[Federal Register Volume 61, Number 226 (Thursday, November 21, 1996)]
[Notices]
[Pages 59259-59261]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29790]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26607]


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

November 15, 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 December 9, 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.

TUC Holding Company (70-8953)

    TUC Holding Company (``TUC Holding''), located at Energy Plaza, 
1601 Bryan Street, Dallas, Texas 75201, a Texas corporation not 
currently subject to the Act, has filed an application for an order 
under sections 9(a)(2) and 10 of the Act authorizing its proposed 
acquisition of all of the issued and outstanding common stock of (1) 
Texas Utilities Company (``TUC''), a Texas electric public-utility 
holding company exempt under section 3(a)(1) from all provisions of the 
Act except section 9(a)(2), and, through such acquisition, TUC's Texas 
public-utility subsidiary companies, Texas Utilities Electric Company 
(``TU Electric'') and Southwestern Electric Service Company 
(``SESCO''); and (2) ENSERCH Corporation (``ENSERCH''), a Texas gas 
public-utility company. TUC Holding also requests an order under 
section 3(a)(1) exempting it from all provisions of the Act except 
section 9(a)(2), following consummation of the proposed transactions.
    TU Electric and SESCO operate as public utilities exclusively in 
the State of Texas.\1\ Both are subject to regulation with respect to 
retail electric rates and other matters by the Public Utility 
Commission of Texas (``Texas Commission'') and by certain 
municipalities with regard to their rates.\2\
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    \1\ TU Electric is engaged in the generation, purchase, 
transmission, distribution and sale of electric energy in the north 
central, eastern and western parts of Texas, an area with a 
population estimated at 5,280,000. SESCO is engaged in the purchase, 
transmission, distribution and sale of electric energy in ten 
counties in the eastern and central parts of Texas, with a 
population estimated at 125,000.
    \2\ In addition, TU Electric is subject to regulation by the 
Nuclear Regulatory Commission in connection with its ownership of 
the Comanche Peak nuclear generating facility.
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    TUC also has eight nonutility subsidiaries. Texas Utilities 
Australia Pty. Ltd, an Australia limited liability company, owns all of 
the common stock of an Australia foreign utility company, as defined in 
section 33 of the Act. Texas Utilities Fuel Company, a Texas 
corporation, owns a natural gas pipeline

[[Page 59260]]

system and acquires, stores and delivers fuel gas and provides other 
fuel services at cost to TU Electric. Texas Utilities Mining Company, a 
Texas corporation, owns, leases and operates fuel production facilities 
for the surface mining and recovery of lignite at cost for TU Electric. 
Texas Utilities Services Inc., a Texas corporation, provides 
administrative services at cost to TUC system companies. Texas 
Utilities Properties Inc., a Texas corporation, owns, leases and 
manages properties, primarily TUC's corporate headquarters. Texas 
Utilities Communications Inc., a Delaware corporation, was organized to 
provide access to advanced telecommunications technology, primarily for 
the TUC system's expected expansion of the energy services business. 
Basic Resources Inc., a Texas corporation, was organized to develop 
natural resources, primarily energy sources, and other business 
opportunities. Chaco Energy Company, a New Mexico corporation, 
currently leases coal reserves in that state.
    For the year ended December 31, 1995, TUC's operating revenues on a 
consolidated basis were approximately $5.64 billion, of which 
approximately $5.61 billion was derived from TU Electric's and SESCO's 
electric operations. Consolidated assets of TUC and its subsidiaries at 
December 31, 1995 were approximately $21.5 billion, of which 
approximately $17.7 billion consists of utility assets. As of March 31, 
1996, there were 225,841,037 outstanding shares of the common stock, no 
par value, of TUC.
    ENSERCH, an integrated company that focuses on natural gas, is the 
successor to a company organized in 1909 for the purpose of providing 
natural gas service to north Texas. Through its Lone Star Gas Company 
division (``Lone Star''), ENSERCH is a gas utility company that 
purchases and distributes natural gas to over 1.3 million residential, 
commercial, industrial and electric-generation customers in 
approximately 550 cities and town, including the Dallas/Fort Worth 
Metroplex.\3\ Lone Star is subject to regulation by the Railroad 
Commission of Texas (``Railroad Commission'') with respect to rates 
charged to customers for gas delivered outside incorporated cities and 
towns and with respect to certain other corporate matters. Rates within 
incorporated cities and towns in Texas are subject to the original 
jurisdiction of the local city council with appellate review by the 
Railroad Commission.
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    \3\ Lone Star also provides consulting services with respect to 
gas distribution.
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    ENSERCH also has various nonutility operations.\4\ Lone Star 
Pipeline Company, a division of ENSERCH, owns a natural gas pipeline in 
Texas and is engaged in the gathering, processing and marketing of 
natural gas. Lone Star Pipeline is regulated with respect to gas 
transportation rates by the Railroad Commission. Enserch Processing 
Company, a division of ENSERCH, is engaged in the processing of natural 
gas for the recovery of natural gas liquids. Enserch Energy Services, 
Inc., a wholly-owned subsidiary of ENSERCH, is a marketer of natural 
gas and natural gas services, primarily in the Northeast and Midwest 
and on the West Coast. Enserch Development Corporation, a division of 
ENSERCH, is engaged in development activities relating to independent 
electric power generation projects. Fleet Star of Texas, L.C. (``Fleet 
Star'') and TRANSTAR Technologies, Inc. (``TRANSTAR''), each of which 
is 50% owned by ENSERCH, are engaged in compressed natural gas 
businesses.\5\
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    \4\ The application states that certain of these interests will 
not become part of the TUC Holding system. These include ENSERCH's 
direct and indirect ownership of 83.4% of the outstanding common 
stock of Enserch Exploration, Inc., a company engaged in the 
exploration for, and development, production and sale of, natural 
gas and crude oil. Two other subsidiaries of ENSERCH that are 
engaged in the compressed natural gas business, Lone Star Energy 
Company and its wholly-owned subsidiary, Lone Star Energy Plant 
Operations, Inc., also will not become part of the TUC Holding 
system.
    \5\ Fleet Star owns public natural gas fueling stations and 
TRANSTAR provides turnkey natural gas vehicle conversions and 
related services.
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    For the year ended December 31, 1995, ENSERCH's operating revenues 
on a consolidated basis were approximately $1.9 billion, of which 
approximately $887 million was attributable to natural gas distribution 
activities and approximately $220 million to oil and gas exploration 
and production. Consolidated assets of ENSERCH and its subsidiaries at 
December 31, 1995 were $3.4 billion, of which approximately $948 
million consists of gas distribution property, plant and equipment and 
$2.6 billion consists of oil and gas exploration and production 
property, plant and equipment. As of March 15, 1996, there were 
68,626,602 outstanding shares of the common stock, par value $4.45 per 
share, of ENSERCH.
    TUC Holding was formed under Texas law to become a holding company 
for TUC and ENSERCH following consummation of the transactions 
contemplated by the terms of an Amended and Restated Agreement and Plan 
of Merger, dated as of April 13, 1996 (``Merger Agreement''), among 
TUC, ENSERCH and TUC Holding.\6\ The Merger Agreement provides for the 
merger of TUC Merger Corp., a wholly-owned subsidiary of TUC Holding, 
with and into TUC, with TUC as the surviving corporation, and for the 
merger of ENSERCH Merger Corp., a wholly-owned subsidiary of TUC Merger 
Corp., with and into ENSERCH, with ENSERCH as the surviving corporation 
(together, ``Mergers'').
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    \6\ At present, the common stock of TUC Holding is owned equally 
by TUC and ENSERCH.
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    The application states that the Mergers are expected to create 
significant operational and administrative economies and efficiencies 
through combined meter reading, meter testing and billing operations, 
as well as customer service operations, savings in facility maintenance 
and emergency work coordination, and other administrative and general 
savings. In addition, as a result of the Mergers, TUC Holding is 
expected to be better positioned to remain competitive as the utility 
industry evolves.
    Upon consummation of the Mergers: (1) Each issued and outstanding 
share of TUC common stock (other than any shares owned by TUC, any 
subsidiary of TUC, ENSERCH or any subsidiary of ENSERCH, all of which 
will be cancelled without consideration and will cease to exist) will 
be converted into the right to receive one share of the common stock, 
without per valve, of TUC Holding; (2) each issued and outstanding 
share of ENSERCH common stock, together with associated rights to 
purchase, in certain specified circumstances, interests in ENSERCH 
voting preference stock or, in other specified circumstances, shares of 
ENSERCH common stock,\7\ (other than any shares owned by ENSERCH, any 
subsidiary of ENSERCH, TUC or any subsidiary of TUC, all of which will 
be cancelled without consideration and will cease to exist) will be 
converted into that number of shares of TUC Holding common stock 
obtained by dividing $8.00 by the average closing sales price of TUC 
common stock as reported on the New York Stock Exchange Consolidated 
Transactions Tape on each of the 15 consecutive trading days preceding 
the fifth trading day prior to the consummation of the Mergers 
(``Average TUC Price''); provided, however, that in no event will the 
Average TUC Price be deemed to be less than $35,625 or more than 
$43,625; and (3) all shares of capital stock of TUC

[[Page 59261]]

Holding issued and outstanding immediately prior to the transaction 
will be cancelled. Outstanding shares of ENSERCH preferred stock and 
ENSERCH convertible debentures will remain outstanding ENSERCH 
securities after the Mergers, and the debentures will be convertible 
into TUC Holding common stock. The Mergers are expected to qualify as 
tax-free transactions under section 351 of the Internal Revenue Code of 
1986, as amended. Based on the Average TUC Price if the Mergers had 
been consummated on April 12, 1996 (the date of the Merger Agreement), 
and the capitalization of TUC and ENSERCH on that date, the 
shareholders of TUC and ENSERCH would own securities representing 
approximately 94.3% and 5.7%, respectively, of the outstanding common 
stock of TUC Holding.
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    \7\ These rights are governed by the terms of a Rights Agreement 
between ENSERCH and Harris Trust Company of New York, as Rights 
Agent thereunder, dated as of March 26, 1996.
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    As a result of the Mergers, TUC Holding will be a public-utility 
holding company as defined in section 2(a)(7) of the Act with three 
public-utility subsidiaries, TU Electric, SESCO and ENSERCH. TUC 
Holding will change its name to Texas Utilities Company. It states that 
following consummation of the Mergers, it will be entitled to an 
exemption from all provisions of the Act except section 9(a)(2) because 
it and each of its public-utility subsidiaries from which it derives a 
material part of its income will be predominantly intrastate in 
character and will carry on their utility businesses substantially 
within the state of Texas.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-29790 Filed 11-20-96; 8:45 am]
BILLING CODE 8010-01-M