[Federal Register Volume 59, Number 175 (Monday, September 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-22381]
[[Page Unknown]]
[Federal Register: September 12, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26117; International Series Release No. 711]
Filings Under the Public Utility Holding Company Act of 1935
(``Act'')
September 2, 1994.
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 September 26, 1994 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.
Northeast Utilities, et al. (70-8062)
Northeast Utilities (``Northeast''), 174 Brush Hill Ave., West
Springfield Massachusetts 01089, a registered holding company, and its
wholly owned subsidiaries, Charter Oak Energy, Inc. (``Charter Oak'')
and COE Development Corporation (``COE Development'') (collectively,
``Applicants''), each located at 107 Selden Street, Berlin,
Connecticut, 06037-1616, have filed a further post-effective amendment
under sections 6(a), 7, 9(a), 10, 12(b), and 33 of the Act and rules 45
and 53 thereunder to their application-declaration filed under sections
6(a), 7, 9(a), 10, 12(b), and 13(b) of the Act and rules 45, 87, 90,
and 91 thereunder.
By order dated January 24, 1994 (HCAR. 25977) (``January 1994
Order'') Charter Oak and COE Development were authorized to engage in
preliminary development activities and make investments in and finance
the acquisition of exempt wholesale generators (``EWGs'') and foreign
utility companies (``FUCOs'') in the amount of $100 million through
December 30, 1994.\1\ The January 1994 Order also authorized the
Applicants to issue guarantees and assume the liabilities of subsidiary
companies for preliminary development activities.
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\1\The Applicants stated in post-effective amendment number 5 to
their application-declaration that they would not acquire an
interest in an intermediate holding company of Northeast that holds,
or would acquire, an interest in a FUCO without prior Commission
approval, unless and until the Commission adopts rules that provide
that intermediate companies themselves may be considered FUCOs under
the Act. The January 1994 Order authorized post-effective amendment
number 5.
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The Applicants now propose to finance the acquisition, and hold the
securities, of: (i) foreign utility companies (``FUCOs''), as defined
in Section 33 of the Act, subject to certain limitations; and (ii)
companies (``Intermediate Companies'') engaged directly or indirectly
and exclusively in the business of owning and holding the securities of
one or more FUCOs and/or exempt wholesale generators (``EWGs''), as
defined in Section 32 of the Act, subject to certain limitations.
Investments in and financings of FUCOs and Intermediate Companies will
be subject to the $100 million limit authorized in the January 1994
Order. The financings and investments in FUCOs and Intermediate
Companies may take the same form and will be subject to the same
restrictions and conditions as set forth in the January 1994 Order.
In addition, the Applicants propose to issue guarantees and assume
the liabilities of FUCOs and Intermediate Companies in connection with
development activities, including construction and permanent financing.
Until such time as there is no possibility of a claim against Northeast
or Charter Oak, the full contingent amount of any such guarantees and
assumptions of liability would be included in the $100 million limit
authorized in the January 1994 Order.
The Applicants state that they have found that the ability to
respond quickly to investment opportunities in FUCOs and finance the
acquisition, and hold the securities, of Intermediate Companies to make
such investments is necessary in order to compete effectively in this
market in accordance with the principles set forth in the Energy Policy
Act of 1992. The Applicants also state that the use of Intermediate
Companies is often necessitated by business concerns such as foreign
ownership requirements in countries where FUCOs are located or to
facilitate investments via a consortium of companies where each member
of the consortium has a consolidated subsidiary involved in the final
FUCO structure for tax and accounting purposes and to ease subsequent
adjustments to or sales of interests among members of the ownership
group.
EUA Cogenex Corporation (70-8441)
EUA Cogenex Corporation (``Cogenex''), Boot Mills South, 100 Foot
of John Street, Lowell, Massachusetts, 01852, a non-utility subsidiary
of Eastern Utilities Associates (``EUA''), a registered holding
company, has filed an application-declaration under Sections 6(a), 7,
9(a), 10, 12(b) and 13(b) of the Act and Rules 43, 45, 86, 87, 90 and
91 thereunder.
Cogenex proposes to form and finance a new non-utility subsidiary,
EUA Cogenex--Canada (``Cogen Canada''). Cogen Canada would consult and
provide energy management and demand-side management services to
institutional customers in Canada. Specifically, Cogenex seeks
Commission authorization through December 31, 1996 for (a) the
organization of Cogen Canada under the laws of Canada and (b) the
acquisition by Cogenex of all 100 shares of common stock to be issued
by Cogen Canada for $1.00 each. Additionally, Cogenex seeks Commission
authorization through December 31, 1995 to provide equity and debt
funding for Cogen Canada and for Cogen Canada to borrow from third
parties in amounts not to aggregate more than $20 million outstanding.
Also, Cogenex seeks Commission authorization through December 31,
1997 to sell certain equipment and services to Cogen Canada and for EUA
Service Corporation (``EUASC'') to provide certain management,
financial and other services to Cogen Canada. Cogenex would charge
Cogen Canada for such goods and services on a fair market value basis.
By order dated December 19, 1986 (HCAR No. 24273) (``1986 Order''),
the Commission authorized EUA to acquire the predecessor corporation of
Cogenex, in order to provide certain energy management services in New
England and, to a limited extent, outside New England. By order dated
September 17, 1992 (HCAR No. 25636) (``1992 Order''), the Commission
authorized Cogenex to provide additional energy management and demand-
side management (``DSM'') services and to develop cogeneration
projects. The 1992 Order also expanded the area in which such services
could be provided without limitation to New York (together with New
England, ``Base Region''). By order dated June 29, 1993 (HCAR No.
25839) (``1993 Order''), the Commission authorized Cogenex to borrow up
to $50 million from EUA in short-term debt through December 31, 1995.
The 1986 and 1992 Orders authorized Cogenex to provide energy
management and DSM services without limitation to customers within the
Base Region. These orders also authorized Cogenex to provide such
services to customers outside the Base Region provided that the
revenues for such services to those customers not exceed the revenues
for such services inside the Base Region (``Fifty Percent
Requirement''). The 1986 and the 1992 Orders imposed no restriction on
revenues from consulting services.
Cogen Canada and Cogenex would provide energy management and DSM
services outside the Base Region, subject to the Fifty Percent
Requirement. The application-declaration proposes, however, that
revenues from such services in the provinces of Ontario, Quebec and New
Brunswick be included in the revenues of the Base Region and purposes
of assessing compliance with the Fifty Percent Requirement. Cogenex
also proposes that there be no restriction on revenues of Cogenex and
Cogen Canada from consulting services and that Cogenex be permitted to
market its consulting services worldwide.
Cogenex seeks authorization through December 31, 1995 to provide
EUA with debt and equity financing (``Cogenex Investments''). Such
funds would take the form of additional acquisitions of common stock,
capital contributions, open account advances and/or short-term loans.
All short-term loans and advances by Cogenex to Cogen Canada would be
made on the basis of the terms available to Cogenex on short-term loans
from EUA under the 1993 Order. Specifically, these arrangements provide
for borrowings at the prime rate or money market rates, together with a
commitment fee of \1/4\ of 1%. Each such loan or advance would mature
in one year or less.
Cogenex also seeks authorization through December 31, 1997 for
Cogen Canada to borrow on a short-term basis from third parties, which
debt may be guaranteed by Cogenex. The interest rate on such debt
denominated in dollars would not exceed the commercial base rate at the
First National Bank of Boston at the time a loan is made. The interest
rate on such debt denominated in Canadian dollars would not exceed the
Canadian prime rate as published in the Wall Street Journal at the time
a loan is made. All loans from third parties would mature in no more
than one year and, together with the Cogenex Investments, would not
aggregate more than U.S. $20 million outstanding at any one time.
Cogenex proposes that Cogen Canada enter into an agreement with EUA
Service Corporation (``EUASC''), pursuant to which EUASC would render
certain management, financial, accounting and other services to Cogen
Canada. Cogenex further requests authority through December 31, 1997 to
provide equipment and services to Cogen Canada, as and when needed, on
a fair market value basis, but at no less than cost. Cogenex also
proposes licensing the use of certain know-how, technologies, models
and systems to Cogen Canada appropriate for conservation and load
management services.
Consolidated Natural Gas Company, et al. (70-8447)
Consolidated Natural Gas Company (``Consolidated''), a registered
holding company, and its wholly-owned, nonutility subsidiary companies,
Consolidated System LNG Company, CNG Research Company, CNG Energy
Company (``CNG Energy'') and Consolidated Natural Gas Service Company,
Inc., located at CNG Tower, 625 Liberty Avenue, Pittsburgh,
Pennsylvania 15222-3199, CNG Coal Company, CNG Producing Company and
its subsidiary, CNG Pipeline Company, located at CNG Tower, 1450
Poydras Street, New Orleans, Louisiana 70112-6000, CNG Transmission
Corporation (``CNGT'') and CNG Storage Service Company, located at 445
West Main Street, Clarksburg, West Virginia 26301, CNG Gas Services
Corporation, located at One Park Ridge Center, P.O. Box 15746,
Pittsburgh, Pennsylvania 15244-0746, and Consolidated's wholly owned
public utility subsidiary companies, The Peoples Natural Gas Company,
located at CNG Tower, 625 Liberty Avenue, Pittsburgh, Pennsylvania
15222-3199, The East Ohio Gas Company, 1717 East Ninth Street,
Cleveland, Ohio 44115, Virginia Natural Gas, Inc., 5100 East Virginia
Beach Boulevard, Norfolk, Virginia 23501-3488, Hope Gas, Inc., P.O. Box
2868, Clarksburg, West Virginia 26302-2868, and West Ohio Gas Company,
319 West Market Street, Lima, Ohio 45802, have filed an application-
declaration (``Application'') under sections 6(a), 7, 9(a), 10 and
12(b) of the Act and Rules 16, 43 and 45 thereunder. The Application
requests Commission approval for the proposed activities described
herein through July 1, 2004.
Consolidated proposes to create and acquire through its subsidiary,
CNG Energy, a newly formed corporation, CNG Market Center Services,
Inc. (``CNGMC''). CNGMC was incorporated under the laws of the State of
Delaware on June 24, 1994, with an authorized equity capitalization of
$2 million consisting of 200 shares of common stock, $10,000 par value
each. CNGMC proposes to issue up to 200 shares of its common stock to
CNG Energy, at a price of $10,000 per share, to become a special
purpose, wholly-owned subsidiary of CNG Energy.
CNGMC will own a 50% general partnership interest in a Delaware
partnership (``Partnership'') to be set up to develop and operate a new
natural gas market center to be called the ``CNG/Sabine Center.'' The
other 50% general partnership interest in the Partnership will be owned
by Sabine Hub Services Company, a wholly-owned subsidiary of Texaco,
Inc. CNGMC proposes to make capital contributions to the Partnership in
the aggregate amount not to exceed $2 million.
The CNG/Sabine Center will introduce the ``super-hub'' concept by
offering services at points along the 7,400 mile pipeline system of
CNGT, a wholly-owned pipeline subsidiary of Consolidated. The
Application states that the use of the CNGT pipeline system would be
under the open-access provisions of Order 636 of the Federal Energy
Regulatory Commission as now applicable to CNGT. Initial services to be
provided by the Partnership will consist of an intra-hub transfer
service, a market activity reporting service, and a transportation,
parking and short-term storage agency service. In addition, other gas
market center services may also be offered at the CNG/Sabine Center to
meet the evolving needs of the natural gas industry. The Application
states that the proposed activities of the Partnership satisfy the
requirements of either Section 2 (a) or (b) of the Gas Related
Activities of 1990.
CNG Energy proposes to raise funds to invest in CNGMC, and CNGMC in
turn proposes to raise funds to invest in the Partnership, by (i)
selling shares of its respective common stock ($1,000 par value each in
the case of CNG Energy and $10,000 par value each in the case of CNGMC)
to the issuer's immediate parent; (ii) open account advances from the
borrower's immediate parent, or the CNG System Money Pool (``Money
Pool'');\2\ and/or (iii) long-term loans from the borrower's immediate
parent, in any combination thereof, provided that the amounts and terms
of CNG Energy to CNGMC financing (or Money Pool in the case of open
account advances) shall be the mirror image of the same respective type
of Consolidated to CNG Energy financings. CNGMC proposes to become a
full participant to the Money Pool.
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\2\The Application states that the Money Pool was authorized by
Commission order dated June 12, 1986 (HCAR No. 24128).
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The open account advances and long-term loans will have the same
effective terms and interest rates as related borrowings of
Consolidated in the forms listed below: (1) Open account advances may
be made to the borrower to provide working capital. Open account
advances may be made, repaid and remade on a revolving basis, and all
such open account advances will be repaid on or before a date not more
than one year from the date of the first advance to such borrower with
interest at the same effective rate of interest as Consolidated's
weighted average effective rate of commercial paper and/or revolving
credit borrowings. If no such borrowings are outstanding, then the
interest rate shall be predicated on the Federal Funds' effective rate
of interest as quoted daily by the Federal Reserve Bank of New York.
Such advances may be made through the Money Pool. (2) Consolidated or
CNG Energy may make long-term loans to its respective immediate
subsidiary, CNG Energy Or CNGMC, for the financing of its activities
described herein. Loans shall be evidenced by long-term non-negotiable
notes of the borrower (documented by book entry only) maturing over a
period of time (not in excess of 30 years), with the interest rate
predicated on and equal to Consolidated's cost of funds for comparable
borrowings. In the event Consolidated has not had recent comparable
borrowings, the rates will be tied to the Salomon Brothers Inc.
indicative rate for comparable debt issuances published in Salomon
Brothers Inc. Bond Market Roundup or similar publication on the date
nearest to the time of takedown. All loans may be prepaid at any time
without premium or penalty.
The Application states that Consolidated will obtain the funds
required for CNG Energy through internal cash generation, issuance of
long-term debt securities, borrowings under credit agreements or
through other authorizations approved by the Commission subsequent to
the effective date of this Application.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-22381 Filed 9-9-94; 8:45 am]
BILLING CODE 8010-01-M
