Form 11-K 2005 RG&E Savings Plan Plus


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
__________

FORM 11-K

(Mark one)

 X  ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the fiscal year ended December 31, 2005

OR

    TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from             to
             

Commission file number 1-14766


Full title of the plan and the address of the plan, if different from
that of the issuer named below:

Rochester Gas and Electric Corporation
  Savings Plus Plan
88 East Avenue
Rochester, New York 14649


Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:

Energy East Corporation
52 Farm View Drive
New Gloucester, Maine 04260-5116

 


REQUIRED INFORMATION

The Rochester Gas and Electric Corporation Savings Plus Plan (Plan) is subject to the Employee Retirement Income Security Act of 1974 (ERISA). Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial statements of the Plan for the two fiscal years ended December 31, 2005 and 2004 and supplemental schedules, which have been prepared in accordance with the financial reporting requirements of ERISA, are attached hereto as Appendix 1 and incorporated herein by reference.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Committee to administer the Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Rochester Gas and Electric Corporation
Savings Plus Plan

 

Date:  June 29, 2006

By    /s/Richard R. Benson                               
            Richard R. Benson
            Committee Member


Date:  June 29, 2006

By    /s/Robert D. Kump                                   
            Robert D. Kump
            Committee Member


Date:  June 29, 2006

By    /s/Joseph Syta                                          
            Joseph Syta
            Committee Member


Date:  June 29, 2006

By    /s/F. Michael McClain                                
            F. Michael McClain
            Committee Member



APPENDIX 1

ROCHESTER GAS AND ELECTRIC CORPORATION
SAVINGS PLUS PLAN

 

STATEMENTS OF NET ASSETS AS OF DECEMBER 31, 2005 and 2004
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEARS ENDED
DECEMBER 31, 2005, and 2004
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2005


Rochester Gas and Electric Corporation
Savings Plus Plan
Index to Financial Statements and Supplemental Schedule

 

Report of Independent Registered Public Accounting Firm - Baker    Newman & Noyes, LLC

1

   
   

Financial Statements:

     Statements of Net Assets Available for Benefits -
       December 31, 2005 and 2004




2

   

     Statements of Changes in Net Assets Available for Benefits -
       Years ended December 31, 2005 and 2004


3

   

     Notes to Financial Statements

4

   

Supplemental Schedule*

 
   

     Schedule H, line 4i - Schedule of Assets (Held at End of Year)

8

   
   

Consent of Independent Registered Public Accounting Firm - Baker    Newman & Noyes, LLC

Exhibit 23

   




*Other supplemental schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.


REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM

 

To the Participants and Administrative Committee of the
Rochester Gas & Electric Corporation
   Savings Plus Plan

 

We have audited the accompanying statements of net assets available for benefits of the Rochester Gas & Electric Corporation Savings Plus Plan (the Plan) as of December 31, 2005 and 2004, and the related statements of changes in net assets available for benefits for the years ended December 31, 2005 and 2004. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Rochester Gas & Electric Corporation Savings Plus Plan as of December 31, 2005 and 2004, and the changes in net assets available for benefits for the years ended December 31, 2005 and 2004, in conformity with accounting principles generally accepted in the United States of America.

Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2005, is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the United States Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

 

 

/s/ Baker, Newman & Noyes           
Limited Liability Company

Portland, Maine
June 21, 2006

 


Rochester Gas and Electric Corporation
Savings Plus Plan
Statements of Net Assets Available for Benefits
December 31, 2005 and 2004


 

2005     

2004     

Assets:

   

  Investments:

   

    Registered Investment Companies

$  178,846,730

$  181,172,505

    Stable Value Fund

70,315,902

72,032,782

    Energy East Corporation Stock Fund

13,800,491

15,757,354

    Participant loans

4,684,317

5,174,733

 

267,647,440

274,137,374


  Receivables:

   

    Due from Broker for securities sold

-

737

    Miscellaneous Contributions

5,871

6,479

    Miscellaneous Loan Transactions - Net

-

191

    Contributions Receivable

285,888

127,668

 

291,759

135,075

Net assets available for benefits

$  267,939,199

$  274,272,449

See notes to financial statements.


Rochester Gas and Electric Corporation
Savings Plus Plan
Statements of Changes in Net Assets Available for Benefits
Year Ended December 31, 2005 and 2004


   

2005      

 

2004      

Additions:

       

  Investment income:

       

    Net appreciation in fair value of investments

 

$  4,566,890 

 

$  19,882,445 

    Interest and dividends

 

8,241,647 

 

8,879,133 

   

12,808,537 

 

28,761,578 


  Contributions:

       

    Participant

 

7,651,007 

 

10,855,139 

    Employer

 

2,104,971 

 

2,617,039 

    Contributions Receivable - Employer

 

93,966 

 

20,088 

    Contributions Receivable - Employee

 

64,254 

 

107,580 

    Transfers from other qualified plans

 

 

168,892 

   

9,914,198 

 

13,768,738 


           Total additions

 


22,722,735 

 


42,530,316 


Deductions:

 


 


  Benefits paid to participants

 

22,266,546 

 

75,305,191 

  Transfers to other qualified plans

6,789,439 

1,620,053 


           Total deductions

 


29,055,985 

 


76,925,244 


Net increase (decrease)

 


(6,333,250)

 


(34,394,928)


Net assets available for benefits:
  Beginning of year

 



274,272,449 

 



308,667,377 


  End of year

 


$   267,939,199 

 


$   274,272,449 

See notes to financial statements.


Rochester Gas and Electric Corporation
Savings Plus Plan
Notes to Financial Statements
December 31, 2005 and 2004


1.   DESCRIPTION OF THE PLAN

The following description of the Rochester Gas and Electric Corporation Savings Plus Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions.

General

The Plan was established, effective January 1, 1985, by the Company under the provisions of Section 401(a) of the Internal Revenue Code (Code), and it includes a qualified cash or deferred arrangement as described in Section 401(k) of the Code for the benefit of eligible employees of the Company. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974. The Plan Administrator is the Company and an Administrative Committee has been appointed to serve as manager of the Plan.

The Plan is a defined contribution plan covering both non-union and union employees of the Company, as well as employees of Energy East Corporation's (Energy East) family of companies that elect to participate under the Plan provisions. Energy East, the parent corporation of the Company, through its subsidiaries, delivers electricity and natural gas to retail customers and provides electricity, natural gas, energy management and other services to retail and wholesale customers in the Northeast.

Eligibility

An employee may become a participant in the Plan as of the first day of any calendar month following their date of hire or any time thereafter.

Contributions

Contributions to the Plan are allocated to participant accounts.

Participant contributions, with certain exceptions, range from 1% to 50% of the participant's base compensation which includes base earnings plus shift differential, certain commissions and any eligible bonuses from both Tier I and Tier II of the Company's Group Incentive Plan. Participant contributions are subject to limitations stipulated by the Code. As of January 1, 2002, participants age 50 or over by the end of the Plan year can make an additional contribution to the Plan in accordance with and subject to the limitations of Section 414(v) of the Code. The maximum additional contribution in 2004 was $3,000 and increased by $1,000 a year until reaching a maximum of $5,000 in 2006.

As of April 1, 2002, the Plan accepts rollovers from other qualified plans, as well as 403(b) and government 457 plans, traditional Individual Retirement Accounts (IRAs), conduit IRAs (but not Roth IRAs), after-tax distributions from employer retirement plans and spousal death benefit payments.

The Energy East Corporation Stock Fund is an Employee Stock Ownership Plan (ESOP). Dividends from the ESOP may be reinvested or taken in cash. The Company contributes solely to the Energy East Corporation Stock Fund an amount equivalent to 50% of the first 6% of participant's contributions. The participant can transfer the Company's matching contribution in the Energy East Corporation Stock Fund to other investment options.

Participants can direct the investment of their contributions into various investment options offered by the Plan.


Rochester Gas and Electric Corporation
Savings Plus Plan
Notes to Financial Statements
December 31, 2005 and 2004

1.   DESCRIPTION OF THE PLAN  (Continued)

Benefit Payments

Upon termination of service a participant may elect either a lump sum amount equal to the value of the participant's interest in the participant's account, or installments over a period permissible under the Code. Distributions from all investment options, except the Energy East Corporation Stock Fund, are made in cash. Distributions from the Energy East Corporation Stock Fund are made in either whole shares of Energy East common stock or in cash, as specified by the participant, except as may otherwise be determined by the Plan's administrative committee, and except that the value of any fractional share shall be paid in cash.

Vesting

Participants have full and immediate vesting rights in participant and employer contributions, investment earnings and other amounts allocated to their accounts.

Participant Loans

Participants may, under certain circumstances, borrow against their account balances. The principal amount of the loan is subject to certain limitations as defined in the Plan document. The term of the loan may not exceed five years except for primary residence loans, which can have terms up to fifteen years, and the interest rate will be equal to the prime interest rate listed in the Wall Street Journal on the first business day of the month in which the loan is issued. This provides the Plan with a return commensurate with the interest rate charged by persons in the business of lending money for loans which would be made under similar circumstances. The loan must be repaid by payroll deductions over the term of the loan. Loan payments are credited to an applicable fund based upon the participant's current elections. If a participant's employment terminates for any reason, the loan will become immediately due and payable and must be paid within 90 days from the date of termination or will be considered a taxable distribution to the participant. The interest rate on loans outstanding at year end range from 4.00% to 9.44% for 2005, and 5.00% to 11.50% for 2004.

2.   SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements are prepared on an accrual basis and in conformity with accounting principles generally accepted in the United States of America, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of additions and deductions during the reporting period. Actual results could differ from those estimates.

Investment Valuation and Income Recognition

Shares of registered investment companies are valued at the net asset value of shares held by the Plan at year-end. The stable value fund is stated at contract value. The Energy East Stock Fund, comprised solely of Energy East common stock, is valued at its quoted market price at year-end. Participant loans are valued at cost, which approximates fair value.

Purchases and sales of investments are recorded on a trade-date basis. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date.


Rochester Gas and Electric Corporation
Savings Plus Plan
Notes to Financial Statements
December 31, 2005 and 2004

2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

Plan Termination

Although the Company has not expressed any intent to terminate the Plan, it has the right to discontinue contributions at any time and terminate the Plan subject to the provisions of the Company's collective bargaining agreement. In the event of termination of the Plan, the net assets of the Plan are set aside, first, for payment of all Plan expenses and, second, for distribution to the participants, based upon the balances in their individual accounts.

Risks and Uncertainties

The Plan provides for various investment options in any combination of stocks, fixed income securities, mutual funds, and other investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risk. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in values in the near term could materially affect participants' account balances and the amounts reported in the Statements of Net Assets Available for Benefits and the Statements of Changes in Net Assets Available for Benefits.

3.   INVESTMENTS

The following presents investments that represent 5% or more of the Plan's net assets at December 31, 2005 and 2004:

 

2005    

2004    

     

T. Rowe Price Growth Stock Fund

$  35,313,637

$  41,979,876

Fidelity Diversified International Fund

14,246,238

-

T. Rowe Price Equity Income Fund

44,723,800

50,634,021

T. Rowe Price Small Cap Value Fund

14,960,311

14,582,052

Energy East Corporation Stock Fund

13,800,491

15,757,354

Pimco Total Return Fund

17,659,235

18,132,116

Vanguard Explorer

22,025,007

25,825,778

J. P. Morgan Stable Value Fund

70,315,902

72,032,782

The plan has a deposit administration contract with J.P. Morgan (JPM). JPM maintains the Plan's deposits in a synthetic guaranteed investment contract, to which it adds interest at the contract rate (adjusted quarterly, not below 0%; 5.4% at December 31, 2005). Deposits into this contract are guaranteed the contract minimum rate of return. The weighted average interest rate earned for the year ended December 31, 2005 was 4.82%. Withdrawals are permitted at any time without penalty and the contract has been determined to be fully benefit responsive as defined in SOP 94-4. The investment is carried at contract value as reported by JPM. The fair value of the investment is not materially different from its contract value at December 31, 2005.


Rochester Gas and Electric Corporation
Savings Plus Plan
Notes to Financial Statements
December 31, 2005 and 2004

3.   INVESTMENTS (Continued)

Plan investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value during 2005 and 2004 as follows:

   

2005    

 

2004    

Registered Investment Companies

 

$   3,776,688 

 

$   17,548,280

Stable Value Fund

 

3,265,660 

 

-

Energy East Corporation Stock Fund

 

(2,475,458)

 

2,334,165

   

$   4,566,890 

 

$   19,882,445

4.   INCOME TAX STATUS

The company has received its most recent determination letter from the Internal Revenue Service dated April 4, 2000, that the Plan qualifies as a tax deferred savings plan under Sections 401(a) and 401(k) of the Code. The Plan has been amended since receiving the determination letter. The Plan Administrator and management believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Code.

5.   RELATED PARTY TRANSACTIONS

Certain Plan investments are shares of registered investment companies managed by T. Rowe Price. T. Rowe Price is the trustee as defined by the Plan. Certain other investments are in the synthetic guaranteed investment contract managed by JPM or the Energy East Stock Fund. Transactions with these parties qualify as party-in-interest transactions and are exempt from the prohibited transaction rules.

6.   ADMINSTRATIVE EXPENSES

Substantially all of the administrative expenses are paid for by the Company.


Rochester Gas and Electric Corporation
Savings Plus Plan
Schedule H, line 4i - Schedule of Assets (Held at End of Year)
December 31, 2005


 

         Identity of Issue

     Description of Investment

Current Value

       

*

JPMCB Intermediate Bond Fund

Commingled Fund

$      68,060,638

*

JPMCB Liquidity Fund

Commingled Fund

1,251,668

 

Monumental Life Insurance Co.

Fully benefit responsive wrapper contract

334,532

 

UBS AG

Fully benefit responsive wrapper contract

334,532

 

IXIS Financial Products, Inc.

Fully benefit responsive wrapper contract

334,532

 

            Subtotal Stable Value Fund

 

70,315,902

 

Pimco Total Return Fund

Registered Investment Company

17,659,235

*

T. Rowe Price Equity Income Fund

Registered Investment Company

44,723,800

 

Domini Social Equity Class R

Registered Investment Company

29,285

 

Fidelity Diversified International Fund

Registered Investment Company

14,246,238

*

T. Rowe Price Growth Stock Fund

Registered Investment Company

35,313,637

*

T. Rowe Price Retirement Income Fund

Registered Investment Company

456,324

*

T. Rowe Price Retirement 2005 Fund

Registered Investment Company

261,852

*

T. Rowe Price Retirement 2010 Fund

Registered Investment Company

3,177,847

*

T. Rowe Price Retirement 2015 Fund

Registered Investment Company

4,367,787

*

T. Rowe Price Retirement 2020 Fund

Registered Investment Company

4,306,658

*

T. Rowe Price Retirement 2025 Fund

Registered Investment Company

2,899,993

*

T. Rowe Price Retirement 2030 Fund

Registered Investment Company

1,540,529

*

T. Rowe Price Retirement 2035 Fund

Registered Investment Company

556,145

*

T. Rowe Price Retirement 2040 Fund

Registered Investment Company

497,175

*

T. Rowe Price Retirement 2045 Fund

Registered Investment Company

423

*

T. Rowe Price Small Cap Value Fund

Registered Investment Company

14,960,311

 

Vanguard Explorer

Registered Investment Company

22,025,007

 

Vanguard Institutional Index Fund

Registered Investment Company

11,824,484

*

Energy East Corporation Stock

Energy East Corporation Stock Fund

13,800,491

*

Loan Fund

Participant Loans (4.00% - 9.44%)

4,684,317

 

            Total assets held at end of year

 

$     267,647,440

       

*

Party-in-interest