8-K

As filed with the Securities and Exchange Commission on December 13, 2000

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 - December 12, 2000

Commission                              Registrant, State of Incorporation                             I.R.S. Employer
File Number                              Address and Telephone Number                               Identification No.
0-25595                                    Niagara Mohawk Holdings, Inc.                              16-1549726
                                               (a New York corporation)
                                               300 Erie Boulevard West
                                               Syracuse, New York 13202
                                               315.474.1511

1-2987                                     Niagara Mohawk Power Corporation                       15-0265555
                                               (a New York corporation)
                                               300 Erie Boulevard West
                                               Syracuse, New York 13202
                                               315.474.1511

Item 5.  Other Events

(a)   On December 12, 2000, Niagara Mohawk Power Corporation issued a press release announcing an agreement
       to sell its Nine Mile Point Unit 1 and 41 percent share of its Nine Mile Point Unit 2 nuclear plants. (Exhibit No. 99-1)

(b)   Niagara Mohawk Power Corporation also distributed a summary presentation of the Value Components of the
       Sale. (Exhibit No. 99-2)

Item 7. Financial Statements and Exhibits

Exhibits – Following is the list of exhibits furnished in accordance with the provisions of Item 601 of Regulation S-K, filed as part of this current report on Form 8-K.

Exhibit No. 99-1 – Press release issued on December 12, 2000 announcing an agreement to sell its Nine Mile Point Unit 1 and 41 percent share of its Nine Mile Point Unit 2 nuclear plants.

Exhibit No. 99-2 – Summary presentation of Value Components of the Sale for Niagara Mohawk Power Corporation.

NIAGARA MOHAWK HOLDINGS, INC. AND SUBSIDIARY COMPANIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

                                                                                 NIAGARA MOHAWK HOLDINGS, INC.
                                                                                                           (Registrant)

Date:  December 13, 2000                                       By:     /s/ Steven W. Tasker
                                                                                          Steve W. Tasker
                                                                                          Vice President–Controller and
                                                                                          Principal Accounting Officer

                                                                                 NIAGARA MOHAWK POWER CORPORATION
                                                                                                           (Registrant)

Date:  December 13, 2000                                       By:     /s/ Steven W. Tasker
                                                                                          Steve W. Tasker
                                                                                          Vice President–Controller and
                                                                                          Principal Accounting Officer

EXHIBIT INDEX

Following is the index of Exhibits furnished in accordance with the provisions of Item 601 of Regulation S-K, filed as part of this current report on Form 8-K.

Exhibit No. 99-1 – Press release issued on December 12, 2000 announcing an agreement to sell its Nine Mile Point Unit 1 and 41 percent share of its Nine Mile Point Unit 2 nuclear plants.

Exhibit No. 99-2 – Summary presentation of Value Components of the Sale for Niagara Mohawk Power Corporation.

EX-99

EXHIBIT NO. 99-1

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 & 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.

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.”

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

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

In a separate news release, Niagara Mohawk said:

The agreement to sell Niagara Mohawk Power Corp.‘s nuclear assets is an important milestone in the planned merger with National Grid Group plc (LSE, NYSE:NGG), Niagara Mohawk Holdings Corp. (NYSE:NMK) Chairman and Chief Executive William E. Davis said today.

“The sale of Niagara Mohawk’s nuclear plants will satisfy a condition of our agreement with National Grid,” Davis said. “Niagara Mohawk and National Grid continue to make progress on planning the integration of the two companies and look forward to gaining the regulatory approvals that will permit the merger’s completion in late 2001. Today’s announcement of a nuclear sale agreement supports that timing.”

Niagara Mohawk today agreed to sell its 41 percent share of the Nine Mile 2 nuclear plant and 100 percent share of the Nine Mile 1 nuclear plant to Constellation Nuclear, a wholly owned subsidiary of Constellation Energy Group (NYSE:CEG), for $262 million in cash and five installments of principal and interest totaling $348 million. In September, National Grid and Niagara Mohawk announced a merger agreement under which National Grid will acquire Niagara Mohawk.

Note to Analysts and Editors:

Analysts:

The company will host an analyst conference call today at 10:00 a.m. Eastern Standard Time. To join the conference call, please dial 800–370–0906 after 9:50 a.m. Only analysts will be able to participate in the question and answer session. For those unable to join the call at that time, a replay will be available for one week by calling 888–695–7641.

In addition, the conference call will be simultaneously webcast live and archived at http://www.vcall.com. Listeners should go to the web site at least fifteen minutes before the event to download and install any necessary audio software. A reply will b available beginning approximately two hours after the event. There is no charge to access this event.

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.

NOTE:   These releases contain 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.

EX-99

Exhibit No. 99-2

Niagara Mohawk Presentation

Sale of Nine Mile Nuclear Assets

December 12, 2000

5 Value Components of the Sale for Niagara Mohawk

• Cash at closing of $262 million
• Installment Payments of: $262 million principal and $86 million interest over 5 years
• Power Purchase Agreements at Competitive Prices
• Revenue Sharing Agreement
• Decommissioning Savings of $71 million

Value Component 1 - Cash at Closing

                                                  $ Millions
                                                  ----------
Nine Mile Point 1                                    117
Niagara Mohawk's 41% of Nine Mile Point 2            145
                                                    ----

Total to Niagara Mohawk                             $262

Value Component 2 - Installment Payments

Total Payments to Niagara Mohawk

                        Total  Year 1  Year 2  Year 3   Year 4   Year 5
                     ----------------------------------------------------
Principle                262     53      52      53      52       52
Interest (11%)            86     28      23      18      11       6
                     ----------------------------------------------------
Total                    348     81      75      71      63       58

Nine Mile Point 1

                        Total   Year 1  Year 2   Year 3   Year 4   Year 5
                     ------------------------------------------------------
Principle                117      23      24       23       23       24
Interest (11%)            38      13      10        8        5        2
                     ------------------------------------------------------
Total                    155      36      34       31       28       26

Niagara Mohawk’s 41% of Nine Mile Point 2

                        Total   Year 1   Year 2   Year 3   Year 4   Year 5
                     -------------------------------------------------------
Principle                145      30       28       30       29       28
Interest (11%)            48      15       13       10        6        4
                     -------------------------------------------------------
Total                    193      45       41       40       35       32

Value Component 3 - Power Purchase Agreements (PPA)

• Niagara Mohawk will purchase 90% of the actual hourly Nine Mile Point 1 plant output, capped at 90% of 609 MW for any hour.
• Niagara Mohawk will purchase 37% (90% of Niagara Mohawk's 41% ownership of Nine Mile Point 2) of the actual hourly Nine Mile Point 2 plant output, capped at 37% of 1,148 MW for any hour.
• Power Purchase Agreement annual prices for energy and capacity:

Nine Mile Point 1 (until end of current operating life)

- ----------------------------------------------------------------------------------
 Year 1   Year 2   Year 3   Year 4   Year 5   Year 6   Year 7   Year 8   Year 9
 $35.70   $35.32   $33.95   $33.60   $33.56   $34.23   $34.91   $35.61    $36.32
- ----------------------------------------------------------------------------------

Nine Mile Point 2

- ------------------------------------------------------------------------------------------
 Year 1   Year 2   Year 3   Year 4   Year 5   Year 6   Year 7   Year 8   Year 9  Year 10
 $35.70   $35.32   $33.95   $33.60   $33.56   $33.23   $33.91   $34.61   $35.32   $36.05
- ------------------------------------------------------------------------------------------

• Prices are established with monthly and peak/off-peak variations.

Value Component 4 - Revenue Sharing Agreement (RSA)

• For Nine Mile Point 2 there will be a ten-year RSA following the PPA.
• RSA provides customers a hedge against higher market prices.
• Revenue sharing payments are tied to actual plant output. Plant output capped at 471 MW (41% of 1,148 MW).
• To the extent market prices (energy and capacity) exceed strike prices, 41% of the value of the plants’ output above the strike price, will be shared 80% to Niagara Mohawk and 20% to Constellation.
• Payments flow from buyer to Niagara Mohawk on a quarterly basis. Negative amounts (i.e., when actual market prices are lower than strike prices) to be carried forward as credits against subsequent payments. Niagara Mohawk will never make payments to Constellation under the terms of the RSA, regardless of future market prices.
• Strike prices are established on a monthly basis. The annual average strike price on a dollar per megawatt-hour basis are as follows:

- -----------------------------------------------------------------------------------------------
 Year 11  Year 12  Year 13   Year 14   Year 15   Year 16   Year 17   Year 18  Year 19  Year 20
 $40.75   $41.57    $42.40    $43.25    $44.11    $44.99    $45.89    $46.81   $47.75   $48.70
- -----------------------------------------------------------------------------------------------

Value Component 5 - Decommissioning

• At closing, the Sellers are obligated to turn over targeted amounts for each plant’s respective decommissioning funds.
• Upon closing, Constellation will assume the Sellers’ obligation to decommission Nine Mile Point 1 and Nine Mile Point 2.
• The targeted amounts for Nine Mile Point 1 are $266 million in decommissioning funds.
• The Sellers of Nine Mile Point 2 have a target of $176.7 million in the decommissioning funds.
• The Sellers will not be required to top-off the decommissioning funds. This represents a savings to Niagara Mohawk of $55.5 million for Nine Mile Point 1 and $16.5 million for Nine Mile Point 2.