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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) JUNE 28, 1996
THE WASHINGTON WATER POWER COMPANY
(Exact name of registrant as specified in its charter)
WASHINGTON 1-3701 91-0462470
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
1411 EAST MISSION AVENUE, SPOKANE, WASHINGTON 99202-2600
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (509) 489-0500
NONE
(Former name or former address, if changed since last report)
Item 5. Other Events.
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On June 28, 1996, the Board of Directors of The
Washington Water Power Company, a Washington corporation (the
"Company"), terminated the Agreement and Plan of Reorganization
and Merger, dated as of June 27, 1994 (the "Merger Agreement"),
by and among the Company, Sierra Pacific Resources, a Nevada
corporation ("SPR"), Sierra Pacific Power Company, a Nevada
corporation and a wholly-owned subsidiary of SPR ("SPPC") and
Altus Corporation, a Nevada corporation and a wholly-owned
subsidiary of the Company ("Altus"), which would have provided
for the merger of the Company, SPR and SPPC with and into Altus.
The Board of Directors noted the significant disparity
in views among the Federal Energy Regulatory Commission (the
"FERC"), as reflected in the position of its Staff, and the state
regulatory commissions having primary jurisdiction over the
companies. The FERC was concerned with wholesale markets at the
national level. Each state commission, on the other hand, was
concerned with the interests of retail customers in its particular
jurisdiction. The Board concluded that there was little chance of
obtaining approval of the proposed merger from each of the
regulatory commissions having jurisdiction, on terms consistent with
the regulatory principles adopted by the companies and satisfactory
to each other commission.
In addition, the Board concluded that even if the
proposed merger were consummated, Altus would be subject to
significant continuing risk of inconsistent regulation, with the
stockholders of Altus bearing the financial consequences of such
inconsistency.
Among other matters, the Board considered the
significant decrease in the amount of estimated net savings to be
achievable as a result of the proposed merger, which decrease was
previously reported in the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1996, and the increase in risks
posed as a result of recent and on-going structural, economic and
regulatory changes in the electric utility industry.
Under the terms of the Merger Agreement, the Company was
entitled to terminate the Merger Agreement since the merger of
the companies was not consummated on or before June 27, 1996 and
because certain conditions precedent, including receipt of all
regulatory approvals, had not been satisfied. On June 28, 1996
the Company commenced a proceeding in the Superior Court of Spokane
County, Washington seeking a declaratory judgment that the
Merger Agreement was properly terminated. The action seeks no
damages.
Item 7. Financial Statements and Exhibits.
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c. Exhibits:
Exhibit Number Exhibit
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99 Press Release, dated June 28,
1996 of The Washington Water
Power Company
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,
THE WASHINGTON WATER POWER COMPANY
Dated: July 8, 1996 By: /s/ J. E. Eliassen
-------------------------------
J. E. Eliassen
Vice President-Finance and
Chief Financial Officer
EXHIBIT INDEX
Exhibit Description
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99 Press Release, dated June 28, 1996 of The
Washington Water Power Company
EXHIBIT 99
Media Contact: Dana Anderson - 509-482-4174
Analyst/Broker Contact: Diane Thoren - 509-482-4331
FOR IMMEDIATE RELEASE:
June 28, 1996
WASHINGTON WATER POWER ENDS MERGER EFFORT
SPOKANE, WASH.: The board of directors of Washington Water Power
(NYSE: WWP) voted late today to terminate efforts to merge with
Sierra Pacific Resources (NYSE: SRP) and its subsidiary, Sierra
Pacific Power Company. The companies' merger agreement allows
termination by either company since the merger was not completed
on or before June 27, 1996 -- the two-year anniversary of the
agreement.
In notifying Sierra Pacific of its decision, Washington
Water Power noted that receipt of all required regulatory
approvals had not yet been obtained and several other conditions
to closing the merger had not yet been satisfied.
The WWP board of directors considered many factors in making
its decision to terminate the agreement including the growing
uncertainty of obtaining approval of the proposed merger from all
the regulatory commissions on terms consistent with the
principles adopted by the companies. Also cited were the
potential risk of inconsistent regulation in the future, the
significant decrease in the amount of net savings expected, and
the recent and on-going structural, economic, and regulatory
changes in the electric utility industry.
"We are disappointed to end a strategic partnership more
than two years in the making," said Paul A. Redmond, chairman of
the board, president and chief executive officer for Washington
Water Power. "We have put forth great effort, time and expense
to try to complete the merger with Sierra Pacific.
"However, because of dramatic changes in the utility
industry, diminishing merger benefits and continuing uncertainty
related to this merger in the regulatory arena, we have
determined that termination of the merger agreement at this time
is in the best interests of our company's shareholders and
customers."
The merger was announced by Washington Water Power and
Sierra Pacific in June 1994 and had been approved by shareholders
of both companies and by utility regulators in the six states
where the companies conduct business.
"We take a tremendous amount of pride in what we were able
to accomplish," Redmond said. "Our company has gained
immeasurably from the experience of working so closely with a
peer. Our thinking has been challenged in ways not otherwise
possible."
Redmond also had high praise for all those involved.
"It is important to acknowledge the diligence of the
regulatory commissions as well as the tremendous work of our
employees in this effort," he said. "Our people rose to many
challenges during the last two years with the greatest
professionalism."
The company has approximately $14.0 million in merger-
related transaction and transition costs that it expects to
expense in the second quarter of 1996; no increase in rates will
result.
Washington Water Power is an energy services company with
operations in five western states. The company provides electric
service to 291,000 customers in eastern Washington and northern
Idaho, and provides natural gas service to 227,000 customers in
parts of four states -- Washington, Idaho, Oregon and California.
EDITORS NOTE: A news conference will be held at 10:00 a.m.
PDT Monday morning, July 1, 1996 in the Executive Board Room of
Washington Water Power's main headquarters building located at
East 1411 Mission Avenue, Spokane, Wash. Members of the media
may participate via teleconference by calling 1-800-857-2535 and
using the password "WWP Media."