[Federal Register Volume 63, Number 224 (Friday, November 20, 1998)]
[Notices]
[Pages 64532-64534]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-31037]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26941]


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

November 13, 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

[[Page 64533]]

complete statements of the proposed transactions(s) and any amendment 
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 December 8, 1998, to the Secretary, Securities and Exchange 
Commission, Washington, DC 20549, and serve a copy on the relevant 
applicant(s) and/or declarants(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 December 8, 1998, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

UtiliCorp United Inc. (70-9363)

    UtiliCorp United Inc. (``UtiliCorp''), 20 West Ninth Street, Kansas 
City, Missouri 64105, a public utility holding company claiming 
exemption from registration under rule 10 of the Act, has filed an 
application under section 3(b) and rules 10 and 11 under the Act.
    UtiliCorp is a publicly traded corporation which engages, through 
divisions, primarily in the sale and distribution of gas and 
electricity to retail and wholesale customers in several states, 
Canada, New Zealand and Australia. One of UtiliCorp's subsidiaries is 
Power New Zealand Limited (``PNZ''), which is also a foreign utility 
company exempt under section 33 of the Act.
    UtiliCorp now requests an order under section 3(b) of the Act, 
exempting PNZ from all provisions of the Act, except section 9(a)(2). 
UtiliCorp states that PNZ will not derive any material part of its 
income, directly or indirectly, from sources within the United States. 
In addition, UtiliCorp states that PNZ is not, and does not own any 
securities of any company which is, a public utility or holding company 
operating in the United States.
    UtiliCorp states that its investment in PNZ will not in any way 
diminish the ability of various state commissions that regulate the 
retail electric and gas operations of UtiliCorp to protect the 
interests of consumers in their respective states. UtiliCorp states 
that its domestic operations are, and will continue to be, fully 
separated from its foreign operations. UtiliCorp represents that it 
will maintain separate books of account for any of its subsidiaries 
that may control any foreign company. UtiliCorp further represents that 
it will provide access to these books and records to each state 
commission with rate jurisdiction to the extent not already required by 
law.
    UtiliCorp states that, if an unqualified exemption under section 
3(b) is granted, it intends to rely on rule 10 to provide it and 
intermediated parent to PNZ an exemption from the Act as holding 
companies due to their interests in PNZ. In addition, UtiliCorp asserts 
that it will rely on rule 11(b)(1) to provide an exemption from the 
approval requirements of sections 9(a)(2) and 10 to which UtiliCorp 
would otherwise be subject.

The Peoples Natural Gas Company, et al. (70-9379)

    The Peoples Natural Gas Company (``PNG''), a gas public utility 
subsidiary company of Consolidated Natural Gas Company (``CNG''), a 
registered holding company, and CNG Producing Company (``CNGP''), a gas 
and oil exploration and production subsidiary company of CNG, both 
located at 625 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3197 have 
filed an application-declaration under sections 9(a), 10 and 12(f) of 
the Act and rules 43 and 54 under the Act.
    PNG has signed a binding letter of intent, contingent upon 
Commission approval, to sell all of its gas production properties 
(``Properties'') to CNGP. The Properties consist of PNG's interest in 
wells having reserves of approximately 41.9 billion cubic feet, 
together with associated oil and gas leases covering approximately 
175,000 acres, related agreements and equipment, and certain portions 
of gathering lines.
    The sale price for the Properties is approximately $14.5 million. 
This price represents the net book value of all the production 
properties as shown on PNG's books of account as of November 30, 1997, 
and will be adjusted for further depreciation at the time of closing.

Conectiv, et al. (70-9069)

    Conectiv, a registered holding company, and its marketing 
subsidiary, Conectiv Energy Supply, Inc. (``CES''), both located at 800 
King Street, Wilmington, DE 19899, Delmarva Capital Investments, Inc. 
(``DCI''), a nonutility subsidiary of Conectiv, Conectiv Services, Inc. 
(``CSI''), an energy-related company, both located at 252 Chapman Road, 
P.O. Box 6066, Newark, DE 19714, ATE Investment, Inc. (``ATE''), 
Atlantic Generation, Inc. (``AGI''), and Atlantic Southern Properties, 
Inc. (``ASP''), all nonutility subsidiaries of Conectiv, located at 
5100 Harding Highway, Mays Landing, NJ 08330 have filed an application-
declaration under sections 6(a), 7, 9(a), 10, 12(b), 12(c) and 12(f) of 
the Act and rules 45, 46 and 54 under the Act.
    By order dated February 25, 1998 (HCAR No. 26832) (``Merger 
Order''), the Commission authorized Conectiv to consummate certain 
transactions (``Merger'') resulting in the acquisition by Conectiv of 
all of the outstanding voting securities of Delmarva Power & Light 
Company, an electric public utility company (``Delmarva''), and 
Atlantic City Electric Company, an electric public utility company 
(``ACE'').\1\ Also as a result of the Merger and certain restructuring 
that was implemented contemporaneously with the Merger, Conectiv became 
the direct or indirect owner of various nonutility businesses.
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    \1\ Conectiv's two public utility subsidiaries (Delmarva and 
ACE) and their subsidiaries are unaffected by the proposed 
restructuring. Similarly, the system's service company, Conectiv 
Resource Partners, Inc., is unaffected.
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    Conectiv now proposes, through December 31, 2001, to simplify and 
consolidate its nonutility subsidiaries. The restructuring will be 
accomplished in two phases (``Phase One'' and ``Phase Two''). During 
Phase One, which will be implemented as soon as practicable following 
the issuance of an order by the Commission in this filing, the number 
of active direct nonutility subsidiaries of Conectiv will be reduced to 
six: (1) CSI, which will focus on energy-related services and the 
marketing of energy to retail customers; (2) CES, which will focus on 
energy supply and marketing to wholesale and industrial customers, 
including associates; (3) DCI, which will be renamed Conectiv 
Properties and Investments, Inc. (``CPI'') and will own the nonutility 
investments which are more passive in nature; (4) ASP, which will be 
merged into CPI in Phase Two; (5) AGI, which will be merged into CES in 
Phase Two; and (6) ATE, which will also be merged into CPI in Phase 
Two.

Phase One

    To implement Phase One and reduce the number of direct non-utility 
subsidiaries, numerous actions must be effected, including the 
following proposed actions. Atlantic Energy Enterprises, Inc. 
(``AEE''), a direct nonutility subsidiary of Conectiv, that was formed 
as a holding company for Conectiv's nonutility investments, will

[[Page 64534]]

be merged with and into Conectiv.\2\ This action will make all seven 
wholly owned direct subsidiaries of AEE \3\ direct holdings of 
Conectiv, for an interim period.
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    \2\ This merger will be a statutory short form merger (``Short-
form Merger''). A Short-form Merger occurs when a parent corporation 
acquires all of the capital stock of a first tier subsidiary.
    \3\ AEE's direct subsidiaries are: ATE; AGI; Conectiv Thermal 
Systems, Inc. (``CTS'') (formerly Atlantic Thermal Systems, Inc.), a 
company that provides thermal energy management services; 
CoastalComm, Inc. (``Coastal''); Atlantic Southern Properties, Inc. 
(``ASP''); Atlantic Energy Technology, Inc. (``AET'') and Enerval, 
LLC (``Enerval''), a limited liability company that provides energy 
management services. CSI will acquire Enerval and CTS during Phase 
One.
    Four of the six subsidiaries of CTS (Atlantic Jersey Thermal 
Systems, Inc., Atlantic Pacific Las Vegas LLC, Atlantic-Pacific 
Glendale LLC and Thermal Energy L.P.I) will be unaffected by the 
restructuring. Atlantic Paxton Cogeneration, Inc. has been dissolved 
and ATS Operating Services, Inc. may be merged with Thermal Energy 
L.P.I in Phase Two.
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    The applicants state that the factors that warranted the formation 
of special purpose subsidiaries for investment in various cogeneration 
projects no longer exist. Therefore, during Phase One, Pedrick General, 
Inc., Vineland General, Inc. and Binghamton General, Inc. 
(``collectively, ``General Partners''), all special purpose 
subsidiaries formed to act as general partners in Pedrick Cogeneration 
Limited, Inc., Vineland Cogneration Limited, Inc. and Binghamton 
Cogeneration Limited, (collectively, ``Cogen LLCs''), respectively. 
During Phase One, the General Partners, through a Short-form Merger, 
will be merged into their parent company, AGI, and the interest in the 
Cogen LLCs will be acquired by ATE.
    During Phase One, CSI will be the surviving corporation following 
Short-form Mergers with Conectiv Solutions LLC, Altemp Energy Systems, 
Inc. and Power Consulting Group, Inc. Each of these companies has been 
authorized to provide energy-related services to retail consumers.\4\ 
CSI will succeed to each of the authorities previously granted by the 
Commission to the predecessor companies in the Merger Order. CSI will 
also own four additional wholly owned subsidiaries: Conectiv Plumbing 
LLC, a company required under New Jersey law in connection with the 
heating, ventilation and air conditioning services provided by CSI; 
CTS; Conectiv Communications, Inc., an exempt telecommunications 
company; and Enerval.
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    \4\ See Conectiv, Holding Company Act Release No. 26832 (Feb. 
25, 1998).
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    During Phase One, CPI will become the holder of certain 
nonregulated investments that are passive in nature. However, for 
maximum flexibility, Conectiv requests authorization to retain certain 
passive investments if retention by Conectiv is deemed more appropriate 
for tax or other reasons. CPI will be the surviving corporation 
following Short-form Mergers with Delmarva Services Company, a 
corporation formed to own and finance an office building that is leased 
to Delmarva and its associates, Christiana Capital Management, Inc., a 
corporation that owns an office building leased to Delmarva, Atlantic 
Energy International, Inc., a corporation formed to broker used utility 
equipment to foreign countries and AET, a corporation formed to 
research and develop energy technology.
    During Phase One, CES will be the surviving corporation following 
the Short-form Merger with Petron Oil Corporation, an energy marketing 
company. CES will also acquire the capital stock of Delmarva Operating 
Services Company (``DOSC''), a company providing management services to 
independent production companies or exempt wholesale generators. The 
capital stock in DOSC will be transferred up to Conectiv by capital 
dividend and then contributed by Conectiv to CES in an exempt capital 
contribution. Depending on the results of a pending tax analysis, the 
transfer may be accomplished by (1) an asset for stock merger in which 
Delmarva Capital Investments, Inc. (``DCI''), owner of the DOSC 
securities would receive CES securities in exchange for the assets or 
securities of DOSC, or (2) a dividend by DCI to Conectiv of the shares 
of DOSC followed by a capital contribution of the shares to CES.

Phase Two

    Phase Two will be completed as appropriate giving consideration to: 
(1) Electric deregulation at the state and federal level; (2) tax 
implications; and (3) other related issues. Upon completion of Phase 
Two, the number of active direct nonutility subsidiaries of Conectiv 
(``Direct Nonutilities'') will be reduced from six to three (CSI, CES 
and CPI).
    During Phase Two: (1) CSI will continue to focus on energy-related 
services and the marketing of energy to retail customers; (2) CES will 
continue to focus on energy supply and marketing to wholesale and 
industrial customers, and acquire AGI by Short-form Merger; and (3) CPI 
will continue to own certain nonutility investments which are more 
passive in nature, and acquire ASP and ATE by Short-form Mergers.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-31037 Filed 11-19-98; 8:45 am]
BILLING CODE 8010-01-M