[Federal Register Volume 61, Number 61 (Thursday, March 28, 1996)]
[Notices]
[Pages 13901-13903]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7541]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26497]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
March 22, 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 April 15, 1996, 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.
New Century Energies, Inc., (70-8787)
New Century Energies, Inc. (``NCE''), 1225 17th Street, Denver,
Colorado 80202, a Delaware corporation not currently subject to the
Act, has filed an application-declaration under sections 5, 6(a), 7, 8,
9(a), 10, 13(b) and rules 43, 45, 81, 83, 87, 88, 90 and 91 thereunder.
As described in more detail below, NCE: (1) proposes to acquire, by
means of the mergers described below (``Transaction''), all of the
issued and outstanding common stock of Public Service Company of
Colorado (``PSCo''), Southwestern Public Service Company (``SPS'') and
Cheyenne Light, Fuel and Power Company (``Cheyenne''), a Wyoming public
utility company and currently a wholly owned subsidiary of PSCo; (2)
proposes to form a new service company subsidiary through the
acquisition by NCE of all of the outstanding voting securities of New
Century Services, Inc. (``NC Services''); (3) requests that NC Services
and Utility Engineering Corporation (``UE'') \1\ be approved as
subsidiary service companies in accordance with the provisions of rule
88 of the Act; (4) requests that the terms of (a) a service agreement
among NC Services and the utility subsidiaries of NCE and (b) a
nonutility service agreement among NC Services and the nonutility
subsidiaries of NCE be approved; (5) requests that the terms of (a) the
UE service agreement among UE and the utility subsidiaries of NCE and
(b) the UE nonutility service agreement among UE and the nonutility
subsidiaries of NCE be approved; (6) proposes to form a new holding
company subsidiary to hold NCE's interests in its nonutility
subsidiaries through the acquisition by NCE of all of the outstanding
voting securities of New Century Hold Co. (``NC Hold''); (7) proposes
to acquire all of the outstanding voting securities of West Gas
Interstate, Inc. (``WGI'');\2\ (8) proposes that UE create two
additional subsidiaries--(a) Utility Services,\3\ and (b) Key Resource
Management
[[Page 13902]]
(``KRM'');\4\ (9) seeks an exemption from the at-cost provisions of
section 13(b) and rules 90 and 91 thereunder for (a) services provided
to certain affiliated qualifying facilities (``QFs''), independent
power projects (``IPPs''), exempt wholesale generators (``EWGs''), and
foreign utility companies (``FUCOs'') by the following entities--(i) e
prime, inc.,\5\ (ii) KRM, (iii) NC Services, (iv) Quixx Corporation
(``Quixx''),\6\ (v) Quixx Power Services, Inc. (``QPS''),\7\ (vi) UE,
(vii) UE Carolina,\8\ and (viii) Utility Services, (b) services
provided by e prime to Young Gas Storage Co., Ltd.,\9\ and (c) goods
and services provided by PSCo which are used as components of the
products and services marketed by e prime; (10) proposes that NC Hold
acquire all of the issued and outstanding common stock of e prime,
Natural Fuels Corporation (``Natural Fuels''),\10\ and Young Gas
Storage Company, Inc. (``Young Gas'') through a transfer of their
common stock to NC Hold pursuant to a declaration of a dividend of
their common stock to NCE and subsequent capital contribution of their
common stock to NC Hold; (11) proposes that NC Hold acquire, in
exchange for notes issued to SPS, all of the issued and outstanding
common stock of Quixx and UE; (12) proposes that SPS acquire such
notes; and (13) proposes to register with the Commission, pursuant to
section 5 of the Act, as a new public-utility holding company.
\1\ UE is currently a subsidiary of SPS. Following the
consummation of the Transaction, UE will be an indirect subsidiary
of NCE.
\2\ WGI is currently a nonutility subsidiary of PSCo operating
in Colorado and Wyoming which is engaged in the natural gas
transmission business.
\3\ NCE proposes that Utility Services would provide services
related to the engineering, design and construction of cooling
towers for power plants.
\4\ NCE proposes that KRM would provide a resource database
service consisting of names of people who can be dispatched to
provide temporary services to various projects.
\5\ e prime, inc. is a nonutility subsidiary company of PSCo
described as a company which offers energy related products and
services to energy-using customers and to selected segments of the
utility industry.
\6\ Quixx is currently a subsidiary of SPS. Quixx's primary
business is investing in and developing cogeneration and energy-
related projects. Quixx also holds water rights and certain other
non-utility assets.
\7\ QPS is a wholly owned subsidiary of Quixx which will operate
and maintain generation facilities in various locations, including
two cogeneration facilities in which Quixx holds an equity interest:
(1) BCH Energy Limited Partnership (``BCH''), which is constructing
a waste-to-energy cogeneration facility located near Fayetteville,
North Carolina to provide steam to a Du Pont De Nemours & Company
(``Du Pont'') plant near Fayetteville and electric power to Carolina
Power & Light; and (2) Carolina Energy Limited Partnership
(``Carolina Energy''), which is developing, and will own and operate
solid waste fueled cogeneration facilities in Wilson and Lenoir
Counties, North Carolina, which will provide steam to a Du Pont
plant and will sell electric power to Carolina Power & Light.
\8\ UE Carolina is currently a wholly owned nonutility
subsidiary of UE which provides engineering, design and construction
related services to the Carolina Energy project.
\9\ Young Gas Storage Co., Ltd. is a partnership which owns and
underground gas storage facility. Young Gas Storage Company, Inc.,
currently a subsidiary of PSCo, holds a 47.5% general partnership
interest in Young Gas Storage Co., Ltd.
\10\ PSCo currently owns 80% of the capital stock of Natural
Fuels, a nonutility company which: sells compressed natural gas as a
transportation fuel to retail markets; converts vehicles for natural
gas usage; constructs fueling facilities; and sells miscellaneous
fueling facility equipment.
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PSCo is an exempt holding company, pursuant to rule 2 under section
3(a)(2) of the Act.\11\ PSCo and Cheyenne are primarily engaged in
providing electric and gas service in Colorado and Cheyenne, Wyoming.
As of December 31, 1994, PSCo provided electric utility service to 1.1
million customers, and Cheyenne provided service to 33,000 customers in
the Cheyenne area. In addition, PSCo and Cheyenne provided gas utility
service to approximately 920,000 and 26,000 customers, respectively. As
of December 12, 1995, there were 63,150,357 shares of PSCo common
stock, par value $5.00 per share, and 2,888,652 shares of PSCo
preferred stock outstanding.
\11\ PSCo's principal executive office is located in Denver,
Colorado.
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On a consolidated basis, for the year ended December 31, 1994,
PSCo's operating revenues were approximately $2.06 billion of which
approximately $1.4 billion were derived from electric operations, $625
million from gas operations and $33 million from other operations.
Consolidated assets of PSCo were approximately $4.2 billion, consisting
of $2.5 billion in identifiable electric utility property, plant, and
equipment and $675 million in identifiable gas utility property, plant,
and equipment, and $990 million in other corporate assets.
PSCo has nine direct and indirect nonutility subsidiaries, eight of
which are wholly-owned, and controlling interests in several small
water and ditch companies. PSCo's nonutility companies are: e prime;
Fuel Resources Development Co. which is engaged in the exploration for,
and the development and production of, natural gas and oil, principally
in Colorado; Green and Clear Lakes Company, which owns water rights and
storage facilities for water used at PSCo's Georgetown Hydroelectric
Station; Natural Fuels; PS Colorado Credit Corporation, a company that
finances (factors) certain of PSCo's current assets; P.S.R.
Investments, Inc., which owns and manages company owned life insurance
policies on certain past and present employees, the benefits from which
are to provide future funding for general corporate purposes; Young
Gas; WGI; and 1480 Welton, Inc., a real estate company which own
certain of PSCo's real estate interests for use in its utility
business.
SPS, a New Mexico corporation, is a public utility company engaged
in the generation, transmission, distribution and sale of electric
energy.\12\ It serves a population of approximately one million in a
52,000 square-mile area of the panhandle and south plains of Texas,
eastern and southeastern New Mexico, the Oklahoma panhandle and
southwestern Kansas. As of December 12, 1995 there were 40,917,908
shares of SPS common stock, par value $1.00 per share, outstanding. All
shares of SPS preferred stock outstanding on that date have been
redeemed or repurchased. On a consolidated basis, for the year ended
August 31, 1995, SPS's operating revenues were approximately $834
million, and its total assets were approximately $1.9 billion.
\12\ SPS's principal corporate office is located in Amarillo,
Texas.
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SPS has two nonutility subsidiaries, UE and Quixx. Both UE and
Quixx hold interests in subsidiaries and affiliates as part of their
business operations.
NCE was incorporated in Delaware on August 21, 1995 to become a
holding company over PSCo and SPS following the proposed merger. At
present, the 200 issued and outstanding shares of NCE common stock are
owned in equal parts by PSCo and SPS.
Pursuant to an Agreement and Plan of Reorganization, dated as of
August 22, 1995, as amended on December 8, 1995 (``Merger Agreement''),
PSCo Merger Corp.\13\ will be merged with and into PSCo with PSCo
continuing as the surviving corporation and SPS Merger Corp.\14\ will
be merged with and into SPS, with SPS as the surviving corporation. As
a result of these mergers, and the declaration of a dividend by PSCo to
NCE of all of the stock of Cheyenne, PSCo, SPS and Cheyenne will become
operating subsidiaries of NCE, and NCE will be a
[[Page 13903]]
holding company within the meaning of the Act.
\13\ PSCo's Merger Corp. will be incorporated under the laws of
the State of Colorado prior to the consummation of the Transaction.
The only authorized capital stock of PSCo Merger Corp. will be
common stock, no par value and all outstanding shares will be held
by NCE. PSCo Merger Corp. has not had, and prior to the closing of
the Transaction will not have, any operations other than the
activities contemplated by the Merger Agreement necessary to
accomplish the combination of PSCo Merger Corp. and PSCo.
\14\ SPS Merger Corp. will be incorporated under the laws of the
State of New Mexico prior to the consummation of the Transaction.
The only authorized capital stock of SPS Merger Corp. will be common
stock, no par value, and all outstanding shares will be held by NCE.
SPS Merger Corp. has not had, and prior to the closing of the
Transaction will not have, any operations other than the activities
contemplated by the Merger Agreement necessary to accomplish the
combination of SPS Merger Corp. and SPS.
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Upon consummation of the proposed transaction: (1) each issued and
outstanding share of PSCo common stock, together with the appurtenant
rights (other than treasury and certain other shares which will be
cancelled, fractional shares and shares held by holders who dissent in
compliance with Colorado law) will be converted into the right to
receive one share of NCE common stock, par value $1.00 per share
(``PSCo Conversion Ratio''); (2) each issued and outstanding share of
SPS common stock, together with the appurtenant rights, (other than
treasury and certain other shares which will be canceled, fractional
shares and shares held by holders who dissent in compliance with New
Mexico law) will be converted into the right to receive 0.95 of one
share of NCE common stock (``SPS Conversion Ratio''); (3) each share of
PSCo Merger Corp. common stock issued and outstanding prior to the
transaction will be converted into the right to receive one share of
common stock of PSCo as the surviving corporation; (4) each share of
SPS Merger Corp. common stock issued and outstanding prior to the
transaction will be converted into the right to receive one share of
common stock of SPS as the surviving corporation and (5) all shares of
capital stock of NCE issued and outstanding immediately prior to the
transaction will be canceled. The shares of preferred stock of PSCo and
SPS outstanding at the time of the consummation of the Transaction will
remain preferred stock of PSCo and SPS, respectively. NCE states that
the transaction is expected to be tax-free to PSCo and SPS shareholders
(except as to dissenters' rights and fractional shares). Based on the
capitalization of PSCo and SPS on December 1, 1995, the shareholders of
PSCo and SPS would own securities representing approximately 62.0% and
38.0%, respectively, of the outstanding voting power of NCE. NCE states
that the proposed merger qualifies for treatment as a pooling of
interests.
Following the merger, PSCo, SPS and Cheyenne will become direct
public utility subsidiaries of NCE and the nonutility subsidiaries of
PSCo and SPS will become either direct or indirect nonutility
subsidiaries of NCE. The Merger Agreement provides that NCE's principal
corporate office will be in Denver, Colorado, with significant
operating offices in Ararillo, Texas. NCE's board of directors will
consist of a total of 14 directors, 8 of whom will be designated by
PSCo and 6 of whom will be designated by SPS.
NCE proposes that the Commission authorize two system service
companies; NC Services and UE. NC Services will be a direct subsidiary
of NCE and will be incorporated in Delaware. NC Services will provide
companies in the NCE system with a variety of administrative,
management and support services. It is anticipated that NC Services
will be staffed by a transfer of personnel from PSCo, SPS and their
subsidiaries. In contrast, UE will be a subsidiary of an intermediate
holding company, NC Hold (discussed below), which will hold the
system's nonutility interests. UE will provide a variety of
engineering, design, construction, management and other miscellaneous
services to NCE system companies.
NCE states that the accounting and cost allocation methods of both
NC Services and UE will comply with the Commission's standards for
service companies in registered holding-company systems and that NC
Services' and UE's billing system will use the Commission's ``Uniform
System of Accounts for Mutual Service Companies and Subsidiary Service
Companies.'' \15\ Except as permitted by the Act or the Commission, and
except as summarized below, all services provided by NC Services and UE
to affiliated companies will be ``at-cost'' pursuant to rules 90 and
91.
\15\ 17 CFR Part 256 (1995).
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NCE requests an exemption from the at-cost provisions of rules 90
and 91 in connection with the provision of services to affiliated QFs,
IPPs, EWGs and FUCOs by the following companies: (1) NC Services, (2)
UE, (3) KRM, (4) Utility Services, (5) UE Carolina, (6) Quixx, (7) QPS,
and (8) e prime. In addition, NCE requests an exemption from rules 90
and 91 in connection with the provision of services by e prime to Young
Gas Storage Co., Ltd. Finally, to facilitate e prime's marketing of
certain products and services to nonaffiliates, NCE requests that PSCo
be exempted from rules 90 and 91 for the sale of certain products and
services to e prime.
NCE further requests authority to form a new subsidiary, NC Hold
Co., which will be incorporated in Delaware, to hold certain of the NCE
system's nonutility interests. At the consummation of the Transaction,
all outstanding shares of NC Hold common stock will be held by NCE. NC
Hold will acquire the common stock of certain of PSCo's nonutility
subsidiaries via a capital contribution from NCE and will purchase the
common stock of SPS's nonutility subsidiaries by issuing debt to SPS.
The debt issued by NC Hold will have a twenty-year maturity and
bear interest at a fixed rate, with interest payments to be made semi-
annually. The interest rate will be determined at the time of issuance
based on the then prevailing rate which would be charged by an
unaffiliated third party. The principal will be repaid in twenty equal
annual installments. NC Hold will have the option to prepay the entire
obligation, including accrued and unpaid interest, at any time without
any prepayment premium.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 96-7541 Filed 3-27-96; 8:45 am]
BILLING CODE 8010-01-M