[Federal Register Volume 63, Number 64 (Friday, April 3, 1998)]
[Notices]
[Pages 16601-16604]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8718]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26851]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
March 27, 1998.
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 21, 1998, 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.
Central and South West Services, Inc. (70-8531)
Central and South West Services, Inc. (``CSWS''), 1616 Woodall
Rodgers Freeway, P.O. Box 660164, Dallas, Texas 75266, a service
company subsidiary of Central and South West Corporation (``CSW''), a
registered holding company, has filed a post-effective amendment to an
application under sections 9(a) and 10 of the Act and rule 54 under the
Act.
By orders dated April 26, 1995 (HCAR No. 26280) and December 11,
1997 (HCAR No. 26794) (``Orders''), the Commission authorized CSWS to
use excess resources in its engineering and construction department,
not needed to provide services to associates within the CSW system at
any given time, to provide power plant control system procurement,
integration and programming services, and power plant engineering and
construction services to nonassociate utilities through December 31,
2002.
CSWS now proposes to expand the authority granted in the Orders to
more clearly identify the excess engineering and construction
services\1\ and provide related environmental\2\ and equipment
maintenance services\3\ to nonassociate companies.
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\1\ The engineering and construction services will relate to:
consulting; design engineering; power quality; predictive
maintenance; energy efficiency; field construction support and field
construction; control system integration and engineering; project
development (small cogeneration, steam production and renewable
resources); production facilities operation; instrument engineering;
electrical engineering; mechanical engineering; civil engineering
and procurement activities.
\2\ The environmental services activities will relate to: Gas
emission equipment; continuous emission monitoring system;
environmental laboratory; environmental & occupational health
strategic planning; environmental & occupational health permitting;
environmental & occupational health management systems; and
environmental & occupational health compliance management.
\3\ The equipment maintenance services (``Equipment Services'')
will be limited to equipment used by CSW and its subsidiaries in
their core utility business. The Equipment Services will consist of:
repair, overhaul, and upgrades to equipment; machine shop services;
vibration analysis and equipment balancing; welding and fabrication;
field consulting and machining.
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American Electric Power Co., et al. (70-8693)
American Electric Power Company, Inc. (``AEP''), 1 Riverside Plaza,
Columbus, Ohio, 43215, a registered holding company, and its eight
wholly owned electric utility subsidiary companies, Appalachian Power
Company (``Appalachian''), Kingsport Power Company (``Kingsport''),
both at 40 Franklin Road, S.W., Roanoke, Virginia, 24011, Columbus
Southern Power Company (``Columbus''), 215 North Front Street,
Columbus, Ohio, 43215, Indiana Michigan Power Company (``Indiana''),
One Summit Square, P.O. Box 60, Fort Wayne, Indiana, 46801, Kentucky
Power
[[Page 16602]]
Company (``Kentucky''), 1701 Central Avenue, Ashland, Kentucky, 41101,
Ohio Power Company (``Ohio''), 301 Cleveland Avenue, S.W., Canton,
Ohio, 44701, AEP Generating Company (``Generating''), 1 Riverside
Plaza, Columbus, Ohio, 43215, and Wheeling Power Company
(``Wheeling''), 51 Sixteenth St., Wheeling, West Virginia, 26003, have
filed a post-effective amendment to a declaration filed under sections
6(a), 7 and 12(b) of the Act and rules 45 and 54 under the Act.
By order dated December 8, 1995, (HCAR No. 26424) (``Order''), the
Commission authorized AEP, Appalachian, Columbus, Indiana, Kentucky and
Ohio to issue and sell, through December 31, 2000, short-term notes to
banks and commercial paper. The Order also authorized Generating,
Kingsport, and Wheeling to issue and sell, through December 21, 2000,
short-term notes to banks.
The Order authorized short-term notes and/or commercial paper in
amounts not to exceed:
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Company Amount
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AEP................................................... $150,000,000
Appalachian........................................... 250,000,000
Columbus.............................................. 175,000,000
Indiana............................................... 175,000,000
Kentucky.............................................. 150,000,000
Generating............................................ 100,000,000
Kingsport............................................. 30,000,000
Ohio.................................................. 250,000,000
Wheeling.............................................. 30,000,000
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Total............................................. 1,310,000,000
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Applicants now request that the Order be amended to authorize
short-term notes (``Notes'') and commercial paper (``Commercial
Paper'') in the following increased amounts:
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Company Amount
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AEP................................................... $500,000,000
Appalachian........................................... 325,000,000
Columbus.............................................. 300,000,000
Indiana............................................... 300,000,000
Kentucky.............................................. 150,000,000
Generating............................................ 100,000,000
Kingsport............................................. 30,000,000
Ohio.................................................. 400,000,000
Wheeling.............................................. 30,000,000
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Total............................................. 2,135,000,000
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Applicants also request that the Commission extend its
authorization through December 31, 2003. Finally, AEP requests
authorization to guarantee up to $40 million in short-term debt of
American Electric Power Service Corporation. The debt AEP requests
authority to guarantee matures within 270 days.
The Notes will mature within 270 days. The Commercial Paper will be
in the form of promissory notes in denominations of not less than
$50,000 and will mature within 270 days.
Applicants also request authorization to issue unsecured promissory
notes or other evidence of their reimbursement obligations in respect
of letters of credit issued on their behalf by certain banks. All
promissory notes or other evidence of reimbursement obligations,
together with other short-term indebtedness authorized, would be in an
aggregate amount not to exceed the above-itemized aggregate amounts
authorized for each Applicant and would mature within 270 days.
New England Electric System, et al. (70-9089)
New England Electric System (``NEES''), a registered holding
company, and its subsidiary companies, Massachusetts Electric Company,
Narragansett Energy Resources Company, New England Electric
Transmission Corporation, New England Energy Incorporated, New England
Hydro-Transmission Electric Company, Inc., New England Hydro-
Transmission Corporation, New England Power Company (``NEP''), and New
England Power Service Company, all located at 25 Research Drive,
Westborough, Massachusetts 01582, and Granite State Electric Company,
407 Miracle Mile, Suite 1, Lebanon, New Hampshire 03766, Nantucket
Electric Company, 25 Fairgrounds Road, Nantucket, Massachusetts 02554,
and The Narragansett Electric Company, 280 Melrose Street, Providence
Rhode Island 02901 (collectively, ``Applicants''), have filed a post-
effective amendment to their application-declaration under sections
6(a), 7, 9(a), 10, and 12(b) of the Act and rules 43 and 45 under the
Act.
By order dated October 29, 1997 (HCAR No. 26768) (``October 1997
Order''), the Commission, among other things, authorized, for the
period from November 1, 1997 through October 31, 2001: (1) NEP to
borrow from the NEES intrasystem money pool (``Money Pool''); (2) any
one Applicant, or a combination of several Applicants, to loan money to
one or more of the Applicants through the Money Pool under the current
terms of the Money Pool; (3) NEP to borrow from banks; and/or (4) NEP
to issue commercial paper. The October 1997 Order authorized NEP to
borrow money and/or issue commercial paper in an amount up to $375
million.
Applicants now propose that NEP be authorized to increase from $375
million to $750 million the total amount of the short-term borrowing
authorized by the October 1997 Order. As of March 1, 1998, NEP had $209
million of short-term debt outstanding in the form of commercial paper
and money pool borrowings. In addition, NEP has $372 million of
variable rate tax-exempt mortgage bonds outstanding (``Bonds''). Under
the terms of these Bonds, NEP is obligated to repurchase the bonds in
the event they cannot be remarketed to investors. NEP has a $205
million bond purchase facility to support this obligation. Thus, NEP
requires $376 million to support the remaining Bonds plus the
authorized level of short-term debt.
NEP currently has 1,100 megawatts of purchased power contracts. NEP
may have opportunities to negotiate or buy out these purchased power
contracts, which may require lump sum, up front payments. Also, upon
divestiture of its non-nuclear generation assets, NEP is required to
defease by either first call or maturity its outstanding mortgage bonds
($711 million of which support fixed or variable rate tax-exempt
mortgage bonds and $240 million of which are publicly held). The
repurchase of some of these publicly held bonds through a tender offer
or open market purchases may achieve cost savings. Therefore, NEP seeks
to increase its short-term borrowing authority by an additional $375
million.
American Electric Power Company, Inc., et al. (70-9145)
American Electric Power Company, Inc. (``AEP''), a registered
holding company, and its wholly owned nonutility subsidiaries AEP
Resources, Inc. (``AEPR''), AEP Energy Services, Inc. (``AEPES''), and
AEP Resources Services company (``Resco''), all located at 1 Riverside
Plaza, Columbus, Ohio 43215, have filed an application-declaration
under sections 6(a), 7, 9(a), 10, 12(b), 12(c) and 13(b) of the Act and
rules 45, 46, 54, 87 and 90 under the Act.
AEPR requests authority to enter, either directly or indirectly,
into a joint venture (``Management Company'') with Conoco Inc.
(``Conoco''), a subsidiary of E.I. du Pont de Nemours and Company
(``DuPont''). The Management Company would provide energy-related
services to industrial, commercial and institutional customers. AEPR
also requests authority to enter, either directly or indirectly, into a
joint venture (``Capital Company'') with Conoco and DuPont that would
provide financing to Management Company customers for energy-related
assets and for the purchase of services from Management Company.
[[Page 16603]]
The energy-related services to be provided by Management Company
would include energy facility management services, energy conservation
services, procurement services, other energy services and incidental
services. These services would be provided either directly by
Management Company or by special purpose subsidiaries established to
conduct these activities.
Energy facility management services include the day-to-day
operations, maintenance, and management, and other technical and
administrative services required to operate, maintain and manage
certain energy-related assets (``Energy Facilities''), as well as long-
term planning and budgeting for and evaluation of improvements to those
assets. ``Energy Facilities'' include facilities and equipment that are
used by industrial, commercial and institutional entities to produce,
convert, store and distribute (i) thermal energy products, such as
processed steam, heat, hot water, chilled water, and air conditioning,
(ii) electricity, (iii) compressed air, (iv) processed and potable
water, (v) industrial gases, such as nitrogen, and (vi) other similar
products. Energy Facilities also include related facilities that
transport, handle and store fuel, such as coal handling and oil storage
tanks, and facilities that treat waste for these entities, such as
scrubbers, precipitators, cooling towers and water treatment
facilities.
National Fuel Gas Company, et al. (70-9175)
National Fuel Gas Company (``National''), a registered holding
company, and its wholly owned nonutility subsidiary, National Fuel Gas
Supply Corporation (``Supply''), both located at 10 Lafayette Square,
Buffalo, New York 14203, have filed an application-declaration under
sections 6(a), 7, 9(a) and 10 of the Act and rule 43 under the Act.\4\
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\4\ National and its subsidiaries are collectively referred to
as the ``National Fuel Gas System.'' In addition to Supply,
National's subsidiaries consist of National Fuel Gas Distribution
Corporation (``Distribution''), Seneca Resources Corporation,
Utility Constructors, Inc., Leidy Hub, Inc., Horizon Energy
Development, Inc., Data-Track Account Services, Inc., National Fuel
Resources, Inc., Highland Land & Minerals, Inc., Niagara Trading
Inc., Niagara Independence Marketing Company, and Seneca
Independence Pipeline Company. Distribution, National's only utility
subsidiary, sells natural gas and provides natural gas
transportation services through a local distribution system located
in an area in western New York and northwestern Pennsylvania that
includes Buffalo, Niagara Falls and Jamestown, New York and Erie and
Sharon, Pennsylvania. Neither National nor any of its subsidiaries
currently has an ownership interest in an exempt wholesale generator
or foreign utility company as defined, respectively, in sections 32
and 33 of the Act.
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Supply is engaged in the interstate transportation and storage of
natural gas subject to the jurisdiction of the Federal Energy
Regulatory Commission. Cunningham Natural Gas Corporation
(``Cunningham''), a New York corporation that is not associated with
the National Fuel Gas System, is a nonutility company that operates two
natural gas wells, one in Allegany County, New York, and the other in
Potter County, Pennsylvania.\5\
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\5\ Cunningham also operates a number of shallow oil wells in
Pennsylvania.
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Supply and Cunningham have entered into an Asset Purchase and
Reorganization Agreement dated October 8, 1997 (``Agreement''), under
which Supply, subject to certain conditions including Commission
approval under the Act, will acquire substantially all the assets of
Cunningham (``Assets''). the Assets to be acquired by supply include
the following:
(1) Cunningham's two natural gas wells, and related pipeline's,
equipment, vehicles, leases, sales agreements and other property used
in the production of natural gas;
(2) Cunningham's cash, cash equivalents and receivables (except as
identified in footnote 4, below);
(3) Approximately 640 acres of undeveloped timber property in
Allegany County, New York;
(4) Any marketable securities that remain in Cunningham's accounts
with two investment brokers \6\ at the time the Exchange (as defined
below) is consummated (``Closing'').\7\
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\6\ One account is with Salomon Smith Barney, and the other is
with Edward Jones. At this time, these accounts consist entirely of
money funds and certificates of deposit.
\7\ The following assets of Cunningham will be excluded from the
Exchange: (1) Cunningham's oil wells and any equipment or other
property used by Cunningham in the production and sale of oil, which
will be sold to one or more other parties in separate transactions;
(2) an amount of cash or cash equivalents (not to exceed $300,000)
retained by Cunningham to pay deferred compensation obligations
predating the Agreement; and (3) two pickup trucks and one brine
truck, which will be sold to one or more other parties in separate
transactions.
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In exchange for the Assets, Cunningham will receive registered
shares of National's common voting stock, $1 par value (``Shares''),
having an aggregate market value (``Consideration'') as of the end of
the last business day immediately preceding the Closing (``Valuation
Date'') equal to the sum of the following: (1) the cash and cash
equivalents to be transferred to Supply; (2) the market value as of the
Valuation Date of any securities to be transferred to Supply (although
it is expected that no securities will be transferred); (3) the unpaid
balance of Cunningham's receivables from its gas sales customer; (4)
the fair market value of the real property owned by Cunningham
according to appraisals to be commissioned by Supply and Cunningham;
and (5) an agreed-upon amount of additional consideration. Applicants
have estimated that the sum of the above five asset categories will be
approximately $3.158 million. A final determination of the exact value
of the Consideration for the Assets and the precise number of Shares
given in exchange for them will be made on the Valuation Date.
Applicants state that, based on pro forma financial states, if the
exchange of Assets for Shares (``Exchange'') had been consummated on
November 30, 1997, Cunningham would have received 67,641 Shares, or
less than \2/10\ of 1% of the 38,251,307 shares of National's common
stock issued and outstanding as of March 17, 1998, and the market value
of the Shares ($3.158 million) would also have amounted to a small
fraction of 1% of the total assets of national and its subsidiaries,
which totaled $2,350,588,000 as of November 30, 1997. Applicants state
that the Exchange is expected to qualify for nonrecognition of gain or
loss under section 368 of the Internal Revenue Code.
The Shares to be exchanged for Cunningham's Assets will be
registered with the Commission under the Securities Act of 1933, issued
in compliance with any applicable state Blue Sky Laws, and listed on
the New York Stock Exchange. The Shares will be exchanged without
preference over any outstanding common stock of National as to
dividends or distribution, and will have equal voting rights with, all
outstanding common stock of National. In order to effectuate the
Exchange, National will issue the Shares to Supply, and Supply will, in
turn, pay National an amount equal to the Consideration for the
Shares.\8\ Supply will then exchange the Shares for the Assets.\9\
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\8\ Supply plans to finance this payment to National through
borrowings from the National Fuel Gas System money pool. See Holding
Co. Act Release No. 26443 (December 28, 1995).
\9\ The Agreement contemplates that, following the Exchange,
Cunningham would wind up its affairs under a plan of liquidation,
where its shareholders would receive the Shares in exchange for
their Cunningham common stock.
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Applicants state that section 2(b) of the Gas Related Activities
Act of 1990 (``GRAA'') is applicable to the proposed acquisition of
Cunningham's natural gas
[[Page 16604]]
properties for purposes of determining whether the functional
relationship requirement of section 11(b)(1) of the Act is
satisfied.\10\ In this regard, Applicants state that the proposed
acquisition is expected to improve operations of Supply's underground
natural gas storage facilities in Allegany and Steuben Counties, New
York, and will be: (1) in the interest of Supply's direct and indirect
transportation and storage customers, including Distribution,
National's public utility subsidiary and its customers; and (2)
nondetrimental to its customers, the public interest, investors or the
proper functioning of the National Fuel Gas System.
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\10\ Section 2(b) of the GRAA provides that the functional
relationship requirement of section 11(b)(1) of the Act will be
deemed satisfied if the Commission determines that ``(1) * * * such
acquisition is in the interest of consumers of each gas utility
company of [the] registered company or consumers of any other
subsidiary of such registered company; and (2) * * * such
acquisition will not be detrimental to the interest of consumers of
any such gas utility company or other subsidiary or to the proper
functioning of the registered holding company system.''
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For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-8718 Filed 4-2-98; 8:45 am]
BILLING CODE 8010-01-M