[Federal Register Volume 62, Number 54 (Thursday, March 20, 1997)]
[Notices]
[Pages 13414-13415]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7045]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26686]


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

March 14, 1997.
    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 7, 1997, 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.

Southern California Water Company  (70-9013)

    Southern California Water Company (``SCWC''), 630 East Foothill 
Boulevard, San Dimas, California 91773, an electric utility company, 
has filed an application seeking an exemptive order under section 
3(a)(1) of the Act. SCWC seeks the requested exemption, from all

[[Page 13415]]

provisions of the Act except section 9(a)(2), for a holding company 
(``Newco'') that will result from a planned reorganization of SCWC's 
operations.\1\
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    \1\ Newco has not yet been incorporated. SCWC states that it 
will inform the Commission of Newco's corporate name in its rule 24 
certificate.
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    SCWC is engaged in the business of providing water service to 
approximately 241,000 consumers in 75 California communities, and 
providing electric service to approximately 20,500 consumers (most of 
whom are residential customers) in one California community.\2\ The 
California Public Utilities Commission (``CPUC'') regulates both the 
water and the electric distribution business of SCWC.\3\ SCWC states 
that it has one subsidiary, California Cities Water Company, that 
engages in unregulated businesses and generated a nominal amount of 
revenues in 1996.
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    \2\ In 1996, SCWC derived more than 92 percent of its revenues 
(about $139.9 million) from water sales and less than 8 percent 
(about $11.5 million) from electric sales. Approximately 7 percent 
of SCWC's assets are devoted to its electric business.
    \3\ Applicant notes that the scope of CPUC's regulation is 
comprehensive including jurisdiction over rates, accounting 
practices, purchases and dispositions of utility property, 
extensions of service, acquisitions of other utility and nonutility 
companies, interaffiliate transactions, securities issuances and 
corporate reorganizations (including formation of utility holding 
companies), and access to the books and records of the affiliates of 
utilities as well as the books and records of the utilities 
themselves for purposes of monitoring interaffiliate transactions.
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    SCWC provides its electric service through its Bear Valley Electric 
District (``Bear Valley''), which owns no generating capacity and 
purchases its energy supply from various suppliers. Bulk power is 
delivered to Bear Valley's distribution system through two transmission 
lines owned by Southern California Edison Company.
    SCWC states that it plans to reorganize into a holding company 
structure to facilitate its expansion into a variety of unregulated 
businesses related to its current activities as a regulated water 
utility while protecting the interests of its ratepayers. After the 
planned reorganization, Newco will be a holding company with at least 
two subsidiaries: one subsidiary will engage in the water and electric 
distribution businesses that are regulated by the CPUC (``Regulated 
Subsidiary''), and one or more other subsidiaries will engage in 
unregulated businesses, including businesses related to the regulated 
water business.
    SCWC states that Newco and the Regulated Subsidiary will be 
incorporated in California, and that the Regulated Subsidiary will be 
incorporated in California, and that the Regulated Subsidiary's 
operations will be confined to California. Newco may also form one or 
more other subsidiaries to acquire and operate other regulated water 
utility businesses outside of California.
    The Regulated Subsidiary will be a ``public utility company'' under 
section 2(a)(5) of the Act, and Newco will be a holding company as 
defined in section 2(a)(7)(A) of the Act, and as such, subject to 
regulation under the Act unless in exemption is obtained.
    SCWC states that, upon consummation of the contemplated 
reorganization, Newco will qualify for an exemption under section 
3(a)(1) of the Act because Newco and every public utility subsidiary of 
Newco from which Newco derives, directly or indirectly, any material 
part of its income, will be predominantly intrastate in character and 
carry on their business substantially in a single State in which Newco 
and every such subsidiary company will be organized.
    SCWC also asserts that the granting of such an exemption will not 
be detrimental to the public interest or the interest of investors or 
consumers. In this regard, SCWC notes, among other things, that the 
proposed reorganization requires the express approval of the CPUC and 
that, following the reorganization requires the express approval of the 
CPUC and that, following the reorganization, the Regulated Subsidiary 
and its dealings with Newco and other Newco subsidiaries will be 
subject to comprehensive regulatory oversight by the CPUC (see note 3, 
above). SCWC also states that Newco's corporate structure will protect 
ratepayers by segregating Newco's state-regulated utility operations 
from its other business activities thereby insulating the Regulated 
Subsidiary from the risks of the non-regulated businesses and enhancing 
the CPUC's ability to ensure that there is no cross-subsidization.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 97-7045 Filed 3-19-97; 8:45 am]
BILLING CODE 8010-01-M