[Federal Register Volume 59, Number 184 (Friday, September 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23595]


[[Page Unknown]]

[Federal Register: September 23, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26128]

 

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

September 16, 1994.
    Notice is hereby given that the following filing(s) has/have been 
made with the Commission pursuant to provisions of the Act and rules 
promulgated thereunder. All interested persons are referred to the 
application(s) and/or declaration(s) for complete statements of the 
proposed transaction(s) summarized below. The application(s) and/or 
declaration(s) and any amendments thereto is/are available for public 
inspection through the Commission's Office of Public Reference.
    Interested persons wishing to comment or request a hearing on the 
application(s) and/or declaration(s) should submit their views in 
writing by October 11, 1994 to the Secretary, Securities and Exchange 
Commission, Washington, D.C. 20549, and serve a copy on the relevant 
applicant(s) and/or declarant(s) at the address(es) specified below. 
Proof of service (by affidavit or, in case of an attorney at law, by 
certificate) should be filed with the request. Any request for hearing 
shall identify specifically the issues of fact or law that are 
disputed. A person who so requests will be notified of any hearing, if 
ordered, and will receive a copy of any notice or order issued in the 
matter. After said date, the application(s) and/or declaration(s), as 
filed or as amended, may be granted and/or permitted to become 
effective.

Jersey Central Power & Light Company (70-6903)

    Jersey Central Power & Light Company (``JCP&L''), 300 Madison 
Avenue, Morristown, New Jersey 07962-1911, an electric utility 
subsidiary company of General Public Utilities Corporation, a 
registered holding company, has filed a post-effective amendment to its 
application under Sections 9(a) and 10 of the Act.
    By Orders dated November 16, 1983 (HCAR No. 23121), November 19, 
1984 (HCAR No. 23486), July 30, 1985 (HCAR No. 23773), June 27, 1986 
(HCAR No. 24138) and January 17, 1990 (HCAR No. 25007), JCP&L was 
authorized, among other things, to acquire from time-to-time until 
December 31, 1994, up to $15 million of obligations of its electric 
customers, and to incur up to $500,000 of administrative and other 
related expenses, arising from such customers' participation in JCP&L's 
Home Energy Loan Program, Solar Water Heating Conversion Program and 
Electric Heat Conversion Program. Such obligations consist of notes 
evidencing disbursements made by JCP&L to contractors on behalf of 
these customers in connection with the programs.
    JCP7L now requests authority to extend the time, through December 
31, 1999, during which it may acquire such customer obligations in the 
same amounts and incur administrative and other related expenses in an 
increased amount of up to $750,000. In all other respects, the proposed 
transactions that were approved previously would remain unchanged.

Southwestern Electric Power Company (70-6977)

    Southewestern Electric Power company (``SWEPCO''), 428 Travis 
Street, Shreveport, Louisiana 71156, an electric utility subsidiary 
company of Central and south West Corporation, a registered holding 
company, has filed a post-effective amendment to its declaration under 
Sections 6(a) and 7 of the Act.
    By order dated June 8, 1984 (HCAR No. 23325), SWEPCO was authorized 
to issue prior to December 31, 1984, up to $75 million of unsecured 
notes in one or more transactions from commercial banks. Pursuant to 
that authority SWEPCO borrowed $50 million from The Bank of New York 
(``BNY'') and First Interstate Bank of California (``FIBC'') under a 
Term Loan Agreement, dated as of June 15, 19984 (``Loan Agreement'').
    By subsequent order dated June 7, 1991 (HCAR No. 25328), SWEPCO was 
authorized to enter into an amendment to the Loan Agreement with the 
lenders to: (1) extend the maturity of the notes through June 15, 1997; 
(2) amend the interest rate on the loan; (3) add provisions to 
compensate the lenders for their costs of complying with capital 
adequacy regulations; and (4) add assignment and participation 
provisions. SWEPCO did not receive any new proceeds as a result of 
entering into the amendment to the Loan Agreement and the aggregate 
principal amount of notes outstanding remained at $50 million.
    SWEPCO now proposes, through December 31, 1994, to enter into a new 
Term Loan Agreement (``New Loan Agreement'') with FIBC, Credit Suisse 
and The Yasuda Trust and Banking Co., LTD., New York Branch and with 
BNY, individually and as agent (collectively, the ``Banks''), to 
replace the Loan Agreement. The New Loan Agreement will modify the Loan 
Agreement by: (1) extending the maturity of the outstanding loan 
through June 15, 2000; and (2) amending the interest rate on the loan. 
The aggregate principal amount of the notes outstanding under the New 
Loan Agreement will be $50 million. Because SWEPCO is requesting 
authority to replace the Existing Loan Agreement and to extend the 
maturity of the existing loan, no new proceeds will be received by 
SWEPCO upon entering into the New Loan Agreement in excess of the 
amounts required to prepay its obligations under the Existing Loan 
Agreement.
    Each loan will be evidenced by a note having a final maturity date 
of June 15, 2000, which will bear interest at an optional rate. Through 
June 15, 1997, the available rates are convertible, and include: (1) an 
Alternate Base Rate, which for any day is an annual rate equal to the 
higher of (i) BNY's prime rate and (ii) the Federal Funds Rate, plus 1/
2 of 1%; and (2) a Eurodollar Rate, which will be .375% above the Libor 
Rate, as defined in the New Loan Agreement. Loans made after June 15, 
1997 will bear interest at the Alternate Base Rate. Accrued interest on 
Alternate Base Rates loans are payable quarterly and interest on 
Eurodollar Rate loans are payable on the last day of the optional 
interest period of one, two, three or six months selected by SWEPCO, 
provided that if the interest period is for six months, accrued 
interest is payable at the end of the third month. An arrangement fee 
of seven and one-half basis points ($37,500) will be paid to BNY upon 
Commission approval of the New Loan Agreement.
    The notes and the New Loan Agreement will permit prepayment of 
principal in whole or in part at any time prior to maturity without 
penalty. No compensating balances with BNY will be required. SWEPCO 
presently anticipates that the notes issued under the New Loan 
Agreement will be repaid no later than June 15, 1997. The aggregate 
principal amount of notes to be issued under the New Loan Agreement 
together with all other unsecured indebtedness of SWEPCO will not 
exceed 20% of the sum of the secured indebtedness of SWEPCO and its 
total capital stock and surplus.
    The New Loan Agreement includes a provision requiring SWEPCO to 
compensate each Bank for the cost to such Bank of complying with any 
law, rule, regulation, request or guideline of any governmental 
authority, central bank or comparable agency regarding capital adequacy 
to the extent that such cost arises as a consequence of the Bank's 
obligations under the New Loan Agreement. Because the circumstances of 
individual banks vary and it is not possible to predict what changes 
might occur relating to capital requirements for banks generally, the 
cost to SWEPCO of complying with this provision of the New Loan 
Agreement cannot be determined. If this provision was to increase 
SWEPCO's costs under the New Loan Agreement, SWEPCO could exercise its 
option to prepay without penalty, although the obligation of SWEPCO to 
pay any increased costs under this provision would survive termination 
of the New Loan Agreement to the extent that any demand for payment was 
made prior to prepayment.

American Electric Power Company, Inc., et al. (70-8307)

    American Electric Power Company, Inc. (``AEP''), a registered 
holding company, and its nonutility subsidiary company, AEP Energy 
Services, Inc. (``AEP Energy'') (collectively, ``Applicants''), both 
located at 1 Riverside Plaza, Columbus, Ohio 43215, have filed a post-
effective amendment to their application-declaration filed under 
Sections 6(a), 7, 9(a), 10, 12(b) and 13(b) of the Act and Rules 45, 
87, 90, and 91 thereunder.
    By order dated April 21, 1982 (HCAR No. 22468) (``1982 Order''), 
the Commission authorized AEP to organize AEP Energy for the purpose of 
providing consulting services to nonassociate companies. In addition, 
the 1982 Order authorized AEP to make capital contributions to AEP 
Energy in the amount of up to $1 million.\1\
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    \1\The 1982 Order also authorized AEP Energy to sell or 
otherwise dispose of intellectual property owned and/or developed by 
AEP system companies. Should AEP Energy use any intellectual 
property developed by American Electric Power Service Corporation 
(``AEP Service'') or any other AEP system company, AEP Energy states 
that it will pay the following amounts to that AEP system company 
for any such intellectual property actually sold or licensed by AEP 
Energy: (1) 70% of the revenues from the intellectual property until 
the AEP system company that developed the intellectual property 
recovers its programming and development costs; and (2) 20% of such 
revenues thereafter. AEP Energy would pay cost for intellectual 
property developed at its request. AEP Energy would address such 
requests only to AEP Service.
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    By order dated March 30, 1994 (HCAR No. 26014) (``March 1994 
Order''), the Commission authorized AEP to make additional investments 
in AEP Energy in the amount of $5 million for preliminary development 
activities associated with its consulting business. The Commission also 
authorized AEP and AEP Energy to expand the scope of AEP's financial 
commitments to include the issuance of guarantees or assumptions of 
liabilities in an aggregate amount not to exceed $25 million.
    AEP now seeks to expand its investment in AEP Energy and the amount 
of debt of AEP Energy that AEP is authorized to guarantee to $50 
million. AEP also seeks to increase the amount of guarantees or 
assumptions of liabilities by AEP on behalf of AEP Energy to $200 
million.
    AEP Energy also seeks authorization to provide energy management 
conservation and load management services to customers located in the 
states of Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and 
West Virginia (``Region'') and to provide limited services outside the 
Region, with the restriction that revenues attributable to customers 
outside of the Region do not exceed revenues attributable to customers 
inside of the Region. AEP Energy also may provide energy management and 
demand side management services to associate companies, at cost.
    AEP Energy further proposes to render services to associated exempt 
wholesale generators (``EWG''), foreign utility companies (``FUCO''), 
qualifying facilities (``QF'') and other associated power projects 
(collectively, ``Associated Power Projects''). Such services would 
include only those that AEP Energy is authorized to render to 
nonaffiliate companies.
    AEP Energy seeks to provide such services and sell goods to any 
Associated Power Project at fair market prices, and requests an 
exemption pursuant to Section 13(b) from the requirements of Rules 90 
and 91 in each of the following circumstances:
    (a) An Associated Power Project derives no part of its income, 
directly or indirectly, from the generation, transmission, or 
distribution of electric energy for sale within the United States; or 
(b) An Associated Power Project is an EWG which sells electricity at 
market-based rates which have been approved by the Federal Energy 
Regulatory Commission (``FERC'') or the appropriate state public 
utility commission, or a QF which sells electricity at the purchaser's 
``avoided cost'' determined in accordance with the regulations under 
the Public Utility Regulatory Policies Act of 1978, or sells 
electricity at rates negotiated at arms-length with large industrial or 
commercial customers purchasing such electricity for their own use and 
not for resale; or (c) An Associated Power Project sells electricity at 
rates based upon its cost of service, as approved by FERC or any state 
public utility commission having jurisdiction, provided that: the 
purchaser of such electricity is not an associate company of AEP Energy 
and the terms and conditions (including price) of the contract pursuant 
to which AEP Energy agrees to provide such services or goods have been 
expressly approved by the holders of a majority of the equity interests 
of such Project other the AEP or an associate company.
    In addition, AEP Energy seeks to enter into separate agreements to 
sell or license intellectual property that is may develop or acquire 
pursuant to its energy consulting activities.
    Finally, AEP Energy seeks to organize subsidiary companies to 
render its services (``AEP Energy Sub''). Under the authorization 
limits described above for AEP and AEP Energy, AEP Energy proposes to 
make capital contributions to the AEP Energy Subs, and for the AEP 
Energy Subs to incur long- and short-term debt, and for AEP or AEP 
Energy to guarantee the debt and performance of such AEP Energy 
Subs.\2\
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    \2\In the March 1994 Order, the Commission authorized AEP Energy 
to obtain debt financing from unaffiliated third parties consisting 
of commercial banks, insurance companies or other institutional 
investors (``Debt Financing'') and for AEP to guarantee the Debt 
Financing up to $5 million. Debt Financing obtained by AEP Energy 
would not exceed a term of 10 years or bear a floating interest rate 
in excess of 115% of the prime rate in effect at the time of 
issuance. In connection with any Debt Financing obtained by AEP 
Energy, it may be required to pay commitment and other fees not to 
exceed 25 basis points per annum on the total amount of the Debt 
Financing. Any debt financing of the AEP Energy Subs would mirror 
these terms.
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Central Power and Light Company, et al. (70-8431)

    Central Power and Light Company (``CPL''), 539 North Carancahua 
Street, Corpus Christi, Texas 78401, and Southwestern Electric Power 
Company (``SWEPCO''), 428 Travis Street, Shreveport, Louisiana 71101, 
both electric public-utility subsidiary companies of Central and South 
West Corporation, a registered holding company, have filed an 
application under Sections 9(a) and 10 of the Act.
    CPL and SWEPCO (``Applicants'') propose to engage in certain 
activities (``Activities''), involving nonaffiliates, in connection 
with Applicants' compliance with the ``alternative fuel'' requirements 
of the Federal Energy Policy Act of 1992 and related legislation 
enacted in Louisiana and Texas (collectively, ``Energy Acts''). The 
nonaffiliates include the cities of Corpus Christi, Texas (``Corpus 
Christi'') which is in the service territory of CPL and Shreveport, 
Louisiana (``Shreveport''), Caddo Parish, Louisiana, the parish in 
which Shreveport is located (``Caddo''), Bossier City, Louisiana, a 
city adjacent to Shreveport (``Bossier City''), and Longview, Texas 
(``Longview''), all of which are in the service territory of SWEPCO 
(Shreveport, Caddo, Bossier City, and Longview collectively referred to 
as, ``SWEPCO Municipalities'').
    The proposed Activities are for: (1) CPL and SWEPCO to purchase, 
install, maintain and provide electric-powered compression equipment in 
an aggregate of seven fueling facilities to be constructed and owned by 
Corpus Christi and the SWEPCO Municipalities for the purpose of making 
natural gas available as an alternative fuel for vehicles; and (2) 
SWEPCO to provide, at an aggregate of four fueling facilities to be 
constructed by SWEPCO principally for use in fueling its own vehicles, 
compressed natural gas to vehicles owned by the SWEPCO Municipalities.
    The Energy Acts require that increasing percentages of the vehicle 
fleets of governmental entities and electric utilities, among others, 
must be capable of operating on fuel other than gasoline of diesel in 
the next several years. The Activities would permit initial compliance 
by CPL and SWEPCO, and by Corpus Christi and the SWEPCO Municipalities, 
with the requirements of the Energy Acts.
    CPL's costs of furnishing compression equipment at the one facility 
to be constructed by Corpus Christi would not exceed $250,000, and the 
initial annual revenues and expenses associated with the furnishing of 
compression services would aggregate $65,000 and $40,000, respectively. 
This cost would be financed out of internally generated funds. The 
gross profits from such services would be accounted for as a reduction 
in fleet expenses of CPL.
    SWEPCO's cost of furnishing compression equipment at the six 
facilities to be constructed by the SWEPCO Municipalities would not 
exceed $1.5 million, and the initial annual revenues and expenses 
associated with the furnishing of compression services would aggregate 
$342,000 and $202,500, respectively. This cost would be financed out of 
internally generated funds. The gross profits from such services would 
be accounted for as a profit from an unregulated activity. SWEPCO's 
cost of constructing the four fueling facilities on its own property 
would aggregate $1.04 million, and the profits from the sale of 
compressed gas provided to vehicles operated by the SWEPCO 
Municipalities would be accounted for as a reduction in fleet expenses 
of SWEPCO.

Georgia Power Company (70-8443)

    Georgia Power Company (``Georgia Power''), 333 Piedmont Avenue, 
N.E., Atlanta, Georgia 30308, a wholly-owned electric public-utility 
subsidiary company of The Southern Company, a registered holding 
company, has filed an application-declaration under Sections 6(a), 7, 
9(a), 10 and 12(d) of the Act and Rules 44 and 54 thereunder.
    Georgia Power proposes to enter into one or more loan agreements or 
installment sales agreements (each an ``Agreement'') on or before 
December 31, 1997 in connection with the issuance and sale by public 
instrumentalities (each an ``Authority'') of one or more series of 
pollution control revenue bonds in an aggregate principal amount not 
exceed $840 million (``Revenue Bonds''). Each issuance of Revenue Bonds 
by an Authority will be used to finance or refinance the costs of 
certain pollution control and/or sewage and solid waste disposal 
facilities at an electric generating plant or other facility 
(``Project'') of Georgia Power within the jurisdiction of such 
Authority.
    Each series of Revenue Bonds will bear an interest rate not to 
exceed the yield, at the time any such rate is determined, on U.S. 
Treasury securities having a maturity comparable to that of such series 
of Revenue Bonds, inclusive of any underwriter's discount commission.
    The Revenue Bonds will mature between one month and forty years 
from the date of issuance and may, if it is deemed advisable for 
purposes of marketability, be entitled to the benefit of a mandatory 
redemption sinking fund calculated to retire a portion of the aggregate 
principal amount of the Revenue Bonds prior to maturity.
    Proceeds from the sale of the Revenue Bonds will be deposited with 
a trustee (``Trustee'') under the indenture to be entered into between 
the Authority and the Trustee (``Indenture''), pursuant to which such 
Revenue Bonds are to be issued and secured. Also, the Agreement will 
provide for the assignment to the Trustee of the Authority's interest 
in, and of the monies receivable by the Authority under, the Agreement.
    Pursuant to the Agreement, the Authority will lend to Georgia Power 
the proceeds of the Sale of the Revenue Bonds. Georgia Power would 
apply these proceeds to pay the Cost of Construction (as defined in the 
Agreement) of the Project or to refund outstanding pollution control 
revenue obligations. Under the Agreement, Georgia Power will pay the 
Authority amounts at times which shall correspond to the payments with 
respect to the principal of, premium, if any, and interest on, the 
related Revenue Bonds. These payments shall be made whenever and in 
whatever manner the principal on such Revenue Bonds shall become due, 
whether at stated maturity, upon redemption or declaration or 
otherwise.
    Georgia Power may be required to purchase any of the Revenue Bonds, 
or any of the Revenue Bonds may be subject to mandatory redemption, at 
any time if the interest thereon is determined to be subject to federal 
income tax. Also in the event of taxability, interest on those Revenue 
Bonds may be effectively converted to a higher rate, and Georgia Power 
also may be required to indemnify the bondholders against any other 
additions to interest, penalties and additions to tax.
    The Indenture and the Agreement may also give the holders of the 
Revenue Bonds the right, during such time as the Revenue Bonds bear 
interest at a fluctuating rate, to require Georgia Power to purchase 
the Revenue Bonds from time-to-time, and arrangements may be made for 
the remarketing of any such Revenue Bonds through a remarketing agent. 
The purchase price payable by or on behalf of Georgia Power in respect 
to Revenue Bonds tendered for purchase at the option of the holders 
thereof will not exceed 100% of the principal amount thereof, plus 
accrued interest to the purchase date.
    Additionally, the Indenture will provide that the Revenue Bonds 
issued thereunder will be redeemable at any time on or after a 
specified date or dates form the date of issuance, in whole or in part, 
at the option of Georgia. The exercise of such option may require the 
payment of a premium at a specified percentage of the principal amount. 
This percentage, which may decline at annual or other intervals, will 
not exceed the greater of (i) 5% of the principal amount of the Revenue 
Bonds so to be redeemed or (ii) the annual rate of interest borne by 
such Revenue Bonds.
    Georgia Power currently has outstanding certain first mortgage 
bonds issued under an indenture dated as of March 1, 1941 between 
Georgia Power and Chemical Bank, as trustee, as supplemented and 
amended (``Mortgage''). In order to obtain the benefit of ratings for 
the Revenue Bonds equivalent to the rating of these mortgage bonds, 
Georgia Power may deliver to the Trustee a series of first mortgage 
bonds, to be issued under the Mortgage, as collateral for its 
obligations to the Authority related to the Revenue Bonds (``Collateral 
Bonds''). The aggregate principal amount of such Collateral Bonds would 
be equal to either: (1) the principal amount of the related Revenue 
Bonds, if the Collateral Bonds are interest-bearing; or (2) the sum of 
such principal amount of those Revenue Bonds plus interest payments 
thereon for a specified period, if the Collateral Bonds are not 
interest-bearing. The Collateral Bonds will mature on the maturity date 
of the Revenue Bonds.
    As a further alternative to, or in conjunction with, securing its 
obligations through the issuance of the Collateral Bonds, Georgia Power 
may: (1) cause an irrevocable letter of credit (``Letter of Credit'') 
to be delivered to the Trustee; and/or (2) cause an insurance company 
to issue a policy (``Policy''), guaranteeing the payment of the Revenue 
Bonds. In the event that the either the Letter of Credit is delivered 
to the Trustee or the Policy is issued, Georgia Power may also convey 
to the Authority a subordinated security interest in the Project or 
other property of Georgia Power as further security for Georgia Power's 
obligations under the Agreement.
    Any Letter of Credit issued as security for the payment of the 
Revenue Bonds will be issued pursuant to a reimbursement agreement 
(``Reimbursement Agreement'') between Georgia Power and the financial 
institution issuing such Letter of Credit (``LC Issuer''). Pursuant to 
such Reimbursement Agreement, the LC Issuer may advance Georgia Power 
amounts to repay the LC Issuer for amounts drawn under the Letter of 
Credit. Any such advance may have a maturity of up to 10 years and bear 
an interest rate not to exceed (i) the LC Issuer's prime rate, (ii) 
LIBOR plus \3/8\ of 1%, or (iii) the LC Issuer's CD rate plus \1/2\ of 
1%.
    In the event that Georgia Power is unable or determines not to 
issue the Collateral Bonds, delivery the Letter of Credit to the 
Trustee or cause the Policy to be issued, it proposes to (1) convey to 
the Authority a subordinated security interest in the Project or other 
property of Georgia Power as further security for Georgia Power's 
obligations under the Agreement and/or (2) guarantee the payment of the 
principal of, premium, if any, and interest on the Revenue Bonds.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-23595 Filed 9-22-94; 8:45 am]
BILLING CODE 8010-01-M