[Federal Register Volume 61, Number 32 (Thursday, February 15, 1996)]
[Notices]
[Pages 6045-6047]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3417]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26470]


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

February 9, 1996.
    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 March 4, 1996, to the Secretary, Securities and Exchange 
Commission, Washington, DC 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.

Allegheny Power System, Inc., et al. (70-8411)

    Allegheny Power System, Inc. (``APS''), 12 East 49th Street, New 
York, New York, 10017, a registered holding company; AYP Capital, Inc. 
(``AYP''), 12 East 49th Street, New York, New York, 10017, a non-
utility subsidiary company of APS; and Allegheny Power Service 
Corporation (``APSC''), 800 Cabin Hill Drive, Greensburg, Pennsylvania, 
15601, a non-utility subsidiary company of APS, have filed a post-
effective amendment to an application-declaration previously filed 
under sections 6(a), 7, 9(a), 10, 12(b), 13(b), 32 and 33 of the Act 
and rules 45, 50, 53, 87, 90 and 91 thereunder.
    By order dated July 14, 1994 (HCAR No. 26085), APS was authorized 
to organize and finance AYP to: (i) explore investment opportunities in 
companies engaged in new technologies related to the core utility 
business of APS and (ii) invest in companies for the acquisition and 
ownership of exempt wholesale generators (``EWGs'').
    By order dated February 3, 1995 (HCAR No. 26229), AYP was 
authorized to engage in the development, acquisition, construction, 
ownership and operation of EWGs and in development activities with 
respect to (i) qualifying cogeneration facilities and small power 
production facilities (``SPPs''); (ii) nonqualifying cogeneration 
facilities, nonqualifying SPPs and independent power production 
facilities (``IPPs'') located within the service territories of APS 
public utility subsidiary companies; (iii) EWGs; (iv) companies 
involved in new technologies related to the core business of APS; and 
(v) foreign utility companies (``FUCOs''). AYP Capital was also 
authorized to consult for nonaffiliate companies. APS was authorized to 
increase its investment in AYP Capital from $500,000 to $3 million.
    By order dated October 27, 1995 (HCAR No. 26401), APS and AYP were 
authorized to form and finance special-purpose subsidiary companies 
(``NEWCOs'') to acquire interests in EWGs and FUCOs, to provide energy 
management services and demand side management services, to factor 
accounts receivable, and to manage the real estate portfolio of the APS 
system. APS also was authorized to invest in AYP, and AYP was 
authorized to invest in NEWCOs, up to $100 million through December 31, 
1999. AYP and the NEWCOs were authorized to obtain loans or to issue 
recourse obligations guaranteed by AYP or APS subject to the $100 
million limit. Finally, the NEWCOs were authorized to issue partnership 
interests or trust certificates through December 31, 1999 to third 
parties to finance EWGs and FUCOs in an amount not to exceed $200 
million.
    This post effective amendment seeks Commission authorization for 
APS and AYP to increase the limit on loans and guarantees from $100 
million to $300 million. This increase is requested in part because AYP 
has agreed to purchase the 50% interest of Duquesne Light Company in 
Fort Martin Generating Station Unit No. 1 (``Fort Martin'') for $181 
million.
    Fort Martin is operated by Monongahela Power Company 
(``Monongahela''), an associate company of AYP and a wholly-owned 
public utility subsidiary of APS, pursuant to an Operating Agreement 
dated April 30, 1965. Monongahela was chosen to operate Fort Martin by 
an operating committee that consists of the three owners of Unit No. 
1--Duquesne Light Company, Monongahela, and Potomac Edison Company. 
Certain common facilities are operated under a Common Facilities 
Operating Agreement dated November 14, 1968. The Operating Agreement 
has been approved by the FERC and by all state commissions with 
jurisdiction over the parties. The Operating Agreement, which details 
the allocation of costs for the operation and maintenance of Fort 
Martin, will remain in effect after the sale of the 50% interest.

Consolidated Natural Gas Company (70-8759)

    Consolidated Natural Gas Company (``CNG''), CNG Tower, 625 Liberty 
Avenue, Pittsburgh, Pennsylvania 15222-3199, a registered holding 
company has filed an application-declaration under sections 3(b), 6(a), 
7, 9(a), 10, 12(b), 13(b), 32 and 33 of the Act and rules 45, 53, 54, 
83, 87, 90 and 91 thereunder.
    CNG proposes to form CNG International Corporation (``CNGI'') as a 
subsidiary which would exclusively invest either directly or, through 
intermediate subsidiaries (``Intermediate Subsidiaries''), indirectly 
in energy-related businesses outside the United States. CNG requests 
authority through March 31, 2001 to invest up to $300 million in any 
combination of debt and equity funds through CNGI in such businesses 
(``Investment Cap'').
    CNG additionally requests authority for CNGI to directly or, 
through one or more Intermediate Subsidiaries, indirectly acquire 
securities or interests in the business of one or more ``exempt 
wholesale generators'' (``EWGs'') located outside of the United States 
and ``foreign utility companies'' (``FUCOs''). Any direct or indirect 
investment by CNGI in an EWG or a FUCO would not be subject to the 
Investment Cap, but would not be undertaken if, as a consequence, the 
aggregate direct and indirect investment by CNG in all EWG's and FUCO's 
exceeded 50% of CNG's consolidated retained earnings.
    The types of energy-related businesses interests, other than EWGs 
and FUCOs, in which CNG requests authority for CNGI to acquire include: 
(a) The sale and servicing of energy equipment; (b) gas transmission 
and storage; (c) gas exploration, production, brokering and marketing; 
(d) brokering and marketing of electricity, gas and other energy 
commodities and (e) services related to the foregoing.
    CNG also requests authority for CNGI and its affiliates to provide 
(a) energy consulting in foreign energy markets and (b) administrative, 
technical, 

[[Page 6047]]
operating, maintenance, and other management services to non-associates 
with respect to their foreign operations. All such services, together 
with the energy-related businesses described above are referred to as 
``Foreign Energy Activities.'' All such services would be provided to 
nonassociates at market-based rates.
    CNGI and its affiliates may also provide similar goods and services 
to wholly-owned subsidiaries and to entities jointly owned by CNGI and 
its subsidiaries. Services provided to CNGI affiliates would be at 
market rates if such affiliate either (a) derives no material part of 
its income, directly or indirectly, from sources within the United 
States and is not a public-utility company operating within the United 
States or (b) does not provide services or sell goods directly or 
indirectly to CNG domestic utility affiliates.
    CNGI and its affiliates may contract with CNG associates in order 
to provide the above services. Services obtained from utility 
associates would be performed at cost. Services from nonutility 
associates may be performed at market; provided, however, that services 
from nonutility associates substantially involved in the provision of 
services to CNG utility associates would be performed at cost.
    CNGI may invest in Foreign Energy Activities through the 
acquisition of up to 100% of the voting or non-voting stock of 
corporations engaged exclusively in such activities. Alternatively, 
CNGI may invest and participate through wholly-owned limited purposes 
subsidiary corporations with nonassociates in partnerships or joint 
ventures exclusively engaged in Foreign Energy Activities.
    CNG would provide funds to CNGI for the proposed activities by 
purchasing from CNGI up to 30,000 shares of its common stock, $10,000 
par value. Although CNGI would issue no more than 30,000 shares, it 
proposes to authorize 50,000 shares of common stock, $10,000 par value. 
CNG would additionally fund CNGI's activities through open account 
advances and/or long-term loans. In addition, CNG proposes that CNG, 
CNGI and Intermediate Subsidiaries be authorized to enter guarantee 
arrangements, obtain letters of credit and otherwise provide credit 
support with respect to the obligations of their respective 
subsidiaries. The maximum aggregate limit on all such credit support 
would be $300 million.
    CNG anticipates that most securities issued among CNGI and its 
affiliates, and most securities issued by CNGI and its affiliates to 
third parties, will be exempt from the requirements of section 6(a) and 
7 of the Act. However, CNG requests authority for CNGI and its 
associates to issue securities in a transaction which would not qualify 
for exemption under rules of the Act at the time such securities would 
be issued.
    Such securities would encompass interests in partnerships, joint 
ventures or other entities, and all other types of equity interests, 
regardless of preference with respect to, or condition on, 
distributions from the issuer of such securities, upon liquidation or 
otherwise.
    CNG states that it would obtain the funds for any investment in 
CNGI from internally generated funds or as the Commission may otherwise 
authorize by separate order.

The Columbia Gas System, Inc. (70-8775)

    The Columbia Gas System, Inc. (``Columbia''), 20 Montchanin Road, 
Wilmington, Delaware 19807, a registered holding company, has filed an 
application-declaration under section 6(a), 7, 9(a), 10, 12(b) and 
13(b) of the Act and rules 43, 45, 87, 90, and 91 thereunder.
    Columbia proposes to form one or more direct or indirect 
subsidiaries (``Consumer Service Company'') to engage in the business 
of providing energy-related consumer services (``Consumer Services''). 
To the extent these services are provided by a new subsidiary, Columbia 
seeks authorization, through December 31, 1997, to fund the new venture 
through the purchase of up to $5 million dollars of shares of common 
stock of Consumer Services Company, $25 par value per share, at a 
purchase price at or above par value. The acquisition may be made by 
either Columbia (in the case of a direct subsidiary) or by one of 
Columbia's subsidiary companies (in the case of an indirect 
subsidiary). To the extent that the services are provided by an 
indirect subsidiary, the funding by the direct subsidiary will come 
either from previously authorized funding or from cash on hand.
    Columbia expects that its Consumer Services subsidiaries will 
conduct their businesses both within and outside of the states of 
Kentucky, Maryland, Ohio, Pennsylvania, and Virginia. Columbia states 
that the Consumer Services will primarily benefit Columbia's customers 
and Columbia's local distributing companies (``LDCs'') (Columbia Gas of 
Kentucky, Inc., Columbia Gas of Maryland, Inc., Columbia Gas of Ohio, 
Inc., Columbia Gas of Pennsylvania, Inc. and Commonwealth Gas Services, 
Inc.). The Consumer Services offered would include the following: (1) 
Safety inspections (energy assessments and energy-related safety 
inspections such as carbon monoxide and radon testing, appliance 
efficiency ratings and wiring safety checks); (2) appliance financing 
(loans supporting the purchase of energy-related appliances); (3) 
billing insurance (to ensure payment of consumer utility bills in the 
event of death, disability or involuntary unemployment); (4) appliance 
repair warranty (repair service for heating and air conditioning and 
major appliances); (5) gas line repair warranty (warranty against the 
cost of repair of faulty gas service lines); (6) merchandising of 
energy-related goods (direct sales of energy-related devices); (7) 
commercial equipment service (warranty service for operators of 
commercial equipment); (8) bill risk management products (price 
protection services for gas consumers); (9) consulting and fuel 
management services (advisory and/or management services regarding 
energy consumption and measurement for commercial and industrial 
customers); (10) electronic measurement services (enhanced measurement 
and billing services for commercial and industrial customers to enable 
them to better monitor their energy consumption and expenditures); (11) 
incidental services (needed as a result of the services set forth 
above).
    Columbia also proposes that its LDCs provide Consumer Services 
Company with billing, accounting, and other energy-related services. 
Columbia states that all services required to conduct the Consumer 
Services Company's business that are provided by the LDCs or any other 
Columbia company will be billed in accordance with section 13(b) of the 
Act and rules 87, 90 and 91 thereunder.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-3417 Filed 2-14-96; 8:45 am]
BILLING CODE 8010-01-M