04-878. Filings Under the Public Utility Holding Company Act of 1935, as Amended (“Act”)

January 9, 2004.

Notice is hereby given that the following filing(s) has/have been made with the Commission pursuant to provisions of the Act and rules promulgated under the Act. All interested persons are referred to the application(s) and/or declaration(s) for complete statements of the proposed transaction(s) summarized below. The application(s) and/or declaration(s) and any amendment(s) is/are available for public inspection through the Commission's Branch of Public Reference.

Interested persons wishing to comment or request a hearing on the application(s) and/or declaration(s) should submit their views in writing by February 2, 2004, to the Secretary, Securities and Exchange Commission, Washington, DC 20549-0609, and serve a copy on the relevant applicant(s) and/or declarant(s) at the address(es) specified below. Proof of service (by affidavit or, in the case of an attorney at law, by certificate) should be filed with the request. Any request for hearing should identify specifically the issues of facts or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in the matter. After February 2, 2004, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective.

C&T Enterprises, Inc., et al. (70-10185)

C&T Enterprises, Inc. (“C&T”), a holding company exempt by order under section 3(a)(1) of the Act from all provisions of the Act except section 9(a)(2),^[1] 1775 Industrial Boulevard, Lewisburg, Pennsylvania 17837, and its parent companies Claverack Rural Electric Cooperative, Inc. (“Claverack”), RR 2 Box 17, Wysox, Pennsylvania 18854, and Tri-County Rural Electric Cooperative, Inc. (“Tri-County” and collectively, “Applicants”), 22 North Main Street, Mansfield, Pennsylvania 16933, both Pennsylvania rural electric cooperatives and holding companies exempt by order under section 3(a)(1) of the Act from all provisions of the Act except section 9(a)(2),^[2] have filed an application with the Commission under sections 3(a)(1) and 9(a)(2) of the Act.

I. Applicants

Claverack, a Pennsylvania corporation and an exempt holding company, is a rural electric cooperative. As of December 31, 2002, it rendered service to approximately 17,200 customers in an eight-county region in north central and northeastern Pennsylvania. Its service territory is approximately 1,820 square miles and is limited primarily to the Commonwealth of Pennsylvania.^[3] Claverack is not subject to utility regulation by any state or federal agency. Its operations are overseen by the United States Department of Agriculture's Rural Utilities Services' Division. For the year ended December 31, 2002, Claverack's operating electric revenues were approximately $21.1 million (on a non-consolidated basis). Its assets at December 31, 2002 were approximately $57 million, consisting of approximately $44 million in identifiable electric utility property, plant and equipment and approximately $13 million in other corporate assets. Claverack's net income for the year ended December 31, 2002 was $1,569,554. Claverack and Tri-County each hold a 50% ownership interest in C&T, another exempt holding company described further below.

Tri-County is a rural electric cooperative rendering retail electric service predominantly to the residents of Pennsylvania's Northern Tier.^[4] As of December 31, 2002, Tri-County provided retail electric service to approximately 17,900 customers, in an area encompassing 4,484 square miles in the following Pennsylvania counties: Bradford, Cameron, Clinton, Lycoming, McKean, Potter and Tioga. For the year ended December 31, 2002, Tri-County had electric operating revenues of approximately $19.1 million (on a non-consolidated basis). The assets of Tri-County were approximately $43 million in identifiable electric utility property, plant and equipment and approximately $16 million in other corporate assets. Tri-County's net income for the year ending December 31, 2002 was $365,994. Tri-County is not subject to utility-style regulation by any state or federal agency. Like Claverack, Tri-County's operations are overseen by the United States Department of Agriculture's Rural Utilities Services' Division.

Wilderness, a Pennsylvania corporation and an exempt holding company, is a wholly owned subsidiary of Tri-County. For the year ending December 31, 2002, Wilderness' net income was -$365,005, its operating revenue was $150,607, and its assets were valued at $14,189,045 (on a non-consolidated basis). Wilderness has one subsidiary, which it wholly owns: Wellsboro (“Wellsboro”), another Pennsylvania corporation.

Wellsboro provides retail electricity service in parts of Tioga County in north central Pennsylvania, serving approximately 5,700 customers in a 266 square mile territory. For the year ended December 31, 2002, Wellsboro: (1) Earned approximately $7.3 million in electric operating revenues; (2) owned assets were approximately $8.1 million, consisting of approximately $6.2 million in identifiable electric utility property, plant and equipment and approximately $1.9 million in other corporate assets; and (3) had net income of $72,766. The Pennsylvania Public Utility Commission (“Pa PUC”) regulates Wellsboro's retail electricity rates, as well as the terms and conditions of its service.

C&T, a Pennsylvania corporation, is an exempt holding company. It holds all of the common stock of Citizens Electric Company (“Citizens”) and Valley Energy (“Valley”), both public-utility companies, and Susquehanna Energy Plus, Inc. (“SEP”), a nonutility company. For the year ended December 31, 2002, C&T's net income was $319,595, its operating revenues were $430,031, and it owned assets worth $30,893,256.

Citizens, a Pennsylvania corporation, provides retail electricity service to approximately 6,500 customers within a fifty-five square mile service area that includes parts of Union and Northumberland Counties in central Pennsylvania. For the year ended December 31, 2002, Citizens: (1) Earned approximately $11.7 million in electric operating revenues; (2) owned assets worth approximately $13.2 million, consisting of approximately $5.9 million in identifiable electric utility property, plant and equipment and approximately $7.3 million in other corporate assets; and (3) earned $402,505 in net income. Citizens is regulated as a public utility by the Pa PUC, which establishes its retail rates and other terms of its service.

Valley, a Pennsylvania corporation, is engaged in the business of selling and distributing natural gas to approximately 6,300 retail customers in a 104 square mile territory that includes in parts of Bradford County, which is in north-central Pennsylvania, and Chemung and Tioga Counties, which are in south-central New York.^[5] As of December 31, 2002, Valley's assets were valued at approximately $18 million, consisting of identifiable natural gas utility property, plant and equipment, net of depreciation. As mentioned above, the Commission authorized C&T to acquire Valley on October 31, 2002. During the two months that Valley was a subsidiary C&T, the utility earned approximately $2,038,841 in total utility revenues and $82,465 in net income. Valley is subject to the jurisdiction of the Pa PUC and the New York Public Service Commission, which regulate the company's retail rates, terms and conditions of service, accounting, issuance of securities, transactions with affiliated companies and other matters.

II. Reorganization

Tri-County and Claverack intend to consolidate the operations of all utility-related subsidiaries under C&T. This would be accomplished through two transfers (collectively, “Reorganization”): Tri-County would transfer all of the common stock of Wilderness to C&T and, simultaneously, Wilderness would transfer all of the common stock of Wellsboro to C&T. After the Reorganization, Wilderness would be an inactive company and would no longer be a holding company within the meaning of the Act.

To ensure that Claverack is making a contribution equivalent to the one that Tri-County is making by the transfer of Wilderness/Wellsboro, Claverack has already transferred its ownership of SEP to C&T. Upon obtaining regulatory approval,^[6] Wilderness would transfer to C&T up to $5.4 million in long-term debt that Wellsboro currently owes to Wilderness.^[7] Wilderness would refinance with C&T its $13.2 million of debt owed to the National Rural Cooperative Finance Corporation, consisting of the $5.4 million incurred by Wellsboro and approximately $9 million in acquisition debt incurred when Wilderness purchased Wellsboro. Finally, C&T would finance the $13.2 million with the National Cooperative Services Corporation.

After the Reorganization, the two rural electric cooperatives would continue to be the sole shareholders of the common stock of C&T, C&T would continue to be a subsidiary of both Tri-County and Claverack, and C&T would hold directly all of the common stock of three public-utility companies: Citizens, Valley, and Wellsboro.

III. Proposals

Applicants request authority for Claverack and C&T to acquire all of the common stock of Wellsboro through their proposed acquisition of its parent company, Wilderness. Additionally, an order is requested from the Commission continuing the exemptions under section 3(a)(1) of Claverack, Tri-County, and C&T from all provisions of the Act, except section 9(a)(2).

For the Commission, by the Division of Investment Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

Footnotes

1.  See C&T Enterprises, HCAR No. 27590 (October 31, 2002).

2.  See id.

3.  Claverack also serves a small percentage of customers in bordering counties of New York. Its New York sales are all a result of four metering points where electricity is sold to New York State Electric & Gas Co. for resale to New York consumers near the Pennsylvania/New York border.

4.  Tri-County also serves a very small percentage of customers in bordering counties of New York.

5.  Approximately 5,000 customers are located in Pennsylvania, and the remaining 1,300 customers are located in New York.

6.  Applicants state that the Pa PUC has already approved the transfer of long-term debt from Wilderness to C&T.

7.  Wellsboro used the proceeds from the sales of this long-term debt to fund capital projects.