[Federal Register Volume 60, Number 135 (Friday, July 14, 1995)]
[Notices]
[Pages 36321-36324]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17266]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26327]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
July 7, 1995.
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 July 31, 1995, 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.
The Southern Company (70-8309)
The Southern Company (``Southern''), 64 Perimeter Center East,
Atlanta, Georgia 30346, a registered holding company, has filed a post-
effective amendment to its application-declaration under sections 6(a),
6(b), 7, 32 and 33 of the Act and rule 53 thereunder.
By order dated March 15, 1994(HCAR No. 26004), Southern was
authorized to issue and sell from time to time prior to April 1, 1996,
short-term and term loan notes to lenders and/or commercial paper to
dealers in an aggregate principal amount at any time outstanding of
$500 million. Southern was also authorized to use the proceeds of such
borrowings or commercial paper sales to make investments in
subsidiaries, to the extent authorized to do so in separate filings,
and in subsidiaries that are exempt wholesale generators (``EWGs'') and
foreign utility companies (``FUCOs''); provided that, at any point in
time, the outstanding amount of borrowings and/or proceeds of
commercial paper sales used for such purpose, the proceeds of sales of
additional common stock used to make such investments, and the
aggregate principal amount of the securities of such entities in
respect of which Southern has issued any guaranty may not, in the
aggregate, exceed $500 million.
Southern now seeks approval to issue and sell short-term and term
loan notes to lenders and/or commercial paper to dealers from time to
time prior to April 1, 2000, in an aggregate principal amount at any
time outstanding not to exceed $1 billion; and to use the net proceeds
thereof to make investments in subsidiaries (to the extent authorized
in separate filings) and in EWGs and FUCOs; provided that, at any time,
the net proceeds of such borrowings and/or commercial paper sales used
to make investments in EWGs and FUCOs, plus the amount of such
investments using the proceeds of additional common stock sales and the
principal amount of outstanding securities of such entities that are
guaranteed by Southern (as authorized in separate proceedings) shall
not, in the aggregate, exceed the greater of (i) $1.072 billion, and
(ii) the difference, at any point in time, between 50% of Southern's
``consolidated retained earnings'' and Southern's ``aggregate
investment,'' each as determined in accordance with rule 53(a). At
March 31, 1995, 50% of Southern's consolidated retained earnings was
about $1.572 billion and Southern had invested, directly or indirectly,
an aggregate of $500.1 million in EWGs and FUCOs.
Southern also proposes that term loan notes issued to lenders may
have maturities of up to seven years. Southern has not proposed any
other changes or modifications to the terms of borrowings or commercial
paper sales.
The Southern Company (70-8277)
The Southern Company (``Southern''), 64 Perimeter Center East,
Atlanta, Georgia 30346, a registered holding company, has filed a post-
effective amendment to its application-declaration under sections 6(a),
7, 12(b), 32 and 33 of the Act and rules 45 and 53 thereunder.
By order dated January 25, 1994 (HCAR No. 25980) (``Order''), the
Commission authorized Southern, among other things, to issue and sell
in one or more transactions from time to time through December 31,
1996, up to ten million shares of its authorized shares of common
stock, $5 par value, as such number of shares may be
[[Page 36322]]
adjusted for any subsequent share split (``Common Stock''). Since
issuance of the Order, Southern effected an authorized 2-for-1 stock
split. As adjusted for the share split, 9.4 million shares of the
additional Common Stock remain unsold.
The Order further authorized Southern to guarantee, from time to
time through December 31, 1996, the securities of any associate exempt
wholesale generators (``EWGs'') or foreign utility companies
(``FUCOs'') in an aggregate principal amount at any time outstanding
not to exceed $500 million, provided that any guarantees outstanding on
that date would terminate or expire in accordance with their terms. In
addition, the net proceeds of sales of the additional Common Stock used
to make investments in any EWGs or FUCOs and the aggregate principal
amount of the securities of such entities in respect of which Southern
has issued any guarantee would not, in the aggregate, exceed $500
million.
Southern now proposes to issue and sell in one or more transactions
from time to time through December 31, 1999, up to 25 million
additional shares of its Common Stock, inclusive of the remaining 9.4
million shares that Southern is authorized to issue and sell under the
Order. Some or all of the Common Stock may be issued and sold through a
primary shelf registration program in accordance with rule 415 under
the Securities Act of 1933, as amended, or otherwise to, or through,
one or more underwriters of dealers for resale in one or more public
offerings, or to investors directly or through agents.
In addition, Southern proposes to increase its authority to
guarantee, from time to time through December 31, 1999, the securities
of one or more EWGs or FUCOs from $500 million up to an aggregate
principal amount at any time outstanding not to exceed $1.2 billion;
provided that the sum of (1) the principal amount of securities of EWGs
and FUCOs in respect of which guarantees are at any time outstanding,
(2) the net proceeds from sale of the 25 million shares of Common Stock
invested directly or indirectly by Southern in EWGs and FUCOs, as
herein proposed, (3) the net proceeds of additional shares of Common
Stock invested directly or indirectly in EWGs and FUCOs, as authorized
in File No. 70-8435, and (4) the proceeds of short-term and term loan
borrowings and/or commercial paper sales by Southern at any time
invested in EWGs and FUCOs, as authorized in File No. 70-8309, shall
not, in the aggregate, exceed the greater of (i) $1.072 billion, and
(ii) the difference, at any point in time, between 50% of Southern's
``consolidated retained earnings,'' and its ``aggregate investment,''
each as determined in accordance with Rule 53(a). At March 31, 1995,
50% of Southern's consolidated retained earnings was about $1.572
billion and Southern had invested, directly or indirectly, an aggregate
of $500.1 million in EWGs and FUCOs.
Southern also proposes to use the net proceeds of the additional
Common Stock, together with other available funds, to make additional
investments in other subsidiary companies, to the extent authorized in
separate proceedings.
Allegheny Power System, Inc., et al. (70-8411)
Allegheny Power System, Inc. (``APS''), 12 East 49th Street, New
York, New York 10017, a registered holding company, and AYP Capital,
Inc. (``AYP Capital''), 12 East 49th Street, New York, New York 10017,
a nonutility subsidiary company of APS, 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, 50, 53, 87,
90 and 91 thereunder.
By order dated July 14, 1994 (HCAR No. 26085), APS was authorized
to organize and finance AYP Capital to invest in (i) companies engaged
in new technologies related to the core utility business of APS and
(ii) companies for the acquisition and ownership of exempt wholesale
generators (``EWGs'').
By order dated February 3, 1995 (HCAR No. 26229), AYP was
authorized to engage in the development, acquisition, construction,
ownership and operation of EWGs and in development activities with
respect to: (i) Qualifying cogeneration facilities and small power
production facilities (``SPPs''); (ii) nonqualifying cogeneration
facilities, nonqualifying SPPs and independent power production
facilities (``IPPs'') located within the service territories of APS
public utility subsidiary companies; (iii) EWGs; (iv) companies
involved in new technologies related to the core business of APS; and
(v) foreign utility companies (``FUCOs''). AYP Capital was also
authorized to consult for nonaffiliate companies. APS was authorized to
increase its investment in AYP Capital from $500,000 to $3 million.
The post-effective amendment seeks Commission authorization to:
(i) Allow AYP Capital to engage in activities related to the
development, acquisition, ownership, construction and operation of
FUCOs;
(ii) Allow AYP Capital to engage in activities related to the
development, acquisition, ownership, construction and operation of
qualifying cogeneration facilities and SPPs;
(iii) Allow APS and AYP Capital to acquire the securities of
companies (``Project NEWCOs'') that own FUCOs and EWGs;
(iv) Allow AYP Capital or one or more special purpose subsidiaries
(``EMS NEWCOs'') to provide energy management services and demand side
management services to nonassociates and to associate companies;
(v) Allow AYP Capital or one or more special purpose subsidiaries
(``Factor NEWCOs'') to factor the accounts receivable of associate and
nonassociate utility companies and similar companies or effect
securitizations of accounts receivable of such companies;
(vi) Allow AYP Capital to enter into one or more investment limited
partnership agreements; \1\
\1\ The investment objective of any partnership will be to
invest principally in securities of businesses engaged in activities
in those product and market areas that AYP has determined meet its
business objectives in the area of new and emerging energy
technologies related to APS' core business. One such partnership may
be with Advent International Corporation (``Advent''). The post-
effective amendment states that ``(b)ecause of the need for quick
response in the area of venture capital, AYP * * * does not intend
to seek prior Commission approval before investing in a company
identified by Advent.''
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(vii) Allow AYP Capital or one or more special purpose subsidiaries
(``Broker NEWCOs'') to engage in brokering of energy-related
commodities and financial instruments to nonassociates and to associate
companies;
(viii) Allow AYP Capital or one or more Brokering NEWCOs to engage
in power brokering, power marketing and related activities;
(ix) Allow AYP Capital or one or more special purpose subsidiaries
(``Real Estate NEWCOs'') to engage in activities relative to the real
estate portfolio of APS and its associate companies;
(x) Allow AYP Capital or one or more special purpose subsidiaries
(``Technology NEWCOs'') to engage in the marketing, sale and
installation of power quality devices to customers of associate and
nonassociate utility companies;
(xi) Allow AYP Capital or one or more special purpose subsidiaries
(``Telecommunications NEWCOs'') to provide telecommunications services
to nonassociates and to associate companies;
(xii) Allow AYP Capital or one or more special purpose subsidiaries
[[Page 36323]]
(``Environmental NEWCOs'') to provide environmental services to
nonassociates;
(xiii) Allow AYP Capital or one or more special purpose
subsidiaries (``Laboratory NEWCOs'') to sell chemical laboratory
services to nonassociates and to associate companies; and
(xiv) Allow APS to increase its investment in AYP Capital or for
AYP Capital to incur debt that might be guaranteed by APS, in each case
to enable AYP Capital to engage in these activities and to enable AYP
Capital to organize Project NEWCOs, EMS NEWCOs, Factor NEWCOs,
Brokering NEWCOs, Real Estate NEWCOs, Technology NEWCOs,
Telecommunications NEWCOs, Environmental NEWCOs and Laboratory NEWCOs
and to make investments in all such NEWCOs to enable them to engage in
such activities; to allow Project NEWCOs to finance their activities
through securities issued to third parties; and to allow APS and AYP
Capital to issue guarantees for AYP Capital and NEWCOs.
APS proposes to invest in AYP Capital up to an aggregate of $100
million through December 31, 1999 through a combination of: (i)
Purchases of common stock, (ii) cash capital contributions and (iii)
loans. In addition, AYP Capital proposes to obtain loans from banks or
issue other recourse obligations which could be guaranteed by APS. Such
borrowings by AYP Capital from third parties that are guaranteed by APS
would be subject to the $100 million investment authority.
Loans from APS would mature by December 31, 2004 and would bear a
fixed interest rate equal to a rate not above the prime rate in effect
on the date of the loan at a bank designated by APS. Notes issued to
APS, at the option of APS, could be converted to capital contributions
to AYP Capital. Loans from third parties would mature by December 31,
2004 and would bear a fixed interest rate not above 3% over the prime
rate at a U.S. money center bank to be designated by APS. Notes sold to
such parties could be guaranteed by APS.
AYP Capital, through December 31, 1999, would organize and invest
in NEWCOs through (i) purchases of capital stock or, in the case of
Project NEWCOs, partnership interests or trust certificates, (ii)
capital contributions, and (iii) loans and conversion of such loans to
capital contributions. APS and AYP Capital propose that amounts
permitted to be invested by APS and AYP Capital shall be permitted to
be reinvested by AYP Capital in NEWCOs. NEWCOs also would obtain loans
from banks that might be guaranteed by APS or AYP Capital. Loans from
third parties would be subject to the $100 million investment
authority. Loans to NEWCOs would be subject to the parameters
applicable to loans to AYP Capital except that guarantees of loans also
might be made by AYP Capital.
APS and AYP Capital, through December 31, 1999, would guarantee or
act as surety on bonds, indebtedness and performance and other
obligations issued or undertaken by AYP Capital or NEWCOs. Such
guarantees, indemnifications and sureties will be subject to the $100
million investment authority.
APS and AYP Capital also seek Commission authorization for Project
NEWCOs to issue equity and debt securities through December 31, 1999 to
third parties, with no recourse to AYP Capital, to finance EWGs and
FUCOs (``Exempt Subsidiaries''). Such nonrecourse debt securities would
not exceed $200 million. Equity securities could include shares of
capital stock, partnership interests or trust certificates. Nonrecourse
debt securities could include secured and unsecured promissory notes,
subordinated notes, bonds or other evidences of indebtedness.
Securities could be denominated in either U.S. dollars or foreign
currencies.
Evidence of indebtedness would mature within thirty years and would
bear interest at a rate not to exceed: (i) 6.5% over the yield to
maturity on an actively traded, non-callable, U.S. Treasury note with
maturity equal to the average life of such indebtedness (``Applicable
Treasury Rate''), for fixed-rate indebtedness, and 6.5% over the then
applicable prime rate at a U.S. money center bank to be designated by
APS (``Applicable Prime Rate''), for floating-rate indebtedness, if
such indebtedness is U.S. dollar denominated; and (ii) at a fixed or
floating rate which, when adjusted for 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 Applicable Treasury Rate or
Applicable Prime Rate, if such indebtedness is denominated in non-U.S.
currency.
The issuance of nonrecourse debt securities by Project NEWCOs could
include security interests in their assets. Such security interests
could take the form of a pledge of the shares or other equity
securities of an Exempt Subsidiary that it owns or a collateral
assignment of its rights under and interests in other property.
AYP Capital anticipates that NEWCOs might not have paid employees,
in which case personnel employed by Allegheny Power Service Corporation
(``APSC''), a wholly owned subsidiary of APS, would provide a wide
range of services to such NEWCOs pursuant to a service agreement. Under
these service agreements, NEWCOs would reimburse APSC for the cost of
services provided.
The Southern Company, et al. (70-8435)
The Southern Company (``Southern''), 64 Perimeter Center East,
Atlanta, Georgia 30346, a registered holding company, Atlanta, Georgia,
and its subsidiaries, Alabama Power Company, 600 North 18th Street,
Birmingham, Alabama 35291, Georgia Power Company, 333 Piedmont Avenue,
NE., Atlanta, Georgia 30308, Gulf Power Company, 500 Bayfront Parkway,
Pensacola, Florida 32501, Mississippi Power Company, 2992 West Beach,
Gulfport, Mississippi 39501, Savannah Electric and Power Company, 600
Bay Street East, Savannah, Georgia 31401, Southern Company Services,
Inc., 64 Perimeter Center East, Atlanta, Georgia 30346, Southern
Electric International, Inc., 900 Ashwood Parkway, Suite 500, Atlanta,
Georgia 30338, Southern Nuclear Operating Company, Inc., 40 Inverness
Center Parkway, Birmingham, Alabama 35204 and Southern Electric
Generating Company, 600 North 18th Street, Birmingham, Alabama 35291, a
subsidiary of Alabama Power Company and Georgia Power Company, have
filed with this Commission under sections 6(a), 7, 32 and 33 of the
Public Utility Holding Company Act of 1935, as amended (``Act'') and
rules 53 and 54 thereunder a post-effective amendment to their
application-declaration previously filed under sections 6(a), 7, 9(a),
10, 32 and 33 and rules 53 and 54 thereunder.
By order dated August 5, 1994 (HCAR No. 26098) (``1994 Order''),
Southern was authorized to issue and sell in one or more transactions
from time-to-time through December 31, 1997, an aggregate of 37 million
shares of its authorized shares of common stock, $5 par value, as such
number of shares may be adjusted for any subsequent share split,
pursuant to its Dividend Reinvestment and Stock Purchase Plan, The
Southern Company Employee Savings Plan, and the Employee Stock
Ownership Plan of the Southern Company System (``Plans''). At May 31,
1995, there were 25,026,688 shares of the additional common stock
remaining unsold under the Plans. Under the 1994 Order, Southern was
authorized: (1) to use the proceeds from the sale of the additional
common stock, together with
[[Page 36324]]
other available funds, to make investments in subsidiaries, to the
extent authorized in separate proceedings; and (2) to use up to $500
million of the proceeds of the additional common stock to make
investments in one or more ``exempt wholesale generators'' (``EWG'')
and ``foreign utility companies'' (``FUCO''), as those terms are
defined in sections 32 and 33 of the act, respectively.
Southern is now seeking approval to use the proceeds of the
additional common stock to make investments, directly or indirectly, in
the securities of one or more EWGs or FUCOs, provided that the net
proceeds from sales of common stock used to make such investments, when
added to such investments using other authorized sources of funds, will
not, in the aggregate, exceed the greater of: (1) $1.072 billion; and
(2) the difference, at any point in time, between 50% of Southern's
``consolidated retained earnings'' and Southern's ``aggregate
investment,'' each as determined under rule 53(a). At March 31, 1995,
50% of Southern's ``consolidated retained earnings'' was about $1.572
billion and its ``aggregate investment'' in EWGs and FUCOs was about
$500.1 million. No other changes to the terms of the 1994 Order have
been requested by the Applicants.
SIGCORP, Inc., et al. (70-8635)
SIGCORP, Inc., 20 N.W. Fourth Street, Evansville, Indiana 47741-
0001, a wholly owned subsidiary of Southern Indiana Gas and Electric
Company (``SIGECO''), an Indiana public-utility holding company exempt
from registration under section 3(a)(1) of the Act by order and
pursuant to rule 2, has filed an application under sections 3(a)(1),
9(a)(2) and 10 of the Act to acquire all of the outstanding common
stock of SIGECO and, indirectly, SIGECO's 33% interest in Community
Natural Gas Company, Inc. (``Community'') and SIGECO's 100% interest in
Lincoln Natural Gas Company (``Lincoln''), both gas utility subsidiary
companies of SIGECO.
SIGCORP requests an order approving the proposed acquisition of
SIGECO, Community and Lincoln under sections 9(a) and 10, and granting
an exemption under section 3(a)(1) from all provisions of the Act
except 9(a)(2) following the acquisition. SIGCORP's proposed
acquisition is part of a corporate restructuring in which SIGCORP will
become a holding company over SIGECO. SIGCORP states that the proposed
restructuring is intended to permit it to participate in independent
power projects, energy marketing activities and other non-regulated and
nonutility businesses without the need for prior regulatory approvals,
to increase financial flexibility, to enhance managerial accountability
for separate business activities, and to protect SIGECO and its
ratepayers from the risks and costs of nonutility projects.
SIGCORP was incorporated under Indiana law to carry out the
restructuring and presently does not conduct any business or own any
utility assets. SIGECO is a gas and electric public-utility company
engaged in the generation, transmission, distribution and sale of
electric energy and the purchase of natural gas and its transportation,
distribution and sale in a service area which covers ten counties in
southwestern Indiana.\2\ In addition to Community \3\ and Lincoln,\4\
SIGECO also owns 1.5% of the outstanding capital stock of Ohio Valley
Electric Corporation (``OVEC'').\5\ SIGECO engages in certain
nonutility businesses through four wholly owned subsidiaries, each of
which is an Indiana corporation.\6\
\2\ SIGECO provides electricity to approximately 118,992
residential, commercial, industrial, public street and highway
lighting and municipal customers, and supplies natural gas service
to approximately 102,929 residential, commercial, industrial and
public authority customers through 2,644 miles of gas transmission
and distribution lines. The only property SIGECO owns outside of
Indiana is approximately eight miles of electric transmission line,
located in Kentucky and interconnected with Louisville Gas and
Electric Company's transmission system at Cloverport, Kentucky.
SIGECO does not distribute any electric energy in Kentucky.
\3\ Community is an Indiana corporation that owns and operates a
small gas distribution system in southwestern Indiana.
\4\ Lincoln is an Indiana corporation that owns and operates a
distribution system in the City of Rockport, Spencer County, Indiana
and surrounding territory. Lincoln serves approximately 1,300
customers in Spencer County in southwestern Indiana contiguous to
the eastern boundary of SIGECO's gas territory and within SIGECO's
electric service area, and owns, operates, maintains and manages
plant, property, equipment and facilities used and useful for the
transmission, transportation, distribution and sale of natural gas
to the public. As of December 31, 1994, Lincoln represented
approximately 0.29% of SIGECO's consolidated operating revenues, 0%
of consolidated net income, 0.06% of consolidated net utility plant,
and 0.08% of consolidated total assets.
\5\ OVEC is an Ohio corporation formed in the early 1950's to
supply electric power and energy to the federal government's gaseous
diffusion plant near Portsmouth, Ohio; OVEC owns all the capital
stock of Indiana-Kentucky Electric Corporation, an Indiana
corporation formed for the same purpose.
\6\ Southern Indiana Properties, Inc., formed to make nonutility
investments in such activities as real estate partnerships,
leveraged leases, and marketable securities; Energy Systems Group,
Inc., formed to install energy efficient controls and equipment for
industrial, commercial and governmental customers; Southern Indiana
Minerals, Inc;, formed to process and market coal combustion by-
products at SIGECO's power plants, including flue gas
desulfurization sludge and coal ash; and Southern Indiana Network
Communications, Inc., formed, but currently inactive, to serve as a
vehicle for additional nonutility activities.
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The acquisition will be accomplished through an exchange
(``Exchange'') of each outstanding share of SIGECO common stock for one
share of SIGCORP common stock. As a result of the Exchange, each share
of SIGECO common stock will be exchanged automatically with one share
of SIGCORP. After the Exchange, SIGECO will continue to conduct its
utility business as a wholly owned subsidiary of SIGCORP. Following the
Exchange, SIGECO will transfer its common stock holdings in its four
nonutility subsidiaries to SIGCORP.
SIGCORP states that there will be no exchange of, or any changes
to, SIGECO's outstanding preferred stock and debt securities.
SIGCORP states that following the Exchange, it will be a public-
utility holding company entitled to an exemption under section 3(a)(1)
of the Act from all the provisions of the Act except for section
9(a)(2) because it and each of its public utility subsidiaries from
which it derives a material part of its income will be predominately
intrastate in character and will carry on their business substantially
in Indiana.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-17266 Filed 7-13-95; 8:45 am]
BILLING CODE 8010-01-M
