resources undertakes no
obligation to update the information contained in such statement
to reflect subsequent developments or information.
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.
PP&L RESOURCES, INC.
PP&L, INC.
By: /s/John R. Biggar
Senior Vice President and
Chief Financial Officer
Date: November 2, 1998