0001135971-15-000035.txt : 20151110 0001135971-15-000035.hdr.sgml : 20151110 20151109132115 ACCESSION NUMBER: 0001135971-15-000035 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20151106 ITEM INFORMATION: Other Events FILED AS OF DATE: 20151109 DATE AS OF CHANGE: 20151109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEPCO HOLDINGS INC CENTRAL INDEX KEY: 0001135971 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 522297449 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31403 FILM NUMBER: 151214942 BUSINESS ADDRESS: STREET 1: SUITE 1300 STREET 2: 701 NINTH STREET, NW CITY: WASHINGTON STATE: DC ZIP: 20068 BUSINESS PHONE: 202-872-2000 MAIL ADDRESS: STREET 1: SUITE 1300 STREET 2: 701 NINTH STREET, NW CITY: WASHINGTON STATE: DC ZIP: 20068 FORMER COMPANY: FORMER CONFORMED NAME: NEW RC INC DATE OF NAME CHANGE: 20010302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: POTOMAC ELECTRIC POWER CO CENTRAL INDEX KEY: 0000079732 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 530127880 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01072 FILM NUMBER: 151214943 BUSINESS ADDRESS: STREET 1: 701 NINTH STREET, NW STREET 2: OFFICE OF CORPORATE SECY., ROOM 1300 CITY: WASHINGTON STATE: DC ZIP: 20068 BUSINESS PHONE: 2028722000 MAIL ADDRESS: STREET 1: 701 NINTH STREET, NW STREET 2: OFFICE OF CORPORATE SECY., ROOM 1300 CITY: WASHINGTON STATE: DC ZIP: 20068 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELMARVA POWER & LIGHT CO /DE/ CENTRAL INDEX KEY: 0000027879 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 510084283 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01405 FILM NUMBER: 151214944 BUSINESS ADDRESS: STREET 1: 800 KING ST STREET 2: PO BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19899 BUSINESS PHONE: 3024293114 MAIL ADDRESS: STREET 1: 800 KING ST STREET 2: P O BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19899 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATLANTIC CITY ELECTRIC CO CENTRAL INDEX KEY: 0000008192 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 210398280 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03559 FILM NUMBER: 151214945 BUSINESS ADDRESS: STREET 1: 800 KING STREET STREET 2: PO BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19899 BUSINESS PHONE: 6096454100 MAIL ADDRESS: STREET 1: 800 KING STREET STREET 2: PO BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19899 8-K 1 nov6phi8k.htm CURRENT REPORT ON FORM 8-K nov6phi8k.htm
UNITED STATES
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 6, 2015                       

State or Other Jurisdiction of Incorporation
  
Exact Name of Registrant as specified in its Charter, Address of Principal Executive Offices, Zip Code and Telephone Number (Including Area Code)
  
Commission File Number
  
IRS Employer Identification No.
             
Delaware
  
PEPCO HOLDINGS, INC.
701 Ninth Street, N.W.
Washington, D.C. 20068
Telephone: (202) 872-2000
  
001-31403
  
52-2297449
             
New Jersey
  
ATLANTIC CITY ELECTRIC COMPANY
500 North Wakefield Drive
Newark, DE 19702
Telephone: (202) 872-2000
  
001-03559
  
21-0398280
             
District of Columbia and Virginia
  
POTOMAC ELECTRIC POWER COMPANY
701 Ninth Street, N.W.
Washington, D.C. 20068
Telephone: (202)872-2000
  
001-01072
  
53-0127880
             
Delaware and Virginia
  
DELMARVA POWER & LIGHT COMPANY
500 North Wakefield Drive
Newark, DE 19702
Telephone: (202)872-2000
  
001-01405
  
51-0084283

Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

THIS COMBINED FORM 8-K IS BEING SEPARATELY FILED BY EACH OF PEPCO HOLDINGS, INC., ATLANTIC CITY ELECTRIC COMPANY, POTOMAC ELECTRIC POWER COMPANY AND DELMARVA POWER & LIGHT COMPANY.  INFORMATION CONTAINED HEREIN RELATING TO ANY INDIVIDUAL REGISTRANT IS FILED BY SUCH REGISTRANT ON ITS OWN BEHALF.  NO REGISTRANT MAKES ANY REPRESENTATION AS TO INFORMATION RELATING TO ANY OTHER REGISTRANT.

 
 
 


Item 8.01.                      Other Events.

On November 6, 2015, Pepco Holdings, Inc. (Pepco Holdings) utility subsidiaries Potomac Electric Power Company (Pepco), Delmarva Power & Light Company (DPL) and Atlantic City Electric Company (ACE), as well as another Maryland-based utility unaffiliated with Pepco Holdings (collectively, the Respondents), together with the public service commissions and public advocates of the District of Columbia, Maryland, Delaware and New Jersey, as well as the Delaware Municipal Electric Corporation, Inc. (collectively, the Complainants), filed a settlement agreement  (the Settlement) with the Federal Energy Regulatory Commission (FERC) to provide for the resolution of  certain pending matters in dispute before FERC as described below.
 
 
As previously reported, in February 2013 and December 2014, the Complainants filed joint complaints at FERC against the Respondents seeking a reduction in the base return on equity (ROE) and modification of certain protocols regarding the formula rate process associated with the transmission service that the Respondents provide. The base ROE currently authorized by FERC for Pepco Holdings’ utility subsidiaries is (i) 11.3% for facilities placed into service after January 1, 2006, and (ii) 10.8% for facilities placed into service prior to 2006.  The 10.8% base ROE for facilities placed into service prior to 2006 receives a 50-basis-point incentive adder for being a member of a regional transmission organization.  The Complainants sought reductions in the base ROE to 8.7% in the February 2013 complaint and 8.8% in the December 2014 complaint.

In August 2014, FERC established a hearing on the February 2013 complaint, directed that the evidence and analysis presented concerning ROE be guided by the new two-step ROE methodology adopted by FERC in June 2014, and set a 15-month refund period that commenced on February 27, 2013.  In February 2015, FERC established a hearing on the December 2014 complaint and established a second 15-month refund period that commenced on December 8, 2014.  On February 20, 2015, the two complaint proceedings were consolidated.  In July 2015, a settlement agreement was entered into by the parties regarding the protocols (but not the ROE) raised in the February 2013 complaint, and such settlement agreement was approved by FERC on November 3, 2015.
 
 
On November 6, 2015, the parties filed the Settlement with FERC regarding the ROE.  The Settlement provides for a base ROE of 10.0%, effective March 8, 2016, to which a 50-basis-point incentive adder will be applied for being a member of a regional transmission organization. The Settlement also provides for customer refunds in the amount of approximately $9.5 million, $11.9 million, and $14.2 million for ACE, Delmarva and Pepco, respectively, covering the two 15-month refund periods.  In addition, under the Settlement, no party may file to change the base ROE or any incentives prior to June 1, 2018. The parties have requested approval of the Settlement by March 16, 2016, in order to incorporate the new ROE and applicable refunds into each utility’s 2016 transmission formula rate update.

A copy of the Settlement filing with FERC will be made available on Pepco Holdings’ Web site (http://www.pepcoholdings.com).  Investors may access copies of this information (among other documents and information) through the “Regulatory Filings” hyperlink on the Investor Relations page of this Web site.

 
2 
 


Cautionary Statements Regarding Forward-Looking Information

Certain of the matters discussed in this Current Report on Form 8-K constitute “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, both as amended by the Private Securities Litigation Reform Act of 1995. Words such as “may,” “might,” “will,” “should,” “could,” “anticipate,” “estimate,” “expect,” “predict,” “project,” “future”, “potential,” “intend,” “seek to,” “plan,” “assume,” “believe,” “target,” “forecast,” “goal,” “objective,” “continue” or the negative of such terms or other variations thereof and words and terms of similar substance used in connection with any discussion of future plans, actions, or events identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding benefits of the proposed Merger, integration plans and expected synergies, the expected timing of completion of the Merger, anticipated future financial and operating performance and results, including estimates for growth. These statements are based on the current expectations of management of Pepco Holdings and its utility subsidiaries. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this Current Report on Form 8-K. For example, (1) uncertainty surrounding the DCPSC’s review and approval of the Merger on the terms set forth in the Settlement Agreement; (2) conditions to the closing of the Merger may not be satisfied; (3) problems may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected; (4) the combined company may be unable to achieve cost-cutting synergies or it may take longer than expected to achieve those synergies; (5) the Merger may involve unexpected costs, unexpected liabilities or unexpected delays, or the effects of purchase accounting may be different from the companies’ expectations; (6) the credit ratings of the combined company or its subsidiaries may be different from what the companies expect; (7) the businesses of Pepco Holdings and its utility subsidiaries may suffer as a result of uncertainty surrounding the Merger; (8) Pepco Holdings and its utility subsidiaries may not realize the values expected to be obtained for properties expected or required to be sold; (9) the industry may be subject to future regulatory or legislative actions that could adversely affect Pepco Holdings and its utility subsidiaries; and (10) Pepco Holdings and its utility subsidiaries may be adversely affected by other economic, business, and/or competitive factors. Other unknown or unpredictable factors could also have material adverse effects on future results, performance or achievements of the combined company. Therefore, forward-looking statements are not guarantees or assurances of future performance, and actual results could differ materially from those indicated by the forward-looking statements. Discussions of some of these other important factors and assumptions are contained in Pepco Holdings’ and its utility subsidiaries’ filings with the Securities and Exchange Commission (SEC), and available at the SEC’s website at www.sec.gov, including: (1) the definitive proxy statement that Pepco Holdings filed with the SEC on August 12, 2014 and mailed to its stockholders in connection with the proposed Merger; (2) Pepco Holdings’ Current Report on Form 8-K filed with the SEC on September 12, 2014, which provides supplemental disclosures to the definitive proxy statement; (3) Pepco Holdings’ and its utility subsidiaries’ Annual Report on Form 10-K for the year ended December 31, 2014 in (a) Part I, Item 1A. “Risk Factors,” (b) Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and (c) Note (16), “Commitments and Contingencies” to the consolidated financial statements of Pepco Holdings included in Part II, Item 8. “Financial Statements and Supplementary Data; and (4) Pepco Holdings’ and its utility subsidiaries’ Quarterly Report on Form 10-Q for the quarter ended

 
3 
 


September 30, 2015 in (a) Part I, Item 1. “Financial Statements,” (b) Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and (c) Part II, Item 1A. “Risk Factors.”  In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this communication may not occur. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication. Pepco Holdings and its utility subsidiaries do not undertake any obligation to publicly release any revision to these forward-looking statements to reflect events or circumstances after the date of this communication. New factors emerge from time to time, and it is not possible for Pepco Holdings or its utility subsidiaries to predict all such factors. Furthermore, it may not be possible to assess the impact of any such factor on Pepco Holdings’ or its utility subsidiaries’ businesses or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any specific factors that may be provided should not be construed as exhaustive.



 
4 
 


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.
 

     
PEPCO HOLDINGS, INC.
     
DELMARVA POWER & LIGHT COMPANY
     
POTOMAC ELECTRIC POWER COMPANY
     
ATLANTIC CITY ELECTRIC COMPANY
       
       
Date:
November 9, 2015
  
/s/ FREDERICK J. BOYLE
     
Name:
Frederick J. Boyle
     
Title:
Senior Vice President and Chief Financial Officer of Pepco Holdings, Inc., Delmarva Power & Light Company and Potomac Electric Power Company and Chief Financial Officer of Atlantic City Electric Company
 
 
 
 
 
5