[Federal Register Volume 63, Number 118 (Friday, June 19, 1998)]
[Notices]
[Pages 33740-33742]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-16348]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26886]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
June 12, 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 under the Act. 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 is/are available for
[[Page 33741]]
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 July 6, 1998, to the Secretary, Securities and Exchange
Commission, Washington, DC 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
should 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 July 6, 1998, the application(s) and/or declaration(s),
as filed or as amended, may be granted and/or permitted to become
effective.
Consolidated Natural Gas Company, et al. (70-9203)
Consolidated Natural Gas Company (``CNG''), CNG Tower, 625 Liberty
Avenue, Pittsburgh, Pennsylvania, 15222-3199, a registered holding
company, and CNG's wholly owned subsidiaries, CNG Energy Services
Corporation (``Energy Services''), CNG Power Company (``Power
Company''), both at One Park Ridge Center, P.O. Box 15746, Pittsburgh,
Pennsylvania 15244-0746, CNG Retail Services Corporation (``Retail
Services''), One Chatham Center, Pittsburgh, Pennsylvania 15219, CNG
Products and Services, Inc. (``Products and Services''), CNG Tower,
Pittsburgh, Pennsylvania 15222-3199 and CNG Producing Company
(``Producing Company''), CNG Tower, 1450 Poydras Street, New Orleans,
Louisiana 70112-6000 (collectively, ``Applicants''), have filed an
application-declaration, as amended, under sections 9(a), 10 and 12(c)
of the Act and rules 43, 46 and 54 under the Act.
CNG has decided to discontinue wholesale marketing and trading of
natural gas and electricity. Energy Services was principally formed to
be the subsidiary in the CNG system to market natural gas at wholesale,
and CNG Power Services Corporation (``Power Services'') was formed to
market electricity at wholesale. Power Services is an exempt wholesale
generator (``EWG'') under section 32 of the Act. Energy Services has
several wholly owned subsidiaries engaged in the energy business. The
six directly owned subsidiaries of Energy Services (collectively,
``Energy Services Subsidiaries'') are: Products and Services, Power
Company, CNG Storage Service Company, CNG Main Pass Gas Gathering
Corporation (``Main Pass''), CNG Oil Gathering Corporation (``Oil
Gathering'') and Retail Services. Power Services has one wholly owned
subsidiary, CNG Lakewood, Inc., which is also an EWG. In its exiting of
the wholesale energy industry, CNG may sell its equity ownership in
Energy Services and Power Services. In order to prepare these companies
for disposition, Applicants propose to transfer ownership of each
subsidiary of Energy Services and Power Services. Additionally, two
subsidiaries of Energy Services would be consolidated.
Applicants consequently propose to effect a two-phase restructuring
of the Energy Services group consisting of the following transactions.
Phase One
Energy Services Subsidiaries Become Direct Subsidiaries of CNG
Since CNG desires to retain the Energy Services Subsidiaries as
part of the CNG System after the disposition of Energy Services,
Applicants propose to transfer ownership of these companies. This would
occur through Energy Services transferring to CNG all of the common
stock of the six subsidiaries as a dividend, so that each company
initially will become a direct subsidiary of CNG (``Phase One'').\1\
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\1\ The Application states that the transfers of stock of the
Energy Services Subsidiaries in Phase One may be in the form of
either dividends or liquidating distributions under a plan of
liquidation adopted under section 332 of the Internal Revenue Code,
depending upon the CNG system's business needs and the ultimate tax
impact of the restructuring transactions. The term ``dividend'', as
used in this notice, includes both dividends and liquidating
distributions.
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Phase Two
Products and Services Merged Into Retail Services
Retail Services was formed under Commission order dated January 15,
1997, HCAR No. 26647 (``January 1997 Order''), which authorized Energy
Services, among other things, to engage in all forms of energy
brokering and marketing transactions, including those involving
electricity, natural gas, coal, oil, other hydrocarbons, wood chips,
wastes and other combustibles, at wholesale and retail. By order dated
August 28, 1995, HCAR No. 26363 (``August 1995 Order''), the
Commission, among other things authorized Energy Services to form
Products and Services to engage in the business of certain energy-
related services. By a subsequent order dated August 27, 1997, HCAR No.
26757 (``August 1997 Order''), the Commission further authorized
Products and Services to offer several additional categories of energy-
related services.
Applicants now propose that Retail Services merge with Products and
Services, with Retail Services being the surviving corporation (the
``Merger'').
Retail Services Succeeds to Certain Authorizations
Upon completion of the Merger, Retail Services would succeed to the
prior authorizations granted to Products and Services under the August
1995 Order and the August 1997 Order. However, Applicants request the
elimination of one restriction in these orders. Both orders state that
Products and Services will provide it categories of services both
within and outside of the four states of Virginia, West Virginia,
Pennsylvania and Ohio where the public utility company subsidiaries of
CNG are located (collectively, ``LDC States''). Both orders require
that during the twelve-month period beginning on the first day of the
month following the commencement of Products and Services' business,
and for each subsequent calendar year, total revenues derived by
Products and Services in LDC States exceed total revenues similarly
derived from customers in all other states. Due to the trend of energy
markets in a deregulation environment to become integrated national
markets, Applicants request that this ``50% limit'' be eliminated for
all future revenues of Retail Services as the successor to Products and
Services after the Merger.
In view of the proposed disposition of Energy Services by CNG,
Applicants propose that Retail Services also succeed to the
authorizations granted to Energy Services under the January 1997 Order.
Specifically, Retail Services would be authorized to engage in energy
marketing to the same extent as that allowed Energy Services, and
Retail Services would be permitted to form subsidiaries through which
to engage in marketing activities to the same extent permitted Energy
Services. CNG would provide financing to Retail Services under rule 52
of the Act.
CNG Technologies, Inc. Becomes a Subsidiary of Power Company
By order dated December 21, 1990, HCAR No. 25224, the Commission
authorized CNG to form CNG Technologies, Inc. (``CNG Technologies'')
and to invest up to 2 million in CNG Technologies for it to acquire
limited partnership interests in a gas industry fund created to invest
in
[[Page 33742]]
smaller companies developing new technologies to enhance the supply,
transportation and utilization of natural gas. CNG Technologies is
currently a subsidiary of Products and Services. Applicants propose
that the outstanding common stock of CNG Technologies be declared as a
dividend by Products and Services to CNG, and subsequently be
transferred by CNG as a capital contribution to Power Company after
Power Company becomes a direct subsidiary of CNG.
Main Pass and Oil Gathering Each Become a Subsidiary of Producing
Company
Producing Company is a wholly owned subsidiary of CNG which engages
in gas and oil exploration and production primarily in the Gulf of
Mexico, the southern and western United States, the Appalachian region
and in Canada.
By order dated July 26, 1995, HCAR No. 26341 (``July 1995 Order''),
Energy Services was authorized, without further Commission approval,
through December 31, 1997, to invest an aggregate amount up to at least
$150 million to acquire direct or indirect interests in entities
engaged in Gas Related Activities.\2\
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\2\ ``Gas Related Activities'' include purchasing, pooling,
transporting, exchanging, storing and selling gas supplies from
competitively priced sources, including the spot markets,
independent producers and brokers, and Producing Company.
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As of December 31, 1997, Energy Services had invested $24,235,000
and $14,323,000 and acquired a partnership interest in the Main Pass
Gathering Company and the Main Pass Oil Gathering Company,
respectively, under the July 1995 Order. Energy Services owns the
interests in these partnerships through Main Pass and Oil Gathering,
respectively.
The July 1995 Order was extended through December 31, 2002 by
Commission order dated December 30, 1997, HCAR No. 26807 (``December
1976 Order''). The December 1997 Order also increased the amount Energy
Services may invest and the amount of guarantees which could be made to
$200 million in each case.
Applicants propose the transfer of ownership of all of the
outstanding common stock of Main pass and Oil Gathering to be held by
CNG after completion of Phase One to Producing Company. The transfer
would occur through a transfer by CNG of the stock to Producing Company
as a capital contribution.
Producing Company Succeeds to Certain Authorizations
As indicated above, Applicants propose that Producing Company
succeed to Energy Services' interests in Main Pass and Oil Gathering,
which are acquired by Energy Services under the July 1995 Order.
Producing Company will also continue to engage in all aspects of the
business of a gas producing company which substantially encompasses all
of the activities defined as ``Gas Related Activities'' in the July
1995 Order. Applicants propose that Producing Company succeed to and be
substituted for Energy Services as the authorized party under the July
1995 Order and the December 1997 Order.
Source and Form of Declaration and Payment of Dividends
Applicants propose that dividends declared and paid in connection
with the restructuring be paid out of capital or unearned surplus, to
the extent permitted under applicable corporate law, in the event the
payer does not have sufficient earned surplus on its books to cover the
amount of the dividend. Applicants represent that the payment of
dividends out of capital or unearned surplus in connection with the
restructuring would not in any way adversely affect the financial
integrity of any company in the CNG system or the working capital of
any public utility company in the CNG system.
The Application states that the form of distributions to CNG in
Phase One of the restructuring and the timing, manner and extent of the
re-distributions by CNG in Phase Two of the restructuring will depend
on the CNG system's business needs as well as the ultimate tax impact
of the restruturing transactions.
Atlantic City Electric Company (70-9307)
Atlantic City Electric Company (``ACE''), 6801 Blackhorse Pike, Egg
Harbor Township, New Jersey 08234, a wholly owned electric utility
subsidiary of Conectiv, Inc., a public utility holding company to be
registered under the Act, has filed an application under sections 9(a)
and 10 of the Act and rule 41 under the Act.
By order dated February 25, 1998 (HCAR No. 26832), Conectiv was
authorized to acquire all of the outstanding voting securities of ACE,
Delmarva Power & Light Company, a public utility company
(``Delmarva''), and various nonutility subsidiaries of Delmarva and
ACE.
ACE now requests authority to purchase two 39.3 megawatt combustion
turbine generating units and accessory equipment (``Units'') for a
purchase price of $8 million. ACE states that the Units were previously
leased by ACE under a December 1, 1972 Indenture of Lease (``Lease'')
among ACE, Frank B. Smith and Ben Maushardt, as lessors (``Lessor''),
and United States Leasing Corporation, as agent for the Lessor. ACE has
used the Units, located in Upper Deerfield Township. Cumberland County,
New Jersey, for the generation of electricity for twenty five years.
The Lease terminates on July 11, 1998 and ACE wishes to purchase the
Units and continue them in service.
For the Commission, by the Division of Investment Management,
under delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 98-16348 Filed 6-18-98; 8:45 am]
BILLING CODE 8010-01-M