Federal Register, Volume 62 Issue 177 (Friday, September 12, 1997)

[Federal Register Volume 62, Number 177 (Friday, September 12, 1997)]
[Notices]
[Pages 48122-48123]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24175]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26758]


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

September 5, 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 applicant(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 September 29, 1997, 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. (70-9089)

    New England Electric System (``NEES''), a registered holding 
company, and its subsidiary companies, Massachusetts Electric Company 
(``Mass. Electric''), Narragansett Energy Resources Company (``NERC''), 
New England Electric Transmission Corporation (``NEET''), New England 
Energy Incorporated (``NEEI''), New England Hydro-Transmission Electric 
Company, Inc. (``Mass. Hydro''), New England Hydro-Transmission 
Corporation (``NH Hydro''), New England Power Company (``NEP''), and 
New England Power Service Company (``NEPSCO''), all of 25 Research 
Drive, Westborough, Massachusetts 01582, and Granite State Electric 
Company (``Granite''), 407 Miracle Mile, Suite 1, Lebanon, New 
Hampshire 03766, Nantucket Electric Company (``Nantucket''), 25 
Fairgrounds Road, Nantucket, Massachusetts 02554, and the Narragansett 
Electric Company (``Narragansett''), 280 Melrose Street, Providence, 
Rhode Island 02901 (collectively, ``Applicants''), have filed an 
application-declaration under sections 6(a), 7, 9,(a), 10, and 12(b) of 
the Act and rules 43 and 45 under the Act.
    Applicants propose, for the period from November 1, 1997 through 
October 31, 2001, that: (i) Mass. Electric, Nantucket, Narragansett, 
Mass. Hydro, NEP, and NEPSCO (``Borrowing Companies'') borrow from the 
NEES intrasystem money pool (``Money Pool''); (ii) any one Applicant, 
or a combination of several Applicants, loan money to one or more of 
the Borrowing Companies through the Money Pool under the current terms 
of the Money Pool; (iii) the Borrowing Companies borrow from banks; 
and/or (iv) Mass. Electric, Narragansett, and NEP issue commercial 
paper. The Borrowing Companies propose to borrow money and/or issue 
commercial paper up to the following amounts: Mass. Electric--$150 
million; Nantucket--$5 million; Narragansett--$100 million; Mass. 
Hydro--$25 million; NEP--$375 million; and NEPSCO--$12 million. In 
addition, Applicants state that the following subsidiary companies plan 
to incur, through exempt transactions, short-term debt in amounts that 
will not exceed: for Granite, $10 million; for NEET, $10 million; and, 
for NH Hydro, $25 million.\1\
---------------------------------------------------------------------------

    \1\ Granite, NEET, and NH Hydro have received express 
authorization for these borrowings from the New Hampshire Public 
Utilities Commission, the state in which these utility companies are 
organized and doing business. These borrowings are exempt under rule 
52 because of the state authorization.
---------------------------------------------------------------------------

    The proceeds from the borrowings will be used: (i) To pay 
outstanding bank notes, dealers in commercial paper, and/or borrowings 
from the Money Pool, (ii) to provide new money and/or reimburse the 
treasury for capital expenditures, and (iii) for other corporate 
purposes, including working capital and the financing of construction 
and property acquisitions.
    Applicants propose to lend surplus funds to the Money Pool. The 
interest rate will be 108% of the monthly average of the rate, as 
published in the Wall Street Journal, for high grand 30-day commercial 
paper issued by major corporations and sold through dealers. Although 
there are no stated maturities, the loans made by the Money Pool are 
payable on demand, and may be prepaid by the borrower without penalty. 
Borrowings may, but do not need to be evidenced by notes.
    The Borrowing Companies will issue notes for the bank loans that 
mature in less than one year, and the notes will have a negotiated 
interest rate. The Borrowing Companies will pay fees to the banks 
instead of making compensating balance arrangements. The effective 
interest cost of bank loans will not exceed the greater of the bank's 
base or prime lending rate, or the rate published in the Wall Street 
Journal as the high federal funds rate, plus, in either case, one 
percent. Some borrowings may be without prepayment privileges. Payment 
of any short-term promissory note before maturity will be made on the 
basis most favorable to the Borrowing Company, taking into account 
fixed maturities, interest rates, and other relevant financial 
considerations.
    In addition, Mass. Electric, Narragansett, and NEP (``CP Issuers'') 
propose to issue and sell commercial paper to one or more nationally 
recognized commercial paper dealers (``CP Dealer''). Initially, the CP 
Issuers will use two CP Dealers, CS First Boston Corporation and 
Merrill Lynch Money Markets Incorporated, but this may change.
    The CP Issuers will issue commercial paper in the form of unsecured 
promissory notes with varying maturities that will not exceed 270 days. 
Actual maturities will be determined by market conditions, the 
effective interest cost to the issuer, and the issuer's cash

[[Page 48123]]

requirements at the time of issuance. The commercial paper will be in 
denominations of $50,000 or higher. The terms of the commercial paper 
will not provide for prepayment before maturity. The commercial paper 
will be purchased by the CP Dealer from the issuer at a discount, which 
will not exceed the discount then prevailing for commercial paper of 
comparable quality and maturity sold by public utility issuers to 
commercial paper dealers. The commercial paper will be further 
discounted, but not more than \1/8\th of 1% per year less than this 
prevailing discount rate, when the CP Dealer reoffers the commercial 
paper.
    The CP Issuer's effective interest cost generally will not exceed 
the effective interest cost of BankBoston's base lending rate. However, 
if necessary, commercial paper will be issued that matures within 90 
days with an interest cost above BankBoston's lending rate.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-24175 Filed 9-11-97; 8:45 am]
BILLING CODE 8010-01-M