[Federal Register Volume 61, Number 232 (Monday, December 2, 1996)]
[Notices]
[Pages 63876-63880]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30531]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26613]


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

November 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 December 16, 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.

Maine Yankee Atomic Power Company (70-8313)

    Maine Yankee Atomic Power Company (``Maine Yankee''), 329 Bath 
Road, Brunswick, Maine 04011, an indirect nuclear generating subsidiary 
of Northeast Utilities (``NU'') and of New England Electric System 
(``NEES''), both registered holding companies, has filed a declaration 
under Sections 6(a) and 7 of the Act.
    By orders dated January 17, 1991 and January 12, 1994 (HCAR Nos. 
25244 and 25973, respectively) Maine Yankee was authorized to issue and 
sell, no later than December 31, 1996, short-term notes (``Notes'') 
under bank lines of credit, and/or commercial paper (``Commercial 
Paper'') up to an aggregate amount at any one time outstanding of $21 
million. As of September 30, 1996, Maine Yankee had no issued and 
outstanding amounts under these lines of credit nor did it have any 
Commercial Paper obligations.
    Maine Yankee now proposes to extend its authority to issue and sell 
Notes and Commercial Paper in an aggregate outstanding amount of $21 
million, through December 31, 2001.
    Maine Yankee has existing bank lines of credit permitting the 
issuance of notes aggregating $21 million, including $8 million with 
The Bank of New York and $13 million with The First National Bank of 
Boston. The Notes will be demand or other short-term obligations under 
bank lines of credit. The Notes will mature in twelve months or less 
from the date of issuance. The effective interest cost of the Notes 
will not exceed the effective interest cost of borrowings at the prime 
rate, as in effect from time-to-time at such banks. Commitment fees 
will not exceed \1/2\ of 1% of the lines of credit from such banks.
    The Commercial Paper will mature in twelve months or less from the 
date of issuance and will be issued through dealers in commercial paper 
and sold to institutional investors. The Commercial Paper may be backed 
by Maine Yankee's available lines of credit or revolving credit 
agreements. Maine Yankee will pay a fee to the dealers in the 
Commercial Paper, estimated to be \1/8\ of 1% per annum, on a discount 
basis, of the amounts borrowed, as compensation for their services with 
regard to the issuance of the Commercial Paper. The interest rate on 
the Commercial Paper will vary depending upon the interest rates 
prevailing in the relevant market at the time of issuance.
    The Notes and Commercial Paper will provide interim financing for 
Maine Yankee's construction program, for working capital and for other 
general corporate purposes.

PSI Energy, Inc. (70-8727)

    PSI Energy, Inc. (``PSI''), 1000 Main Street, Plainfield, Indiana 
46168, an electric utility subsidiary of Cinergy Corp., a registered 
holding company (``Cinergy''), has filed a post-effective amendment to 
its application under sections 9(a) and 10 of the Act and rule 54 
thereunder.
    By order dated November 21, 1995 (HCAR No. 26412) (``1995 Order''), 
the Commission authorized PSI to enter into a business venture with 
H.H. Gregg (``Gregg''), a retail vendor of household electronic 
appliances and related consumer goods, through December 31, 1996, 
involving an appliance sales program (``Pilot Program''). Pursuant to 
the 1995 Order, PSI was authorized to market Gregg's electronic goods 
and appliances at retail, on a best-efforts, consignment basis, to 
PSI's customers at a limited number of its local offices. PSI was also 
authorized to sell extended service warranties covering any items 
purchased. Further, the Pilot Program contemplated that PSI might 
arrange customer financing through a bank or other financial 
institution for a fee.
    Pursuant to the 1995 Order, PSI has been conducting the Pilot 
Program through four of its local offices, in Bedford, Connersville, 
Greencastle, and Huntington, Indiana. PSI has also been marketing to 
customers Gregg's extended service warranties. In addition, as 
contemplated, PSI has arranged (i.e., brokered) customer financing with 
third-party financial institutions in exchange for a fee from the 
third-party financier.
    The initial proposal estimated that the Pilot Program would:
    (1) result in total sales revenues of approximately $2.6 million;
    (2) utilize the full-time employee equivalent of three or four 
employees; and (3) involve approximately $320,000 of expenditures 
(consisting primarily of advertising and sales expenses, expenses 
associated with the use of local offices and related facilities, and 
expenses associated with employees' time).
    The interim financial results of the Pilot Program have not met 
PSI's expectations, with revenues less than and expenses more than 
original estimates. PSI states that a principal reason why revenues to 
date have not matched expectations is because of local competition with 
other appliances and home electronics dealers. PSI states that 
advertising expenses were higher than anticipated partly due to the 
rush to open stores in time for the 1995 Christmas shopping season, but 
states that, since April of this year, the advertising strategy has 
been modified, and monthly advertising expenses have fallen back into 
line with original estimates. In addition, PSI entered into a 
settlement agreement with the Indiana Office of Utility Consumer 
Counselor providing, among other things, that 20% of the gross margins 
from all sales revenues to which PSI is entitled as a result of its 
participation in the Pilot Program will be allocated to PSI's retail 
electric customers through PSI's quarterly fuel adjustment clause.

[[Page 63877]]

Finally, initial non-recurring start-up costs also exceeded estimates.
    PSI now requests authorization to continue the Pilot Program with 
certain minor modifications for an additional year in order to advance 
the program goals for which authorization for the Pilot Program was 
originally sought. Specifically, PSI states that it continues to 
believe that the energy industry is transforming into a competitive 
industry, and that marketing appliances and electronic goods (whether 
in collaboration with Gregg or some other third-party vendor or by PSI 
on its own) to PSI's retail customers, on the limited basis currently 
in effect, will provide incremental benefits to PSI in this emerging 
environment by among other things (1) promoting a company brand-name 
identity, thereby facilitating the eventual marketing to customers by 
PSI or its associate companies of other energy-related and demand-side 
management products; (2) more fully utilizing existing employees and 
offices to hold down costs; and (3) strengthening ties to customers.
    PSI states that although interim costs of the Pilot Program have 
exceeded estimates, many of these costs are non-recurring start-up 
costs (e.g., local office redesign, employee training, acquisition of 
point-of-sale software). Therefore, the investments PSI has made and 
the hands-on experience it has gained will benefit it significantly in 
the extended Pilot Program. To further contain 1997 program costs, 
Gregg has proposed certain program modifications, including increased 
price discounts, advertising support, and increased Gregg staff support 
and training for store personnel, that will increase the potential 
profitability of the program.
    The renewed Pilot Program would be subject to the same terms and 
conditions contained in the 1995 Order except that: PSI may continue to 
conduct the program in collaboration with Gregg; alternatively, PSI may 
conduct the program on its own or in collaboration with other 
appliances or home electronics vendors.\1\ In any event, PSI, whether 
on its own or together with third-party vendors, would market household 
appliances and other consumer electronic goods (including marketing 
extended service warranties and arranging for customer financing from 
third-party financial institutions) from not more than five of PSI's 
local offices.
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    \1\ PSI will not acquire any ownership interest in Gregg or such 
other third-party vendors; nor would PSI establish any new 
subsidiaries to implement the extended program.
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    Furthermore, PSI requests authorization to market extended service 
warranties to its customers, covering the cost of repairs for their 
household appliances/electronic goods, whether or not purchased from 
PSI as part of the extended program. Based on its experience to date, 
PSI may wish to use the full-time equivalent of up to five employees 
(out of the approximately 2230) to carry out the program.

Consolidated Natural Gas Co., et al. (70-8883)

    Consolidated Natural Gas Company (``CNG''), CNG Tower, Pittsburgh, 
Pennsylvania, 15222-3199, a registered holding company, and its wholly 
owned non-utility subsidiary, CNG Energy Services Corporation (``Energy 
Services'') (collectively, ``Applicants''), One Park Ridge Center, 
Pittsburgh, Pennsylvania, 15244-0746, have filed an application-
declaration, as amended, under sections 6(a), 7, 9(a), 10, 12(b) and 
13(b) of the Act and rules 43, 45, 54 and 90 thereunder.
    Energy Services, which markets natural gas and engages in the power 
generation business, seeks Commission authorization to invest, through 
December 31, 2001, up to $250 million to expand its business to market 
electricity and other energy commodities and to engage in fuel 
management and other incidental related activities. CNG and Energy 
Services also seek Commission authorization to provide up to $250 
million in guarantees or other credit support to subsidiaries that 
market energy commodities (``Subsidiaries'').
    The Applicants propose that Energy Services and the Subsidiaries 
engage in all forms of brokering and marketing transactions, including 
electricity, natural gas, coal, oil, other hydrocarbons, wood chips, 
wastes and other combustibles, at wholesale and retail. All proposed 
activities will be conducted by personnel of Energy Services.
    The Subsidiaries might be corporations, partnerships, limited 
liability companies, joint ventures or other entities in which Energy 
Services might have a 100% interest, a majority equity or debt 
position, or a minority equity or debt position. The Applicants also 
propose that Energy Services and the Subsidiaries provide incidental 
related services, such as fuel management, storage and procurement.
    The Applicants contemplate that Energy Services and the 
Subsidiaries engage in the proposed activities without regard to 
locations or identities of clients or sources of revenues. Energy 
Services and the Subsidiaries will not make retail sales of electricity 
or natural gas, however, in states in which such sales are not 
authorized or permitted under applicable state laws or regulations.
    The Applicants request that the Commission reserve jurisdiction 
over any activities by Energy Services or the Subsidiaries outside the 
United States subject to completion of the record.
    Finally, the applicants request that the Commission authorize 
Energy Services and the Subsidiaries to acquire or construct physical 
assets that are incidental and reasonably necessary in the day-to-day 
conduct of marketing operations, such as oil and gas storage 
facilities, gas, oil or coal reserves, or a pipeline spur needed for 
deliveries of fuel to an industrial client. The Applicants represent, 
however, that Energy Services and the Subsidiaries will not acquire 
assets or make retail sales of energy commodities that would result in 
a ``public utility company'' within the definition of the Act.
    Energy Services and the Subsidiaries will take appropriate measures 
in the normal course of their business to mitigate the risks associated 
with electricity and fuel purchases or sales contracts. Such measures 
may include matches between long-term firm or variable price 
electricity sales contracts and long-term firm or variable price fuel 
purchase contracts. Purchases of fuel or fuel reserves or options on 
fuel reserves might also be used to hedge fuel price risks.
    Energy Services and the Subsidiaries may purchase or sell 
commodity-based derivative instruments, such as electricity or gas 
futures contracts and options on electricity or gas futures, similar to 
those traded on the New York Mercantile Exchange, and gas and oil price 
swap agreements and other commodity-based derivative instruments.
    Energy Services and the Subsidiaries will seek to manage a 
portfolio of energy contracts involving purchases, sales and trades of 
electricity and other energy commodities. Energy Services and the 
Subsidiaries will seek to hedge the risks associated with these 
contracts through a combination of physical assets, balanced physical 
purchases and sales, purchases and sales on futures markets, or other 
derivative risk management tools.
    Energy Services intends to engage in transactions involving gas, 
electricity and other fuel capacity rights, rate swaps and other 
commodity-based derivative products that may be developed for use in 
the energy markets in which it will participate in the

[[Page 63878]]

ordinary course of its business as an energy company.
    Energy Services will not deal in such derivative products for 
purposes of speculation, but rather would use them only to reduce 
price-risk exposure through hedging.
    Energy Services might also engage in energy commodities marketing 
activities with the gas utility companies or other affiliates in the 
CNG system on the same market terms that would be available to non-
affiliate clients.
    Energy Services proposes to raise funds for the activities through 
(i) sales of common stock, $1.00 par value, to CNG for up to $10,000 
per share, (ii) open account advances, and (iii) long-term loans from 
CNG. The open account advances and long-term loans will have the same 
effective terms and interest rates as related funds borrowed by CNG.
    In particular, open account advances would be made under letter 
agreement with Energy Services and pursuant to a note issued by it and 
would be repaid within one year with interest equal to the effective 
rate of interest of the weighted average effective rate for CNG 
commercial paper and/or revolving credit funds. In the absence of such 
funds, the interest rate would be based on the Federal Funds effective 
rate of interest quoted daily by the Federal Reserve Bank of New York.
    Loans to Energy Services would be evidenced by long-term non-
negotiable notes that mature within thirty years with the interest 
equal to the cost of comparable funds borrowed by CNG. In the absence 
of such funds, the interest will be tied to the Salomon Brothers 
indicative rate for comparable debt issuances published in Salomon 
Brothers Inc. Bond Market Roundup or similar publication on the date 
nearest to the time of takedown.
    CNG will obtain the funds required for Energy Services through 
internal cash generation, issuance of long-term debt securities, funds 
borrowed under credit agreements or through other authorizations 
approved by the Commission.

New England Electric System, et al. (70-8921)

    New England Electric System (``NEES''), a registered holding 
company, and its power marketing subsidiary company, NEES Energy, Inc. 
(``NEES Energy'') (together, ``Applicants''), both located at 25 
Research Drive, Westborough, Massachusetts 01582, and NEES Energy's 
proposed power marketing subsidiary, AllEnergy Marketing Company, 
L.L.C. (``AllEnergy LLC''), 3 University Office Park, 95 Sawyer Road, 
Waltham, Massachusetts 02154, have filed an application-declaration 
under sections 6(a), 7, 9(a), 10, 12(b) and 13(b) of the Act and rules 
22, 45, 54, 90, 91 and 104 thereunder.
    By orders dated May 23, 1996 (HCAR No. 26520) and August 28, 1996 
(HCAR No. 26563) (``Orders''), the Commission approved the formation of 
one or more marketing companies (``Marketing Companies'') by NEES in 
Massachusetts, New Hampshire, Rhode Island, Connecticut, Maine, 
Vermont, Maryland, Delaware, Pennsylvania, New Jersey, and New York to 
engage in wholesale marketing of electric power and related 
transactions. Additionally, the Orders authorized the Marketing 
Companies in New Hampshire and Massachusetts to participate in those 
states' pilot programs for retail electric power sales. Finally, the 
Orders authorized the formation of Marketing Companies in Connecticut, 
Maine and Vermont to engage in the business of wholesale and retail 
marketing of energy. The Commission reserved jurisdiction over retail 
electric sales by Marketing Companies in Rhode Island, New York, New 
Jersey, Pennsylvania, Maryland, Delaware, New Hampshire and 
Massachusetts, except to the extent that electric retail marketing is 
permitted under the New Hampshire and Massachusetts pilot programs. 
Pursuant to the Orders, NEES has formed NEES Energy, a Massachusetts 
corporation, and Granite State Energy, Inc., a New Hampshire 
corporation, to undertake marketing activities consistent with the 
Commission's Orders.
    NEES Energy now proposes to enter into a joint venture with a 
subsidiary of Eastern Enterprises (``Eastern''), an exempt gas public 
utility holding company, to engage in the marketing of energy and 
related services and products. NEES Energy proposes to invest, from 
time-to-time, not exceeding $50 million in, and be a voting member of 
AllEnergy LLC, a limited liability corporation formed under the laws of 
Massachusetts on September 18, 1996 pursuant to a Limited Liability 
Company Agreement (``LLC Agreement''), subject to Commission 
authorization. NEES Energy proposes to own not exceeding a 50% voting 
interest in AllEnergy LLC. The remaining 50% voting interest in 
AllEnergy LLC will be owned initially by AllEnergy Marketing Company, 
Inc. (``Eastern Sub''), a wholly owned subsidiary of Eastern.
    NEES proposes to provide initial financing, through December 31, 
2001, for NEES Energy's investment in AllEnergy LLC by making capital 
contributions and/or loans to NEES Energy from time-to-time, provided 
that such NEES financing shall not be in excess of an aggregate of $50 
million, including any short-term loans and any amounts provided by 
NEES and/or NEES Energy which are used by AllEnergy LLC to acquire the 
assets or securities of third parties, or to otherwise invest in a 
subsidiary, pursuant to the authority requested, below, but excluding 
any guarantees from NEES and/or NEES Energy. Any such loans will be in 
the form of non-interest bearing subordinated notes payable in twenty 
years or less from the date of issue. NEES Energy may prepay any or all 
of such outstanding notes, in whole or in part, at any time and from 
time-to-time without premium or penalty.
    AllEnergy LLC will engage in the business of marketing and selling: 
(1) energy commodities, including electricity, natural gas, oil and 
other energy sources as well as options, futures contracts, forward 
contracts, collars, spot contracts or swap contracts related to the 
choice, purchase or consumption of any such energy commodity and any 
other related financial products; and (2) incidental and reasonably 
necessary products and services related to the choice, purchase or 
consumption of any such energy commodity, whether or not sold or 
provided on a bundled basis with natural gas, electricity, oil, or 
other energy source, such as, but not limited to, audits, power 
quality, fuel supply, repair, maintenance, construction, design, 
engineering and consulting.
    AllEnergy LLC will employ various risk-reduction measures to limit 
potential losses that could be incurred through AllEnergy LLC 
activities. These measures may include energy commodity hedging 
transactions. AllEnergy LLC will not engage in speculative trading in 
the energy market.
    While AllEnergy LLC's initial efforts will focus on the Northeast 
region, it may expand its business to all 50 states, and, subject to 
Commission approval, to Canada. AllEnergy LLC will engage in brokering 
and retail marketing of electric power and natural gas within a state 
or other jurisdiction only to the extent permitted or authorized under 
such state's or other jurisdiction's laws or programs.
    AllEnergy LLC also proposes to form one or more subsidiaries in 
order, among other things, to pursue its business in a particular 
target state. It will make an initial equity contribution in an amount 
not to exceed $100,000 in any one subsidiary. The form of the

[[Page 63879]]

initial investment, together with the formalities of the subsidiary's 
formation, may vary depending on the type of entity organized. It may 
involve the acquisition of common stock, a partnership interest, 
membership interest or an interest pursuant to an organizational 
agreement.
    AllEnergy LLC may have opportunities to acquire businesses to 
complement its business, such as, but not limited to, engineering 
services and the propane gas business. AllEnergy LLC will not acquire 
any utility assets or gas distribution facilities, as those terms are 
defined under the Act, regulations and orders issued thereunder, and 
will, therefore, not be either an electric or gas utility under the 
Act.
    AllEnergy LLC proposes to acquire a propane gas marketing business 
operating in the Eastern United States for a price not exceeding $3.5 
million. The terms of the acquisition will likely require, without 
limitation: (1) the payment or cancellation of the acquired entities 
debt prior to the acquisition; (2) execution of agreements by key 
employees of the acquired entity to continue employment; (3) the 
assignment of material contracts, contract rights and other rights and 
commitments of the acquired entity to AllEnergy LLC; and (4) the making 
of customary representations and warranties by the acquired entity and 
AllEnergy LLC, respectively.
    The LLC Agreement provides that in the event an AllEnergy LLC 
member defaults in making a required capital contribution to AllEnergy 
LLC, the non-defaulting member may, at its discretion, advance to 
AllEnergy LLC on behalf of the defaulting member all or a portion of 
such required capital contribution (``Member Default Loan''). The 
defaulting member is responsible for repaying the Member Default Loan 
to the member making such loan in accordance with the LLC Agreement. In 
the event that: (1) the non-defaulting member elects not to make such a 
Member Default Loan; or (2) the Member Default Loan is not repaid, then 
the member's percentage interests in AllEnergy LLC shall, at the 
election of the non-defaulting member, be adjusted to reflect the 
failure of the defaulting member to either make the required capital 
contribution, or repay the Member Default Loan, as the case may be, in 
accordance with a formula set forth in the LLC Agreement.
    Members of AllEnergy LLC may effect a transfer of all or a portion 
of their interest in accordance with terms of the LLC Agreement. Such 
transfers may include required regulatory transfers, transfers to 
affiliates, transfers to another member of AllEnergy LLC, and transfers 
to third parties. The LLC Agreement provides that, in the event an 
AllEnergy LLC member receives an offer to purchase its interest and 
intends to transfer its interest pursuant to such offer, or must make a 
required regulatory transfer of all or a portion of its interest, the 
other member shall have a right to purchase such interest at the offer 
price, or at the fair market value of the transferred portion of such 
interest, in the case of a required regulatory transfer.
    The LLC Agreement provides a mechanism whereby either NEES Energy 
or Eastern Sub may trigger a withdrawal of either party from AllEnergy 
LLC by means of a buy/sell transaction (``Buy/Sell Provision''). The 
Buy/Sell Provision permits either party to withdraw by giving the other 
party a notice of intention to withdraw indicating a cash price at 
which the withdrawing party would be willing to either buy or sell its 
interest in AllEnergy LLC. The party receiving such notice may then 
either buy the other party's AllEnergy LLC interest, or sell its own 
AllEnergy LLC interest to such other party, at such price. The Buy/Sell 
Provision is intended as a means of addressing disputes between NEES 
Energy and Eastern Sub in connection with AllEnergy LLC which the 
parties are unable to resolve.
    AllEnergy LLC staffing is expected to begin with a small group of 
employees. It is intended that four employees of New England Power 
Service Company (``NEPSCO'') will be assigned to AllEnergy LLC on a 
full-time basis. To the extent any more NEPSCO personnel are assigned 
to AllEnergy LLC, they will become employees of AllEnergy LLC. Other 
than such four NEPSCO employees, AllEnergy LLC will have its own 
employees and only rely on NEPSCO or an Eastern subsidiary for 
administrative services such as accounting, tax, legal, information 
services, insurance, and personnel management. All costs associated 
with these NEPSCO services, and with services of the above four NEPSCO 
employees assigned to AllEnergy LLC on a full-time basis, would be 
fully reimbursed on a cost basis by AllEnergy LLC in accordance with 
Rules 90 and 91 of the Act. Reimbursements for these costs will be on a 
thirty-day cycle basis.
    AllEnergy LLC intends to engage in short-term borrowing from third 
parties under rule 52(b) of the Act. The borrowing will be solely for 
the purpose of financing AllEnergy LLC's existing business. The 
interest rates and maturity dates of any debt security issued to an 
associate company of AllEnergy LLC will be designed to parallel the 
effective cost of capital of that associate company. The Applicants may 
also be required to supply guarantees or other credit support 
agreements for AllEnergy LLC in the ordinary course of its business 
including, without limitation, in connection with its execution of 
office leases, or of long term gas or electrical supply contracts. The 
Applicants request authorization to provide such guarantees or credit 
support in amounts not to exceed $20 million in the aggregate and 
inclusive of guarantees or credit support provided in connection with 
short-term borrowing, above.

Columbia Gas System, Inc., et al. (70-8965)

    Columbia Gas System, Inc. (``Columbia''), 12355 Sunrise Valley 
Drive, Suite 300, Reston, Virginia 20191-3420, a registered holding 
company, and Columbia Gas of Maryland, Inc. (``Columbia Maryland''), 
200 Civic Center Drive, Columbus, Ohio, 43215, a natural gas subsidiary 
company of Columbia, have filed an application-declaration under 
sections 6(a), 7, 9(a) and 10 of the Act and rule 43 thereunder.
    The application-declaration seeks Commission authorization for 
Columbia Maryland to refinance long-term debt.
    By order dated December 22, 1994 (HCAR No. 26201), Columbia 
Maryland was authorized through 1996 to sell to Columbia securities 
(``Old Notes'') in an aggregate amount of up to $5.5 million. By order 
dated January 25, 1996 (HCAR No. 26462) (``Order''), Columbia and 
Columbia Maryland were authorized to change the type of securities 
Columbia Maryland would sell to Columbia (``New Notes'') and, in order 
to refinance all previously issued Old Notes, to increase the amount of 
New Notes to be sold to $19.5 million.
    The Order authorized the exchange of Old Notes by Columbia Maryland 
for New Notes on or around December 31, 1995 as well as the future 
issuance of New Notes to meet the capital needs of Columbia Maryland in 
1996. However, due to various administrative delays, the exchange of 
Old Notes never occurred.
    The application-declaration now seeks Commission authorization for 
Columbia Maryland, on or around December 31, 1996, to exchange Old 
Notes sold to Columbia, which total approximately $18.0 million, for 
New Notes.
    The New Notes will have a weighted average interest rate below that 
of the Old Notes. The maturities and interest

[[Page 63880]]

rates of the New Notes will mirror the seven series of debentures that 
were issued by Columbia upon emergence from bankruptcy (HCAR No. 
26361). The New Notes will be governed by the terms of a loan agreement 
in certificated form and will be secured or unsecured.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-30531 Filed 11-29-96; 8:45 am]
BILLING CODE 8010-01-M