[Federal Register Volume 60, Number 194 (Friday, October 6, 1995)]
[Notices]
[Pages 52433-52436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24912]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26384]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
September 29, 1995.
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 23, 1995, 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.
Energy Initiatives, Inc., et al. (70-7727)
Energy Initiatives, Inc. (``EII''), One Upper Pond Road,
Parsippany, New Jersey 07054, a nonutility subsidiary of General Public
Utilities Corporation (``GPU''), a registered holding company, and GPU
(both, ``Applicants''), 100 Interpace Parkway, Parsippany, New Jersey
07054, have filed a post-effective amendment under sections 6(a), 7,
9(a), 10 and 12(b) of the Act and rules 45, 52, 53 and 54 thereunder to
their application-declaration filed under sections 6(a), 7, 9(a), 10,
12(b), 12(c) and 13(b) of the Act and rules 45, 50, 51, 90 and 91
thereunder.
By orders dated June 26, 1990, December 18, 1992, September 12,
1994, December 28, 1994 and June 14, 1995 (HCAR Nos. 25108, 25715,
26123, 26205 and 26307, respectively) (collectively, ``Orders''), EII
was authorized to engage in preliminary project development and
administrative activities (``Project Activities'') in connection with
its investments in: (i) qualifying cogeneration facilities (``QFs''),
as defined in the Public Utility Regulatory Policies Act of 1978, as
amended (``PURPA''), located anywhere in the United States, (ii) small
power production facilities (also ``QFs''), as defined by PURPA, (iii)
exempt wholesale generators (``EWG''), and (iv) foreign utility
companies (``FUCOs'').
The Orders also authorized GPU from time to time through December
31, 1997 to: (i) make capital contributions to EII; (ii) enter into
letter of credit reimbursement agreements (``Reimbursement
Agreements'') and guarantees or similar obligations (``Guarantees'') to
secure EII's agreement with any person (including without limitation
project lenders) in connection with EII's Project Activities and the
acquisition of ownership or participation interests in projects; (iii)
guarantee the securities or other obligations of EWGs and FUCOs; and
(iv) assume liabilities of EWGs and FUCOs. The aggregate amount which
GPU was authorized to contribute to EII, together with the outstanding
face or principal amount of the Reimbursement Agreement and Guarantee
obligations, and liabilities assumed, could not exceed $200 million
(``Contribution Cap''). The Orders also authorized EII to enter into
Reimbursement Agreements and Guarantees, and to assume liabilities of
EWGs and FUCOs, in an aggregate amount of up to $30 million from time
to time through December 31, 1997 (``EII Guarantee Cap'').
The Orders further authorized EII to issue, sell and renew from
time to time through December 31, 1997 its promissory notes evidencing
short-term borrowings from commercial banks and other financial
institutions, in an aggregate principal amount at any time outstanding
(together with the aggregate amount of obligations outstanding under
Reimbursement Agreements and Guarantees entered into, and liabilities
assumed, by EII) not exceeding the EII Guarantee Cap. In addition, the
Orders authorized GPU to guarantee such promissory notes (``Note
Guarantees'').
As of June 30, 1995, GPU made cash capital contributions to EII,
and had outstanding Reimbursement Agreement and Guarantee obligations,
and liabilities assumed, of approximately $29 million, pursuant to the
December 28, 1994 Order. As of such date EII had not entered into any
Reimbursement Agreements or Guarantees or assumed any liabilities
pursuant to the Orders.
GPU and EII now propose to: (i) increase the Contribution Cap to
$500
[[Page 52434]]
million; (ii) expand the purposes for which GPU may enter into
Guarantees, subject to the limitation of the Contribution Cap, to
include Guarantees of bank or other borrowings by EII, as described
below; (iii) relinquish the authorization with respect to GPU Note
Guarantees; and (iv) increase the EII Guarantee Cap to $50 million.\1\
\1\ Pursuant to amendments to rules 52(b) and 45(b)(4) effective
June 28, 1995, cash capital contributions by GPU to EII are now
exempt from section 9(a) and rule 45, and borrowings by EII pursuant
to Notes are now exempt from section 6(a); accordingly, such
transactions are no longer subject to the limitation of the
Contribution Cap and the EII Guarantee Cap, respectively.
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The term of each Guarantee, and any letter of credit (``L/C'')
backed by a GPU or EII Reimbursement Agreement, would not exceed 25
years. Drawings under each L/C would bear interest at not more than 5%
above the prime rate as in effect from time to time, and L/C fees would
note exceed 1% annually of the face amount of the L/C.
Borrowings by EII with respect to which GPU may issue a Guarantee
would be in the form of bank or other institutional borrowings
(``Institutional Borrowings''), commercial paper (``Commercial
Paper''), or notes sold in a private placement (``Notes'') under the
Securities Act of 1933 (``1933 Act''). Institutional Borrowings would
mature not later than five years after issuance, bear interest at a
rate not in excess of (i) 250 basis points above the greater of (A) the
lending bank's or other recognized prime rate and (B) 50 basis points
above the federal funds rate, (ii) 400 basis points above the specified
London Interbank Offered Rate plus any applicable reserve requirement,
or (iii) a negotiated fixed rate which, in any event, would not exceed
500 basis points above the 30 year ``current coupon'' treasury bond
rate. Such borrowings would be prepayable only to the extent provided
therein. In addition, such borrowings would be unsecured and would not
be made as part of any public offering. Borrowings may be made pursuant
to loan agreements or lines of credit established by EII with
commercial banks or other institutions. Such agreements or lines of
credit may include a letter of credit facility. Drawings on an L/C
would bear interest at rates not exceeding the interest rates for
Institutional Borrowings (described above), and EII may be required to
pay the issuing bank a letter of credit fee not exceeding 1% per annum
of the face amount of the L/C.
Commercial Paper sold by EII would be issued in denominations of
$100,000 or multiples thereof with maturities of up to 270 days and
would not be prepayable prior to maturity. Commercial Paper would be
sold directly to one or more commercial paper dealers at a discount
rate prevailing at the date of issuance for commercial paper of
comparable quality and of the particular maturity sold by other issuers
of commercial paper. Commercial Paper will be reoffered by the
purchasing dealer or dealers to institutional investors at a discount
of not more than \1/8\ of 1% per annum less than the prevailing
discount rate to EII.
The Commercial Paper dealers will offer and resell the Commercial
Paper to not more than a total of 200 of their respective customers,
identified and designated in a non-public list (``Closed List'')
prepared by each such dealer in advance for this purpose.
EII may also utilize the services of one or more commercial paper
placement agents (``Placement Agent'') through whom they would sell
their Commercial Paper directly to one or more institutional investors
included on the Placement Agent's Closed List (as it may be amended)
which would not exceed 200 such investors. The Placement Agent would
arrange for the sale of Commercial Paper and would be compensated for
its services out of the discount on the sale.
Notes would be sold by EII directly to one or more financial
institutions in a private placement, or to one or more underwriters for
resale to qualified institutional buyers pursuant to rule 144A under
the 1933 Act. The Notes would be unsecured, have maturities not
exceeding 20 years, and would bear interest at a fixed rate not to
exceed the sum of the yield to maturity of an actively traded U.S.
treasury bond with a maturity equal to the maturity of the Notes plus
600 basis points. A placement agent would arrange for the sale of the
Notes issued in a private placement, and would be compensated for its
services by payment of a fee not to exceed 3% of the face amount of the
Notes issued and sold. EII would compensate an underwriter in a rule
144A sale of Notes through a discount on the sale.
The proceeds from the Institutional Borrowings, Commercial Paper or
Notes as proposed herein will be used by EII to finance its business,
including to finance the acquisition of securities of EWGs and FUCOs.
EII believes that having the flexibility to provide a GPU Guarantee
will enable it to reduce the interest costs of these borrowings.
The authorization requested herein with respect to Guarantees of
Institutional Borrowings, Commercial Paper and Notes is intended to
supersede and replace the authorization heretofore granted in respect
of GPU Note Guarantees. Accordingly, effective upon receipt of the
supplemental Commission order requested herein, GPU would relinquish
any remaining authorization in respect of Note Guarantees.
Allegheny Power System, Inc., et al. (70-7888)
Allegheny Power System, Inc. (``Allegheny''), Tower Forty Nine, 12
East 49th Street, New York, New York 10017, a registered holding
company, Allegheny Power Service Corporation, 800 Cabin Hill Drive,
Greensburg, Pennsylvania 15601, Allegheny's service company subsidiary,
three electric utility subsidiary companies of Allegheny--(i)
Monongahela Power Company (``Monongahela''), 1310 Fairmont Avenue,
Fairmont, West Virginia 26554, (ii) The Potomac Edison Company
(``Potomac Edison''), 10435 Downsville Pike, Hagerstown, Maryland
21740, and (iii) West Penn Power Company (``West Penn''), 800 Cabin
Hill Drive, Greensburg, Pennsylvania 15601, and Allegheny Generating
Company (``AGC''), Tower Forty Nine, 12 East 49th Street, New York, New
York 10017, and electric public utility subsidiary of Monongahela,
Potomac Edison and West Penn (collectively, ``Applicants'') have filed
a post-effective amendment to their application-declaration filed under
sections 6(a), 7, 9(a), 10 and 12(b) of the Act and rules 45, 53 and 54
thereunder.
By order dated January 29, 1992 (HCAR No. 25462) (``January 1992
Order''), the Commission authorized the issuance on the part of
Monongahela of short-term bank notes and of commercial paper through
December 31, 1993. The authorization was for an aggregate principal
amount of up to $86 million.
By order dated February 28, 1992 (HCAR No. 25481) (``February 1992
Order''), the Commission authorized: (i) the issuance of short-term
bank notes on the part of Allegheny, Potomac Edison and West Penn; (ii)
the issuance and sale of commercial paper on the part of Allegheny,
Potomac Edison, West Penn and AGC; (iii) a revolving credit agreement
for AGC; and (iv) the establishment of a money pool for the Allegheny
system (``Money Pool''). The authorization extended through December
31, 1993. In addition, the February 1992 Order limited the aggregate
principal amount of short-term financing to $165 million for Allegheny,
$94 million for Potomac Edison, $147 million for West Penn and $150
million for AGC. The commercial paper issued by AGC was to be backed by
a $150 million revolving credit
[[Page 52435]]
agreement between AGC and a group of banks. The February 1992 Order
also authorized Monongahela, Potomac Edison and West Penn to guarantee,
through June 30, 1993, the amounts that AGC borrowed under the
revolving credit agreement.
By order dated July 14, 1992 (HCAR No. 25581), Monongahela, Potomac
Edison and West Penn were authorized to guarantee the amounts that AGC
borrowed under the revolving credit agreement through December 31,
1993.
By order dated November 5, 1993 (HCAR No. 25919) (``November 1993
Order''), Applicants were authorized to continue their short-term
financing from December 31, 1992 through December 31, 1995.
Applicants now propose to continue the authorization granted by the
November 1993 Order from December 31, 1995 through December 31, 1997,
subject to the changes described below. In all other respects,
Applicants' proposals remain the same as authorized by prior Commission
orders.
Allegheny, Monongahela, Potomac Edison, West Penn, and AGC hereby
request that, from December 31, 1995 to December 31, 1997, they be
authorized to issue short-term debt in aggregate amounts not to exceed
the following amounts outstanding at any one time for each of the
following Applicants: Allegheny--$165 million; Monongahela--$100
million; Potomac Edison--$115 million; West Penn--$170 million; AGC--
$175 million.
Allegheny, Monongahela, Potomac Edison and West Penn have
established at 14 different banks lines of credit ranging from $5
million to $30 million for short-term borrowings. Allegheny,
Monongahela, Potomac Edison and West Penn have agreed to pay for each
of the lines of credit above an annual cash fee no greater than 10
basis points on all or the balance of the line of credit.
Allegheny, Monongahela, Potomac Edison, and West Penn each propose
to borrow short-term funds through the issuance of notes to banks and
dealers in commercial paper in aggregate amounts not to exceed the
following amounts outstanding at any one time: Allegheny--$165 million;
Monongahela--$100 million; Potomac Edison--$115 million; and West
Penn--$170 million. Applicants propose that such notes and commercial
paper will be issued from time-to-time prior to December 31, 1997,
provided that no such notes or commercial paper shall mature after June
30, 1998.
Each note payable to a bank will be dated as of the date of the
borrowing which it evidences, will mature not more than 270 days after
the date of issuance or renewal thereof, will bear interest at a
mutually agreed upon rate, provided that the effective rate for any 30-
day period, on an annualized basis, will not exceed prime plus 2
percentage points and may or may not have prepayment privileges. It is
estimated that the maximum aggregate amount of any short-term
borrowings on behalf of Applicants (except AGC) at any one time
outstanding, when taken together with any commercial paper then
outstanding and funds borrowed by such affiliates under the Money Pool,
will not be in excess of $550 million.
The commercial paper will be in the form of promissory notes and
will be of varying maturities, with no maturity more than 270 days
after the date of issue.
AGC requests the authority to issue, from December 31, 1995 to
December 31, 1997, commercial paper in an amount up to $75 million.
AGC's commercial paper is backed by a funding commitment of a $50
million Revolving Credit Agreement dated as of May 15, 1985, with a
group of seven banks (the ``Revolving Credit Agreement''). AGC is
seeking to continue its borrowing authority under the Revolving Credit
Agreement through December 31, 1997 and is seeking permission to
establish through December 31, 1997 a line of credit of up to $25
million, but only if necessary and if the Revolving Credit Agreement is
not sufficient. The Revolving Credit Agreement provides for a credit
facility pursuant to which promissory notes (``Notes'') may be issued
in the maximum aggregate principal amount of $50 million. The Notes
will have a maturity of no later than December 31, 1998. The Agreement
provides that the lending banks may extend the maturity of the Notes
for one year periods. In order to extend the maturity date of the Notes
beyond December 31, 1998, however, AGC must seek further Commission
authorization. Total AGC debt outstanding, including the Revolving
Credit Agreement, this commercial paper issuance, and a $25 million
line of credit, but not including the Debentures and Medium Term Notes
authorized previously by the Commission under File Nos. 70-7246, and
70-7548, will not at any time exceed $75 million.
Monongahela, Potomac Edison, and West Penn, severally and not
jointly, guarantee 27%, 28%, and 45%, respectively, of the amount due
the banks from AGC pursuant to the Revolving Credit Agreement.
Monongahela, Potomac Edison, and West Penn request authority to extend
their guarantees through December 31, 1997.
Applicants hereby seek to continue the Allegheny Power System Money
Pool from December 31, 1995 to December 31, 1997. Allegheny is a
participant in the Money Pool only insofar as it has funds available
for lending through the Money Pool. Allegheny may not borrow from the
Money Pool. AGC will be allowed to borrow from, but not invest in, the
Money Pool.
Northeast Utilities, et al. (70-8052)
Northeast Utilities (``Northeast''), 174 Brush Hill Avenue, West
Springfield, Massachusetts 01090-0010, a registered holding company,
and its wholly owned subsidiaries (``Subsidiaries''), Western
Massachusetts Electric Company (``WMECO''), 174 Brush Hill Avenue, West
Springfield, Massachusetts 01090-0010, Holyoke Water Power Company
(``Holyoke''), 1 Canal Street, Holyoke, Massachusetts 01040, and The
Connecticut Light & Power Company (``CL&P''), Northeast Nuclear Energy
Company (``Nuclear''), The Rocky River Realty Company (``Rocky River'')
(Northeast and all Subsidiaries being ``Borrowers'') and Northeast
Utilities Service Company (``NUSCO''), each of 107 Selden Street,
Berlin, Connecticut 06037 (all companies collectively, ``Declarants''),
have filed a post-effective amendment to their declaration filed under
sections 6(a), 7 and 12(b) of the Act and rules 45 and 53 thereunder.
By order of the Commission dated July 29, 1988 (HCAR No. 24686)
(``1988 Order''), all of the Subsidiaries, including other Northeast
subsidiaries, entered into a revolving credit agreement, dated as of
August 25, 1988, which permitted each of the subsidiaries to borrow up
to $50 million, but not more than $50 million in the aggregate, on a
short-term revolving credit basis through August 24, 1993. In addition,
by order of the Commission dated August 18, 1989 (HCAR No. 24943)
(``1989 Order''), Northeast, WMECO and CL&P entered into a revolving
credit agreement, dated as of August 23, 1989, which permitted these
subsidiaries to borrow up to $100 million, $105 million and $350
million, respectively, but not more than $350 million in the aggregate,
on a short-term revolving credit basis through September 4, 1993.
By order dated November 23, 1992 (HCAR No. 25683) (``1992 Order''),
Declarants were authorized, through December 31, 1995, to: (i) replace
the two revolving credit facilities authorized by the 1988 Order and
the 1989 Order with new revolving credit
[[Page 52436]]
facilities aggregating up to $360 million; (ii) issue notes (``Notes'')
evidencing borrowing under such new revolving credit facilities; (iii)
allow Northeast to guarantee the obligations of Nuclear and Rocky River
under such new revolving credit facilities; and (iv) allow NUSCO to act
as agent for such new revolving credit facilities.
Declarants now propose to: (i) extend through December 31, 2000 the
existing revolving credit agreements pursuant to their terms; and (ii)
amend the existing revolving agreements to, as described below--(a)
change the margin rate applicable to the determination of the interest
rate charged under the credit agreements, and (b) change the facility
fees charged in connection with the credit agreements.
Pursuant to the 1992 Order, the interest rate under the Eurodollar
interest option equals the Eurodollar Rate (as defined in the 1992
Order) plus a certain margin rate (``Margin''). The Margin for each
Borrower varies, depending on the debt ratings provided by Moody's
Investors Service Inc. and Standard and Poor's Corporation. Currently
under the credit agreement, the Margin cannot exceed 0.625% for loans
made at CL&P and WMECO and 0.75% for loans made to Northeast, Holyoke,
Nuclear, and Rocky River. The Declarants request the flexibility to
increase or decrease the Margins under the credit agreements from time
to time during the term of the credit agreements, provided that the
Margins will not exceed 1%.
The initial credit agreement facility fees under the 1992 Order
equaled 0.2% per annum for the three-year credit agreement and 0.135%
per annum for the 364-day credit agreements. The Declarants propose to
increase either or both credit agreement facility fees by not more than
10 basis points during the term of the credit agreements if such an
increase is needed to respond to changing market conditions.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
FR Doc. 95-24912 Filed 10-5-95; 8:45 am]
BILLING CODE 8010-01-M
