[Federal Register Volume 62, Number 95 (Friday, May 16, 1997)]
[Notices]
[Pages 27079-27080]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12823]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26717]


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

May 9, 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 June 2, 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.

New England Electric System, et al. (70-8783)

    New England Electric System (``NEES''), a registered holding 
company, and its nonutility subsidiary company, New England Electric 
Resources, Inc. (``NEERI'') (together, ``Applicants''), both located at 
25 Research Drive, Westborough, Massachusetts 01582, have filed a post-
effective amendment to their application-declaration under sections 
6(a), 7, 9(a), 10, 12(b), 13(b), 32, and 33 of the Act and rules 45 and 
53 thereunder.
    By order dated April 15, 1996 (HCAR No. 26504) (``Order''), the 
Commission authorized NEES and/or NEERI to acquire interests in, 
finance the acquisition, and hold the securities, of one or more exempt 
wholesale generators (``EWGs'') and foreign utility companies 
(``FUCOs'') (together, Exempt Companies''), as those terms are defined 
respectively in sections 32 and 33 of the Act (``NEES Investments''), 
either directly or indirectly, through a project entity (``Project 
Parent''). The Project Parents may issue securities to NEES and/or 
NEERI and NEES and/or NEERI may acquire the securities. The NEES 
Investments may take the form of capital stock or shares, debt 
securities, trust certificates, capital contributions, open account 
advances and partnership interests or other equity or participation 
interests, bid bonds or other credit support to secure obligations 
incurred by NEERI and/or Project Parents in connection with Exempt 
Company investments or of NEERI's undertaking to contribute equity to a 
Project Parent. The Order authorized NEES and/or NEERI to make up to 
$60 million in NEES Investments, provided that the investments would 
not cause NEES' ``aggregate investment'', as defined in rule 53(a)(i), 
in EWGs and FUCOs to exceed 50% of the NEES system's ``consolidated 
retained earnings'', as defined in rule 53(a)(ii).
    NEES and NEERI now propose to remove the $60 million limitation on 
NEES Investments. NEES and NEERI also propose to, from time-to-time 
through December 31, 1998: (1) Guarantee the indebtedness or other 
obligations of one or more Exempt Companies; (2) assume the liabilities 
of one or more Exempt Companies; and/or (3) enter into guarantees and 
letters of credit reimbursement agreements in support of equity 
contribution obligations or otherwise in connection with project 
development activities for one or more Exempt Companies.
    As proposed, NEES Investments may be made from NEES to NEERI and/or 
Project Parents directly or indirectly. Any open account advance made 
by NEES will be non-interest bearing and shall have a maturity not 
exceeding one year. Any promissory note issued to NEES by NEERI or a 
Project Parent, or to NEERI by a Project Parent, and any promissory 
note or other similar evidence of indebtedness issued by a Project 
Parent to a person other than NEES or NEERI with respect to which NEES 
or NEERI may issue a guarantee, would mature not later than 30 years 
after the date of issuance. It would bear interest at a rate not 
greater than the prime rate of a bank to be designated by NEES in the 
case of a promissory note issued to NEES or NEERI. In the case of any 
note or similar evidence of indebtedness issued to a person other than 
NEES or NEERI and guaranteed by NEES or NEERI, the rate would not 
exceed: (a) The greater of 250 basis points above the lending bank's or 
other recognized prime rate and 50 basis points above the federal funds 
rate; (b) 400 basis points above the specified London Interbank Offered 
Rate plus any applicable reserve requirement; or (c) a negotiated fixed 
rate 500 basis points above the 30 years ``current coupon'' treasury 
bond rate if such note or other indebtedness in U.S. dollar 
denominated. If such note or other indebtedness is denominated in the 
currency of a foreign nation, the interest rate will not exceed a fixed 
or floating rate which, when adjusted for the prevailing rate of 
inflation, would be equivalent to a rate on a U.S. dollar denominated 
borrowing of identical average life that does not exceed 10% over the 
highest rate set forth above.
    NEES may enter into reimbursement agreements with banks to support 
letters of credit delivered as security for NEES' or NEERI's equity 
contribution obligation to a Project Parent or otherwise in connection 
with a Project Parent's or NEERI's Exempt Company project development 
activities. Any reimbursement agreement supporting a letter of credit 
would have a term not in excess of 30 years. Drawings under any such 
letter of credit would bear interest at not more than 5% above the 
prime rate of the letter of credit bank as in effect from time-to-time, 
and letter of credit fees would not exceed 1% annually of the face 
amount of the letter of credit.

DQE, Inc., et al. (70-9027)

    DQE, Inc., Cherrington Corporate Center, Suite 100, 500 Cherrington 
Parkway, Coraopolis, Pennsylvania, 15108-3184 (``DQE''), a public 
utility holding company exempt under section 3(a)(1) and rule 2 from 
all provisions of the Act except section 9(a)(2), and its energy 
services subsidiary, DQE Energy Services, Inc., One North Shore Center, 
12 Federal Street, Suite 200, Pittsburgh, Pennsylvania 15212 (``Energy 
Services'') and Energy Services' subsidiary, DH Energy, Inc., One North 
Shore Center, 12 Federal Street, Suite 200, Pittsburgh, Pennsylvania 
15212 (``DH Energy'') collectively, ``Applicants''), have filed an 
application under sections under 9(a)(2) and 10 of the Act.
    By order dated March 24, 1995 (HCAR No. 26257), Allegheny 
Development Corporation (``ADC''), an indirect public utility energy 
services subsidiary of DQE, was authorized to acquire utility assets to 
provide energy services to the Midfield Terminal Complex at the Greater 
Pittsburgh International Airport. The energy services provided by ADC 
are generated by four boilers and seven chillers to provide hot and 
cold water to the complex and three capacitors

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connecting DQE's generating facilities to the airport facilities.
    DQE and Energy Services now propose to cause the execution of an 
Operation and Maintenance Services Agreement (``O&M Agreement'') 
between ADC and an entity that will be formed as a subsidiary of Energy 
Services (``Newco''). The term of the O&M Agreement will be 5 years and 
Newco will receive compensation in the approximate amount of $4.5 
million. Under the O&M Agreement, Newco will serve as operator of ADC's 
electrical and thermal energy facility located at the Midfield Terminal 
Complex.
    On January 22, 1997, ADC entered into: (1) The Heinz Facility Lease 
(``Lease'') between Heinz USA (``Heinz'') and ADC; and (2) the Energy 
Supply Agreement (``Supply Agreement''), among Heinz, ADC and Duquesne 
Energy, Inc., a subsidiary of Energy Services. Both agreements provided 
for the assignment of all of ADC's rights and obligations to DH Energy. 
The Applicants now propose to have ADC assign to DH Energy all of ADC's 
rights and obligations under the two agreements.
    The Lease provides, among other things, that DH Energy will lease, 
operate and maintain an inside the fence energy facility (``Facility'') 
for Heinz that will provide energy in the form of steam, electricity 
and compressed air. The Facility has two 3 MV steam turbine generators 
capable of generating 40 million kilowatt hours of electricity per year 
and coal/gas fired boilers capable of generating one billion pounds of 
steam per year. Under the Supply Agreement, DH Energy will be obligated 
to sell to Heinz electricity and steam produced by the Facility for use 
in Heinz' manufacturing processes.
    Following the consummation of the transactions, the Applicants 
state that DQE and Energy Services will be exempt public utility 
holding companies under section 3(a)(1) and rule 2 of the Act.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-12823 Filed 5-15-97; 8:45 am]
BILLING CODE 8010-01-M