[Federal Register Volume 67, Number 26 (Thursday, February 7, 2002)]
[Notices]
[Pages 5855-5857]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2963]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27491]


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

February 1, 2002.
    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 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 February 26, 2002, 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 February 26, 2002, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Ameren Corporation, et al.

[70-9965]

    Ameren Corporation (``Ameren''), a registered holding company, and 
its direct and indirect wholly owned nonutility subsidiaries, Union 
Electric Development Corporation (``UEDC'') and CIPSCO Investment 
Company (``CIC''),\1\ all located at 1901 Chouteau Avenue, St. Louis, 
Missouri 63103, have filed an application (``Application'') under 
section 9(c)(3) of the Act.
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    \1\ Ameren's public utility subsidiaries are Union Electric 
Company and Central Illinois Public Service Company, which together 
serve approximately 1.5 million electric and 300,000 retail gas 
customers in portions of Missouri and Illinois, including St. Louis.
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    Ameren, through UEDC and CIC, or one or more other nonutility 
subsidiaries formed specifically for this purpose, requests authority 
to invest up to $125 million in total from time to time through 
December 31, 2006 in existing or new low income housing tax credit 
(``LIHTC'') projects, historic building or other qualified 
rehabilitated building projects, and/or ``brownfield'' remediation 
projects (``Tax Credit Projects'') that qualify or are expected to 
qualify for Federal and/or State tax credits.\2\ Ameren will not take 
any active role in the development, management or operation of any Tax 
Credit Project and will not acquire any interest in any venture holding 
a Tax Credit Project if, as a result, the venture would become an 
``affiliate'' of Ameren as defined under section 2(a)(11) of the Act. 
Ameren and its subsidiaries will, however, conduct appropriate due 
diligence activities in connection with making investments and manage 
the investments in order to protect the tax credits that each Tax 
Credit Project is entitled to and to assure that the physical 
properties are properly maintained. These activities will include 
reviewing and analyzing financial statements generated by the general 
partners, the managing member, or third-party property manager against 
the approved budget for the investments and conducting due diligence 
assessments to determine that the properties remain in compliance with 
the provisions of all applicable Federal and State regulations. 
Investment management in this context may also include on site 
inspections to determine that the physical structures and grounds are 
maintained as quality affordable housing. Accordingly, Ameren will 
invest in ventures as a limited partner in one or more limited 
partnerships and/or as a non-member in one or more LLCs, with rights 
that are substantially the same as rights typically accorded limited 
partners under limited partnership statutes.
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    \2\ As of December 31, 2000, Ameren, through UEDC and CIC, held 
passive investments totaling $6,923,708 in various separate limited 
partnerships or limited liability companies (LLCs) that own or 
manage low-income housing properties. In a 1997 merger order, the 
Commission directed Ameren to sell or reduce its ownership in 
certain low income housing tax credits properties held through 
investments in manager-managed LLCs to below 5%. By order dated June 
27, 2001 (HCAR No. 27421), the Commission subsequently eliminated 
this requirement.
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    The applicants state that, in general, a separate limited 
partnership or manager-managed LLC would be

[[Page 5856]]

established for each new qualifying Tax Credit Project. This structure 
will allow for financing each Tax Credit Project on a stand-alone basis 
under the control of an unaffiliated third party, insulate each 
investment property from any liabilities that may arise in connection 
with the development or management of any other Tax Credit Project, and 
facilitate compliance with the requirements of sections 42 of the 
Internal Revenue Code (``Code'') (as applicable to low income housing 
properties) and section 47 of the Code (as applicable to certified 
historic structures and other qualified rehabilitated buildings), or 
other laws.
    The applicants state that the LIHTC program provides Ameren a major 
incentive to invest in low income housing projects by generating a 
stream of tax credits that would reduce Ameren's federal and state 
income tax liability. Under the LIHTC program, equal annual tax credits 
are available over a ten-year period payable over eleven years, with 
the first and last years prorated. Under section 42(h)(6)(A) of the 
Code, no credit is allowed for any taxable year unless an agreement 
between the housing project owner and the applicable state housing 
credit agency is in effect as of the end of such taxable year. Under 
sections 42(h)(6)(B)(i), 42(h)(6)(D), and 42(h)(6)(E)(ii) of the Code, 
the agreement must prohibit any increase in gross rent for a period 
ending on the later of (a) the date specified by the agency in the 
agreement or (b) 15 years after the date when the building is placed in 
service. Thus, even though the flow of tax credits for an LIHTC 
property stops after ten years, the property remains subject to rent 
and income restrictions for at least fifteen years.
    Likewise, Ameren seeks to earn tax credits under section 47 of the 
Code through investments in ``certified historic structures'' (defined 
as structures that are either listed in the National Register or 
located in a registered historic district and certified by the 
Secretary of the Interior as being of historic significance), as well 
as other types of ``qualified rehabilitated buildings'' (which could 
include apartment and office buildings, factories, warehouses, etc.) 
that were first placed in service before 1936. The tax credit is based 
on the qualified rehabilitation expenditures, as defined under the Code 
and regulations. It is equal to 20% in the case of ``certified historic 
structures'' and 10% in the case of other rehabilitated buildings. 
These credits are subject to possible recapture if the rehabilitated 
property is transferred before five years after it is placed in 
service. In addition to the federal tax credits, Ameren may also 
qualify for tax credits that are available under state law (including 
in Missouri) with respect to investments in historic building 
rehabilitation projects.
    In addition, Ameren also may obtain state income tax credits under 
section 447 of the Missouri State Tax Code through qualified 
investments called ``brownfield'' sites that require environmental 
remediation in order to extend the useful life of a business property. 
The tax credit is based on a combination of qualified expenditures for 
environmental remediation and job creation by the businesses that 
occupy the renovated properties, as defined in the tax regulations. The 
credit is equal to 2.1% of the qualified investment in purchased or 
leased real estate or purchased or leased equipment per year, and is 
cumulative. Ameren requests authority to make passive investments in 
projects qualifying for these tax credits in Missouri or similar 
credits that may be available from time to time under the laws of other 
States in which Ameren or its subsidiaries have a state income tax 
liability.

Duke Energy Corp.

[70-10013]

    Duke Energy Corp. (``Duke''), 526 S. Church Street, Charlotte, N.C. 
28202, a North Carolina corporation, has filed an application under 
section 3(b) of the Act and rules 10(a)(1) and 11(b)(1) under the Act 
in connection with its proposed acquisition of Westcoast Energy Inc. 
(``Westcoast''), a corporation organized under the laws of Canada.
    Duke engages directly and indirectly in the generation, 
transmission, distribution and sale of electric energy to retail and 
wholesale customers in the States of North Carolina and South Carolina. 
Duke is an electric utility company and a public-utility company as 
defined in sections 2(a)(3) and 2(a)(5) of the Act, respectively.\3\ 
Duke entered into a Combination Agreement with Westcoast under which 
Duke seeks to acquire the stock of Westcoast in exchange for $3.5 
billion in cash and stock and the assumption of approximately $5 
billion in Westcoast debt (``Acquisition''). Duke states that 
Westcoast's holdings include three subsidiaries that are public-utility 
companies operating outside the United States (``Non-U.S. Utilities''). 
The Non-U.S. Utilities are:
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    \3\ Currently, Duke is not a holding company under the Act.
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    (1) Union Gas Limited (``Union Gas''), a wholly-owned, direct 
subsidiary of Westcoast engaged in the transportation and storage of 
natural gas and the distribution of natural gas to residential, 
commercial and industrial customers in Ontario, Canada;
    (2) Pacific Northern Gas Ltd. (``Pacific Northern''), a 40.04%-
owned, direct subsidiary of Westcoast, engaged in the transportation of 
natural gas and the distribution of natural gas to residential, 
commercial, and industrial customers in British Columbia, Canada; and
    (3) P.T. Puncakjaya Power (``PJP''), a 42.86%-owned indirect 
subsidiary of Westcoast engaged in the generation and sale of electric 
power to industrial customers in Irian Jaya, Indonesia.
    Union Gas is a public company. Westcoast directly owns 100% of the 
Voting Common Shares of Union Gas stock. The public holds 100% of the 
Class A, Class B and the Class C Preferred, Non-Voting Shares of the 
Union Gas stock. The preferred shares of Union Gas trade on the Toronto 
Stock Exchange. The voting common shares are not listed.
    Pacific Northern is a public company and has Class A Non-Voting 
Common Shares with a par value of $2.50 each and 6.75% Cumulative 
Redeemable Preferred Shares with a par value of $25.00 each that trade 
on the Toronto Stock Exchange. Westcoast directly owns 40.04% of the 
Class A Non-Voting Common Shares of Pacific Northern and 100% of the 
Class B Voting Common Shares, without intermediate subsidiaries. The 
public owns the balance of the Class A Common Shares and all (200,000 
shares) of the 6.75% Cumulative Redeemable Preferred Shares.
    Westcoast indirectly owns, through Westcoast (PJP) Holdings, Inc., 
a corporation organized under the laws of Canada, a 42.86% share of 
PJP. Duke indirectly owns, through Duke Energy International PJP 
Holdings (Maruritius), Ltd., an Indonesian company, a 42.86% share of 
PJP. The remaining 14.28% interest in PJP is owned by P.T. Austindo 
Nusantara Jaya, a limited liability company established under the laws 
of the Republic of Indonesia. Duke states that upon and after the 
effective date of the Acquisition, Duke may, for tax, legal, regulatory 
or administrative reasons, restructure the corporate organization 
described above.
    Duke requests an order under section 3(b) of the Act, exempting 
without qualification each of the Non-U.S. Utilities from all 
provisions of the Act. Duke states that none of the Non-U.S. Utilities, 
either before or after the Acquisition, will serve customers in the 
United States, nor will the Non-U.S. Utilities derive any income 
directly or indirectly from sources within the

[[Page 5857]]

United States. Duke further states that the Non-U.S. Utilities are not 
qualified to do business in any state of the United States, nor is any 
Non-U.S. Utility a public-utility company operating in the United 
States.
    Duke states that its domestic utility operations are, and will 
continue to be, fully separated from Duke's foreign operations. Duke 
further states that it will not seek recovery through higher rates to 
its domestic regulated utility customers for any possible loss it might 
sustain by reason of the proposed investment in the Non-U.S. Utilities 
or for any inadequate returns on that investment.
    Duke asserts that an unqualified section 3(b) exemption of the Non-
U.S. Utilities would entitle Duke and its subsidiary companies that 
directly or indirectly hold interests in the Non-U.S. Utilities 
(``Intermediate Subsidiaries'') to the exemption provided by rule 10 of 
the Act. Duke and the Intermediate Subsidiaries intend to rely upon 
rule 10(a)(1) to provide an exemption insofar as each is a holding 
company. Further, Duke and the Intermediate Subsidiaries intend to rely 
upon rule 11(b)(1), to provide an exemption from the approval 
requirements of sections 9(a)(2) and 10 to which Duke and its 
Intermediate Subsidiaries would otherwise be subject.
    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-2963 Filed 2-6-02; 8:45 am]
BILLING CODE 8010-01-P