[Federal Register Volume 62, Number 197 (Friday, October 10, 1997)]
[Notices]
[Pages 53034-53036]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-26905]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26763]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
October 3, 1997.
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 thereunder. 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 amendments thereto is/are available for public
inspection through the Commission's Office 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 October 27, 1997, to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, 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 case of an attorney at law, by
certificate) should be filed with the request. Any request for hearing
shall identify specifically the issues of fact 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 said date, the application(s) and/or declaration(s), as
filed or as amended, may be granted and/or permitted to become
effective.
Columbia Gas System, Inc. (70-8925)
The Columbia Gas System, Inc. (``Columbia''), a registered holding
company, its service company subsidiary, Columbia Gas System Service
Corporation, its liquified natural gas subsidiary, Columbia LNG
Corporation, its trading subsidiary, Columbia Atlantic Trading
Corporation, all located at 12355 Sunrise Valley Drive, Suite 300,
Reston, Virginia 20191-3458; Columbia's five distribution subsidiaries,
Columbia Gas of Ohio, Inc., Columbia Gas of
[[Page 53035]]
Pennsylvania, Inc., Columbia Gas of Kentucky, Inc., Columbia Gas of
Maryland, Inc., Commonwealth Gas Services, Inc., all located at 200
Civic Center Drive, Columbus, Ohio 43215; Columbia's two transmission
subsidiaries, Columbia Gas Transmission Corporation and Columbia Gulf
Transmission Company, located at 1700 MacCorkle Avenue, S.E.,
Charleston, West Virginia 25314; Columbia's exploration and production
subsidiary, Columbia Natural Resources, Inc., 900 Pennsylvania Avenue,
Charleston, West Virginia 25302; Columbia's propane distribution
subsidiaries, Commonwealth Propane, Inc. and Columbia Propane
Corporation, both located at 9200 Arboretum Parkway, Suite 140,
Richmond, Virginia 23236; Columbia's energy services and marketing
subsidiaries, Columbia Energy Services Corporation (``Columbia
Energy''), Columbia Service Partners, Inc. and Columbia Energy
Marketing Corporation, all located at 121 Hill Pointe Drive, Suite 100,
Canonsburg, Pennsylvania 15317; Columbia's network services subsidiary,
Columbia Network Services Corporation (``CNS'') and CNS' subsidiary,
CNS Microwave, Inc., both located at 1600 Dublin Road, Columbus, Ohio
43215-1082; and Columbia's other subsidiaries, Tristar Ventures
Corporation, Tristar Capital Corporation, Tristar Pedrick Limited
Corporation, Tristar Pedrick General Corporation, Tristar Binghamton
Limited Corporation, Tristar Binghamton General Corporation, Tristar
Vineland Limited Corporation, Tristar Vineland General Corporation,
Tristar Rumford Limited Corporation, Tristar Georgetown Limited
Corporation, Tristar Georgetown General Corporation, Tristar Fuel Cells
Corporation, TVC Nine Corporation, TVC Ten Corporation and Tristar
System, Inc., all located at 205 Van Buren, Herndon, Virginia 22070,
have filed a post-effective amendment to their joint application-
declaration under sections 6(a), 7, 9(a), 10 and 12(b) of the Act and
rules 45 and 53.
By order dated December 23, 1996 (HCAR No. 26634) (``Order''), the
Commission authorized the Applicants to establish their internal and
external financing program, through December 31, 2001. In particular,
the Order authorized Columbia, its existing nonutility subsidiaries and
any nonutility subsidiaries established before December 31, 2001, to
enter into guarantee arrangements, obtain letters of credit, and
otherwise provide credit support for their respective subsidiaries in
amounts of up to $500 million (``Guaranties''). Columbia and its
existing and future nonutility subsidiaries now propose to increase the
amount of Guaranties to $2 billion.
Columbia wants to increase its investments in non-rate regulated
businesses, particularly gas marketing operations, and will use the
Guaranties to support these activities. Columbia notes that, in May
1997, Columbia Energy entered into an agreement to purchase and market
the offshore natural gas production for the Kerr-McGee Corporation
(``Kerr-McGee'') of approximately 250 Mmcf per day. Columbia Energy
will mange all of Kerr-McGee's United States natural gas marketing
activities including scheduling, nominating, balancing pipeline
transportation and providing financial risk management services. Also,
Columbia Energy purchased Pennunion Energy Services L.L.C.
(``Pennunion''), an energy marketing subsidiary of the Pennzoil
Company. The Pennunion acquisition will add sales of 2. Bcf per day.
Conectiv, Inc. (70-9069)
Conectiv, Inc. (``Conectiv''), 800 King Street, Wilmington,
Delaware 19899, a Delaware corporation not currently subject to the
Act, has filed an application-declaration under sections 6(a), 7, 8,
9(a), 10, 11, and rules 80 through 91, 93 and 94 under the Act.
Conectiv proposes to acquire, by means of the Mergers described
below (``Mergers''), all of the issued and outstanding common stock of
Delmarva Power & Light Company (``Delmarva'') and Atlantic Energy, Inc.
(``Atlantic''). Conectiv makes four other requests. Following the
Mergers, Conectiv will register under section 5 of the Act.
First, Conectiv requests that Support Conectiv (``Support
Conectiv'') be designated as a subsidiary service company under rule 88
of the Act.\1\ Second, Conectiv requests approval of the terms of the
service agreement among companies in the Conectiv system and Support
Conectiv. Third, Conectiv seeks Commission approval for it to acquire
the gas properties of Delmarva and to continue to operate Delmarva as a
combination utility. Fourth, Conectiv seeks Commission approval for it
to acquire the nonutility activities, businesses and investments of
Delmarva and Atlantic.
---------------------------------------------------------------------------
\1\ Support Conectiv will be incorporated before the
consummation of the Mergers to serve as the service company for the
Conectiv system.
---------------------------------------------------------------------------
Delmarva is a public utility company which provides electric
service in Delaware, Maryland and Virginia and gas service in Delaware.
As of December 31, 1996, Delmarva provided electric utility service to
approximately 442,000 customers in an area encompassing about 6,000
square miles in Delaware (253,000 customers), Maryland (169,000
customers) and Virginia (20,000 customers), and gas utility service to
approximately 100,000 customers in an area consisting of about 275
square miles in northern Delaware.
For the year ended December 31, 1996, Delmarva's operating revenues
on a consolidated basis were approximately $1,160 million, of which
approximately $981 million were derived from electric operations, $114
million from gas operations and $65 million from other operations.
Consolidated assets of Delmarva and its subsidiaries at December 31,
1996 were approximately $2,979 million, consisting of approximately
$2,536 million in identifiable electric utility property, plant and
equipment; approximately $219 million in identifiable gas utility
property, plant and equipment; and approximately $224 million in other
corporate assets.
As of December 31, 1996 Delmarva owned gas property consisting of a
liquefied natural gas plant located in Wilmington, Delaware with a
storagecapacity of 3.045 million gallons and a maximum daily sendout
capacity of 49,898 Mcf per day. This facility is used primarily as a
peak-shaving facility for Delmarva's gas customers. Delmarva also owns
four natural gas city gate stations at various locations in its gas
service territory. These stations have a total contract sendout
capacity of 125,000 Mcf per day. Delmarva has 111 miles of transmission
mains (including 11 miles of joint-use gas pipelines that are used 10%
for gas distribution and 90% for electricity production), 1,539 miles
of distribution mains and 1,091 miles of service lines. The Delmarva
gas facilities are located exclusively in New Castle County, Delaware.
Delmarva has seven direct nonutility subsidiaries: Delmarva
Industries, Inc., Delmarva Energy Company, Delmarva Services Company,
Conectiv Services, Inc., Conectiv Communications, Inc., Delmarva
Capital Investments,Inc. and East Coast Natural Gas Cooperative, L.L.C.
(``ECNG'').\2\
---------------------------------------------------------------------------
\2\ Delmarva Industries, Inc. and Delmarva Energy Company
participate in oil and gas exploration and development
opportunities.
Delmarva Services Company owns and finances an office building
that it leases to Delmarva and/or its affiliates. Delmarva Services
Company also owns approximately 2.9% of the common stock of
Chesapeake Utilities Corporation, a publicly-traded gas utility
company with gas utility operations in Delaware, Maryland and
Florida.
Conectiv Services, Inc. acquires and operates service businesses
primarily involving heating, ventilation and air conditioning sales,
installation and servicing, and other energy-related activities.
Conectiv Communications, Inc. provides a full-range of retail
and wholesale telecommunications services.
Delmarva Capital Investments, Inc. is a holding company for a
variety of unregulated investments.
ECNG is a limited liability company in which Delmarva holds a
\1/7\th interest, is engaged in gas related activities.
---------------------------------------------------------------------------
[[Page 53036]]
On December 31, 1996, Delmarva's nonutility subsidiaries and
investments constituted approximately 4 percent of the consolidated
assets of Delmarva and its subsidiaries.
Delmarva also has a nonutility subsidiary trust, Delmarva Power
Financing I (``DPF I''), which was formed in 1996 in connection with
the issuance by Delmarva of Cumulative Quarterly Income Preferred
Securities.
Atlantic is a public utility holding company that claims an
exemption from regulation by the Commission under section 3(a)(1) from
all provisions of the Act except section 9(a)(2).
The principal subsidiary of Atlantic is Atlantic City Electric
Company (``ACE''). ACE is itself a holding company which claims
exemption from regulation by the Commission under section 3(a)(1) from
all provisions of the Act except section 9(a)(2). ACE is engaged in the
generation, transmission, distribution and sale of electric energy. ACE
serves a population of approximately 476,000 customers in a 2,700
square-mile area of Southern New Jersey.
ACE currently has one utility subsidiary, Deepwater Operating
Company (``Deepwater''). Deepwater operates generating facilities in
New Jersey for ACE. Deepwater owns no physical assets. Prior to the
closing of the Mergers, the employees of Deepwater will become
employees of ACE. ACE also has a nonutility subsidiary trust, Atlantic
Capital I (``ACI''), which was formed in 1996 in connection with the
issuance by ACE of Cumulative Quarterly Income Preferred Securities.
On a consolidated basis, Atlantic's operating revenues for the
calendar year ended December 31, 1996 were approximately $980 million,
and its total assets as of December 31, 1996 were approximately $2,671
million.
Atlantic has two direct nonutility subsidiaries, Atlantic Energy
International, Inc. (``AEII'') and AEE.\3\
---------------------------------------------------------------------------
\3\ AEII brokers used utility equipment to developing countries,
and provides utility consulting services related to the design of
sub-stations and other utility infrastructure. AEE is a holding
company for Atlantic's non-regulated subsidiaries.
---------------------------------------------------------------------------
At December 31, 1996, Atlantic's nonutility subsidiaries and
investments constituted approximately 8.2 percent of the consolidated
book value of the assets of Atlantic and its subsidiaries.
Conectiv has no operations other than those contemplated by the
Merger Agreement to accomplish the Mergers. At present, Conectiv's
common stock, consisting of 1,000 issued and outstanding shares, is
owned by Delmarva and Atlantic, each of which owns 500 shares.
The merger agreement, dated as of August 9, 1996, as amended and
restated as of December 26, 1996 (``Merger Agreement''), provides for
Atlantic to be merged with and into Conectiv. Also under the Merger
Agreement, DS Sub, Inc., a direct subsidiary of Conectiv (``DS Sub''),
will be merged with and into Delmarva.\4\
---------------------------------------------------------------------------
\4\ DS Sub has been incorporated as a direct transitory
subsidiary of Conectiv established to effectuate the Delmarva
Merger. The authorized capital stock of DS Sub consists of 1000
shares of common stock, $0.01 par value, all of which is held by
Conectiv. DS Sub has not had, and prior to the closing of the
Mergers will not have, any operations other than the activities
contemplated by the Merger Agreement necessary to accomplish the
combination of DS Sub and Delmarva.
---------------------------------------------------------------------------
Conectiv will be a public utility holding company and will have two
direct utility subsidiaries, Delmarva and ACE, whose only nonutility
subsidiaries will be the two trusts: DPF I and ACI. Delmarva's and
Atlantic's other direct subsidiaries will also become direct
subsidiaries of Conectiv. Support Conectiv will be incorporated as a
service company for the Conectiv system.
Conectiv proposes to convert each issued and outstanding share of
Delmarva common stock into the right to receive one share of Conectiv
common stock (``Conectiv Common Stock''). Each issued and outstanding
share of Atlantic common stock shall be converted into the right to
receive 0.75 shares of Conectiv Common Stock and 0.125 shares of Class
A common stock of Conectiv (``Conectiv Class A Common Stock'').\5\
---------------------------------------------------------------------------
\5\ The proposed use of two classes of common stock addresses
the difference in Delmarva's and Atlantic's evaluations of the
growth prospects of, and uncertainties associated with deregulation
of, the regulated electric utility business of Atlantic. The
Conectiv Class A Common Stock has been created to track the
performance of the currently regulated electric utility businesses
of ACE. This stock will be issued only to the holders of the
Atlantic Common Stock, thereby giving the current holders of
Atlantic Common Stock a proportionately greater opportunity to share
in the growth prospects of, and a proportionately greater exposure
to the uncertainties associated with deregulation of, the regulated
electric utility business of Atlantic. The proposed Conectiv Class A
Common Stock will have full voting rights with the Conectiv Common
Stock.
---------------------------------------------------------------------------
The Mergers will have no effect on the shares of preferred stock of
Delmarva issued and outstanding at the time of the consummation of the
Mergers, each series of which and each share of which will remain
unchanged. Atlantic has no shares of preferred stock outstanding.
Conectiv proposes that the Commission authorize Support Conectiv as
the system service company. Support Conectiv will provide the Conectiv
system companies with a variety of administrative, management,
engineering, construction, environmental and support services, either
directly or through agreements with associate or nonassociate
companies, as needed.
Support Conectiv will enter into a service agreement with most, if
not all, companies in the Conectiv system. Support Conectiv's
authorized capital stock will consist of up to 3,000 shares of common
stock, $1 par value per share. Conectiv will hold all issued and
outstanding shares of Support Conectiv common stock.
Support Conectiv and its associate companies' cost and allocation
methods will conform with the ``at costs'' requirements of section 13
and rules under the Act.
Conectiv also requests authority to provide, directly, or through
one or more of its subsidiaries, retail services to residential,
commercial and industrial customers. Retail services include energy
analysis, project management, design and construction, energy efficient
equipment installation and maintenance, facilities management services,
environmental services and compliance, fuel procurement, and other
similar kinds of managerial and technical services.\6\
---------------------------------------------------------------------------
\6\ Conectiv states that the retail services may specifically
include: (1) service lines repair/extended warranties; (2) surge
protection; (3) appliance merchandising/repair/extended warranties;
(4) utility bill insurance; and (5) incidental and reasonably
necessary products and services related to the choice, purchase or
consumption of any of these products and services.
---------------------------------------------------------------------------
Conectiv further requests authority, after consummation of the
Mergers for a period of 24 months from the effective date of the
Mergers, to transfer certain assets such as real property used for
administrative purposes and information technology equipment and
software from Delmarva or ACE at cost to Support Conectiv.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-26905 Filed 10-9-97; 8:45 am]
BILLING CODE 8010-01-M
