[Federal Register Volume 62, Number 95 (Friday, May 16, 1997)]
[Notices]
[Pages 27079-27080]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12823]
[[Page 27079]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26717]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
May 9, 1997.
Notice is hereby given that the following filing(s) has/have been
made with the Commission pursuant to provisions of the Act and rules
promulgated thereunder. All interested persons are referred to the
application(s) and/or declaration(s) for complete statements of the
proposed transaction(s) summarized below. The application(s) and/or
declaration(s) and any amendments thereto is/are available for public
inspection through the Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in
writing by June 2, 1997, to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, and serve a copy on the relevant
applicant(s) and/or declarant(s) at the address(es) specified below.
Proof of service (by affidavit or, in case of an attorney at law, by
certificate) should be filed with the 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.
New England Electric System, et al. (70-8783)
New England Electric System (``NEES''), a registered holding
company, and its nonutility subsidiary company, New England Electric
Resources, Inc. (``NEERI'') (together, ``Applicants''), both located at
25 Research Drive, Westborough, Massachusetts 01582, have filed a post-
effective amendment to their application-declaration under sections
6(a), 7, 9(a), 10, 12(b), 13(b), 32, and 33 of the Act and rules 45 and
53 thereunder.
By order dated April 15, 1996 (HCAR No. 26504) (``Order''), the
Commission authorized NEES and/or NEERI to acquire interests in,
finance the acquisition, and hold the securities, of one or more exempt
wholesale generators (``EWGs'') and foreign utility companies
(``FUCOs'') (together, Exempt Companies''), as those terms are defined
respectively in sections 32 and 33 of the Act (``NEES Investments''),
either directly or indirectly, through a project entity (``Project
Parent''). The Project Parents may issue securities to NEES and/or
NEERI and NEES and/or NEERI may acquire the securities. The NEES
Investments may take the form of capital stock or shares, debt
securities, trust certificates, capital contributions, open account
advances and partnership interests or other equity or participation
interests, bid bonds or other credit support to secure obligations
incurred by NEERI and/or Project Parents in connection with Exempt
Company investments or of NEERI's undertaking to contribute equity to a
Project Parent. The Order authorized NEES and/or NEERI to make up to
$60 million in NEES Investments, provided that the investments would
not cause NEES' ``aggregate investment'', as defined in rule 53(a)(i),
in EWGs and FUCOs to exceed 50% of the NEES system's ``consolidated
retained earnings'', as defined in rule 53(a)(ii).
NEES and NEERI now propose to remove the $60 million limitation on
NEES Investments. NEES and NEERI also propose to, from time-to-time
through December 31, 1998: (1) Guarantee the indebtedness or other
obligations of one or more Exempt Companies; (2) assume the liabilities
of one or more Exempt Companies; and/or (3) enter into guarantees and
letters of credit reimbursement agreements in support of equity
contribution obligations or otherwise in connection with project
development activities for one or more Exempt Companies.
As proposed, NEES Investments may be made from NEES to NEERI and/or
Project Parents directly or indirectly. Any open account advance made
by NEES will be non-interest bearing and shall have a maturity not
exceeding one year. Any promissory note issued to NEES by NEERI or a
Project Parent, or to NEERI by a Project Parent, and any promissory
note or other similar evidence of indebtedness issued by a Project
Parent to a person other than NEES or NEERI with respect to which NEES
or NEERI may issue a guarantee, would mature not later than 30 years
after the date of issuance. It would bear interest at a rate not
greater than the prime rate of a bank to be designated by NEES in the
case of a promissory note issued to NEES or NEERI. In the case of any
note or similar evidence of indebtedness issued to a person other than
NEES or NEERI and guaranteed by NEES or NEERI, the rate would not
exceed: (a) The greater of 250 basis points above the lending bank's or
other recognized prime rate and 50 basis points above the federal funds
rate; (b) 400 basis points above the specified London Interbank Offered
Rate plus any applicable reserve requirement; or (c) a negotiated fixed
rate 500 basis points above the 30 years ``current coupon'' treasury
bond rate if such note or other indebtedness in U.S. dollar
denominated. If such note or other indebtedness is denominated in the
currency of a foreign nation, the interest rate will not exceed a fixed
or floating rate which, when adjusted for the prevailing rate of
inflation, would be equivalent to a rate on a U.S. dollar denominated
borrowing of identical average life that does not exceed 10% over the
highest rate set forth above.
NEES may enter into reimbursement agreements with banks to support
letters of credit delivered as security for NEES' or NEERI's equity
contribution obligation to a Project Parent or otherwise in connection
with a Project Parent's or NEERI's Exempt Company project development
activities. Any reimbursement agreement supporting a letter of credit
would have a term not in excess of 30 years. Drawings under any such
letter of credit would bear interest at not more than 5% above the
prime rate of the letter of credit bank as in effect from time-to-time,
and letter of credit fees would not exceed 1% annually of the face
amount of the letter of credit.
DQE, Inc., et al. (70-9027)
DQE, Inc., Cherrington Corporate Center, Suite 100, 500 Cherrington
Parkway, Coraopolis, Pennsylvania, 15108-3184 (``DQE''), a public
utility holding company exempt under section 3(a)(1) and rule 2 from
all provisions of the Act except section 9(a)(2), and its energy
services subsidiary, DQE Energy Services, Inc., One North Shore Center,
12 Federal Street, Suite 200, Pittsburgh, Pennsylvania 15212 (``Energy
Services'') and Energy Services' subsidiary, DH Energy, Inc., One North
Shore Center, 12 Federal Street, Suite 200, Pittsburgh, Pennsylvania
15212 (``DH Energy'') collectively, ``Applicants''), have filed an
application under sections under 9(a)(2) and 10 of the Act.
By order dated March 24, 1995 (HCAR No. 26257), Allegheny
Development Corporation (``ADC''), an indirect public utility energy
services subsidiary of DQE, was authorized to acquire utility assets to
provide energy services to the Midfield Terminal Complex at the Greater
Pittsburgh International Airport. The energy services provided by ADC
are generated by four boilers and seven chillers to provide hot and
cold water to the complex and three capacitors
[[Page 27080]]
connecting DQE's generating facilities to the airport facilities.
DQE and Energy Services now propose to cause the execution of an
Operation and Maintenance Services Agreement (``O&M Agreement'')
between ADC and an entity that will be formed as a subsidiary of Energy
Services (``Newco''). The term of the O&M Agreement will be 5 years and
Newco will receive compensation in the approximate amount of $4.5
million. Under the O&M Agreement, Newco will serve as operator of ADC's
electrical and thermal energy facility located at the Midfield Terminal
Complex.
On January 22, 1997, ADC entered into: (1) The Heinz Facility Lease
(``Lease'') between Heinz USA (``Heinz'') and ADC; and (2) the Energy
Supply Agreement (``Supply Agreement''), among Heinz, ADC and Duquesne
Energy, Inc., a subsidiary of Energy Services. Both agreements provided
for the assignment of all of ADC's rights and obligations to DH Energy.
The Applicants now propose to have ADC assign to DH Energy all of ADC's
rights and obligations under the two agreements.
The Lease provides, among other things, that DH Energy will lease,
operate and maintain an inside the fence energy facility (``Facility'')
for Heinz that will provide energy in the form of steam, electricity
and compressed air. The Facility has two 3 MV steam turbine generators
capable of generating 40 million kilowatt hours of electricity per year
and coal/gas fired boilers capable of generating one billion pounds of
steam per year. Under the Supply Agreement, DH Energy will be obligated
to sell to Heinz electricity and steam produced by the Facility for use
in Heinz' manufacturing processes.
Following the consummation of the transactions, the Applicants
state that DQE and Energy Services will be exempt public utility
holding companies under section 3(a)(1) and rule 2 of the Act.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-12823 Filed 5-15-97; 8:45 am]
BILLING CODE 8010-01-M
