[Federal Register Volume 62, Number 222 (Tuesday, November 18, 1997)]
[Notices]
[Pages 61563-61566]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30180]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26777]
Filings Under the Public Utility Holding Company Act of 1935, as
amended (``Act'')
November 10, 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 December 4, 1997, 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.
GPU, Inc. and GPU International, Inc. (70-7727)
GPU, Inc. (``GPU''), 100 Interpace Parkway, Parsippany, New Jersey
07054, a registered holding company, and GPU International, Inc. (``GPU
International''), One Upper Pond Road, Parsippany, New Jersey 07054, a
nonutility subsidiary of GPU, have filed a post-effective amendment
under sections 6(a), 7, 9(a), 10 and 12(b) of the Act and rules 45, 53
and 54 under the Act 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 under the Act.
By orders dated November 16, 1995, June 14, 1995, December 28,
1994, September 12, 1994, December 18, 1992, and June 26, 1990 (HCAR
Nos. 26409, 26307, 26205, 26123, 25715, and 25108) (``Prior Orders''),
GPU International \1\ was authorized to engage in preliminary project
development and administrative activities (``Project Activities'') for
its investments in: (i) Qualifying facilities (``QFs''), as defined in
the Public Utility Regulatory Policies Act of 1978, as amended
(``PURPA''); (ii) exempt wholesale generators (``EWGs''), as defined in
section 32 of the Act; and (iii) foreign utility companies (``FUCOs''),
as defined in section 33 of the Act.
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\1\ The Prior Orders were issued for Energy Initiatives, Inc.
(``EII''). GPU International is the entity which succeeded EII.
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The Prior Orders also authorized GPU from time to time through
December 31, 1997 to: (i) Enter into guarantees, support instruments,
and bank letters of credit reimbursement agreements or similar
financial instruments or undertakings (``Guarantees'') to secure GPU
International's agreement with any person (including without limitation
project lenders) in connection with GPU International's Project
Activities and the acquisition of ownership or participation interests
in QF, EWG, or FUCO projects; (ii) guarantee the securities or other
obligations of EWGs and FUCOs; and (iii) assume liabilities of EWGs and
FUCOs, in an amount of up to $500 million. The Prior Orders also
authorized GPU International to enter into guarantees, and to assume
liabilities of EWGs and FUCOs, in an aggregate amount of up to $50
million from time to time through December 31, 1997.
GPU and GPU International (``Applicants'') propose to: (i) Expand
the purposes for which GPU may enter into Guarantees on behalf of GPU
International to include Guarantees of any security or other obligation
of GPU International or a subsidiary of GPU International (``GPUI
Subsidiary''), provided the issuance and sale of any such security is
exempt from the requirement of prior Commission approval under section
6(a) of the Act or has been otherwise authorized by the Commission;
(ii) to increase to $150 million the aggregate principal amount of
Guarantees which GPU International may have outstanding hereunder and
to expand the purposes for which GPU International may enter into
Guarantees to include guarantees of the securities or other obligations
of GPUI Subsidiaries, provided the issuance and sale of any such
security is exempt from the requirement of prior Commission approval
under section 6(a) of the Act or has been otherwise authorized by the
Commission; (iii) to extend until December 31, 2000 the period during
which Applicants may enter into Guarantees; and (iv) to permit any GPUI
Subsidiary which is not an EWG or FUCO to guarantee the securities or
other obligations of their direct or indirect subsidiaries from time to
time through December 31, 2000 in an aggregate amount not to exceed,
together with the aggregate amount of GPU International Guarantees
outstanding, $150 million, provided the issue and sale of any such
security is exempt from the requirement of prior Commission approval
under section 6(a) of the Act or has been otherwise authorized by the
Commission.
The term of each Guarantee and any letter of credit (``L/C'')
reimbursement agreement, would not exceed 35 years. L/C fees would not
exceed 1% annually of the face amount of the L/C. Drawings under each
L/C would bear interest at not more than 5% above the prime rate
[[Page 61564]]
as in effect from time to time. The interest rate on GPU International
debt guaranteed by GPU, and fees payable, would not exceed rates and
fees which are generally obtainable for debt bearing similar terms,
conditions and features and which is issued by companies of the same or
reasonably comparable credit quality.
GPU agrees that it will not enter into any Guarantee which: (i)
Guarantees the securities or obligations of an EWG or FUCO; or (ii)
guarantees the performance of a Guarantee executed by GPU International
or a GPUI Subsidiary of the securities or other obligations of an EWG
or FUCO, unless in any such case the conditions set forth in the
Commission's supplemental order dated November 5, 1997 (HCAR No. 26773)
have been satisfied. Furthermore, any such Guarantee by GPU would be
included in GPU's ``aggregate investment'' as defined in rule 53(a).
Allegheny Power System, Inc., et al. (70-7888)
Allegheny Power System, Inc. (``Allegheny''), 10435 Downsville
Pike, Hagerstown, Maryland 21740, 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''), 10435
Downsville Pike, Hagerstown, Maryland 21740, an electric 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 43, 45, 53 and 54 under the Act.
By orders dated January 29, 1992, February 28, 1992, July 14, 1992,
November 5, 1993, November 28, 1995, and April 18, 1996 (HCAR Nos.
25462, 25481, 25581, 25919, 26418, and 26506) (``Prior Orders''),
Applicants were authorized to engage in certain short-term financing
programs and operation of the Allegheny System Money Pool (``Money
Pool''). Applicants now propose, from December 31, 1997 through
December 31, 2002, to continue certain short-term financing programs
and operation of the Money Pool, described below.
Allegheny, Monongahela, Potomac Edison, West Penn, and AGC (the
``Companies'') request that, from December 31, 1997 to December 31,
2002, they be authorized to engage in short-term financing, including
notes to banks (``Notes''), commercial paper (``CP''), and Money Pool
borrowings, in aggregate amounts not to exceed the following amounts
outstanding at any one time for each of the following Applicants:
Allegheny--$400 million; Monongahela--$106 million; Potomac Edison--
$130 million; West Penn--$182 million; AGC--$100 million.
The Companies have established bank lines of credit ranging from
$10 million to $40 million for an aggregate total of $295 million
available for short-term borrowings. The Companies have agreed to pay
for each of these lines of credit an annual cash fee no greater than 10
basis points on all or the balance of the line of credit.
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, as set
forth in the Prior Orders. It is estimated that the maximum aggregate
amount of any short-term borrowings on behalf of Applicants at any one
time outstanding, when taken together with any CP then outstanding and
funds borrowed by such affiliates under the Money Pool, will not be in
excess of $918 million.
The CP 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. The CP will have the other terms and conditions as authorized
by the Prior Orders. Applicants state that no Notes or CP will mature
after June 30, 2003.
Applicants also propose to continue the Allegheny Power System
Money Pool from December 31, 1997 to December 31, 2002. Allegheny is a
participant in the Money Pool only to the extent 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.
The calculation of interest income and expense have been revised in
the Money Pool agreement (``Agreement''). Interest income and expense
are now calculated using the previous day's Fed Funds Effective
Interest Rate as quoted by the Federal Reserve Bank of New York as long
as this rate is at least four basis points lower than the previous
day's seven-day commercial paper rate as quoted by the same source.
Whenever the Fed Funds rate is not at least four basis points lower
than the seven-day commercial paper rate, the Agreement provides that
the seven-day commercial paper rate minus four basis points should be
used.
The Agreement has been revised in the following additional ways.
The interest income resulting from the external investments will be
accrued daily instead of booked upon receipt. In addition, interest
income will be allocated to members of the Money Pool on a basis equal
to their pro rata share of net contributions in the Money Pool
throughout the month, instead of on the net contributions on the day
the investment was placed. Also, a sentence was added to the Agreement
providing that the allocation of interest income will be settled on a
cash basis on the last business day of each month.
Allegheny proposes to use the proceeds from the proposed borrowings
to: (1) Acquire common stock of subsidiaries; (2) make capital
contributions to subsidiaries (which, in turn, may use the proceeds for
investments in exempt wholesale generators or foreign utility
companies); and (3) purchase shares of Allegheny common stock in order
to fund its Dividend Reinvestment and Stock Purchase Plan and Employee
Stock Option and Stock Purchase Plan in lieu of issuing additional new
shares of common stock pursuant to such plans.
Northeast Utilities, et al. (70-8507)
Northeast Utilities (``NU''), 174 Brush Hill Avenue, West
Springfield, Massachusetts 01089, a registered holding company, and its
wholly owned subsidiaries, Northeast Utilities Service Company
(``Service''), PO Box 270, Hartford, Connecticut 06141-0270, Charter
Oak Energy, Inc. (``Charter Oak'') and COE Development Corporation
(``COE Development''), both located at 107 Seldon Street, Berlin,
Connecticut 06037, (collectively, ``Applicants'') have filed a post-
effective amendment to their application-declaration under sections
6(a), 7, 9(a) 10, 12(b), 12(c), 13(b), 32 and 33 of the Act and rules
45, 46, 53, 54, 83, 86, 87(b)(1), 90 and 91 under the Act.
By orders dated December 30, 1994 (HCAR No. 26213), as amended on
August 7, 1995 (HCAR No. 26345), December 12, 1996 (HCAR No. 26623),
and March 25, 1997 (HCAR No. 26691) (collectively, ``Prior Orders''),
the
[[Page 61565]]
Commission generally authorized, among other things, Charter Oak and
COE Development to invest in, and finance the acquisition of, exempt
wholesale generators within the meaning of section 32 of the Act
(``EWGs'') and foreign utility companies within the meaning of section
33 of the Act (``FUCOs,'' and together with EWGs, ``Exempt Projects''),
subject to certain limitations. Specifically, the Prior Orders
authorized: (1) The formation of intermediate subsidiary companies
(``Intermediate Companies'') to acquire an interest in, finance the
acquisition and hold the securities of Exempt Projects, through the
issuance by the Intermediate Companies of up to $600 million of equity
securities and debt securities to third parties, of which $150 million
would be recourse; (2) Intermediate Companies to make partial sales of
certain projects; (3) participation in joint ventures with nonassociate
companies; (4) 1% of the total NU system employees and no more than 2%
of the total of NU Service Company employees to provide services to
Intermediate Companies, EWGs and FUCOs; and (5) certain Intermediate
Companies, EWGs and FUCOs to pay dividends to their parent companies,
from time to time out of capital or unearned surplus, and for Charter
Oak to use such funds to pay dividends to NU, to the extent permitted
by applicable corporate law.
The Prior Orders authorized Charter Oak and COE Development to
invest and hold interests in qualifying cogeneration and small power
production facilities as defined in the Public Utility Regulatory
Policies Act of 1978 (``QF''), throughout the United States;
independent power production facilities that would constitute a part of
NU's ``integrated public utility system'' within the meaning of section
2(a)(29)(A) of the Act (``Qualified IPPs''); and Exempt Projects.
Charter Oak and COE Development were also authorized to provide
consulting services to the projects. In addition, the Applicants have
authority to issue guarantees and assume the liabilities of subsidiary
companies for pre-development activities, and for both pre-development
and contingent liabilities subsequent to operation with regard to
Exempt Projects, subject to certain restrictions.
To date, NU has invested approximately $115 million in Charter Oak
and expects to invest an additional $5 million through December 31,
1997. NU has $80 million remaining from its previous authorization to
engage in power development activities (``Remaining Amount''). Charter
Oak and COE Development may invest in QF and Qualified IPPs after
obtaining Commission approval.
NU has announced its intention to sell its interest in Charter Oak
and the majority of its subsidiaries to an unaffiliated third party
(``Sale''). Charter Oak may sell the voting stock of some or all of its
subsidiaries to third parties prior to NU's sale of the voting
securities of Charter Oak. NU may retain an indirect interest in one or
more of Charter Oak's Exempt Projects by transferring the stock of that
Exempt Project or its Intermediate Company parent to another NU
subsidiary.
As a result of the proposed Sale, the Applicants are requesting
authorization to extend NU's period of authorization to invest directly
in Charter Oak and indirectly, in COE Development, the Remaining
Amount, and engage in the related transactions, pursuant to the terms
and conditions set forth in the Prior Orders, through December 31,
1998.
The Applicants also request modification of the Prior Orders to
authorize: (1) Charter Oak and its subsidiaries to pay dividends to
their parent companies out of capital or unearned surplus, in
compliance with rule 46 and relevant corporate law, to ensure that the
NU system receives the full amount of funds available to it in
connection with the sale or transfer of these entities; (2) Service
employees (which include the current employees of Charter Oak) to
continue to provide services \2\ to Exempt Projects and Intermediate
Companies after they have been sold to unaffiliated buyers, subject to
the de minimis amount limitation established under the Prior Orders;
and (3) NU to invest a maximum of $75 million to fund the acquisition
by an NU subsidiary of any Exempt Project or Intermediate Company
currently owned by Charter Oak.\3\
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\2\ The services that may be rendered will include: management,
administrative, legal, tax and financing advice, accounting,
engineering consulting, language skills and software development,
provided that, such software development will not involve
proprietary software owned by Service.
\3\ The investment may take the form of acquisitions of common
stock, capital contributions, open account advances, and/or
subordinated loans. Open account advances or subordinated loans will
either bear no interest or bear interest at a rate based on NU's
cost of funds in effect on the date of issue, but in no case in
excess of the prime rate at a bank designated by NU. Any investment
by NU in the equity securities of a subsidiary that have a stated
par value will be in an amount equal or greater to that value.
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Service company employees may continue to provide services at
market rates to any Exempt Project or Intermediate Company retained by
the system subject to the terms and conditions set forth in the Prior
Orders.
GPU, Inc. et al. (70-8593)
GPU, Inc. (``GPU''), of 100 Interpace Parkway, Parsippany, New
Jersey 07054, a registered holding company, and two of its nonutility
subsidiaries, GPU International, Inc. and EI Services, Inc., both of
One Upper Pond Road, Parsippany, New Jersey 07054, its operating
companies, Jersey Central Power & Light Company, Metropolitan Edison
Company and Pennsylvania Electric Company, each of P.O. Box 16001,
Reading, Pennsylvania 19640, and its service company, GPU Service,
Inc., of 100 Interpace Parkway, Parsippany, New Jersey 07054, have
filed a post-effective amendment under sections 6(a), 7, 9(a), 10,
12(b), 32 and 33 of the Act and rules 43, 45, 53 and 54 thereunder, to
their application-declaration, under sections 6(a), 7, 9(a), 10, 12(b),
32 and 33 of the Act and rules 45, 52, 53 and 54 thereunder, in the
above file.
By orders of the Commission dated November 5, 1997, January 19,
1996 and July 6, 1995 (HCAR Nos. 26773, 26457 and 26326, respectively)
(``Orders''), among other things, GPU is authorized to acquire and own
interests in exempt wholesale generators (``EWGs'') and foreign utility
companies (``FUCOs'' and EWGs, ``Exempt Entities'') through GPU
subsidiaries (``Project Parents'') that are not Exempt Entities, but
are engaged, directly or indirectly, and exclusively, in the business
of owning and holding the interests and securities of one or more
Exempt Entities and related project development activities. GPU is
authorized to make equity investments in Project Parents in the form of
capital stock or shares, trust certificates, partnership interests or
other equity or participation interests. GPU is also authorized,
through December 31, 1997, to make investments in one or more Project
Parents in the form of: Loans evidenced by promissory notes; guarantees
by GPU of the principal of, or interest on, any promissory notes or
other evidences of indebtedness or obligations of any Project Parent or
an undertaking by GPU to contribute equity; assumption of liabilities
of a Project Parent; and reimbursement agreements with banks which
support letters of credit delivered as security for GPU's obligations
to contribute equity to a Project Parent or otherwise in connection
with the project development activities of a Project Parent.
GPU is also authorized to make investments in Exempt Entities,
through December 31, 1997, in the form of:
[[Page 61566]]
Guarantees of the indebtedness or other obligations of one or more
Exempt Entities; assumption of liabilities of one or more Exempt
Entities; and guarantees and letter of credit reimbursement agreements
in support of equity contribution obligations or otherwise in
connection with project development activities for one or more Exempt
Entities.
Under the Orders, GPU's ``aggregate investment'' (as defined in
rule 53(a)(1)(i)) in Project Parent and Exempt Entities cannot exceed
100% of GPU's ``consolidated retained earnings'' (as defined in rule
53(a)(1)(ii)).
Applicants now propose to extend the authorizations under the
Orders through December 31, 2000. In addition, applicants request
authorization for Project Parent to guarantee or assume liabilities of
the securities issued by, or other obligations of, their direct or
indirect subsidiaries in an aggregate amount not to exceed $1 billion,
through December 31, 2000.\4\
\4\ Applicants represent that these guarantees will support only
securities issuances authorized by the Commission or exempt from the
requirement of prior Commission approval under section 6(a) of the
Act.
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For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-30180 Filed 11-17-97; 8:45 am]
BILLING CODE 8010-01-M
