[Federal Register Volume 59, Number 227 (Monday, November 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29215]
[Federal Register: November 28, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26163]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
November 18, 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 December 12, 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.
Holyoke Water Power Company (70-7495)
Holyoke Water Power Company (``HWP''), One Canal Street, Holyoke,
Massachusetts 01040, an electric utility subsidiary company of
Northeast Utilities, a registered holding company, has filed a post-
effective amendment under Sections 6(a) and 7 of the Act and Rule 54
thereunder to its declaration previously filed under Sections 6(a) and
7 and Rule 50(a)(5) thereunder.
By Commission order dated November 9, 1988 (HCAR No. 24742), HWP
was authorized to finance certain pollution control facilities at its
Mt. Tom Station (``Facilities''). The cost of acquiring, constructing
and installing the Facilities was financed by HWP through its use of
the net proceeds from the sale by the Industrial Development Finance
Authority of the City of Holyoke, Massachusetts (``IDA'') of its
pollution control revenue bonds (``Bonds'') in the principal amount of
$8 million. The Bonds were issued pursuant to an Indenture of Trust
between the IDA and Baybank Middlesex, as trustee (``Trustee''), and
the proceeds of the issuance of the Bonds were loaned to HWP pursuant
to a Loan Agreement (``Loan Agreement'') between HWP and the IDA.
In order to obtain the benefits of a high quality rating for the
Bonds, HWP's obligations under the Loan Agreement are secured by an
irrevocable letter of credit (``Letter of Credit'') in the amount of
$8,667,000 issued by Union Bank of Switzerland, New York Branch
(``Bank'') in favor of the Trustee. The Letter of Credit secures $8
million of principal amount plus interest in the amount of $667,000 at
the maximum rate of 15% per annum for 218 days.
HWP now proposes to amend the Reimbursement and Security Agreement,
dated as of November 1, 1988 between HWP and the Bank in order to: (1)
change the expiration date of the Letter of Credit, from perpetual to a
three-year term ending November 1, 1997, extendible for successive one-
year terms thereafter during the term of the Loan Agreement, with the
consent of HWP and the Bank; (2) reduce the annual Letter of Credit fee
payable to the Bank; and (3) extend, modify or replace the Letter of
Credit provided by the Bank, as permitted by the Loan Agreement, by
delivery of a substitute credit facility, consisting of a new letter of
credit, and related agreements, to be provided by a substitute bank to
be chosen by HWP (``Substitute Bank'').
The proposed Letter of Credit fee will be changed from 0.45% of the
Letter of Credit amount to 0.40% of that amount. This represents an
annual fee reduction of $4,334 per annum.
HWP proposes to extend, modify or replace the Bank's Letter of
Credit with a new letter of credit (``Substitute ``LOC'') to be issued
by the same or a Substitute Bank during the term of the Bonds. The
Substitute LOC would be issued under a new letter of credit and
reimbursement agreement (``New LOC Agreement'') substantially identical
to the Letter of Credit and Reimbursement Agreement, dated as of
September 1, 1993 among HWP's associate company, The Connecticut Light
& Power Company, Deutsche Bank AG, New York Branch and various co-
agents and participating banks, as approved by Commission order, dated
September 15, 1993 (HCAR No. 25881). The New LOC Agreement will be in
accordance with the Loan Agreement and provide that: (1) the total
amount available to be drawn under any such extended, modified, or
replacement letter of credit does not exceed $8,667,000; (2) the annual
letter of credit costs applicable to any such extension, modification,
or replacement do not exceed 1.00% per annum of the total amount
available; (3) that tender advances bear interest until paid at a rate
not to exceed the higher of (a) the prime rate plus 2.00% or (b) the
federal funds rate plus 2.00%; (4) such extension, modification, or
replacement is otherwise on terms that are substantially similar in all
material respects to those applicable to the New LOC Agreement.
GPU Nuclear Corporation, et al. (70-8425)
GPU Nuclear Corporation (``GPUN''), One Upper Pond Road,
Parsippany, New Jersey, 07054, a public-utility subsidiary company of
General Public Utilities Corporation (``GPU''), a registered holding
company; Energy Initiatives, Inc. (``EII''), One Upper Pond Road,
Parsippany, New Jersey, 07054, a nonutility subsidiary company of GPU;
Jersey Central Power & Light Company (``JCP&L''), 300 Madison Avenue,
Morristown, New Jersey, 07960, a public-utility subsidiary company of
GPU; Metropolitan Edison Company (``Met Ed''), P.O. Box 16001, Reading,
Pennsylvania, 19640; a public-utility subsidiary company of GPU;
Pennsylvania Electric Company (``Penelec''), 1001 Broad Street,
Johnstown, Pennsylvania, 15907, a public-utility subsidiary company of
GPU; and GPU Service Corporation (``GPUS''), 100 Interpace Parkway,
Parsippany, New Jersey, 07054, a nonutility subsidiary company of GPU,
have filed a declaration under Section 13(b) of the Act and Rules 87,
90 and 91 thereunder.
GPUN proposes to perform a range of nonnuclear technical, training,
management and consulting services (``Services'') for GPU Service,
Initiatives, JCP&L, Met Ed, and Penn Elec (``GPU Companies''),\1\ which
include: (1) plant operations and maintenance; (2) plant inspections
and risk analysis; (3) plant equipment corrosion control and failure
analysis; (4) engineering and design services; (5) plant life extension
analysis; (6) project and construction management; (7) plant
modification, design, installation, evaluation and testing; (8)
environmental protection services; (9) emergency preparedness training
and services; (10) quality assurance services; (11) training programs;
(12) plant management consulting and operation analysis; (13)
industrial safety and hygiene services; and (14) medical services.
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\1\On April 5, 1994, GPU filed an application (File No. 70-8409)
to form GPU Generation Corporation (``GPU Generation'') to operate,
maintain and rehabilitate the non-nuclear generation facilities of
the GPU Companies. GPUN proposes that when GPU Generation is
authorized, GPUN also would provide services for it under the
authorization requested herein.
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GPUN intends to enter into a Non-Nuclear Technical, Training,
Management and Consulting Services Agreement (``Agreement'') with the
GPU Companies to provide the Services in connection with their business
operations. The Agreement will be substantially in the form of the
Laboratory Service Agreement previously filed (Exhibit A-4) in SEC File
No. 70-7720.
Schedule I to the Agreement describes the types of Services that
GPUN intends to furnish to the GPU Companies. Schedule II to the
Agreement, Determination of Cost of Service and Allocation Thereof,
provides that any Services to be rendered by GPUN will be charged at
cost pursuant to the Act and the regulations thereunder.
Schedule II will also reflect the practice of (i) charging capital
costs for providing Services to the serviced companies consistent with
generally accepted accounting principles, and (ii) billing to the
serviced company the costs of service before they are paid by GPUN,
which is consistent with the practice that was approved by the
Commission in its letter to GPUS dated June 3, 1982. Such costs will be
accounted for and billed to the GPU Companies substantially as
described in HCAR No. 25149 (Sept. 14, 1990).
The GPU Companies believe that the technical, analytical and
related expertise of GPUN can be usefully applied in support of their
business activities. Providing the Services will not interfere with
GPUN's primary responsibility of operating and maintaining nuclear
generating facilities of behalf of those companies. The total level of
Services GPUN will provide will not exceed ten percent of the level of
primary nuclear services which it is currently providing to the GPU
Companies.
GPUN will, by May 1 each year, separately report to the Commission
any revenues received from the performance of the Services on its
annual report on Form U-13-60 filed under the Act.
American Electric Power Co., et al. (70-8429)
American Electric Power Company, Inc. (``AEP''), 1 Riverside Plaza,
Columbus, Ohio 43215, a registered holding company, and AEP Resources,
Inc. (``Resources''), 1 Riverside Plaza, Columbus, Ohio 43215, a non-
utility subsidiary company of AEP, have filed an application-
declaration under Sections 6(a), 7, 9(a), 10, 12(b), 32 and 33 of the
Act and Rules 45 and 53 thereunder.
AEP and Resources propose to issue and sell up to $300 million in
debt and/or equity securities through June 30, 1997 to invest in two
types of power projects (``Power Projects'')--exempt wholesale
generators (``EWGs'') and foreign utility companies (``FUCOs''). AEP
and Resources also request approval to acquire the securities of one or
more companies (``Project Parents'') that will directly or indirectly
own and hold the securities of one or more FUCOs and EWGs.
AEP proposes to guarantee the debt securities and other commitments
of Resources, and AEP and Resources also propose to guarantee the
securities of one or more Project Parents or Power Projects, and for
Project Parents to guarantee the securities of their Power Projects,
through June 30, 1997, in an aggregate amount which together with the
securities will not exceed $300 million.
With respect to AEP equity financing, AEP proposes to issue and
sell up to 10 million additional shares (``Shares'') of its common
stock, par value $6.50 per share, which are authorized but unissued or
held by AEP, provided that the gross proceeds from such sale will not
exceed $300 million. AEP proposes to effect the issuance and sale by
competitive bidding, negotiations with underwriters or agents, or
agents at market prices. The Commission is requested to reserve
jurisdiction over the issuance and sale by AEP of the Shares pending
completion of the record.
With respect to long-term debt financing, AEP and Resources also
request authorization to issue and sell through June 30, 1997
promissory notes (``Long-term Notes'') in the aggregate principal
amount of up to $300 million to one or more commercial banks, financial
institutions or other institutions or other investors pursuant to one
or more loan agreements (``Proposed Agreement''). The Proposed
Agreement and the Long-term Notes thereunder would be for a term of not
less than nine months nor more than twenty years.
The Proposed Agreement would provide that the Long-term Notes bear
interest at either a fixed rate, a fluctuating rate or some combination
of fixed and fluctuating rates. Any fixed rate of interest of the Long-
term Notes will not be greater than 250 basis points above the yield at
the time of issuance of the Long-term Notes of United States Treasury
obligations (``Applicable Treasury Rate''). Any fluctuating rate will
not be greater than 200 basis points above the rate of interest
announced publicly by a major bank as its base or prime rate (``Prime
Rate''). If the indebtedness is denominated in the currency of a
country other than the United States, the fixed or floating rate, when
adjusted for inflation in such country, will not be greater than 700
basis points over the Applicable Treasury Rate or Prime Rate.
With respect to short-term debt financing, AEP and Resources
request authorization to incur such indebtedness through June 30, 1997
through the issuance and sale of notes to banks and, in the case of
AEP, commercial paper to dealers in commercial paper in an aggregate
amount not to exceed $300 million. Borrowings under the lines of credit
would generally bear interest at an annual rate not greater than the
prime commercial rate in effect from time to time. The total annual
cost of borrowings under all such bank lines is estimated to be not
greater than the effective rate for borrowings bearing interest at the
prime commercial rate with compensating balances of up to 10% of the
line of credit. The effective annual interest cost under any of the
above arrangements, assuming full use of the line of credit, will not
exceed 125% of the prime commercial rate in effect from time to time,
or not more than 10.625% on the basis of a prime commercial rate of
8.50%.
Commercial paper will be sold directly by AEP to dealers in
commercial paper. The commercial paper will be in the form of
promissory notes in denominations of not less than $50,000, and of
varying maturities, with no maturity more than 270 days after the date
of issue. Such notes will not be prepayable prior to maturity and will
be sold at a discount rate not to excess of the discount rate per annum
prevailing at the time of issuance for commercial paper of comparable
quality and maturity.
The application-declaration states that it may be necessary from
time to time for AEP to guarantee certain indebtedness or other
financial commitments of Resources, for AEP or Resources to guarantee
certain indebtedness or financial commitments of a Project Parent or
Power Project in which they may invest, or for a Project Parent to
guarantee certain indebtedness or financial commitments of a FUCO or
EWG in which it may invest. The terms and conditions of such guarantees
would be negotiated in individual cases, would vary in duration, and
may be contingent and conditional or absolute and unconditional. AEP
and Resources request authority to issue, or have Project Parents
issue, from time to time through June 30, 1997, up to $300 million in
guarantees provided that any guarantee outstanding on June 30, 1997
would expire or terminate in accordance with its terms.
AEP will not sell any Shares and neither AEP nor Resources will
incur any indebtedness or issue, or have a Project Parent issue, any
guarantee if the gross proceeds of all Shares and the principal amount
of all indebtedness and all guarantees authorized hereunder would
exceed $300 million. AEP intends to use the net proceeds from the sale
of the Shares or the short-term or long-term indebtedness to make
additional investments in Resources and direct or indirect investments
in Power Projects. Resources intends to use such funds from AEP and the
net proceeds from any short-term or long-term indebtedness to make
direct or indirect investments in Power Projects.
Investments in Resources by AEP would be by acquisitions of common
stock, capital contributions, open account advances and/or loans. Open
account advances or loans would bear interest at a rate based on the
cost of funds to AEP in effect on the date of issue. If AEP uses the
proceeds of long-term indebtedness to fund such investment, then the
interest rate will be the same as that of the term loan. If AEP uses
the proceeds of short-term borrowings to fund such investment, then the
cost of such funds will be the interest rate of short-term borrowings--
that is, would generally bear interest at an annual rate not greater
than the prime commercial rate in effect from time to time.
AEP and Resources request authority to make direct or indirect
investments in Project Parents in an aggregate amount not to exceed
$300 million. It is proposed that investments by AEP and Resources in
any Project Parent may take the form of (i) purchases of capital
shares, partnership interests, trust certificates, or the equivalent of
any of the foregoing, (ii) open account advances or loans, and/or (iii)
guarantees by AEP or Resources.
Open account advances or loans to a Project Parent would bear
interest at a rate based on cost of funds to AEP or Resources on the
date of issue. Any open account advance or loan may be converted to a
capital contribution to such Project Parent. Funds for any open account
advances or loans by AEP or Resources in any Project Parent will be
derived from the sale of common stock and/or the issuance of short-term
and long-term indebtedness or guarantees and from available cash.
Approval is requested for Project Parents to issue short-term and
long-term indebtedness to persons other than AEP or Resources which
would be guaranteed by AEP or Resources (``Recourse Debt''). Recourse
Debt would be subject to the same terms and conditions as indebtedness
of AEP and Resources. Approval is also requested for any Project Parent
to issue equity securities and debt securities to persons other than
AEP or Resources (``Non-Recourse Securities'') exclusively for the
purpose of financing investments in Exempt Subsidiaries. It is proposed
that the aggregate principal amount of non-recourse debt securities
issued by Project Parents to persons other than AEP and Resources will
not exceed $800 million provided that no more than $200 million
principal amount may be denominated in currencies other than U.S.
dollars.
Equity securities issued by any Project Parent to a person other
than AEP or Resources may include capital shares, partnership
interests, trust certificates, or any of the foregoing. Non-recourse
debt securities issued to persons other than AEP or Resources may
include secured and unsecured promissory notes, subordinated notes,
bonds, or other evidence of indebtedness. Securities issued by Project
Parents may be denominated in either U.S. dollars or foreign
currencies. The amount and type of such securities, and the terms
thereof, including interest rate, maturity, prepayment or redemption
privileges, and the terms of any collateral security granted with
respect thereto, would be negotiated on a case by case basis.
However, AEP and Resources state that any note, bond or other
evidence of indebtedness issued or sold by any Project Parent will
mature not later than 30 years from the date of issuance thereof, and
will bear interest, if such note, bond or other indebtedness is U.S.
dollar denominated, at a fixed rate not to exceed 6.5% over the
Applicable Treasury Rate, or at a floating rate not to exceed 6.5% over
the Prime Rate, and, if such note, bond or other indebtedness is
denominated in the currency of a different country, will bear interest
at a fixed or floating rate which, when adjusted for inflation in such
country, will not exceed 10% over the Applicable Treasury Rate or Prime
Rate.
The application-declaration states that AEP will not sell any
Shares, and neither AEP nor Resources will incur any indebtedness or
issue, or have a Project Parent issue, any guarantee, if the gross
proceeds of all outstanding Shares and the principal amount of all such
outstanding indebtedness and all such outstanding guarantees authorized
hereunder would exceed $300 million.
New England Electric System, et al. (70-8475)
New England Electric System (``NEES''), a registered holding
company, and New England Electric Resources, Inc. (``NEERI''), its
wholly owned, nonutility subsidiary company, both of 25 Research Drive,
Westborough, Massachusetts 01582, have filed an application-declaration
under sections 6(a), 7, 9(a), 10 and 12(b) of the Act and rule 45
thereunder.
NEERI proposes to enter into a joint arrangement with Separation
Technologies, Inc. (``STI''), the developer of a process for separating
unburned carbon from coal ash. In connection with this joint
arrangement, NEERI will be called on to invest in STI projects and to
provide certain consulting services to STI. Applicants-declarants state
that STI has developed a system of economically separating unburned
carbon from coal (or fly) ash produced by utility generating plants.
The separated carbon can be reburned by the utility. The processed ash
can be sold as a cement substitute in the manufacture of concrete.
As part of its joint arrangement with STI, NEERI proposes to enter
into a project with STI involving the processing of coal ash at an
electric generation facility in the New England/New York region (``NE/
NY Project'') owned by a nonaffiliated electric company (``Owner'').
NEERI proposes to invest $700,000 in the NE/NY Project in return for a
percentage of the NE/NY Project revenue stream. In addition, NEERI will
provide to STI consulting services for a fee. STI will be responsible
for processing the ash at the Owner's facility.
NEERI proposes to enter into similar joint arrangements with STI at
other locations where STI equipment will be installed. NEERI's
investment in these other utility locations is anticipated to range
between $0.5 and $2.0 million per installation. NEERI and STI also
propose to perform research to further refine the carbon-rich and low
carbon processed waste stream and to find other applications for the
STI separation process in recycling.
NEES proposes to provide additional financing to NEERI by making
capital contributions up to an additional $11.7 million and/or by
lending to NEERI from time to time additional amounts not to exceed
$11.7 million at any one time, such loans to be in the form of non-
interest bearing subordinated notes. The aggregate amount of all
investments (including amounts previously authorized by the Commission)
by NEES in NEERI shall not exceed $13.95 million.
Louisiana Power & Light Company (70-8487)
Louisiana Power & Light Company (``LP&L''), 639 Loyola Avenue, New
Orleans, Louisiana 70113, an electric public-utility subsidiary company
of Entergy Corporation, a registered holding company, has filed an
application-declaration under Sections 6(a), 7, 9(a), and 10 of the Act
and Rule 54 thereunder.
LP&L proposes to issue and sell up to an aggregate principal amount
of $565 million its first mortgage bonds (``Bonds'') to be issued and
sold in one or more new series from January 1, 1995 through December
31, 1996. Each series of Bonds will be sold at such price, will bear
interest at such rate and will mature on such date as will be
determined at the time of sale. One or more series of Bonds may include
provisions for redemption or retirement prior to maturity, including
restrictions on optional redemption for a given number of years. LP&P
may determine to provide an insurance policy for the payment of the
principal of and/or interest and/or premium on one or more series of
Bonds.
LP&L further proposes to issue and sell, from January 1, 1995
through December 31, 1996, one or more new series of its preferred
stock, cumulative, of either $25 par value or $100 par value
(collectively, the ``Preferred''). The total aggregate par value of
shares of those new series of the Preferred issued will be up to an
aggregate principal amount of $110 million. The price, exclusive of
accumulated dividends, and the dividend rate for each series of
Preferred will be determined at the time of sale. LP&L may determine
that the terms of the Preferred should provide for an adjustable
dividend rate thereon to be determined on a periodic basis, subject to
specified maximum and minimum rates, rather than a fixed dividend rate.
The terms of one or more series of the Preferred may include provisions
for redemption, including restrictions on optional redemption, and/or a
sinking fund designed to redeem all outstanding shares of such series
not later than thirty years after the date of original issuance.
LP&L proposes to use the net proceeds derived from the issuance and
sale of Bonds and/or the Preferred for general corporate purposes,
including, but not limited to, the possible acquisition of certain
outstanding securities. LP&L states that it presently contemplates
selling the Bonds and the Preferred either by competitive bidding,
negotiated public offering or private placement.
LP&L also proposes to enter into arrangements to finance on a tax-
exempt basis certain solid waste, sewage disposal and/or pollution
control facilities (``Facilities'') at Unit No. 3 of its Waterford
Steam Electric Generating Station in the Parish of St. Charles,
Louisiana (``Parish''). LP&L proposes, from time to time through
December 31, 1996, to enter into one or more installment sale
agreements and supplements (``Agreement''), pursuant to which the
Parish may issue one or more series of tax-exempt revenue bonds (``Tax-
Exempt Bonds'') up to an aggregate principal amount of $65 million. The
net proceeds from the sale of Tax-Exempt Bonds will be deposited by the
Parish with the trustee (``Trustee'') under one or more indentures
(``Indenture'') and will be applied by the Trustee to reimburse the
Company for, or to permanently finance or refinance on a tax-exempt
basis, the costs of the acquisition, construction, installation or
equipping of the Facilities.
LP&L further proposes, under the Agreement, to sell the Facilities
to the Parish for cash and simultaneously repurchase the Facilities
from the Parish for a purchase price, payable on an installment basis
over a period of years, sufficient to pay the principal of, purchase
price of, the premium, if any, and the interest on Tax-Exempt Bonds as
the same become due and payable. Under the Agreement, LP&L will also be
obligated to pay certain fees incurred in the transactions.
The price to be paid to the Parish for each series of Tax-Exempt
Bonds and the interest rate applicable thereto will be determined at
the time of sale. The Agreement and the Indenture will provide for
either a fixed interest rate or an adjustable interest rate for each
series of the Tax-Exempt Bonds. Each series may be subject to optional
and mandatory redemption and/or a mandatory cash sinking fund under
which stated portions of such series would be retired at stated times.
In order to obtain a more favorable rating and thereby improve the
marketability of the Tax-Exempt Bonds, LP&L may: (1) arrange for a
letter of credit from a bank (``Bank'') in favor of the Trustee (in
connection therewith, LP&L may enter into a Reimbursement Agreement
pursuant to which LP&L would agree to reimburse the Bank for amounts
drawn under the letter of credit and to pay commitment and/or letter of
credit fees); (2) provide an insurance policy for the payment of the
principal of and/or interest and/or premium on one or more series of
Tax-Exempt Bonds; and/or (3) obtain authentication of one or more new
series of First Mortgage Bonds (``Collateral Bonds'') to be issued
under LP&L's Mortgage on the basis of unfunded net property additions
and/or previously retired First Mortgage Bonds and delivered to the
Trustee and/or the Bank to evidence and secure LP&L's obligations under
the Agreement and/or the Reimbursement Agreement, respectively.
Allegheny Power System, Inc., et al. (70-8491)
Allegheny Power System, Inc. (``Allegheny''), a registered holding
company, and AYP Capital, Inc. (``AYP Capital''), its wholly owned
nonutility subsidiary, both of 12 East 49th Street, New York, New York
10017, have filed an application-declaration under sections 6(a), 7,
9(a) and 10 of the Act and rule 45(a) thereunder.
Allegheny proposes to invest in AYP Capital up to $5 million in the
form of cash contributions from time to time through December 31, 2002.
This money will fund AYP Capital's proposed acquisition, as a limited
partner of up to 10% of the interests of all limited partners in
Envirotech Investment Fund I Limited Partnership, a Delaware limited
partnership (``Envirotech Partnership''). In no event shall AYP
Capital's investment be more than $5 million.
The sole general partner of the Envirotech Partnership (``General
Partner'') will be Advent International Limited Partnership, a Delaware
limited partnership of which Advent International Corporation (``AIC'')
is the general partner. A key objective of the Envirotech Partnership
is to make investments that will contribute to the reduction, avoidance
or sequestering of greenhouse gas emissions; help utilities and their
customers handle waste by-products more effectively or produce or
manufacture goods or services more cost effectively; improve the
efficiency of the production, storage, transmission, and delivery of
energy; and provide investors with attractive opportunities relating to
the evolving utility business climate which meet the above objectives.
In selecting suitable investments, the Envirotech Partnership will
focus on the following technology sectors, among others: alternate and
renewable energy technologies; environmental and waste treatment
technologies and services; energy efficiency technologies, processes
and services; electrotechnologies used in the reduction of medical
waste; technologies and processes promoting alternative energy for
transportation; and other technologies related to improving the
generation, transmission and delivery of electricity.
The term of Envirotech Partnership shall be for 10 years from the
date of the partnership agreement, subject to extension for up to two
years upon agreement of the General Partner and limited partners
holding 66\2/3\% of the combined capital contributions of all limited
partners. Subject to certain limitations set forth in the partnership
agreement, the management, operation, and implementation of policy of
the Envirotech Partnership will be vested exclusively in the General
Partner. Among other powers, the General Partner shall have discretion
to invest the Partnership's fund in accordance with investment
guidelines set forth in the charter. The investment guidelines may be
amended or modified only upon the affirmative vote of limited partners
representing at least 75% of the commitments of all limited partners.
Under the terms of the partnership agreement the General Partner
will be paid an annual management fee equal to 2\1/2\% of the total
amount of the capital commitments of the partners through the first six
(6) years, thereafter declining by \1/4\ of 1% on each anniversary to
1.5% commencing on the ninth anniversary date. In addition, the General
Partner shall be entitled to reimbursement for all reasonable expenses
incurred in the organization of the Envirotech Partnership up to
$195,000, and for other third party expenses incurred on behalf of the
Envirotech Partnership.
All Envirotech Partnership income and losses (including income and
losses deemed to have been realized when securities are distributed in
kind) will generally be allocated 80% to and among the limited partners
and 20% to the General Partner. One hundred percent (100%) of all cash
distributions to the partners shall be made first to the limited
partners until such time as the limited partners shall have received
aggregate distributions equal to the aggregate of their respective
capital contributions, and thereafter 20% to the General Partner and
80% to the limited partners. Distributions in kind of the securities of
Portfolio Companies that are listed on or otherwise traded in a
recognized over-the-counter or unlisted securities market may be made
at the option of the General Partner.
Entergy Corporation (70-8509)
Entergy Corporation (``Entergy''), 225 Baronne Street, New Orleans,
Louisiana 70112, a registered holding company, and its wholly owned
nonutility subsidiary companies, Entergy Enterprises, Inc.,
(``Enterprises''), Three Financial Centre, 900 South Shackleford Road,
Suite 210, Little Rock, Arkansas 72211, and Entergy Systems and
Service, Inc. (``Entergy SASI''), 4740 Shelby Drive, Suite 105,
Memphis, Tennessee 38118, (collectively, ``Applicants''), have filed an
application-declaration under sections 6(a), 7, 9(a), 10 and 12(b) of
the Act and rules 45 and 54 thereunder.
Pursuant to Commission order dated December 28, 1992 (HCAR No.
25718), Entergy SASI was organized as a wholly owned subsidiary of
Enterprises that would provide energy management services to
commercial, industrial and institutional customers. Such order
authorized Entergy SASI to provide energy management services, without
limitation, to customers within a region consisting of the states of
Arkansas, Louisiana and Mississippi; and the service territories of
utilities from which the Entergy system could expect to purchase
economy, replacement and emergency energy (``Base Region''). The order
also permitted Entergy SASI to solicit and serve customers outside the
Base Region to a limited extent and subject to the condition that at
least 50% of Entergy SASI's annual revenues be derived from its
activities within the Base Region (``50% Revenue Restriction'').
The Applicants now seek additional authorization for Entergy SASI
to provide consulting services related to energy management and demand-
side management (``DSM'') activities. Such consulting services would
generally be limited to the rendering of advice, know-how and
management/technical services for a consulting fee in order to assist
energy customers, utilities, federal, state and foreign government
entities and other customers with energy management and/or DSM
activities in cases where Entergy SASI is not directly involved in the
performance of such energy management and/or DSM services. Entergy SASI
proposes to provide such consulting servies on a worldwide basis and
that associated revenues not be subject to the 50% Revenue Restriction.
Specifically, Entergy SASI's consulting services would include the
following: (1) development and review of architectural, structural and
engineering drawings for energy and other resource efficiency; (2)
design and specification of energy consuming or conservation equipment,
controls and systems; (3) design and marketing of intellectual
property, i.e. any process, program, technique, or computer software
used to analyze energy conservation opportunities and results; (4)
general technical advice concerning the use, benefits, planning and/or
administration of energy management and/or DSM programs; and (5)
general management advice and services relating to the implementation
of functions, practices and procedures incidental to the conduct of the
energy management services business and/or DSM programs.
In addition, Entergy SASI proposes to provide funding to other
energy management and DSM contractors to enable them to carry out
energy conservation measures. Although the precise terms of such
funding arrangements will not be determined until the time of the
applicable transactions, it is anticipated that Entergy SASI will be
repaid through assignments of a portion of the monthly fees paid by
customers under contracts relating to the installation of such energy
conservation measures. The Applicants state that the proposed funding
arrangements will not involve the acquisition by Entergy SASI of any
promissory notes.
Finally, the Applicants request authorization for: (1) Entergy to
make additional investments in Enterprises of up to an aggregate amount
of $100 million from time to time through December 31, 1997, with such
investments to be made through any combination of purchases of
Enterprises' common stock and/or capital contributions to Enterprises;
(2) Enterprises to use the proceeds of such transactions to make
additional investments in Entergy SASI (in the form of equity
investments and/or loans) of up to $100 million from time to time
through December 31, 1997; and (3) Entergy SASI to issue and sell to
nonaffiliated third parties during the same period up to $100 million
of commercial paper, promissory notes and/or other debt securities,
secured or unsecured (collectively, the ``Debt Securities).
It is proposed that the proceeds derived from Enterprises'
investments, as well as any third party financing, be used by Entergy
SASI for the following purposes: (1) to repay its existing indebtedness
under notes issued to Entergy; (2) to provide financing for customer
contracts and funding for the implementation of energy conservation
measures by other energy management and DSM contractors; and (3) to
provide Entergy with necessary working capital in connection with its
ongoing energy management, consulting and other authorized businesses,
as well as to pay for general and administrative expenses and to
provide for Entergy SASI's other capital needs.
Any loans made by Enterprises to Entergy SASI would be evidenced by
promissory notes bearing an interest rate to be determined at the time
of borrowing (but in no event greater than the then prevailing prime
rate, as reported by the Wall Street Journal) and maturing no later
than ten years from the date of borrowing. Where Debt Securities issued
to nonaffiliates are involved, the yield to maturity of such Debt
Securities would not exceed the then current yield to maturity on U.S.
Treasury securities of comparable maturities (subject to straight line
interpolation when there is no comparable U.S. Treasury security), plus
400 basis points, and no Debt Securities would be issued for a term of
greater than thirty years. It is further proposed that any notes issued
by Entergy SASI to Enterprises may, at the option of Enterprises, be
converted to capital contributions to Entergy SASI by the forgiveness
of the debt represented thereby.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 94-29215 Filed 11-25-94; 8:45 am]
BILLING CODE 8010-01-M