[Federal Register Volume 60, Number 86 (Thursday, May 4, 1995)]
[Notices]
[Pages 22088-22091]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11040]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26283]


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

April 28, 1995.
    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 May 22, 1995, 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.

Arkansas Power & Light Company, et al. (70-8001)

    Arkansas Power & Light Company (``AP&L''), 425 West Capitol, 40th 
Floor, Little Rock, Arkansas 72201, Louisiana Power & Light Company 
(``LP&L''), 639 Loyola Avenue, New Orleans, Louisiana 70113, 
Mississippi Power & Light Company (``MP&L''), 308 East Pearl Street, 
Jackson, Mississippi 39201 and New Orleans Public Service Inc. 
(``NOPSI''), 639 Loyola Avenue, New Orleans, Louisiana 70113, each an 
electric public-utility subsidiary of Entergy Corporation, a registered 
holding company, and System Fuels, Inc. (``SFI''), 639 Loyola Avenue, 
New Orleans, Louisiana 70113, a fuel supply company jointly owned by 
AP&L, LP&L, MP&L and NOPSI (all companies collectively, 
``Applicants''), have filed a post-effective amendment under sections 
9(a) and 10 of the Act and rule 54 thereunder to their application 
previously filed under sections 9(a) and 10 of the Act.
    By orders dated November 1, 1979, August 25, 1980, June 15, 1982 
and May 15, 1984 (HCAR Nos. 21277, 21689, 22556 and 23309), the 
Commission authorized SFI to acquire by leveraged lease (``Lease'') 
600, 750, 580 and 320 steel railroad cars,\1\ respectively, for the 
transportation of coal from Wyoming to the White Bluff Steam Electric 
Station located near Redfield, Arkansas (``White Bluff'') and the 
Independence Steam Electric Station located near Newark, Arkansas 
(``ISES''). Pursuant to the Lease transactions, the obligations of SFI 
were supported by SFI's parent companies (AP&L, LP&L, MP&L and NOPSI, 
collectively ``Parents'') by means of ``keep-well'' arrangements. Under 
these keep-well arrangements, the Parents agreed, severally and to the 
extent of their percentage ownership of SFI, to keep SFI in sound 
financial condition and to place SFI in a position, and cause SFI, to 
perform and discharge all its obligations under the relevant Lease 
transaction agreements.

    \1\AP&L states that, during the past 14 years, 25 of the 
original steel railcars were destroyed in derailments leaving 2,225 
railcars currently in service.
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    By orders dated July 7, 1992 and September 3, 1992 (HCAR Nos. 25576 
and 25618) (collectively, ``1992 Orders''), AP&L was authorized to 
assume SFI's rights and obligations as lessee under the Leases. Such 
assumption released and discharged SFI from its obligations under the 
Leases, and the Parents were released and discharged from their keep-
well obligations. In addition, the 1992 Orders authorized AP&L to 
sublease the steel railroad cars to nonaffiliate companies. The 1992 
Orders included two restrictions on such subleasing: (i) No sublease 
could be longer than the lesser of one year or the period during which 
the steel railcars were not needed for the transportation of coal to 
White Bluff and ISES; and (ii) no more than 50% of the steel railroad 
cars leased by AP&L could be subleased at any one time (``50% 
Restriction''). [[Page 22089]] 
    AP&L now proposes to replace its existing steel railcar fleet with 
aluminum railcars. Consequently, AP&L seeks Commission authority to: 
(i) Sublease all of its existing steel railcars for up to the remainder 
of their respective lease terms; and (ii) sublease new aluminum 
railcars during periods when they are not needed to service the coal 
transportation requirements of White Bluff and ISES.
    AP&L states that the above request for authority would be limited 
by the following conditions: (i) Each subleasing transaction shall be 
reported by a quarterly rule 24 certificate; and (ii) any revenue 
realized from the sublease of the steel railcars shall be credited 
against AP&L's costs as lessee of the steel railcars. AP&L's proposal 
expressly rejects the 50% Restriction, as imposed by the 1992 Orders.
    AP&L further states that the benefit from such lower costs of 
leasing the steel railcars shall accrue to the owners of White Bluff 
and ISES on a pass-through basis. Such revenues shall be reflected 
accordingly in AP&L's ratemaking provisions, except to the extent the 
regulatory authority having jurisdiction over the matters authorizes a 
different treatment. Such revenues will be credited to ``Fuel Stock'' 
(Account No. 151 under the Federal Energy Regulatory Commission's 
Uniform System of Accounts). In the event AP&L changes its method of 
accounting for subleasing it will provide 30 days advance notice of the 
proposed change to the Commission.

General Public Utilities Corporation (70-8593)

    General Public Utilities Corporation (``GPU''), 100 Interpace 
Parkway, Parsippany, New Jersey 07054, a registered holding company, 
has filed an application-declaration under sections 6(a), 7, 9(a), 10 
and 12(b) of the Act and rules 45 and 53 thereunder.
    GPU proposes to acquire and hold the interests or securities of one 
or more foreign utility companies (``FUCOs'') and exempt wholesale 
generators (``EWGs'') (each, an ``Exempt Entity''), as defined in 
sections 32 and 33 of the Act. To facilitate the acquisition and 
ownership of interests in Exempt Entities, GPU proposes to acquire the 
securities of subsidiary companies which are not themselves Exempt 
Entities (each, a ``Subsidiary Company''). Each Subsidiary Company will 
be engaged, directly or indirectly, and exclusively, in the business of 
owning and holding the interests and securities of one or more Exempt 
Entities and in project development activities relating to the 
acquisition of such interests and securities and the underlying 
projects.
    Accordingly, GPU proposes to acquire Subsidiary Company securities 
which may take the form of capital stock or shares, trust certificates, 
partnership interests or other equity or participation interests. Any 
investment in the capital stock or other equity securities of a 
Subsidiary Company having a stated or par value will be in an amount 
equal to or greater than such stated or par value.
    If GPU determines that a Subsidiary Company whose securities it has 
acquired no longer has a purpose (whether due to termination of a 
proposed project acquisition, loss of a bid, change of law, or 
otherwise), it shall (to the extent that it is able to do so), 
liquidate or dissolve such Subsidiary Company within 45 days after such 
determination, unless GPU determines that such Subsidiary Company may 
be used in conjunction with a proposal or plan to acquire an interest 
in a different Exempt Entity.
    GPU further proposes to make investments in such Subsidiary 
Companies from time to time through December 31, 1997 in an aggregate 
amount of up to $200 million. Investments may take the form of cash 
capital contributions or open account advances; loans evidenced by 
promissory notes; guarantees by GPU of the principal of, or interest 
on, any promissory notes or other evidences of indebtedness or 
obligations of any Subsidiary Company, or of GPU's undertaking to 
contribute equity to a Subsidiary Company; assumption of liabilities of 
a Subsidiary Company; and reimbursement agreements with banks entered 
into to support letters of credit delivered as security for GPU's 
equity contribution obligation to a Subsidiary Company or otherwise in 
connection with a Subsidiary Company's project development activities.
    In addition to the above-described investments in Subsidiary 
Companies, GPU requests authority to make investments in Exempt 
Entities from time to time through December 31, 1997. Such investments 
could take the form of (i) guarantees of the indebtedness or other 
obligations of one or more Exempt Entities; (ii) assumption of 
liabilities of one or more Exempt Entities; and (iii) guarantees and 
letter of credit reimbursement agreements in support of equity 
contribution obligations or otherwise in connection with project 
development activities for one or more Exempt Entities. The aggregate 
amount of such guarantees, assumptions and reimbursement agreements 
entered into with respect to Exempt Entities, together with the amount 
invested in Subsidiary Companies, would not exceed $200 million in the 
aggregate outstanding at any one time.
    Any open account advance made by GPU will be non-interest bearing 
and repayable within one year of the date of the advance. Any 
promissory note issued by a Subsidiary Company to GPU, and any 
promissory note or similar evidence of indebtedness issued by a 
Subsidiary Company or an Exempt Entity to a person other than GPU with 
respect to which GPU may issue a guarantee, would mature not later than 
30 years after the date of issuance thereof, and would bear interest at 
a rate (a) not greater than the prime rate at a bank to be designated 
by GPU in the case of any promissory note issued to GPU, and (b) in the 
case of any note or similar evidence of indebtedness issued to a person 
other than GPU and guaranteed by GPU, not in excess of the rates 
proposed below for borrowings by Subsidiary Companies. Any promissory 
note issued to GPU by any Subsidiary Company may, at GPU's option, be 
converted to a capital contribution to such Subsidiary Company through 
GPU's forgiveness of the indebtedness evidenced thereby.
    Any reimbursement agreement supporting a letter of credit would 
have a term not in excess of 30 years. Drawings under any such letter 
of credit would bear interest at not more than 5% above the prime rate 
of the letter of credit bank as in effect from time to time, and letter 
of credit fees would not exceed 1% annually of the face amount of the 
letter of credit.
    GPU also requests authorization for each Subsidiary Company to 
issue equity and debt securities to persons other than GPU (and with 
respect to which there is no recourse to GPU except to the extent GPU 
may guarantee payment of such securities pursuant to the authorization 
herein requested), including banks, insurance companies and other 
financial institutions, exclusively for the purpose of financing or 
refinancing investments in and project development activities for 
Exempt Entities. Such securities may be issued in one or more 
transactions from time to time through the earlier to occur of (i) 
December 31, 1997, and (ii) the effective date of any rule or 
regulation under the Act exempting such transactions from prior 
Commission authorization. No equity security having a stated or par 
value would be issued or sold by a Subsidiary Company for a 
consideration that is less than such stated or par value.
    The aggregate principal amount of such debt securities issued by 
[[Page 22090]] Subsidiary Companies to persons other than GPU will not 
exceed $500 million at any one time outstanding. In any case in which 
GPU directly or indirectly owns less than 100% of the equity interests 
of a Subsidiary Company, only that portion of the indebtedness of such 
Subsidiary Company equal to GPU's equity ownership percentage shall be 
included for purposes of the foregoing limitation.
    Debt securities issued or sold by any Subsidiary Company will 
mature not later than 30 years from the date of issuance thereof, and 
will bear interest at a rate not in excess of the greater of (A) if 
such note, bond or other indebtedness is U.S. dollar denominated, the 
greater of (i) 250 basis points above the greater of (a) the lending 
bank's or other recognized prime rate and (b) 50 basis points above the 
federal funds rate, (ii) 400 basis points above the specified London 
Interbank Offered Rate plus any applicable reserve requirement, or 
(iii) a negotiated fixed rate which, in any event, would not exceed 500 
basis points above the 30 years ``current coupon'' treasury bond rate; 
and (B) if such note, bond or other indebtedness is denominated in the 
currency of a country other than the United States , at a fixed or 
floating rate which, when adjusted (i.e., reduced) for the prevailing 
rate of inflation in such country, as reported in official indices 
published by such country, would be equivalent to a rate on a U.S. 
dollar denominated borrowing of identical average life that does not 
exceed 10% over the highest rate set forth in clause (A) above.
    In connection with the issuance of any securities by any Subsidiary 
Company, it is anticipated that such Subsidiary Company may grant a 
security interest in its assets. Such security interest may take the 
form of a pledge of the shares or other equity securities of an Exempt 
Entity that it owns, including a security interest in any distributions 
from any such Exempt Entity, and/or a collateral assignment of its 
rights under and interests in other property, including rights under 
contracts.
    It is also anticipated that fees in the form of placement or 
commitment fees, or other similar fees, would be paid to lenders, 
placement agents, or others in connection with the issuance of any such 
securities. GPU proposes that any Subsidiary Company may agree in any 
case to pay placement or commitment fees, and other similar fees, in 
connection with such issuance, provided that the aggregate amount of 
any such fees (i) payable at or about the time of the issuance of the 
securities would not exceed 4% of the stated or principal amount 
thereof and (ii) payable thereafter would not cause the effective 
annual interest charge on such securities to exceed 115% of the stated 
interest rate thereon.
    GPU states that it would obtain the funds for any direct or 
indirect investment in any Subsidiary Company or Exempt Entity from 
available cash or as the Commission may otherwise authorize by separate 
order.

West Penn Power Company, et al. (70-8613)

    Monongahela Power Company (``Monongahela''), 1310 Fairmont Avenue, 
Fairmont, West Virginia 26554, The Potomac Edison Company (``Potomac 
Edison''), 10435 Downsville Pike, Hagerstown, Maryland 21740, and West 
Penn Power Company (``West Penn''), 800 Cabin Hill Drive, Greensburg, 
Pennsylvania 15601, public-utility subsidiary companies of Allegheny 
Power System, Inc., a registered holding company, have filed a 
declaration under sections 6(a), 7 and 12(c) of the Act and rule 42 
thereunder.
    Monongahela, Potomac Edison and West Penn proposes to issue and 
sell, at any time or from time to time through December 31, 1998, in 
one or more series, up to $95,000,000, $61,834,900, and $110,000,000 
principal amount, respectively (an aggregate of $266,834,900 principal 
amount for all three companies) of junior subordinated debentures (the 
``Debt Securities''). The Debt Securities will be issued under an 
indenture or indentures to be entered into with a trustee or trustees 
to be named.
    The Debt Securities will be unsecured obligations of the issuer 
thereof, will be subordinate to all other indebtedness for borrowed 
money of such issuer, and may contain cross-default provisions with 
respect to other indebtedness of the issuer. Each such series will have 
a term of no more than fifty years and will bear interest, payable at 
periodic intervals, at a fixed or an adjustable rate. Any adjustable 
rate will be determined on a periodic basis as a percentage of or 
spread from a predetermined benchmark security, by auction or 
remarketing procedures, in accordance with a formula based on reference 
rates, or by other predetermined methods. The issuer of any series of 
Debt Securities may have the right to defer payment of interest for up 
to five years, provided that at the end of any deferral period the 
issuer would be required to pay all accrued and unpaid interest, with 
interest thereon at the rate borne by such Debt Securities, and during 
any deferral period the issuer may not be permitted to declare or pay 
dividends on or to acquire any of its capital stock. Debt Securities of 
any series may be redeemable at the option of the issuer, at any time 
after a specified date not later than twenty years from the date of 
issuance, at a price equal to the principal amount thereof plus accrued 
and unpaid interest, plus a premium (if any).
    The Debt Securities will be sold at such time, at such interest 
rates, and for such prices as shall be approved by the issuer, 
depending on market conditions. The proceeds of the sale of Debt 
Securities will be applied to the redemption, tender offer or other 
retirement of outstanding preferred stock. Monongahela, Potomac Edison 
and West Penn state that the Debt Securities will provide substantial 
benefits over traditional perpetual preferred stock (including 
increased cash flow and net income and a lower net interest cost due to 
the tax deductibility of interest payments), while receiving 
substantially similar treatment for rating agency and other credit 
analysis purposes.

Appalachian Power Company, et al. (70-8615)

    Appalachian Power Company (``Appalachian''), an electric utility 
subsidiary of American Electric Power Company, Inc., a registered 
holding company, and its subsidiary, Southern Appalachian Coal Company 
(SACCo'') (collectively, the ``Sellers''), both located at 40 Franklin 
Road, Roanoke, Virginia 24022, have filed an application-declaration 
under Sections 9(a), 10 and 12(b) of the Act and Rule 45 thereunder.
    By Commission order dated June 6, 1984 (HCAR No. 23322), the 
Commission approved the sale of a significant portion of Appalachian's 
and its subsidiary's coal mining assets. The Sellers have now entered 
into an Agreement of Purchase and Sale, dated March 22, 1995 
(``Agreement''), with Whites Creek Limited Liability Company 
(``Buyer''), a West Virginia limited liability company, with respect to 
most of its remaining West Virginia mining assets. Appalachian owns 
certain real property interests, including coal lands and docking 
facilities, located in Boone and Kanawha Counties, West Virginia. SACCo 
owns the Bull Creek Preparation Plant and equipment consisting of 
certain raw coal and clean coal handling and preparation plant facility 
together with fixed assets and improvements and other coal mining 
equipment. SACCo is the permittee under various reclamation, 
[[Page 22091]] pollutant discharge, pollution control and facilities 
permits applicable to coal mining, preparation and transportation.
    Pursuant to the Agreement, the Buyer will acquire the real property 
interests, the coal preparation facility, the equipment and the permits 
(``Assets'') from the Sellers. The Sellers shall assign and delegate to 
the Buyer all rights and obligations under various oil and gas leases, 
farming leases, timber leases, residential leases, licenses, 
franchises, contracts, concessions and recorded and unrecorded 
occupancy agreements applicable to or for the use or occupancy of the 
real estate to be sold. The total purchase price under the Agreement 
for the Assets is $6.05 million, of which $1.25 million shall be paid 
at closing to be held no later than June 30, 1995. The Buyer will 
deliver a promissory note, secured by a letter of credit, in the amount 
of $4.8 million, bearing interest at the rate of a 8.004213 percent per 
annum, payable in 40 equal quarterly installments of principal and 
interest of $175,500, beginning on September 30, 1995 and ending on 
June 30, 2005.
    Under the Agreement, the Sellers have agreed to indemnify the Buyer 
against certain liabilities and contingencies that may be asserted by 
employees or former employees of SACCo against the Buyer or by federal, 
state or local agencies as a result of noncompliance with laws relating 
to mining operations.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-11040 Filed 5-3-95; 8:45 am]
BILLING CODE 8010-01-M