-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WKz4fIb+8oIMursHXSG9iXcVvgWmvniLYmVnOi2spySMaYbGwX+UaqhnO8yRze5/ ZiqYp/kkB5aHr5xLHlrihQ== 0000018647-00-000015.txt : 20001214 0000018647-00-000015.hdr.sgml : 20001214 ACCESSION NUMBER: 0000018647-00-000015 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20001213 ITEM INFORMATION: FILED AS OF DATE: 20001213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL HUDSON GAS & ELECTRIC CORP CENTRAL INDEX KEY: 0000018647 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 140555980 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-03268 FILM NUMBER: 788266 BUSINESS ADDRESS: STREET 1: 284 SOUTH AVE CITY: POUGHKEEPSIE STATE: NY ZIP: 12601 BUSINESS PHONE: 9144522000 MAIL ADDRESS: STREET 1: 284 SOUTH AVENUE CITY: POUGHKEEPSIE STATE: NY ZIP: 12601 8-K 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 Date of Report - December 13, 2000 CENTRAL HUDSON GAS & ELECTRIC CORPORATION ----------------------------------------- (Exact name of registrant as specified in its charter) NEW YORK 1-3268 14-0555980 - --------------------- ------------------ ------------- State or other (Commission File (IRS Employer jurisdiction of Identification) Number) incorporation number 284 South Avenue, Poughkeepsie, New York 12601-4879 - ---------------------------------------- --------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (845) 452-2000 Item 5. Other Events. 1. Auction of the Nine Mile Point Unit No. 2 Nuclear Station --------------------------------------------------------- Reference is made to Note 3, "Nine Mile 2 Plant" of the Notes to Consolidated Financial Statements referred to in Item 8 of the Registrant's Annual Report, on Form 10-K, for the year ended December 31, 1999, as amended by Form 10-K/A, for a discussion of the ownership interest of Registrant in the Nine Mile Point Unit No. 2 Nuclear Station ("Nine Mile 2 Plant"). On December 12, 2000, Registrant announced that it has agreed to sell its interest in the Nine Mile 2 Plant to Constellation Nuclear LLC, as described in the Press Releases from both Registrant and Niagara Mohawk Power Corporation filed herewith as Exhibits 99 (i) 10 and 99 (i) 11. Item 7. Financial Statements and Exhibits. (b) Exhibits. See Exhibit Index. -------- 2 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. CENTRAL HUDSON GAS & ELECTRIC CORPORATION (Registrant) By: /s/ Donna S. Doyle ---------------------------------------------- DONNA S. DOYLE Vice President - Accounting & Controller Dated: December 13, 2000 3 Exhibit Index ------------- Exhibit No. Regulation S-K Item 601 Designation Exhibit Description - ----------- ------------------- 99 (i) 10 Press Release of CH Energy Group, Inc. issued December 12, 2000, relating to the sale of Registrant's interest in the Nine Mile Point 2 Nuclear Plant. 99 (i) 11 Press Release of Niagara Mohawk Power Corporation, issued December 12, 2000, relating to the sale of the interests of certain of the owners in the Nine Mile Point 1 and 2 Nuclear Plants. EX-99 2 0002.txt PRESS RELEASE EXHIBIT 99 (i) 10 December 12, 2000 For Release: Immediately Central Hudson Customers To Benefit from Sale of Nine Mile Point 2 Nuclear Plant (POUGHKEEPSIE, NY) Central Hudson Gas & Electric Corporation has agreed to sell its 9 percent interest in the Nine Mile Point 2 Nuclear Plant in Scriba, New York, to Constellation Nuclear as part of a sale announced by the site's cotenants after a competitive auction. The Poughkeepsie-based utility will receive $74 million for its 9 percent share of the 1,148-megawatt plant. Of this purchase price, $32 million will be paid at closing and another $42 million in principal and interest payments will be paid in five annual installments. All payments are subject to purchase price adjustments at the time of closing. As part of the agreement, the co-tenants will sell 82 percent of Nine Mile 2 for a total purchase price of $677 million, one of the highest values ever received for a nuclear plant. "Our customers benefit from this sale in two primary ways. First, the sale means that Central Hudson will have no 'stranded costs' that will be built into the delivery rates of many other electric utilities for years to come. These sale proceeds, when combined with those from the sale of our fossil-fuel units, mean that no Central Hudson customer will pay what is called a 'Competitive Transition Charge' to recover the costs of investments made during the regulated era, "said Arthur Upright, Senior Vice President. "That will help to keep delivery rates as low as possible. "Secondly, we negotiated a Purchase Power Agreement to buy 90 percent of the electricity we currently receive from the plant for the next 10 years in order to help stabilize the price of electricity for our customers. That will have enormous value during those critical years, while New York's deregulated electric market matures." 284 South Avenue Poughkeepsie, NY 12601-4879 Telephone (914) 471-8323 Nine Mile Point 2 began producing electricity in 1988. Niagara Mohawk Power Corporation, which also owns the adjoining Nine Mile Point 1, owns 41 percent of Unit 2 and is the operator of both plants. The Nuclear Regulatory Commission, the New York State Public Service Commission, the Federal Energy Regulatory Commission and other regulatory bodies must approve the sale. Completion is expected by mid-2001. Central Hudson invested a total of $528 million in Nine Mile Point 2. In 1987, its shareholders absorbed a $169 million, or 32 percent, write-off of this investment, and through depreciation the plant's book cost has declined further to approximately $295 million. It is estimated that there will be approximately $290 million in premium-above-book value received from the auction of Central Hudson's fossil-fuel generating units. These funds, along with the proceeds of the sale announced today, will be applied to the remaining book value of the Nine Mile Pont 2 investment. "We had invested in our fossil-fuel generating units at Roseton and Danskammer to ensure that they were among the best-performing units in the region. The market recognized this, and as a result, we received one of the highest prices in the nation for those units. Now, a portion of the profits from that enormously successful sale will be combined with the proceeds from the sale of Nine Mile Point 2 to eliminate any stranded costs for our customers, "Upright explained. "In fact, we have created a significant pool of customer benefits from the combined sale of the fossil and nuclear plants." # # # Statements included in this press release which are not historical in nature, are intended to be, and are hereby identified as, "forward-looking statements" for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended by Public Law 104-67, and within the meaning of the Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words including "anticipate," "believe," "intends," "estimates," "expect," and similar expressions. The Company cautions readers that forward-looking statements, including without limitation, those relating to the Company's future business prospects, revenues, proceeds, working capital, liquidity, income and margins, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements, due to several important factors including those identified from time-to-time in the Company's reports filed with the SEC. All forward-looking statements are intended to be subject to the safe harbor protections provided by the laws mentioned above. A number of important factors affecting the Company's business and financial results could cause actual results to differ materially from those stated in the forward-looking statements. Those factors include weather, energy supply and demand, developments in the legislative, regulatory and competitive environment, electric and gas industry restructuring and cost recovery, future market prices for energy, capacity and ancillary services, nuclear industry regulation, the outcome of pending litigation, and certain environmental matters, particularly ongoing development of air quality regulations and industrial waste remediation requirements. EX-99 3 0003.txt PRESS RELEASE EXHIBIT 99 (i) 11 Niagara Mohawk, NYSEG, Rochester Gas and Electric and Central Hudson to sell Nine Mile Point nuclear assets to Constellation Nuclear in deal valued at $1.04 billion Value includes $815 million in cash and payments, $134 million in interest and $88 million in decommission savings Syracuse-- Dec. 12 - Niagara Mohawk Power Corp. will sell its ownership of the Nine Mile Point 1 and 2 nuclear plants, and New York State Electric & Gas Corp., (NYSEG) Rochester Gas and Electric Corp., and Central Hudson Gas & Electric Corp. have agreed to sell their ownership of the Nine Mile 2 nuclear plant, to Constellation Nuclear, under an agreement announced today. Constellation Nuclear was the successful bidder in a competitive auction for the plants. The purchase price is $815 million in cash and payments and $134 million in interest for 82 percent of the 1,148-megawatt Nine Mile Point 2 plant and 100 percent of the 609-megawatt Nine Mile Point 1 plant. Of the purchase price, $407.5 million will be paid at closing and another $407.5 million in principal and $134 million in interest will be paid in five annual payments. The total of payments and interest for the 82 percent of Nine Mile 2 is $676.6 million. The total of payments and interest for Nine Mile 1 is $272.6 million. The sellers' pre-existing decommission funds will be transferred to Constellation, who will take responsibility for all future decommissioning funding. No additional funding from the sellers is required, a saving to the sellers of $88 million. Constellation Nuclear, a wholly owned subsidiary of Constellation Energy (NYSE:CEG), is the owner and operator of the two-unit Calvert Clifts nuclear plant in Maryland. -more- 300 Erie Boulevard West, Syracuse, New York 13202-4250 315.474.1511 www.niagaramohawk.com Page 2 Niagara Mohawk is a wholly owned subsidiary of Niagara Mohawk Holdings, Inc. (NYSE:NMK). NYSEG is a wholly owned subsidiary of Energy East Corp. (NYSE: EAS). Rochester Gas and Electric is a wholly owned subsidiary of RGS Energy Group (NYSE: RGS). Central Hudson is a wholly owned subsidiary of CH Energy Group, Inc. (NYSE:CHG). The Long Island Power Authority, an 18 percent owner of Nine Mile 2, is not participating in the sale. The sale is consistent with an April New York State Public Service Commission order urging the owners to determine the market value of the plants through an open, competitive process. Department of Public Service staff participated in the auction process. Niagara Mohawk will receive $145 million at closing and five annual principal and interest payments totaling $193 million for its 41 percent ownership share of Nine Mile 2. NYSEG will receive $64 million at closing and five annual principal and interest payments totaling $85 million for its 18 percent ownership share of Nine Mile 2. Rochester Gas and Electric will receive $ 50 million at closing and five annual principal and interest payments totaling $66 million for its 14 percent ownership share of Nine Mile 2. Central Hudson will receive $32 million at closing and five annual principal and interest payments totaling $42 million for its 9 percent ownership share of Nine Mile 2. Niagara Mohawk will also receive $117 million at closing and five annual principal and interest payments totaling $155 million for its 100 percent ownership share of Nine Mile 1. All payments are subject to purchase price adjustments at the time of closing. Also part of the transaction is a purchase power agreement calling for Constellation Nuclear to provide electricity to the sellers at negotiated competitive prices for approximately 10 years. After the completion of the purchase power agreement a revenue sharing agreement begins, which will provide a hedge against electricity price increases and could provide the sellers additional future revenue through 2021. Both the purchase power agreement and the revenue sharing agreement are based on plant output. The sale of the plants furthers the state's initiative to separate electricity generation from transmission and distribution, said Niagara Mohawk chairman and chief executive officer William E. Davis, speaking on behalf of the selling utilities. "The competitive auction process maximized the value for the plants and puts them in the hands of a proven nuclear organization committed to the continued safe and efficient operations of the plants," Davis said. "The sale also protects customers and shareholders from unforeseen operating and decommissioning costs." -more- 300 Erie Boulevard West, Syracuse, New York 13202-4250 315.474.1511 www.niagaramohawk.com Page 3 As part of the agreement, Constellation Nuclear will offer to continue employment to the approximately 1,330 employees at the two plants and will become the successor to the collective bargaining agreement with the International Brotherhood of Electrical Workers Local 97. The Nuclear Regulatory Commission, Federal Energy Regulatory Commission, New York State Public Service Commission, and other regulatory bodies must approve the sale. The transaction is targeted to close in mid-2001. Constellation Energy, parent company of Constellation Nuclear, is a holding company whose subsidiaries include energy-related businesses focused mostly on power marketing, generation and portfolio management, plus BGE, which provides service to more than 1.1 million electric customers and 590,000 natural gas customers in Central Maryland. Nine Mile Point is a two-unit boiling water reactor site. Nine Mile 1 began producing electricity in 1969. Nine Mile 2 began producing electricity in 1988. Niagara Mohawk operates both plants. The plants are located in Scriba, N.Y., approximately 40 miles north of Syracuse. J. P. Morgan & Co. Inc. acted as co-auction manager and financial advisor to Niagara Mohawk and NYSEG. Navigant Consulting Inc. acted as co-auction manager and financial advisor to Rochester Gas and Electric and Central Hudson. Note to Editors: A media conference call will be conducted today at 11:15 a.m. Eastern Standard Time. To join the conference call, please dial 1-800-683-1535 after 11:05 a.m., ask to be connected to the "Nuclear Plants" call. For those unable to join the call at that time, a replay will be available for 48 hours by calling 866-334-7071. Media Contacts: Niagara Mohawk - Alberto Bianchetti 315-349-7183 NYSEG - Clayton Ellis 607-762-7336 RG&E - Mike Power 716-724-8828 Central Hudson - Denise VanBuren 845-471-8323 -more- 300 Erie Boulevard West, Syracuse, New York 13202-4250 315.474.1511 www.niagaramohawk.com Page 4 Investor Contacts: Niagara Mohawk - Leon T. Mazur 315-428-5876 NYSEG - Thorn Dickinson 607-347-2561 RG&E - Mark Graham 716-724-8176 Central Hudson - Steven V. Lant 845-486-5254 NOTE: This release contains statements that constitute forward-looking information. Words such as "will" and "expect" and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to certain risks, uncertainties and assumptions. All of these forward-looking statements are based on estimates and assumptions made by the company's management which, although believed by the company's management to be reasonable, are inherently uncertain. Such forward-looking statements are not guarantees of future performance or results and involve certain risks and uncertainties. Actual results or developments may differ materially from the forward-looking statements as a result of various factors. ### -----END PRIVACY-ENHANCED MESSAGE-----