[Federal Register Volume 61, Number 77 (Friday, April 19, 1996)]
[Notices]
[Pages 17333-17336]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9635]



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SECURITIES AND EXCHANGE COMMISSION
[Release No.35-26503]


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

April 12, 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 May 6, 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.

Central and South West Corp., et al. (70-8469)

    Central and South West Corporation (``CSW''), a registered holding 
company, CSW Energy, Inc. (``CSW Energy''), a wholly-owned non-utility 
subsidiary company of CSW, and four special-purpose, wholly-owned 
subsidiary companies of CSW Energy--CSW Sweeny GP, Inc. (``Sweeney GP 
I''), CSW Sweeny GP II, Inc. (``Sweeney GP II''), CSW Sweeny LP, Inc. 
(``Sweeny LP I''), and CSW Sweeny LP II, Inc. (``Sweeny LP II'')--all 
of 1616 Woodall Rodgers Freeway, P.O. Box 660164, Dallas, Texas, 75202, 
have filed a post-effective amendment, under sections 6, 7, 9(a), 10, 
12(b) and 12(c) of the Act and rules 42, 43, 45, and 51 thereunder, to 
an application-declaration filed under sections 6, 7, 9(a), 10, and 
12(b)( of the Act and rules 45 and 51 thereunder.
    By order dated December 9, 1994 (HCAR No. 26184) (``Order''), CSW 
and CSW Energy were authorized to invest in and develop, construct, 
own, and operate qualifying congeneration facility--the Sweeny 
Congeneration Project (``Project'')--through a special purpose limited 
partnership, the Sweeny Generation Limited Partnership 
(``Partnership''). CSW Energy was authorized to invest in the 
Partnership through several general and limited partnership--Sweeney GP 
I, Sweeney GP II, Sweeny LP I and Sweeny LP II (``Sweeny 
Subsidiaries'').
    The Order authorized CSW Energy and the Partnership to incur up to 
$20 million in development expenses for the Project (``Development 
Expenses''), which would be funded by equity contributions, loans, or 
open account advances from CSW to CSW Energy, from CSW Energy to the 
Sweeny Subsidiaries, and from the Sweeny Subsidiaries to the 
Partnership.
    CSW, CSW Energy, and the Sweeny Subsidiaries (``Applicants'') now 
purpose (i) to obtain third-party construction and term financing, of 
up to $250 million, through a credit facility (``Credit Facility''); 
(ii) to provide advances (``Advances'') to the Partnership in an amount 
not to exceed $250 million in the event construction financing has not 
been secured as of the commencement of construction; (iii) to obtain or 
arrange for irrevocable standby letters of credit (``Letters'') and a 
revolving working capital credit line of up to $50 million; and (iv) to 
provide up to $300 million in equity support to the Project.
    Applicants propose that the Partnership obtain the Credit Facility 
through one or more third-party lending institutions (``Project 
Lender''). The Credit Facility would include a construction loan of up 
to $250 million. The construction loan would have a term of up to five 
years and thereafter would be converted to, or refinanced by, a term 
loan or a combination of a term loan and equity contributions from CSW 
Energy and one or more non-associate companies (``New Partner'') prior 
to or upon the completion of the Project, which is expected to occur 
before December 31, 2000.
    It is anticipated that the term loan would be repaid over a term of 
up to 25 years. The interest cost to the Applicants under the Credit 
Facility is not anticipated to exceed the prime

[[Page 17334]]

commercial lending rate of Mellon Bank in effect from time to time plus 
4%.
    To meet project milestones and completion deadlines, the 
Partnership might be required to begin construction prior to 
acquisition of the third-party construction financing. Thus CSW or CSW 
Energy, directly or indirectly through the Sweeny Subsidiaries, might 
make the Advances in the form of loans, open account advances or 
additional contributions to the Partnership in an aggregate amount not 
to exceed $250 million.
    The Advances would be used for construction and operation of the 
Project. If the Advances are in the form of additional contributions, 
then the Advances would be repaid out of the proceeds of the Credit 
Facility or out of revenues from the Project. If the Advances are made 
in the form of loans or open account advances, then the Advances would 
be made on the same terms as the loans or open account advances which 
have been made in respect of the Development Expenses. It is 
anticipated that the Advances would be refinanced by the Credit 
Facility or the equity contribution of the New Partner.
    Independent of the Credit Facility and Advances, CSW and CSW Energy 
request authorization to issue corporate guaranties (``Guaranties'') 
and to arrange with a third-party lender (``Issuer'') for the Letters 
in an aggregate amount not to exceed $50 million. CSW, CSW Energy, the 
New Partner or the Partnership would be the account party (``Account 
Party'') under the Letters.
    The Guaranties and Letters would support certain payment 
obligations of the Partnership required by third parties under project 
documents. The Letters would be issued for renewable terms not to 
exceed 10 years for the duration of the project documents to which such 
Letters relate. Funds drawn under the Letters would be reimbursable to 
the Issuer by the Account party and, upon such reimbursement, the 
Letters might be reinstated to the face amount. Fees payable to the 
Issuer by the Account Party for the Letters would not exceed 2% per 
annum of the face amount of the Letters, and the interest rate payable 
per annum on unreimbursed funds drawn under the Letters would not 
exceed the prime rate of the Issuer plus four percentage points.
    Finally, the Project Lender might request that CSW, CSW Energy or 
the New Partner provide some assurance that up to $300 million of 
equity contributions will be made to the Project in the form of an 
equity support agreement, guarantee or letter of credit. Such equity 
support agreement, guarantee or letter of credit shall be substantially 
on the terms of, and reimbursable in the manner of, the Credit 
Facility, Advances, Guarantees or Letters. Any funds drawn under such 
equity support agreement, guarantee or letter of credit would be 
applied to amounts outstanding under the Credit Facility and would not 
increase the exposure of the Applicants above the amount of the Credit 
Facility.

Jersey Central Power & Light Company, et al. (70-8805)

    Jersey Central Power & Light Company (``JCP&L''), 300 Madison 
Avenue Morristown, New Jersey 07960, Metropolitan Edison Company 
(``Met-Ed''), 2800 Pottsville Pike, Reading, Pennsylvania 19640, and 
Pennsylvania Electric Company (``Penelec''), 2800 Pottsville Pike, 
Reading, Pennsylvania 19640, all of which are electric public utility 
subsidiaries of General Public Utilities Corporation (``GPU''), a 
registered holding company, and GPU Service Corporation (together with 
JCP&L, Met-Ed and Penelec, ``Applicants''), 100 Interspace Parkway, 
Parsippany, New Jersey 07054, a service company subsidiary of GPU, have 
filed an application under sections 9(a) and 10 of the Act.
    Applicants propose to provide (i) meter reading, billing and 
collection services, and customer call-center services (``Services'') 
for non-affiliated water and gas utility entities, including the 
utility agencies of cities, municipalities, counties and governmental 
entities (``Non-Affiliated Utilities''); (ii) billing and collection 
and call-center services (``Billing and Marketing Services'') to other 
businesses such as commercial service providers and retailers (``Non-
Utility Businesses''); and (iii) consolidated electric, water and gas 
bills, consolidated remittance processing of electric, water and gas 
utility accounts and consolidated account services (``Consolidated 
Services'') for both Non-Affiliated Utilities and Non-Utility 
Businesses.
    Applicants propose to provide the Services, Billing & Marketing 
Services, and the Consolidated Services (collectively, the ``Proposed 
New Services'') whether or not the Non-Utility Businesses or the 
customers of the Non-Affiliated Utilities are also customers of JCP&L, 
Met-Ed or Penelec. Agreements for the provision of the Proposed New 
Services will be negotiated and entered into on an arm's length basis.
    Applicants propose to offer the Proposed New Services described 
herein from time to time through December 31, 2001; however, it is 
proposed that the term of any contracts to provide such services which 
are entered into before that date may extend beyond that date in 
accordance with the terms of such contracts.

Central and South West Corporation, et al. (70-8809)

    Central and South West Corporation (``CSW''), a registered holding 
company, CSW International, Inc. (``CSWI''), and CSW Energy, Inc. 
(``Energy''), both wholly-owned nonutility subsidiary companies of CSW 
(collectively ``Applicants''), all located at 1616 Woodall Rodgers 
Freeway, Dallas, Texas 75202, have filed an application-declaration 
under sections 6(a), 7, 12(b), 32 and 33 of the Act and rules 45, 53, 
and 54 thereunder.
    Since 1990, CSW, directly or through Energy, has engaged in 
development activities (including preliminary studies, research, 
investigation and consulting) pertaining to the construction (subject 
to further Commission authorization) of independent power facilities, 
including, among other things, exempt wholesale generators (``EWGs''), 
as defined in section 32 of the Act. Since 1994, CSW, directly or 
through CSWI, has engaged in development and investment activities with 
respect to, among other things, EWGs and foreign utility companies 
(``FUCOs''), as defined in section 33 of the Act.
    CSW is currently authorized under the terms of orders and 
supplemental orders issued under File Nos. 70-7758 [HCAR Nos. 25162 
(September 28, 1990), 25414 (November 22, 1991), 25728 (December 31, 
1992), and 26417 (November 28, 1995)], 70-8205 [HCAR Nos. 25866 (August 
6, 1993) and 26416 (November 28, 1995)], and 70-8423 [HCAR Nos. 26156 
(November 3, 1994) and 26383 (September 27, 1995)] (collectively, the 
``Financing Orders'') to finance the operations of CSW, Energy and 
CSWI, and their respective subsidiaries, by issuing and selling debt 
and equity securities and by issuing guarantees of the obligations of 
certain subsidiaries.\1\
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    \1\ The order and supplemental order in File No. 70-8423 [HCAR 
Nos. 26156 (November 3, 1994) and 26383 (September 27, 1995)] also 
authorize CSW, directly or through CSWI or their respective 
subsidiaries, to provide a variety of services (including design, 
construction, engineering, operation, maintenance, management, 
administration, employment, tax, accounting, economic, financial, 
fuel, environmental, communications, energy conservation, demand 
side management, overhead efficiency, utility performance and 
electronic data processing, and software development and support 
services in connection therewith) to EWGs, FUCOs and certain foreign 
electric utility enterprises that are not EWGS or FUCOs.

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[[Page 17335]]

    Under the terms of the Financing Orders, CSW, among other things, 
may use the proceeds of common stock sales and borrowings to finance 
the acquisition of the securities of, or other interests in, one or 
more EWGs or FUCOs, as defined in sections 32 and 33 of the Act, and 
may issue guarantees of the obligations of such entities, provided that 
the sum of the guarantees at any time outstanding and the net proceeds 
of common stock sales and borrowings by CSW that may at any time be 
used by CSW to fund investments in EWGs or FUCOs (or in Energy, CSWI or 
project parents to facilitate investments in EWGs or FUCOs) shall not, 
when added to CSW's ``aggregate investment'' (as defined in rule 53(a) 
under the Act) in all EWGs and FUCOs, exceed 50% of CSW's 
``consolidated retained earnings'' (as defined in rule 53(a)). This 
investment limitation is consistent with the investment limitation 
contained in rule 53(a)(1).
    Applicants request the Commission to modify this limitation, and 
exempt them from the requirements of rule 53(a)(1), to permit CSW to 
use the net proceeds of common stock sales and borrowings to acquire, 
directly or indirectly, the securities of, or other interests in, EWGs 
and FUCOs, and to issue guarantees of the obligations of such entities 
(all as authorized by and in accordance with the terms of the Financing 
Orders) in an aggregate amount that, when added to CSW's direct and 
indirect ``aggregate investment,'' as defined, in all EWGs and FUCOs, 
would not at any time exceed 100% of CSW's ``consolidated retained 
earnings,'' as defined. The current amount of CSW's ``aggregate 
investment,'' as defined, in EWGs and FUCOs (approximately $825 million 
as of February 1, 1996) represents approximately 45% of its 
``consolidated retained earnings,'' as defined (approximately $1.85 
billion as of December 31, 1995). Increasing this limitation as 
Applicants propose would allow financing of additional investments in 
EWGs and FUCOs of approximately $1.022 billion.\2\
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    \2\ Applicants note that additional investments in EWGs and 
FUCOs totaling approximately $1.215 billion are contemplated and 
acknowledge that the additional financing authority requested will 
not be sufficient, as of December 31, 1995, to enable CSW to make 
investments in all EWG and FUCO projects it is presently 
investigating or developing. Applicants anticipate, however, that 
such limitations will be abated to the extent that the development 
of all projects currently under consideration is not consummated and 
that CSW's ``consolidated retained earnings,'' as defined, increase 
prior to consummation of the contemplated investments.
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    Applicants state that CSW is committed to making additional 
investments in EWGs and FUCOs, primarily because (1) for over ten years 
there has been, and for at least the next three years there is 
projected to be, no need for CSW to make new equity investment in any 
of its utility subsidiaries; (2) acquisitions of EWGs and FUCOs give 
CSW the opportunity to continue to grow through reinvestment of 
retained earnings in an industry sector that CSW has decades of 
experience in, while at the same time diversifying overall asset risk; 
and (3) CSW has purposely invested in utility systems in foreign 
countries where deregulation of and competition in retail and wholesale 
electricity markets is more fully developed than in the United States 
in order to gain valuable experience with deregulated markets that will 
enhance CSW's ability to make its core domestic utility operations more 
competitive and efficient in the future as the United States moves 
toward deregulation and increased competition. Applicants also describe 
comprehensive procedures that CSW has established to identify and 
address risks involved in EWG and FUCO investments.
    CSW states that the use of financing proceeds and guarantees to 
make investments in EWGs and FUCOs to the proposed increased level will 
not have a substantial adverse impact on the financial integrity of the 
CSW system or an adverse impact on any utility subsidiary of CSW or its 
customers or on the ability of the affected state commissions to 
protect such customers. Applicants also state that CSW will not seek 
recovery through higher rates to its utility subsidiaries' customers in 
order to compensate CSW for any possible losses that it may sustain on 
investments in EWGs and FUCOs or for any inadequate returns on such 
investments.

General Pubic Utilities Corporation, et al. (70-8817)

    General Pubic Utilities Corporation (``GPU''), 100 Interpace 
Parkway, Parsippany, New Jersey 07054, a registered holding company, 
and its subsidiary companies, Jersey Central Power & Light Company 
(``JCP&L''), 300 Madison Avenue, Morristown, New Jersey 07962, 
Metropolitan Edison Company (``Met-Ed''), P.O. Box 16001, Reading, 
Pennsylvania 19640, Pennsylvania Electric Company (``Penelec''), P.O. 
Box 16001, Reading, Pennsylvania 19640, and Energy Initiatives, Inc. 
(``EI''), One Upper Pond Road, Parsippany, New Jersey 07054 
(collectively, GPU, JCP&L, Met-Ed, EI and Penelec, ``ENCON 
Applicants''), and GPU Service Corporation (``Service''), 100 Interpace 
Parkway, Parsippany, New Jersey 07054, have filed an application-
declaration under sections 9(a), 10, 12(b) and 13(b) of the Act and 
rules 45, 90 and 91 thereunder.
    Pursuant to state authorizations, JCP&L, Met-Ed and Penelec 
currently provide certain engineering and consulting services to their 
own electric utility customers within their respective service 
territories as part of their utility businesses. These previously 
authorized activities relate to what GPU calls conditioned power 
services, which are designed to prevent, control or mitigate the 
adverse effects of power disturbances in a customer's electrical system 
to ensure the power quality required by customers. particularly for 
their sensitive electronic equipment.
    The ENCON Applicants now propose to engage in the provision of 
energy-related engineering services, as well as technical and 
analytical consulting services in connection with energy-related 
matters. Such activities may also entail the marketing, installation, 
operation and maintenance of various products and systems, designed to 
implement the energy management, demand-side management and load 
management solutions recommended in the course of providing these 
services (collectively, referred to as ``ENCON Services'').
    Specifically, ENCON Services will, include the following 
activities: (1) The identification of energy and other resource (water, 
labor, maintenance, materials, etc.) cost reduction and/or efficiency 
opportunities; (2) the design of facility and process modifications 
and/or enhancements to realize such opportunities; (3) the management 
of, or the direct construction or installation of energy conservation 
or energy efficiency equipment; (4) the training of client personnel in 
the operation of equipment; (5) the maintenance of energy systems; (6) 
the design and/or management of and/or the direct construction or 
installation of new and retrofit heating, ventilating and air 
conditioning, electrical and power systems, motors, pumps, lighting, 
waster and plumbing systems, and related structures, to realize energy 
and other resource efficiency goals or to otherwise meet a customer's 
energy needs; (7) system commissioning (i.e. observing the operation of 
the installed system to insure that it meets the design specifications; 
(8) the reporting of system results; (9) the design of energy 
conservation programs; (10) the implementation of energy conservation 
programs; (11) the provision of conditioned power services and related

[[Page 17336]]

equipment; and (12) other similar or related activities.
    The ENCON Applicants propose to: (1) Invest, through December 31, 
1998, up to an aggregate principal amount of $25 million in the 
engineering and consulting business; (2) expand the scope of their 
engineering and consulting services beyond conditioned power services 
so as to encompass the ENCON Services listed above; and (3) provide 
such ENCON Services both within and beyond the boundaries of the 
service territories of JCP&L, Met-Ed and Penelec.
    One or more of the ENCON Applicants have been engaged in 
discussions with non-affiliated engineering and consulting companies 
(``ENCONCo'') which are actively providing ENCON Services (``ENCON 
Business''). One or more the ENCON Applicants may acquire an interest 
in the ENCON Business directly or through: (1) The acquisition of 
securities of an ENCONCo; (2) new wholly owned or partly owned 
subsidiary companies to be formed (each, an ``ENCON Subsidiary''); and/
or (3) a joint venture involving any of the foregoing and an ENCONCo or 
its affiliate (each, an ``ENCON JV''). Notwithstanding the foregoing, 
GPU will not acquire a direct interest in the ENCON Business other than 
through the acquisition of securities of an ENCONCo.
    The ENCON Applicants request authorization for: (1) EI, ENCON 
Subsidiaries or ENCON JVs to provide goods and services to JCP&L, Met-
Ed and Penelec; and (2) Service to provide services to ENCON 
Subsidiaries and ECON JVs at cost. Each ENCON Applicant, ENCON 
Subsidiary and ENCON JV will maintain separate financial records 
relating to the ENCON Business.

General Public Utilities Corporation, et al. (70-8827)

    General Public Utilities Corporation (``GPU''), 100 Interpace 
Parkway, Parsippany, New Jersey 07054, a registered public utility 
holding company, and its subsidiary companies Jersey Central Power & 
Light Company (``JCP&L''), 300 Madison Avenue, Morristown, New Jersey 
07960, Metropolitan Edison Company (``Met-Ed'') and Pennsylvania 
Electric Company (``Penelec''), each at P.O. Box 16001, Reading, 
Pennsylvania 19640, Energy Initiatives, Inc. (``EII''), One Upper Pond 
Road, Parsippany, New Jersey 07054, and GPU Service Corporation 
(``GPUSC''), 100 Interpace Parkway, Parsippany, New Jersey 07054, 
(collectively, ``Applicants'') have filed an application-declaration 
under sections 9(a), 10, 12 and 13 of the Act and rules 90 and 91 
thereunder.
    GPU, JCP&L, Met-Ed, Penelec and EII (each, a ``TPS Applicant'') 
propose to provide power to the telecommunications industry. JCP&L has 
been engaged in discussions with non-affiliated telecommunications 
companies (each, a ``Telco'') concerning the Telco's need for a 
mechanism to deliver power on a reliable basis to the local 
distribution points disbursed throughout the Telco's telecommunications 
network. These local distribution points, known as optical network 
units (``ONUs''), may be ground-based or located on utility poles, with 
each ONU serving a number of customer locations, depending upon the 
particular configuration. The ONUs, which will replace the Telco's 
existing wire-based power supply system, convert the lightwave signal 
which travels over the Telco's fiber optic network into an electrical 
signal which travels down a coaxial cable into the customer's premises 
and delivers the ultimate telecommunications services. JCP&L has 
developed an ONU power service unit (``ONU Power Unit'') which would be 
installed on the same utility pole as an ONU. The ONU Power Unit would 
draw power from the existing electric utility wire, convert it to the 
direct current required by the ONU and deliver such converted power to 
the ONU. The ONU Power Unit would also contain a battery backup to 
assure reliable service, as well as a communications device to allow 
remote monitoring.
    The TPS Applicants propose that ONU Power Units be marketed, 
installed, operated and maintained in one or more Telco's service 
territories (which may overlap, in whole or in part, the boundaries 
JCP&L's, Met-Ed's or Penelec's respective service territories) and in 
the service territories of other telecommunications providers, 
regardless of location. In addition, one or more of the TPS Applicants 
may also seek to develop, market, install, operate and maintain other 
products and systems designed to address the power requirements of 
telecommunications providers. Such other products and systems may 
employ technology comparable to the ONU Power Unit or other 
technologies, such as photovoltaics, fuel cells, wind and flywheels. In 
addition, such activities may include providing other 
telecommunications infra-structure services which may not utilize any 
of these technologies. (These telecommunications power services 
activities are collectively referred to as the ``TPS Business.'')
    It is proposed that one or more of the TPS Applicants may acquire 
an interest in the TPS Business either directly, through the 
acquisition of securities of a Telco or otherwise, or, alternatively, 
through new wholly-owned or partly-owned subsidiary companies (each, a 
``TPS Subsidiary''), or through a joint venture involving any of the 
foregoing and a Telco or a Telco affiliate (each, a ``TPS JV''). GPU 
states that, notwithstanding the foregoing, GPU will not acquire a 
direct interest in the TPS Business other than through the acquisition 
of securities of a Telco.
    It is also requested that the Commission authorize the provision of 
goods and services relating to the TPS Business: (1) to JCP&L, Met-Ed 
and Penelec by EII or any TPS Subsidiaries or TPS JVs; and (2) to any 
TPS Subsidiaries and TPS JVs by GPUSC, all of which goods and services 
will be provided at cost in compliance with rules 90 and 91 under the 
Act.
    It is presently expected that the aggregate amount of the TPS 
Applicants' investment in the TPS Business will not exceed $30 million 
through December 31, 1998.
    The proposal to acquire securities of a Telco or any TPS 
Subsidiaries or TPS JVs shall expire upon the first to occur of (i) 
December 31, 1998 and (ii) the adoption by the Commission of Rule 58 
(HCAR No. 35-26313, June 20, 1995) or such other rule, regulation or 
order as shall exempt the transactions as herein proposed from section 
9(a) of the Act.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-9635 Filed 4-18-96; 8:45 am]
BILLING CODE 8010-01-M