[Federal Register Volume 61, Number 92 (Friday, May 10, 1996)]
[Notices]
[Pages 21508-21515]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11669]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26514]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
May 3, 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 28, 1996, 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 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.
Louisiana Power & Light Company (70-8487)
Louisiana Power & Light Company (``LP&L'' or ``Company''), 639
Loyola Avenue, New Orleans, Louisiana 70113, an electric public-utility
subsidiary company of Entergy Corporation, a registered holding
company, has filed a post-effective amendment to its application-
declaration under section 6(a), 7, 9(a) and 10 of the Act and rule 54
thereunder.
By order dated October 3, 1995 (HCAR No. 26387) (``Order''), the
Commission authorized, among other things, LP&L to issue and sell,
through December 31, 1997: (1) Directly or indirectly through a
subsidiary, not more than $610 million principal amount of its first
mortgage bonds (``Bonds''), debentures (``Debentures'') and preferred
securities of a subsidiary of LP&L to be issued in one or more new
series; and (2) collateral bonds in a total aggregate principal amount
of $75 million to secure certain tax-exempt bonds.
LP&L now proposes to issue and sell the Debentures either unsecured
or secured by certain LP&L assets, junior and subordinate to the first
lien (``Junior Lien'') of its Mortgage and Deed of Trust dated April 1,
1944, to Bank of Montreal Trust Company (``Mortgage''). In addition,
LP&L proposes that the Debentures may be secured by a pledge of first
mortgage bonds issued under the Mortgage.
The Debentures will be issued under either LP&L's Debenture
Indenture, Indenture for Debt Securities or its Subordinated Debenture
Indenture, (each, a ``Debenture Indenture''), as may be supplemented
from time to time. Debentures issued under the form of the Debenture
Indenture initially will be secured obligations of the Company,
entitled to the Junior Lien on the Company's assets. In connection with
the issuance of Debentures secured by the Junior Lien under such
Debenture Indenture, the Company may provide security for the holders
of such Debentures in the form of first mortgage bonds issued under the
Mortgage as it may be supplemented. Such first mortgage bonds would be
issued on the basis of unfunded net property additions and/or
previously-retired first mortgage bonds and delivered to the trustee
under such Debenture Indenture. The first mortgage bonds could be
issued in an amount equal to the principal amount of such Debentures
and bear interest at a rate of interest equivalent to the rate of
interest on such Debentures or bear no interest. These first mortgage
bonds would be separate and apart from the Bonds (proposed to be issued
and sold in an aggregate principal amount of not more than $610
million).
The Company's Amended and Restated Articles of Incorporation
(``Charter'') provide, for the benefit of holders of preferred
securities, restrictions on the amount of unsecured indebtedness issued
by the Company. As a result of these restrictions, the Company proposes
to issue Debentures secured by either the Junior Lien or a pledge of
first mortgage bonds in order that any such Debentures so issued would
not constitute unsecured debt for purposes of the Charter.
The Debenture Indenture under which the Company may issue
Debentures secured by the Junior Lien and/or such first mortgage bonds
provides for the amendment and restatement of such Debenture Indenture
in its entirety, without the consent of the holders of the Debentures
outstanding thereunder, to remove the Junior Lien and to release any
such collateral first mortgage bonds such that the Debentures would
become entirely unsecured obligations of the Company. Such an amendment
eliminating the Junior Lien would be subject to the following
conditions: (1) No event of default has occurred and is continuing
under the Debenture Indenture; and (2)(a) the Company's Charter has
been duly amended to eliminate the restrictions on the issuance of
unsecured indebtedness, (b) all preferred securities issued by the
Company and outstanding are paid, retired or redeemed, or (c) holders
of such preferred securities consent to amend the Company's Charter for
the purpose of eliminating such restrictions.
The Order also authorized LP&L to enter into arrangements to
finance or refinance pollution control facilities (``Facilities'')
through the issuance of tax-exempt revenue bonds up to an aggregate
principal amount of $65 million, including the possible issuance of an
irrevocable letter of credit from a bank (``Bank'') and/or pledge of
one or more series of first mortgage bonds up to an aggregate principal
amount of $75 million to be used as collateral for the tax-exempt
revenue bonds. As an alternative to the security provided by the Bank,
in order to obtain a more favorable rating on tax-exempt bonds and
consequently improve the marketability thereof, the Company may (a)
determine to provide an insurance policy for the payment of the
principal of and/or interest and/or premium on one or more series of
tax-exempt bonds, and/or (b) provide security for holders of tax-exempt
bonds and/or the Bank equivalent to the security accorded to (i)
holders of first mortgage bonds outstanding under the Company's
Mortgage by obtaining the authentication of and pledging one or more
new series of first mortgage bonds (``Collateral Bonds'') under the
Mortgage as it may be supplemented or (ii)
[[Page 21509]]
holders of Debentures outstanding under the Debenture Indenture that
are secured by the Junior Lien by obtaining the authentication of and
pledging one or more series of Debentures (the ``Collateral
Debentures'') under the Debenture Indenture.
The Collateral Bonds would be issued on the basis of unfunded net
property additions and/or previously-retired first mortgage bonds;
Collateral Debentures would be issued pursuant to the terms of a
Debenture Indenture. The Collateral Bonds or Collateral Debentures
would be delivered to the trustee under the Indenture and/or to the
Bank to evidence and secure the Company's obligation to pay the
purchase price of the Facilities and the Company's obligation to
reimburse the Bank under any reimbursement agreement.
The Collateral Bonds or Collateral Debentures could be issued in
several ways. First, if tax-exempt bonds bear a fixed interest rate,
the Collateral Bonds or Collateral Debentures could be issued in an
amount equal to the principal amount of such tax-exempt bonds and bear
interest at a rate equal to the rate of interest on such tax-exempt
bonds. Secondly, the Collateral Bonds or Collateral Debentures could be
issued in an amount equivalent to the principal amount of such tax-
exempt bonds plus an amount equal to interest on the Bonds for a
specified period. In such case, the Collateral Bonds or Collateral
Debentures would bear no interest. Thirdly, the Collateral Bonds or
Collateral Debentures could be issued in an amount equivalent to the
principal amount of such tax-exempt bonds or in such amount plus an
amount equal to interest on those Bonds for a specified period, but
carry a fixed interest rate that would be lower than the fixed interest
rate of the tax-exempt bonds. Fourthly, the Collateral Bonds or
Collateral Debentures could be issued in a principal amount equivalent
to the principal amount of tax-exempt bonds at an adjustable rate of
interest, varying with such tax-exempt bonds but having a ``cap'' (not
greater than 15%) above which the interest on Collateral Bonds or
Collateral Debentures could not rise.
Each series of the Collateral Bonds or Collateral Debentures that
bear interest would bear interest at a fixed interest rate or initial
adjustable interest rate not to exceed 15%. The maximum aggregate
principal amount of Collateral Bonds and Collateral Debentures that
would be issued is $75 million. The terms of the Collateral Bonds or
Collateral Debentures relating to maturity, interest payment dates, if
any, redemption provisions and acceleration will correspond to the
terms of the related tax-exempt bonds. Upon issuance, the terms of each
series of the Collateral Bonds or Collateral Debentures will not vary
during the life of such series except for the interest rate of any such
series that bears interest at an adjustable rate.
Northern States Power Company and Wisconsin Energy Corporation, et al.
(70-8833)
Northern States Power Company (``NSP''), 414 Nicollet Mall,
Minneapolis, Minnesota 55401, a combination electric and gas public
utility company incorporated in Minnesota and an exempt public utility
holding company its combination electric and gas public utility
subsidiary company incorporated in Wisconsin, Northern States Power
Company (``NSP-W''), 100 North Barstow Street, Eau Claire, Wisconsin
54703, and its nonutility subsidiary company, Northern Power Wisconsin
Corporation incorporated in Wisconsin (``New NSP''),\1\ 414 Nicollet
Mall, Minneapolis, Minnesota, and Wisconsin Energy Corporation
(``WEC''), an exempt public utility holding company incorporated in
Wisconsin, and its combination electric and gas public utility
subsidiary company incorporated in Wisconsin, Wisconsin Electric Power
Company (``WEPCO''), both located at 231 West Michigan Street,
Milwaukee, Wisconsin 53203 (together, ``Applicants''), have filed
jointly an application-declaration under sections 2(b), 3(a)(2), 4, 5,
6(a), 7, 8, 9, 10, 11, 12(b), 13(b), 32 and 33 of the Act and rules 42,
43, 45, 81, 83, 87, 88, 90 and 91 thereunder.
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\1\ New NSP has no operations and exists solely to facilitate
the proposed combination.
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The Applicants proposed to combine NSP and WEC (``Transaction'')
under the Agreement and Plan of Merger, dated April 28, 1995 and
amended and restated on July 26, 1995 (``Merger Agreement''). The
Merger Agreement is among NSP, WEC, New NSP and WEC Sub Corp. (``WEC''
Sub'').\2\ Generally, the Merger Agreement contemplates: (1) the
acquisition by WEC of all of the issued and outstanding common stock of
NSP; and (2) the acquisition by WEPCO of substantially all of the
assets of NSP-W. Following the Transaction, WEC will be renamed
Primergy Corporation (``Primergy'') and will register with the
Commission under section 5 of the Act.
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\2\ WEC Sub is a Wisconsin corporation that has no operations
and exists solely to facilitate the proposed combination and will
not exist legally at the time of consummation of the Transaction.
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Applicants and Background
NSP is engaged primarily in the generation, transmission and
distribution of electricity throughout a 30,000 square mile service
area. NSP provides electric utility service in South Dakota and
electric and gas utility service in Minnesota and North Dakota. NSP
purchases, distributed and sells natural gas to retail customers, and
transports customer-owned gas, in approximately 100 communities in this
area. Of the more than 2.5 million people served by NSP, the majority
are concentrated in the Minneapolis-St. Paul metropolitan area. As of
December 31, 1995, NSP provided electric utility service to
approximately 1,100,000 customers and gas utility service to
approximately 330,000 customers.
NSP has seven direct wholly owned subsidiaries that are engaged in
nonutility businesses. These subsidiaries are: (1) Viking Gas
Transmission Company, a natural gas transmission company operating in
Minnesota, Wisconsin and North Dakota; (2) Cenerprise, Inc., a natural
gas and eclectic power marketing and brokering company which also
provides energy conservation and management services and energy
products and services and which has several energy related businesses;
(3) Eloigne Company, affordable housing investment and development
company which has investments in a variety of low-income housing and
other projects; (4) First Midwest Auto Park, Inc., a company which owns
and operates a parking garage located next to NSP's headquarters; (5)
Cormorant Corporation, a company which engages in oil, gas, coal
lignite and uranium exploration and the acquisition of fuel resources;
(6) United Power & Land Company, a company which owns and hold, and
sometimes leases, real property which is generally surrounding or
adjacent to property owned and used by NSP in its regulated operations;
and (7) NRG Energy, Inc., a company that develops, builds, acquires,
owns and operates several non-regulated energy related businesses, owns
and operates certain resource recovery businesses and steam and chilled
water businesses, and through subsidiaries and affiliates, is involved
in a variety of independent power projects, energy-related services and
fuel enhancement and related projects and other nonutility businesses
both domestic and international.
NSP-W is engaged in the generation, transmission, and distribution
of electricity to: (1) Approximately 208,000 retail customers in an
area of approximately 18,900 square miles in northwestern Wisconsin;
(2) approximately 9,100 retail customers in an area of approximately
300 square miles in the western portion of the
[[Page 21510]]
Upper Peninsula of Michigan; and (3) to 10 wholesale customers in the
same general area. NSP-W purchases, distributes and sells to retail
customers or transports customer-owned natural gas in the same service
territory to approximately 68,200 customers in Wisconsin and 4,700
customers in Michigan.
NSP-W has two wholly owned subsidiaries. These subsidiaries are
Clearwater Investment, Inc., an affordable housing investment and
development company which has investments in a variety of low-income
housing and other projects, and NSP Lands, Inc., a company which is
currently developing for sale land owned by NSP-W. It also has a 78%
owned subsidiary, Chippewa & Flambeau Improvement Company, a company
which builds, maintains and operates dams and reservoirs on the
Chippewa and Flambeau Rivers in Wisconsin.
NSP common stock is listed on the New York Stock Exchange, Inc.
(``NYSE'') and the Chicago and Pacific Stock Exchanges. As of December
31, 1995, there were 68,175,934 shares of NSP common stock and
2,400,000 shares of NSP cumulative preferred stock outstanding. NSP-W
does not have any preferred stock outstanding and all of its common
stock is owned by NSP. On a consolidated basis, for the year ended
December 31, 1995, NSP's operating revenues were approximately $3.146
billion, of which approximately $2.401 billion were derived from
electric operations, approximately $414 million from gas operations and
approximately $331 million from other operations,. Also for the year
ended December 31, 1995, approximately 10.2% of NSP's consolidated
operating revenues were derived from nonutility businesses. In 1995,
NSP-W provided approximately 15.1% of NSP's consolidated operating
revenues. Consolidated assets of NSP and its subsidiaries as of
December 31, 1995 were approximately $6.229 billion, consisting of
$3.681 billion in net electric utility property, plant and equipment
($3.135 billion for NSP and $546 million for NSP-W); $376 million in
net gas utility property, plant and equipment ($320 million for NSP and
$56 million for NSP-W); and $2.172 billion in other corporate assets.
WEC, which will change its name to primer Corporation at the time
of the consummation of the Transaction, has one public utility
subsidiary, WEPCO. WEPCO is engaged in the business of generating,
transmitting, distributing and selling electric energy to approximately
955,616 customers as of December 31, 1995. Its service area spans
approximately 12,000 square miles in southeastern, including the
Milwaukee area, central and northern Wisconsin and in the Upper
Peninsula of Michigan and includes a population estimated at over
2,200,000. WEPCO also purchases, distributes and sells to retail
customers and transports customer-owned natural gas to approximately
357,030 customers as of December 31, 1995 in three distinct service
areas in Wisconsin: west and south of the City of Milwaukee, the
Appleton area and the Prairie du Chien area. The gas service territory,
which has an estimated population of over 1,100,000, is largely within
the electric service area of WEPCO. WEPCO also distributes and sells
steam supplied by its Valley Power Plant to approximately 473 space
heating and processing customers (as of December 31, 1995) in downtown
and near southside Milwaukee.
WEC's common stock (``Common Stock'') is listed on the NYSE. As of
December 31, 1995, there were 110,819,337 shares of WEC Common Stock
outstanding. WEC has no shares of preferred stock outstanding. All of
WEPCO's common stock is owned by WEC. As of December 31, 1995, there
were 304,508 shares of WEPCO preferred stock outstanding. WEPCO's
outstanding preferred stock will not be affected by the Transaction. On
a consolidated basis, for the year ended December 31, 1995, WEPC's
operating revenues were approximately $1.779 billion, of which
approximately $1.437 billion were derived from electric operations,
approximately $318 million from gas operations, approximately $15
million from steam operations and approximately $9 million from other
operations. Operating revenues from WEC's nonutility subsidiaries were
approximately one-half of 1% of WEC's consolidated total operating
revenues for the year ended December 31, 1995. Consolidated assets of
WEC and its subsidiaries as of December 31, 1995, were approximately
$4.561 billion, consisting of $3.907 billion in net electric utility
property, plant and equipment, $387 million in net gas utility
property, plant and equipment, $25 million in net steam utility
property, plant and equipment and $242 million in nonutility assets.
WEC has seven wholly owned nonutility subsidiaries devoted
primarily to stimulating economic growth in WEPCO's service area and to
capitalizing on diversified investment opportunities, all of which have
been formed under and pursuant to the requirements and policies of the
Wisconsin Holding Company Act. These subsidiaries are: (1) Badger
Service Company, a company which holds coal rights in Indiana; (2)
Minergy Corp., a company engaged in the business of developing and
marketing proprietary technologies designed to convert high volume
industrial and municipal wastes into value-added products and which
will build and operate a paper-sludge recycling facility; (3) WEC
Generation International Inc., a company which will investigate
investment opportunities and which has two, currently inactive,
international subsidiaries; (4) Wisconsin Michigan Investment
Corporation, a company which engages in investment and financing
activities which include advances to affiliated companies and
investments in financial instruments and partnerships developing
affordable housing and other businesses; (5) WISPARK Corporation, a
real estate development company which engages in all aspects of real
estate development and which holds investment and ownership positions
in a variety of real estate projects; (6) WISVEST Corporation, a
company which invests in energy-related activities and holds
investments in several energy-related companies; and (7) WITECH
Corporation, a company which provides venture capital and holds equity
and other positions in a variety of businesses. In addition, WEC holds
a 50% interest in Custometrics LLC, a joint venture which will provide
systems solutions relating to billing and other aspects of the customer
service segment of the energy services industry.
Summary of Merger Related Transactions
In addition to the Transaction itself and as described more fully
below as needed, the Applicants propose: (1) to form under rule 88 of
the Act a new service company through Primergy's acquisition of all of
the common stock of Primergy Services, Inc. (``Primergy Services'') and
may form, in the same way, one or more other service companies
(``Additional Service Companies''),\3\ and to enter into service
[[Page 21511]]
agreements; (2) to form a new holding company subsidiary (``Primergy
Hold''), if needed, to hold, all or some of Primergy's interests in
certain of its nonutility investments in existence prior to the
Transaction;\4\ (3) that Primergy will acquire all of the outstanding
voting securities of certain NSP nonutility subsidiaries or, if
Primergy Hold is not formed, all of the outstanding voting securities
of all of NSP's direct nonutility subsidiaries; (4) that Primergy will
retain the gas properties of NSP and WEPCO and continue their operation
as combination gas and electric utilities; (5) that Primergy will
retain the nonutility businesses and affiliates of NSP and WEC; (6)
that Primergy will issue and/or acquire in the open market up to 18.2
million shares of its common stock (``Primergy Common Stock'') for five
years from the date of an order in this matter in connection with its
shareholder dividend reinvestment and stock purchase plan and its stock
incentive plan; (7) to provide services at market rates, pursuant to an
exemption from the at-cost standard contained in section 13(b) of the
Act and provided for in rules 90 and 91, in connection with: (a)
certain affiliated qualifying facilities (``QFs''), independent power
projects (``IPPs''), exempt wholesale generators (EWG''), foreign
utility companies (``FUCOs'') and with other associated entities
presently existing or to be formed after the Transaction that derive no
part of their income from the generation, transmission or distribution
of electric energy for sale or the distribution of natural gas at
retail in the United States (``Primergy Exempt Associate Companies''),
which services may be provided by Primergy Services, the Additional
Service Companies, the Primergy Exempt Associate Companies and other
NSP associates and affiliates\5\; and (b) transactions approved by any
state public utility regulatory agency, the Federal Energy Regulatory
Commission or transactions otherwise exempted from section 13(b)
requirements; (8) that all existing intra-system debt, guarantees of
debt and other intrasystem transactions among NSP and WEC and their
respective associated and affiliated companies be approved by the
Commission\6\; and (9) that the Commission issue an order temporarily
exempting New NSP from the registration requirements of section 5 of
the Act for the limited time in which New NSP owns NSP-W.
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\3\ Primergy Services will be incorporated in Wisconsin to serve
as the service company for the Primergy system. The Additional
Service Companies would be known as Primergy Generation Corporation
(``Primergy GC'') and Primergy Nuclear Corporation (``Primergy
NC''). Primergy GC would be responsible for the operation,
maintenance, repair, rehabilitation and replacement of all
nonnuclear generation and steam and/or chilled water system
facilities owned or operated by the system. Primergy NC would be
responsible for the operation, maintenance, repair, rehabilitation
and replacement of all nuclear generation facilities owned or
operated by the system. The authorized capital stock of Primergy
Services and any Additional Service Companies would consist of 1,000
shares of common stock, par value $.01 per share.
\4\ Applicants also seek approval with regard to the issuance,
sale and acquisition of the capital stock of certain of the Primergy
system's approximately 16 nonutility subsidiaries in connection with
the possible formation of Primergy Hold and the requisite authority
to realign the nonutility companies as first-tier subsidiaries of
Primergy. The authorized capital stock of Primergy Hold will consist
of 1,000 shares of common stock, par value $.01 per share. Upon
consummation of the Transaction, all issued and outstanding shares
of Primergy Holding will be held by Primergy. If Primergy Hold is
not formed, the direct nonutility subsidiaries of NSP and WEC will
become direct subsidiaries of Primergy. See, SEC File No. 70-8833,
Form U-1 (``Application-Declaration''), Exhibits E-12 and 13
(Primergy corporate charts with and without Primergy Hold).
\5\ See, Entergy Corporation, Holding Co. Act Release No. 26322
(June 30, 1995).
\6\ Application-Declaration at 101-03.
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The Transaction
The Transaction will be accomplished through a three-stage process.
In the first state, NSP will reincorporate in Wisconsin by merging into
New NSP. Immediately prior to this merger, and for state public utility
regulatory purposes, NSP-W will transfer the gas utility assets
necessary to furnish gas utility services to the communities of
LaCrosse and Hudson, Wisconsin to New NSP (``Designated Gas Utility
Assets''). In the second stage, WEC Sub will merge with and into New
NSP, with New NSP left as the surviving corporation. In the third
stage, NSP-W will merge into WEPCO and ownership of all other NSP
subsidiaries will be transferred from NSP to Primergy. WEPCO will be
then renamed Wisconsin Energy Company. Following the Transaction
Primergy proposes to realign certain nonutility subsidiaries and to
acquire all of the capital stock of Primergy Hold, if it is deemed
necessary. Primergy Hold will serve as a holding company acquiring the
capital stock of certain nonutility subsidiaries of NSP and WEC.
Specifically, the Merger Agreement provides for: (1) The merger of
NSP with and into New NSP (``Reincorporation Merger'') pursuant to
which (a) each issued and outstanding share of common stock, par value
$2.50 per share, of NSP (``NSP Common Stock''), except shares held by
NSP shareholders who perfect dissenters' rights (``NSP Dissenting
Shares''), will be canceled and converted into one share of common
stock, par value $2.50 per share, of New NSP (``New NSP Common
Stock''), and (b) each issued and outstanding share of cumulative
preferred stock, par value $100.00 per share, of NSP (``NSP Preferred
Stock''), except NSP Dissenting Shares, will be cancelled and converted
into one share of cumulative preferred stock, par value $100.00 per
share, of New NSP (``New NSP Preferred Stock'') with terms, including
dividend rates and general voting rights, and designations under New
NSP's Articles of Incorporation identical to those of the canceled
shares of NSP Preferred Stock under NSP's existing Restated Articles of
Incorporation; and (2) the merger of WEC Sub with and into New NSP
(``NSP Merger,'' together with the Reincorporation Merger, the
``Mergers'') pursuant to which (a) each issued and outstanding share of
New NSP Common Stock will be canceled and converted into 1.626
(``Ratio'') shares of common stock, par value $.01 per share, of
Primergy Common Stock and (b) each issued and outstanding share of New
NSP Preferred Stock will remain outstanding and shall be unchanged
thereby, except for any shares of New NSP Common Stock and New NSP
Preferred Stock owned directly or indirectly by New NSP or WEC, which
will be canceled and will not be converted or remain outstanding.
Each issued and outstanding share, par value $.01 per share, of WEC
Common Stock will remain outstanding and unchanged, as one share of
Primergy Common Stock. Based upon the capitalization of NSP and WEC on
April 28, 1995 (the date the Merger Agreement was initially signed),
and the Ratio, holders of NSP Common Stock and WEC Common Stock would
each have held 50% of the aggregate number of shares of Primergy Common
Stock that would have been outstanding if the Mergers had been
consummated as of such date. The Applicants state that the proposed
Transaction qualifies for treatment as a pooling of interests for
federal income tax purposes.
Upon completion of the Transaction, Primergy will own two
combination electric and gas utility companies, NSP and WEPCO. NSP will
continue to operate and own the same utility facilities at the same
locations outside Wisconsin as prior to the Transaction, along with the
Designated Gas Utility Assets formerly owned by NSP-W. WEPCO will own
and operate the same utility facilities at the same locations as prior
to the Transaction, along with the balance of the gas and electric
utility assets of NSP-W. The Merger Agreement provides that Primergy's
principal corporate offices will be in Minneapolis, Minnesota. NSP and
WEC will retain offices in Minneapolis and Milwaukee respectively as
their regional headquarters. Primergy's board of directors will consist
of a total of 12 directors, 6 of whom will be designated by NSP and 6
of whom will be designated by WEC.
[[Page 21512]]
Services
The Applicants further request the authority to form Primergy
Services and the Additional Service Companies and for them to perform
services. Primergy Services and the Additional Services Companies may
provide services for NSP and WEPCO, and Primergy Services may provide
services for any Additional Service Companies pursuant to a service
agreement and for the nonutility subsidiaries of the Primergy system
pursuant to a nonutility service agreement. Such services may include
any of the following: administrative, management and support services,
including services relating to information systems, meters and
transportation, electric and gas system maintenance, marketing and
customer relations, transmission and distribution, engineering and
construction, power engineering and construction, human resources,
materials management, facilities, accounting, power planning, public
affairs, legal, rates, finance, rights of way, internal auditing,
environmental affairs, fuels, investor relations, strategic and
operations planning, and general administrative and executive
management services. It is anticipated that such service companies will
be staffed primarily by transferring personnel from the current
employee rosters of NSP, WEPCO, and their subsidiaries.
Primergy and the Additional Service Companies will record
transactions using the existing data capture and accounting systems of
each company. Costs will be accumulated in accounts of each service
company and directly assigned, distributed and allocated to the
appropriate company pursuant to the Service Agreement.
The Applicants state that the accounting and cost allocation
methods and procedures of all such service companies which are formed,
including Primergy Services, will comply with the Commission's
standards for service companies in registered holding company systems,
and that the billing systems of all such service companies, including
Primergy Services, will use the Commission's ``Uniform System of
Accounts for Mutual Service Companies and Subsidiary Service
Companies.'' Except as permitted under the Act or by the Commission,
all services provided by such service companies to affiliated companies
will be on an ``at cost'' basis as determined by rules 90 and 91 of the
Act.
Primergy and the Additional Service Companies request that the
Commission grant an exemption from the provisions of rules 90 and 91
under section 13(b) of the Act for the following transactions: (1)
Services provided for EWGs, FUCOs and associate companies that derive
no part of their income, directly or indirectly, from the generation,
transmission or distribution of electric energy for sale, or the
distribution of natural gas at retail, in the United States; and (2)
services provided to an associated EWG, QF or IPP, provided that the
purchaser of the electricity is not an associate company of Primergy.
No services will be provided at market-based rates to an EWG, QF or IPP
selling electricity to NSP or WEPCO, unless authorized by the Act or
the Commission.
The Applicants request further that the Commission permit the
various subsidiaries and affiliates that are providing currently
services, including operation and maintenance, and selling goods to
EWGs and QFs or to entities that will qualify as EWGs, FUCOs or QFs
following the Transaction to continue such transactions without
compliance with the at-cost provisions of section 13(b) and the rules
thereunder. In addition, the Applicants request an exception regarding
NSP's affiliated companies, Landfill Power LLC and Minnesota Methane
LLC, that own portions of QF facilities that sell power to NSP under
Public Utility Regulatory Policies Act contracts approved by the
Minnesota Public Utility Commission (``MPUC'').\7\
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\7\ Entergy Corporation, supra.
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The Applicants request further that the Commission exempt from the
at-cost standards various existing contracts, which have been approved
by the MPUC or the Public Service Commission of Wisconsin, among NSP
and WEC affiliates that are not EWGs or QFs or entities that will
become EWGs, FUCOs or QFs following the Transaction.\8\ Finally, a
section 13(b) exemption is requested regarding NRG Energy, Inc.'s
(``NRG'') management and administrative services to be provided to
O'Brien Environmental Services, Inc., which was partially acquired by
NRG pursuant to a reorganization plan. The services have been approved
by the bankruptcy court as part of the reorganization plan.
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\8\ Application-Declaration, Annex H.
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EUA Energy Investment Corporation (70-8837)
EUA Energy Investment Corporation (``EEIC''), P.O. Box 2333,
Boston, Massachusetts 02107, a nonutility subsidiary company of Eastern
Utilities Associates, a registered holding company, has filed an
application-declaration under sections 6(a), 7, 9(a) and 10 of the Act
and rules 45, 53 and 54 thereunder.
By orders dated December 4, 1987 and January 11, 1988 (HCAR Nos.
24525 and 24515A, respectively (``Orders''), EEIC was authorized, among
other things, to conduct energy and energy conservation research and to
invest, directly or indirectly in such activities.
Pursuant to the Orders, EEIC now proposes to invest through
December 31, 1998, approximately $4 million to acquire approximately
1,052,630 shares of common stock of Separation Technologies, Inc.
(``STI''), at a purchase price of $3.80 per share, pursuant to the
terms of a stock purchase agreement (``Agreement''). STI is engaged in
the research, development, design, sale, installation, construction and
servicing of solid and liquid materials separation systems and
facilities including, without limitation, a system for economically
separating unburned carbon from coal (or fly) ash produced by utility
generating plants.
EEIC will invest in STI by acquiring shares of: (1) STI's
authorized but unissued common stock; and (2) a to-be-formed class of
nonvoting common stock which, in all respects other than voting rights,
would be identical to STI's currently authorized common stock.\9\
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\9\ As a result of the acquisition, EEIC anticipates that it
will own approximately 20 percent of STI's issued and outstanding
capital stock. However, EEIC states that it will only acquire a
number of shares representing up to 9.9 percent of the then
outstanding voting common stock of STI. In the event of an initial
public offering of STI common stock, any share of nonvoting common
stock acquired by EEIC would automatically convert to share of
voting common stock.
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EEIC also requests authorization to make project financing
available up to an aggregate principal amount of $15 million for the
installation and construction of STI fly ash separation projects. The
Agreement contains provisions granting EEIC and exclusive right of
first negotiation with respect to financing all fly ash separation
projects designed, sold, constructed and/or installed by STI during the
eighteen month period immediately following the execution of the
Agreement, excepting only financing for: (1) STI's Colbert Station
project located in Alabama; and (2) any host utility financed projects.
EEIC proposes to provide such financing by entering into joint
arrangements with STI at locations where STI equipment will be
installed. EEIC's investment in these utility locations is anticipated
to range between $0.5 and $2.5 million per installation. EEIC's
investments in such future projects with STI may take the
[[Page 21513]]
form of, without limitation, joint ventures, general partnerships,
limited partnerships, teaming agreements, royalties or other revenue
sharing, special purpose entities, loans and equity participations.
STI has its own employees, and no employees of the EUA system
retail electric utilities will be assigned to perform services for STI.
EEIC does not anticipate the need to hire any additional personnel in
connection with EEIC's investment in STI or the exercise of its
financing rights under the Agreement.
Entergy Corporation (70-8839)
Entergy Corporation (``Entergy'' or ``Company''), 639 Loyola
Avenue, New Orleans, Louisiana 70113, a registered holding company, has
filed an application-declaration under sections 6(a) and 7 of the Act
and rule 54 thereunder.
Entergy proposes to issue and sell through December 31, 2000, up to
ten million additional shares of its authorized but unissued common
stock, par value $.01 per share (``Common Stock'') pursuant to a new
Dividend Reinvestment and Stock Purchase Plan ``Plan'').
The Common Stock will offered by all holders of shares of Common
Stock and other interested investors (each a ``Participant'') pursuant
to the Plan whereby Participants voluntarily may elect to: (1)
automatically reinvest dividends received on all of their shares of
Common Stock; or (2) automatically reinvest dividends received on less
than all of their shares of Common Stock and continue to receive cash
dividends on their remaining shares; and/or (3) invest in additional
shares of Common Stock by making optional cash investments of not less
than $100 nor more than $3,000 per month, with certain exceptions.
Interested investors that are not shareholders may make optional cash
investments in the Common Stock, but will be subject to an initial
minimum investment of $1,000 and, subject to certain exceptions, a
maximum of $3,000 for that month.
The shares of Common Stock purchased on behalf of the Participants
to fulfill the requirements of the Plan will be in the Company's
discretion, either previously issued shares purchased on the open
market or in privately negotiated transactions or newly issued shares
purchased directly from the Company. The decision whether to allow the
Plan to purchase new but unissued shares or shares on the open market
may be made by the Company only once in any three-month period.
Under the Plan, the purchase price of newly issued shares will be
the weighted average of the daily high and low sales prices of the
Common Stock on the New York Stock Exchange (``NYSE'') during the
pricing period, which consists of the twelve trading days immediately
preceding the investment date. The purchase price for shares purchased
on the open market will be the weighted average price paid by the Plan
including brokerage fees and commissions.
Optional cash investments in excess of $3,000 per month may be made
pursuant to a waiver granted at the discretion of the Company
(``Request for Waiver''). The Company has sole discretion as to whether
to grant any Request for Waiver. In deciding whether to grant a Request
for Waiver, the Company may consider relevant factors including, but
not limited to, whether the Plan has been acquiring newly issued shares
from the Company or acquiring shares in the open market or in privately
negotiated transactions from third parties, the Company's need for
additional capital, the attractiveness of obtaining such additional
capital through a sale of Common Stock as compared to the sources of
other funds, the purchase price likely to apply to a sale of the Common
Stock, the Participants submitting the requests, the extent and nature
of such Participants' prior participation in the Plan, the number of
shares of Common Stock held of record by such Participants and the
amount of their proposed investments, and the aggregate amount of
optional cash investments in excess of the allowable maximum that have
been submitted by all Participants. If Requests for Waiver are
submitted at any time for an aggregate investment amount in excess of
the amount, if any, that the Company is then willing to accept, the
Company may grant such Requests for Waiver in the order of receipt, pro
rata or by any other method the Company determines is appropriate.
The Company may also establish, for each monthly pricing period
under the Plan, a minimum price (``Threshold Price'') applicable to the
purchase of shares directly from the Company pursuant to a Request for
Waiver. If established for any pricing period, the Threshold Price will
be the minimum dollar amount that the average of the high and low sales
prices of the Common Stock on the NYSE for each trading day of the
relevant pricing period must equal or exceed. In the event the
Threshold Price is not satisfied or no trades are made on the NYSE for
any trading day in the pricing period, then that trading day and all
trading prices for that day will be excluded in the determination of
the purchase price. Additionally, for each trading day of the pricing
period excluded from the pricing period, one-twelfth of the total
amount of the optional cash investment of each Participant made
pursuant to a Request for Waiver will be returned to that Participant
without interest.
For those purchases of Common Stock made pursuant to a Request for
Waiver, the Company, at least three business days prior to the first
day of the applicable pricing period, may also establish a discount
from the purchase price applicable to those optional cash investments
(``Waiver Discount''). The Waiver Discount may be between 0% and 3% and
may vary each month, but once established will apply uniformly to all
optional cash investments made for that month pursuant to a Request for
Waiver. The Waiver Discount will be established at the Company's total
discretion after a review of current market conditions, the level of
participation in the Plan and current and projected capital needs. The
Company has no present plans to establish either a discount or minimum
price for optional cash investments of $3,000 or less or for dividend
reinvestments, but reserves the right under the Plan to do so in the
future.
The Plan will be administered by Mellon Bank, N.A. or such
successor administrator as Entergy may designate (``Administrator'').
The Administrator will act as agent for Participants, keep records of
the accounts of Participants, send regular account statements to
Participants, and perform other duties relating to the Plan. Shares
purchased for each Participant under the Plan will be held by and
registered in the name of the Administrator or its nominee on behalf of
the Participants, unless and until a Participant requests that stock
certificates be issued. No service fee will be paid by Participants for
shares purchased directly from the Company, but Participants will pay
certain administrative fees and/or commissions on all other
transactions made pursuant to the Plan.
A Participant retains all voting rights relating to shares
purchased under the Plan and credited to his account, and such shares
will be voted in accordance with his instructions. A Participant may
withdraw from the Plan at any time upon written notice. In addition,
without withdrawing from the Plan, a Participant is entitled to demand
and receive a certificate representing any number of whole shares of
Common Stock credited to his account. Entergy reserves the right to
suspend, modify
[[Page 21514]]
(subject to any requisite Commission approval) or terminate the Plan at
any time.
National Fuel Gas Company (70-8841)
National Fuel Gas Company (``NFG''), 10 Lafayette Square, Buffalo,
New York 14203, a registered public utility holding company, has filed
an application-declaration under sections 6(a), 7, 9(a), 10 and 12(c)
of the Act and rules 42 and 46 thereunder.
NFG proposes to implement a sharedholder rights plan to discourage
unwanted takeover bids. The Board of Directors of NFG (``Board'')
proposes to declare a dividend distribution of one right (``Right'')
for each outstanding share of common stock of NFG (``Common Stock''),
$1.00 per value, to shareholders of record at the close of business on
a record date yet to be established (``Record Date''). Each Right would
entitle the registered holder to purchase from NFG one-half of one
share of Common Stock at a price of $130 per share, subject to
adjustment (``Purchase Price'').
Until the earliest to occur of (i) ten days following the date
(``Share Acquisition Date'') of the public announcement that a person
or affiliated group (``Acquiring Person'') has acquired, or obtained
the right to acquire, beneficial ownership of Common Stock or other
voting securities (``Voting Stock'') that have 10% or more of the
voting power of the outstanding shares of Voting Stock or (ii) ten days
following the commencement or announcement of an intention to make a
tender offer, or exchange offer, the consummation of which would result
in such person acquiring, or obtaining the right to acquire, beneficial
ownership of Voting Stock having 10% or more of the voting power of the
outstanding shares of Voting Stock (the earlier of such dates being
called the ``Distribution Date''), the Rights will be evidenced, with
respect to any shares of Common Stock outstanding as of the Record
Date, by the Common Stock certificates representing those outstanding
shares. Until the Distribution Date, the Rights will be transferable
only with the Common Stock, and new Common Stock certificates issued
after the Record Date will contain a notation incorporating the
Agreement by reference. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights
(``Rights Certificates'') will be mailed to holders of record of Common
Stock as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. As in
the case with most right plans which are in place, the Rights will
expire at the close of business on the tenth anniversary of the Record
Date, unless earlier redeemed or exchanged by NFG as described below.
Subject to redemption or exchange of the Rights, at any time
following the Distribution Date, each holder of a Right will have the
right to receive, upon exercise, Common Stock (or, in certain
circumstances, cash, property or other securities of NFG) having a
value to two times Purchase Price of the Right then in effect. However,
all Rights that are, or under certain circumstances were, beneficially
owned by any Acquiring Person will be null and void.
In the vent that, at any time following the Share Acquisition Date,
(i) NFG is acquired in a merger or other business combination
transaction, or (ii) 50% or more of NFG's assets or earning power are
sold or transferred, each holder of a Right shall thereafter have the
right to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the Purchase Price of the Right then
in effect.
The Purchase Price payable, and the number of shares of Common
Stock (or other securities, as the case may be) issuable upon exercise
of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Common Stock, (ii) upon the
grant to holders of the Common Stock of certain rights or warrants to
subscribe for or purchase shares of the Common Stock or convertible
securities at less than the then current market price of the Common
Stock or (iii) upon the distribution to holders of the Common Stock of
evidences of indebtedness or assets (excluding regular periodic cash
dividends or dividends payable in Common Stock) or of subscription
rights or warrants (other than those referred to above). Prior to the
Distribution Date, the Board may make such other equitable adjustments
as it deems appropriate in the circumstances in addition to or in lieu
of any adjustment otherwise required by the foregoing.
With certain exceptions, no adjustment in the Purchase price will
be required until the earlier of (i) three years from the date of the
event giving rise to such adjustment or (ii) the time at which
cumulative adjustments require an adjustment of at least 1% in such
Purchase Price. No fractional shares of Common Stock will be issued
and, in lieu thereof, an adjustment in cash will be made based on the
market price of the Common Stock on the last trading date prior to the
date of exercise.
At any time prior to 5:00 p.m. Buffalo, New York time on the tenth
day following the Share Acquisition Date, NFG may redeem the Rights in
whole, but not in part, at a price of $0.01 per Right (``Redemption
Price''), payable in cash or stock. Under certain circumstances set
forth in the Agreement, the decision to redeem shall require the
concurrence of a majority of the Independence Directors. An
``Independent Director'' means any member of the Board who was a member
of the Board prior to the date of the Agreement, and any person who is
subsequently elected to the Board if such person is recommended or
approved by a majority of the Independent Directors, but shall not
include an Acquiring Person or any representative thereof. Immediately
upon the action of the Board electing to redeem the Rights, NFG shall
make announcement thereof and the only right of the holders of Rights
will be to receive the Redemption Price.
At any time after a person becomes an Acquiring Person, the Board
may exchange the Rights (other than Rights owned by an Acquiring
Person, which become void), in whole or in part, at an exchange ratio
of one share of Common Stock and/or other securities, cash or other
assets deemed to have the same value as one share of Common Stock, per
Right, subject to adjustment.
Until a Right is exercised or exchanged for Common Stock, the
Rights, as such, will not grant the holders thereof rights as a
stockholder of NFG. While the distribution of the Rights will not be
taxable to stockholders or to NFG, stockholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights
become exercisable for Common Stock of NFG (or other consideration) or
for the stock of the Acquiring Person.
Any of the provisions of the Agreement may be amended by the Board
without the consent of the holders of the Rights prior to the
Distribution Date. Thereafter, the Agreement may be amended by the
Board in order to cure any ambiguity, defect or inconsistency, or to
make changes which do not adversely affect the interests of holders of
Rights (excluding the interest of any Acquiring Person); provided,
however, that no supplement or amendment may be made on or after the
Distribution Date which changes those provisions relating to the
principal economic terms of the
[[Page 21515]]
Rights. The Board may also, with the concurrence of a majority of the
Independent Directors, extend the redemption period for up to an
additional 20 days.
Entergy Corporation, et al. (70-8845)
Entergy Corporation (``Entergy''), 639 Loyola Avenue, New Orleans,
Louisiana 70113, a registered public utility holding company, and its
wholly owned subsidiary company Entergy Power, Inc. (``EPI''), 900
South Shackleford Road, Little Rock, Arkansas 72211, (both,
``Declarants''), have filed a declaration under section 12(c) of the
Act and rule 46 thereunder.
EPI proposes to make one or more cash payments in an aggregate
amount not to exceed $55 million to Entergy from time to time through
December 31, 1998 out of EPI's unearned surplus. As of December 31,
1995, EPI had approximately $249,950,000 of capital or unearned surplus
and cash and cash equivalents of approximately $59,482,000. The cash
equivalents of EPI include temporary cash investments of $59,225,000,
which derive from capital contributions made by Entergy to EPI in July
and December 1995. Declarants state that these liquid assets are far in
excess of any foreseeable capital needs of EPI. Therefore, EPI proposes
to return all or most of these assets to Entergy, EPI's sole
shareholder, through the proposed cash payments.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-11669 Filed 5-9-96; 8:45 am]
BILLING CODE 8010-01-M
