[Federal Register Volume 67, Number 46 (Friday, March 8, 2002)]
[Notices]
[Pages 10776-10778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5547]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27493]


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

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

Exelon Corporation, et al. (70-10050)

    Exelon Corporation (``Exelon''), a registered holding company, and 
four Exelon subsidiary companies, Exelon Ventures Company, LLC 
(``Ventures''), Exelon Enterprises Company, LLC (``Enterprises''), 
Exelon Generation Company, LLC (``Genco''), and Exelon Energy Delivery 
Company, LLC (``Delivery''), all located at 10 South Dearborn Street, 
37th Floor, Chicago, Illinois 60603 (collectively, ``Applicants'') have 
filed an application-declaration (``Application'') under sections 9(a), 
9(c), 10, 11(b), 12(c), 12(f), 32, 33, 34 and rules 42, 43, 53, 54, and 
58 of the Act.
    Applicants request the following authority for the period ending 
June 30, 2005 (``Authorization Period''):

Development and Administrative Activities

    Exelon requests authority, directly or through subsidiaries, to 
engage in preliminary development activities (``Development 
Activities'') and administrative and management activities 
(``Administrative Activities'') related to exempt wholesale generators 
(``EWGs''), foreign utility companies (``FUCOs''), exempt 
telecommunications companies (``ETCs''), subsidiaries permitted under 
rule 58 of the Act (``Rule 58 Subsidiaries''), and energy-related 
subsidiaries operating outside the United States (``Energy-related 
Subsidiaries'') (collectively, ``Permitted Nonutility Investments''). 
Exelon proposes to expend directly or through subsidiaries up to $500 
million in the aggregate outstanding at any time during the 
Authorization Period on Development Activities.\1\
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    \1\ Expenditures in EWGs, FUCOs, Rule 58 Subsidiaries and 
Energy-related Subsidiaries, which count against the ``aggregate 
investment'' limitation of rule 53 or rule 58, as modified by 
Commission orders applicable to Exelon, will not count against the 
$500 million limitation for Development Activities.
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    Development Activities will be limited to due diligence and design 
review; market studies; preliminary engineering; site inspection; 
preparation of bid proposals, including the posting of bid bonds; 
application for required permits and/or regulatory approvals; 
acquisition of site options and options on other necessary rights; 
negotiation

[[Page 10777]]

and execution of contractual commitments with owners of existing 
facilities, equipment vendors, construction firms, power purchasers, 
thermal ``hosts,'' fuel suppliers and other project contractors; 
negotiation of financing commitments with lenders and other third-party 
investors; and other preliminary activities that may be required in 
connection with the purchase, acquisition or construction of facilities 
or the securities of other companies. Development Activities will be 
designed to eventually result in a Permitted Nonutility Investment.
    Exelon proposes a ``revolving fund'' concept for permitted 
Development Activities. To the extent a subsidiary for which amounts 
were expended for Development Activities becomes an EWG, FUCO, Rule 58 
Subsidiary or Energy-related Subsidiary, the amount expended in 
development of that entity will no longer count against the limitation 
set for Development Activities but will then count against the 
limitation on the aggregate investment under rules 53 or 58, as 
modified by Commission order applicable to Exelon. The approval sought 
will not increase Exelon's authorized amount of aggregate investment in 
EWGs and FUCOs nor increase the permitted aggregate investment 
authorized under rule 58.

Incidental Acquisition of Nonutility Assets

    Exelon requests authority to expend directly or through 
subsidiaries up to $500 million to construct or acquire energy assets 
that are incidental and related to its business as an electricity and 
energy commodities marketer and broker (``Energy Assets'') or to 
acquire the securities of one or more existing or new companies 
substantially all of whose physical properties consist or will consist 
of Energy Assets. Exelon's business as an electricity and energy 
commodities marketer and broker is conducted through Genco or Permitted 
Nonutility Investments. Energy Assets acquired will not include 
``utility assets'' within the meaning of the Act. Energy Assets will 
not constitute additional investments in EWGs or FUCOs.

New Intermediate Subsidiaries for Internal Corporate Structuring

    Exelon requests authority to acquire directly or through 
subsidiaries the securities of one or more corporations, trusts, 
partnerships, limited liability companies or other entities 
(``Intermediate Subsidiaries'') which would be created and organized 
exclusively for the purpose of acquiring, holding and/or financing or 
facilitating the acquisition of Permitted Nonutility Investments. These 
transactions will involve only internal organization and no authority 
is sought to acquire any new business not otherwise approved, 
authorized or exempted. Intermediate Subsidiaries may also engage in 
Development Activities and Administrative Activities.
    Applicants state that there are several legal and business reasons 
for the use of Intermediate Subsidiaries in connection with making 
investments in Permitted Nonutility Investments. An Intermediate 
Subsidiary may be organized, among other things: (1) To facilitate the 
making of bids or proposals to develop or acquire an interest in any 
EWG, FUCO, ETC, or other nonutility company which, upon acquisition, 
would qualify as a Rule 58 Subsidiary or Energy-related Subsidiary; (2) 
after the award of such a bid proposal, to facilitate closing on the 
purchase or financing of such acquired company; (3) at any time 
subsequent to the consummation of an acquisition of an interest in any 
such company in order, among other things, to effect an adjustment in 
the respective ownership interests in such business held by the Exelon 
system and non-affiliated investors; (4) to facilitate the sale of 
ownership interests in one or more acquired Permitted Nonutility 
Investments; (5) to comply with applicable laws of foreign 
jurisdictions limiting or otherwise relating to the ownership of 
domestic companies by foreign nationals; (6) as a part of tax planning 
in order to limit Exelon's exposure to U.S. and foreign taxes; (7) to 
further insulate Exelon and its utility subsidiaries from operational 
or other business risks that may be associated with investments in 
nonutility companies; or (8) for other lawful business purposes.
    Investments in Intermediate Subsidiaries may take the form of any 
combination of the following: (1) Purchases of capital shares, 
partnership interests, member interests in limited liability companies, 
trust certificates or other forms of voting or non-voting equity 
interests; (2) capital contributions; (3) open account advances without 
interest; (4) loans; and (5) guarantees issued, provided or arranged in 
respect of the securities or other obligations of any Intermediate 
Subsidiaries. Funds for any direct or indirect investment in any 
Intermediate Subsidiary will be derived from Exelon's available funds. 
No authority is sought for additional financing authority. To the 
extent that Exelon provides funds directly or indirectly to an 
Intermediate Subsidiary which are used to make an investment in an EWG, 
FUCO, Rule 58 Subsidiary or Energy-related Subsidiary, the amount of 
these funds will be included in Exelon's ``aggregate investment'' in 
such entities, as calculated in accordance with rules 53 or 58 of the 
Act, as applicable and as modified by Commission order applicable to 
Exelon.\2\
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    \2\ If the Intermediate Subsidiary is merely a conduit, the 
aggregate investment will not ``double count'' as both the conduit 
investment and the investment in the operating company authorized as 
an EWG, FUCO, Rule 58 subsidiary or other approved investment.
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Internal Corporate Reorganization of Existing Investments

    Exelon and its subsidiaries request authority to undertake internal 
reorganizations of existing and permitted nonutility subsidiaries and 
businesses. For example, a nonutility subsidiary may be moved to be a 
subsidiary of a different parent company. The internal reorganizations 
will be accomplished through a contribution, sale, distribution, 
assignment or other transfer from one entity and the acquisition by 
another entity of the securities, assets or interests in such entities. 
The internal corporate reorganizations will not include any transfer of 
utility assets or the securities of any utility subsidiary. These 
transactions will involve only internal reorganizations, and no 
authority is sought to acquire any new business not otherwise approved, 
authorized or exempted under the Act.
    Exelon and its subsidiaries request authority, to the extent not 
exempt, to sell or otherwise transfer (1) nonutility businesses, (2) 
the securities of current subsidiaries engaged in some or all of these 
businesses or (3) investments which do not involve a subsidiary (i.e. 
less than 10% voting interest) to a different subsidiary. And, to the 
extent approval is required, Exelon requests, on behalf of the 
subsidiaries, authority to acquire the assets of nonutility businesses, 
subsidiaries or other then existing investment interests. 
Alternatively, transfers of such securities or assets may be effected 
by share exchanges, share distributions or dividends followed by 
contribution of such securities or assets to the receiving entity. In 
the future, following its direct or indirect acquisition of the 
securities of new nonutility subsidiaries, Exelon seeks authority to 
transfer the securities or the assets of these new nonutility 
subsidiaries to other subsidiaries as described in this section. Exelon 
also seeks authority to liquidate or merge nonutility subsidiaries.

[[Page 10778]]

    These internal transactions would be undertaken to eliminate 
corporate complexities, to combine related business segments for 
staffing and management purposes, to eliminate administrative costs, to 
achieve tax savings, or for other ordinary and necessary business 
purposes.

Energy-Related Subsidiaries Outside the United States

    Exelon requests authority to engage through subsidiaries, direct or 
indirect, in energy-related activities outside the United States like 
those activities exempted in the United States under rule 58 of the 
Act. Exelon requests authority to conduct energy management services 
\3\ and consulting services \4\ anywhere outside the United States and 
to conduct energy marketing activities \5\ in Canada and Mexico.
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    \3\ Energy management services includes the marketing, sale, 
installation, operation and maintenance of various products and 
services related to energy management and demand-side management, 
including energy and efficiency audits; meter data management, 
facility design and process control and enhancements; construction, 
installation, testing, sales and maintenance of (and training client 
personnel to operate) energy conservation equipment; design, 
implementation, monitoring and evaluation of energy conservation 
programs; development and review of architectural, structural and 
engineering drawings for energy efficiencies, design and 
specification of energy consuming equipment and general advice on 
programs; the design, construction, installation, testing, sales, 
operation and maintenance of new and retrofit heating, ventilating, 
and air conditioning, electrical and power systems, alarm, security, 
access control and warning systems, motors, pumps, lighting, water, 
water-purification and plumbing systems, building automation and 
temperature controls, installation and maintenance of refrigeration 
systems, building infrastructure wiring supporting voice, video, 
data and controls networks, environmental monitoring and control, 
ventilation system calibration and maintenance, piping and fire 
protection systems, and design, sale, engineering, installation, 
operation and maintenance of emergency or distributed power 
generation systems, and related structures, in connection with 
energy-related needs; and the provision of services and products 
designed to prevent, control, or mitigate adverse effects of power 
disturbances on a customer's electrical systems.
    \4\ Consulting services, for energy- and gas-related matters for 
associate and nonassociate companies as well as for individuals, 
includes technical and consulting services involving technology 
assessments, power factor correction and harmonics mitigation 
analysis, meter reading and repair, rate schedule design and 
analysis, environmental services, engineering services, billing 
services (including consolidation or centralized billing, bill 
disaggregation tools and bill inserts), risk management services, 
communications systems, information systems/data processing, system 
planning, strategic planning, finance, general management consulting 
including training activities, feasibility studies, and other 
similar related services.
    \5\ Energy marketing means the brokering and marketing of 
electricity, natural gas and other energy commodities, as well as 
providing incidental, related services, such as fuel management, 
storage and procurement.
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Reporting

    Ventures (or Enterprises, as appropriate) proposes to file a single 
consolidated quarterly report under rule 24 of all investments in 
subsidiaries, commencing with the quarterly report for the first full 
calendar quarter which ends at least 45 days following the date of the 
order for this Application. It is proposed that the combined report be 
in lieu of any separate notification on Form U-6B-2 that would 
otherwise be required with respect to exempt securities issuances.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 02-5547 Filed 3-7-02; 8:45 am]
BILLING CODE 8010-01-P