[Federal Register Volume 66, Number 85 (Wednesday, May 2, 2001)]
[Notices]
[Pages 22055-22057]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-10980]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27385]


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

April 27, 2001.
    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

[[Page 22056]]

application(s) and/or declaration(s) and any amendment(s) is/are 
available for public inspection through the Commission's Branch 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 17, 2001, to the Secretary, Securities and Exchange 
Commission, Washington, DC 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 the case of an attorney at law, 
by certificate) should be filed with the request. Any request for 
hearing should identify specifically the issues of facts 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 17, 2001, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

DTE Energy Company, et al. (70-9589)

    DTE Energy Company (``DTE''), a public-utility holding company that 
claims exemption from registration under section 3(a)(1) of the Act by 
rule 2, and DTE Enterprises, Inc. (``Merger Sub''), an inactive, wholly 
owned subsidiary of DTE (collectively, ``Applicants''), both located at 
2000 Second Avenue, Detroit, Michigan 48226-1279, have filed an amended 
application under sections 3(a)(1), 3(a)(2), 9(a)(2), and 10 of the 
Act.
    On February 23, 2001, the Commission issued a notice of these 
proposed acquisitions.\1\ The terms of the underlying agreement, 
however, were subsequently changed. Applicants have amended their 
application to reflect this change, and this supplemental notice is 
therefore necessary.
---------------------------------------------------------------------------

    \1\ See HCAR No. 27349.
---------------------------------------------------------------------------

    Under the terms of an Agreement and Plan of Merger dated October 4, 
1999, as amended on November 12, 1999 and February 28, 2001, Merger Sub 
will merge with MCN Energy Group Inc. (``MCN''), a Michigan public-
utility holding company claiming exemption under section 3(a)(1) of the 
Act by rule 2 under the Act, with Merger Sub surviving as a wholly 
owned direct subsidiary of DTE. Each share of outstanding MCN common 
stock (including the associated right to purchase Series A Junior 
Participating Preferred Stock) will be converted into a right to 
receive either $24.00 in cash or .715 shares of DTE common stock. DTE 
and Merger Sub therefore request authority to acquire indirectly and 
directly, respectively, all of the ownership interests that MCN holds 
in the three public-utility companies described below. Applicants state 
that, except as discussed below (and except for the merger of MCN into 
Merger Sub), the current corporate structures of DTE and MCN will not 
change.
    DTE, a Michigan corporation, is engaged, through subsidiaries, in 
various utility and nonutility activities.\2\ Its common stock is 
listed on the New York Stock Exchange (``NYSE'') and, as of January 31, 
2001, 142,649,172 of its shares were outstanding. For the year ended 
December 31, 2000, DTE had consolidated operating revenues of $5.6 
billion, approximately $1.47 billion of which were attributable to 
nonutility activities. Applicants state that the total value of the 
assets of DTE and its subsidiaries as of December 31, 2000 was 
approximately $12.7 billion, of which approximately $7.4 billion 
consisted of the net value of electric plant and equipment. Applicants 
state that, as of December 31, 2000, The Detroit Edison Company 
(``Detroit Edison''), a direct public-utility company subsidiary of 
DTE, had 8,691 employees and the other subsidiaries of DTE had 453 
employees.
---------------------------------------------------------------------------

    \2\ DTE is indirectly engaged in many nonutility activities, 
including operating pulverized coal facilities and coke oven 
batteries, coal sourcing, blending and transportation, landfill gas-
to-energy facilities, providing expertise in the application of new 
energy technologies, real estate development, merchant generation, 
and power marketing and trading.
---------------------------------------------------------------------------

    DTE owns directly or indirectly all of the outstanding common stock 
of two public-utility companies, Detroit Edison and International 
Transmission Company (``ITC''), a direct subsidiary of Detroit 
Edison.\3\ Detroit Edison is engaged in, among other things, the 
generation and distribution of electric energy in a 7,600 square-mile 
area in southeastern Michigan. Detroit Edison's service area includes 
about thirteen percent of Michigan's total land area and about half of 
the population of the State (approximately five million people). 
Applicants state that, for the year that ended December 31, 2000, 
Detroit Edison's operating revenues and net income were approximately 
$4.13 billion and $413 million, respectively. As of December 31, 2000, 
Detroit Edison's assets had a book value of $10.99 billion. As of 
December 31, 2000, Detroit Edison had a summer net rated capability of 
approximately 11,030 MW. Detroit Edison is subject to general 
regulation by the Michigan Public Service Commission (``MPSC'') 
regarding the conditions of its service, rates and recovery of certain 
costs, accounting and various other matters. Its wholesale electric 
rates are also subject to regulation by the Federal Energy Regulatory 
Commission (``FERC''). In addition, the Nuclear Regulatory Commission 
has jurisdiction over all phases of the operation, construction 
(including plant modifications), licensing and decommissioning of 
Detroit Edison's Fermi 2 nuclear power plant.
---------------------------------------------------------------------------

    \3\ Applicants state that DTE will become the direct parent 
company of ITC, as contemplated by an order dated September 13, 
2000. See DTE, HCAR No. 27229 (authorizing DTE to acquire directly 
all of the issued and outstanding voting securities of ITC). In the 
interim, as the current owner of all ownership interests in ITC, 
Detroit Edison claims to be entitled to an exemption from 
registration under section 3(a)(2) of the Act.
---------------------------------------------------------------------------

    ITC, having acquired the transmission assets of Detroit Edison in 
January of 2001, is an electric public-utility company. Its 
transmission system consists of approximately 6,472 miles of 
transmission lines, operated at up to 345 kilovolts, through 41 
transmission stations. The FERC has jurisdiction over the rates, terms, 
and conditions of ITC's transmission service, and the MPSC has 
jurisdiction over the siting of transmission facilities.
    MCN, a Michigan corporation is engaged in the distribution of 
natural gas through three public-utility company subsidiaries: Michigan 
Consolidated Gas Company (``MichCon''), Citizens Gas Fuel Company 
(``Citizens''), and Southern Missouri Gas Company, LP (``SMGC''). MCN 
is also indirectly engaged in various nonutility activities.\4\ The 
common stock of MCN is listed on the NYSE, and Applicants state that, 
as of the close of business on February 28, 2001, there were 90,185,793 
shares of MCN common stock issued and outstanding. For the year that 
ended on December 31, 2000, MCN's operating revenues on a consolidated 
basis were approximately $2.8 billion, of which approximately $1.2 
billion were attributable to utility activities. Applicants state that 
the consolidated assets of MCN and its subsidiaries, as of December 31, 
2000, were valued at more than $4.8 billion, of which approximately 
$1.5 billion consisted of the net value of gas utility plant and 
equipment. As of December 31, 2000, MichCon employed 2,707 people, 
while

[[Page 22057]]

MCN and its other subsidiaries had 239 employees.
---------------------------------------------------------------------------

    \4\ MCN is indirectly engaged in many nonutility activities that 
are managed primarily through MCN's Diversified Energy group which 
consists of predominately two segments: Pipelines and Processing and 
Energy Marketing. Diversified Energy also holds investments in oil 
and gas exploration and production properties.
---------------------------------------------------------------------------

    MichCon, a Michigan corporation, is a natural gas distribution and 
transmission company that owns distribution, transmission, production 
and storage properties and facilities and serves approximately 1.2 
million customers in more than 500 communities throughout Michigan.\5\ 
As of December 31, 2000, its distribution system included 17,313 miles 
of distribution mains, 1,109,528 service lines and 1,222,287 active 
meters. MichCon owns 2,604 miles of transmission and production lines 
that deliver natural gas to the distribution districts and interconnect 
its storage fields with the sources of supply and the market areas, as 
well as properties relating to four underground natural gas storage 
fields with an aggregate working gas storage capacity of approximately 
124 Bcf. For the year that ended December 31, 2000, MichCon's operating 
revenues and net income were approximately $1.1 billion and $109.5 
million, respectively. As of December 31, 2000, MichCon had $2.3 
billion in assets. MichCon's rates are regulated by the MPSC.
---------------------------------------------------------------------------

    \5\ All of the issued and outstanding common stock of MichCon is 
held by MichCon Holdings, a wholly owned direct subsidiary of MCN. 
MichCon Holdings claims exception from registration under section 
3(a)(1) of the Act by rule 2.
---------------------------------------------------------------------------

    Citizens, a wholly owned public-utility company subsidiary of MCN, 
is engaged in the distribution of natural gas in Michigan. Citizens 
serves approximately 16,000 residential, commercial and industrial 
customers in and around Adrian, Michigan. For the year that ended 
December 31, 2000, Citizen's operating revenues and net income were 
approximately $18.4 million and $1.3 million, respectively, and its 
assets were valued at $26.4 million. Applicants state that the Adrian 
Gas Rate Commission establishes Citizens' rates, and that the MPSC has 
jurisdiction over Citizens with respect to gas safety, service in other 
areas served by other gas utilities, intrastate lines and accounting 
matters.
    MCN also owns a 46.5% limited partnership interest, and a 1% 
general partnership interest in Southern Missouri Gas Company, L.P. 
(``SMGC''), a public-utility company engaged in the distribution of 
natural gas. SMGC serves approximately 7,000 residential, commercial, 
and industrial customers in southern Missouri. For the year that ended 
on December 31, 2000, MCN's share of SMGC's operating revenues were 
approximately $3.7 million, MCN's share of SMGC's net loss was 
approximately $1.1 million, and MCN's share of SMGC's assets were 
valued at $25 million. Applicants state that the Missouri Public 
Service Commission has jurisdiction over SMGC's rates, safety 
practices, long-term financing, and mergers and acquisitions directly 
involving SMGC.
    Additionally, Applicants request that the Commission issued an 
order under section 3(a)(1) of the Act exempting DTE and Merger Sub, 
after the Merger, from all of the requirements of the Act, except for 
section 9(a)(2) of the Act.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 01-10980 Filed 5-1-01; 8:45 am]
BILLING CODE 8010-01-M