[Federal Register Volume 59, Number 179 (Friday, September 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-22917]


[[Page Unknown]]

[Federal Register: September 16, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26119]

 

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

September 9, 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 3, 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.

Entergy Corp., et al. (70-8449)

    Arkansas Power & Light Co. (``AP&L''), 425 West Capitol Avenue, 
Little Rock, Arkansas, 72201, Gulf States Utilities Co. (``GSU''), 
Edison Plaza, 350 Pine Street, Beaumont, Texas, 77704, Louisiana Power 
& Light Co. (``LP&L''), 639 Loyola Avenue, New Orleans, Louisiana, 
70113, Mississippi Power & Light Co. (``MP&L''), 308 East Pearl Street, 
Jackson, Mississippi, 39201, and New Orleans Public Service, Inc. 
(``NOPSI''), 639 Loyola Avenue, New Orleans, Louisiana, 70113, all 
utility subsidiaries (``Utilities'') of Entergy Corp. (``Entergy''), 
225 Baronne Street, New Orleans, Louisiana, 70112, as well as System 
Energy Resources, Inc. (``SERI''), 1340 Echelon Parkway, Jackson, 
Mississippi, 39213, a utility subsidiary of Entergy, Entergy Services, 
Inc. (``ESI''), 639 Loyola Avenue, New Orleans, Louisiana, 70113, a 
non-utility subsidiary of Entergy, System Fuels, Inc. (``System 
Fuels''), Three Lakeway Center, 3838 North Causeway Boulevard, 
Metairie, Louisiana, 70003, a non-utility subsidiary of Entergy, and 
Entergy Operations, Inc. (``EOI''), 1340 Echelon Parkway, Jackson, 
Mississippi, 39213, a utility subsidiary of Entergy, have filed an 
application-declaration under Sections 6(a), 7, 9(a), 10, and 12(b) of 
the Act and Rules 43 and 45 thereunder.
    The Utilities and SERI propose to continue to finance their interim 
capital needs through loans from a money pool and through the issuance 
and sale of unsecured short-term notes and commercial paper through 
November 30, 1996. Entergy, ESI, EOI, and System Fuels also propose to 
continue to participate in the same money pool through November 30, 
1996 and to extend certain loan agreements.
    In orders dated November 18, 1992 (HCAR No. 25680) (``1992 
Order''), March 14, 1994 (HCAR No. 26010), and April 21, 1994 (HCAR No. 
26033), the Utilities and SERI are authorized through November 30, 
1994, to make unsecured short-term loans through the Entergy System 
Money Pool (``Money Pool'') and to issue and sell unsecured short-term 
notes and commercial paper to various commercial banks to meet their 
respective interim capital requirements. In addition, in the 1992 
Order, Entergy, ESI, System Fuels, and EOI are authorized to 
participate in the Money Pool through November 30, 1994. The Money Pool 
is composed of available funds invested by the companies that 
participate in the Money Pool, which funds can be borrowed by those 
companies other than Entergy to meet their respective interim capital 
requirements.
    In orders dated June 5, 1990 (HCAR No. 25100) and April 29, 1992 
(HCAR No. 25526), and in the 1992 Order, EOI is authorized through 
November 30, 1994 to (i) borrow from Entergy up to $15 million pursuant 
to a June 6, 1990 loan agreement (``EOI Loan Agreement'') and an 
additional $5 million over which the Commission has reserved 
jurisdiction and (ii) enter into loan agreements with banks to reduce 
the amount Entergy committed to EOI under the EOI Loan Agreement. Loans 
under the EOI Loan Agreement are evidence by a note that matures on 
November 30, 1994 (``EOI Note''), which obligates EOI to remit the $15 
million or the aggregate unpaid principal amount of all loans 
thereunder.
    In orders dated September 17, 1991 (HCAR No. 25376) and October 23, 
1991 (HCAR No. 25395), and in the 1992 Order, ESI is authorized through 
November 30, 1994 to (i) borrow from Entergy up $90 million pursuant to 
a September 18, 1994 loan agreement (``ESI Loan Agreement'') and (ii) 
enter into loan agreements with banks to reduce the amount of Entergy 
committed to ESI under the Loan Agreement. Loans under the ESI Loan 
Agreement are evidenced by a note that matures on November 30, 1994 
(``ESI Note''), which obligates ESI to remit the full $90 million or 
the aggregate unpaid principal amount of all loans thereunder.
    The Utilities and SERI propose to continue to finance their interim 
capital needs through loans from the Money Pool and through the 
issuance and sale of unsecured short-term notes and commercial paper 
through November 30, 1996. The maximum amount of loans, notes, and 
commercial paper would be $243 million for AP&L, $395 million for GSU, 
$236 million for LP&L, $108 million for MP&L, $39 million for NOPSI, 
and $195 million for SERI. Entergy, ESI, EOI, and System Fuels propose 
to continue to participate in the Money Pool through November 30, 1996. 
In addition, EOI and Entergy propose to (i) extend the EOI Loan 
Agreement and the EOI Note through November 30, 1996 and (ii) extend 
the authorization for loan agreements with banks through November 30, 
1996. Finally, ESI and Entergy propose to (i) increase the amount of 
the ESI Loan Agreement from $90 million to $150 million and extend the 
ESI Loan Agreement and the ESI Note through November 30, 1996 and (ii) 
extend the authorization for loan agreements with banks through 
November 30, 1996 and increase the amount of the loan agreements from 
$90 million to $150 million.
    The Utilities and SERI request that the Commission reserve 
jurisdiction over loans from the Money Pool and the issuance and sale 
of notes and commercial paper in excess of $125 million for AP&L, $125 
million for GSU, $150 million for LP&L, $100 million for MP&L, $39 
million for NOPSI, $125 million for SERI. The Utilities, SERI, Entergy, 
ESI, EOI, and System Fuels (``Companies'') propose to participate in 
the Money Pool, which will continue to be administered by ESI. The 
Money Pool will consist of funds from the Companies loaned on a short-
term basis to other Companies--besides Entergy--or invested. The 
Companies will not borrow funds to participate in the Money Pool. 
Entergy will invest in the Money Pool but under no circumstances will 
Entergy be permitted to borrow funds from the Money Pool.
    The Money Pool will be managed to match the available cash and 
capital requirements of the Companies to minimize the need for loans by 
the Companies from external sources. However, the Companies might make 
some short-term loans or issue some commercial paper to maintain a 
market presence. The Utilities and SERI will have a priority on funds 
from the Money Pool--ESI, System Fuels, and EOI will be permitted to 
borrow through the Money Pool if there are additional funds available. 
If the available funds in the Money Pool are insufficient for the 
short-term capital requirements of the Utilities or SERI, those 
Companies will use external loans through banks and sales of commercial 
paper.
    It is proposed that certain operative limitations as ESI, EOI, and 
system Fuels loans through the Money Pool be maintained. First, the 
aggregate amount of loans by ESI will never exceed an amount equal to 
the aggregate unused portion of credit then available under the ESI 
Loan Agreement and other credit arrangements hereafter entered into by 
ESI with Commission approval. Second, the aggregate amount of loans by 
EOI will never exceed an amount equal to the aggregate unused portion 
of credit then available under the EOI Loan Agreement and other credit 
arrangements hereafter entered into by EOI with Commission approval. 
Third, the aggregate amount of loans by SERI will never exceed the 
amount equal to the aggregate unused portion of credit then available 
to SERI under other credit arrangements hereafter entered into by SERI 
upon Commission approval with commercial banks or other entities.\1\
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    \1\See generally HCAR No. 24809 (Jan. 31, 1989), HCAR No. 25810 
(Oct. 30, 1990), HCAR No. 25417 (Dec. 2, 1991), and HCAR No. 25909 
(Oct. 15, 1993) (SERI-Bank of America National Trust and Savings 
Association credit agreement); HCAR No. 24957 (Sept. 27, 1989) and 
HCAR No. 25467 (Feb. 5, 1992) (System Fuels-Yasuda Trust & Banking 
Co. credit agreement); HCAR No. 26006 (March 16, 1994) (System 
Fuels-Entergy loan agreement).
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    Some SERI credit arrangements require, in the absence of waivers, 
the Money Pool loans be subordinated indebtedness to the extent that, 
under certain circumstances--for example, a default under the credit 
arrangements--no remittance by SERI of principal or interest on Money 
Pool loans would be permitted until all obligations under such credit 
arrangements have been discharged. The System Fuels-Bank of America 
credit agreement requires that Money Pool loans be subordinated to the 
extent that, under certain circumstances--for example, a default under 
the credit agreement--no remittance by System Fuels, without the 
consent of Bank of America, of principal or interest on Money Pool 
loans would be permitted.
    ESI will invest funds not loaned to the Companies and will allocate 
the return on those investments to the Companies that provided the 
excess funds on a pro rata basis in accordance with their respective 
interests in such funds. ESI proposes to invest the excess funds in 
securities permitted by Section 9(c) of the Act and Rule 40 thereunder.
    The Utilities and SERI, ESI, System Fuels, and EOI will be entitled 
to borrow an amount of the total funds available determined on the 
basis of an equal allocation of such funds among all Companies, except 
that where such an allocation would provide Companies funds in excess 
of their capital requirements, such excess will be available for loans 
allocated among the other Companies. To the extent that EOI, ESI, and 
System Fuels are permitted to borrow through the Money Pool, the funds 
available to EOI, ESI, and System Fuels will be allocated in the same 
manner. Companies that borrow will borrow pro rata from Companies that 
lend in the proportion that the total amount loaned by the Companies 
that lend bears to the total amount then loaned through the Money Pool.
    Loans from and investments through the Money Pool will be evidenced 
on the books of Companies that borrow from or invest in the Money Pool. 
Loans will be payable on demand, prepayable without premium, and will 
bear interest equal to the Daily Weighted Average Investment Rate.\2\ 
However, if there are no excess Money Pool funds invested and thus no 
Weighted Average Investment Rate, then the loans will bear interest 
equal to the Daily Federal Funds Effective Rate quoted by the Federal 
Reserve Bank of New York.
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    \2\The Daily Weighted Average Investment Rate shall be the 
aggregate of the total interest payable on all investments in the 
Money Pool multiplied by 360 and then divided by the total amount 
invested in the Money Pool.
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    It is believed that the cost of loans through the Money Pool will 
be less than the cost of external loans through banks and sales of 
commercial paper, and that the yield and terms available to Companies 
that invest in the Money Pool will be better than the yields otherwise 
available to the Companies, because there is no spread added to the 
cost of funds borrowed and because funds invested can be aggregated to 
command better terms.
    The Utilities and SERI might establish lines of credit with various 
local commercial banks (``Local Banks'') and with various non-local 
commercial banks (``Non-Local Banks'') on either an individual or a 
consolidated basis. The Utilities and SERI also propose to issue and 
see unsecured short-term notes payable within one year. The Utilities 
and SERI will select the interest rate for the notes from four 
options--(i) the prime commercial loan rate (``Prime Rate'') from time 
to tome in effect; (ii) the sum of specified offered rates for bank 
certificates of deposit and a margin not in excess of 2% per annum 
(``CD Rate''); (iii) the sum of specified rates offered for U.S. dollar 
deposits in the inter-bank euro-dollar market and a margin not in 
excess of 2% per annum (``LIBOR Rate''); and (iv) a negotiated rate not 
in excess of the Prime Rate (``Bid Rate''). The notes will, under 
certain circumstances and with the consent of the banks, be prepayable 
without premium (except in the case of the CD Rate or LIBOR Rate).
    The Utilities and SERI might agree to offer the banks a commitment 
fee not in excess of .025% per annum of the total unused portion of the 
lines of credit, to maintain balances in accounts with the Local Banks 
to yield the equivalent of .025%, or a combination of both.
    The Utilities and SERI might also issue and sell commercial paper 
in the form of unsecured notes to mature within 270 days, not to be 
pre-payable, for a discount rate not in excess of the then-current 
maximum discount rate per annum. No commission or fee will be paid by 
the Utilities or SERI. The commercial paper will be re-sold, for the 
then-current discount rate, on a non-public basis to commercial banks, 
insurance companies, corporate pension funds, investment trusts, 
foundations, colleges and university funds, municipal and state funds 
and other financial and non-financial corporations that often invest 
funds in commercial paper.
    Construction expenditures for the Utilities and SERI in 1994, 1995, 
and 1996 are estimated to be:

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                                                  AP&L        GSU       LP&L       MP&L       NOPSI       SERI  
----------------------------------------------------------------------------------------------------------------
94............................................     $180.5     $139.6     $133.9     $130.0      $25.1      $18.0
95............................................      172.1      127.5      143.2      063.0       26.1       21.8
96............................................      174.7      118.9      142.1      063.0       26.3       22.9
----------------------------------------------------------------------------------------------------------------

    In addition, the Utilities and SERI will require capital funds 
during 1994-1996 to meet scheduled long-term debt maturities and 
sinking fund requirements in amounts of $83 million for AP&L, $215 
million for GSU, $162 million for LP&L, $228 million for MP&L, $81 
million for NOPSI, and $645 million for SERI.
    Money Pool loans and receipts from notes to banks and commercial 
paper, with other funds available, will be used to provide interim 
capital for construction expenditures, to meet long-term debt 
maturities and sinking-fund requirements and to refund, redeem, 
purchase, or otherwise acquire high-cost debt and preferred stock.
    Loans through the Money Pool, pursuant to the ESI Loan Agreement, 
and under other external arrangements will be used by ESI for lawful 
purposes in connection with its various functions. ESI expects to use a 
portion of the funds to finance capital and other expenditures to be 
incurred through December 31, 1996, which include those in connection 
with a new Corporate Training Center, telecommunications equipment, the 
renovation of Entergy Corporate Headquarters, the acquisition of 
aircraft and the ESI pension plan. Loans through the Money Pool will be 
used by System Fuels for lawful purposes in connection with its various 
functions, which include the acquisition and ownership of nuclear 
materials and related services. Loans through the Money Pool, pursuant 
to the EOI Loan Agreement, and under other external arrangements will 
be used by EOI to finance its interim capital needs. No proceeds to the 
Companies through the Money Pool, the issuance and sale of notes, or 
the issuance and sale of commercial paper will be used to invest 
directly or indirectly in exempt wholesale generators or foreign 
utility companies.
    EOI and Entergy propose to enter into Amendment No. 3 to the EOI 
Loan Agreement (``Amendment No. 3'') to extend it through November 30, 
1996 and to provide for the issuance of a new note (``New EOI Note'') 
to mature on November 30, 1996. Amendment No. 3 will state that the New 
EOI Note shall replace and supersede the EOI Note and represent the 
loans of EIO from Entergy under the EOI Loan Agreement. The EOI Loan 
Agreement will continue in full force and effect under the terms of 
HCAR No. 25100.
    In addition, ESI and Entergy propose to enter into Amendment No. 2 
to the ESI Loan Agreement (``Amendment No. 2'') to increase the 
commitment thereunder from $90 million to $150 million, extend its 
expiration date through November 30, 1996, and to provide for the 
issuance of a new note (``New ESI Note'') to mature on November 30, 
1996. Amendment No. 2 will also state that the New ESI Note shall 
replace and supersede the ESI Note and represent the loans of ESI from 
Entergy under the ESI Loan Agreement. The ESI Loan Agreement shall 
continue in full force and effect under the terms authorized in HCAR 
No. 25376 and HCAR No. 25395.
    The New EOI Note and the New ESI Note will be dated on or about the 
date of issuance of the order herein requested and be stated to mature 
on November 30, 1996. The New EOI Note and the New ESI Note will 
continue to be payable to the order of Entergy and will be prepayable 
without premium. The New EOI Note and the New ESI Note will bear 
interest on the unpaid principal amount with interest based on the 
prime rate announced by Chemical Banking Corporation in New York, New 
York from time to time.
    Loans under the EOI Loan Agreement and the ESI Loan Agreement will 
be in addition to loans through the Money Pool. The aggregate principal 
amount of loans to EOI pursuant to the EOI Loan Agreement, through the 
Money Pool, and through other arrangements shall not exceed $15 
million, subject to a prospective increase to $20 million pursuant to 
the above-mentioned Commission reservation of jurisdiction. The 
aggregate principal amount of loans to ESI pursuant to the ESI Loan 
Agreement, through the Money Pool, and through other arrangements shall 
not exceed $150 million. Finally, the aggregate principal amount of 
loans to EOI and ESI through the Money Pool shall not credit then 
available to EOI and ESI pursuant to the EIO Loan Agreement and the ESI 
Loan Agreement and other arrangements.
    EOI and ESI also request authorization to extend the authorized 
period for external arrangements to borrow from one or more banks 
through November 30, 1996 and, in the case of ESI, to increase the 
commitment thereunder from $90 million to $150 million. Those external 
arrangements will reduce the amount Entergy has committed to EOI under 
the EOI Loan Agreement and to ESI under the ESI Loan Agreement.
    The proposed bank loans would be evidenced through unsecured notes 
in an aggregate principal amount of up to $15 million for EOI, subject 
to the above-mentioned increase to $20 million, and up to $150 million 
for ESI. The notes would be payable by November 30, 1996 and would bear 
interest on the unpaid principal amount thereof at a rate per annum 
selected by EOI or ESI from the Prime Rate, the CD Rate, the LIBOR Rate 
or the Bid Rate. The notes will, under certain circumstances and with 
the consent of the banks, be prepayable without premium (except in the 
case of the CD Rate or LIBOR Rate).
    EOI or ESI might agree to offer the banks a commitment fee not in 
excess of \3/8\ of 1% per annum of the total unused portion of the 
lines of credit, to maintain balances in accounts with the Local Banks 
to yield the equivalent of \3/8\ of 1%, or a combination of both. 
Entergy might be required to guarantee the obligations of EOI and ESI 
to the banks. Authorization for such guarantees through November 30, 
1996 also is requested. Neither EOI nor ESI will borrow from banks 
until EOI and Entergy, or ESI and Entergy, have filed a post-effective 
amendment with the names of the banks and the terms and conditions of 
the loans.

New England Electric System (70-8453)

    New England Electric System (``NEES''), 25 Research Drive 
Westborough, Massachusetts 01582, a registered holding company, has 
filed a declaration under Sections 6(a) and 7 of the Act.
    NEES proposes to issue and sell short-term promissory notes to 
banks from time to time from November 1, 1994 to October 31, 1996 up to 
an aggregate principal amount of $100 million (``Notes'').
    The Notes will mature in less than one year from the date of 
issuance. NEES will negotiate with banks the interest costs of such 
borrowings. The effective interest cost of borrowings from a bank will 
not exceed the greater of the bank's base or prime lending rate, or the 
rate published in the Wall Street Journal as the high federal funds 
rate, plus, in either case, one percent. Certain of such borrowings may 
be without prepayment privileges. Based on the current base lending 
rate of 7.25% and an equivalent or lower high federal funds rate, the 
effective interest costs of such borrowing would not exceed 8.25% per 
annum.
    Payment of the Notes prior to maturity will be made on the basis 
most favorable to NEES, taking into account fixed maturities, interest 
rates, and any other relevant financial consideration.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-22917 Filed 9-15-94; 8:45 am]
BILLING CODE 8010-01-M