[Federal Register Volume 64, Number 69 (Monday, April 12, 1999)]
[Notices]
[Pages 17698-17700]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-8968]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26997]
Filings Under the Public Utility Holding Company Act of 1935, as
amended (``Act'')
April 2, 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 transaction(s) summarized below. The application(s) and/or
declaration(s) and any amendments 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 April 27, 1999, to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549-0609, 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 any 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 April 27, 1999, 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''), 300 Madison Avenue, Morristown, New Jersey
07962, a registered holding company, and its electric public utility
subsidiaries, Jersey Central Power & Light Company, Metropolitan Edison
Company (``Met-Ed''), and Pennsylvania Electric Company (``Penelec'')
(collectively, ``GPU Subsidiaries'' or together with GPU,
``Applicants''), each of 2800 Pottsville Pike, Reading, Pennsylvania
19640 have filed a post-effective amendment under sections 6(a), 7, 32
and 33 of the Act and rules 53 and 54 under the Act.
By orders dated July 17, 1996 (HCAR No. 26544) and December 22,
1997 (HCAR No. 26801) (``December Order'') (collectively ``Orders''),
the Commission, among other things, authorized the GPU Subsidiaries,
from time to time through December 31, 2000, to issue, sell and renew
unsecured promissory notes in amounts up to the limitations on short-
term indebtedness contained in the GPU Subsidiaries' respective
charters. GPU was authorized to issue, sell and renew unsecured short-
term notes in amounts up to $250 million.
The December Order limited the amount of short-term indebtedness
which Met-Ed and Penelec could have outstanding to the maximum amounts
permitted by their respective charters. At the time the Orders were
issued, the Met-Ed and Penelec charters, among other things, restricted
the amount of unsecured debt that they could have outstanding without
the consent of a majority of the preferred shareholders so long as
preferred shares were outstanding. On February 19, 1999, Met-Ed and
Penelec redeemed all of their remaining shares of cumulative preferred
stock outstanding ($11.95 million and $16.55 million aggregate stated
value, respectively). The Applicants state that as the preferred stock
has been redeemed and is no longer outstanding, the associated
limitations contained in the GPU Subsidiaries' charters on the issuance
of unsecured debt are no longer applicable to Met-Ed and Penelec.
Applicants now seek authorization, through December 31, 2000, to:
permit Met-Ed and Penelec to each issue and sell up to $150 million in
short-term indebtedness from time to time. Applicants also propose,
through December 31, 2003, to: (1) extend the period during which the
GPU Subsidiaries may issue unsecured promissory notes under credit
agreements or in the form of short-term indebtedness; (2) permit GPU to
issue and sell commercial paper in amounts up to $100 million; and (3)
extend GUP's authority to issue and sell short-term notes in amounts up
to $250 million, under the terms and conditions of the Orders.
Cinergy Corp., et al. (70-9449)
Cinergy Corp., a registered holding company (``Cinergy''),\1\ 139
East Fourth Street, Cincinnati, Ohio 45202, has filed a declaration
under sections 12(b) and 13(b) of the Act and rules 45, 54, 80, 81, 86,
87, 89, 90, and 91 under the Act.
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\1\ Cinergy has two direct, wholly owned domestic retail public
utility companies--The Cincinnati Gas & Electric Company (``CG&E'')
and PSI Energy, Inc. (``PSI''). CG&E has four direct, wholly owned
domestic retail public utility companies--The Union Light, Heat and
Power Company (``ULH&P''), Lawrenceburg Gas Company
(``Lawrenceburg''), The West Harrison Gas and Electric Company
(``West Harrison'') and Miami Power Corporation (``Miami Power'').
Through these subsidiaries, Cinergy provides retail electric service
in north central, central and southern Indiana and retail electric
and gas service in the southwestern portion of Ohio and adjacent
areas of Indiana and Kentucky.
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Cinergy requests authorization for its domestic nonutility
subsidiaries to enter into service agreements with Cinergy's utility
subsidiaries under which the nonutility subsidiaries may provide a
range of services to the utility affiliates, and vice versa,\2\ priced
at ``cost'' as determined under rule 91 of the Act. Cinergy requests
authorization for each of its domestic nonutility subsidiaries,
including those formed after the date of the requested authorization,
but excluding ``foreign utility companies'' \3\ and ``exempt
telecommunications companies'' \4\ (each, a ``Nonutility Company'') to
enter into a separate but substantially similar contract (``Service
Agreement'') with each of Cinergy's utility subsidiaries.
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\2\ Services rendered under the proposed service agreements by
the utility subsidiaries to the nonutility affiliates are exempt
from prior Commission approval by virtue of rule 87(b)(1) under the
Act. Accordingly, Cinergy does not seek Commission authorization for
those service transactions, which are an integral aspect of the
proposed contracts.
\3\ Foreign utility company (``FUCO'') is defined in section 33
of the Act.
\4\ Exempt telecommunications company (``ETC'') is defined in
section 34 of the Act.
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CG&E, an Ohio electric and gas utility company, and PSI, an Indiana
electric and gas utility company, are Cinergy's two principal utility
subsidiaries. CG&E is subject to state utility regulation by the Public
Utilities Commission of Ohio (``Ohio Commission'') and PSI is subject
to state utility regulation by the Indiana Utility Regulatory
Commission (``Indiana Commission''). Under provisions regarding
affiliate contracts contained in settlement agreements dating from
Cinergy's acquisition of CG&E and PSI in 1994,\5\ CG&E and PSI
submitted identical proposed forms of Service Agreements to the Ohio
Commission and the Indiana Commission staff in August 1998 for their
review prior to review by the
[[Page 17699]]
Commission. In late January 1999 the Ohio Commission and the Indiana
Commission staff completed their review and, based upon certain
modifications made to the CG&E Service Agreement and assurances
regarding certain costs that may arise under the PSI Service Agreement,
cleared the CG&E and PSI Service Agreements for filing with the
Commission.\6\
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\5\ These merger-related settlement agreements with the Ohio
Commission and the Indiana Commission (and other interested
parties), as well as conditions agreed to by Cinergy in connection
with related merger proceedings before the Kentucky Public Service
Commission, were noted by the Commission in its order approving the
acquisition of CG&E and PSI by Cinergy and related transactions. See
HCAR No. 26146 (October 21, 1994).
\6\ Cinergy states that, concurrently with the filing of this
application with the Commission, PSI is submitting the proposed PSI
Service Agreement to the Indiana Commission. According to Cinergy,
that submission was not to initiate any proceeding before the
Indiana Commission and did not seek any approval or other action by
the Indiana Commission (beyond the clearance previously issued by
its staff).
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Cinergy states that the proposed Service Agreements with the
utility subsidiaries of CG&E--ULH&P, Lawrenceburg, West Harrison and
Miami Power (collectively with CG&E and PSI, the ``Operating
Companies'')--do not require prior state commission review. According
to Cinergy, except in regard to prior state commission review of
amendments, the proposed Service Agreement for CG&E utility subsidiary
conforms in all material respects to the CG&E Service Agreement,
including the additional protections incorporated as a result of the
Ohio Commission's review.
Cinergy Investments, Inc., a direct, wholly owned Nonutility
Subsidiary of Cinergy (``Cinergy Investments''), holds interests in all
of the Nonutility Companies, except for certain minor interests held by
CG&E and PSI.\7\ At December 31, 1998, Cinergy Investments had 11
direct wholly owned subsidiaries: Cinergy-Cadence, Inc., an ``energy-
related company'' within the meaning of Rule 58 under the Act (``Rule
58 Company'') which has a one-third ownership interest in a Rule 58
Company, Cadence Network LLC, which markets various energy management
services to multi-site retail establishments; Cinergy Capital &
Trading, Inc., a Rule 58 Company engaged in energy marketing and
trading that has eight subsidiaries, each engaged in energy marketing
or ownership or operation of exempt wholesale generators, \8\ Cinergy
Communications, Inc., an ETC; Cinergy Engineering, Inc., a Rule 58
Company engaged in utility-related engineering and other technical
services; Cinergy-Centrus, Inc., an ETC; Cinergy-Centrus
Communications, Inc., an ETC that holds a one-third ownership interest
in Centrus LLP, also an ETC; Cinergy Resources, Inc., a Rule 58 Company
engaged in energy marketing and trading; Cinergy Solutions, Inc.,\9\
which, together with its 12 partly and wholly owned subsidiaries,
primarily markets energy management services and engages in
development, ownership and operation of district cooling and heating
systems and qualifying facilities under the Public Utility Regulatory
Policies Act of 1978, principally through a joint venture with a non-
affiliate, Trigen Energy Corporation; Cinergy Supply Network, Inc., a
Rule 58 Company, which engages in utility materials brokering services
and, through its one-third-owned Rule 58 Company, Reliant Services,
LLC, proposes to engage in underground utility facilities location and
construction services; Cinergy Technology, Inc., which is engaged in
commercialization of utility technologies and related investments;\10\
and Enertech Associates, Inc., an inactive Rule 58 Company.
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\7\ CG&E has two nonutility subsidiaries--Tri-State Improvement
Company, which acquires and holds property in support of the
businesses of CG&E and its utility subsidiaries, and KO Transmission
Company, a gas pipeline company. CG&E also holds limited partnership
interests in several local venture capital and community development
funds. PSI has one nonutility subsidiary, South Construction
Company, which holds title to real estate not used and useful in
PSI's business. PSI also holds limited partnership interests in
several local venture capital and community development funds.
Cinergy has pending a request in Commission File No. 70-8427 for an
order releasing Commission jurisdiction over Cinergy's continued
retention, through CG&E and PSI, of these nonutility businesses and
interests.
\8\ Exempt wholesale generator is defined in section 32 of the
Act.
\9\ Cinergy Solutions, Inc. was formed under Commission order
dated February 7, 1997 (HCAR No. 26662).
\10\ Cinergy has pending a request in Commission File No. 70-
8427 for an order releasing Commission jurisdiction over Cinergy's
continued retention of this entity.
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In general, the Service Agreements authorize the provision of
services, including loans of employees, from the Operating Companies to
the Nonutility Companies, and from the Nonutility Companies to the
Operating Companies, priced at ``cost.'' More specifically, upon
receipt by a party to the Service Agreement of a written request for
specified services, including, if applicable, the use of any related
equipment, facilities, properties or other resources (``Services''),
the receiving party would provide the requested Services if in its sole
discretion it can do so without impairing its normal business
operations. Services may include, but are not limited to, engineering
and construction; operations and maintenance; equipment testing;
information services; monitoring, surveying, inspecting, constructing,
locating and marking of overhead and underground utility facilities;
meter reading; materials management; vegetation management; and
marketing and customer relations. In addition to the exclusion of
transactions involving affiliated ETCs and FUCOs, affiliate
transactions involving sales, leases, or other transfers of assets,
goods, energy commodities (including electricity, gas, coal and other
combustible fuels) or thermal energy products are outside the scope of
the Service Agreements.
Any loans of employees by the company providing Services also would
be at the service provider's sole discretion. While performing work on
behalf of the client company, any loaned employees would be under its
supervision and control, and the client company would be responsible
for their actions.
All service requests would be in writing consistent with the form
of service request appended to the Service Agreement. Each service
request must identify the client company and proposed service provider,
be authorized by an appropriate individual at both the client company
and the service provider, include a detailed description of the
proposed services and estimated costs, and specify the scheduled start
date and completion date. In addition, all Services would be assigned
to applicable activities, projects, programs or on other appropriate
bases to enable specific work to be properly assigned. The client
company may amend service requests from time to time, subject to
certain conditions.
All Services would be rendered at the full cost, as computed in
accordance with applicable rules, regulations and accounting standards,
including rules 90 and 91 under the Act. As soon as practicable after
the close of each month, any company providing Services would provide
to each client company a statement reflecting the billing information
necessary to identify the costs charged for that month. The client
company is required to pay all amounts billed within 30 days of receipt
of the billing statement.
The sole and exclusive responsibility of a company providing
Services for any asserted deficiency would be to correct or repair the
deficiency or re-perform the Services, at no additional cost to the
client company. The service provider disclaims any additional
warranties or remedies, and each client company agrees to accept
Services on that basis. In addition, any company receiving Services
agrees to indemnify the company providing those Services (including
each of its officers, directors, employees and agents) from any losses,
liabilities or claims arising from or in connection with the provision
of the
[[Page 17700]]
Services. The indemnity applies regardless of negligence, willful
misconduct, or breach of warranty by the company that provided the
Services or any of its officers, directors, employees or agents.
Any amendment to a Service Agreement must be in writing executed by
all of the parties. In addition, the CG&E and PSI Service Agreements
(but not the form of Service Agreement for CG&E's utility subsidiaries)
provide that any amendment to either of those Service Agreements,
before being submitted to the Commission for its review, must first be
submitted to the Ohio Commission and the Indiana Commission staff for
their review (and submitted to certain other interested parties for
informational purposes). As a result, the Ohio Commission and Indiana
Commission staffs have effective veto power over any proposed
amendment. Cinergy is precluded from seeking Commission approval of the
contract or amendment, or must withdraw it, and may not put it into
effect with respect to CG&E or PSI, if the Ohio Commission or Indiana
Commission staff Disapprove it or find it unreasonable.
Additional Nonutility Companies may become parties to the Service
Agreement after the original execution by executing appropriate
signature pages. In the absence of any changes to the terms of the
Service Agreement, merely adding new Nonutility Companies as
signatories would not be considered an amendment, including for
purposes of any prior state review.
The provision of Services would in all cases, be subject to any
limitations or restrictions contained in any applicable current or
future orders or authorizations, statutory provisions, rules or
regulations, tariffs, or agreements of regulatory or governmental
agencies having jurisdiction over the parties to the Service Agreement,
including the Commission, the applicable state commission and the
Federal Energy Regulatory Commission. To the extent, if any, that at
any time any provision of the Service Agreement conflicts with any
limitation or restriction of any regulatory agency, the limitation of
restriction would control.
Northeast Utilities, et al. (70-9463)
Northeast Utilities (``NU''), 174 Brush Hill Avenue, West
Springfield, Massachusetts 01090-0010, a registered holding company,
and its service company subsidiary, Northeast Utilities Service Company
(``NUSCO''), have filed an application-declaration under sections 6(a),
7, 9(a), 10 and 12(c) of the Act and rules 42 and 54 under the Act.
NU proposes to adopt a stockholder rights plan (``Plan'') and to
enter into a related Rights Agreement (``Agreement'') with NUSCO,
acting as transfer agent, to implement the Plan. Under the Plan, NU's
Board of Trustees (``Board'') proposes to declare a dividend of one
right (``Right'') for each outstanding share of NU common stock, $5.00
par value (``Common Stock''). The dividend will be payable to
stockholders of record on the fifth business day after the Commission
has issued an order requested in this filing (``Record Date''). Each
Right would entitle the holder to purchase one share of Common Stock at
a price of $65.00 per share, subject to adjustment (``Purchase
Price'').
Initially, the Rights may only be traded together with the Common
Stock certificates that are outstanding on the Record Date. The Rights
may not be exercised until the Distribution Date, which is defined in
the Agreement as the earlier of two dates. The first is ten days after
the first public announcement that any person or group has acquired
beneficial ownership of fifteen percent or more of Common Stock
(``Acquiring Person''), without Board approval (``Acquisition Event'').
The second is ten business days (unless extended by the Board) after
any person or group has commenced, or announced an intent to make, a
tender or exchange offer which would, upon its consummation, result in
the person or group becoming an Acquiring Person (this event, together
with an Acquisition Event, ``Triggering Events''). On the occurrence of
either Triggering Event, each Right will be evidenced by a Right
Certificate, which may then be traded independently of the Common
Stock.
In the event that a person becomes an Acquiring Person, Right
holders will have the right to receive Common Stock (or, in certain
circumstances, cash, property, other NU securities or a reduction in
the Purchase Price) having a value equal to two times the effective
Purchase Price (``Discount Purchase Price''). If, after the
Distribution Date, NU is acquired by another person, the Common Stock
is changed into shares of another person, or fifty percent of NU's
consolidated assets or earning power are sold or transferred to another
person (in each case, a ``Surviving Person''), each Right holder may
exercise a Right and receive for each Right the common stock of the
Surviving Person at the Discount Purchase Price. If a Triggering Event
occurs, all Rights that are, were or subsequently become beneficially
owned by an Acquiring Person, and certain other related persons, become
null and void.
NU may redeem the Rights, as a whole, at an adjustable price of
$.001 per Right, at any time prior to the close of business on the
tenth day after the date that any person has become an Acquiring
Person. At any time after any person or group becomes an Acquiring
Person and before any person or group, other than NU and certain
related entities, becomes the beneficial owner of fifty percent or more
of the outstanding shares of Common Stock, the Board may direct the
exchange of shares of Common Stock for all or any part of the Rights.
The exchange would be at a rate of one Right per share of Common Stock
or the equivalent in other NU securities or assets.
For the Commission, by the Division of Investment Management,
under delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 99-8968 Filed 4-9-99; 8:45 am]
BILLING CODE 8010-01-M
