[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]


-----------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \2\The Application states that the Money Pool was authorized by 
Commission order dated June 12, 1986 (HCAR No. 24128).
---------------------------------------------------------------------------

    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