[Federal Register Volume 61, Number 77 (Friday, April 19, 1996)]
[Notices]
[Pages 17333-17336]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9635]
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SECURITIES AND EXCHANGE COMMISSION
[Release No.35-26503]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
April 12, 1996.
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 May 6, 1996, 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.
Central and South West Corp., et al. (70-8469)
Central and South West Corporation (``CSW''), a registered holding
company, CSW Energy, Inc. (``CSW Energy''), a wholly-owned non-utility
subsidiary company of CSW, and four special-purpose, wholly-owned
subsidiary companies of CSW Energy--CSW Sweeny GP, Inc. (``Sweeney GP
I''), CSW Sweeny GP II, Inc. (``Sweeney GP II''), CSW Sweeny LP, Inc.
(``Sweeny LP I''), and CSW Sweeny LP II, Inc. (``Sweeny LP II'')--all
of 1616 Woodall Rodgers Freeway, P.O. Box 660164, Dallas, Texas, 75202,
have filed a post-effective amendment, under sections 6, 7, 9(a), 10,
12(b) and 12(c) of the Act and rules 42, 43, 45, and 51 thereunder, to
an application-declaration filed under sections 6, 7, 9(a), 10, and
12(b)( of the Act and rules 45 and 51 thereunder.
By order dated December 9, 1994 (HCAR No. 26184) (``Order''), CSW
and CSW Energy were authorized to invest in and develop, construct,
own, and operate qualifying congeneration facility--the Sweeny
Congeneration Project (``Project'')--through a special purpose limited
partnership, the Sweeny Generation Limited Partnership
(``Partnership''). CSW Energy was authorized to invest in the
Partnership through several general and limited partnership--Sweeney GP
I, Sweeney GP II, Sweeny LP I and Sweeny LP II (``Sweeny
Subsidiaries'').
The Order authorized CSW Energy and the Partnership to incur up to
$20 million in development expenses for the Project (``Development
Expenses''), which would be funded by equity contributions, loans, or
open account advances from CSW to CSW Energy, from CSW Energy to the
Sweeny Subsidiaries, and from the Sweeny Subsidiaries to the
Partnership.
CSW, CSW Energy, and the Sweeny Subsidiaries (``Applicants'') now
purpose (i) to obtain third-party construction and term financing, of
up to $250 million, through a credit facility (``Credit Facility'');
(ii) to provide advances (``Advances'') to the Partnership in an amount
not to exceed $250 million in the event construction financing has not
been secured as of the commencement of construction; (iii) to obtain or
arrange for irrevocable standby letters of credit (``Letters'') and a
revolving working capital credit line of up to $50 million; and (iv) to
provide up to $300 million in equity support to the Project.
Applicants propose that the Partnership obtain the Credit Facility
through one or more third-party lending institutions (``Project
Lender''). The Credit Facility would include a construction loan of up
to $250 million. The construction loan would have a term of up to five
years and thereafter would be converted to, or refinanced by, a term
loan or a combination of a term loan and equity contributions from CSW
Energy and one or more non-associate companies (``New Partner'') prior
to or upon the completion of the Project, which is expected to occur
before December 31, 2000.
It is anticipated that the term loan would be repaid over a term of
up to 25 years. The interest cost to the Applicants under the Credit
Facility is not anticipated to exceed the prime
[[Page 17334]]
commercial lending rate of Mellon Bank in effect from time to time plus
4%.
To meet project milestones and completion deadlines, the
Partnership might be required to begin construction prior to
acquisition of the third-party construction financing. Thus CSW or CSW
Energy, directly or indirectly through the Sweeny Subsidiaries, might
make the Advances in the form of loans, open account advances or
additional contributions to the Partnership in an aggregate amount not
to exceed $250 million.
The Advances would be used for construction and operation of the
Project. If the Advances are in the form of additional contributions,
then the Advances would be repaid out of the proceeds of the Credit
Facility or out of revenues from the Project. If the Advances are made
in the form of loans or open account advances, then the Advances would
be made on the same terms as the loans or open account advances which
have been made in respect of the Development Expenses. It is
anticipated that the Advances would be refinanced by the Credit
Facility or the equity contribution of the New Partner.
Independent of the Credit Facility and Advances, CSW and CSW Energy
request authorization to issue corporate guaranties (``Guaranties'')
and to arrange with a third-party lender (``Issuer'') for the Letters
in an aggregate amount not to exceed $50 million. CSW, CSW Energy, the
New Partner or the Partnership would be the account party (``Account
Party'') under the Letters.
The Guaranties and Letters would support certain payment
obligations of the Partnership required by third parties under project
documents. The Letters would be issued for renewable terms not to
exceed 10 years for the duration of the project documents to which such
Letters relate. Funds drawn under the Letters would be reimbursable to
the Issuer by the Account party and, upon such reimbursement, the
Letters might be reinstated to the face amount. Fees payable to the
Issuer by the Account Party for the Letters would not exceed 2% per
annum of the face amount of the Letters, and the interest rate payable
per annum on unreimbursed funds drawn under the Letters would not
exceed the prime rate of the Issuer plus four percentage points.
Finally, the Project Lender might request that CSW, CSW Energy or
the New Partner provide some assurance that up to $300 million of
equity contributions will be made to the Project in the form of an
equity support agreement, guarantee or letter of credit. Such equity
support agreement, guarantee or letter of credit shall be substantially
on the terms of, and reimbursable in the manner of, the Credit
Facility, Advances, Guarantees or Letters. Any funds drawn under such
equity support agreement, guarantee or letter of credit would be
applied to amounts outstanding under the Credit Facility and would not
increase the exposure of the Applicants above the amount of the Credit
Facility.
Jersey Central Power & Light Company, et al. (70-8805)
Jersey Central Power & Light Company (``JCP&L''), 300 Madison
Avenue Morristown, New Jersey 07960, Metropolitan Edison Company
(``Met-Ed''), 2800 Pottsville Pike, Reading, Pennsylvania 19640, and
Pennsylvania Electric Company (``Penelec''), 2800 Pottsville Pike,
Reading, Pennsylvania 19640, all of which are electric public utility
subsidiaries of General Public Utilities Corporation (``GPU''), a
registered holding company, and GPU Service Corporation (together with
JCP&L, Met-Ed and Penelec, ``Applicants''), 100 Interspace Parkway,
Parsippany, New Jersey 07054, a service company subsidiary of GPU, have
filed an application under sections 9(a) and 10 of the Act.
Applicants propose to provide (i) meter reading, billing and
collection services, and customer call-center services (``Services'')
for non-affiliated water and gas utility entities, including the
utility agencies of cities, municipalities, counties and governmental
entities (``Non-Affiliated Utilities''); (ii) billing and collection
and call-center services (``Billing and Marketing Services'') to other
businesses such as commercial service providers and retailers (``Non-
Utility Businesses''); and (iii) consolidated electric, water and gas
bills, consolidated remittance processing of electric, water and gas
utility accounts and consolidated account services (``Consolidated
Services'') for both Non-Affiliated Utilities and Non-Utility
Businesses.
Applicants propose to provide the Services, Billing & Marketing
Services, and the Consolidated Services (collectively, the ``Proposed
New Services'') whether or not the Non-Utility Businesses or the
customers of the Non-Affiliated Utilities are also customers of JCP&L,
Met-Ed or Penelec. Agreements for the provision of the Proposed New
Services will be negotiated and entered into on an arm's length basis.
Applicants propose to offer the Proposed New Services described
herein from time to time through December 31, 2001; however, it is
proposed that the term of any contracts to provide such services which
are entered into before that date may extend beyond that date in
accordance with the terms of such contracts.
Central and South West Corporation, et al. (70-8809)
Central and South West Corporation (``CSW''), a registered holding
company, CSW International, Inc. (``CSWI''), and CSW Energy, Inc.
(``Energy''), both wholly-owned nonutility subsidiary companies of CSW
(collectively ``Applicants''), all located at 1616 Woodall Rodgers
Freeway, Dallas, Texas 75202, have filed an application-declaration
under sections 6(a), 7, 12(b), 32 and 33 of the Act and rules 45, 53,
and 54 thereunder.
Since 1990, CSW, directly or through Energy, has engaged in
development activities (including preliminary studies, research,
investigation and consulting) pertaining to the construction (subject
to further Commission authorization) of independent power facilities,
including, among other things, exempt wholesale generators (``EWGs''),
as defined in section 32 of the Act. Since 1994, CSW, directly or
through CSWI, has engaged in development and investment activities with
respect to, among other things, EWGs and foreign utility companies
(``FUCOs''), as defined in section 33 of the Act.
CSW is currently authorized under the terms of orders and
supplemental orders issued under File Nos. 70-7758 [HCAR Nos. 25162
(September 28, 1990), 25414 (November 22, 1991), 25728 (December 31,
1992), and 26417 (November 28, 1995)], 70-8205 [HCAR Nos. 25866 (August
6, 1993) and 26416 (November 28, 1995)], and 70-8423 [HCAR Nos. 26156
(November 3, 1994) and 26383 (September 27, 1995)] (collectively, the
``Financing Orders'') to finance the operations of CSW, Energy and
CSWI, and their respective subsidiaries, by issuing and selling debt
and equity securities and by issuing guarantees of the obligations of
certain subsidiaries.\1\
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\1\ The order and supplemental order in File No. 70-8423 [HCAR
Nos. 26156 (November 3, 1994) and 26383 (September 27, 1995)] also
authorize CSW, directly or through CSWI or their respective
subsidiaries, to provide a variety of services (including design,
construction, engineering, operation, maintenance, management,
administration, employment, tax, accounting, economic, financial,
fuel, environmental, communications, energy conservation, demand
side management, overhead efficiency, utility performance and
electronic data processing, and software development and support
services in connection therewith) to EWGs, FUCOs and certain foreign
electric utility enterprises that are not EWGS or FUCOs.
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[[Page 17335]]
Under the terms of the Financing Orders, CSW, among other things,
may use the proceeds of common stock sales and borrowings to finance
the acquisition of the securities of, or other interests in, one or
more EWGs or FUCOs, as defined in sections 32 and 33 of the Act, and
may issue guarantees of the obligations of such entities, provided that
the sum of the guarantees at any time outstanding and the net proceeds
of common stock sales and borrowings by CSW that may at any time be
used by CSW to fund investments in EWGs or FUCOs (or in Energy, CSWI or
project parents to facilitate investments in EWGs or FUCOs) shall not,
when added to CSW's ``aggregate investment'' (as defined in rule 53(a)
under the Act) in all EWGs and FUCOs, exceed 50% of CSW's
``consolidated retained earnings'' (as defined in rule 53(a)). This
investment limitation is consistent with the investment limitation
contained in rule 53(a)(1).
Applicants request the Commission to modify this limitation, and
exempt them from the requirements of rule 53(a)(1), to permit CSW to
use the net proceeds of common stock sales and borrowings to acquire,
directly or indirectly, the securities of, or other interests in, EWGs
and FUCOs, and to issue guarantees of the obligations of such entities
(all as authorized by and in accordance with the terms of the Financing
Orders) in an aggregate amount that, when added to CSW's direct and
indirect ``aggregate investment,'' as defined, in all EWGs and FUCOs,
would not at any time exceed 100% of CSW's ``consolidated retained
earnings,'' as defined. The current amount of CSW's ``aggregate
investment,'' as defined, in EWGs and FUCOs (approximately $825 million
as of February 1, 1996) represents approximately 45% of its
``consolidated retained earnings,'' as defined (approximately $1.85
billion as of December 31, 1995). Increasing this limitation as
Applicants propose would allow financing of additional investments in
EWGs and FUCOs of approximately $1.022 billion.\2\
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\2\ Applicants note that additional investments in EWGs and
FUCOs totaling approximately $1.215 billion are contemplated and
acknowledge that the additional financing authority requested will
not be sufficient, as of December 31, 1995, to enable CSW to make
investments in all EWG and FUCO projects it is presently
investigating or developing. Applicants anticipate, however, that
such limitations will be abated to the extent that the development
of all projects currently under consideration is not consummated and
that CSW's ``consolidated retained earnings,'' as defined, increase
prior to consummation of the contemplated investments.
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Applicants state that CSW is committed to making additional
investments in EWGs and FUCOs, primarily because (1) for over ten years
there has been, and for at least the next three years there is
projected to be, no need for CSW to make new equity investment in any
of its utility subsidiaries; (2) acquisitions of EWGs and FUCOs give
CSW the opportunity to continue to grow through reinvestment of
retained earnings in an industry sector that CSW has decades of
experience in, while at the same time diversifying overall asset risk;
and (3) CSW has purposely invested in utility systems in foreign
countries where deregulation of and competition in retail and wholesale
electricity markets is more fully developed than in the United States
in order to gain valuable experience with deregulated markets that will
enhance CSW's ability to make its core domestic utility operations more
competitive and efficient in the future as the United States moves
toward deregulation and increased competition. Applicants also describe
comprehensive procedures that CSW has established to identify and
address risks involved in EWG and FUCO investments.
CSW states that the use of financing proceeds and guarantees to
make investments in EWGs and FUCOs to the proposed increased level will
not have a substantial adverse impact on the financial integrity of the
CSW system or an adverse impact on any utility subsidiary of CSW or its
customers or on the ability of the affected state commissions to
protect such customers. Applicants also state that CSW will not seek
recovery through higher rates to its utility subsidiaries' customers in
order to compensate CSW for any possible losses that it may sustain on
investments in EWGs and FUCOs or for any inadequate returns on such
investments.
General Pubic Utilities Corporation, et al. (70-8817)
General Pubic Utilities Corporation (``GPU''), 100 Interpace
Parkway, Parsippany, New Jersey 07054, a registered holding company,
and its subsidiary companies, Jersey Central Power & Light Company
(``JCP&L''), 300 Madison Avenue, Morristown, New Jersey 07962,
Metropolitan Edison Company (``Met-Ed''), P.O. Box 16001, Reading,
Pennsylvania 19640, Pennsylvania Electric Company (``Penelec''), P.O.
Box 16001, Reading, Pennsylvania 19640, and Energy Initiatives, Inc.
(``EI''), One Upper Pond Road, Parsippany, New Jersey 07054
(collectively, GPU, JCP&L, Met-Ed, EI and Penelec, ``ENCON
Applicants''), and GPU Service Corporation (``Service''), 100 Interpace
Parkway, Parsippany, New Jersey 07054, have filed an application-
declaration under sections 9(a), 10, 12(b) and 13(b) of the Act and
rules 45, 90 and 91 thereunder.
Pursuant to state authorizations, JCP&L, Met-Ed and Penelec
currently provide certain engineering and consulting services to their
own electric utility customers within their respective service
territories as part of their utility businesses. These previously
authorized activities relate to what GPU calls conditioned power
services, which are designed to prevent, control or mitigate the
adverse effects of power disturbances in a customer's electrical system
to ensure the power quality required by customers. particularly for
their sensitive electronic equipment.
The ENCON Applicants now propose to engage in the provision of
energy-related engineering services, as well as technical and
analytical consulting services in connection with energy-related
matters. Such activities may also entail the marketing, installation,
operation and maintenance of various products and systems, designed to
implement the energy management, demand-side management and load
management solutions recommended in the course of providing these
services (collectively, referred to as ``ENCON Services'').
Specifically, ENCON Services will, include the following
activities: (1) The identification of energy and other resource (water,
labor, maintenance, materials, etc.) cost reduction and/or efficiency
opportunities; (2) the design of facility and process modifications
and/or enhancements to realize such opportunities; (3) the management
of, or the direct construction or installation of energy conservation
or energy efficiency equipment; (4) the training of client personnel in
the operation of equipment; (5) the maintenance of energy systems; (6)
the design and/or management of and/or the direct construction or
installation of new and retrofit heating, ventilating and air
conditioning, electrical and power systems, motors, pumps, lighting,
waster and plumbing systems, and related structures, to realize energy
and other resource efficiency goals or to otherwise meet a customer's
energy needs; (7) system commissioning (i.e. observing the operation of
the installed system to insure that it meets the design specifications;
(8) the reporting of system results; (9) the design of energy
conservation programs; (10) the implementation of energy conservation
programs; (11) the provision of conditioned power services and related
[[Page 17336]]
equipment; and (12) other similar or related activities.
The ENCON Applicants propose to: (1) Invest, through December 31,
1998, up to an aggregate principal amount of $25 million in the
engineering and consulting business; (2) expand the scope of their
engineering and consulting services beyond conditioned power services
so as to encompass the ENCON Services listed above; and (3) provide
such ENCON Services both within and beyond the boundaries of the
service territories of JCP&L, Met-Ed and Penelec.
One or more of the ENCON Applicants have been engaged in
discussions with non-affiliated engineering and consulting companies
(``ENCONCo'') which are actively providing ENCON Services (``ENCON
Business''). One or more the ENCON Applicants may acquire an interest
in the ENCON Business directly or through: (1) The acquisition of
securities of an ENCONCo; (2) new wholly owned or partly owned
subsidiary companies to be formed (each, an ``ENCON Subsidiary''); and/
or (3) a joint venture involving any of the foregoing and an ENCONCo or
its affiliate (each, an ``ENCON JV''). Notwithstanding the foregoing,
GPU will not acquire a direct interest in the ENCON Business other than
through the acquisition of securities of an ENCONCo.
The ENCON Applicants request authorization for: (1) EI, ENCON
Subsidiaries or ENCON JVs to provide goods and services to JCP&L, Met-
Ed and Penelec; and (2) Service to provide services to ENCON
Subsidiaries and ECON JVs at cost. Each ENCON Applicant, ENCON
Subsidiary and ENCON JV will maintain separate financial records
relating to the ENCON Business.
General Public Utilities Corporation, et al. (70-8827)
General Public Utilities Corporation (``GPU''), 100 Interpace
Parkway, Parsippany, New Jersey 07054, a registered public utility
holding company, and its subsidiary companies Jersey Central Power &
Light Company (``JCP&L''), 300 Madison Avenue, Morristown, New Jersey
07960, Metropolitan Edison Company (``Met-Ed'') and Pennsylvania
Electric Company (``Penelec''), each at P.O. Box 16001, Reading,
Pennsylvania 19640, Energy Initiatives, Inc. (``EII''), One Upper Pond
Road, Parsippany, New Jersey 07054, and GPU Service Corporation
(``GPUSC''), 100 Interpace Parkway, Parsippany, New Jersey 07054,
(collectively, ``Applicants'') have filed an application-declaration
under sections 9(a), 10, 12 and 13 of the Act and rules 90 and 91
thereunder.
GPU, JCP&L, Met-Ed, Penelec and EII (each, a ``TPS Applicant'')
propose to provide power to the telecommunications industry. JCP&L has
been engaged in discussions with non-affiliated telecommunications
companies (each, a ``Telco'') concerning the Telco's need for a
mechanism to deliver power on a reliable basis to the local
distribution points disbursed throughout the Telco's telecommunications
network. These local distribution points, known as optical network
units (``ONUs''), may be ground-based or located on utility poles, with
each ONU serving a number of customer locations, depending upon the
particular configuration. The ONUs, which will replace the Telco's
existing wire-based power supply system, convert the lightwave signal
which travels over the Telco's fiber optic network into an electrical
signal which travels down a coaxial cable into the customer's premises
and delivers the ultimate telecommunications services. JCP&L has
developed an ONU power service unit (``ONU Power Unit'') which would be
installed on the same utility pole as an ONU. The ONU Power Unit would
draw power from the existing electric utility wire, convert it to the
direct current required by the ONU and deliver such converted power to
the ONU. The ONU Power Unit would also contain a battery backup to
assure reliable service, as well as a communications device to allow
remote monitoring.
The TPS Applicants propose that ONU Power Units be marketed,
installed, operated and maintained in one or more Telco's service
territories (which may overlap, in whole or in part, the boundaries
JCP&L's, Met-Ed's or Penelec's respective service territories) and in
the service territories of other telecommunications providers,
regardless of location. In addition, one or more of the TPS Applicants
may also seek to develop, market, install, operate and maintain other
products and systems designed to address the power requirements of
telecommunications providers. Such other products and systems may
employ technology comparable to the ONU Power Unit or other
technologies, such as photovoltaics, fuel cells, wind and flywheels. In
addition, such activities may include providing other
telecommunications infra-structure services which may not utilize any
of these technologies. (These telecommunications power services
activities are collectively referred to as the ``TPS Business.'')
It is proposed that one or more of the TPS Applicants may acquire
an interest in the TPS Business either directly, through the
acquisition of securities of a Telco or otherwise, or, alternatively,
through new wholly-owned or partly-owned subsidiary companies (each, a
``TPS Subsidiary''), or through a joint venture involving any of the
foregoing and a Telco or a Telco affiliate (each, a ``TPS JV''). GPU
states that, notwithstanding the foregoing, GPU will not acquire a
direct interest in the TPS Business other than through the acquisition
of securities of a Telco.
It is also requested that the Commission authorize the provision of
goods and services relating to the TPS Business: (1) to JCP&L, Met-Ed
and Penelec by EII or any TPS Subsidiaries or TPS JVs; and (2) to any
TPS Subsidiaries and TPS JVs by GPUSC, all of which goods and services
will be provided at cost in compliance with rules 90 and 91 under the
Act.
It is presently expected that the aggregate amount of the TPS
Applicants' investment in the TPS Business will not exceed $30 million
through December 31, 1998.
The proposal to acquire securities of a Telco or any TPS
Subsidiaries or TPS JVs shall expire upon the first to occur of (i)
December 31, 1998 and (ii) the adoption by the Commission of Rule 58
(HCAR No. 35-26313, June 20, 1995) or such other rule, regulation or
order as shall exempt the transactions as herein proposed from section
9(a) of the Act.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-9635 Filed 4-18-96; 8:45 am]
BILLING CODE 8010-01-M
