Pepco Holdings DEFA14A 2014
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 7, 2014
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:
THIS COMBINED FORM 8-K IS BEING SEPARATELY FILED BY EACH OF PEPCO HOLDINGS, INC. AND ATLANTIC CITY ELECTRIC 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.
New Jersey Base Rate Case Settlement Agreement
On August 7, 2014, Atlantic City Electric Company (ACE), a wholly-owned subsidiary of Pepco Holdings, Inc. (Pepco Holdings), entered into a Stipulation of Settlement (the Settlement Agreement) with the Staff of the New Jersey Board of Public Utilities (the NJBPU) and the Division of Rate Counsel, with respect to ACE’s March 14, 2014 petition to increase its electric distribution base rates. The Settlement Agreement provides for an annual increase in ACE’s electric distribution base rates by the net amount of approximately $19.0 million, exclusive of New Jersey sales and use taxes related to the increase in base rates, and is based on a specified return on equity (ROE) of 9.75%. The parties have agreed that, if the Settlement Agreement is approved by the NJBPU, the new electric distribution base rates will become effective for service rendered by ACE on and after September 1, 2014. The annual pre-tax earnings impact of the rate increase is approximately $19.0 million. ACE’s requested rate increase sought to recover $61.7 million (excluding New Jersey sales and use taxes), based on a requested ROE of 10.25%.
The Settlement Agreement was approved on August 8, 2014 by the administrative law judge assigned to this proceeding, and was transmitted to the NJBPU for review. The initial decision recommends that the Settlement Agreement be approved by the NJBPU. The NJBPU must either approve the settlement or allow the terms of the settlement to go into effect by taking no action for a period of 45 days. ACE anticipates the settlement will be considered at the August 20, 2014 NJBPU meeting.
Copies of the initial decision and the Settlement Agreement will be made available on Pepco Holdings’ Web site. If and when the Settlement Agreement is approved by the NJBPU, ACE intends to make the NJBPU’s order with respect to such approval available on Pepco Holdings’ Web site, as soon as reasonably practicable after such order has been made publicly available by the NJBPU. 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 (http://www.pepcoholdings.com).
New Jersey Merger Procedural Schedule
On August 13, 2014, the presiding commissioner of the NJBPU issued a pre-hearing order in “The Matter of the Merger of Exelon Corporation and Pepco Holdings, Inc.” in which he set a procedural schedule. This proceeding relates to the application filed on June 18, 2014 by Pepco Holdings, ACE and Exelon Corporation (Exelon) with respect to the proposed merger of an indirect, wholly-owned subsidiary of Exelon with and into Pepco Holdings (the Merger). Among other dates, the evidentiary hearings before the presiding commissioner are set for December 8-12, 2014, with all briefs to be filed by January 23, 2015. New Jersey law does not impose any time limit on the NJBPU’s review of the Merger. The pre-hearing order is available on Pepco Holdings’ Web site, and may be accessed as described above.
Some of the statements contained in this Current Report on Form 8-K are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. These statements include declarations regarding Pepco Holdings’ and ACE’s intents, beliefs, estimates and current expectations. In some cases, forward-looking statements can be identified by terminology such as “may,” “might,” “will,” “should,” “could,” “expects,” “intends,” “assumes,” “seeks to,” “plans,” “anticipates,” “believes,” “projects,” “estimates,” “predicts,” “potential,” “future,” “goal,” “objective,” or “continue,” or the negative of such terms or other variations thereof or comparable terminology, or by discussions of strategy that involve risks and uncertainties. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause Pepco Holdings’ or ACE’s (or one or more of its subsidiaries’) actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. 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.
The forward-looking statements contained herein are qualified in their entirety by reference to the following important factors, which are difficult to predict, contain uncertainties, are beyond the control of Pepco Holdings or ACE (or one or more of its subsidiaries) and may cause actual results to differ materially from those contained in forward-looking statements:
These forward-looking statements are also qualified by, and should be read together with, the risk factors and other statements in Pepco Holdings’ and ACE’s Annual Report on Form 10-K for the year ended December 31, 2013, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, each as filed with the Securities and Exchange Commission (SEC), and investors should refer to such risk factors and other statements in evaluating the forward-looking statements contained in this Current Report on Form 8-K.
Any forward-looking statements speak only as to the date this Current Report on Form 8-K was filed with the SEC, and Pepco Holdings and ACE does not undertake any obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements are made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for Pepco Holdings and ACE to predict all such factors. Furthermore, it may not be possible for Pepco Holdings and ACE to assess the impact of any such factor on its or its subsidiary’s business (viewed independently or together) 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. The foregoing factors should not be construed as exhaustive.
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.