[Federal Register Volume 59, Number 184 (Friday, September 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23595]
[[Page Unknown]]
[Federal Register: September 23, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26128]
Filings Under the Public Utility Holding Company Act of 1935
(``Act'')
September 16, 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 October 11, 1994 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.
Jersey Central Power & Light Company (70-6903)
Jersey Central Power & Light Company (``JCP&L''), 300 Madison
Avenue, Morristown, New Jersey 07962-1911, an electric utility
subsidiary company of General Public Utilities Corporation, a
registered holding company, has filed a post-effective amendment to its
application under Sections 9(a) and 10 of the Act.
By Orders dated November 16, 1983 (HCAR No. 23121), November 19,
1984 (HCAR No. 23486), July 30, 1985 (HCAR No. 23773), June 27, 1986
(HCAR No. 24138) and January 17, 1990 (HCAR No. 25007), JCP&L was
authorized, among other things, to acquire from time-to-time until
December 31, 1994, up to $15 million of obligations of its electric
customers, and to incur up to $500,000 of administrative and other
related expenses, arising from such customers' participation in JCP&L's
Home Energy Loan Program, Solar Water Heating Conversion Program and
Electric Heat Conversion Program. Such obligations consist of notes
evidencing disbursements made by JCP&L to contractors on behalf of
these customers in connection with the programs.
JCP7L now requests authority to extend the time, through December
31, 1999, during which it may acquire such customer obligations in the
same amounts and incur administrative and other related expenses in an
increased amount of up to $750,000. In all other respects, the proposed
transactions that were approved previously would remain unchanged.
Southwestern Electric Power Company (70-6977)
Southewestern Electric Power company (``SWEPCO''), 428 Travis
Street, Shreveport, Louisiana 71156, an electric utility subsidiary
company of Central and south West Corporation, a registered holding
company, has filed a post-effective amendment to its declaration under
Sections 6(a) and 7 of the Act.
By order dated June 8, 1984 (HCAR No. 23325), SWEPCO was authorized
to issue prior to December 31, 1984, up to $75 million of unsecured
notes in one or more transactions from commercial banks. Pursuant to
that authority SWEPCO borrowed $50 million from The Bank of New York
(``BNY'') and First Interstate Bank of California (``FIBC'') under a
Term Loan Agreement, dated as of June 15, 19984 (``Loan Agreement'').
By subsequent order dated June 7, 1991 (HCAR No. 25328), SWEPCO was
authorized to enter into an amendment to the Loan Agreement with the
lenders to: (1) extend the maturity of the notes through June 15, 1997;
(2) amend the interest rate on the loan; (3) add provisions to
compensate the lenders for their costs of complying with capital
adequacy regulations; and (4) add assignment and participation
provisions. SWEPCO did not receive any new proceeds as a result of
entering into the amendment to the Loan Agreement and the aggregate
principal amount of notes outstanding remained at $50 million.
SWEPCO now proposes, through December 31, 1994, to enter into a new
Term Loan Agreement (``New Loan Agreement'') with FIBC, Credit Suisse
and The Yasuda Trust and Banking Co., LTD., New York Branch and with
BNY, individually and as agent (collectively, the ``Banks''), to
replace the Loan Agreement. The New Loan Agreement will modify the Loan
Agreement by: (1) extending the maturity of the outstanding loan
through June 15, 2000; and (2) amending the interest rate on the loan.
The aggregate principal amount of the notes outstanding under the New
Loan Agreement will be $50 million. Because SWEPCO is requesting
authority to replace the Existing Loan Agreement and to extend the
maturity of the existing loan, no new proceeds will be received by
SWEPCO upon entering into the New Loan Agreement in excess of the
amounts required to prepay its obligations under the Existing Loan
Agreement.
Each loan will be evidenced by a note having a final maturity date
of June 15, 2000, which will bear interest at an optional rate. Through
June 15, 1997, the available rates are convertible, and include: (1) an
Alternate Base Rate, which for any day is an annual rate equal to the
higher of (i) BNY's prime rate and (ii) the Federal Funds Rate, plus 1/
2 of 1%; and (2) a Eurodollar Rate, which will be .375% above the Libor
Rate, as defined in the New Loan Agreement. Loans made after June 15,
1997 will bear interest at the Alternate Base Rate. Accrued interest on
Alternate Base Rates loans are payable quarterly and interest on
Eurodollar Rate loans are payable on the last day of the optional
interest period of one, two, three or six months selected by SWEPCO,
provided that if the interest period is for six months, accrued
interest is payable at the end of the third month. An arrangement fee
of seven and one-half basis points ($37,500) will be paid to BNY upon
Commission approval of the New Loan Agreement.
The notes and the New Loan Agreement will permit prepayment of
principal in whole or in part at any time prior to maturity without
penalty. No compensating balances with BNY will be required. SWEPCO
presently anticipates that the notes issued under the New Loan
Agreement will be repaid no later than June 15, 1997. The aggregate
principal amount of notes to be issued under the New Loan Agreement
together with all other unsecured indebtedness of SWEPCO will not
exceed 20% of the sum of the secured indebtedness of SWEPCO and its
total capital stock and surplus.
The New Loan Agreement includes a provision requiring SWEPCO to
compensate each Bank for the cost to such Bank of complying with any
law, rule, regulation, request or guideline of any governmental
authority, central bank or comparable agency regarding capital adequacy
to the extent that such cost arises as a consequence of the Bank's
obligations under the New Loan Agreement. Because the circumstances of
individual banks vary and it is not possible to predict what changes
might occur relating to capital requirements for banks generally, the
cost to SWEPCO of complying with this provision of the New Loan
Agreement cannot be determined. If this provision was to increase
SWEPCO's costs under the New Loan Agreement, SWEPCO could exercise its
option to prepay without penalty, although the obligation of SWEPCO to
pay any increased costs under this provision would survive termination
of the New Loan Agreement to the extent that any demand for payment was
made prior to prepayment.
American Electric Power Company, Inc., et al. (70-8307)
American Electric Power Company, Inc. (``AEP''), a registered
holding company, and its nonutility subsidiary company, AEP Energy
Services, Inc. (``AEP Energy'') (collectively, ``Applicants''), both
located at 1 Riverside Plaza, Columbus, Ohio 43215, have filed a post-
effective amendment 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 April 21, 1982 (HCAR No. 22468) (``1982 Order''),
the Commission authorized AEP to organize AEP Energy for the purpose of
providing consulting services to nonassociate companies. In addition,
the 1982 Order authorized AEP to make capital contributions to AEP
Energy in the amount of up to $1 million.\1\
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\1\The 1982 Order also authorized AEP Energy to sell or
otherwise dispose of intellectual property owned and/or developed by
AEP system companies. Should AEP Energy use any intellectual
property developed by American Electric Power Service Corporation
(``AEP Service'') or any other AEP system company, AEP Energy states
that it will pay the following amounts to that AEP system company
for any such intellectual property actually sold or licensed by AEP
Energy: (1) 70% of the revenues from the intellectual property until
the AEP system company that developed the intellectual property
recovers its programming and development costs; and (2) 20% of such
revenues thereafter. AEP Energy would pay cost for intellectual
property developed at its request. AEP Energy would address such
requests only to AEP Service.
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By order dated March 30, 1994 (HCAR No. 26014) (``March 1994
Order''), the Commission authorized AEP to make additional investments
in AEP Energy in the amount of $5 million for preliminary development
activities associated with its consulting business. The Commission also
authorized AEP and AEP Energy to expand the scope of AEP's financial
commitments to include the issuance of guarantees or assumptions of
liabilities in an aggregate amount not to exceed $25 million.
AEP now seeks to expand its investment in AEP Energy and the amount
of debt of AEP Energy that AEP is authorized to guarantee to $50
million. AEP also seeks to increase the amount of guarantees or
assumptions of liabilities by AEP on behalf of AEP Energy to $200
million.
AEP Energy also seeks authorization to provide energy management
conservation and load management services to customers located in the
states of Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and
West Virginia (``Region'') and to provide limited services outside the
Region, with the restriction that revenues attributable to customers
outside of the Region do not exceed revenues attributable to customers
inside of the Region. AEP Energy also may provide energy management and
demand side management services to associate companies, at cost.
AEP Energy further proposes to render services to associated exempt
wholesale generators (``EWG''), foreign utility companies (``FUCO''),
qualifying facilities (``QF'') and other associated power projects
(collectively, ``Associated Power Projects''). Such services would
include only those that AEP Energy is authorized to render to
nonaffiliate companies.
AEP Energy seeks to provide such services and sell goods to any
Associated Power Project at fair market prices, and requests an
exemption pursuant to Section 13(b) from the requirements of Rules 90
and 91 in each of the following circumstances:
(a) An Associated Power Project derives no part of its income,
directly or indirectly, from the generation, transmission, or
distribution of electric energy for sale within the United States; or
(b) An Associated Power Project is an EWG which sells electricity at
market-based rates which have been approved by the Federal Energy
Regulatory Commission (``FERC'') or the appropriate state public
utility commission, or a QF which sells electricity at the purchaser's
``avoided cost'' determined in accordance with the regulations under
the Public Utility Regulatory Policies Act of 1978, or sells
electricity at rates negotiated at arms-length with large industrial or
commercial customers purchasing such electricity for their own use and
not for resale; or (c) An Associated Power Project sells electricity at
rates based upon its cost of service, as approved by FERC or any state
public utility commission having jurisdiction, provided that: the
purchaser of such electricity is not an associate company of AEP Energy
and the terms and conditions (including price) of the contract pursuant
to which AEP Energy agrees to provide such services or goods have been
expressly approved by the holders of a majority of the equity interests
of such Project other the AEP or an associate company.
In addition, AEP Energy seeks to enter into separate agreements to
sell or license intellectual property that is may develop or acquire
pursuant to its energy consulting activities.
Finally, AEP Energy seeks to organize subsidiary companies to
render its services (``AEP Energy Sub''). Under the authorization
limits described above for AEP and AEP Energy, AEP Energy proposes to
make capital contributions to the AEP Energy Subs, and for the AEP
Energy Subs to incur long- and short-term debt, and for AEP or AEP
Energy to guarantee the debt and performance of such AEP Energy
Subs.\2\
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\2\In the March 1994 Order, the Commission authorized AEP Energy
to obtain debt financing from unaffiliated third parties consisting
of commercial banks, insurance companies or other institutional
investors (``Debt Financing'') and for AEP to guarantee the Debt
Financing up to $5 million. Debt Financing obtained by AEP Energy
would not exceed a term of 10 years or bear a floating interest rate
in excess of 115% of the prime rate in effect at the time of
issuance. In connection with any Debt Financing obtained by AEP
Energy, it may be required to pay commitment and other fees not to
exceed 25 basis points per annum on the total amount of the Debt
Financing. Any debt financing of the AEP Energy Subs would mirror
these terms.
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Central Power and Light Company, et al. (70-8431)
Central Power and Light Company (``CPL''), 539 North Carancahua
Street, Corpus Christi, Texas 78401, and Southwestern Electric Power
Company (``SWEPCO''), 428 Travis Street, Shreveport, Louisiana 71101,
both electric public-utility subsidiary companies of Central and South
West Corporation, a registered holding company, have filed an
application under Sections 9(a) and 10 of the Act.
CPL and SWEPCO (``Applicants'') propose to engage in certain
activities (``Activities''), involving nonaffiliates, in connection
with Applicants' compliance with the ``alternative fuel'' requirements
of the Federal Energy Policy Act of 1992 and related legislation
enacted in Louisiana and Texas (collectively, ``Energy Acts''). The
nonaffiliates include the cities of Corpus Christi, Texas (``Corpus
Christi'') which is in the service territory of CPL and Shreveport,
Louisiana (``Shreveport''), Caddo Parish, Louisiana, the parish in
which Shreveport is located (``Caddo''), Bossier City, Louisiana, a
city adjacent to Shreveport (``Bossier City''), and Longview, Texas
(``Longview''), all of which are in the service territory of SWEPCO
(Shreveport, Caddo, Bossier City, and Longview collectively referred to
as, ``SWEPCO Municipalities'').
The proposed Activities are for: (1) CPL and SWEPCO to purchase,
install, maintain and provide electric-powered compression equipment in
an aggregate of seven fueling facilities to be constructed and owned by
Corpus Christi and the SWEPCO Municipalities for the purpose of making
natural gas available as an alternative fuel for vehicles; and (2)
SWEPCO to provide, at an aggregate of four fueling facilities to be
constructed by SWEPCO principally for use in fueling its own vehicles,
compressed natural gas to vehicles owned by the SWEPCO Municipalities.
The Energy Acts require that increasing percentages of the vehicle
fleets of governmental entities and electric utilities, among others,
must be capable of operating on fuel other than gasoline of diesel in
the next several years. The Activities would permit initial compliance
by CPL and SWEPCO, and by Corpus Christi and the SWEPCO Municipalities,
with the requirements of the Energy Acts.
CPL's costs of furnishing compression equipment at the one facility
to be constructed by Corpus Christi would not exceed $250,000, and the
initial annual revenues and expenses associated with the furnishing of
compression services would aggregate $65,000 and $40,000, respectively.
This cost would be financed out of internally generated funds. The
gross profits from such services would be accounted for as a reduction
in fleet expenses of CPL.
SWEPCO's cost of furnishing compression equipment at the six
facilities to be constructed by the SWEPCO Municipalities would not
exceed $1.5 million, and the initial annual revenues and expenses
associated with the furnishing of compression services would aggregate
$342,000 and $202,500, respectively. This cost would be financed out of
internally generated funds. The gross profits from such services would
be accounted for as a profit from an unregulated activity. SWEPCO's
cost of constructing the four fueling facilities on its own property
would aggregate $1.04 million, and the profits from the sale of
compressed gas provided to vehicles operated by the SWEPCO
Municipalities would be accounted for as a reduction in fleet expenses
of SWEPCO.
Georgia Power Company (70-8443)
Georgia Power Company (``Georgia Power''), 333 Piedmont Avenue,
N.E., Atlanta, Georgia 30308, a wholly-owned electric public-utility
subsidiary company of The Southern Company, a registered holding
company, has filed an application-declaration under Sections 6(a), 7,
9(a), 10 and 12(d) of the Act and Rules 44 and 54 thereunder.
Georgia Power proposes to enter into one or more loan agreements or
installment sales agreements (each an ``Agreement'') on or before
December 31, 1997 in connection with the issuance and sale by public
instrumentalities (each an ``Authority'') of one or more series of
pollution control revenue bonds in an aggregate principal amount not
exceed $840 million (``Revenue Bonds''). Each issuance of Revenue Bonds
by an Authority will be used to finance or refinance the costs of
certain pollution control and/or sewage and solid waste disposal
facilities at an electric generating plant or other facility
(``Project'') of Georgia Power within the jurisdiction of such
Authority.
Each series of Revenue Bonds will bear an interest rate not to
exceed the yield, at the time any such rate is determined, on U.S.
Treasury securities having a maturity comparable to that of such series
of Revenue Bonds, inclusive of any underwriter's discount commission.
The Revenue Bonds will mature between one month and forty years
from the date of issuance and may, if it is deemed advisable for
purposes of marketability, be entitled to the benefit of a mandatory
redemption sinking fund calculated to retire a portion of the aggregate
principal amount of the Revenue Bonds prior to maturity.
Proceeds from the sale of the Revenue Bonds will be deposited with
a trustee (``Trustee'') under the indenture to be entered into between
the Authority and the Trustee (``Indenture''), pursuant to which such
Revenue Bonds are to be issued and secured. Also, the Agreement will
provide for the assignment to the Trustee of the Authority's interest
in, and of the monies receivable by the Authority under, the Agreement.
Pursuant to the Agreement, the Authority will lend to Georgia Power
the proceeds of the Sale of the Revenue Bonds. Georgia Power would
apply these proceeds to pay the Cost of Construction (as defined in the
Agreement) of the Project or to refund outstanding pollution control
revenue obligations. Under the Agreement, Georgia Power will pay the
Authority amounts at times which shall correspond to the payments with
respect to the principal of, premium, if any, and interest on, the
related Revenue Bonds. These payments shall be made whenever and in
whatever manner the principal on such Revenue Bonds shall become due,
whether at stated maturity, upon redemption or declaration or
otherwise.
Georgia Power may be required to purchase any of the Revenue Bonds,
or any of the Revenue Bonds may be subject to mandatory redemption, at
any time if the interest thereon is determined to be subject to federal
income tax. Also in the event of taxability, interest on those Revenue
Bonds may be effectively converted to a higher rate, and Georgia Power
also may be required to indemnify the bondholders against any other
additions to interest, penalties and additions to tax.
The Indenture and the Agreement may also give the holders of the
Revenue Bonds the right, during such time as the Revenue Bonds bear
interest at a fluctuating rate, to require Georgia Power to purchase
the Revenue Bonds from time-to-time, and arrangements may be made for
the remarketing of any such Revenue Bonds through a remarketing agent.
The purchase price payable by or on behalf of Georgia Power in respect
to Revenue Bonds tendered for purchase at the option of the holders
thereof will not exceed 100% of the principal amount thereof, plus
accrued interest to the purchase date.
Additionally, the Indenture will provide that the Revenue Bonds
issued thereunder will be redeemable at any time on or after a
specified date or dates form the date of issuance, in whole or in part,
at the option of Georgia. The exercise of such option may require the
payment of a premium at a specified percentage of the principal amount.
This percentage, which may decline at annual or other intervals, will
not exceed the greater of (i) 5% of the principal amount of the Revenue
Bonds so to be redeemed or (ii) the annual rate of interest borne by
such Revenue Bonds.
Georgia Power currently has outstanding certain first mortgage
bonds issued under an indenture dated as of March 1, 1941 between
Georgia Power and Chemical Bank, as trustee, as supplemented and
amended (``Mortgage''). In order to obtain the benefit of ratings for
the Revenue Bonds equivalent to the rating of these mortgage bonds,
Georgia Power may deliver to the Trustee a series of first mortgage
bonds, to be issued under the Mortgage, as collateral for its
obligations to the Authority related to the Revenue Bonds (``Collateral
Bonds''). The aggregate principal amount of such Collateral Bonds would
be equal to either: (1) the principal amount of the related Revenue
Bonds, if the Collateral Bonds are interest-bearing; or (2) the sum of
such principal amount of those Revenue Bonds plus interest payments
thereon for a specified period, if the Collateral Bonds are not
interest-bearing. The Collateral Bonds will mature on the maturity date
of the Revenue Bonds.
As a further alternative to, or in conjunction with, securing its
obligations through the issuance of the Collateral Bonds, Georgia Power
may: (1) cause an irrevocable letter of credit (``Letter of Credit'')
to be delivered to the Trustee; and/or (2) cause an insurance company
to issue a policy (``Policy''), guaranteeing the payment of the Revenue
Bonds. In the event that the either the Letter of Credit is delivered
to the Trustee or the Policy is issued, Georgia Power may also convey
to the Authority a subordinated security interest in the Project or
other property of Georgia Power as further security for Georgia Power's
obligations under the Agreement.
Any Letter of Credit issued as security for the payment of the
Revenue Bonds will be issued pursuant to a reimbursement agreement
(``Reimbursement Agreement'') between Georgia Power and the financial
institution issuing such Letter of Credit (``LC Issuer''). Pursuant to
such Reimbursement Agreement, the LC Issuer may advance Georgia Power
amounts to repay the LC Issuer for amounts drawn under the Letter of
Credit. Any such advance may have a maturity of up to 10 years and bear
an interest rate not to exceed (i) the LC Issuer's prime rate, (ii)
LIBOR plus \3/8\ of 1%, or (iii) the LC Issuer's CD rate plus \1/2\ of
1%.
In the event that Georgia Power is unable or determines not to
issue the Collateral Bonds, delivery the Letter of Credit to the
Trustee or cause the Policy to be issued, it proposes to (1) convey to
the Authority a subordinated security interest in the Project or other
property of Georgia Power as further security for Georgia Power's
obligations under the Agreement and/or (2) guarantee the payment of the
principal of, premium, if any, and interest on the Revenue Bonds.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-23595 Filed 9-22-94; 8:45 am]
BILLING CODE 8010-01-M
