[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]



-----------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    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).
---------------------------------------------------------------------------

    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