[Federal Register Volume 64, Number 229 (Tuesday, November 30, 1999)]
[Notices]
[Pages 66937-66938]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31033]
[[Page 66937]]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-27107]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
November 23, 1999.
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
applications(s) and/or declaration(s) for complete statements of the
proposed transactions(s) summarized below. The application(s) and/or
declarations(s) and any amendments is/are available for public
inspection through the Commission's Branch of Public Reference.
Interested persons wishing to comment or request a hearing on the
applications(s) and/or declaration(s) should submit their views in
writing by December 20, 1999, to the Secretary, Securities and Exchange
Commission, Washington, DC 20549-0609, 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
should identify specifically the issues of facts 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 20, 1999, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted
to become effective.
Northeast Utilities; 70-9535
Northeast Utilities (``Northeast''), 174 Brush Hill Avenue, West
Springfield, Massachusetts 01090, a registered holding company, has
filed an application-declaration under sections 6(a), 7, 9(a) and 10 of
the Act and rule 54 under the Act.
Northeast proposes to acquire, by means of a merger, all of the
issued and outstanding common stock of Yankee Energy System, Inc.
(``YES''), a Connecticut corporation and an exempt holding company
under section 3(a)(2) of the Act, pursuant to an Agreement and Plan of
Merger dated as of June 14, 1999 (``Merger Agreement''). Northeast
proposes to cause the organization of a wholly-owned subsidiary
(``Merger Sub'') by Merger Sub issuing and Northeast acquiring one
hundred shares of Merger Sub common stock, par value $10 per share for
$1000. Under the Merger Agreement, YES will merge with and into Merger
Sub. Holders of the common stock of YES will receive consideration in
cash and Northeast common stock valued at $45.00 per YES share. The
total consideration to be paid by Northeast for the outstanding shares
of YES common stock will be approximately $478 million, based on
approximately 10.6 million shares of YES common stock outstanding.
Each YES shareholder can elect the form of consideration, but this
election is subject to proration and adjustment. Under the Merger
Agreement, 55% of all issued and outstanding YES shares will be
exchanged for cash, and 45% will be exchanged for Northeast common
stock. If YES shareholders owning more than 55% of YES shares elect to
receive cash, the number of YES shares converted into cash will be less
than the number elected. If YES shareholders owning more than 45% of
YES shares elect to receive Northeast common stock, the number of YES
shares converted into stock will be less than the number elected.
Northeast currently anticipates that the full amount necessary to
fund the cash consideration to be paid to YES shareholders will be
financed through debt issued by Northeast. Northeast requests
authorization to issue from time to time through June 30, 2002 short or
long-term debt securities in an amount sufficient to satisfy the cash
portion of the consideration in connection with the merger, estimated
not to exceed $275 million. Such debt securities may include notes,
debentures and medium-term notes and/or borrowings from banks and
others financial institutions. Any long-term debt security would have
such designation, aggregate principal amount, maturity, interest rates
or methods of determining the same, terms of payment of interest,
redemption provisions, non-refunding provision, sinking fund terms and
other terms and conditions as Northeast may determine at the time of
issuance. The effective cost of money on short-term debt borrowings
will not exceed at issuance 400 basis points over the comparable term
London Interbank Offered Rate and the effective cost of money on long-
term borrowing will not exceed at issuance 400 basis over comparable
term U.S. Treasury securities. The maturity of indebtness will not
exceed 10 years from the date of issuance and the underwriting fees,
commissions, or other similar remuneration paid in connection with the
noncompetitive issue, sale or distribution of a security will not
exceed 2.5% of the principal or total amount of the financing.
Merger Sub, as a wholly-owned subsidiary of Northeast and as
successor to YES, will register as a holding company under section 5 of
the Act and will act as the holding company for Northeast's gas utility
subsidiary and related companies. Northeast's existing operating
electric utility subsidiaries will remain direct operating subsidiaries
of Northeast.
Northeast is the parent of a number of companies comprising the
Northeast Utilities system (``System''). Northeast has traditionally
furnished franchised retail electric service in Connecticut, New
Hampshire and western Massachusetts through three of Northeast's
wholly-owned subsidiaries, The Connecticut Light and Power Company
(``CL&P''), Public Service Company of New Hampshire (``PSNH'') and
Western Massachusetts Electric Company (``WMECO''). Northeast has also
furnished retail electric service to a limited number of customers
through another wholly-owned subsidiary, Holyoke Water Power Company
(``HWP''), doing business in and around Holyoke, Massachusetts. In
addition to their retail electric service business, CL&P, PSNH, WMECO
and HWP (including its wholly owned subsidiary, Holyoke Power and
Electric Company), together furnish wholesale electric service to
various municipalities and other utilities throughout the Northeast.\1\
The System serves approximately 30% of New England's electric needs and
is one of the 24th largest electric utility systems in the country as
measured by revenues.
---------------------------------------------------------------------------
\1\ CL&P, PSNH and WMECO furnish retail delivery franchise
service in 149, 198 and 59 cities and towns in Connecticut, New
Hampshire and Massachusetts, respectively. In 1998, CL&P furnished
retail franchise service to approximately 1.11 million customers in
Connecticut, PSNH provided retail service to approximately 422,000
customers in New Hampshire and WMECO served approximately 196,000
retail franchise customers in Massachusetts. HWP serves 32 retail
customers in Holyoke, Massachusetts.
---------------------------------------------------------------------------
North Atlantic Energy Corporation is a special-purpose operating
subsidiary of Northeast that owns a 35.98 percent interest in the
Seabrook nuclear generating facility in Seabrook, New Hampshire, and
sells its share of the capacity and output from Seabrook to PSNH under
two life-of-unit, full-cost recovery contracts. Several wholly-owned
subsidiaries of Northeast provide support services for the Northeast
companies and, in some cases, for other New England utilities.\2\
---------------------------------------------------------------------------
\2\ Northeast Utilities Service Company (``NUSCO''), provides
centralized accounting, administrative, information resources,
engineering, financial, legal, operational, planning, purchasing and
other services to the System companies. North Atlantic Energy
Service Corporation has operational responsibility for Seabrook.
Northeast Nuclear Energy Company acts as agent for the System
companies and other New England utilities in operating the Millstone
nuclear generating facilities in Waterford, Connecticut. Three other
subsidiaries (Rocky River Realty Company, The Quinnehtuk Company,
and Properties, Inc.) construct, acquire or lease some of the
property and facilities used by the System companies.
In January 1999, Northeast added three new corporations to the
System: NU Enterprises, Inc. (``NUEI''), the holding company for the
System's unregulated businesses; Northeast Generation Company and
Northeast Generation Services Company. Also in January 1999
Northeast transferred to NUEI the stock of three other of its
subsidiaries, making them wholly owned subsidiaries of NUEI: Select
Energy, Inc.; HEC Inc.; and Mode 1 Communications, Inc. These
companies engage, either directly or indirectly through
subsidiaries, in a variety of energy-related and telecommunications
activities, as applicable, primarily in the unregulated energy
retail and wholesale commodity, marketing and service fields.
---------------------------------------------------------------------------
[[Page 66938]]
YES, is primarily engaged in the retail distribution of natural gas
through its wholly-owned subsidiary, Yankee Gas Services Company
(``Yankee Gas''), a Connecticut public utility service company. Yankee
Gas serves approximately 185,000 residential, commercial and industrial
customers in 69 cities and towns, and covers approximately 1,995 square
miles in Connecticut.\3\ Yankee Gas operates the largest natural gas
distribution system in Connecticut as measured by number of customers
and size of service territory.
---------------------------------------------------------------------------
\3\ Yankee Gas' assets include distribution lines, meters,
pumps, valves and pressure and flow controllers. Yankee Gas owns
approximately 2,820 miles of distribution mains, 133,033 service
lines, and 185,000 active meters for customer use, all located in
Connecticut. Yankee Gas also owns and operates various propane
facilities and six gas storage holders.
---------------------------------------------------------------------------
YES also owns four active non-utility subsidiaries including: (1)
NorConn Properties Inc., which holds property and facilities of Yes;
(2) Yankee Energy Financial Services Company, which provides customers
with financing for energy equipment installations; (3) Yankee Energy
Services Company, which provides a wide range of energy-related
services for its customers; and (4) R.M. Services, Inc., which provides
debt collection service to utilities and other businesses nationwide.
For the Commission by the Division of Investment Management,
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-31033 Filed 11-29-99; 8:45 am]
BILLING CODE 8010-01-M
