[Federal Register Volume 59, Number 208 (Friday, October 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26697]
[Federal Register: October 28, 1994]
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POSTAL RATE COMMISSION
[Release No. 35-26147]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
October 21, 1994.
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 November 14, 1994, to the Secretary, Securities and Exchange
Commission, Washington, DC 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.
Consolidated Natural Gas Company (70-6306)
Consolidated Natural Gas Company, CNG Tower, Pittsburgh,
Pennsylvania 15222-3199 (``Consolidated''), a registered holding
company, has filed a post-effective amendment to its declaration under
Sections 6(a) and 7 of the Act.
By prior Commission orders in this proceeding dated November 27,
1985, March 20, 1986 and December 18, 1989 (HCAR Nos. 23925, 24053 and
25003, respectively), Consolidated was authorized to issue 364,616
shares of its common stock, $2.75 par value (``Common Stock''), from
time-to-time through December 31, 1994, to the agent for participants
in Consolidated's Dividend Reinvestment Plan (``DRP'') and to the
Trustees of the Employee Stock Ownership Plan (``ESOP'') of
Consolidated and its participating subsidiaries. Of the total number of
shares authorized, Consolidated allocated 210,348 and 154,268 shares,
respectively, to the DRP and ESOP. It is anticipated that 133,251
shares of Common Stock allocated to the ESOP will remain unissued as of
December 31, 1994. All shares allocated to the DRP have been issued.
Consolidated proposes to continue the ESOP and, at the option of
its Board of Directors (``Board''), distribute to participants either
authorized and unissued Common Stock or outstanding Common Stock
purchased in the open market. Authorized and unissued shares of Common
Stock will be issued whenever additional equity capital is needed by
Consolidated. The per share price of original issue Common Stock
purchased from Consolidated will be the average of the closing price of
Consolidated's Common Stock on the New York Stock Exchange Consolidated
tape for the 20 consecutive trading days immediately preceding the date
of transfer. Consolidated will use the proceeds from the sale of such
shares for general corporate purposes. Whenever additional equity
capital is not needed by Consolidated, ESOP shares will be acquired
through open market purchases by the ESOP trustees.
The ESOP is noncontributory on the employee's part and is
administered by trustees. No one has the right to vote any shares
acquired by the ESOP other than the participants who own such shares.
The Board has the right to adjust the number of shares reserved under
the ESOP which may be issued in order to prevent dilution or
enlargement of participants' rights under the ESOP in the event of a
stock split, reserve stock split, reorganization or similar event with
respect to which the Board determines that an equitable adjustment is
appropriate. Consolidated requests authority to issue said 133,251
shares, or such shares as may respectively remain unissued at December
31, 1994, until such numbers shall be exhausted, but not beyond
December 31, 1999. Consolidated further requests authority to adjust
the number and par value (if appropriate) of shares of Common Stock
that may be issued under the ESOP in the implementation of the
anticipation or anti-enlargement of rights provisions of the ESOP.
Consolidated Natural Gas Company (70-7170)
Consolidated Natural Gas Company, CNG Tower, Pittsburgh,
Pennsylvania 15222-3199 (``Consolidated''), a registered holding
company, has filed a post-effective amendment to its declaration under
Sections 6(a) and 7 of the Act.
By prior Commission orders, dated November 27, 1985, March 20, 1986
and December 18, 1989 (HCAR Nos. 23926, 24052 and 25002, respectively),
Consolidated was authorized to issue 1,500,000 shares of its common
stock, $2.75 par value (``Common Stock''), from time-to-time through
December 31, 1994, to the agent for participants in Consolidated's
Dividend Reinvestment Plan (``DRP''). Pursuant to those orders, 84,097
shares of Common Stock have been issued through September 8, 1994. It
is anticipated that 1,415,903 shares of Common Stock allocated to the
DRP will remain unissued as of December 31, 1994.
Consolidated proposes to continue the DRP and, at the option of its
Board of Directors (``Board''), offer participants either authorized
and unissued Common Stock or outstanding Common Stock purchased in the
open market. Authorized and unissued shares of Common Stock will be
issued whenever additional equity capital is needed by Consolidated.
The per share price of original issue Common Stock purchase from
Consolidated will be the closing price of Consolidated's Common Stock
on the New York Stock Exchange Consolidated tape on the dividend
payment date. Consolidated will use the proceeds from the sale of such
shares for general corporate purposes. Whenever additional equity
capital is not needed by Consolidated, DRP shares will be acquired
through open market purchases by Society National Bank (``Society'') in
Cleveland, Ohio, which will continue to act as agent for stockholders
participating in the DRP. Consolidated will absorb all brokerage
commissions and administrative charges, such as agent fees.
No one has the right to vote any shares acquired through the DRP
other than the respective participants in the DRP who own such shares.
The Board has the right to adjust the number of shares reserved under
the DRP which may be issued in order to prevent dilution or enlargement
of participants' rights under the DRP in the event of a stock split,
reverse stock split, reorganization or similar event with respect to
which the Board determines that an equitable adjustment is appropriate.
Consolidated requests authority to issue 1,415,903 shares of Common
Stock, or such shares as may actually remain unissued at December 31,
1994, to Society as agent for the DRP until such number shall be
exhausted, but not beyond December 31, 1999. Consolidated further
requests authority to adjust the number and par value (if appropriate)
of shares of Common Stock that may be issued under the DRP in the
implementation of the anti-dilution of rights provisions of the DRP.
Central Power and Light Company (70-7572)
Central Power and Light Company (``CPL''), 539 N. Carancahua
Street, Corpus Christi, Texas 78401, an electric utility subsidiary
company of Central and South West Corporation, a registered holding
company, has filed a post-effective amendment to its application,
previously filed under sections 9(a) and 10 of the Act, under sections
9(a) and 10 of the Act and Rule 54 thereunder.
By order dated April 13, 1989 (HCAR No. 24863), the Commission
authorized CPL to lease to nonaffiliated third parties:
(1) Approximately 23,400 square feet of excess space on the first
two floors of its corporate headquarters building, located at 539 N.
Carancahua Street, Corpus Christi, Texas (``Headquarters Building'');
(2) Approximately 17,800 square feet of excess space on the third
and fourth floors, in the basement and on the roof of the Headquarters
Building; and
(3) Space in one of its former office buildings pending eventual
sale of the building.
CPL now proposes to lease to Enron Oil & Gas Company, a
nonaffiliated third party (``Enron''), approximately 34,954 square feet
of excess space in Headquarters Building (``Leased Space''). CPL has
entered into a Lease Agreement, dated September 16, 1994, with Enron
providing for such lease, as supplemented by a letter, dated September
22, 1994, from CPL to Enron (``Lease''). The obligations of CPL under
the Lease are subject to and conditioned upon receipt by CPL of all
required governmental and regulatory approvals, including this
Commission's. The term of the Lease is for five years, commencing on
November 1, 1994 and ending on October 31, 1999, unless certain
improvements to the Leased Space have not been completed or all
required governmental and regulatory approvals have not been received
by November 1, 1994. In the case of such a delay, the term of the lease
will commence when such improvements have been completed or such
approvals have been obtained and will end five years thereafter.
The rental payments due under the Lease are $30,584.75 per month,
equivalent to an annual rental rate of $10.50 per square foot of ``net
rentable area,'' as defined in the Lease. The rental payments are
subject to increase in accordance with increases in a specified
Consumer Price Index and to other customary adjustments. The Lease also
provides for a grant by CPL to Enron of a ``tenant finish allowance''
of $325,072.20 or $9.30 per square foot of net rentable area for the
purpose of constructing improvements to the Leased Space. This
allowance is payable as work on improvements to the Leased Space is
performed and, to the extent not expended on improvements, shall be
credited to rent due under the Lease. Under the Lease, CPL is to pay a
brokerage fee to Enron Property Company, an affiliate of Enron, of
$73,403.40 or 4% of the gross rental due over the term of the Lease.
Such fee is payable within ten days after the date the Lease becomes
effective. CPL believes that the rental payments, the tenant finish
allowance and the brokerage fee provided for in the Lease, taken
together, will result in net rental payments that are at or near market
rates for space comparable to the Leased Space.
CPL has also agreed to give Enron a right of first refusal to lease
any additional space on two floors of the Headquarters Building that
might become available for lease during the term of the Lease. Such
provisions as to additional space are in addition to and independent of
the provisions governing the Leased Space. Any lease of such additional
space would be for the remaining unexpired term of the Lease, at an
annual rental rate per square foot equal to the rate to be paid under
the Lease. The lease would also provide for a tenant finish allowance
per square foot equal to the allowance to be paid under the Lease, but
proportionately reduced to reflect the portion of the term of the Lease
that will have then expired. In all other respects, the lease of such
additional space would be on the same terms and conditions as are
contained in the Lease.
Northeast Utilities, et al. (70-8479)
Northeast Utilities (``Northeast''), 174 Brush Hill Avenue, West
Springfield, Massachusetts 01809, a registered holding company, and its
wholly owned subsidiary companies (``Subsidiaries''), Holyoke Water
Power Company (``Holyoke''), Canal Street, Holyoke, Massachusetts
01040, Western Massachusetts Electric Company (``WMECO'') and The
Quinnehtuk Company (``Quinnehtuk''), both of 174 Brush Hill Avenue,
West Springfield, Massachusetts 01809, Public Service Company of New
Hampshire (``PSNH'') and North Atlantic Energy Corporation (``North
Atlantic''), both of 1000 Elm Street, Manchester, New Hampshire 03015,
The Connecticut Light & Power Company (``CL&P''), Northeast Nuclear
Energy Company (``Nuclear'') and The Rocky River Realty Company
(``Rocky River''), each of 107 Selden Street, Berlin, Connecticut
06037, and HEC Inc. (``HEC''), 24 Prime Parkway, Natick, Massachusetts
01760 (all companies collectively, ``Applicants''), have filed an
application-declaration under Sections 6(a), 7, 9(a), 10 and 12(b) of
the Act and Rules 43, 45, 53 and 54 thereunder.
By orders dated December 16, 1992, June 25, 1993 and September 13,
1994 (HCAR Nos. 25710, 25836, and 26126, respectively), authority was
granted, through December 31, 1994 (subject to certain borrowing
limits), for inter alia:
(1) Northeast to make open account advances to its subsidiary
companies;
(2) The continuation of the Northeast Utilities System Money Pool
(``Money Pool'');
(3) The issuance of short-term notes pursuant to lines of credit by
Northeast, Holyoke, WMECO, CL&P, Nuclear, Rocky River and PSNH; and
(4) The issuance and sale of commercial paper by Northeast, CL&P
and WMECO.
As described in more detail below, Applicants propose, subject to
certain maximum limits described below, to:
(1) Make short-term borrowings from time-to-time after December 31,
1994 and on or before December 31, 1996, evidenced (a) in the case of
Northeast, CL&P, WMECO, PSNH, Holyoke, Nuclear, and Rocky River, by
notes (``Short-Term Notes'') issued to banks and non-bank lending
institutions through formal and informal credit lines and (b) in the
case of CL&P, WMECO and Northeast, by commercial paper (``Commercial
Paper'');
(2) Continue to use, through December 31, 1996, the Money Pool; and
(3) Allow Northeast, under the terms of the Money Pool, to borrow
funds from lending institutions solely for the purpose of lending those
funds through the Money Pool to PSNH, Nuclear, North Atlantic, Rocky
River, Quinnehtuk and HEC.
Applicants propose that the maximum aggregate borrowings pursuant
to the authority requested herein shall not exceed the following
amounts: Northeast--$150 million; CL&P--$325 million;\1\ WMECO--$60
million; PSNH--$175 million; Holyoke--$5 million; Nuclear--$50 million;
North Atlantic--$50 million; Rocky River--$22 million; Quinnehtuk--$8
million; and HEC--$11 million.
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\1\The aggregate amount of short-term debt that can be incurred
by CL&P and WMECO is further restricted by the provisions of their
respective preferred stocks. CL&P and WMECO each have authorization
from the holders of their respective preferred stocks (through March
31, 2004 in the case of CL&P and through February 10, 2004 in the
case of WMECO) to issue securities representing unsecured
indebtedness up to a maximum of 20% of their respective
capitalizations.
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The Applicants propose to extend their present authority through
December 31, 1996 to make open account advances to PSNH, Nuclear, North
Atlantic, Quinnehtuk, Rocky River and HEC through the Money Pool by
issuing Short-Term Notes, Selling Commercial Paper or borrowing from
the Northeast Utilities multi-bank revolving credit facility
(``Revolving Credit Facility'').\2\
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\2\NU, CL&P, WMECO, Holyoke, Nuclear and Rocky River are patties
to the $360 million multi-bank revolving credit facility (the ``NU
System Facility''). By order dated Nov. 23, 1992 (HCAR No. 25683,
creation of the facility was authorized. By order dated Dec. 16,
1992 and May 5, 1994 (HCAR Nos. 25710 and 26046, respectively), PSNH
was authorized to create its own $125 million multi-bank revolving
credit facility.
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It is also stated that North Atlantic and HEC will be entitled to
borrow through the Money Pool only if and to the extent that funds in
the Money Pool attributable to contributions from Northeast are
available for such borrowings. PSNH will not be entitled to borrow
funds through the Money Pool that are attributable to contributions
from WMECO unless and until the Massachusetts Department of Public
Utilities has issued an order authorizing WMECO to lend funds to PSNH
through the Money Pool. PSNH's participation in the Money Pool is only
expected to be a back up to the PSNH Facility.
All borrowings from the contributions to the Money Pool, including
the open account advances, will be documented and will be evidenced on
the books of each Applicant that is borrowing from or contributing
surplus funds to the Money Pool. Any Applicant contributing funds to
the Money Pool may withdraw those funds at any time without notice to
satisfy its daily need for funds. Except for loans from the proceeds of
external borrowings by Northeast, all loans will be payable on demand,
may be prepaid by any borrowing Applicant at any time without premium
or penalty and will bear interest for both the borrower and lender,
payable monthly, equal to the daily Federal Funds Effective Rate as
quoted by the Federal Reserve Bank of New York. Loans from the proceeds
of external borrowings by Northeast will bear interest at the same rate
paid by Northeast on its borrowings, and no such loans may be prepaid
unless Northeast is made whole for any additional costs that may be
incurred because of such prepayment. Northeast will be fully reimbursed
for all costs that it incurs in relation to loans made to the other
Applicants.
If no such short-term needs match the amount of funds that are
available for the period such funds are available, the Applicants state
that the funds in the Money Pool will be invested in:
(1) Obligations issued or guaranteed by the United States;
(2) Obligations issued or guaranteed by any person controlled or
supervised by and acting as an instrumentality of the U.S. pursuant to
authority granted by the Congress of the U.S.;
(3) Obligations issued or guaranteed by any state or political
subdivision thereof, provided that such obligations are rated for
investment purposes at not less than ``A'' by Moody's Investors
Service, Inc. (``Moody's'') or by Standard & Poors Corporation
(``S&P'');
(4) Commercial paper rated not less than ``P-1'' by Moody's or not
less than ``A-1'' by S&P; or
(5) Such other instruments as are permitted by Rule 40(a)(1) under
the Act and approved by the Massachusetts Department of Public
Utilities (``DPU'') pursuant to Massachusetts General Laws chapter 164,
section 17A and the regulations thereunder.
The Applicants (other than North Atlantic, HEC and Quinnehtuk) also
request authority to secure both formal and informal credit lines with
a number of lending institutions. Formal credit lines may be subject to
compensating balance and/or fee requirements and will therefore be used
only when an Applicant determines that such a credit line offers
advantages as compared with other available credit options.
Compensating balance requirements will not exceed 5% of the committed
credit line amount, and fees will not exceed 0.30% per annum. Each
Applicant participating in a credit line would be able to draw funds to
the exclusion of the other Applicants. The Applicants may change their
credit lines and may obtain additional lines over time. The continued
availability of such credit lines is subject to the continuing review
of the lending institutions.
In addition, the Applicants (other than North Atlantic, HEC and
Quinnehtuk) propose to issue Short-Term Notes pursuant to such formal
and formal lines of credit. Short-Term Notes will be issued both on a
transactional basis, with a separate note evidencing each loan, and on
a so-called grid note (``Grid Note'') basis, as described below.
Each Short-Term Note issued on transactional basis will be dated
the date of issue, will have a maximum term of 270 days, and will bear
interest at a fixed or floating rate. Such Short-Term Notes will be
issued no later than December 31, 1996, and will (except as described
below) be subject to prepayment at any time at the borrower's option.
From time-to-time, an Applicant may use a different form of Short-Term
Note containing customary terms to evidence its borrowings, if
necessary, to satisfy the needs of a particular lender.
Short-Term Notes issued on a Grid Note basis will be issued by an
Applicant to a particular lending institution at or prior to the first
borrowing under the Grid Note from that lender by the Applicant. Each
repayment and reborrowing subsequent to the first borrowing will be
recorded on a schedule to the note without the necessity of issuing
additional notes. Also recorded on a schedule to the note at the time
of a borrowing will be the date of the borrowing, the maturity (which
may not exceed 270 days from the date of the borrowing), the number of
days the borrowing is outstanding, the interest rate or method of
determining the interest rate, the amount of interest due, and the date
of payment. Except as described below, borrowings on a Grid Note basis
will be subject to prepayment at any time at the borrower's option.
The interest rate on all Short-Term Notes will be determined on the
basis of competitive quotations from several lending institutions, and
will either be at a fixed interest rate or at a floating interest rate
determined with reference to an agreed-upon index (such as a Lending
institution's prime rate, the London InterBank Offered Rate,
certificate of deposit rates, money market rates or commercial paper
rates). The interest rate in any case will not exceed two percentage
points above the Federal Funds Effective Rate. The Applicants will
select the lending institution(s) from which to make a particular
short-term borrowing and determine whether to borrow at a fixed or a
floating rate on the basis of the lowest expected effective interest
cost for borrowings of comparable sizes and maturities.
Borrowings bearing floating interest rates will generally be
subject to prepayment at the borrower's option. The Applicants believe
that many lending institutions lending funds at fixed interest rates
are engaged in ``matched funding,'' i.e., such lenders acquire for
comparable maturities the funds that are lent to their borrowers.
Because the lenders would remain obligated under their own borrowings
from others if the Applicants were to prepay their borrowings in
advance of their scheduled maturities, many lending institutions
lending funds at fixed interest rates stipulate that such borrowings
may not be prepaid or may be prepaid only with a premium that will make
the lender whole for any losses (including lost profits) it may incur.
Accordingly, in order to realize the benefits of fixed interest rates
when a fixed-rate borrowing is evaluated to be the lowest cost
borrowing available, the Applicants may from time to time agree with
individual lenders that such borrowings may not be prepaid or may only
be prepaid if the lender is made whole for its losses.
CL&P, WMECO and Northeast request authority to continue to sell
Commercial Paper publicly. Such Commercial Paper will be issued through
the Depository Trust Company in the form of book entry notes in
denominations of not less than $50,000, of varying maturities, with no
maturity more than 270 days after the date of issue. The Commercial
Paper will not be repayable prior to maturity. The Commercial Paper
will be sold through a placement agent or agents in a co-managed
commercial paper program pursuant to a placement agent agreement at
either the discount rate per annum or the interest rate per annum
prevailing at the date of issuance for commercial paper of comparable
quality and of the particular maturity sold by public utility issuers
thereof. No Commercial Paper will be issued unless the issuing
Applicant believes that the effective interest cost to the Applicant
will be equal to or less than the effective interest rate at which the
applicant could issue Short-Term Notes in an amount at least equal to
the principal amount of such Commercial Paper. The placement agent or
agents will receive a commission for the sale of the Commercial Paper
of not more than \1/8\ of 1% per annum, on a discounted basis.
Except as otherwise described herein and unless otherwise
authorized by the Commission, any short-term borrowings of the
Applicants outstanding at December 31, 1996 will either be repaid from
internal cash resources or from the proceeds of long-term debt or
equity financing or remain outstanding if the Commission authorizes the
Applicants to continue such short-term borrowings after December 31,
1996.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 94-26697 Filed 10-27-94; 8:45 am]
BILING CODE 8010-01-M
