-----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, Q9DrmZjhXFh8BGbR/olLFb5RpJkZ4yA81FvG6T4A7/rHURjDcgxd/JtJtg5UXBkP +qSloe1Vb+nASq6omB/RuQ== 0000891836-97-000159.txt : 19970311 0000891836-97-000159.hdr.sgml : 19970311 ACCESSION NUMBER: 0000891836-97-000159 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970310 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970310 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NIAGARA MOHAWK POWER CORP /NY/ CENTRAL INDEX KEY: 0000071932 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 150265555 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-02987 FILM NUMBER: 97553313 BUSINESS ADDRESS: STREET 1: 300 ERIE BLVD W CITY: SYRACUSE STATE: NY ZIP: 13202 BUSINESS PHONE: 3154741511 MAIL ADDRESS: STREET 1: 300 ERIE BLVD W CITY: SYRACUSE STATE: NY ZIP: 13202 FORMER COMPANY: FORMER CONFORMED NAME: CENTRAL NEW YORK POWER CORP DATE OF NAME CHANGE: 19710419 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 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): March 10, 1997 NIAGARA MOHAWK POWER CORPORATION ------------------------------------------------------ (Exact Name of Registrant as specified in its charter) New York 1-2987 15-026555 - ---------------------------- -------------- -------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 300 Erie Boulevard West, Syracuse, NY 13202 - ---------------------------------------- ---------- (Address of Principal executive offices) (Zip Code) Registrant's telephone number, including area code: 315-474-1511 Not Applicable (Former Name or Former Address, if changed Since Last Report) Item 5. Other Events The Company announced on March 10, 1997 an agreement in principle to restructure or terminate 44 power purchase contracts. The agreement in principle contemplates that Niagara Mohawk would pay the counterparties to these contracts approximately $3.6 billion in cash and/or debt securities and 46 million common shares, representing approximately 25 percent of the anticipated fully diluted common shares. In addition, Niagara Mohawk would enter into new agreements that would further compensate these counterparties and hedge specified amounts of power at specified prices (subject in certain cases to adjustment for changes in gas or other indices). The contracts may be in the form of fixed financial and physical agreements, options, indexed financial instruments, or a combination thereof. Set forth below is a schedule of possible quantities and prices to be reflected in such contracts. HYDRO COAL AND WASTE** GAS** ----------------------- -------------------- ---------------------- QUANTITY PRICE/ QUANTITY PRICE/ QUANTITY PRICE/ YEAR (GWH) MWH* (GWH) MWH (GWH) MWH - ------ --------- --------- --------- ------- ----------- -------- 1 875 $86 - $98 353 $ 28 4,630 $ 46 2 875 88 - 100 353 28 4,640 46 3 875 93 - 101 353 29 4,640 47 4 875 94 - 103 353 30 4,690 44 5 875 96 - 102 353 31 4,731 46 6 875 97 - 113 353 32 7,736 49 7 875 99 - 115 353 33 7,755 52 8 875 99 - 116 353 34 7,766 53 9 875 100 - 119 353 35 7,778 55 10 875 86 - 121 353 36 7,787 57 11 875 86 - 123 353 37 8,000 62 12 875 87 - 124 353 38 8,000 64 13 875 86 - 126 353 39 -- -- 14 875 89 - 126 353 41 -- -- 15 875 90 - 117 353 42 -- -- 16 802 101 - 122 353 43 -- -- 17 802 104 - 124 176 45 -- -- 18 802 115 - 125 -- -- -- -- 19 802 115 - 127 -- -- -- -- 20 802 114 - 129 -- -- -- -- - ---------- * Prices subject to final negotiation. ** May be subject to adjustment in certain cases for changes in gas or other indices. A press release describing the terms of the agreement in concept (and various conditions thereto) is filed as an exhibit hereto, and is incorporated hereto by reference. Item 7. Financial Statements and Exhibits 99.1 Press Release dated March 10, 1997. SIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereto duly authorized. NIAGARA MOHAWK POWER CORPORATION By /s/ Steven W. Tasker Name: Steven W. Tasker Title: Vice President-Controller Date: March 10, 1997 Exhibit Index Exhibit No. Description - ----------- -------------------------------------------- 99.1 Press Release dated March 10, 1997. EX-99.1 2 PRESS RELEASE DATED MARCH 10, 1997 Exhibit 99.1 Media Inquiries: Nicholas J. Ashooh 315/428-6922 Kerry P. Burns 315/428-5266 Financial Inquiries: Leon T. Mazur 315/428-5876 NIAGARA MOHAWK, INDEPENDENT POWER PRODUCERS AGREE IN PRINCIPLE TO RESOLVE ABOVE-MARKET POWER CONTRACTS Proposal Includes Cash, Debt Securities And Equity; Would Reduce Prices For All Customer Classes, Ease Transition To Competition; Details Still To Be Negotiated SYRACUSE, March 10 -- Niagara Mohawk Power Corp. (NYSE:NMK) and 19 independent power producers today jointly announced an agreement in principle to restructure or terminate 44 power purchase contracts. These contracts represent more than 90 percent of Niagara Mohawk's above-market power costs under all existing IPP contracts. The agreement contemplates that Niagara Mohawk would restructure or terminate the 44 power contracts in exchange for approximately $3.6 billion in cash and/or debt securities, and 46 million common shares, representing approximately 25 percent of the anticipated fully diluted outstanding common shares. The new debt will be subordinate to existing first mortgage bonds. In addition, Niagara Mohawk and the IPPs would enter into new agreements that would compensate the IPPs and hedge the prices for specified amounts of power. Additional information on possible terms for these agreements is being filed today with the Securities and Exchange Commission. Niagara Mohawk estimates it will realize savings of up to $5 billion, in nominal dollars, over 15 years, with those savings occurring in the second half of that period. Under the agreement, electricity prices for all customer classes would be reduced, with larger reductions allocated to large commercial and industrial customers to retain and attract jobs in upstate New York. Other state actions, such as passage of the Ratepayer Relief Act or cuts in utility taxes, would produce further savings for residential and commercial customers. William E. Davis, Niagara Mohawk's chairman and chief executive officer, and Joseph P. Kearney, president and CEO of U.S. Generating Co., one of the lead negotiators for the IPPs, both called the agreement in principle a critical step toward resolving the independent power issue. -MORE- "Although we have a lot more work to do, we now have an agreement that should allow us to deliver meaningful rate relief to customers while arresting Niagara Mohawk's financial decline," Davis said. "We also have a road map for rebuilding shareholder value and for positioning Niagra Mohawk to compete successfully in the new competitive electricity market." Kearney said "The agreement builds momentum toward competition and choice." Kenneth A. Buckfire, the Wasserstein Perella & Co., investment banker advising the IPPs, said, "This agreement represents a consensus of all 19 IPPs supporting an equitable settlement of the power contracts and restoring financial health to Niagara Mohawk, their key customer." Carol Murphy, executive director of the Independent Power Producers of New York said, "New York's independent power producers look forward to a strong energy partnership with Niagara Mohawk." All parties thanked the office of N.Y. Gov. George Pataki and Public Service Commission Chairman John O'Mara for their support and guidance during negotiations. The parties cautioned that there are still important issues that must be resolved including negotiations with each IPP of specific terms of the new price-hedging agreements that may be executed. Final resolution will also require execution of binding agreements; approval of Niagara Mohawk shareholders; New York Public Service Commission approval of both the agreement and an acceptable long-term rate structure; other state and federal approvals; successful completion of all financing transactions on reasonable terms; the resolution of all tax issues and obtaining required amendments or waivers under existing credit agreements and third-party contracts. The parties said they will begin negotiating remaining details immediately with a goal of presenting a final agreement to the New York PSC for approval. The parties will seek required financing following PSC approval and expect to close the transaction by year-end 1997. #### -----END PRIVACY-ENHANCED MESSAGE-----