[Federal Register Volume 60, Number 178 (Thursday, September 14, 1995)]
[Notices]
[Pages 47795-47798]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22844]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26370]


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

September 8, 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 October 2, 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.

Central Power and Light Company (70-7572)

    Central Power and Light Company (``CPL''), 539 N. Carancahua 
Street, Corpus Christi, Texas 78401-2431, an electric utility 
subsidiary company of Central and South West Corporation, a registered 
holding company, has filed a post-effective amendment to its 
application under sections 9(a) and 10 of the Act and rule 54 
thereunder.
    By order dated April 13, 1989 (HCAR No. 24863), (``1989 Order''), 
the Commission authorized CPL to lease to nonaffiliated third parties: 
(1) Approximately 23,400 square feet of excess space on the first two 
floors of its corporate headquarters building (``Headquarters 
Building''); (2) approximately 17,800 square feet of excess space on 
the third and fourth floors, in the basement and on the roof of the 
Headquarters Building; and (3) space in one of its former office 
buildings (``Other Building'') pending eventual sale of the Other 
Building.
    CPL now requests authority to lease any existing or future excess 
space in the Headquarters Building to unaffiliated third parties at 
what CPL considers to be market rates for such space at the time of 
entering such leases. CPL also requests authority to lease several of 
its other rentable properties or portions thereof (``other 
Properties'') to unaffiliated third parties until such properties are 
sold or are again put into use by CPL at what CPL considers to be 
market rates for the Other Properties at the time of entering such 
leases. The Other Properties shall include the following types of 
properties: (1) Area or regional offices, which typically consist of 
less than 10,000 square feet; (2) service centers which include office 
and warehouse facilities and which typically consist of less than 
20,000 square feet; (3) district or regional offices, which typically 
consist of less than 20,000 square feet; (4) excess capacity in CPL 
training facilities; miscellaneous facilities which are being held for 
future use or sale and which typically consist of less than 10,000 
square feet; and (5) other improved and unimproved land. All rental 
payments from nonaffiliated third parties for excess space in the 
Headquarters Building and the Other Properties are, and in the future 
will be, accounted for as rent from property devoted to electric 
operations.

Jersey Central Power & Light Company, et al. (70-7862)

    Jersey Central Power & Light Company (``JCP&L''), 300 Madison 
Avenue, Morristown, New Jersey 07460, Metropolitan Edison Company 
(``Met-Ed'') and Pennsylvania Electric Company (``Penelec''), 2800 
Pottsville Pike, Reading, Pennsylvania 19605 (collectively, ``GPU 
Companies''), electric utility subsidiaries of General Public Utilities 
Corporation, a registered holding company, have filed a post-effective 
amendment to their application under sections 9(a) and 10 of the Act 
and rule 54 thereunder.
    By order dated August 15, 1991 (HCAR No. 25361), (``1991 Order''), 
the Commission, among other things, authorized JCP&L, Met-Ed and 
Penelec to enter into separate fuel lease agreements and to establish 
related financing arrangements to provide for the acquisition of 
nuclear fuel and certain related services for the Three Mile Island 
Unit 1 nuclear generating station (``TMI-1'') and the Oyster Creek 
nuclear generating station (``Oyster Creek''). The GPU Companies 
jointly own TMI-1 in the following percentages: Met-Ed--50%; JCP&L--

[[Page 47796]]
25%; and Penelec--25%. JCP&L owns a 100% interest in Oyster Creek. TMI-
1 and Oyster Creek are operated and maintained on behalf of the GPU 
Companies by GPU Nuclear Corporation, a subsidiary of GPU.
    Pursuant to the 1991 Order, a nuclear fuel trust (``Fuel Trust'') 
was established in accordance with a trust agreement under which United 
States Trust Company of New York acts as trustee. The Fuel Trust is the 
sole stockholder of two nonaffiliated Delaware corporations, TMI-1 Fuel 
Corporation and Oyster Creek Fuel Corporation (collectively, ``Fuel 
Companies'') which own certain nuclear fuel assemblies and component 
parts (``Nuclear Material'') for use at TMI-1 and Oyster Creek, 
respectively. The GPU Companies have entered into separate lease 
agreements (``1991 Lease Agreements'') by which TMI-1 Fuel Corporation 
leases Nuclear Material for TMI-1 to the GPU Companies in proportion to 
their respective undivided ownership interests in TMI-1, and Oyster 
Creek Fuel Corporation leases Nuclear Material for Oyster Creek to 
JCP&L. In connection with the 1991 Lease Agreements, The Prudential 
Life Insurance Company of America and certain of its affiliates entered 
into lending agreements to provide for borrowings by the Fuel Companies 
of up to a total of $250 million to finance the acquisition costs of 
Nuclear Material under such lease agreements.
    The GPU Companies now propose to enter into an agreement 
(``Agreement'') with Union Bank of Switzerland, New York Branch 
(``UBS'' or ``Agent'') for UBS to provide a new credit facility 
(``Facility''), which would provide for borrowings of up to $210 
million by the Fuel Companies from UBS and other lenders for which UBS 
would act as Agent (collectively, ``Lenders''). The Fuel Companies will 
enter into one or more Facilities providing for aggregate borrowings of 
up to $210 million and under which: (1) letters of credit (``LC's'') 
would be issued by UBS, as Agent, to provide credit enhancement for 
commercial paper to be issued by the Fuel Companies and (2) revolving 
credit loans would be made by the Lenders to the Fuel Companies. In 
addition, the 1991 Lease Agreements would be amended and/or restated in 
certain respects consistent with the establishment of the Facilities.
    Under the Facility, the Fuel Companies would issue and sell their 
commercial paper from time-to-time to finance acquisition costs of 
Nuclear Material. To reduce borrowing costs, the Fuel Companies' 
commercial paper credit would be enhanced through the issuance by UBS 
of LC's in an aggregate face amount of up to $210 million outstanding 
at any time, subject to the following sublimits: (1) JCP&L--$127.5 
million; (2) MetEd--$55 million and (3) Penelec--$27.5 million. The 
commercial paper would be evidenced by commercial paper notes (``CP 
Notes''). Under the Agreement, the Fuel Companies would enter into 
separate credit agreements (``New Credit Agreements'') pursuant to 
which the Agent would issue its LC's and each Fuel Company would agree 
to reimburse the Lenders for related drawings.
    The Fuel Companies would also be entitled to borrow directly under 
the Facility in lieu of issuing CP Notes. To evidence its obligations 
to repay direct borrowings, each Fuel Company will issue and sell to 
the Lenders its promissory notes (``New Notes''). The aggregate 
principal amount of New Notes outstanding at any time would not exceed 
the lesser of: (1) $210 million less the outstanding principal amount 
of CP Notes and (2) the Stipulated Casualty Value of all Nuclear 
Material, as defined in the 1991 Lease Agreements, under lease at such 
time, less the outstanding principal amount of CP Notes. The Facility 
would have an initial term of three years, renewable on the first 
anniversary and on each anniversary thereafter.
    The New Notes would be secured on the same basis as the existing 
notes issued in connection with the 1991 Lease Agreements and would 
bear interest at either an Alternative Base Rate or a Eurodollar Rate. 
The Alternative Base Rate is a fluctuating annual rate equal to the 
higher of: (1) The Agent's publicly announced prime rate and (2) 50 
basis points above the rate on overnight federal funds transactions 
with members of the Federal Reserve System arranged by Federal funds 
brokers. Eurodollar Rate Notes would bear interest at the Eurodollar 
Rate plus the Applicable Margin, as defined, and would be fixed at the 
Fuel Company's option for interest periods of 1, 2, 3 or 6 months. The 
Eurodollar Rate is defined as the annual interest rate for deposits in 
U.S. dollars as reported in the Dow Jones Telerate system or if such 
rate is not reported, at the LIBOR rate, in each case for the two 
business day period prior to the interest period. The Applicable Margin 
would range from 27.5 to 65 basis points depending on the GPU Company's 
senior secured long-term debt ratings.

Central Power & Light Co. (70-8677)

    Central Power and Light Company (``CP&L''), 539 No. Carancahua St., 
Corpus Christi, Texas 78401, a wholly-owned electric utility subsidiary 
company of Central and South West Corporation, 1616 Woodall Rodgers 
Freeway, P.O. Box 660164, Dallas, Texas 75266-0164, 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.
    CP&L seeks authorization through December 31, 1998, to incur 
obligations in connection with the proposed issuance by Nueces County 
Navigation District No. 1 (``Nueces'') and/or Guadalupe-Blanco River 
Authority, Texas (``Guadalupe'') in one or more series of up to 
$95,000,000 aggregate principal amount of Pollution Control Revenue 
Bonds. Of this amount, up to $45,000,000 may be Pollution Control 
Revenue Refunding Bonds (``Refunding Bonds'') and up to $50,000,000 may 
be new money Revenue Bonds (``New Money Bonds''). The issuance by 
Neuces and Guadalupe (``Issuers'') of New Money Bonds and Refunding 
Bonds (collectively, ``New Bonds'') may be combined.
    The purpose of the Refunding Bonds is to reacquire all or a portion 
of four previously issued Pollution Control Revenue Bonds (``Old 
Bonds''). The purpose of the New Money Bonds is to reimburse CP&L for 
expenditures that qualify for tax-exempt financing or to provide for 
current solid waste expenditures.
    CP&L also seeks authority to manage interest rate risk or lower its 
interest rate costs on any variable rate New Bond through the issue of 
caps, floors, and collars during the life of the New Bonds.
    The Old Bonds were issued to finance the acquisition and 
improvements of air and water pollution control facilities at two 
plants--the Barney M. Davis Power Station and the Coleto Creek 
generating plant--operated by CP&L. The Old Bonds were issued pursuant 
to Indentures of Trust (``Indentures'') with two banks as trustees, 
NationsBank of Texas, N.A. and Texas Commerce Bank--Dallas, N.A. 
(``Trustees''), and had the following terms:

------------------------------------------------------------------------
                                                                 First  
                 Series                   Interest  Maturity  redemption
                                            rate      date       date   
------------------------------------------------------------------------
1974A..................................    7\1/8\%    6/1/04     6/1/84 
1974B..................................    7\1/8\%    6/1/04     6/1/84 
1977...................................         6%   11/1/07    11/1/87 
1977A..................................         6%   11/1/07    11/1/87 
------------------------------------------------------------------------

    CP&L and the Issuers entered into installment sales agreements 
(``Sale Agreements'') for the issuance of the Old Bonds. In connection 
with the issuance of the New Bonds, CP&L will 

[[Page 47797]]
amend the Sale Agreements, enter into agreements with substantially the 
same terms, and/or enter into new installment sale agreements 
(collectively, ``Amended Sale Agreements'').
    The New Bonds will bear a fixed or floating interest rate, may be 
secured with First Mortgage Bonds, and will mature in not more than 
forty years. The interest rate, redemptions provision and other terms 
applicable to the New Bonds will be determined in negotiations between 
CP&L and one or more investment banking firms that will purchase or 
underwrite (``Purchasers'') the New Bonds.
    CP&L anticipates that the New Bonds will be redeemable at its 
option upon the occurrence of various events specified in the Amended 
Sale Agreements and the Indentures, which might be amended or 
supplemented (``Supplemental Indentures''), or a new indenture (``New 
Indenture''). The New Bonds will be subject to optional redemption with 
premiums to be determined by negotiations between CP&L and the 
Purchasers, and will be subject to mandatory redemption if the interest 
on the New Bonds becomes subject to federal income tax.
    CP&L may obtain a credit enhancement for the New Bonds, which would 
include bond insurance, a letter of credit or a liquidity facility. 
CP&L anticipates it may be required to provide credit enhancement if it 
issues floating rate bonds. A premium or fee would be paid for the 
credit enhancement, which would still result in a net benefit through a 
reduced interest rate on the New Bonds. CP&L will not provide credit 
enhancement unless it is economically beneficial.
    CP&L also seeks authority to issue First Mortgage Bonds as security 
for the New Bonds, subject to applicable indenture restrictions under a 
Supplemental Indenture to its Mortgage Indenture dated November 1, 1943 
to the First National Bank of Chicago and A.H. Bohm (``Mortgage 
Indenture''). The First Mortgage Bonds will be held by the Trustee for 
the New Bonds for the benefit of the New Bonds holders and will not be 
transferable, except to a successor trustee. The First Mortgage Bonds 
will be issued in the exact amount and with substantially the same 
terms as the New Bonds. To the extent payments in respect of the New 
Bonds are made in accordance with their terms, corresponding payment 
obligations under the First Mortgage Bonds will be deemed satisfied.
    The redemption, sinking fund, and dividend provisions of the First 
Mortgage Bonds may deviate from the Statement of Policy Regarding First 
Mortgage Bonds. CP&L anticipates that the New Bonds will be sold by the 
Issuers pursuant to a Bond Purchase Agreement (``Purchase Agreement'') 
between the Issuers and one or more Purchasers.
    The proceeds of the New Bonds will be used to redeem the Old Bonds 
pursuant to the terms of the Indentures (``Redemption'') and reimburse 
CP&L for expenditures made that qualify for tax-exempt financing or to 
provide for current solid waste expenditures. The proceeds of any 
offering also may be used to reimburse CP&L for Old Bonds previously 
acquired. Additional funds required to pay for the Redemption and the 
costs of issuance of the New Bonds will be provided by CP&L from 
internally generated funds and short-term borrowings.
    CP&L believes that the Redemption of the Old Bonds and the issuance 
of floating rate Refunding Bonds could result in substantial savings 
and benefit ratepayers. Whether or not net present value savings are 
available, CP&L proposes to refund the Series 1974A and the Series 1977 
Bonds to eliminate the sinking fund requirement so that the current 
amount of tax-exempt bonds outstanding will be maintained. CP&L also 
proposes to refund the Series 1974B and the Series 1977A Bonds to 
achieve savings from consolidating several series of bonds into one or 
two series.

New England Electric System, et al. (70-8679)

    New England Electric System (``NEES''), a registered holding 
company, and its subsidiary companies, Massachusetts Electric Company 
(``Mass. Electric''), New England Electric Transmission Corporation 
(``NEET''), Narragansett Energy Resources Company (``NERC''), New 
England Energy Incorporated (``NEEI''), New England Hydro-Transmission 
Electric Company, Inc. (``Mass. Hydro''), New England Hydro-
Transmission Corporation (``NH Hydro''), New England Power Company 
(``NEP''), and New England Power Service Company (``NEPSCO''), all of 
25 Research Drive, Westborough, Massachusetts 01582, Granite State 
Electric Company, 33 West Lebanon Road, Lebanon, New Hampshire 03766, 
and The Narragansett Electric Company (``Narragansett''), 280 Melrose 
Street, Providence, Rhode Island 02901, (collectively, ``Applicants'') 
have filed an application-declaration under sections 6(a), 7, 9(a), 10, 
and 12(b) of the Act and rules 43 and 45 thereunder.
    The subsidiaries noted below (``Borrowing Companies'') propose, 
from November 1, 1995 to October 31, 1997, to borrow from the NEES 
intrasystem money pool (``Money Pool'') and/or banks, and/or, in the 
case of Mass. Electric, Narragansett, and NEP, through the issuance of 
commercial paper up to the following amounts:

Granite.................................................     $10,000,000
Mass. Electric..........................................     150,000,000
Narragansett............................................     100,000,000
NEET....................................................      10,000,000
Mass. Hydro.............................................      25,000,000
NH Hydro................................................      25,000,000
NEP.....................................................     375,000,000
NEPSCO..................................................      25,000,000
                                                         ---------------
      Total.............................................     720,000,000

    The proceeds from the borrowings will be used: (i) to pay 
outstanding notes to banks and/or commercial paper dealers and/or 
borrowings from the Money Pool; (ii) to provide new money, and/or to 
reimburse the treasury, for capital expenditures; and (iii) for other 
corporate purposes relating to ordinary business operations, including 
working capital and the financing of construction and property 
acquisitions.
    Applicants request authority to lend to the Money Pool from surplus 
funds that may be available in their treasuries. Loans by the Money 
Pool to the Borrowing Companies may or may not be evidenced by notes. 
The interest rate for such loans will be 108% of the monthly average of 
the rate for high grade 30-day commercial paper sold through dealers by 
major corporations as published in the Wall Street Journal. Although 
there are no stated maturities, Money Pool loans are payable on demand 
and may be prepaid without penalty.
    Applicants state that bank loans will be evidenced by notes 
maturing less than one year from date of issuance, with a negotiated 
interest rate. Fees will be paid to the banks in lieu of compensating 
balance arrangements. The effective interest cost of bank loans will 
not exceed the greater of the bank's base or prime lending rate or the 
rate published in the Wall Street Journal as the high federal funds 
rate, plus, in either case, one percent. Some bank borrowings may be 
without prepayment privileges. Payment of any short-term promissory 
notes prior to maturity will be made on the basis most favorable to the 
Borrowing Companies, taking into account fixed maturities, interest 
rates, and any other relevant financial considerations.
    Mass. Electric, Narragansett, and NEP also propose to issue and 
sell commercial paper to one or more nationally recognized commercial 
paper dealers (``CP Dealer''). Initially, the CP Dealer will be CS 
First Boston 

[[Page 47798]]
Corporation and/or Merrill Lynch Money Markets Incorporated.
    The effective interest cost to the issuer of commercial paper will 
generally not exceed the effective interest cost of the base lending 
rate at the First National Bank of Boston. However, the effective 
interest cost of such paper is based on the supply of, and demand for, 
that and similar paper at the time of sale, and interest costs have 
from time to time exceeded bank base rates. While it is not anticipated 
that the effective annual cost of borrowing through commercial paper 
will exceed the annual base rate borrowing from the First National Bank 
of Boston, commercial paper may be issued with a maturity of not more 
than 90 days with an effective cost in excess of the then-existing 
lending rate.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-22844 Filed 9-13-95; 8:45 am]
BILLING CODE 8010-01-M