U-1/A

                                                               File No. 70-9069




                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                       ----------------------------------

                               AMENDMENT NO. 2 TO
                        FORM U-1 APPLICATION/DECLARATION

                                      UNDER

                 THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
                        ---------------------------------

                                 Conectiv, Inc.
                                 800 King Street
                           Wilmington, Delaware 19899
                       ----------------------------------

                     (Name of company filing this statement
                   and address of principal executive offices)

                                      None
                       ----------------------------------

                 (Name of top registered holding company parent)

Barbara S. Graham                         Michael J. Barron
President                                 Vice President
Conectiv, Inc.                            Conectiv, Inc.
800 King Street                           6801 Black Horse Pike
Wilmington, Delaware 19899                Egg Harbor Township, New Jersey 08234


                   (Names and addresses of agents for service)



The  Commission  is  requested  to  send  copies  of  all  notices,  orders  and
communications in connection with this Application- Declaration to:


Joanne C. Rutkowski, Esq.                James M. Cotter, Esq.
William S. Lamb, Esq.                    Vincent Pagano, Jr., Esq.
H. Liza Moses, Esq.                      Simpson Thacher & Bartlett
LeBoeuf, Lamb, Greene                    425 Lexington Avenue
  & MacRae, L.L.P.                       New York, New York  10017
125 West 55th Street 
New York, New York  10019


Dale Stoodley, Esq.                      James E. Franklin II, Esq.
Delmarva Power & Light Company           Atlantic Energy, Inc.
800 King Street                          6801 Black Horse Pike
Wilmington, Delaware  19899              Egg Harbor Township, New Jersey  08234


The Form U-1  Application/Declaration in this proceeding,  originally filed with
the Commission on July 2, 1997 and amended on August 13, 1997, is hereby amended
to the extent indicated below.


1. The following exhibit is added to Item 6.A.:


         J-4      Memorandum of Law in Response to The Motion of South
                  Jersey Gas Company.


                                    SIGNATURE

                  Pursuant to the  requirements  of the Public  Utility  Holding
Company Act of 1935, the undersigned  company has duly caused this Amendment No.
2 to the Application/Declaration of Conectiv, Inc. to be signed on its behalf by
the undersigned thereunto duly authorized.


Date: November 26, 1997

                                                     Conectiv, Inc.



                                                     By: /s/ B.S. Graham
                                                        Barbara S. Graham
                                                        President

EX-99

                                MEMORANDUM OF LAW
                                 IN RESPONSE TO
                     THE MOTION OF SOUTH JERSEY GAS COMPANY


     For the reasons set forth below, Conectiv, Inc. asks the Commission to deny
the Motion for a Formal Hearing and for Leave to File Supplemental Comments at a
Later Time submitted by South Jersey Gas Company ("South Jersey") on October 27,
1997, and  supplemented by Letter Brief on November 3, 1997  (collectively,  the
"Motion" or the "South Jersey Motion").

     The sole issue  presented by the Motion,  whether  Conectiv can acquire the
gas properties of Delmarva Power & Light Company,  is  well-settled  in favor of
the  continued  operation of those  properties  by Delmarva as a subsidiary of a
registered holding company. As explained more fully in the Conectiv application,
the retail gas operations at issue in this matter amply satisfy the standards of
Section 10(c)(1) and, by reference,  the "A-B-C" clauses of Section 11(b)(1), as
interpreted by this Commission and the courts.  See, e.g., New Century Energies,
Inc.,  Holding  Co. Act  Release  No.  26748  (Aug.  1, 1997) (the "New  Century
Energies order").

     Briefly  stated,  Section  11(b)(1)  permits a registered  holding  company
system  to own  more  than  one  integrated  public-utility  system  if  certain
conditions are met, namely:

                  (A) each of such  additional  systems cannot be operated as an
         independent system without the loss of substantial  economies which can
         be secured by the retention of control by such holding  company of such
         system;

                  (B) all of  such additional  systems are located in one state,
         adjoining states, or a contiguous foreign country; and

                  (C) the  continued  combination  of  such  systems  under  the
         control of such holding company is not so large  (considering the state
         of the art and the area or region affected) as to impair the advantages
         of localized management,  efficient operation,  or the effectiveness of
         regulation.

The intervenor  concedes that the  requirements  of clauses B and C are met but
argues  that  the   standards  of  clause  A  have   not  been  satisfied.   In
particular,  South Jersey  alleges that  Conectiv has failed to  demonstrate  by
clear and convincing evidence:  first, that divestiture would result in "serious
impairment" of the gas properties and second,  that  competition in the Delmarva
service  territory is so robust as to overcome the assumption that a combination
of gas and electric operations is disadvantageous to the gas operations.

     With  respect  to  the   intervenor's   first  point,  the  record  clearly
establishes  that there  would be a  substantial  loss of  economies  if the gas
operations were divested. Historically, as a "guide" to determining whether lost
economies are "substantial" under Section 11(b)(1)(A), under its previous narrow
interpretation of this section,  the Commission has given  consideration to four
ratios which  measure the  projected  loss of economies as a percentage  of: (1)
total gas  operating  revenues;  (2) total gas  expense  or  "operating  revenue
deductions";  (3) gross gas  income;  and (4) net gas income or net gas  utility
operating  income.  Although the  Commission  has declined to draw a bright-line
numerical  test  under  Section  11(b)(1)(A),  it has  recently  noted that cost
increases resulting in a 6.78% loss of operating  revenues,  a 9.72% increase in
operating revenue deductions, a 25.44% loss of gross income and a 42.46% loss of
net income would afford an  "impressive  basis for finding a loss of substantial
economies." See New Century  Energies,  citing  Engineers Public Service Co., 12
S.E.C. 41, 59 (1942).

     As explained more fully in the  application  at pages 55-56,  the losses in
the instant matter,  both in absolute and relative terms,  exceed those accepted
by  the  Commission  in  New  Century  Energies  and  the  Engineers   decision.
Divestiture  of the Delmarva gas  operations  would result in lost  economies of
$14,728,000  for the  stand-alone  company.  These lost  economies  compare with
Delmarva's  gas  operating  revenues  of  $104,687,000,  gas  operating  revenue
deductions of $84,628,000, gas gross income of $20,059,000 and gas net income of
$13,910,000. On a percentage basis, the lost economies would represent 14.07% of
gas operating  revenue,  17.40% of gas operating revenue  deductions,  73.42% of
gross gas income and 105.88% of net gas income.  Indeed, the percent loss in net
gas income alone would exceed the 30% loss that the  Commission has described as
the highest loss of net income in any past divestiture order.1

     To recover these lost economies,  the gas operations would have to increase
revenue  from rates by  $15,493,000  or 14.80%.  Such an  increase  would have a
direct and immediate  negative  impact on the rates charged to consumers for gas
services.  As the Commission  recognized in the New Century  Energies  order, in
today's energy markets, "the separation of gas and electric businesses may cause
the  separated  entities to be weaker  competitors  than they would be together.
This factor  adds to the  quantifiable  loss of  economies  caused by  increased
costs." Emphasis added.

- --------

1      New England  Electric System,  41 S.E.C. 888 (1964),  aff'd, 384 U.S. 176
       (1966) and 390 U.S. 207 (1968).



     With respect to the intervenor's second point, in New Century Energies, the
Commission  reexamined  the factual  underpinning  of the decision of the United
States Supreme Court in SEC v. New England Electric System,  390 U.S. 207 (1968)
(the "NEES decision"):

             In the 1960s,  when the NEES case was decided,  utilities were
             primarily franchised  monopolies with captive ratepayers,  and
             competition between suppliers of gas and electricity,  however
             limited,  was virtually the only source of customer choice and
             was thus deemed beneficial to energy consumers.  The fact that
             other  gas   utilities  of   comparable   size  could  operate
             successfully  on an independent  basis was evidence that a gas
             system  could also  operate on its own,  a  desirable  result,
             without a substantial  loss of economies.  The empirical basis
             for these assumptions,  however, is rapidly eroding.  Although
             franchised  monopolies  are  still the  rule,  competition  is
             increasing.  Increased  expenses of separate  operation may no
             longer be offset, as they were in New England Electric System,
             by  a  gain  of  qualitative  benefits,   but  rather  may  be
             compounded by a loss of such benefits, as the Commission finds
             in this matter.
             Emphasis added.

The decision in New Century Energies was  not predicated  on the introduction of
retail  wheeling in the affected  jurisdictions.   Indeed, the record is silent
on that point.  Rather,  the  Commission  was  speaking  to the larger  issue of
competition  in the energy  markets  generally.  Such  competition  can  include
wholesale  competition,  intra-fuels  competition  and the  move  by many  large
industrial customers to self-generation,  in addition to retail competition. The
significance  of such  competition  is that it addresses the concern of the NEES
court that a  registered  holding  company  with both gas and  electric  utility
operations  might be  tempted  to  favor  one  technology  over  another  to the
detriment of utility  consumers.  In New Century Energies,  the Commission noted
that it is  appropriate  to revisit its  interpretation  of the Act "in light of
these  changed and  changing  circumstances."  See also Union  Electric  Co., 45
S.E.C.  489,  509-10  (1974),  aff'd sub nom. City of Cape Girardeau v. SEC, 521
F.2d 324 (D.C.  Cir.  1975)  (noting that the issue of retention of  combination
systems must be resolved  "in a way that makes  economic and social sense in the
light  of  contemporary  realities"),  and  Municipal  Electric  Association  of
Massachusetts  v. SEC,  413 F.2d 1052,  1059  (D.C.  Cir.  1969)  ("That a . . .
development of . . . importance and probable  impact . . . was not foreseen when
the Act was  written  should  not  justify a static  historical  reading  of its
provisions").


     In the instant case, as in New Century  Energies,  the gas properties  have
long been under common control with Delmarva's electric operations. Ownership of
these  properties  by Conectiv will not alter the status quo with respect to the
utility operations.  Further, the relevant state commission has already approved
the proposed  Mergers.  Thus, in this matter,  as in New Century  Energies,  the
Commission  should find, in light of the increased  expenses,  and the potential
loss of  competitive  advantages  that could  result  from  separation  from the
electric system, that the requirements of clause A are satisfied.

     Accordingly,    for   the   reasons   set   forth   herein   and   in   the
Application-Declaration,  as amended, Conectiv requests that the Commission deny
the South Jersey Motion,  and issue an order approving  proposed  transaction no
later than December 31, 1997.