[Federal Register Volume 63, Number 224 (Friday, November 20, 1998)]
[Notices]
[Pages 64532-64534]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-31037]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26941]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
November 13, 1998.
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
[[Page 64533]]
complete statements of the proposed transactions(s) and any amendment
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 8, 1998, to the Secretary, Securities and Exchange
Commission, Washington, DC 20549, and serve a copy on the relevant
applicant(s) and/or declarants(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
should 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 December 8, 1998, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted
to become effective.
UtiliCorp United Inc. (70-9363)
UtiliCorp United Inc. (``UtiliCorp''), 20 West Ninth Street, Kansas
City, Missouri 64105, a public utility holding company claiming
exemption from registration under rule 10 of the Act, has filed an
application under section 3(b) and rules 10 and 11 under the Act.
UtiliCorp is a publicly traded corporation which engages, through
divisions, primarily in the sale and distribution of gas and
electricity to retail and wholesale customers in several states,
Canada, New Zealand and Australia. One of UtiliCorp's subsidiaries is
Power New Zealand Limited (``PNZ''), which is also a foreign utility
company exempt under section 33 of the Act.
UtiliCorp now requests an order under section 3(b) of the Act,
exempting PNZ from all provisions of the Act, except section 9(a)(2).
UtiliCorp states that PNZ will not derive any material part of its
income, directly or indirectly, from sources within the United States.
In addition, UtiliCorp states that PNZ is not, and does not own any
securities of any company which is, a public utility or holding company
operating in the United States.
UtiliCorp states that its investment in PNZ will not in any way
diminish the ability of various state commissions that regulate the
retail electric and gas operations of UtiliCorp to protect the
interests of consumers in their respective states. UtiliCorp states
that its domestic operations are, and will continue to be, fully
separated from its foreign operations. UtiliCorp represents that it
will maintain separate books of account for any of its subsidiaries
that may control any foreign company. UtiliCorp further represents that
it will provide access to these books and records to each state
commission with rate jurisdiction to the extent not already required by
law.
UtiliCorp states that, if an unqualified exemption under section
3(b) is granted, it intends to rely on rule 10 to provide it and
intermediated parent to PNZ an exemption from the Act as holding
companies due to their interests in PNZ. In addition, UtiliCorp asserts
that it will rely on rule 11(b)(1) to provide an exemption from the
approval requirements of sections 9(a)(2) and 10 to which UtiliCorp
would otherwise be subject.
The Peoples Natural Gas Company, et al. (70-9379)
The Peoples Natural Gas Company (``PNG''), a gas public utility
subsidiary company of Consolidated Natural Gas Company (``CNG''), a
registered holding company, and CNG Producing Company (``CNGP''), a gas
and oil exploration and production subsidiary company of CNG, both
located at 625 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3197 have
filed an application-declaration under sections 9(a), 10 and 12(f) of
the Act and rules 43 and 54 under the Act.
PNG has signed a binding letter of intent, contingent upon
Commission approval, to sell all of its gas production properties
(``Properties'') to CNGP. The Properties consist of PNG's interest in
wells having reserves of approximately 41.9 billion cubic feet,
together with associated oil and gas leases covering approximately
175,000 acres, related agreements and equipment, and certain portions
of gathering lines.
The sale price for the Properties is approximately $14.5 million.
This price represents the net book value of all the production
properties as shown on PNG's books of account as of November 30, 1997,
and will be adjusted for further depreciation at the time of closing.
Conectiv, et al. (70-9069)
Conectiv, a registered holding company, and its marketing
subsidiary, Conectiv Energy Supply, Inc. (``CES''), both located at 800
King Street, Wilmington, DE 19899, Delmarva Capital Investments, Inc.
(``DCI''), a nonutility subsidiary of Conectiv, Conectiv Services, Inc.
(``CSI''), an energy-related company, both located at 252 Chapman Road,
P.O. Box 6066, Newark, DE 19714, ATE Investment, Inc. (``ATE''),
Atlantic Generation, Inc. (``AGI''), and Atlantic Southern Properties,
Inc. (``ASP''), all nonutility subsidiaries of Conectiv, located at
5100 Harding Highway, Mays Landing, NJ 08330 have filed an application-
declaration under sections 6(a), 7, 9(a), 10, 12(b), 12(c) and 12(f) of
the Act and rules 45, 46 and 54 under the Act.
By order dated February 25, 1998 (HCAR No. 26832) (``Merger
Order''), the Commission authorized Conectiv to consummate certain
transactions (``Merger'') resulting in the acquisition by Conectiv of
all of the outstanding voting securities of Delmarva Power & Light
Company, an electric public utility company (``Delmarva''), and
Atlantic City Electric Company, an electric public utility company
(``ACE'').\1\ Also as a result of the Merger and certain restructuring
that was implemented contemporaneously with the Merger, Conectiv became
the direct or indirect owner of various nonutility businesses.
---------------------------------------------------------------------------
\1\ Conectiv's two public utility subsidiaries (Delmarva and
ACE) and their subsidiaries are unaffected by the proposed
restructuring. Similarly, the system's service company, Conectiv
Resource Partners, Inc., is unaffected.
---------------------------------------------------------------------------
Conectiv now proposes, through December 31, 2001, to simplify and
consolidate its nonutility subsidiaries. The restructuring will be
accomplished in two phases (``Phase One'' and ``Phase Two''). During
Phase One, which will be implemented as soon as practicable following
the issuance of an order by the Commission in this filing, the number
of active direct nonutility subsidiaries of Conectiv will be reduced to
six: (1) CSI, which will focus on energy-related services and the
marketing of energy to retail customers; (2) CES, which will focus on
energy supply and marketing to wholesale and industrial customers,
including associates; (3) DCI, which will be renamed Conectiv
Properties and Investments, Inc. (``CPI'') and will own the nonutility
investments which are more passive in nature; (4) ASP, which will be
merged into CPI in Phase Two; (5) AGI, which will be merged into CES in
Phase Two; and (6) ATE, which will also be merged into CPI in Phase
Two.
Phase One
To implement Phase One and reduce the number of direct non-utility
subsidiaries, numerous actions must be effected, including the
following proposed actions. Atlantic Energy Enterprises, Inc.
(``AEE''), a direct nonutility subsidiary of Conectiv, that was formed
as a holding company for Conectiv's nonutility investments, will
[[Page 64534]]
be merged with and into Conectiv.\2\ This action will make all seven
wholly owned direct subsidiaries of AEE \3\ direct holdings of
Conectiv, for an interim period.
---------------------------------------------------------------------------
\2\ This merger will be a statutory short form merger (``Short-
form Merger''). A Short-form Merger occurs when a parent corporation
acquires all of the capital stock of a first tier subsidiary.
\3\ AEE's direct subsidiaries are: ATE; AGI; Conectiv Thermal
Systems, Inc. (``CTS'') (formerly Atlantic Thermal Systems, Inc.), a
company that provides thermal energy management services;
CoastalComm, Inc. (``Coastal''); Atlantic Southern Properties, Inc.
(``ASP''); Atlantic Energy Technology, Inc. (``AET'') and Enerval,
LLC (``Enerval''), a limited liability company that provides energy
management services. CSI will acquire Enerval and CTS during Phase
One.
Four of the six subsidiaries of CTS (Atlantic Jersey Thermal
Systems, Inc., Atlantic Pacific Las Vegas LLC, Atlantic-Pacific
Glendale LLC and Thermal Energy L.P.I) will be unaffected by the
restructuring. Atlantic Paxton Cogeneration, Inc. has been dissolved
and ATS Operating Services, Inc. may be merged with Thermal Energy
L.P.I in Phase Two.
---------------------------------------------------------------------------
The applicants state that the factors that warranted the formation
of special purpose subsidiaries for investment in various cogeneration
projects no longer exist. Therefore, during Phase One, Pedrick General,
Inc., Vineland General, Inc. and Binghamton General, Inc.
(``collectively, ``General Partners''), all special purpose
subsidiaries formed to act as general partners in Pedrick Cogeneration
Limited, Inc., Vineland Cogneration Limited, Inc. and Binghamton
Cogeneration Limited, (collectively, ``Cogen LLCs''), respectively.
During Phase One, the General Partners, through a Short-form Merger,
will be merged into their parent company, AGI, and the interest in the
Cogen LLCs will be acquired by ATE.
During Phase One, CSI will be the surviving corporation following
Short-form Mergers with Conectiv Solutions LLC, Altemp Energy Systems,
Inc. and Power Consulting Group, Inc. Each of these companies has been
authorized to provide energy-related services to retail consumers.\4\
CSI will succeed to each of the authorities previously granted by the
Commission to the predecessor companies in the Merger Order. CSI will
also own four additional wholly owned subsidiaries: Conectiv Plumbing
LLC, a company required under New Jersey law in connection with the
heating, ventilation and air conditioning services provided by CSI;
CTS; Conectiv Communications, Inc., an exempt telecommunications
company; and Enerval.
---------------------------------------------------------------------------
\4\ See Conectiv, Holding Company Act Release No. 26832 (Feb.
25, 1998).
---------------------------------------------------------------------------
During Phase One, CPI will become the holder of certain
nonregulated investments that are passive in nature. However, for
maximum flexibility, Conectiv requests authorization to retain certain
passive investments if retention by Conectiv is deemed more appropriate
for tax or other reasons. CPI will be the surviving corporation
following Short-form Mergers with Delmarva Services Company, a
corporation formed to own and finance an office building that is leased
to Delmarva and its associates, Christiana Capital Management, Inc., a
corporation that owns an office building leased to Delmarva, Atlantic
Energy International, Inc., a corporation formed to broker used utility
equipment to foreign countries and AET, a corporation formed to
research and develop energy technology.
During Phase One, CES will be the surviving corporation following
the Short-form Merger with Petron Oil Corporation, an energy marketing
company. CES will also acquire the capital stock of Delmarva Operating
Services Company (``DOSC''), a company providing management services to
independent production companies or exempt wholesale generators. The
capital stock in DOSC will be transferred up to Conectiv by capital
dividend and then contributed by Conectiv to CES in an exempt capital
contribution. Depending on the results of a pending tax analysis, the
transfer may be accomplished by (1) an asset for stock merger in which
Delmarva Capital Investments, Inc. (``DCI''), owner of the DOSC
securities would receive CES securities in exchange for the assets or
securities of DOSC, or (2) a dividend by DCI to Conectiv of the shares
of DOSC followed by a capital contribution of the shares to CES.
Phase Two
Phase Two will be completed as appropriate giving consideration to:
(1) Electric deregulation at the state and federal level; (2) tax
implications; and (3) other related issues. Upon completion of Phase
Two, the number of active direct nonutility subsidiaries of Conectiv
(``Direct Nonutilities'') will be reduced from six to three (CSI, CES
and CPI).
During Phase Two: (1) CSI will continue to focus on energy-related
services and the marketing of energy to retail customers; (2) CES will
continue to focus on energy supply and marketing to wholesale and
industrial customers, and acquire AGI by Short-form Merger; and (3) CPI
will continue to own certain nonutility investments which are more
passive in nature, and acquire ASP and ATE by Short-form Mergers.
For the Commission, by the Division of Investment Management,
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-31037 Filed 11-19-98; 8:45 am]
BILLING CODE 8010-01-M
