Annual Report (Form 10-K), fiscal year 1994

Item 1. Business
General Development of Business:
Orange and Rockland Utilities, Inc. (the "Company") is a New York corporation, with its principal office at One Blue Hill Plaza, Pearl River, New York 10965 (telephone number 914-352-6000), which was formed originally under the name Rockland Light and Power Company on May 21, 1926 through the consolidation of a company having the latter name (organized in 1899), Catskill Power Corporation and Orange County Public Service Company, Inc. Its present name was adopted on February 28, 1958, when The Orange and Rockland Electric Company was consolidated with Rockland Light and Power Company.
The Company has two wholly owned utility subsidiaries, Rockland Electric Company ("RECO"), a New Jersey corporation, and Pike County Light & Power Company ("Pike"), a Pennsylvania corporation. The Company has three wholly owned non-utility subsidiaries, O&R Energy Development, Inc. ("ORED"), a Delaware corporation, Clove Development Corporation ("Clove"), a New York corporation and O&R Development, Inc. ("ORD"), a Delaware corporation. RECO has a wholly owned non-utility subsidiary, Saddle River Holdings Corp. ("SRH"), a Delaware corporation. SRH has two wholly owned non-utility subsidiaries, NORSTAR Holdings, Inc. ("NHI") (formerly O&R Energy, Inc.) and Atlantic Morris Broadcasting, Inc., both Delaware corporations. NHI has two wholly owned non-utility subsidiaries, Millbrook Holdings, Inc. and NORSTAR Management, Inc. ("NMI"), both Delaware corporations. NMI is the sole general partner of a Delaware limited partnership, NORSTAR Energy Limited Partnership. The businesses of the non-utility subsidiaries are described under the subheading "Diversified Activities" in this Item 1.
Financial Information about Industry Segments:
Consolidated financial information regarding the Company's principal business segments, Electric Operations, Gas Operations and Diversified Activities is contained in Note 13 of the Notes to Consolidated Financial Statements - "Segments of Business" on page 32 of the 1994 Annual Report to Shareholders, which material is incorporated by reference in this Form 10-K Annual Report.
Narrative Description of Business:
Principal Business
The Company and its utility subsidiaries supply electricity and gas to a territory covering approximately 1,350 square miles. The eastern boundary of the Company's service territory extends along the west bank of the Hudson River from a point in New Jersey six miles north of the George Washington Bridge northerly for approximately 37 miles to a point in New York a short distance north of the United States Military Academy at West Point. From the Hudson River, the Company's territory in New York State extends westward to the Delaware River, embracing all of Rockland County, most of Orange County and a part of Sullivan County.
In New Jersey, RECO supplies electricity to the northern parts of Bergen and Passaic Counties and small areas in the northeastern and northwestern parts of Sussex County. Pike supplies electricity and gas to the northeastern corner of Pike County, Pennsylvania.
As of December 31, 1994, the Company and its utility subsidiaries furnished electric service to approximately 260,000 customers in 96 communities with an estimated population of 666,000 and gas service to approximately 111,000 customers in 57 communities with an estimated population of 470,000. There have been no significant changes in either the population of the Company's service territory or in the number of customers served since December 31, 1993. At that time, electric service was provided to approximately 257,000 customers in 96 communities with an estimated population of 656,000 and gas service was provided to approximately 109,000 customers in 57 communities with an estimated population of 463,000. At December 31, 1994 and 1993, 95% of the Company's residential gas customers used gas as their major source of space heating fuel. While the territory served is predominantly residential, the Company and its utility subsidiaries also serve a number of commercial and industrial customers in diversified lines of business activities from which significant electric and gas revenues are derived. No customer accounts for more than 10% of either gas or electric sales. The business of the Company and its utility subsidiaries is seasonal to the extent that sales of electricity are higher during the summer, mainly due to air conditioning requirements, and sales of gas are greater in the winter months, primarily as a result of space heating requirements.
Events Affecting the Company
On August 16, 1993, the Rockland County, New York District Attorney (the "District Attorney") charged a then Vice President of the Company with grand larceny, commercial bribery and making illegal political contributions and commenced a related investigation of the Company. Two other former employees who had reported to the Vice President were also charged with grand larceny.
The events which followed these actions include the formation of a special committee of the Company's Board of Directors and the conduct of an independent investigation under the supervision of that Committee, investigations conducted by both the District Attorney and various utility regulatory agencies, various legal actions brought both by and against the Company, the refund of misappropriated funds to the Company's customers and the effects on the Company's rate filings. Details concerning these events, including the cost incurred for legal counsel, accounting services, and other professional and consultative services related to the investigations and their effect on the Company's results of operations, are contained in the "Review of the Company's Results of Operations and Financial Condition" under the captions "Results of Operations", "Events Affecting the Company", "Rate Activities" and "Other Income and Deductions and Interest Charges" and in Note 12 of the Notes to Consolidated Financial Statements under the caption "Legal Proceedings" beginning on pages 9 and 28, respectively, of the 1994 Annual Report to Shareholders, which material is incorporated by reference in this Form 10-K Annual Report. Reference is also made to Item 3, "Legal Proceedings", of this Form 10-K Annual Report.
Electric Operations
Generating Capacity and Purchased Power. As described more fully in Item 2



Item 2. Properties
The Company's property consists primarily of electric generation, transmission and distribution facilities and gas distribution facilities. This property is required for the continued operation of the Company's major business segments. In addition, the Company maintains certain miscellaneous utility and non-utility property. The Company's facilities are in satisfactory condition, are suitable for the particular purpose for which they were acquired, and are adequate for the Company's present operations.
Electric Generating Facilities. The Company's generating plants, all of which are located in New York State, are as follows:
Maximum Summer Percent Net Mwh Net Mw of Total Generated Plant Name Units Energy Source Capacity Capacity in 1994 Swinging Bridge, 8 Mongaup & Rio Hydroelectric 25.8 2.5% 62,103 Grahamsville 1 Hydroelectric 18.0 1.8 106,046 Hillburn 1 Jet Fuel/Gas 37.0 3.6 1,063 Shoemaker 1 Jet Fuel/Gas 37.0 3.6 9,385 Lovett 5 Coal/Oil/Gas 501.7 49.2 2,098,547 Bowline Point 2 Oil/Gas 400.6(1) 39.3 1,183,869 1,020.1 100.0% 3,461,013
(1) Company's share of maximum summer net megawatt capability.
Electric Transmission and Distribution Facilities. The Company owns, in whole or in part, and operates 512 miles of transmission lines, 67 substations, 67,901 in-service line transformers and 4,930 miles of distribution lines. With the exception of the Grahamsville Substation, the electric transmission and distribution facilities of the Company and its utility subsidiaries are located within the Company's New York, New Jersey and Pennsylvania service territory, which is described under the caption "Principal Business" in Item 1 of this Form 10-K. The Bowline Substation and the related transmission facilities are jointly owned by the Company and Con Ed and are operated by the Company. The Ramapo Substation and certain related transmission facilities consist of property which is either owned by the Company, owned by Con Ed or jointly owned by the Company and Con Ed and which is operated and maintained by the Company except for the 500/345 Kv section of the Ramapo substation and a 500 Kv transmission line now operated and maintained by Con Ed effective January, 1995.
Gas Facilities. The Company owns and operates three propane air gas plants at Middletown, Orangeburg and Suffern, New York and its gas distribution system, which is located within its gas franchise territory in New York and Pennsylvania, includes 1,697 miles of mains.
Miscellaneous Properties. The Company owns office buildings and operating facilities in Middletown, Spring Valley, Blooming Grove and West Nyack, New York, and other structures at different locations within the Company's service territory which are used as offices, service buildings, store houses and garages. The Company leases its corporate headquarters in Pearl River, New York, as well as office space at other locations. In addition, the Company has lease agreements covering certain of its data processing equipment, office equipment and vehicle fleet.
Character of Ownership. The Company's electric and gas plants and its major electric substations are located on land owned by the Company in fee, except for the Grahamsville Plant and the Bowline Point Plant. The greater portion of the Grahamsville Plant is located on land leased from the City of New York and the Bowline Point Plant is located on land in which the Company has a one-third undivided interest, with the remainder being owned by Con Ed. Water power and flowage rights for the operation of its Mongaup River Hydro Plants are controlled by the Company either through ownership of the necessary land in fee or through easements which are, in practically all cases, perpetual. In the case of the Grahamsville Plant, however, water is obtained under contract with the City of New York.
Electric transmission facilities of the Company and its utility subsidiaries (including substations) are, with minor exceptions, located on land owned in fee or occupied pursuant to perpetual easements. Electric distribution lines and gas mains are located in, on or under public highways or private lands pursuant to lease, easement, permit, municipal consent, agreement or license, express or implied through use by the Company or its utility subsidiaries without objection by the owners. In the case of distribution lines, the Company owns approximately 60% of the poles upon which its wires are installed and has a joint right of use in the remaining poles on which its wires are installed, which poles are owned, in most cases, by telephone companies.
The Company's electric and gas plants are owned by the Company except for the gas turbines at Hillburn and Shoemaker which are leased and the Bowline Point Plant which is jointly owned with Con Ed and operated by the Company. Additional information regarding the investment in the Bowline Point Plant by the Company and Con Ed is included in Note 1 of the Notes to Consolidated Financial Statements under the caption "Jointly Owned Utility Plant" on page 22 of the 1994 Annual Report to Shareholders, which material is incorporated by reference in this Form 10-K Annual Report.
Substantially all of the utility plant and other physical property owned by the Company and its utility subsidiaries is subject to the liens of the respective indentures securing the first mortgage bonds of the Company and its utility subsidiaries.
Investments in securities of the utility subsidiaries costing $11.8 million which have been eliminated from the Consolidated Balance Sheet are pledged under the Company's First Mortgage Indenture, as amended and supplemented.
Item 3.

Item 3. Legal Proceedings
Investigation and Related Litigation:
On August 26, 1993, the Company filed Orange and Rockland Utilities, Inc. v. Winikow in the United States District Court, Southern District of New York, against Linda Winikow, a former Vice President of the Company, three other former Company employees and two vendors. In its suit, filed under the Federal Racketeer Influenced and Corrupt Organizations Act ("RICO"), the Company alleges that the defendants had engaged in a conspiracy to divert monies from the Company through the submission of false and fraudulent invoices in order to pay personal expenses of and/or to provide personal services to the defendants. In addition, the Company alleges that the defendants made various contributions to political candidates consisting of money and services diverted from the Company. Accordingly, the Company seeks treble damages as called for by the RICO statute, punitive damages, attorney's fees, interest and court costs. On December 19, 1994, the Company filed a notice dismissing the action against three former Company employees, two of whom had paid restitution to the Company, and one vendor. The Company is continuing to pursue its claims against Ms. Winikow and one vendor. The Company has been directed to report to Judge Brieant on March 29, 1995 as to whether a settlement can be reached in this case. Settlement negotiations are ongoing.
On October 6, 1993, Ms. Winikow pleaded guilty in the Supreme Court of the State of New York, County of Rockland, to grand larceny (a class D felony), commercial bribery (a class A misdemeanor), and making a campaign contribution under a false name (an unclassified misdemeanor) and, on November 10, 1993, the two former employees pleaded guilty to grand larceny (a class D felony). Ms. Winikow's sentencing on these pleas is currently scheduled to take place during March 1995.
On October 5, 1993, the independent Directors determined to terminate for cause the employment of James F. Smith as Chief Executive Officer of the Company and to remove him as Chairman of the Board. On October 7, 1993, notice of such termination was delivered to Mr. Smith and he was suspended from all duties effective immediately. Mr. Smith had certain rights under his employment agreement with the Company to take corrective action with respect to his termination for cause which lapsed, without such action being taken, on December 6, 1993.
On February 7, 1994, the Company commenced Orange and Rockland Utilities, Inc. v. James F. Smith, in New York State Supreme Court, County of Rockland, by the filing of a Summons with Notice. The Summons put Mr. Smith on notice of claims for breach of his fiduciary duties of loyalty and care, waste, conversion, fraud, and unjust enrichment based on allegations that Mr. Smith misused Company assets and personnel and misappropriated Company funds for his own benefit or for other improper purposes, and failed to maintain proper management controls or to properly supervise corporate affairs and subordinate employees. The Company seeks an accounting by Mr. Smith of certain Company funds and property, restitution of all amounts misappropriated, misused, or unaccounted for, forfeiture of compensation paid or awarded by the Company to Mr. Smith during the period in which breaches of fiduciary duties occurred, and compensatory and punitive damages. The Company seeks recovery in an amount not less than $5,000,000.
Under the terms of his employment agreement, Mr. Smith had the right to contest his termination for cause in an arbitration proceeding. On May 5, 1994, Mr. Smith filed a motion demanding arbitration of his termination for cause and the Company's claims asserted against him in Orange and Rockland Utilities, Inc. v. Smith. On June 17, 1994, the Court issued an Order granting Mr. Smith's motion to compel arbitration. Pursuant to a second Court Order dated August 10, 1994, the parties filed their demands for arbitration with the American Arbitration Association. Hearings in this matter are currently scheduled to begin on May 15, 1995.
On March 22, 1994, a Rockland County Grand Jury indictment was returned charging Mr. Smith with eight felony counts of grand larceny and two misdemeanor counts of petit larceny. A superseding indictment on 22 counts was brought against Mr. Smith in June 1994. Mr. Smith has entered a plea of not guilty. The trial in this matter is scheduled to begin in March 1995.
On August 18, 1993, Feiner v. Orange and Rockland Utilities, Inc., et al. ("Feiner"), a purported ratepayer class action complaint against the Company, RECO, Ms. Winikow and others, was filed in the United States District Court, Southern District of New York. The Feiner complaint alleged that the defendants violated RICO and New York common law by using false and misleading information to obtain rate increases from the NYPSC and used funds obtained from ratepayers in furtherance of an alleged scheme to make illegal campaign contributions and other illegal payments. On February 18, 1994, the Company filed a motion to dismiss this case, which motion was granted on September 8, 1994 and the case was dismissed. Plaintiff then filed a Notice of Appeal with the United States Court of Appeals for the Second Circuit (the "Second Circuit") appealing the District Court's decision. Thereafter, the parties signed a Stipulation of Settlement dismissing the appeal, which was approved by the Second Circuit on December 7, 1994. The settlement recognizes the remedial measures already taken by the Company, pays $75,000 toward the plaintiffs' attorneys fees and leaves the District Court decision dismissing the case in effect.
On August 31, 1993, Patents Management Corporation v. Orange and Rockland Utilities, Inc., et al. ("Patents Management"), a purported shareholder derivative complaint, was filed in the Supreme Court of the State of New York, County of New York, against the Company, all but one of the Directors and several other named defendants by an alleged shareholder of the Company. Plaintiff claimed that the named Directors breached their fiduciary duties by failing to exercise appropriate supervisory control over Ms. Winikow and others. Plaintiff requested that the Court require each Director to indemnify the Company against all losses sustained by the Company as a result of these alleged wrongful acts. On February 23, 1995, the Court approved a settlement agreement entered into by the Directors, the plaintiff and the Company resolving all issues in this case. Under the approved settlement terms, the Company agrees to implement remedial measures and provision is made for payment of the plaintiff's attorneys fees and expenses totaling $155,000.
On November 23, 1993, Gross v. Orange and Rockland Utilities, Inc. ("Gross"), a purported shareholder class action complaint, was filed in the United States District Court, Southern District of New York. Plaintiff alleged that various Securities and Exchange Commission ("SEC") filings of the Company during the period between March 2, and November 4, 1993 contained false and misleading information, and thereby violated Sections 11 and 12(2) of the Securities Act of 1933, by failing to disclose what the plaintiff alleged was a "scheme" by the Company to make illegal political payments and campaign contributions to various public officials and politicians. As a result, plaintiff claimed, during such period persons who purchased the Company's stock through the Company's Dividend Reinvestment and Stock Purchase Plan did so at artificially inflated prices. The complaint sought unspecified money damages.
On March 31, 1994, Bernstein v. Orange and Rockland Utilities, Inc. and James F. Smith ("Bernstein"), a purported shareholder class action complaint, was filed in the United States District Court, Southern District of New York. Plaintiff alleged that various SEC filings of the Company during the period between March 2 and August 18, 1993 contained false and misleading information or omitted to state material facts necessary to make the statements therein not misleading, and thereby violated Section 10 of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by failing to disclose what the plaintiff alleged was a "scheme" by the Company to make illegal political payments and campaign contributions to various public officials and politicians. As a result, plaintiff claimed, during such period persons who purchased the Company's stock did so at artificially inflated prices. The Bernstein complaint sought unspecified money damages.
On November 3, 1994, the Company signed a settlement agreement in the Gross and Bernstein actions. On November 21, 1994, the Court consolidated the two cases, approved a notice, and conditionally certified a class action for settlement purposes only. Notice to the class was mailed and published at the end of November. The settlement was approved by the Court on January 27, 1995. Pursuant to the settlement agreement, the Company has created a settlement fund of $1.85 million, to be distributed on a pro rata basis to members of the settlement class, and all claims in both cases have been deemed resolved.
Other Litigation:
On May 11, 1993, an action was commenced against the Company by Hudson Riverkeeper Fund, Inc. ("Riverkeeper") in the United States District Court for the Southern District of New York. In its complaint, Riverkeeper alleged that the Company violated and continues to violate its SPDES permit for its Lovett Generating Station ("Lovett") by failing to maintain cooling water intake structures that reflect the best technology available for minimizing adverse environmental impact. In addition, the complaint alleged that the Company failed to submit a scope of work for entrainment studies required by its SPDES permit (the "entrainment studies"). The original complaint requested that the Court assess civil penalties aggregating $22 million and order the Company to take steps to insure that the cooling water intake structures at Lovett reflect the best technology available for minimizing adverse environmental impact. On May 18, 1992, Riverkeeper amended its complaint against the Company by withdrawing its entrainment studies allegation and reducing the amount of civil penalties sought to approximately
$11 million. On June 30, 1993, the Company filed its answer to Riverkeeper's amended complaint. In its answer the Company denied Riverkeeper's allegations and thereafter, reflecting the Company's belief that Riverkeeper's allegations have no legal merit, on July 20, 1993 the Company filed a Motion for Summary Judgment seeking the dismissal of this action. On October 21, 1993, the Court issued a Memorandum and Order denying the Company's Motion for Summary Judgment and ruling that the New York State Department of Environmental Conservation ("DEC") should be included as a party to this action. On January 14, 1994, a conference was held before Judge Brieant during which the DEC intervened in this litigation as a designated plaintiff. On April 8, 1994, the parties agreed to have engineers enter into discussions regarding modifications to the Lovett plant's cooling water intake structures. These discussions are continuing.
Additional information regarding the Company's SPDES Permits is contained under the caption "Water Quality" of "Environmental Matters" in Item 1 of this Form 10-K.
On January 15, 1993, the Company was served with a complaint naming the Company as one of several defendants in Warwick Administrative Group, et al. v. Avon Products, Inc. et al. ("Warwick"), which case was filed in the United States District Court for the Southern District of New York. The allegations in this case stem from an Administrative Order for Remedial Design and Remedial Action issued on February 28, 1992 by the United States Environmental Protection Agency pursuant to Superfund laws which impose liabilities on entities who are identified as having contributed hazardous wastes to a particular site requiring clean-up, including generators and transporters of such wastes. The Order directs certain members of the Warwick plaintiff group to implement a plan for the clean-up of the Warwick Landfill site in Greenwood Lake, New York. The Warwick plaintiff group now alleges that some defendants, including the Company, arranged to have hazardous substances disposed of at the Warwick site and thus seeks to recover from the defendants costs incurred and damages suffered in connection with the clean-up of the Warwick Landfill site. An answer to the complaint, as amended, was filed by the Company on February 23, 1993, denying all of the allegations in the amended complaint and setting forth a number of affirmative defenses.
On May 3, 1993, Judge Goettel of the United States District Court, Southern District of New York, dismissed the plaintiffs' amended complaint for failure to state a claim for which relief could be granted and granted plaintiffs leave to replead. Thereafter, the plaintiffs filed a second amended complaint which was superseded by a third amended complaint served on June 3, 1993. On June 23, 1993, the Company filed an answer to the third amended complaint, denying all of the plaintiffs' allegations and setting forth a number of affirmative defenses. As it is presently unclear if any hazardous waste generated by the Company was transported to the Warwick Landfill site, and because the nature and quantities of hazardous waste sent by others to such site are undetermined, the Company is unable to determine its liability, if any, with regard to this proceeding.
On September 25, 1991, the Company was named as one of several hundred third party defendants in the United States v. Kramer, et al. and State of New Jersey Dep't of Environmental Protection v. Almo Anti-Pollution Services, et al., which cases have been consolidated in the United States District Court for the District of New Jersey, Camden Vicinage. The allegations in
this action concern the Helen Kramer Landfill site in Mantua, New Jersey, which operated from 1963 to 1981. Suit in this case was brought under Superfund laws. Additional information concerning Superfund laws is contained under the subheading "Environmental Matters" in Item 1 of this Form 10-K Annual Report. While it is presently unclear if any hazardous waste generated by the Company was transported to the Helen Kramer Landfill site, the total cost of remediation and damages at the site, while not clearly established, is reportedly estimated at $100 million or more, and the Company is monitoring the situation. It appears reasonable to expect the Company's relative contribution to the Helen Kramer site, if any, to have been less than 1% of the total volume sent to the site. At this time, the Company does not believe this action will have a material effect on the financial condition of the Company.
On March 29, 1994, the Company received a third party summons and complaint naming it as one of 22 third party defendants in Carpenters Local No. 964 Pension Fund v. DiGiacinto et al. ("DiGiacinto"), filed in the Supreme Court of the State of New York, County of Rockland. This complaint stems from an underlying action, Guarino et al. v. Carpenters Local No. 964 Pension Fund ("Guarino"), brought by residents of a subdivision who allege that homes developed and sold by the Carpenters Local No. 964 Pension Fund (the "Pension Fund") were constructed on the site of a former landfill. Plaintiffs claim that the deterioration of wallboard materials buried at the site has resulted in a continuous release of hydrogen sulfide gas which has rendered the houses unfit for dwelling. Plaintiffs seek damages in excess of $25,000,000.
The third party complaint alleges that (1) the Company owned land that ultimately became part of the subdivision; (2) the Company permitted the dumping of wallboard materials on its former property; and (3) certain improvements constructed by the Company on property adjacent to the subdivision altered the flow of ground and surface water, contributing to the production of hydrogen sulfide gas. The third party complaint seeks to hold the Company responsible for any liability incurred by the Pension Fund as a result of the Guarino action. On April 26, 1994, the Company filed its answer denying all of the plaintiff's allegations and setting forth a number of affirmative defenses.
On June 8, 1994, the New York State Attorney General's office commenced an action in the Supreme Court of the State of New York, County of Rockland, entitled State of New York v. Carpenters Local No. 964 Pension Fund, et al. against the Pension Fund and five other defendants, not including the Company, alleging that the subdivision site constituted a public nuisance. On August 8, 1994, the Company was served with United States Gypsum Company v. Broadhaver Realty Corp. ("U.S. Gypsum"), a third-party complaint brought by the United States Gypsum Company, a defendant in the action brought by the Attorney General's office.
The Company has concluded that its liability, if any, in the DiGiacinto and U.S. Gypsum litigations, individually or in the aggregate, will not have a material effect on the financial condition of the Company.
On January 17, 1995, the Company was served with a summons in Payran v. Orange and Rockland Utilities, Inc. and James Donnery, a purported personal injury action commenced in the Supreme Court of the State of New York. Plaintiff seeks compensatory damages of $50 million as a result of injuries allegedly resulting from actions by the defendants at the Company's Lovett Power Plant. Since the Company has not been served with the complaint in this action, it cannot evaluate plaintiff's claims.
Regulatory Matters:
On January 29, 1993, the Company filed an electric rate increase application with the NYPSC (Case 93-E-0082) requesting a $17.1 million (4.8%) annual increase in electric revenues to be effective January 1, 1994.
As a result of the ongoing investigation of alleged financial improprieties, the NYPSC issued an Order on December 21, 1993 which resulted in the postponement of the effective date of new electric rates from January 1, 1994 until June 30, 1994.
On June 10, 1994, the NYPSC issued an Order terminating Case 93-E-0082 due to the Company's failure to meet its burden of proof. The NYPSC stated that various improprieties uncovered at the Company negated the credibility of the record developed in this rate proceeding. In this Order, the NYPSC reduced the Company's targeted rate of return on equity from 11.45% to 10.6% retroactive to January 1, 1994. All earnings above 10.6% will be deferred for later disposition pending the outcome of the investigations in Case 93-M- 0849 discussed below. Additional information regarding the termination of Case 93-E-0082 is contained under the caption "Current Rate Activities" of "Regulatory Matters" in Item 1 of this Form 10-K. On September 19, 1994, the Company filed an Article 78 action against the NYPSC in New York State Supreme Court, County of Albany appealing the NYPSC's June 10, 1994 Order reducing the Company's targeted rate of return on equity to 10.6% (from 11.45%) and making such reduction retroactive to January 1, 1994. The appeal contests the retroactivity of the NYPSC Order. The Company and the NYPSC have agreed to stay the briefings in this appeal until after the NYPSC has issued its final report on its investigation of the Company.
On September 30, 1992, the NYPSC approved a four-year settlement agreement ("Settlement Agreement") in the Company's gas rate case (Case 92-G- 0050). The Settlement Agreement contains a weather adjustment clause which automatically adjusts rates to offset the effects of variations in weather from that assumed for setting rates. The Settlement Agreement provides for an overall rate of return of 10.26%, with a return on common equity of 12.15% including incentives of 50 basis points. On September 1, 1993, the Company filed with the NYPSC the second stage adjustment to gas rates pursuant to the Settlement Agreement. The requested increase in annual gas revenues as a result of the second-stage adjustment is $3.8 million or 2.5%. Although the Settlement Agreement provided for an effective date for this adjustment of January 1, 1994, the Company agreed to extend the effective date until June 30, 1994, in connection with the ongoing investigations of alleged financial improprieties. The effective date of this adjustment was further extended until December 30, 1994 by NYPSC Order issued June 3, 1994.
On September 1, 1994, the Company filed a plan to implement the second- stage rate adjustment on January 1, 1995 and to postpone the next adjustment to gas rates to January 1, 1996. On September 19, 1994, the Company subsequently requested the further postponement of the second-stage gas rate adjustment until the NYPSC's investigation of alleged financial improprieties is concluded. The purpose of the request was to combine the results of the investigation and staged filings into a single rate change. On November 4, 1994, the NYPSC issued an Order terminating the Settlement Agreement effective December 31, 1994. The Order denies the Company the opportunity for rate adjustments in the third and fourth years (1995 and 1996) of the Settlement Agreement. However, the Order authorizes the Company to defer the second-stage rate adjustment and all previously authorized reconciliations through the end of 1994, pending review and audit by the NYPSC Staff and the conclusion of the NYPSC's investigation of alleged financial improprieties.
On October 4, 1993, the NYPSC issued an order instituting a proceeding (Case 93-M-0849) to investigate the operations and management of the Company. On November 10, 1994, the Company filed with the NYPSC a quantification of the rate making effects of its ongoing investigation into prior financial improprieties. The Company requested that the NYPSC approve a refund of approximately $3.4 million to its New York gas and electric customers. This refund would be in addition to the $369,000 which previously had been refunded to the Company's New York gas and electric customers. The NYPSC has not yet acted on this proposal or issued its report of its investigation of the Company. The Company is unable to predict the final results of this proceeding and what modifications, if any, will be made to the amount proposed to be refunded to New York ratepayers.
On November 3, 1993, the New Jersey Board of Regulatory Commissioners, now the New Jersey Board of Public Utilities ("NJBPU") commenced its periodic management audit of RECO. As a result of the events and investigations described above, the NJBPU audit included, in addition to a standard review of operating procedures, policies and practices, a review of the posture of RECO management regarding business ethics and a determination regarding the effect of such events on RECO ratepayers. The NJBPU has not yet issued its report.
In December 1994, a filing was made with the NJBPU to refund approximately $.7 million to the Company's New Jersey customers based upon the Company's ongoing investigation into prior financial improprieties. By order dated January 27, 1995, the NJBPU accepted this proposal. The Company is unable to predict the final results of any NJBPU proceedings in this area and what modifications, if any, will be made to the amount proposed to be refunded in New Jersey.
On December 30, 1992, in connection with RECO's 1991 electric rate case (Docket No. ER910303565), the NJBRC issued a Decision and Order dealing with the appropriateness of additional tax liability placed on New Jersey utilities pursuant to New Jersey's June 1, 1991 tax legislation. Pursuant to this legislation, RECO was required to pay a combined additional amount of approximately $16 million of gross receipts and franchise taxes in 1993 and 1994. In its Decision and Order the NJBRC allowed RECO to recover this amount over a ten year period with interest on the unamortized balance at an annual rate of 7.5%. On February 26, 1993, Rate Counsel filed a Notice of Appeal from the NJBRC Decision and Order with the Superior Court of
New Jersey, Appellate Division, stating as grounds for the appeal that the Decision was arbitrary and capricious and would result in unjust and unreasonable rates. On March 21, 1994, the Superior Court of New Jersey, Appellate Division, upheld the NJBRC Decision and Order.
On March 29, 1989, the New Jersey Department of Environmental Protection ("NJDEP") issued a directive under the New Jersey Spill and Control Act to various potentially responsible parties ("PRPs") including the Company, with respect to a site formerly owned and operated by Borne Chemical Company in Elizabeth, Union County, New Jersey, ordering certain interim actions directed at both site security and the off-site removal of certain hazardous substances. Certain PRPs, including the Company, signed an administrative consent order with the NJDEP requiring them to perform a removal action at the site, which action was completed on June 22, 1992. The PRPs have entered into negotiations with the NJDEP regarding the terms of the additional administrative consent order which will obligate the PRPs, including the Company, to perform a remedial investigation and feasibility study at the site. The results of this study will determine what, if any, subsurface remediation at the Borne site is required. The Company does not believe that this matter will have a material effect on the financial condition of the Company.
On August 2, 1994 the Company entered into a Consent Order with the New York State Department of Environmental Conservation ("NYSDEC") in which the Company agreed to conduct a remedial investigation of certain property it owns in West Nyack, New York. Polychlorinated biphenyls ("PCBs") have been discovered at the West Nyack site. The results of this investigation will determine what, if any, remediation at the West Nyack site will be required. The Company does not believe that this matter will have a material effect on the financial condition of the Company.
On May 29, 1991 a group of ten electric utilities (the "Metal Bank Group") entered into an Administrative Consent Order with the United States Environmental Protection Agency ("EPA") to perform a remedial investigation and feasibility study ("RIFS") at the Cottman Avenue/Metal Bank Superfund site in Philadelphia, Pennsylvania. PCBs have been discharged at the Cottman Avenue site from an underground storage tank and the handling of transformers and other electrical equipment at the site. On May 25, 1994, the Company entered into a tolling agreement pursuant to which the Metal Bank Group reserved its right to file suit against the Company while the Metal Bank Group and the Company entered into discussions to determine the extent of the Company's involvement with the Cottman Avenue site. These discussions continue. The RIFS has been completed and submitted to the EPA for determination of what remedial measures will be required at the Cottman Avenue site. The Company is unable at this time to estimate its share, if any, of past or future costs at this site.
Information regarding the Company's involvement in, and the effect on the Company of, pipeline take-or-pay proceedings before the FERC is contained under the caption "Gas Energy Costs" in the "Review of the Company's Results of Operations and Financial Condition" and in Note 12 of the Notes to Consolidated Financial Statements - "Gas Supply and Storage Contracts" on pages 12 and 28, respectively, of the 1994 Annual Report to Shareholders, which material is incorporated by reference in this Form 10-K Annual Report. Reference is also made to the information contained under the caption "Take- or-Pay Surcharge Costs and FERC Order No. 636 Transition Costs" of "Gas Operations" in Item 1 of this Form 10-K Annual Report.
The Company's gas operations were not materially affected by take-or-pay charges in 1994. However, as required by the NYPSC in Case No. 88-G-062, the Company has deferred a portion of these costs. As of December 31, 1994, $2.8 million of deferred take-or-pay charges and accrued interest remain on the books of the Company. The Company is negotiating with the Staff of the Commission to recover the remainder of the take-or-pay liability.
On April 8, 1992, the FERC issued Order No. 636 requiring interstate natural gas pipelines to unbundle their sales and transportation services and to offer each of these services on a stand alone basis. It is currently estimated that the Company's obligation related to Order No. 636 transition costs will amount to $24.6 million. It is anticipated that transition costs incurred by the Company will be recoverable in gas rates to the extent such costs were prudently incurred. Information regarding the Company's involvement in, and effect on the Company of, Order No. 636 and its related proceedings is contained under the caption "Gas Energy Costs" in the "Review of the Company's Results of Operations and Financial Condition" and in Note 12 of the Notes to Consolidated Financial Statements under the caption "Gas Supply and Storage Contracts" on pages 12 and 28, respectively, of the 1994 Annual Report to Shareholders, which material is incorporated by reference in this Form 10-K Annual Report. Reference is also made to the information contained under the caption "Take-or-Pay Surcharge Costs and FERC Order 636 Transition Costs" of "Gas Operations" in Item 1 of this Form 10-K Annual Report.
The Company has been named as a defendant or third-party defendant in a number of proceedings involving alleged personal injuries, primarily to construction workers, as a result of exposure to asbestos at facilities owned and operated by the Company. Discovery with regard to these cases will determine, among other things, if the plaintiffs in each of these cases worked at Company facilities. The Company anticipates that similar asbestos- related claims may be asserted against the Company from time to time in the future. However, at this time the Company does not believe that the asbestos-related lawsuits currently outstanding, nor those which may be brought in the future, will, individually or in the aggregate, have a material effect on the financial condition of the Company.
The Company is a party to a number of administrative proceedings involving potential impact to the environment. Such proceedings arise out of the operation and maintenance of facilities for the generation, transmission and distribution of electricity and natural gas. Information regarding the Company's involvement in these various proceedings is included in Note 12 of the Notes to Consolidated Financial Statements under the caption "Environmental" on page 31 of the 1994 Annual Report to Shareholders, which information is incorporated by reference in Item 1 of this Form 10-K Annual Report, as well as under the subheading, "Environmental Matters" of this Form 10-K Annual Report. Such proceedings are not, in the aggregate, material to the financial condition of the Company.
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal year ended December 31, 1994.
EXECUTIVE OFFICERS OF THE REGISTRANT
All of the officers of the Company are appointed on an annual basis at the first Board of Directors' meeting following the annual meeting. The following list includes two Company employees who, due to the policy making functions they perform for the Company, are considered executive officers under SEC criteria, but who are not officers of the Company and who are not appointed on an annual basis.
Officers, Age, and Title Business Experience Past Five Years
D. Louis Peoples, 54 Vice Chairman of the Board and Chief Vice Chairman of the Executive Officer since July 14, 1994. Board of Directors and Executive Vice President, and a member Chief Executive Officer of the Board of Directors, Madison Gas and Electric Company from 1992 to 1993. Senior Vice President, RCG/Hagler, Bailly Inc. from 1991 to 1992. Senior Vice President, and a member of the Board of the Directors, Nuclear Services Division, Tenera, L.P. from 1990 to 1991;
R. Lee Haney, 55 Vice President and Chief Financial Vice President and Officer since September 8, 1994. Chief Financial Officer Senior Vice President from January 1993 until September 1994, and Vice President and Chief Financial Officer until January 1993, San Diego Gas & Electric Company.
G. D. Caliendo, 54 Vice President, General Counsel and Vice President - Secretary since March 2, 1995. General Counsel Senior Vice President, General and Secretary Counsel and Secretary of Pennsylvania Power and Light Company from 1989 to 1994.
Robert J. Biederman, Jr., 42 Vice President since April 1990. Vice President, Operations Director of Operations from 1986 until April 1990.
Robert J. McBennett, 52 Treasurer since 1984. Treasurer
George V. Bubolo, Jr., 50 Director, Engineering and System Director, Engineering and Operations since November 1, 1994. System Operations Director, Electric Operations from 1983 until November 1, 1994.
Vincent R. Tummarello, 44 Division Vice President - Electric Division Vice President, Production since November 1, 1994. Electric Production Director, Electric Production from April 1, 1985 until November 1, 1994.
PART II
Item 5.

Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
The Common Stock of the Company is listed on the New York Stock Exchange under the ticker symbol ORU. The stock is listed in published stock tables as "OranRk".
At December 31 1994, there were 23,299 holders of record of the Company's common stock, $5.00 par value. During 1994 dividend payments were made to holders of the Company's common stock on February 1, May 1, August 1 and November 1.
Quarterly market price and dividend information on the Company's Common Stock is as follows:
Quarter High Low Dividend
1993 1 $45 7/8 $40 1/4 $.615 2 47 1/2 43 3/8 .615 3 47 1/2 44 3/8 .63 4 45 3/8 38 5/8 .63
1994 1 41 1/4 32 1/8 .63 2 35 7/8 30 1/2 .63 3 31 7/8 29 1/2 .64 4 32 1/2 28 3/8 .64
Information regarding the restriction of retained earnings for dividend payment is contained in Note 4 of the Notes to Consolidated Financial Statements - "Retained Earnings" on page 24 of the 1994 Annual Report to Shareholders, which material is incorporated by reference in this Form 10-K Annual Report.
Item 6.

Item 6. Selected Financial Data
The information required by this Item is contained under the captions "Financial Statistics - Common Stock Data", and "Financial Statistics - Selected Financial Data" on page 36 of the 1994 Annual Report to Shareholders, which material is incorporated by reference in this Form 10-K Annual Report.
Item 7.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The information required by this Item is contained under the caption "Review of the Company's Results of Operations and Financial Condition" on pages 8 through 16 of the 1994 Annual Report to Shareholders, which material is incorporated by reference in this Form 10-K Annual Report.
Item 8.


Item 8. Financial Statements and Supplementary Data
The financial statements and supplementary financial information required by this Item are contained on pages 17 through 33 of the 1994 Annual Report to Shareholders, which material is incorporated by reference in this Form 10-K Annual Report. Such information is listed in Item l4(a)(1) "Financial Statements" of this Form 10-K Annual Report.
Item 9.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
On February 10, 1994, the Executive Committee of the Board of Directors of the Company appointed the accounting firm of Arthur Andersen LLP to audit the books, records and accounts of the Company and its subsidiaries for the 1994 fiscal year. The appointment of Arthur Andersen LLP was approved by the shareholders at the Annual Meeting held on May 11, 1994.
The accounting firm of Grant Thornton LLP audited the Company's consolidated financial statements for 1993 and prior years. Upon recommendation of the Audit Committee, the Board of Directors decided to solicit bids for the performance of auditing services for the Company for 1994. Bids were received from six public accounting firms, including Grant Thornton LLP. Based on a review of the competing bids, the Audit Committee believe that the selection of Arthur Andersen LLP would be in the best interests of the Company and recommended such selection to the Board of Directors.
The reports of Grant Thornton LLP on the Company's consolidated financial statements for the fiscal years ended December 31, 1992 and 1993 did not contain an adverse opinion or a disclaimer of opinion and the reports were not qualified or modified as to uncertainty, audit scope or accounting principles, except that the report for 1993 was modified by inclusion of an explanatory paragraph regarding the uncertainty of the pending investigations of the Company and related litigation described in the Company's Current Reports on Form 8-K dated August 16, October 6, November 23 and December 16, 1993 and Quarterly Report on Form 10-Q for the quarter ended September 30, 1993. Since January 1, 1992, there have been no disagreements with Grant Thornton LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which, if not resolved to the satisfaction of Grant Thornton LLP, would have caused Grant Thornton LLP to make reference to the subject matter of such disagreements in connection with its report.
PART III
The information required by Item 10







Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) Financial Statements
The following consolidated financial statements of the Company and its subsidiaries appearing on pages 17 through 33 of the 1994 Annual Report to Shareholders are incorporated by reference in this Form 10-K Annual Report. With the exception of these consolidated financial statements and the information incorporated in Items 1, 3, 5, 6, 7 and 8, herein, the 1994 Annual Report to Shareholders is not deemed filed as part of this Form 10-K Annual Report. Page* Consolidated Statements of Income and Retained Earnings for the years ended December 31, 1994, 1993 and 1992. 17
Consolidated Balance Sheets as of December 31, 1994 and 1993. 18
Consolidated Cash Flow Statements for the years ended December 31, 1994, 1993 and 1992. 20
Notes to Consolidated Financial Statements. 21
Report of Independent Public Accountants. 33
*Page number reference is to the 1994 Annual Report to Shareholders
(a)(2) Financial Statement Schedules Page**
Valuation and Qualifying Accounts and Reserves for the years ended December 31, 1994, 1993 and 1992 (Schedule II). 51
**Page number reference is to this Form 10-K Annual Report
All other schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.
The information required by Rule 5-04, Schedule I - Condensed Financial Information of Registrant has been omitted since Consolidated Financial State- ments of the Registrant and its subsidiaries are contained in the Company's 1994 Annual Report to Shareholders and the test prescribed was not met.
(a)(3) Exhibits
* 3.1 Restated Certificate of Incorporation, as amended through April 14, 1988. (Exhibit 4.1 to Registration Statement 33-25359).
3.2 By-Laws, as amended through November 3, 1994.
* 4.1 Composite First Mortgage of the Company as Supplemented and Modified by Twenty-six Supplemental Indentures. (Exhibit 4.1 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
* 4.2 Twenty-seventh Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1980. (Exhibit 4.2 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
* 4.3 Mortgage Trust Indenture of Rockland Electric Company, dated as of July 1, 1954. (Exhibit 2.16 to Registration Statement No. 2-14159).
* 4.6 Third Supplemental Indenture of Rockland Electric Company, dated as of August 15, 1965. (Exhibit 4.23 to Registration Statement No. 2-24682).
* 4.11 Mortgage Trust Indenture of Pike County Light & Power Company, dated as of July 15, 1971. (Exhibit 4.31 to Registration Statement No. 2-45632).
* 4.12 Twenty-eighth Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1982. (Exhibit 4.12 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
* 4.17 Twenty-ninth Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1984. (Exhibit 4.17 to Form 10-K for the fiscal year ended December 31, 1989, File No. 1-4315).
* 4.20 Thirtieth Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1986. (Exhibit 4.20 to Form 10-K for the fiscal year ended December 31, 1991, File No. 1-4315).
* 4.21 Thirty-first Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1988. (Exhibit 4.21 to Form 10-K for the fiscal year ended December 31, 1988, File No. 1-4315).
* 4.22 Thirty-second Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1990. (Exhibit 4.22 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
* 4.25 Indenture between the Company and The Bank of New York as Trustee regarding unsecured debt, dated March 1, 1990. (Exhibit 4.25 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
* 4.26 First Supplemental Indenture between the Company and The Bank of New York as Trustee regarding unsecured debt, dated March 7, 1990. (Exhibit 4.26 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
* 4.27 Second Supplemental Indenture between the Company and the Bank of New York as Trustee regarding unsecured debt, dated October 15, 1992. (Exhibit 4.27 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
* 4.28 Thirty-third Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1992. (Exhibit 4.28 to Form 10-K for the fiscal year ended December 3, 1992, File No. 1-4315).
* 4.29 Third Supplemental Indenture between the Company and The Bank of New York as Trustee regarding unsecured debt, dated as of March 1, 1993. (Exhibit 4.29 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
* 4.30 Ninth Supplemental Indenture of Rockland Electric Company, dated as of March 1, 1993. (Exhibit 4.30 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
4.31 Thirty-fourth Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1994.
*10.1 General Agreement: Bowline Point Generating Plant, dated as of October 10, 1969. (Exhibit 5(b) to Registration Statement No. 2-42156).
*10.2 Financing Agreements, dated as of February 1, 1971. (Exhibit 5(a) to Registration Statement No. 2-42156).
*10.7 New York Power Pool Agreement, dated July 16, 1985. (Exhibit 10.7 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
*10.8 Agreement governing the supply of residual fuel oil by Con Edison to Bowline Point Generating Station dated August 31, 1983. (Exhibit 10.18 to Form 10-K for fiscal year ended December 31, 1991, File No. 1-4315).
*10.10 PJM Facilities Agreement, dated May 1, 1970, as amended December 12, 1972. (Exhibit 10.10 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
+*10.11 Officers' Supplemental Retirement Plan, as amended April 1, 1993.
*10.12 Incentive Compensation Plan, amended January 3, 1991. (Exhibit 10.12 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
*10.13 Severance Pay Plan, as amended January 3, 1991. (Exhibit 10.13 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
*10.14 Management Long-Term Disability Plan. (Exhibit 10.14 to Form 10-K for the fiscal year ended December 31, 1991, File No. 1-4315).
*10.15 New York Power Authority Firm Purchase Contract, dated July 28, 1975. (Exhibit 10.15 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
10.17 Coal Purchase and Sale Agreement among Orange and Rockland Utilities, Inc., Rawl Sales and Processing Company, and Massey Coal Sales, Inc., dated March 9, 1984, as amended through July 1, 1994.
*10.18 Agreement between Orange and Rockland Utilities, Inc., and Pittston Coal Sales Company, dated March 14, 1984 as amended through December 1, 1986. (Exhibit 10.18 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
*10.18A Amendment to the Agreement between Orange and Rockland Utilities, Inc., and Pittston Coal Sales Company, dated July 1, 1991 and executed May 5, 1993. (Exhibit 10.18A to Form 10-K for the fiscal year ended December 31, 1993, File No. 1-4315).
+*10.19 Employment contract between Orange and Rockland Utilities, Inc. and James F. Smith as amended December 1, 1990. (Exhibit 10.19 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
10.20 Orange and Rockland Utilities, Inc. Post Director Service Retainer Continuation Program, as amended March 2, 1995.
*10.21 Electric Contract for the Sale of Firm Power and Energy by the Power Authority of the State of New York to Orange and Rockland Utilities, Inc., dated April 26, 1989, including Application dated April 20, 1989. (Exhibit 10.21 to Form 10-K for the fiscal year ended December 31, 1989, File No. 1-4315).
+*10.22 Form of Severance Agreement for Company Officers effective January 3, 1991. (Exhibit 10.22 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
+*10.23 Performance Unit Incentive Plan effective December 3, 1992. (Exhibit 10.23 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
+*10.24 Award Agreement under the Performance Unit Incentive Plan applicable to P. J. Chambers, Jr., dated December 3, 1992. (Exhibit 10.24 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
+*10.25 Award Agreement under the Performance Unit Incentive Plan applicable to J. F. Smith dated December 3, 1992. (Exhibit 10.25 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
+*10.26 Letter agreement dated September 29, 1994 between Orange and Rockland Utilities, Inc. and R. Lee Haney regarding participation in the Officers' Supplemental Retirement Plan of Orange and Rockland Utilities, Inc. (Exhibit 10.26 to Form 10-Q for the period ended September 30, 1994, File No. 1-4315).
+*10.27 Letter agreement dated September 29, 1994 between Orange and Rockland Utilities, Inc. and D. Louis Peoples regarding participation in the Officers' Supplemental Retirement Plan of Orange and Rockland Utilities, Inc. (Exhibit 10.27 to Form 10-Q for the period ended September 30, 1994, File No. 1-4315).
+10.28 Agreement between Orange and Rockland Utilities, Inc. and Victor J. Blanchet, Jr. dated March 1, 1995.
+10.29 Deferred Compensation Plan for Non Employee Directors as amended through October 6, 1994.
13 The Company's 1994 Annual Report to Shareholders to the extent identified in this Form 10-K Annual Report for the fiscal year ended December 31, 1994.
*16 Letter from Grant Thornton (Exhibit 16 to Form 8-K/A dated February 22, 1994, File No. 1-4315).
21 Subsidiaries of the Company.
24 Powers of Attorney.
27 Financial Data Schedule.
*99.1 Joint Cooperation Agreement between the Office of the Rockland County District Attorney and Orange and Rockland Utilities, Inc., dated November 3, 1993 (Exhibit 99.1 to Form 10-Q for the quarter ended September 30, 1993, File No. 1-4315).
*99.2 Complaint against James F. Smith dated March 16, 1994. (Exhibit 99.2 to Form 10-K for the year ended December 31, 1993, File No. 1-4315).
*99.5 Agreement Between Orange and Rockland Utilities, Inc. and Kroll Associates, Inc. dated as of November 1, 1994. (Exhibit 99.5 to Form 10-Q for the period ended September 30, 1994, File No. 1-4315).
+ Denotes executive compensation plans and arrangements.
* Incorporated by reference to the indicated filings.
The securities issued relevant to each of the following agreements were not registered with the Securities and Exchange Commission and the total amount of securities authorized under each agreement does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis. Therefore, as provided in Item 601 of Regulation S-K, the following agreements are not filed as exhibits. The Company agrees, however, to furnish to the Commission a copy of each agreement upon request:
- Participation Agreement between NYSERDA and Orange and Rockland Utilities, Inc., dated as of July 1, 1982.
- Indenture of Trust between NYSERDA and The Bank of New York, as Trustee, relating to the Pollution Control Revenue Bonds (Orange and Rockland Utilities, Inc. Project) dated as of July 1, 1982.
- Second Supplemental Indenture of Trust between NYSERDA and the Bank of New York, as Trustee, relating to the 9% Pollution Control Revenue Bonds (Orange and Rockland Utilities, Inc. Projects), 1985 Series.
- Second Supplemental Participation Agreement between NYSERDA and Orange and Rockland Utilities, Inc., dated as of August 1, 1985.
- First Supplemental Indenture, dated August 15, 1990, to the Indenture of Mortgage and Deed of Trust of Pike County Light & Power Company.
- Eighth Supplemental Indenture of Rockland Electric Company, dated as of August 15, 1990.
- Indenture of Trust between NYSERDA and the Bank of New York, as Trustee, relating to the Pollution Control Revenue Bonds (Orange and Rockland Utilities, Inc. Project) dated as of August 15, 1994.
- Participation Agreement between NYSERDA and Orange and Rockland Utilities, Inc., dated as of August 15, 1994.
(b) Reports on Form 8-K
The Company has not filed any reports on Form 8-K current report covering an event during the fourth quarter of 1994.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ORANGE AND ROCKLAND UTILITIES, INC. (Registrant)
By D. LOUIS PEOPLES (D. Louis Peoples Vice Chairman of the Board of Directors and Chief Executive Officer)
Date: March 17, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature and Title Capacity in Which Signing
D. LOUIS PEOPLES* Chief Executive (D. Louis Peoples, Officer, Director Vice Chairman of the Board of Directors and Chief Executive Officer)
R. LEE HANEY* Chief Financial Officer (R. Lee Haney, Vice President and Chief Financial Officer)
TERRY L. DITTRICH* Acting Principal (Terry L. Dittrich, Acting Accounting Officer Controller)
H. KENT VANDERHOEF* Chairman of the (H. Kent Vanderhoef) Board of Directors
RALPH M. BARUCH* Director (Ralph M. Baruch)
J. FLETCHER CREAMER* Director (J. Fletcher Creamer)
Signature and Title Capacity in Which Signing
MICHAEL J. DEL GIUDICE* Director (Michael J. Del Giudice)
FRANK A. McDERMOTT, JR.* Director (Frank A. McDermott, Jr.)
KENNETH D. McPHERSON* Director (Kenneth D. McPherson)
JAMES F. O'GRADY, JR.* Director (James F. O'Grady, Jr.)
FREDERIC V. SALERNO* Director (Frederic V. Salerno)
LINDA C. TALIAFERRO* Director (Linda C. Taliaferro)
*By G. D. CALIENDO (G. D. Caliendo, Attorney-in-fact)
Date: March 17, 1995
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES
We have audited in accordance with generally accepted auditing standards, the 1994 consolidated financial statements included in Orange and Rockland Utilities, Inc.'s Annual Report to Shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated February 2, 1995. Our audit was made for the purpose of forming an opinion on those consolidated financial statements taken as a whole. Supplemental Schedule II, Valuation and Qualifying Accounts and Reserves for the year ended December 31, 1994 (see index of financial statements) is presented for purposes of complying with the Securities and Exchange Commissions rules and is not part of the basic consolidated statements and, in our opinion, fairly states in all material respects the financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic consolidated statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole.
ARTHUR ANDERSEN LLP
New York, New York February 2, 1995
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our reports included or incorporated by reference in this Form 10-K, into the Company's previously filed Registration Statements on Form S-8 (File Nos. 33-25358, 33-25359 and 33-22129) and on Form S-3 (File No. 33-63872).
ARTHUR ANDERSEN LLP
New York, New York March 17, 1995
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES
Board of Directors and Shareholders of Orange and Rockland Utilities, Inc.
In connection with our audit of the consolidated financial statements of Orange and Rockland Utilities, Inc. and Subsidiaries referred to in our report dated February 16, 1994, which report included an explanatory paragraph that described the investigations and litigation discussed in Note 12 (Legal Proceedings) of those statements, which is included in the 1993 Annual Report to Shareholders and incorporated by reference in this Form 10-K, we have also audited the schedule listed in the Index at Item 14(a)(2). In our opinion, this schedule presents fairly, in all material respects, the information required to be set forth therein.
GRANT THORNTON LLP
New York, New York February 16, 1994
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our reports dated February 16, 1994, accompanying the consolidated financial statements and schedule incorporated by reference or included in the Annual Report of Orange and Rockland Utilities, inc. and Subsidiaries on Form 10-K for the year ended December 31, 1993. We hereby consent to the incorporation by reference of said reports in the Registration Statements of Orange and Rockland Utilities, Inc. and Subsidiaries on Forms S-8 (No. 33-25358, No. 33-25359 and No. 33-22129) and on Forms S-3 (No. 33-63872).
GRANT THORNTON LLP
New York, New York March 17, 1995
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549
________________________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
________________________
Fiscal Year Ended December 31, 1994 Commission File Number 1-4315
ORANGE AND ROCKLAND UTILITIES, INC. (Exact name of Registrant as Specified in its Charter)
EXHIBITS
Orange and Rockland Utilities, Inc. Index of Exhibits 1994 Form 10-K
* 3.1 Restated Certificate of Incorporation, as amended through April 14, 1988. (Exhibit 4.1 to Registration Statement 33-25359).
3.2 By-Laws, as amended through November 3, 1994.
* 4.1 Composite First Mortgage of the Company as Supplemented and Modified by Twenty-six Supplemental Indentures. (Exhibit 4.1 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
* 4.2 Twenty-seventh Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1980. (Exhibit 4.2 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
* 4.3 Mortgage Trust Indenture of Rockland Electric Company, dated as of July 1, 1954. (Exhibit 2.16 to Registration Statement No. 2-14159).
* 4.6 Third Supplemental Indenture of Rockland Electric Company, dated as of August 15, 1965. (Exhibit 4.23 to Registration Statement No. 2-24682).
* 4.11 Mortgage Trust Indenture of Pike County Light & Power Company, dated as of July 15, 1971. (Exhibit 4.31 to Registration Statement No. 2-45632).
* 4.12 Twenty-eighth Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1982. (Exhibit 4.12 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
* 4.17 Twenty-ninth Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1984. (Exhibit 4.17 to Form 10-K for the fiscal year ended December 31, 1989, File No. 1-4315).
* 4.20 Thirtieth Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1986. (Exhibit 4.20 to Form 10-K for the fiscal year ended December 31, 1991, File No. 1-4315).
* 4.21 Thirty-first Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1988. (Exhibit 4.21 to Form 10-K for the fiscal year ended December 31, 1988, File No. 1-4315).
* 4.22 Thirty-second Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1990. (Exhibit 4.22 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
* 4.25 Indenture between the Company and The Bank of New York as Trustee regarding unsecured debt, dated March 1, 1990. (Exhibit 4.25 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
* 4.26 First Supplemental Indenture between the Company and The Bank of New York as Trustee regarding unsecured debt, dated March 7, 1990. (Exhibit 4.26 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
* 4.27 Second Supplemental Indenture between the Company and the Bank of New York as Trustee regarding unsecured debt, dated October 15, 1992. (Exhibit 4.27 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
* 4.28 Thirty-third Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1992. (Exhibit 4.28 to Form 10-K for the fiscal year ended December 3, 1992, File No. 1-4315).
* 4.29 Third Supplemental Indenture between the Company and The Bank of New York as Trustee regarding unsecured debt, dated as of March 1, 1993. (Exhibit 4.29 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
* 4.30 Ninth Supplemental Indenture of Rockland Electric Company, dated as of March 1, 1993. (Exhibit 4.30 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
4.31 Thirty-fourth Supplemental Indenture to the First Mortgage of the Company, dated as of April 1, 1994.
*10.1 General Agreement: Bowline Point Generating Plant, dated as of October 10, 1969. (Exhibit 5(b) to Registration Statement No. 2-42156).
*10.2 Financing Agreements, dated as of February 1, 1971. (Exhibit 5(a) to Registration Statement No. 2-42156).
*10.7 New York Power Pool Agreement, dated July 16, 1985. (Exhibit 10.7 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
*10.8 Agreement governing the supply of residual fuel oil by Con Edison to Bowline Point Generating Station dated August 31, 1983. (Exhibit 10.18 to Form 10-K for fiscal year ended December 31, 1991, File No. 1-4315).
*10.10 PJM Facilities Agreement, dated May 1, 1970, as amended December 12, 1972. (Exhibit 10.10 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
+*10.11 Officers' Supplemental Retirement Plan, as amended April 1, 1993.
*10.12 Incentive Compensation Plan, amended January 3, 1991. (Exhibit 10.12 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
*10.13 Severance Pay Plan, as amended January 3, 1991. (Exhibit 10.13 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
*10.14 Management Long-Term Disability Plan. (Exhibit 10.14 to Form 10-K for the fiscal year ended December 31, 1991, File No. 1-4315). *10.15 New York Power Authority Firm Purchase Contract, dated July 28, 1975. (Exhibit 10.15 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
10.17 Coal Purchase and Sale Agreement among Orange and Rockland Utilities, Inc., Rawl Sales and Processing Company, and Massey Coal Sales, Inc., dated March 9, 1984, as amended through July 1, 1994.
*10.18 Agreement between Orange and Rockland Utilities, Inc., and Pittston Coal Sales Company, dated March 14, 1984 as amended through December 1, 1986. (Exhibit 10.18 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
*10.18A Amendment to the Agreement between Orange and Rockland Utilities, Inc., and Pittston Coal Sales Company, dated July 1, 1991 and executed May 5, 1993. (Exhibit 10.18A to Form 10-K for the fiscal year ended December 31, 1993, File No. 1-4315).
+*10.19 Employment contract between Orange and Rockland Utilities, Inc. and James F. Smith as amended December 1, 1990. (Exhibit 10.19 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
10.20 Orange and Rockland Utilities, Inc. Post Director Service Retainer Continuation Program, as amended March 2, 1995.
*10.21 Electric Contract for the Sale of Firm Power and Energy by the Power Authority of the State of New York to Orange and Rockland Utilities, Inc., dated April 26, 1989, including Application dated April 20, 1989. (Exhibit 10.21 to Form 10-K for the fiscal year ended December 31, 1989, File No. 1-4315).
+*10.22 Form of Severance Agreement for Company Officers effective January 3, 1991. (Exhibit 10.22 to Form 10-K for the fiscal year ended December 31, 1990, File No. 1-4315).
+*10.23 Performance Unit Incentive Plan effective December 3, 1992. (Exhibit 10.23 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
+*10.24 Award Agreement under the Performance Unit Incentive Plan applicable to P. J. Chambers, Jr., dated December 3, 1992. (Exhibit 10.24 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
+*10.25 Award Agreement under the Performance Unit Incentive Plan applicable to J. F. Smith dated December 3, 1992. (Exhibit 10.25 to Form 10-K for the fiscal year ended December 31, 1992, File No. 1-4315).
+*10.26 Letter agreement dated September 29, 1994 between Orange and Rockland Utilities, Inc. and R. Lee Haney regarding participation in the Officers' Supplemental Retirement Plan of Orange and Rockland Utilities, Inc. (Exhibit 10.26 to Form 10-Q for the period ended September 30, 1994, File No. 1-4315). +*10.27 Letter agreement dated September 29, 1994 between Orange and Rockland Utilities, Inc. and D. Louis Peoples regarding participation in the Officers' Supplemental Retirement Plan of Orange and Rockland Utilities, Inc. (Exhibit 10.27 to Form 10-Q for the period ended September 30, 1994, File No. 1-4315).
+10.28 Agreement between Orange and Rockland Utilities, Inc. and Victor J. Blanchet, Jr. dated March 1, 1995.
+10.29 Deferred Compensation Plan for Non Employee Directors as amended through October 6, 1994.
13 The Company's 1994 Annual Report to Shareholders to the extent identified in this Form 10-K Annual Report for the fiscal year ended December 31, 1994.
*16 Letter from Grant Thornton (Exhibit 16 to Form 8-K/A dated February 22, 1994, File No. 1-4315).
21 Subsidiaries of the Company.
24 Powers of Attorney.
27 Financial Data Schedule.
*99.1 Joint Cooperation Agreement between the Office of the Rockland County District Attorney and Orange and Rockland Utilities, Inc., dated November 3, 1993 (Exhibit 99.1 to Form 10-Q for the quarter ended September 30, 1993, File No. 1-4315).
*99.2 Complaint against James F. Smith dated March 16, 1994. (Exhibit 99.2 to Form 10-K for the year ended December 31, 1993, File No. 1-4315).
*99.5 Agreement Between Orange and Rockland Utilities, Inc. and Kroll Associates, Inc. dated as of November 1, 1994. (Exhibit 99.5 to Form 10-Q for the period ended September 30, 1994, File No. 1-4315).
+ Denotes executive compensation plans and arrangements.
* Incorporated by reference to the indicated filings.
The securities issued relevant to each of the following agreements were not registered with the Securities and Exchange Commission and the total amount of securities authorized under each agreement does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis. Therefore, as provided in Item 601 of Regulation S-K, the following agreements are not filed as exhibits. The Company agrees, however, to furnish to the Commission a copy of each agreement upon request:
- Participation Agreement between NYSERDA and Orange and Rockland Utilities, Inc., dated as of July 1, 1982.
- Indenture of Trust between NYSERDA and The Bank of New York, as Trustee, relating to the Pollution Control Revenue Bonds (Orange and Rockland Utilities, Inc. Project) dated as of July 1, 1982. - Second Supplemental Indenture of Trust between NYSERDA and the Bank of New York, as Trustee, relating to the 9% Pollution Control Revenue Bonds (Orange and Rockland Utilities, Inc. Projects), 1985 Series.
- Second Supplemental Participation Agreement between NYSERDA and Orange and Rockland Utilities, Inc., dated as of August 1, 1985.
- First Supplemental Indenture, dated August 15, 1990, to the Indenture of Mortgage and Deed of Trust of Pike County Light & Power Company.
- Eighth Supplemental Indenture of Rockland Electric Company, dated as of August 15, 1990.
- Indenture of Trust between NYSERDA and the Bank of New York, as Trustee, relating to the Pollution Control Revenue Bonds (Orange and Rockland Utilities, Inc. Project) dated as of August 15, 1994.
- Participation Agreement between NYSERDA and Orange and Rockland Utilities, Inc., dated as of August 15, 1994.