[Federal Register Volume 63, Number 143 (Monday, July 27, 1998)]
[Notices]
[Pages 40142-40143]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19982]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26897]


Filing Under the Public Utility Holding Company Act of 1935, as 
amended (``Act'')

July 20, 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 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 August 13, 1998, to the Secretary, Securities and Exchange 
Commission, Washington, D.C. 20549, and serve a copy on the relevant 
applicant(s) and/or declaration(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 August 13, 1998, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Sempra Energy, et al. (70-9333)

    Sempra Energy (``Sempra''), located at 101 Ash Street, San Diego, 
California 92101, an exempt holding company under section 3(a)(1) of 
the Act, and an indirect subsidiary of Sempra, Frontier Pacific, Inc. 
(`Frontier Pacific''), located at 555 West Fifth Street, Suite 2900, 
Los Angeles, California 90013-1001, have filed an application under 
sections 3(a)(1), 9(a)(2), and 10 of the Act.
    Applicants seek authority for Frontier Pacific to acquire up to 
90.1% of the outstanding shares of Frontier Energy, LLC (``Frontier 
Energy''), a North Carolina partnership that will construct, own and 
operate a gas utility distribution system in North Carolina. The 
remaining membership interests in Frontier Energy would be acquired by 
a third party, Frontier Utilities of North Carolina, Inc. (``Frontier 
Utilities''.\1\) In addition, applicants are seeking an order under 
section 3(a)(1) exempting Sempra, Frontier Pacific, and each of their 
subsidiary companies from all provisions of the Act, except section 
9(a)(2).
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    \1\ Frontier Utilities is an indirect subsidiary of ARB, Inc., a 
closely held California corporation. ARB, Inc. is not now a 
``holding company'' or an ``affiliate'' of any ``holding company'' 
or ``public-utility company,'' as defined in section 2 of the Act.
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    Sempra has two principal subsidiaries, Pacific Enterprises 
(``Pacific'') and Enova Corporation (``Enova''), each of which is an 
exempt holding company under section 3(a)(1) of the Act. Pacific's sole 
utility subsidiary is Southern California Gas Company (``SoCalGas''), 
which purchases, transports and distributes natural gas in southern 
California. As of December 31, 1997, Pacific reported consolidated 
total assets of $4.977 billion, of which approximately $3.154 billion 
consisted of net gas utility plant. For the year ended December 31, 
1997, Pacific reported $2.738 billion in operating revenues (including 
revenues from transportation-only customers) and $184 million in net 
income.
    Enova's sole utility subsidiary is San Diego Gas & Electric Company 
(``SDG&E''), which provides electric and natural gas service in San 
Diego and surrounding areas. As of December 31, 1997, Enova reported 
consolidated total assets of $5.2 billion, of which approximately $2.49 
billion consists of net electric plant and $449 million consists of net 
gas utility plant. For the year ended December 31, 1997, Enova reported 
operating revenues of $2.2 billion (81.6% from electricity sales and 
18.4% from gas sales) (including revenues from transportation only 
customers), and $252 million in net income. Both SoCalGas and SDG&E are 
subject to the jurisdiction of the California Public Utility 
Commission.
    Frontier Pacific, which will directly acquire interests in Frontier 
Energy, currently is a wholly owned subsidiary of Sempra Energy 
Solutions, LLC (``Solutions''), itself an indirect subsidiary of 
Sempra.\2\ However, applicants state that Solutions will transfer the 
common stock of Frontier Pacific to Sempra prior to the issuance of any 
order in this filing.
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    \2\ Solutions currently is jointly owned by Pacific and Enova.
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    By orders dated January 27, 1996, August 16, 1996, and March 27, 
1997, the North Carolina Utilities Commission (``NCUC'') granted 
Frontier Utilities certificates of public convenience and necessity 
(``Certificates'') to construct, test, market, own and operate a new

[[Page 40143]]

natural gas distribution system in seven counties in northwestern North 
Carolina. By order dated March 9, 1998, the NCUC approved various 
proposals by Frontier Utilities and Frontier Energy related to the 
financing for the construction of this gas system, including 
participation by Frontier Pacific as an equity investor in Frontier 
Energy.\3\ In addition, the NCUC authorized Frontier Utilities to 
transfer the Certificates to Frontier Energy.
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    \3\ Specifically, the NCUC authorized Frontier Pacific and 
Frontier Utilities to contribute approximately $12 million of equity 
and capital to Frontier Energy. In addition, the NCUC authorized 
Frontier Energy to borrow $40 million, subject to certain 
conditions.
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    Frontier Energy commenced construction in four of the counties 
during the second quarter of 1998. When complete, the system in these 
counties will consist of approximately 140 miles of transmission mains, 
including a 40 mile lateral tap off the interstate pipeline facilities 
of Transcontinental Gas Pipe Line Corp. and at least 320 miles of 
distribution mains. Construction in the other counties will commence at 
a later date. Applicants state that attributable income from Frontier 
Energy will contribute less than 1% of Sempra's consolidated income on 
a pro forma basis.
    Following the proposed transactions, Sempra and each of its public 
utility subsidiaries, except Frontier Energy and Frontier Pacific, will 
be organized in California. Frontier Energy and Frontier Pacific will 
be organized in North Carolina. Applicants contend that they, and each 
of their subsidiaries, will qualify for a section 3(a)(1) exemption 
upon consummation of the proposed transactions.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 98-19982 Filed 7-24-98; 8:45 am]
BILLING CODE 8010-01-M