[Federal Register Volume 59, Number 102 (Friday, May 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12941]


[[Page Unknown]]

[Federal Register: May 27, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26055]

 

Filings Under the Public Utility Holding Company Act of 1935 
(``Act'')

May 20, 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 statement 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 13, 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.

National Fuel Resources, Inc., at al. (70-7833)

    National Fuel Resources, Inc. (``Resources'') and Leidy Hub, Inc. 
(``Leidy Hub''),\1\ each of 10 Lafayette Square, Buffalo, New York 
14203, each a non-utility subsidiary of National Fuel Gas Company 
(``NFG''), a registered holding company, have filed a post-effective 
amendment under sections 9(a), 10 and 12(b) of the Act and Rule 45 
thereunder to their application-declaration under sections 6(a), 7, 
9(a), 10, 12(b) and 13(b) of the Act and Rules 45 and 50(a)(5) 
thereunder.
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    \1\Leidy Hub, Inc. is the successor of Enerop Corporation. This 
change was reported in a Rule 24 certificate filed on January 24, 
1994.
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    By order dated December 20, 1991 (HCAR No. 25437), NFG was 
authorized to: (i) Acquire all of the authorized shares of common stock 
of Resources for $3.5 million in cash; (ii) acquire through Resources, 
a 50% interest in a partnership (``Partnership''), named Citizens 
National Gas Company, with Citizens Gas Supply Corporation (``Citizens 
Gas'') for $1.5 million in cash; (iii) include Resources in the NFG 
system money pool (``Money Pool'') for a maximum of $10 million; and 
(iv) make available to the Partnership, through Resources, through 
December 31, 1991, one or more loans aggregating up to $10 million. It 
was stated that the $10 million would be used by the Partnership for 
investment in ``any and all physical assets, and any and all associated 
contracts and property interest attendant thereto, for use in 
connection with gathering, transportation, distribution or marketing of 
natural gas which it would consider taking for itself, and which is 
consistent with, or is a natural and reasonable extension of, its 
business'' (``Marketing-Related Investments'').
    In the quarter ended September 30, 1993, Resources and Citizens 
National Gas Company completed the sale of substantially all of the 
Partnership assets. Thereafter, the Partnership was wound up and 
dissolved.
    Resources now proposes to use its existing authorization to borrow 
up to $15 million from the Money Pool in order to make investments in 
Marketing-Related Investments. (Resources presently has the authority, 
by order dated December 29, 1993 (HCAR No. 25964), to borrow, through 
December 31, 1995, up to $15 million from the Money Pool). It is stated 
that the majority of these Marketing-Related Investments will be the 
purchase of gas reserves, gas pipelines and appurtenant property.
    Resources also proposed to acquire Leidy Hub's investment in 
Metscan, Inc. (``Metscan''). Leidy presently owns 7.31% of Metscan's 
common stock, 9.83% of the Metscan Class A Preferred Stock and 1.07% of 
the Class B Preferred, or about 5.52% of the actual and potential 
equity investment in Metscan, and Leidy's total investment in Metscan 
is $1,261,000. All Leidy's interest in Metscan will be transferred to 
Resources at book value. It is stated that Metscan developed a low cost 
and efficient electronic automatic meter reading device (``AMD'') that 
provides an economical and efficient method of reading residential 
natural gas utility meters. The AMD is a microprocessor that is affixed 
to a gas meter and accumulates and stores information regarding natural 
gas usage by a customer and transmits it by telephone line to a 
computer. This information is then available for billing purposes. It 
is stated that the Metscan system provides the following benefits. (i) 
it improves meter reading efficiency, as accurate readings can be 
received electronically, (ii) it enhances meter security and theft 
detection, because actual consumption data is phoned in monthly (or 
possibly daily) and the AMD has a tamper alarm, and (iii) it enhances 
consumption monitoring by providing daily consumption data.
    Resources also seeks authorization to: (i) Accept assignment from 
Leidy Hub of an agreement dated October 1, 1993, between Enerop and 
Perfection Corporation, unaffiliated manufacturing company with its 
principal place of business in Madison, Ohio (``Perfection 
Agreement''); and, (ii) undertake the obligations and rights under the 
Perfection Agreement, including--(a) the obligation to make an 
investment in the aggregate amount of $610,000, and (b) the right to 
receive a royalty (``Royalty'') of 3% of the net revenue from the sales 
of polyethylene ball valves (``Valves'') for polyethylene fuel gas 
piping systems (``Perfection Valve Development Program''). The 
Perfection Agreement covers three separate valve research and 
development programs: (i) the 1\1/4\'' Program, (ii) the 2'' Program, 
and (iii) the 3-4-6'' Program. Enerop invested $125,000 in the 1\1/4\'' 
Program and $85,000 in the 2'' Program. These programs have been rolled 
up into the Perfection Agreement along with the new 3-4-6'' Program. It 
is anticipated that the Valves will be marketed and sold throughout the 
United States with a significant percentage of such sales occurring 
within National's system.
    It is stated that plastic piping has been shown to be superior to 
traditional metal piping in regard to durability, leak resistance and 
ease of installation. It is anticipated that the various plastic Valves 
developed as a result of the Perfection Research and Development 
Program will also be superior to metal ones in these respects. 
Additionally, it is anticipated that in many instances plastic Valves 
will be installed in a pipeline system that is otherwise already all 
plastic. In such circumstances the need for cathodic protection will be 
eliminated. Distribution's consumers will benefit from the development 
of these Valves because the utility will experience lower operations 
and maintenance costs, thus helping to keep rates from rising.
    It is stated that Leidy Hub is selling and assigning its interests 
in Metscan and the Perfection Agreement so that it can focus on 
marketing hub activities. The entry by Leidy Hub into marketing hub 
activities is the subject of File No. 70-8417.

HEC, Inc. (70-8086)

    HEC, Inc. (``HEC''), 24 Prime Parkway, Natick, Massachusetts, 
01760, a non-utility subsidiary of Northeast Utilities (``NU''), 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 45, 
86, 87, 90, and 91 thereunder.
    HEC proposes to form and finance two new non-utility subsidiaries--
HEC Energy Consulting Canada, Inc. (``HEC Canada'') and HEC 
International Corporation (``HEC International''). HEC Canada would 
consult and provide energy management and demand-side management 
services to utilities, government agencies and large energy consumers 
in Canada. HEC International would be formed to participate, on a 
fifty-fifty basis, with a subsidiary of Barakat & Chamberlin, Inc. 
(``BCI''), an unaffiliated company, in a joint venture--HECI, which 
would be a subsidiary company of HEC International. HECI would consult 
and provide energy management and demand-side management services to 
utilities, government agencies and large energy consumers in the 
western United States (Washington, Oregon, California, Montana, Idaho, 
Wyoming, Colorado, Utah, New Mexico, Nevada and Arizona) and in foreign 
countries (except Canada).
    With respect to HEC Canada, HEC seeks Commission authorization for 
(i) the organization of HEC Canada, within 120 days of Commission 
approval, under the laws of Ontario and of Canada, (ii) the issuance by 
HEC Canada, and the acquisition by HEC, of 100 shares of common stock 
(no par value) for $10,000 (``HEC Canada Common Stock''), within 120 
days of Commission approval, (iii) the investment by HEC of up to $1.5 
million in HEC Canada through June 30, 1996, and (iv) the provision by 
HEC of administrative, engineering, and marketing services to HEC 
Canada through June 30, 1996. HEC would charge HEC Canada the cost of 
administrative, engineering, and marketing services.
    With respect to HECI, HEC seeks Commission authorization for (i) 
the organization of HEC International under the laws of Massachusetts, 
(ii) the issuance by HEC International, and the acquisition by HEC, of 
100 shares of common stock (par value $1) for $10,000 (``HEC 
International Common Stock''), (iii) the formation of HECI within 120 
days of Commission approval, and (iv) the investment by HEC of up to 
$2.5 million in HEC International, for the purpose of funding HECI, 
through June 30, 1996, and (v) the provision by HEC of administrative, 
engineering, and marketing services to HEC International and to HECI 
through June 30, 1996.
    By order dated July 27, 1990 (HCAR No. 25114-A) (``1990 Order''), 
the Commission authorized HEC to provide energy management services to 
customers in New England and New York (``Region'') and, to a limited 
extent, to customers outside the Region. By order dated September 30, 
1993 (HCAR No. 25900) (``1993 Order''), the Commission authorized HEC 
to provide additional energy management and demand-side management 
(``DSM'') services and to consult. The 1993 Order authorized NU to make 
capital contributions to HEC of up to $6 million through June 30, 1996. 
By Order dated June 25, 1993 (HCAR No. 25836) (``Money Pool Order''), 
the Commission authorized HEC to borrow up to $11 million through 
December 31, 1994.
    The 1993 Order authorized HEC to provide energy management and DSM 
services without limitation to customers within the Region and, to a 
limited extent, to customers outside the Region subject to the 
requirement that the revenues from the former not exceed the revenues 
from the latter (``Fifty-Percent Standard''). The 1993 Order imposed no 
restriction on revenues from consulting services.
    HEC Canada and HECI would provide energy management and DSM 
services outside the Region. The application-declaration proposes, 
however, that the Fifty-Percent Standard be applicable to the revenues, 
from energy management and DSM services, of HEC combined with those of 
HEC Canada and one-half of those of HECI. HEC proposes that there be no 
restriction on revenues of HEC Canada and HECI from consulting 
services. The definitions of energy management services, DSM services, 
and consulting services used in the application-declaration are 
consistent with the definitions of energy management services, DSM 
services, and consulting services used in the 1993 Order. Pursuant to 
terms and conditions discussed in the 1993 Order, HEC Canada and HECI 
also would design and market Intellectual Property, the definition of 
which is consistent with that used in the 1993 Order.
    With respect to HEC Canada, HEC would advance monies needed by HEC 
Canada to operate through June 30, 1996. The investments by HEC in HEC 
Canada, which would not exceed $1.5 million would take the form of 
additional acquisitions of common stock, capital contributions, open 
account advances and/or subordinated loans. The source of those 
investments would include internal funds and loans through the Money 
Pool. The interest rate on open account advances and subordinated loans 
to HEC Canada would equal the interest rate in effect on HEC's loans 
through the Money Pool. The maximum term of such loans would not exceed 
five years and the maturity date would be no later than June 30, 2001. 
However, to the extent that the advances and/or loans are HEC loans 
through the Money Pool, the term and maturity date of such advances 
and/or loans would equal those of the loans through the Money Pool.
    With respect to HECI, HEC would advance monies needed by HEC 
International for its one-half share of HECI costs. The investments by 
HEC in HEC International would take the form of additional acquisitions 
of common stock, capital contributions, open account advances and/or 
subordinated loans. The sources of those investments would include 
internal funds and loans through the Money Pool. The interest rate on 
open account advances and subordinated loans to HEC International would 
equal the interest rate on HEC's loans through the Money Pool. The 
maximum term of such loans would not exceed five years and the maturity 
date would be no later than June 30, 2001. However, to the extent that 
the advances and/or loans are HEC loans through the Money Pool, the 
term and maturity date of such advances and/or loans would equal those 
of the loans through the Money Pool. The investments by HEC in HEC 
International and other financial, performance or contractual 
guarantees by HEC to HECI will not exceed either $2.5 million or one-
half of its total costs.
    On March 10, 1993, HEC and BCI, which is based in Oakland, 
California and which provides economic and management consulting 
services to utilities and energy companies, signed a letter of intent 
for the formation, upon Commission approval, of HECI under the laws of 
California. BCI and HEC International would each fund one-half of the 
expenses for HECI in the form of open account advances through June 30, 
1996. The interest on these advances would equal the interest rate on 
loans or advances to HEC International from HEC. The maximum term of 
advances to HECI would not exceed five years and the maturity date 
would be no later than June 30, 2001. Advances and direct payments by 
HEC International to HECI and other costs associated with HECI would 
not exceed $2.5 million.
    HECI proposes to enter into an agreement with HEC and BCI to 
subcontract for services at cost. This agreement would prohibit HEC and 
BCI competition with HECI. Except for some retained earnings in HECI, 
all of its profits, after repayment to HEC International and BCI for 
their respective contributions, advances and loans, would be split on a 
fifty-fifty basis between HEC International and BCI. The management 
committee of HECI will consist of a representative of BCI, a 
representative of HEC International and the HECI manager.
    HECI activities might result in projects that require investments 
by one or both of the participants in the form of additional loans to 
HECI. In that event, the participant will be paid an interest rate and 
fees that reflect the risk of the investment. Such loans will be 
project-specific and depend on revenues generated by the project for 
payment of interest and principal. The interest rate on such loans 
would not exceed 17%. The term for these loans would not exceed three 
years, and the maturity date for such loans would be no later than June 
30, 1999. Profits after the return of capital and interest and fees 
will accrue to HECI. Such loans by HEC International and/or BCI to HECI 
each would be subject to the overall aggregate limitation of $2.5 
million.
    HECI might also subcontract with HEC for construction and 
engineering services, financing, performance and other contractual 
guarantees. The maximum commitment and/or exposure of HEC in this 
regard would be considered a contribution from HEC to HECI and would be 
subject to the overall aggregate limitation on such contributions of 
$2.5 million.

Central and South West Corporation, et al. (70-8269)

    Central and South West Corporation (``CSW''), a registered holding 
company, its nonutility subsidiary companies CSW Energy, Inc. 
(``Energy'') and CSW Development-I, Inc. (``Energy Sub''), all located 
at 1616 Woodall Rodgers Freeway, P.O. Box 660164, Dallas, Texas 75202, 
and Ark/CSW Development Partnership (``Joint Venture'') (collectively, 
``Applicants''), 23046 Avenida De Carlotta, Laguna Hills, California 
92653, have filed an application-declaration under sections 6(a), 7, 
9(a), 10, 12(b), and 13(b) of the Act and rules 45, 51, 87, 90, and 91 
thereunder.
    Energy Sub proposes to acquire up to 100% of the common stock of 
Sacramento Power, Inc. (``Project Venture''), a Delaware corporation 
engaged in the development, construction, operation, and maintenance, 
and possible ownership of, an independent energy facility known as the 
Sacramento Power Cogeneration Project (``Project'') to be located in or 
near Sacramento, California, The Project will be a 148.5 megawatt, gas-
fired qualifying cogeneration facility or an exempt wholesale 
generator, as defined in section 32 of the Act.
    Currently, two individuals, Arnold R. Klann and Leslie C. Confair, 
are equal owners of all of the 500 shares of common stock, no par 
value, of Project Venture. Energy Sub will acquire 500 shares of new 
common stock, no par value, that are to be issued by the Project 
Venture and may acquire up to 100% of the shares currently owned by 
Klann and Confair, for $1 per share or an aggregate amount of up to 
$1,000.
    The Project Venture may be reorganized as a limited liability 
company under Nevada, Texas or California law. Accordingly, the 
Applicants propose to purchase the securities of the Project Venture or 
exchange any shares held at the time of such reorganization, as 
appropriate, in the event it is reorganized. The total purchase price 
paid by Energy Sub for the reorganized Project Venture would not exceed 
$1,000.
    The Project Venture and Joint Venture have entered into a 
development agreement (``Development Agreement'') with the Sacramento 
Municipal District Financing Authority (``Municipal Authority''), a 
public agency established by the Sacramento Municipal Utility District. 
Under the Development Agreement, the Joint Venture and Project Venture 
are to provide services to the Project in two phases: Development 
(``Phase I'') and construction (``Phase II'').\2\ Joint Venture will 
perform services only in Phase I. The Project Venture is obligated to 
enter into an engineering, procurement and construction agreement with 
a nationally recognized engineering and construction firm. The Project 
Venture proposes to enter into such an agreement with The Babcock & 
Wilcox Company.
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    \2\The Project Venture has also made certain performance and 
completion guarantees with respect to the Project, noncompliance 
with which would result in assessment of liquidated damages against 
the Project Venture up to a maximum amount of $25 million.
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    During Phase I, the Municipal Authority may terminate the 
Development Agreement for its own convenience or as a result of a 
default by the Joint Venture or the Project Venture under the 
Development Agreement. However, if the Municipal Authority terminates 
the Development Agreement for reasons unrelated to a default by the 
Project Venture, for example for its own convenience or where it is in 
default under the Development Agreement, the Project Venture has the 
option (``Option'') to terminate its involvement in the Project or, 
alternatively, to retain all Project assets and assume all of the 
Municipal Authority's rights in and to the Project, including the right 
to complete construction of the Project and to own and operate the 
Project. Accordingly, the Applicants seek authority for Project Venture 
to exercise the Option to retain the Project Assets, to complete 
construction of the Project as necessary and to own and operate the 
Project. The exercise of the Option shall require no fee or other 
consideration.
    Phase II of the Project, construction, would commence after the 
Municipal Authority has obtained third party construction and term 
financing for the Project. After completion of construction and start-
up of the Project, the Municipal Authority will pay the Project Venture 
a ``base purchase price,'' based on the Project's actual electrical 
generation capacity, of no less than $84,064,000 and no more than 
$111,751,500. In addition, the Municipal Authority will pay the Project 
Venture $4.75 million for services rendered pursuant to the terms of a 
subordinated note in the same principal amount. The Municipal Authority 
will execute and deliver the subordinated note to the Project Venture 
at the completion of the Project. After start-up of the Project, the 
Project Venture will also provide operations and maintenance services 
for the Project.
    As of December 31, 1993, the Joint Venture has incurred development 
expenses of approximately $6.7 million.\3\ In order to fund future 
development expenses, Energy proposes to make capital contributions, 
loans or open account advances of up to $15 million downstream, 
directly or indirectly, to Project Venture. All loans or open account 
advances would bear interest at a rate per annum not in excess of the 
prime commercial lending rate as in effect from time to time at Mellon 
Bank plus 4% and would have a final maturity not to exceed 25 years.
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    \3\The Municipal Authority, which is responsible for Project 
financing, will use the proceeds of the construction financing to 
reimburse the Joint Venture and the Project Venture for these and 
all other properly incurred and substantiated development expenses 
during Phase I.
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    Finally, the Applicants seek authorization for CSW, Energy or the 
Joint Venture to obtain a long-term irrevocable standby letter of 
credit in the amount of $2.9 million (``LOC'') to replace a letter of 
credit in the same amount currently issued for the benefit of the 
Municipal Authority. The LOC ensures that the Project Venture will 
perform its obligations under the Development Agreement. The Municipal 
Authority would continue to be the beneficiary of the LOC and CSW would 
be the account party responsible for reimbursing the issuer for 
drawings made under the LOC. Fees under the LOC would not exceed 1% per 
annum and the interest payable on the unreimbursed drawings under the 
LOC would not exceed the prime rate of the issuer plus 4%.

General Public Utilities Corporation, et al. (70-8409)

    General Public Utilities Corporation (``GPU''), 100 Interpace 
Parkway, Parsippany, New Jersey 07054, a registered holding company, 
and its subsidiaries, Jersey Central Power & Light Company (``JCP&L''), 
300 Madison Avenue, Morristown, New Jersey 07960, Metropolitan Edison 
Company (``Met-Ed''), 2800 Pottsville Pike, Reading, Pennsylvania 
19640, and Pennsylvania Electric Company (``Penelec''), 1001 Broad 
Street, Johnstown, Pennsylvania 15907, have filed an application-
declaration pursuant to sections 6(a), 7, 9(a), 10, 12(b) and 13(b) of 
the Act and Rules 45 and 86-95 thereunder.
    GPU proposes to organize a new, wholly-owned subsidiary company to 
be known as GPU Generation Corporation (``GPUGC''). GPUGC proposes to 
undertake responsibility for the operation, maintenance and 
rehabilitation of all non-nuclear generation facilities owned and/or 
operated by JCP&L, Met-Ed and Penelec (collectively, ``Subsidiaries''). 
GPUGC also proposes to undertake responsibility for the design, 
construction, start-up and testing of any new non-nuclear generation 
facilities which the Subsidiaries may need in the future. In addition, 
GPUGC proposes to assume (subject to obtaining the requisite consent of 
the station co-owners) the responsibilities of Penelec and JCP&L under 
certain operating agreements under which they operate and maintain 
certain fossil fuel and hydroelectric generation facilities (i.e., the 
Keystone, Conemaugh and Homer City coal-fired facilities and the Yards 
Creek and Seneca pumped storage hydroelectric facilities) each of which 
is jointly owned by a GPU company with one or more unaffiliated 
utilities. GPUGC's Board of Directors will include the presidents of 
each of the Subsidiaries. Ownership of the generation facilities, 
however, will remain unchanged so that each Subsidiary will continue to 
own the utility plant currently reflected on its respective books, as 
well as any capital additions made to its respective facilities or 
other new generation investments made at its request for its own 
account.
    To implement this program, the Subsidiaries will enter into an 
operating agreement (``Operating Agreement'') with GPUGC. In effect, 
the Subsidiaries will simply make use of the staff, facilities and 
other combined resources of GPUGC (which, at least initially, will be 
largely derived from existing GPU system staff, facilities and 
resources) to operate and maintain the same generation facilities in 
which the Subsidiaries presently have an interest. From time to time, 
GPUGC may also employ others (who may or may not be present employees 
of the GPU system) and engage consultants and contractors as needed for 
the discharge of its functions. It is also contemplated that certain 
general and administrative functions and services, such as finance/
treasury, accounting, internal auditing, legal, data processing, taxes, 
insurance, human resources and environmental, will be performed for 
GPUGC at cost by GPU Service Corporation (``GPUGC'') and/or one or more 
of the Subsidiaries. The services rendered by GPUSC will be furnished 
at cost, including reasonable compensation for necessary capital, in 
compliance with Rule 91.
    GPU will acquire for cash all of the 2,500 authorized shares of 
GPUGC's common stock, par value of $20, at a price of $20 per share or 
an aggregate consideration of $50,000. If necessary, GPU proposes to 
make open account advances to GPUGC from time to time during the term 
of the Operating Agreement up to an aggregate amount of $1 million 
outstanding at any time. Interest on such open account advances will 
accrue at a rate equal to the Citibank, N.A. base rate as in effect 
from time to time.
    Certain management and supervisory personnel presently employed by 
the Subsidiaries (and/or GPUSC) are expected to be transferred to 
GPUGC. However, it is not expected that union employees of the 
Subsidiaries will initially be transferred to GPUGC. Rather, such 
employees will continue to perform their services at and on behalf of 
the GPU system's non-nuclear generation facilities as employees of the 
same entities within the GPU system with which they are currently 
associated.

National Fuel Gas Company, et al. (70-8417)

    National Fuel Gas Company (``NFG''), 30 Rockefeller Plaza, New 
York, New York 10112, a registered holding company, and Leidy Hub, Inc. 
(``Leidy Hub''),\4\ 10 Lafayette Square, Buffalo, New York 14203, a 
non-utility subsidiary of NFG, have filed an application-declaration 
under Section 9(a), 10 and 12(b) of the Act and Rules 16 and 45 
thereunder.
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    \4\Leidy Hub, Inc. is the successor of Enerop Corporation. This 
change was reported in a Rule 24 certificate filed on January 24, 
1994.
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    NFG and Leidy Hub propose that Leidy Hub acquire, for $500,000, an 
interest in a partnership (``Partnership'') with Hub Services, Inc. 
(``Hub Services''), an unaffiliated company, and a subsidiary of 
Natural Gas Clearinghouse (``Clearinghouse''). Leidy Hub proposes to 
borrow the $500,000 needed for the acquisition from the National Fuel 
System Money Pool (``Money Pool''). Leidy Hub presently has the 
authority, pursuant to an order dated December 29, 1993 (HCAR No. 
25964), to borrow up to $2.5 million from the Money Pool. Leidy Hub and 
Hub Services plan to form the Partnership in order to operate a natural 
gas market area hub (``Hub''). The Hub will offer customers services 
relating to the transportation, storage, purchase, sale, exchange and 
lending of natural gas in the Hub area.
    NFG also proposes to act as guarantor, through December 31, 1998, 
of certain obligations of Leidy Hub and the Partnership in an amount 
not to exceed $5 million at any one time. The guarantees will be made 
for an indefinite period of time not to exceed four years. It is stated 
that the obligations of Leidy Hub and the Partnership to be guaranteed 
would be incurred as a result of the activities undertaken by the 
Partnership related to the supply of natural gas as delineated in the 
Gas Related Activities Act of 1990 (``GRAA''). It is anticipated that 
whenever the Partnership is required to provide a guarantee, it will be 
provided one-half by NFG and one-half by Clearinghouse. Such guarantees 
include the guarantee of obligations associated with: (1) Gas 
transportation agreements entered into by the Partnership with local 
distribution companies or pipelines such as Distribution and Supply; 
(2) gas purchase and sale agreements entered into by the Partnership in 
the provision of certain contemplated title transfer services; and (3) 
any and all other agreements relating to the transportation, storage or 
supply of natural gas, as such activities are defined under the GRAA.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-12941 Filed 5-26-94; 8:45 am]
BILLING CODE 8010-01-M