[Federal Register Volume 62, Number 225 (Friday, November 21, 1997)]
[Notices]
[Pages 62375-62381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30630]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26778]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
November 14, 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 8, 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
[[Page 62376]]
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., et al. (70-7926)
GPU, Inc. (``GPU''), 100 Interpace Parkway, Parsippany, New Jersey
07054, a registered holding company, and Jersey Central Power & Light
Company (``JCP&L''), Metropolitan Edison Company (``Met-Ed''), and
Pennsylvania Electric Company (``Penelec''), 2800 Pottsville Pike,
Reading, Pennsylvania 19640, each an electric public utility subsidiary
of GPU, have filed a post-effective amendment to their declaration
under sections 6(a), 7, 32 and 33 of the Act and rules 53 and 54 under
the Act.
By order dated October 26, 1994 (HCAR No. 26150) (``Order'') and
supplemental order dated July 17, 1996 (HCAR No. 26544) (``Supplemental
Order''), the Commission, among other things, authorized, through
December 31, 1997: (1) GPU, JCP&L, Met-Ed, and Penelec (``Declarants'')
to issue, sell and renew their respective unsecured promissory notes
(``Unsecured Promissory Notes''), maturing not more than nine months
after issuance, to various commercial banks under loan participation
arrangements and informal lines of credit (``Lines of Credit'') in
amounts up to the limitations on short-term indebtedness contained in
their respective charters (``Charter Limits'') and, in the case of GPU,
up to $250 million; (2) JCP&L, Met-Ed and Penelec to issue and sell
their unsecured short-term promissory notes as commercial paper
(``Commercial Paper'') in amounts up to their Charter Limits; and (3)
the Declarants to issue, sell and renew unsecured promissory notes to
lenders other than commercial banks, insurance companies or similar
institutions (``Other Short-Term Debt'') in amounts up to their Charter
Limits and, in the case of GPU, up to $250 million. Borrowings under
Lines of Credit, Commercial Paper and Other Short-Term Debt are
collectively referred to as ``Short-Term Borrowings.''
Declarants request that the period during which they may issue,
sell and renew Short-Term Borrowings be extended to December 31, 2000.
In all other respects, the transactions remain as described in the
Order and the Supplemental Order.
The proceeds from the borrowings will be used by the Declarants to
finance their businesses, including, in the case of GPU, to finance the
acquisition of exempt wholesale generators, as defined in section 32 of
the Act, and foreign utility companies, as defined in section 33 of the
Act.
Central and South West Corporation, et al. (70-9107)
Central and South West Corporation (``CSW''), 1616 Woodall Rodgers
Freeway, Dallas, Texas 75202, a registered holding company, and its
electric public-utility subsidiary companies, Central Power and Light
Company (``CPL''), 539 North Carancahua Street, Corpus Christi, Texas
78401-2802, Public Service Company of Oklahoma (``PSO''), 212 East
Sixth Street, Tulsa, Oklahoma 74119-1212, Southwestern Electric Power
Company (``SWEPCO''), 428 Travis Street, Shreveport, Louisiana 71156-
0001, and West Texas Utilities Company (``WTU''), 301 Cypress Street,
Abilene, Texas 79601-5820, and Central and South West Services, Inc.
(``CSW Services''), 1616 Woodall Rodgers Freeway, Dallas, Texas 75202,
a service company subsidiary of CSW (all companies collectively,
``Applicants'') have filed an application-declaration (``Application'')
under sections 6(a), 7, 9(a), 10, 12(b) and 12(e) of the Act and rules
43, 45, 54, 62 and 65 under the Act.
The Applicants seek authorization to engage in various financing
and related transactions (``Financing Plan''), effective through
December 31, 2002 (``Authorization Period''). As described more fully
below, the Applicants seek authority for: (i) External financings by
CPL, PSO, SWEPCO, WTU and CSW Services (``Subsidiaries'') and CSW; (ii)
CSW to acquire common stock from the Subsidiaries; (iii) the
Subsidiaries to repurchase their common stock from CSW; (iv) credit
enhancement for their securities, including guarantees; (v) the
Subsidiaries to guarantee the securities of their subsidiary financing
entities; (vi) CSW and the Subsidiaries to repurchase their securities
by means of tender offers; (vii) the issuance of other types of
securities not exempt under rules 45 and 52; (viii) the Subsidiaries to
organize new entities for facilitating certain types of financings and
for the financing entities to issue securities to third parties; and
(ix) increasing their authorized capital, amending their articles of
incorporation, and soliciting proxies through a proxy statement
requesting shareholder approval of any amendment to their articles of
incorporation, subject to a reservation of jurisdiction pending
completion of the record. The Applicants request authority to engage in
financing transactions for which the specific terms and conditions are
not currently known, subject to certain conditions concerning the
financial condition of the Applicants.
Financings by each Applicant will be subject to the following
limitations: (i) The issuance of common stock by CSW will not exceed
$250 million; (ii) external financings by the Subsidiaries, other than
the refunding of outstanding securities which will not be limited, will
not exceed the following amounts--(a) CPL-$500 million, (b) PSO-$250
million, (c) SWEPCO-$300 million, (d) WTU-$150 million, and (e) CSW
Services-$100 million; (iii) the issuance of common stock by the
Subsidiaries to CSW will not exceed the following amounts--(a) CPO-$200
million, (b) PSO-$100 million, (c) SWEPCO-$100 million, and (d) WTU-$50
million; (iv) repurchases by the Subsidiaries of their common stock
from CSW will not exceed the following amounts--(a) CPL-$1 billion, (b)
PSO-$150 million, (c) SWEPCO-$200 million, and (d) WTU-$100 million;
and (v) credit enhancement and guarantees will only be provided in
connection with a financing that satisfies the requirements set forth
in an order authorizing this Application.
1. External Financings by CSW
CSW requests authorization to issue common stock, including
issuances of common stock upon the exercise of convertible debt or
pursuant to rights, options, warrants and similar securities. CSW also
requests authorization to purchase common stock from the Subsidiaries
and to sell common stock back to the Subsidiaries. The only financing
authority requested by CSW in the Application is to issue common stock.
CSW seeks authority to issue common stock in any of the following
ways: (i) Through underwriters or dealers; (ii) directly to a limited
number of purchasers or to a single purchaser, or (iii) through agents
or dealers. If underwriters are used in the sale of the securities,
these securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
securities may be offered to the public either through underwriting
syndicates (which may be represented by managing underwriters) or
directly by one or more underwriters acting alone. The securities may
be sold directly by CSW or through agents
[[Page 62377]]
designated from time to time. If dealers are used in the sale of any
securities, these securities will be sold to the dealers as principal.
Any dealers may then resell these securities to the public at varying
prices to be determined by the dealer at the time of resale.
If the common stock is being sold by CSW in an underwritten
offering, CSW may grant the underwriters a ``green shoe'' option
permitting the purchase from CSW of additional equity securities (an
additional 15% under present guidelines) at the same price as the
original equity securities then being offered, solely for the purpose
of covering over-allotments.
2. External Financing by the Subsidiaries
The Subsidiaries seek authority to obtain funds externally through:
sales for preferred stock, including the sale of tax-advantaged
preferred securities; short-term debt financing; long-term debt
financing, such as first mortgage bonds, pollution control revenue
bonds, notes (secured and unsecured) and debentures; medium-term notes;
other forms of indebtedness; and borrowings under credit agreements
(``Credit Agreements''). The Subsidiaries also request authorization to
issue common stock to CSW.
The Subsidiaries propose to borrow from banks or other lending
institutions from time to time through the end of the Authorization
Period. The borrowings will be evidenced by promissory notes issued to
the lender, to be dated as of the date of the first borrowing, with
each borrowing maturing in not more than 50 years. Notes may or many
not be prepayable, in whole or in part, with or without a premium in
the event of prepayment.
The Subsidiaries seek authority to issue external financing in any
of the following ways: (i) Through underwriters or dealers; (ii)
directly to a limited number of purchasers or to a single purchaser, or
(iii) through agents or dealers. If underwriters are used in the sale
of the securities, these securities will be acquired by the
underwriters for their own account and may be resold from time to time
in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time
of sale. The securities may be offered to the public either through
underwriting syndicates (which may be represented by managing
underwriters) or directly by one or more underwriters acting, alone.
The securities may be sold directly by the Subsidiaries or through
agents designated from time to time. If dealers are used in the sale of
any securities, these securities will be sold to the dealers as
principal. Any dealers may then resell these securities to the public
at varying prices to be determined by the dealer at the time of resale.
If debt securities are being sold, they may be sold under ``delayed
delivery contracts'' which permit the underwriters to locate buyers who
will agree to buy the debt at the same price but at a later date than
the date of the closing of the sale to the underwriters. Debt
securities may also be sold through the use of medium-term note and
similar programs, including in transactions covered by the rule 144A
under the Securities Act of 1933. Pollution control revenue bonds may
be sold either currently or in forward refunding where the price of the
securities is established currently for delivery at a future date.
3. Acquisition of Securities
CSW requests authorization to purchase common stock from the
Subsidiaries. In addition, the Subsidiaries request authorization to
repurchase their common stock from CSW.
4. Credit Enhancement
Applicants may obtain credit enhancement for the securities covered
by this Application, which could include insurance, a letter of credit
or a liquidity facility. The Applicants anticipate they may be required
to provide credit enhancement if they were to issue floating rate
securities, whereas credit enhancement would be a purely economic
decision for fixed rate securities. The Applicants anticipate that even
though they would be required to pay a premium or fee to obtain the
credit enhancement, they would realize a net benefit through a reduced
interest rate on the new securities. Applicants will obtain credit
enhancement only if it is economically beneficial to do so.
If insurance is obtained, the Applicants may be required to enter
into an agreement with the insurer and an escrow agent under which the
Applicants would be obligated to make payments of certain amounts into
an escrow fund upon a failure to maintain certain financial ratios and
on the occurrence of certain other events. Amounts held in an escrow
fund would be payable to the insurer as an indemnity for any amounts
paid by the insurer for principal or interest on the new securities.
5. Financing Entities
The Subsidiaries seek authority to organize new corporations,
trusts, partnership or other entities to be created for the purpose of
facilitating certain types of financing such as the issuance of tax
advantaged preferred securities. The financing entities may issue these
securities to third parties. In addition, authority is requested for
(i) the Subsidiaries' issuance of debentures or other evidences of
indebtedness to a financing entity in return for the proceeds of the
financing and (ii) the acquisition by a Subsidiary of voting interests
or equity securities issued by the financing entity to establish the
Subsidiary's ownership of the financing entity (the equity portion of
the entity generally being created through a capital contribution or
the purchase of equity securities, such as shares of stock or
partnership interests, involving an amount usually ranging from 1 to 25
percent of the capitalization of the financing entity). The
Subsidiaries also request authorization to enter into expense
agreements with their respective financing entities, under which they
would agree to pay all expenses of the financing entity.
6. Guarantees
Aside from any guaranty provided by any instrument acquired and/or
issued for credit enhancement, the Subsidiaries may also guarantee (i)
payment of interest, dividends or distributions on the securities
issued by their subsidiary financing entities if and to the extent
these financing entities declare dividends or distributions or pay
interest out of funds legally available therefor; (ii) payments to the
holders of the securities issued by financing entities of amounts due
upon liquidation of these financing entities or redemption of their
securities; and (iii) certain additional amounts that may be payable on
these securities.
7. Refinanancings/Tender Offers
In connection with any refinancing by CSW or a Subsidiary under an
order in this filing, CSW and the Subsidiaries may determine to acquire
outstanding securities (``Outstanding Securities'') through tender
offers to the holders of the Outstanding Securities. Tender offers may
be conditioned upon receipt of a certain percentage of the Outstanding
Securities. The tender offer price would be based on a number of
factors, including the coupon rate of the Outstanding Securities, the
date of expiration of the refunding protection of the Outstanding
Securities, the date of expiration of the refunding protection of
[[Page 62378]]
the Outstanding Securities, the redemption price on the expiration date
and the then current market rates for similar securities, all of which
are relevant to the decision of an informed holder as to whether to
hold or sell Outstanding Securities. Holders of Outstanding Securities
may be offered a fixed price for their Outstanding Securities, or the
tender offer may be a ``fixed spread'' offer where the Applicants will
offer a price based upon a fixed spread over comparable U.S. Treasury
securities. Any tender offer will be conducted in accordance with
standard market practice, i.e., the length of time the offer will be
held open, the method of solicitation, etc., at the time of the tender
offer.
The Applicants would, in connection with any tender offer, retain
one or more investment banking firms experienced in these matters to
act as tender agent and dealer-manager. The dealer-manager will act as
the Applicants' agent in disseminating the tender offer and receiving
responses thereto. As a dealer-manager, the investment banking firm
will not itself become obligated to purchase or sell any of the
Outstanding Securities. The dealer-manager's fee will be determined
following negotiation and investigation of fees in similar transactions
and will include reasonable out-of-pocket expenses and attorney's fees.
It is expected that the Applicants will be required, as is customary,
to indemnify the dealer-manager for certain liabilities. The Applicants
may also retain a depositary to hold the tendered Outstanding
Securities pending the purchase thereof and/or an information agent to
assist in the tender offer.
8. Other Securities
The Applicants also propose to issue other types of securities
within the parameters of this Application during the period ending
December 31, 2002. The Applicants request that the Commission reserve
jurisdiction over the issuance of additional types of securities. The
Applicants also undertake to file a post-effective amendment in this
proceeding which will describe the general terms of each security and
request a supplemental order of the Commission authorizing their
issuance. The Applicants request that each supplemental order be issued
by the Commission without further public notice.
9. Charter Amendments
The Applicants propose that they be allowed to (i) increase their
authorized capital as deemed necessary and appropriate by CSW for
proper corporate purposes, (ii) amend their articles of incorporation,
and (iii) solicit proxies through a proxy statement, filed under and
meeting the standards of the Securities Exchange Act of 1934,
requesting shareholder approval of any amendment to their articles of
incorporation.
Proxy solicitation material relating to amendments to the articles
of incorporation will meet the requirements of Schedule 14A under the
Securities Exchange Act of 1934, and will, to the extent required, be
reviewed for compliance with this regulation by the Commission before
the proxy material is sent to shareholders. The Applicants request
reservation of jurisdiction over any order to solicit proxies and the
implementation of amendments to the articles of incorporation pending
completion of the record. The Applicants further request that any
supplemental order authorizing amendments to the articles of
incorporation be issued by the Commission without further public
notice.
The authorization requested by the Applicants will be subject to
the following conditions: (i) For financings at the Subsidiary level
only, the Subsidiaries seeking to issue securities or enter into Credit
Agreements will maintain long-term debt ratings which are investment
grade as established by a nationally recognized statistical rating
organization (as this term is used in rule 15c3-1(c)(2)(vi)(F) under
the 1934 Act); (ii) the effective cost of money on debt securities will
not exceed the greater of (a) 300 basis points over comparable term
U.S. Treasury securities, or (b) a gross spread over comparable term
U.S. Treasury securities which is consistent with comparable investment
grade securities; (iii) the effective cost of money for borrowings
under Credit Agreements will not exceed the greater of (a) the prime
rate plus 300 basis points, or (b) the rate of interest for comparable
investment grade credits prevailing in the market on the date of
borrowing; (iv) the effective cost of money on preferred stock and
other fixed income oriented securities will not exceed the greater of
(a) 500 basis points over 30 year term U.S. Treasury securities, or (b)
a gross spread over 30 year term U.S. Treasury securities which is
consistent with comparable investment grade securities; (v) the
underwriting fees, commissions, or other similar expenses paid in
connection with the issue, sale or distribution of a security under an
order for this filing will not exceed 5% of the principal or total
amount of the financing; (vi) the aggregate amount of outstanding
external financing, other than the refunding of outstanding securities
which will not be limited, will not exceed $2 billion; and (vii)
proceeds of the proposed financing may not be used to invest in an
exempt wholesale generator, as defined under section 32 of the Act, or
a foreign utility company, as defined under section 33 of the Act. Any
deviation from these conditions would require further Commission
approval.
The Applicants request authorization to deviate from the
Commission's Statement of Policy Regarding First Mortgage Bonds, HCAR
No. 13105 (Feb. 16, 1956), as amended by HCAR No. 16369 (May 8, 1969),
and Statement of Policy Regarding Preferred Stock, HCAR No. 13106 (Feb.
16, 1956), as amended by HCAR No. 16758 (June 22, 1970), as applicable,
where they apply to the proposed financings.
The Applicants are proposing that the authorization to engage in
external financing requested in this filing supersede all relevant
prior authorizations (the ``Prior Authorizations'').\1\ If this
proposal is approved, the Applicants would engage in long-term
financing in the context of their needs and financial market conditions
at the time of issuance, subject to the terms and conditions set forth
in this notice and in any order in this file, and without reference to
the terms and restrictions set forth in the Prior Authorizations. Any
long-term debt or other security would have the designations, aggregate
principal amount, maturity, interest rate(s) or methods of determining
the same, interest payment terms, redemption provisions, non-refunding
provisions, sinking fund terms, conversion or put terms and other terms
and conditions as the Applicants may at the time of issuance determine,
unless this Application specifically provides otherwise.
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\1\ Holding Co. Act Release Nos. 26703 (Apr. 10, 1997), 26548
(July 30, 1996), 26531 (June 12, 1996), 26390 (Oct. 13, 1995), 26340
(July 26, 1995), 26309 (June 15, 1995), 26045 (May 2, 1994), 26019
(Apr. 6, 1994), and 25928 (Nov. 19, 1993).
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New England Electric System (70-9109)
New England Electric System (``NEES''), 25 Research Drive,
Westborough, Massachusetts 01582, a registered holding company, has
filed a declaration under sections 6(a) and 7 of the Act and rule 54
under the Act.
NEES requests authority through December 31, 2002 to issue short-
term notes to banks (``Notes'') and/or commercial paper to dealers
(``CP'') up
[[Page 62379]]
to an aggregate amount of $500 million outstanding at any one time.\2\
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\2\ By Commission Order dated October 9, 1996 (HCAR No. 26589),
NEES was authorized to issue and sell short-term promissory notes to
banks up to a maximum aggregate principal amount outstanding at any
time not exceeding $100 million. This borrowing authority expires
October 31, 1998. The authority requested in this filing is intended
to supersede such existing authorization.
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NEES proposes to enter into a credit agreement (``Credit
Agreement'') with Merrill Lynch Capital Corporation (``MLCC''), as
arranger and syndication agent. The Credit Agreement provides for a
revolving facility of $500 million which reduces to $400 million after
three years and to $300 million after four years. Under the Credit
Agreement, NEES would borrow at one of three types of interest
rates.\3\ Under the Credit Agreement, NEES is required to pay a
facility fee quarterly in arrears to each bank that makes a commitment
to loan funds to NEES.\4\
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\3\ 1. At a periodic fixed Eurodollar rate with maturities of 1,
2, 3 or 6 months at the then applicable LIBOR plus a margin (based
on NEES' subsidiaries' senior debt ratings), payable at the end of
each interest period or quarterly for interest periods longer than 3
months.
2. At the highest of the following base rates: (a) BankBoston
base rate, (b) \1/2\ of 1% per annum above the latest three week
moving average of secondary market offering rates in the United
States for three-month certificates of deposit of major U.S. money
market banks adjusted to the nearest \1/4\ of 1 percent; and (c) \1/
2\ of 1% per annum above the federal funds rate. These would be
payable quarterly in arrears and would be calculated on the basis of
a 365/366 day year.
3. At a rate obtained through competitive bids. NEES may request
competitive bids for an aggregate outstanding amount not to exceed
$100 million.
\4\ The annual amount of the facility fee is determined by
multiplying (i) the particular bank's commitment amount and (ii) the
Applicable percentage (defined below). The Applicable Percentage
varies between 0.065% and 0.200%, depending on the lowest debt
rating of NEES' electric utility subsidiaries (Massachusetts
Electric Company, The Narragansett Electric Company, and New England
Power Company (``NEP'') senior secured debt. If NEP does not have
secured debt, then the rating for its senior debt will apply. Based
on current ratings, the Applicable percentage would be 0.105%.
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NEES also proposes to make arrangements with certain banks for
short-term lines of credit, for various purposes, to be evidenced by
notes payable maturing in less than one year from the date of issuance,
and at rates that will not exceed on a daily basis the greater of the
bank's base or prime lending rate, or the rate published daily as the
high federal funds published in the Wall Street Journal.
NEES also proposes to issue and sell CP directly to one or more
nationally recognized commercial paper dealers (``CP Dealers'')
Initially the CP Dealer will be CS First Boston Corporation and/or
Merrill Lynch Money Markets Incorporated. NEES states that the
commercial paper so issued and sold will be in the form of unsecured
promissory notes having varying maturities of not in excess of 270
days, with no payment rights until maturity. The CP will be in
denominations of not less than $50,000, and will be at an interest rate
generally not exceeding the base lending rate at BankBoston.\5\
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\5\ NEES states, however, that the effective interest cost of
such paper is based on the supply of, and demand for, that and
similar paper at the time of sale. Specifically, NEES notes that on
several previous occasions short-term money markets have become very
volatile during brief periods of extraordinary demand, and the
interest costs of commercial paper have exceeded bank base rates.
Because such volatile market conditions usually exist for brief
periods, it is not anticipated that any sale of commercial paper
with interest costs in excess of bank base rates would have a
significant marginal impact on the annual interest cost of NEES.
Therefore, NEES states that while it anticipates that the effective
annual cost of borrowing through commercial paper will not exceed
the annual base rate borrowing from BankBoston, in order to obtain
maximum flexibility during the periods described above, it may issue
commercial paper with a maturity of not more than 90 days with an
effective cost in excess of the then-existing lending rate.
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NEES states that it may use the proceeds from the authorized
transactions, subject to meeting margin requirements, to facilitate a
share buy back of its subsidiaries' shares (not to exceed five million
shares) after their anticipated sale of their non-nuclear generation
business to U.S. Generating Company in the near future. In addition,
NEES states that it may need to make investments in anticipation of
receipt of the sale proceeds in order prudently to re-deploy funds
obtained through the sale. NEES further states that it may also need to
use such proceeds to make contributions to NEP, pending consummation of
the sale. NEES also plans to use proceeds for other general corporate
purposes.
NGE Resources, Inc. (70-9111)
NGE Resources, Inc. (``NGE''), a New York corporation not currently
subject to the Act, located at One Commerce Plaza, Suite 2006A, Albany,
New York 12260, has filed an application under sections 3(a)(1),
9(a)(2) and 10 of the Act.
NGE is a subsidiary of New York State Electric & Gas Corporation
(``NYSEG''), a public utility company also not currently subject to the
Act. NYSEG is engaged in generating, purchasing, transmitting and
distributing electricity, and purchasing, transporting and distributing
natural gas in the central, eastern and western parts of the state of
New York.\6\
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\6\ In addition, NYSEG has two direct nonutility subsidiaries.
These are Somerset Railroad Corporation, which owns a rail line used
to transport coal and other materials to one of NYSEG's generating
plants, and NGE Enterprises, Inc. (``Enterprises''). Enterprises
owns interests in various companies engaged in power marketing,
environmental and conservation engineering and consulting, energy-
related financial services, energy usage information services,
demand-side management services, utility-related software
development, and energy management services.
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In summary, NGE seeks authority to acquire all of the outstanding
common stock of NYSEG and of a wholly owned subsidiary of NYSEG
(``Genco'') organized to own all or a part of NYSEG's coal-fired
generating assets (``Generation Assets''). In addition, NGE seeks an
order under section 3(a)(1) of the Act exempting NGE from all
provisions of the Act, except section 9(a)(2).
On May 20, 1996 the New York Public Service Commission (``PSC'')
issued an order establishing certain electricity industry restructuring
goals for the state of New York. In response, NTSEG filed a petition on
December 19, 1996 with the PSC requesting authority to form a holding
company over NYSEG and to separate the Generating Assets from its other
businesses regulated by the PSC.
Under a proposed plan of exchange, all outstanding NGE common stock
will be canceled and all of the NYSEG common stock will be exchanged on
a share-for-share basis for NGE common stock (``Share Exchange''),
subject to appraisal rights. Each person who owned NYSEG common stock
immediately prior to the Share Exchange (other than those who exercise
their appraisal rights) will immediately after the Share Exchange own a
corresponding number of shares and percentage of the outstanding NGE
common stock. In addition, NGE will own all of the outstanding shares
of NYSEG Common Stock.\7\
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\7\ Following the consummation of the proposed transactions, one
of NYSEG's two direct nonutility subsidiaries, Somerset Railroad
Corporation, will be a direct subsidiary of Genco and the other, NGE
Enterprises, Inc., will be a direct subsidiary of NGE.
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NGE also seeks authority to acquire all of the outstanding common
stock of Genco, which will become an electric utility company as a
consequence of the transfer to it of the Generation Assets by NYSEG.
NYSEG may temporarily become a holding company under the Act if the
Generation Assets are transferred to Genco prior to the acquisition of
Genco by NGE. In this case, NYSEG will claim an exemption form the Act
under sections 3(a)(1) or 3(a)(2) of the Act.
The Share Exchange will not affect shares of NYSEG's Serial
Preferred Stock (``NYSEG Preferred Stock''), which will remain
securities of NYSEG after the Share Exchange. Those shares of NYSEG
Preferred Stock that were
[[Page 62380]]
issued and outstanding immediately prior to the Share Exchange will
have the same preferences, designations, relative rights, privileges
and powers, and will be subject to the same restrictions, limitations
and qualifications, as were applicable prior to the Share Exchange.
Other than the release of the Generation Assets from the lien of
NYSEG's first mortgage bond indenture, the proposed transactions will
not result in any change in the outstanding indebtedness of NYSEG,
which will continue to be obligations of NYSEG after the Share
Exchange.
NGE asserts that it will satisfy the requirements for an exemption
under section 3(a)(1). It states that it, NYSEG and Genco are organized
and carry on their business substantially in New York State.
Monongahela Power Company, et al. (70-9115)
Monongahela Power Company (``Monongahela''), 1310 Fairmont Avenue,
Fairmont, West Virginia 26554, The Potomac Edison Company (``Potomac
Edison''), 10435 Downsville Pike, Hagerstown, Maryland 21740, and West
Penn Power Company (``West Penn''), 800 Cabin Hill Drive, Greensburg,
Pennsylvania 15601, each an electric utility subsidiary of Allegheny
Energy, Inc., a registered holding company, have filed a declaration
under sections 6(a) and 7 of the Act and rule 54 under the Act.
Monongahela, Potomac Edison, and West Penn (``Declarants'') propose
to enter into an agreement with The County Commission of Pleasants
County, West Virginia (``County Commission'') under which, through
December 31, 2002, Declarants will issue notes to support the
contemporaneous issuance of pollution control revenue bonds by the
County Commission.
The County Commission proposes to issue $92.5 million aggregate
principal amount in three new series of long-term bonds (``Series D
Bonds''). The proceeds from the Series D Bonds will be used to refund
the County Commission's Series A Bonds presently outstanding. The
Series A Bonds were issued for the tax exempt financing of certain air
and water pollution control equipment and facilities at the Declarants'
Pleasants Power Station located in Pleasants County, West Virginia.
The Series D Bonds will be issued under a supplemental trust
indenture with a corporate trustee, approved by the Declarants, and
sold at a time, interest rate, and price approved by the Declarants.
The interest rate for the Series D Bonds will not exceed the interest
rate of the corresponding series of Series A Bonds presently
outstanding. The Series D Bonds will mature no later than the year
2020.
Each Declarant will deliver concurrently with the issuance of the
Series D Bonds its non-negotiable Pollution Control Note (``Notes'')
corresponding to the Series D Bonds in respect of principal amount,
interest rate and redemption provisions (which may include a special
right of the holder to require the redemption or repurchase of the
Series D Bond at stated intervals) and having installments of principal
corresponding to any mandatory sinking fund payments and stated
maturities. The Notes will be secured by a second lien on the
Facilities and certain other properties, under the Deed of Trust and
Security Agreement dated November 1, 1977, as supplemented by a First
Supplement thereto dated August 1, 1978 as to West Penn and Potomac
Edison and a First Supplemental thereto dated February 1, 1979 as to
Monongahela, delivered by the Declarants to the trustee creating a
mortgage and security interest in the Facilities and certain other
property (subject to the lien securing each Declarant's first mortgage
bonds). Payment on the Notes will be made to the Trustee under the
Third Supplemental Indentures to be entered into between the Declarants
and the Trustee and will be applied by the Trustee to pay the maturing
principal and redemption price of and interest and other costs on the
Series D Bonds as the same become due. Each Declarant also proposes to
pay any trustees' fees or other expenses incurred by the County
Commission.
The Columbia Gas System, Inc., et al, (70-9129)
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, Columbia's energy services and marketing subsidiaries,
Columbia Energy Services Corporation (``Columbia Energy''), Columbia
Assurance Agency, Inc., Columbia Energy marketing Corporation, Columbia
Power Marketing Corporation, and Columbia Service Partners, Inc., all
located at 12355 Sunrise Valley Drive, Suite 300, Reston, Virginia
20191-3458; Columbia's four distribution subsidiaries, Columbia Gas of
Ohio, Inc., Columbia Gas of Pennsylvania, Inc., Columbia Gas of
Kentucky, Inc., Columbia Gas of Maryland, Inc. (collectively, ``Utility
subsidiaries''), and Columbia's service company subsidiary,
Commonwealth Gas Service, Inc., all located at 200 Civic Center Drive,
Columbus, Ohio 43215; Columbia's two transmission subsidiaries,
Columbia Gas Transmission Corporation, located at 12801 Fairlakes
Parkway, Fairfax, Virginia 22030-0146, and Columbia Gulf Transmission
Company, located at 2603 Augusta, Suite 125, Houston, Texas 77057;
Columbia's exploration and production subsidiary, Columbia Natural
Resources, Inc. (``CNR''), CNR's subsidiaries, Alamco, Inc., Alamco-
Delaware, Inc. and Hawg Hauling & Disposal, Inc, all located at 900
Pennsylvania Avenue, Charleston, West Virginia 25302; Columbia's
propane distribution subsidiary, Columbia Propane Corporation, located
at 9200 Arboretum Parkway, Suite 140, Richmond, Virginia 23236;
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 (collectively, the
``System''), have filed an application-declaration under sections 6, 7,
9 and 10 of the Act and rules 53 and 54 under the Act.
Columbia requests Commission approval to updated and expand its
existing short-term financing authority. By Commission order dated
December 23, 1996 (HCAR No. 26634) (the ``Omnibus Financing Order''),
Columbia was authorized to engaged in a wide range of financing
transactions through December 31, 2001, including short-term financing
in an amount not to exceed $1 billion outstanding at any one time,
subject to certain conditions and parameters. Columbia wishes to expand
the foregoing order and specifically requests authorization to increase
the System's short-term financing authority to an amount not to exceed
$2 billion outstanding at any one time through
[[Page 62381]]
December 31, 2003. The short-term financing could include a revolving
credit agreement, the issuance of commercial paper, bid notes issued to
individual banks, which are participants in the revolving credit
agreement, bank borrowing, or medium-term notes issued under its
Indenture dated November 28, 1995, between Columbia and marine Midland
Bank, Trustee, as amended.
Columbia and the Utility Subsidiaries also request authorization
for the Utility Subsidiaries to issue to Columbia, and for Columbia to
acquire from the utility Subsidiaries, short-term securities through
December 31, 2003.
The authorization Columbia requests is subject to the general
conditions for financing contained in the Omnibus Financing Order.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-30630 Filed 11-20-97; 8:45 am]
BILLING CODE 8010-01-M
