[Federal Register Volume 59, Number 241 (Friday, December 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30916]


[[Page Unknown]]

[Federal Register: December 16, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26183]

 

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

December 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 January 3, 1995, to the Secretary, Securities and Exchange 
Commission, Washington, D.C. 20549, and serve a copy on the relevant 
applicant(s) and/or declaration(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.

Consolidated Natural Gas Company, et al. (70-7508)

    Consolidated Natural Gas Company (``CNG'') a registered holding 
company, and its wholly-owned subsidiary company, CNG Financial 
Services, Inc. (``CNGF''), both located at CNG Tower, 625 Liberty 
Avenue, Pittsburgh, Pennsylvania 15222-3199, have filed an application-
declaration under Sections 6(a), 7, 9(a), 10, 12(b), 12(c) and 13 of 
the act and Rules 42, 43, 45 and 87-90 thereunder.
    CNG and CNGF request authorization, through December 31, 1998, for 
CNGF to finance the purchase of certain gas utilizing equipment (``Gas 
Equipment'')\1\ by creditworthy\2\ customers who purchase or may be 
expected to purchase gas directly or indirectly from the local 
distribution companies (``LDCs''), gas marketing or gas pipeline 
subsidiaries of the CNG system. In addition, CNG seeks authorization to 
provide CNGF with up to an aggregate of $25 million in funds, on a 
revolving basis, through December 31, 1998, to enable CNGF to make Gas 
Equipment financing loans to such customers. CNGF may obtain funds from 
CNG through this day by (1) selling CNGF common stock. $10,000 par 
value, to CNG, and/or (2) obtaining open account advances from CNG and/
or (3) obtaining long-term loans from CNG.
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    \1\The Gas Equipment to be financed would fall into one or more 
of the following categories: (1) Standard Gas Appliances -- the type 
of standard gas appliances contemplated by Rule 48, including such 
gas equipment as ranges, dryers, waterheaters and furnaces: (2) New 
Technology Equipment -- gas equipment marketed to promote new or 
unfamiliar technology that uses gas as a fuel (which could include 
equipment using existing technology designed for a new application), 
such as gas heat pumps, gas air conditioning and gas turbines; (3) 
Alternate Fuel Equipment -- gas equipment that enables an end-user 
to use natural gas as an alternative to another fuel; such equipment 
would include both conversion equipment necessary to convert non-gas 
utilizing equipment to equipment that can use gas as a fuel (e.g., 
energy connective apparatus enabling a coal-burning boiler to use 
gas as a fuel) and gas utilizing equipment that is manufactured and 
sold as a complete indivisible unit (e.g., compact gas generators).
    \2\A customer would be deemed creditworthy if it had asset and 
equity strength indicating a degree of expected liquidity and good 
financial management. Such a condition would lead CNGF to believe 
there exists a reasonable degree of probability that the Gas 
Equipment financing loan would be repaid at maturity.
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    Open account advances made to CNGF will be made by book entry only, 
not evidenced by short-term notes, and will bear the same interest rate 
as open account advances made to participants in the CNG System Money 
Pool, which is equal to the effective weighted average rate of interest 
on CNG's commercial paper and/or revolving credit borrowing. All such 
advances will be payable on demand and may be prepaid at any time 
without premium or penalty. Long-term loans to CNGF will be evidenced 
by long-term non-negotiable notes (which may be book entry) of CNGF 
maturing over a period of time to be determined by the officers of CNG, 
with the interest predicated on and substantially equal to CNG's cost 
of funds for comparable borrowings by CNG. In the event that CNG has 
not had recent comparable borrowings, the rates will be tied to the 
Solomon Brothers, Inc. Bond Market Roundup, or to a comparable rate 
index, on the date nearest to the time of takedown. All such loans may 
be prepaid at any time without premium or penalty.
    CNG states that it will obtain the funds it loans to CNGF through 
internal cash generation, issuance of long-term debt securities as 
authorized by Commission orders dated April 21, 1993 (HCAR No. 25800) 
and April 14, 1994 (HCAR No. 26026), borrowings under a credit 
agreement, as authorized by Commission orders dated March 28, 1991 
(HCAR No. 25283) and September 9, 1992 (HCAR No. 25626), or through 
other authorizations approved or to be approved by the Commission.
    Applicants also seek authorization for CNGF, from time to time 
through December 31, 1998, to purchase, at par from CNG, shares of 
CNGF's $10,000 par value common stock previously sold to CNG to obtain 
funds, as described above, to hold such required shares as treasury 
shares and to resell such shares to CNG at par.
    Applicants state that customers receiving loans (``Financing 
Customers'') will come primarily from the commercial and/or industrial 
sectors and will result mainly from contacts between CNG Systems LDCs 
and their end-use customers.\3\ CNGF proposes to conduct its Gas 
Equipment financing activities both within and outside of the four 
states of Virginia, West Virginia, Pennsylvania and Ohio where the CNG 
System LDC's are located (collectively, ``LDC States''). However, 
applicants state that during the twelve-month period beginning on the 
first day of January in the year following the date CNGF commences Gas 
Equipment financing activities pursuant to a Commission order issued in 
the matter, and for each subsequent calendar year thereafter, the total 
dollar value of Gas Equipment financing loans made to Financing 
Customers in the LDC States will exceed the total dollar value of Gas 
Equipment financing loans made to Financing Customers in all other 
states.
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    \3\CNGF will not act as a representative of any gas equipment 
manufacturer or supplier but may recommend specific manufacturers or 
types of gas equipment to end-users. For example, a CNG System LDC 
marketing representative may recommend to a glass manufacturing 
company that a new type of gas equipment be installed in a furnace 
to increase production efficiency.
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    CNGF will provide Gas Equipment financing to Financing Customers by 
(1) making short-term loans to cover the period of installation of the 
Gas Equipment until permanent financing can be obtained by the customer 
or (2) making long-term loans for a period of time not to exceed the 
lesser of 10 years or the expected useful life of the equipment. The 
aggregate amount of Gas Equipment financing loans by CNGF outstanding 
at any one time will not exceed $25,000,000, with an individual 
customer financing limit of $5,000,000 at any one time.
    Loans to Financing Customers may be secured or unsecured and will 
be made at a spread above the cost of funds from CNG in order to cover 
CNGF's costs and earn a return on its capital. CNGF does not have any 
full-time employees, and Applicants expect CNGF to obtain accounting, 
credit, financial, management, marketing, operating, technical and 
clerical support, at cost, from CNG Service Company (``Service 
Company'') pursuant to a written service agreement.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-30916 Filed 12-15-94; 8:45 am]
BILLING CODE 8010-01-M