[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] ----------------------------------------------------------------------- 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\ --------------------------------------------------------------------------- \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. --------------------------------------------------------------------------- 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\ --------------------------------------------------------------------------- \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. --------------------------------------------------------------------------- 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