[Federal Register Volume 64, Number 69 (Monday, April 12, 1999)]
[Notices]
[Pages 17698-17700]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-8968]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26997]


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

April 2, 1999.
    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 
applications(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 April 27, 1999, to the Secretary, Securities and Exchange 
Commission, Washington, D.C. 20549-0609, 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 any 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 April 27, 1999, the application(s) and/or declaration(s), 
as filed or as amended, may be granted and/or permitted to become 
effective.

GPU, Inc., et al. (70-7926)

    GPU, Inc. (``GPU''), 300 Madison Avenue, Morristown, New Jersey 
07962, a registered holding company, and its electric public utility 
subsidiaries, Jersey Central Power & Light Company, Metropolitan Edison 
Company (``Met-Ed''), and Pennsylvania Electric Company (``Penelec'') 
(collectively, ``GPU Subsidiaries'' or together with GPU, 
``Applicants''), each of 2800 Pottsville Pike, Reading, Pennsylvania 
19640 have filed a post-effective amendment under sections 6(a), 7, 32 
and 33 of the Act and rules 53 and 54 under the Act.
    By orders dated July 17, 1996 (HCAR No. 26544) and December 22, 
1997 (HCAR No. 26801) (``December Order'') (collectively ``Orders''), 
the Commission, among other things, authorized the GPU Subsidiaries, 
from time to time through December 31, 2000, to issue, sell and renew 
unsecured promissory notes in amounts up to the limitations on short-
term indebtedness contained in the GPU Subsidiaries' respective 
charters. GPU was authorized to issue, sell and renew unsecured short-
term notes in amounts up to $250 million.
    The December Order limited the amount of short-term indebtedness 
which Met-Ed and Penelec could have outstanding to the maximum amounts 
permitted by their respective charters. At the time the Orders were 
issued, the Met-Ed and Penelec charters, among other things, restricted 
the amount of unsecured debt that they could have outstanding without 
the consent of a majority of the preferred shareholders so long as 
preferred shares were outstanding. On February 19, 1999, Met-Ed and 
Penelec redeemed all of their remaining shares of cumulative preferred 
stock outstanding ($11.95 million and $16.55 million aggregate stated 
value, respectively). The Applicants state that as the preferred stock 
has been redeemed and is no longer outstanding, the associated 
limitations contained in the GPU Subsidiaries' charters on the issuance 
of unsecured debt are no longer applicable to Met-Ed and Penelec.
    Applicants now seek authorization, through December 31, 2000, to: 
permit Met-Ed and Penelec to each issue and sell up to $150 million in 
short-term indebtedness from time to time. Applicants also propose, 
through December 31, 2003, to: (1) extend the period during which the 
GPU Subsidiaries may issue unsecured promissory notes under credit 
agreements or in the form of short-term indebtedness; (2) permit GPU to 
issue and sell commercial paper in amounts up to $100 million; and (3) 
extend GUP's authority to issue and sell short-term notes in amounts up 
to $250 million, under the terms and conditions of the Orders.

Cinergy Corp., et al. (70-9449)

    Cinergy Corp., a registered holding company (``Cinergy''),\1\ 139 
East Fourth Street, Cincinnati, Ohio 45202, has filed a declaration 
under sections 12(b) and 13(b) of the Act and rules 45, 54, 80, 81, 86, 
87, 89, 90, and 91 under the Act.
---------------------------------------------------------------------------

    \1\ Cinergy has two direct, wholly owned domestic retail public 
utility companies--The Cincinnati Gas & Electric Company (``CG&E'') 
and PSI Energy, Inc. (``PSI''). CG&E has four direct, wholly owned 
domestic retail public utility companies--The Union Light, Heat and 
Power Company (``ULH&P''), Lawrenceburg Gas Company 
(``Lawrenceburg''), The West Harrison Gas and Electric Company 
(``West Harrison'') and Miami Power Corporation (``Miami Power''). 
Through these subsidiaries, Cinergy provides retail electric service 
in north central, central and southern Indiana and retail electric 
and gas service in the southwestern portion of Ohio and adjacent 
areas of Indiana and Kentucky.
---------------------------------------------------------------------------

    Cinergy requests authorization for its domestic nonutility 
subsidiaries to enter into service agreements with Cinergy's utility 
subsidiaries under which the nonutility subsidiaries may provide a 
range of services to the utility affiliates, and vice versa,\2\ priced 
at ``cost'' as determined under rule 91 of the Act. Cinergy requests 
authorization for each of its domestic nonutility subsidiaries, 
including those formed after the date of the requested authorization, 
but excluding ``foreign utility companies'' \3\ and ``exempt 
telecommunications companies'' \4\ (each, a ``Nonutility Company'') to 
enter into a separate but substantially similar contract (``Service 
Agreement'') with each of Cinergy's utility subsidiaries.
---------------------------------------------------------------------------

    \2\ Services rendered under the proposed service agreements by 
the utility subsidiaries to the nonutility affiliates are exempt 
from prior Commission approval by virtue of rule 87(b)(1) under the 
Act. Accordingly, Cinergy does not seek Commission authorization for 
those service transactions, which are an integral aspect of the 
proposed contracts.
    \3\ Foreign utility company (``FUCO'') is defined in section 33 
of the Act.
    \4\ Exempt telecommunications company (``ETC'') is defined in 
section 34 of the Act.
---------------------------------------------------------------------------

    CG&E, an Ohio electric and gas utility company, and PSI, an Indiana 
electric and gas utility company, are Cinergy's two principal utility 
subsidiaries. CG&E is subject to state utility regulation by the Public 
Utilities Commission of Ohio (``Ohio Commission'') and PSI is subject 
to state utility regulation by the Indiana Utility Regulatory 
Commission (``Indiana Commission''). Under provisions regarding 
affiliate contracts contained in settlement agreements dating from 
Cinergy's acquisition of CG&E and PSI in 1994,\5\ CG&E and PSI 
submitted identical proposed forms of Service Agreements to the Ohio 
Commission and the Indiana Commission staff in August 1998 for their 
review prior to review by the

[[Page 17699]]

Commission. In late January 1999 the Ohio Commission and the Indiana 
Commission staff completed their review and, based upon certain 
modifications made to the CG&E Service Agreement and assurances 
regarding certain costs that may arise under the PSI Service Agreement, 
cleared the CG&E and PSI Service Agreements for filing with the 
Commission.\6\
---------------------------------------------------------------------------

    \5\ These merger-related settlement agreements with the Ohio 
Commission and the Indiana Commission (and other interested 
parties), as well as conditions agreed to by Cinergy in connection 
with related merger proceedings before the Kentucky Public Service 
Commission, were noted by the Commission in its order approving the 
acquisition of CG&E and PSI by Cinergy and related transactions. See 
HCAR No. 26146 (October 21, 1994).
    \6\ Cinergy states that, concurrently with the filing of this 
application with the Commission, PSI is submitting the proposed PSI 
Service Agreement to the Indiana Commission. According to Cinergy, 
that submission was not to initiate any proceeding before the 
Indiana Commission and did not seek any approval or other action by 
the Indiana Commission (beyond the clearance previously issued by 
its staff).
---------------------------------------------------------------------------

    Cinergy states that the proposed Service Agreements with the 
utility subsidiaries of CG&E--ULH&P, Lawrenceburg, West Harrison and 
Miami Power (collectively with CG&E and PSI, the ``Operating 
Companies'')--do not require prior state commission review. According 
to Cinergy, except in regard to prior state commission review of 
amendments, the proposed Service Agreement for CG&E utility subsidiary 
conforms in all material respects to the CG&E Service Agreement, 
including the additional protections incorporated as a result of the 
Ohio Commission's review.
    Cinergy Investments, Inc., a direct, wholly owned Nonutility 
Subsidiary of Cinergy (``Cinergy Investments''), holds interests in all 
of the Nonutility Companies, except for certain minor interests held by 
CG&E and PSI.\7\ At December 31, 1998, Cinergy Investments had 11 
direct wholly owned subsidiaries: Cinergy-Cadence, Inc., an ``energy-
related company'' within the meaning of Rule 58 under the Act (``Rule 
58 Company'') which has a one-third ownership interest in a Rule 58 
Company, Cadence Network LLC, which markets various energy management 
services to multi-site retail establishments; Cinergy Capital & 
Trading, Inc., a Rule 58 Company engaged in energy marketing and 
trading that has eight subsidiaries, each engaged in energy marketing 
or ownership or operation of exempt wholesale generators, \8\ Cinergy 
Communications, Inc., an ETC; Cinergy Engineering, Inc., a Rule 58 
Company engaged in utility-related engineering and other technical 
services; Cinergy-Centrus, Inc., an ETC; Cinergy-Centrus 
Communications, Inc., an ETC that holds a one-third ownership interest 
in Centrus LLP, also an ETC; Cinergy Resources, Inc., a Rule 58 Company 
engaged in energy marketing and trading; Cinergy Solutions, Inc.,\9\ 
which, together with its 12 partly and wholly owned subsidiaries, 
primarily markets energy management services and engages in 
development, ownership and operation of district cooling and heating 
systems and qualifying facilities under the Public Utility Regulatory 
Policies Act of 1978, principally through a joint venture with a non-
affiliate, Trigen Energy Corporation; Cinergy Supply Network, Inc., a 
Rule 58 Company, which engages in utility materials brokering services 
and, through its one-third-owned Rule 58 Company, Reliant Services, 
LLC, proposes to engage in underground utility facilities location and 
construction services; Cinergy Technology, Inc., which is engaged in 
commercialization of utility technologies and related investments;\10\ 
and Enertech Associates, Inc., an inactive Rule 58 Company.
---------------------------------------------------------------------------

    \7\ CG&E has two nonutility subsidiaries--Tri-State Improvement 
Company, which acquires and holds property in support of the 
businesses of CG&E and its utility subsidiaries, and KO Transmission 
Company, a gas pipeline company. CG&E also holds limited partnership 
interests in several local venture capital and community development 
funds. PSI has one nonutility subsidiary, South Construction 
Company, which holds title to real estate not used and useful in 
PSI's business. PSI also holds limited partnership interests in 
several local venture capital and community development funds. 
Cinergy has pending a request in Commission File No. 70-8427 for an 
order releasing Commission jurisdiction over Cinergy's continued 
retention, through CG&E and PSI, of these nonutility businesses and 
interests.
    \8\ Exempt wholesale generator is defined in section 32 of the 
Act.
    \9\ Cinergy Solutions, Inc. was formed under Commission order 
dated February 7, 1997 (HCAR No. 26662).
    \10\ Cinergy has pending a request in Commission File No. 70-
8427 for an order releasing Commission jurisdiction over Cinergy's 
continued retention of this entity.
---------------------------------------------------------------------------

    In general, the Service Agreements authorize the provision of 
services, including loans of employees, from the Operating Companies to 
the Nonutility Companies, and from the Nonutility Companies to the 
Operating Companies, priced at ``cost.'' More specifically, upon 
receipt by a party to the Service Agreement of a written request for 
specified services, including, if applicable, the use of any related 
equipment, facilities, properties or other resources (``Services''), 
the receiving party would provide the requested Services if in its sole 
discretion it can do so without impairing its normal business 
operations. Services may include, but are not limited to, engineering 
and construction; operations and maintenance; equipment testing; 
information services; monitoring, surveying, inspecting, constructing, 
locating and marking of overhead and underground utility facilities; 
meter reading; materials management; vegetation management; and 
marketing and customer relations. In addition to the exclusion of 
transactions involving affiliated ETCs and FUCOs, affiliate 
transactions involving sales, leases, or other transfers of assets, 
goods, energy commodities (including electricity, gas, coal and other 
combustible fuels) or thermal energy products are outside the scope of 
the Service Agreements.
    Any loans of employees by the company providing Services also would 
be at the service provider's sole discretion. While performing work on 
behalf of the client company, any loaned employees would be under its 
supervision and control, and the client company would be responsible 
for their actions.
    All service requests would be in writing consistent with the form 
of service request appended to the Service Agreement. Each service 
request must identify the client company and proposed service provider, 
be authorized by an appropriate individual at both the client company 
and the service provider, include a detailed description of the 
proposed services and estimated costs, and specify the scheduled start 
date and completion date. In addition, all Services would be assigned 
to applicable activities, projects, programs or on other appropriate 
bases to enable specific work to be properly assigned. The client 
company may amend service requests from time to time, subject to 
certain conditions.
    All Services would be rendered at the full cost, as computed in 
accordance with applicable rules, regulations and accounting standards, 
including rules 90 and 91 under the Act. As soon as practicable after 
the close of each month, any company providing Services would provide 
to each client company a statement reflecting the billing information 
necessary to identify the costs charged for that month. The client 
company is required to pay all amounts billed within 30 days of receipt 
of the billing statement.
    The sole and exclusive responsibility of a company providing 
Services for any asserted deficiency would be to correct or repair the 
deficiency or re-perform the Services, at no additional cost to the 
client company. The service provider disclaims any additional 
warranties or remedies, and each client company agrees to accept 
Services on that basis. In addition, any company receiving Services 
agrees to indemnify the company providing those Services (including 
each of its officers, directors, employees and agents) from any losses, 
liabilities or claims arising from or in connection with the provision 
of the

[[Page 17700]]

Services. The indemnity applies regardless of negligence, willful 
misconduct, or breach of warranty by the company that provided the 
Services or any of its officers, directors, employees or agents.
    Any amendment to a Service Agreement must be in writing executed by 
all of the parties. In addition, the CG&E and PSI Service Agreements 
(but not the form of Service Agreement for CG&E's utility subsidiaries) 
provide that any amendment to either of those Service Agreements, 
before being submitted to the Commission for its review, must first be 
submitted to the Ohio Commission and the Indiana Commission staff for 
their review (and submitted to certain other interested parties for 
informational purposes). As a result, the Ohio Commission and Indiana 
Commission staffs have effective veto power over any proposed 
amendment. Cinergy is precluded from seeking Commission approval of the 
contract or amendment, or must withdraw it, and may not put it into 
effect with respect to CG&E or PSI, if the Ohio Commission or Indiana 
Commission staff Disapprove it or find it unreasonable.
    Additional Nonutility Companies may become parties to the Service 
Agreement after the original execution by executing appropriate 
signature pages. In the absence of any changes to the terms of the 
Service Agreement, merely adding new Nonutility Companies as 
signatories would not be considered an amendment, including for 
purposes of any prior state review.
    The provision of Services would in all cases, be subject to any 
limitations or restrictions contained in any applicable current or 
future orders or authorizations, statutory provisions, rules or 
regulations, tariffs, or agreements of regulatory or governmental 
agencies having jurisdiction over the parties to the Service Agreement, 
including the Commission, the applicable state commission and the 
Federal Energy Regulatory Commission. To the extent, if any, that at 
any time any provision of the Service Agreement conflicts with any 
limitation or restriction of any regulatory agency, the limitation of 
restriction would control.

Northeast Utilities, et al. (70-9463)

    Northeast Utilities (``NU''), 174 Brush Hill Avenue, West 
Springfield, Massachusetts 01090-0010, a registered holding company, 
and its service company subsidiary, Northeast Utilities Service Company 
(``NUSCO''), have filed an application-declaration under sections 6(a), 
7, 9(a), 10 and 12(c) of the Act and rules 42 and 54 under the Act.
    NU proposes to adopt a stockholder rights plan (``Plan'') and to 
enter into a related Rights Agreement (``Agreement'') with NUSCO, 
acting as transfer agent, to implement the Plan. Under the Plan, NU's 
Board of Trustees (``Board'') proposes to declare a dividend of one 
right (``Right'') for each outstanding share of NU common stock, $5.00 
par value (``Common Stock''). The dividend will be payable to 
stockholders of record on the fifth business day after the Commission 
has issued an order requested in this filing (``Record Date''). Each 
Right would entitle the holder to purchase one share of Common Stock at 
a price of $65.00 per share, subject to adjustment (``Purchase 
Price'').
    Initially, the Rights may only be traded together with the Common 
Stock certificates that are outstanding on the Record Date. The Rights 
may not be exercised until the Distribution Date, which is defined in 
the Agreement as the earlier of two dates. The first is ten days after 
the first public announcement that any person or group has acquired 
beneficial ownership of fifteen percent or more of Common Stock 
(``Acquiring Person''), without Board approval (``Acquisition Event''). 
The second is ten business days (unless extended by the Board) after 
any person or group has commenced, or announced an intent to make, a 
tender or exchange offer which would, upon its consummation, result in 
the person or group becoming an Acquiring Person (this event, together 
with an Acquisition Event, ``Triggering Events''). On the occurrence of 
either Triggering Event, each Right will be evidenced by a Right 
Certificate, which may then be traded independently of the Common 
Stock.
    In the event that a person becomes an Acquiring Person, Right 
holders will have the right to receive Common Stock (or, in certain 
circumstances, cash, property, other NU securities or a reduction in 
the Purchase Price) having a value equal to two times the effective 
Purchase Price (``Discount Purchase Price''). If, after the 
Distribution Date, NU is acquired by another person, the Common Stock 
is changed into shares of another person, or fifty percent of NU's 
consolidated assets or earning power are sold or transferred to another 
person (in each case, a ``Surviving Person''), each Right holder may 
exercise a Right and receive for each Right the common stock of the 
Surviving Person at the Discount Purchase Price. If a Triggering Event 
occurs, all Rights that are, were or subsequently become beneficially 
owned by an Acquiring Person, and certain other related persons, become 
null and void.
    NU may redeem the Rights, as a whole, at an adjustable price of 
$.001 per Right, at any time prior to the close of business on the 
tenth day after the date that any person has become an Acquiring 
Person. At any time after any person or group becomes an Acquiring 
Person and before any person or group, other than NU and certain 
related entities, becomes the beneficial owner of fifty percent or more 
of the outstanding shares of Common Stock, the Board may direct the 
exchange of shares of Common Stock for all or any part of the Rights. 
The exchange would be at a rate of one Right per share of Common Stock 
or the equivalent in other NU securities or assets.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 99-8968 Filed 4-9-99; 8:45 am]
BILLING CODE 8010-01-M