[Federal Register Volume 64, Number 73 (Friday, April 16, 1999)]
[Notices]
[Pages 18952-18954]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9586]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27004]


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

April 9, 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

[[Page 18953]]

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 May 4, 1999, to the Secretary, Securities and Exchange 
Commission, Washington, D.C. 20549-0609, 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 May 4, 1999, the application(s) and/or declaration(s), as 
filed or as amended, may be granted and/or permitted to become 
effective.

Northeast Utilities, et al. (70-8875)

    Northeast Utilities (``Northeast''), 174 Brush Hill Avenue, West 
Springfield, Massachusetts 01090-0010, a registered holding company, 
Northeast's public utility subsidiaries, The Connecticut Light and 
Power Company, 107 Selden Street, Berlin, Connecticut 06037, Western 
Massachusetts Electric Company, 174 Brush Hill Avenue, West 
Springfield, Massachusetts 01090-0010, Holyoke Water Power Company, 
Canal Street, Holyoke, Massachusetts 01040, and Public Service Company 
of New Hampshire and North Atlantic Energy Corporation (``NAEC'') 
(collectively, ``Utility Subsidiaries''), each at 1000 Elm Street, 
Manchester, New Hampshire 03015, and Northeast's nonutility 
subsidiaries, NU Enterprises, Inc. (``NUEI''), Northeast Generation 
Service Company (``NGS''), Northeast Generation Company (``NGC''), 
Select Energy, Inc. (``Select''), and Mode 1 Communications, Inc. 
(``Mode 1'') (collectively, ``Nonutility Subsidiaries''), each at 107 
Selden Street, Berlin, Connecticut 06037 (all companies being 
``Applicants''), have filed a post-effective amendment to their 
application-declaration filed under sections 6(a), 7, 9(a), 10, and 
12(b) of the Act and rules 43, 45, and 54 under the Act.
    By order dated November 12, 1998 (HCAR No. 26939) (``November 1998 
Order''), the Commission authorized, among other things: (1) The 
formation and financing by Northeast of NUEI \1\ to ``through multiple 
subsidiaries, engage in a variety of energy-related and other 
activities and acquire and manage nonnuclear generating plants'', and 
(2) the acquisition by NUEI of the securities of NGC,\2\, NGS,\3\ HEC, 
Inc., Select, and Mode 1. By order dated November 20, 1996 (HCAR No. 
26612) and subsequent supplemental orders \4\ (collectively, ``Money 
Pool Orders''), the Commission authorized, among other things, the 
continued use, through December 31, 2000, of the Northeast Utilities 
System Money Pool (``Money Pool''). The Money Pool Orders also reserved 
jurisdiction over Money Pool borrowings by PSNH that are attributable 
to contributions by WMECO, pending the approval of the Massachusetts 
Department of Public Utilities.
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    \1\ The name cited in the November 1998 Order is ``NEWCO.'' The 
post-effective amendment states that the company is now known as 
NUEI.
    \2\ The name cited in the November 1998 Order is ``GENCO.'' The 
post-effective amendment states that the company is now known as 
NGC.
    \3\ The name cited in the November 1998 Order is ``Northeast 
Generation Services, Inc.'' The post-effective amendment states that 
the company is now known as NGS.
    \4\ See Holding Co. Act Release Nos. 26665 (Feb. 11, 1997), 
26692 (Mar. 25, 1997), 26721 (May 29, 1997), and 26816 (Jan. 16, 
1998).
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    The Applicants now request that the Nonutility Subsidiaries be 
authorized to participate in the Money Pool. The Money Pool currently 
consists principally of surplus funds that may be available from day to 
day to Northeast and certain of its subsidiaries. In addition to 
surplus funds, funds borrowed by Northeast (through the issuance of 
short-term notes, by selling commercial paper or by borrowing under a 
revolving credit facility--each transaction as authorized by prior 
Commission order) are a source of funds for making open account 
advances to certain of Northeast's subsidiaries through the Money Pool. 
In addition to the subsidiaries of Northeast which are currently 
authorized to be potential recipients of these open account advances, 
the Applicants propose that the Nonutility Subsidiaries be authorized 
to receive these open account advances from Northeast. It is stated 
that Money Pool transactions will be designed to match, on a daily 
basis, the available cash and short-term borrowing requirements of 
Northeast, the Utility Subsidiaries, and, it is proposed, the 
Nonutility Subsidiaries in order to minimize the need for short-term 
borrowings by the Utility Subsidiaries and Nonutility Subsidiaries from 
external sources. Only certain of Northeast's subsidiaries are now 
authorized to borrow through the Money Pool from the proceeds of 
external borrowings by Northeast. It is proposed that the Nonutility 
Subsidiaries be eligible to borrow through the Money Pool from the 
proceeds of external borrowings by Northeast. It is stated that, among 
other Northeast subsidiaries, the Nonutility Subsidiaries will not be 
parties to the revolving credit facility authorized by prior Commission 
order. Applicants further propose that the aggregate amount of short-
term debt outstanding at any one time will not exceed the following: 
$75 million for NUEI; $50 million for Select; and $5 million each for 
NGC, NGS, and Mode 1.

Georgia Power Company (7-9437)

    Georgia Power Company (``Georgia Power''), 241 Ralph McGill 
Boulevard, N.E., Atlanta, Georgia 30308-3374, a wholly owned subsidiary 
of the Southern Company, a registered holding company, has filed an 
application-declaration under sections 9(a), 10 and 12(d) of the Public 
Utility Holding Company Act of 1935, as amended (``Act''), and rules 44 
and 54 under the Act.
    Georgia Power proposes to convey all of its rights, title and 
interests in and to real and personal property, including engineering 
drawings, comprising 30 distribution and transmission substation 
facilities (``Georgia Power Substation Facilities'') to Georgia 
Transmission Corporation (``GTC''), an electric membership corporation. 
In exchange, GTC will convey to Georgia Power all its rights, title and 
interests in and to real and personal property comprising up to four 
distribution and transmission substation facilities (``GTC's Substation 
Facilities''), an exchange equalization payment of $3,808,831, and an 
additional payment of $560,000 to ensure that Georgia Power suffers no 
after-tax loss on the exchange.
    Georgia Power states that the exchange will realign its and GTC's 
interests so that GTC will be responsible for the operation and 
maintenance payments for facilities which principally save GTC's load 
and Georgia Power will be responsible for the operation and maintenance 
for facilities which principally serve its load. The 30 substations 
being exchange by Georgia Power represent less than 1% of Georgia 
Power's total substation facilities (based on original cost).
    Georgia Power will obtain from its First Mortgage Bond Trustee a 
release of the Georgia Power Substation Facilities from the lien of 
Georgia Power's First Mortgage Bond Indenture. GTC will obtain a 
release executed by SunTrust

[[Page 18954]]

Bank, Atlanta, as Trustee under GTC' Indenture dated as March 1, 1997 
releasing the GTC Substation Facilities from the lien of said 
Indenture.
    Georgia Power requests authority to consummate the transaction at 
any time on or before December 31, 1999 subject to Georgia Power's and 
GTC's receiving the requisite approvals of all applicable regulatory 
agencies, including the Commission.

Pennsylvania Electric Company (70-9457)

    Pennsylvania Electric Company (``Penelec''), 2800 Pottsville Pike, 
Reading, Pennsylvania 19605, an electric utility subsidiary of GPU, 
Inc. (``GPU''), a registered holding company, has filed a declaration 
under section 12(d) of the Act and rules 44 and 54 under the Act.
    Penelec owns a twenty percent undivided ownership interest in the 
Seneca Pumped Storage Generating Station (``Seneca''), a 435 MW pumped 
storage station generating facility located near Warren, Pennsylvania. 
The other eighty percent is owned by Cleveland Electric Illuminating 
Company, a utility subsidiary of FirstEnergy Corp. (``FistEnergy''), 
and exempt holding company.
    Penelec proposes to sell its interest in Seneca to FE Acquisition 
Corp. (``FEAC''), a wholly owned, special purpose subsidiary of 
FistEnergy. In a purchase and sales agreement dated as of October 30, 
1998 with FEAC, Penelec agreed to sell its interest to FEAC for $43 
million, subject to certain adjustments. Applicant states that the 
purchase price was determined through a competitive auction process.
    Penelec intends to use the net proceeds from the sale, among other 
things, to reduce debt, pay dividends and/or to fund or offset stranded 
asset liabilities.\5\
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     \5\ This use of proceeds is mandated by an order of the 
Pennsylvania Public Utilities Commission, dated October 16, 1998, 
relating to the sale by Penelec of its generation assets.
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Allegheny Energy, Inc. (70-9459)

    Allegheny Energy, Inc. (``Allegheny''), 10435 Downsville Pike, 
Hagerstown, Maryland 21740, a registered holding company, has filed an 
application-declaration under sections 6(a), 7, 9(A), 10, and 12(c) of 
the Act and rules 42, 46, and 54 under the Act.
    Allegheny requests authority to adopt and implement a shareholder 
rights plan (``Plan'') and enter into a related agreement creating the 
shareholder rights (``Rights Agreement''). The Plan is intended to 
maximize shareholder value by reducing the risk of nonrealization of 
shareholder value due to opportunistic takeover proposals. Under the 
Plan, the board of directors of Allegheny (``Board'') would declare a 
dividend of one right (``Right'') for each outstanding share of 
Allegheny common stock, par value $1.25 per share (``Common Stock''), 
payable to all stockholders of record on a specified record date.
    Each Right would, after the Rights become exercisable, entitle the 
holder to purchase from Allegheny one share of Common Stock at a price 
to be determined by the Board, subject to adjustment (``Exercise 
Price''). The Rights would not entitle the holders to make a discounted 
purchase of shares of Common Stock or the common stock of the person 
acquiring Allegheny until the occurrence of one of the events described 
below. The Rights will expire at the close of business ten years from 
the date of the Rights Agreement, unless earlier redeemed or exchanged 
by Allegheny, as described below.
    Until the earlier of two dates described below (``Distribution 
Date''), Rights would not be exercisable and would trade with the 
outstanding shares of Common Stock. One date occurs when the Board 
fixes the date of a public announcement that a person or group 
(``Acquiring Person'') has acquired beneficial ownership of 15% or more 
of the Common Stock. The second date occurs ten business days (unless 
extended by the Board) after any person or group has commenced a tender 
or exchange offer which would, upon its consummation, result in such 
person or group becoming an Acquiring Person.
    After the Distribution Date, the holders of the Rights would 
immediately have the right to receive, for each Right exercised, either 
Common Stock having a market value equal to two times or one times the 
Exercise Price then in effect, depending upon the circumstances. Under 
certain circumstances where Allegheny is acquired in a business 
combination transaction with, or 50% or more of its assets or earning 
power is sold or transferred to, another person or entity 
(``Acquiror''), exercise of a Right will entitle its holder to receive 
common stock of the Acquiror having a market value to two times the 
Exercise Price then in effect. Rights beneficially owned by any 
Acquiring Person and certain transferees of the Acquiring Person will 
be null and void.
    The Rights may be redeemed, as a whole, at the discretion of the 
Board, at a Redemption Price of $0.01 per Right, subject to adjustment, 
which will be paid, at Allegheny's option, in cash, shares of Common 
Stock or other equivalent Allegheny securities, at any time prior to 
the close of business on the date that any person has become an 
Acquiring Person.
    At any time after the Distribution Date and prior to the time that 
any person (other than Allegheny and certain related entities), 
together with its affiliates and associates, becomes the beneficial 
owner of 50% or more of the outstanding shares of Common Stock, the 
Board may direct the exchange of shares of Common Stock for all of the 
Rights (other than Rights which have become void) at the exchange ratio 
of one share of Common Stock per Right, subject to adjustment.
    The Exercise Price payable, and the number of shares of Common 
Stock (or other securities, as the case may be) issuable upon exercise 
of the Rights are subject to adjustment from time to time to prevent 
dilution (i) in the event of a stock dividend on, or a subdivision or 
combination of, the Common Stock, or (ii) upon the distribution to 
holders of the Common Stock of securities or assets (excluding regular 
periodic cash dividends) whether by dividend, reclassification, 
recapitalization or otherwise.
    The terms of the Rights may be amended by the Board (i) prior to 
the Distribution Date in any manner and (ii) on or after the 
Distribution Date to cure any ambiguity, to correct or supplement any 
provision of the Rights Agreement which may be defective or 
inconsistent with any other provisions, or in any manner not adversely 
affecting the interests of the holders of the Rights generally.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 99-9586 Filed 4-15-99; 8:45 am]
BILLING CODE 8010-01-M