[Federal Register Volume 67, Number 128 (Wednesday, July 3, 2002)]
[Notices]
[Pages 44649-44652]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-16832]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27544]


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

June 28, 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 July 18, 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 July 18, 2002 the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

National Grid Group plc, et al. (70-10025)

    National Grid Group plc (``National Grid''), a registered holding 
company, 15 Marylebone Road, London NW1 5JD, United Kingdom; National 
Grid's registered holding company subsidiary National Grid USA (``Grid 
USA'') 01582; Grid USA's exempt holding company subsidiary, New England 
Power Company (``NEP''), both located at 25 Research Drive, 
Westborough, MA; and Vermont Yankee Nuclear Power Corporation 
(``Vermont Yankee''), an electric public utility subsidiary company of 
NEP, 185 Old Ferry Road, Brattleboro, VT 05703 (together, 
``Applicants''), have filed a declaration under sections 6(a), 7, and 
12(d) of the Act and rules 44, 53, and 54 under the Act.
    Vermont Yankee is a single purpose electric utility which operates 
a 540 MW nuclear powered electric generating plant (``Plant'') located 
in Vernon, Vermont. Vermont Yankee is owned by New England Power 
Company, a subsidiary of each of National Grid USA and National Grid 
Group plc, both registered holding companies, owns 23.89% of the 
outstanding common stock of Vermont Yankee.\1\ Vermont Yankee's output 
is currently shared by the eight utility companies which own Vermont 
Yankee (``Sponsoring Utilities'').\2\ The Sponsoring Utilities

[[Page 44650]]

and Vermont Yankee currently operate under cost-of-service power 
contracts approved by the Federal Energy Regulatory Commission 
(``FERC'') and additional power contracts.
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    \1\ Connecticut Power & Light Company (``CP&L''), Western 
Massachusetts Electric Company (``WME''), and Public Service Company 
of New Hampshire (``PSC''), all public utility subsidiaries of 
Northeast Utilities (``Northeast''), a registered holding company, 
own an aggregate of 16.99% of the outstanding common stock of 
Vermont Yankee. Central Maine Power Company (``Central Maine''), an 
indirect electric utility subsidiary of Energy East Corporation 
(``Energy East''), a registered holding company, also owns 4.25% of 
the outstanding common stock of Vermont Yankee. Northeast and Energy 
East have filed applications S.E.C. File Nos. 70-10033 and 70-10070, 
respectively, regarding the sale of Vermont Yankee's assets and the 
Commission is issuing a notice of those filings simultaneously with 
the issuance of this notice.
    \2\ The eight Sponsoring Utilities are: Central Vermont Public 
Service Corporation, New England Power Company, Green Mountain Power 
Corporation, CP&L, Central Maine, PSC, WME, and Cambridge Electric 
Light Company.
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    On August 15, 2001,Vermont Yankee entered into a purchase and sale 
agreement (``PSA'') with Entergy Nuclear Vermont Yankee, L.L.C. 
(``ENVY''), a subsidiary of Entergy, a registered holding company doing 
business in Texas, among other states. The PSA states that Vermont 
Yankee proposes to sell to ENVY substantially all of its assets, 
including the Plant. The PSA contemplates that ENVY will pay a purchase 
price of $180 million, subject to closing adjustments, and will assume 
Vermont Yankee's obligation for operating and decommissioning the Plant 
in exchange for the transfer at the closing of the sale (``Closing'') 
of:
    1. Substantially all of the assets comprising the Plant,
    2. The funds in Vermont Yankee's decommissioning trust 
(``Decommissioning Trust''), which had a fair market value of 
approximately $299.6 million as of September 30, 2001,\3\
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    \3\ Although the PSA provides that Vermont Yankee may be 
required to fund fully or ``top-off'' the Decommissioning Trust, 
Applicants state that any ``top-off'' payment is contingent on 
several factors. First, if the value of the assets of the 
Decommissioning Trust at Closing meets or exceeds the Nuclear 
Regulatory Commission required minimum, no ``top-off'' payment will 
be required. Second, any ``top-off'' payment will be capped at $5.4 
million, which represents the difference between the amount that 
would have been collected by Vermont Yankee before the recent 
settlement in a FERC proceeding relating to secondary purchaser 
issues ($16.8 million) and the amount that would be collected under 
that settlement ($11.4 million). Based on an analysis of all 
relevant factors at the time of execution of the PSA, Vermont Yankee 
does not anticipate that it will have to make a ``top-off'' payment 
at the Closing, although this expectation could change based on a 
change in circumstances.
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    3. Vermont Yankee's rights with respect to the funds held by the 
State of Vermont in connection with the Texas Low-Level Radioactive 
Waste Disposal Compact,
    4. Certain human and site assets related to the Plant,
    5. The Plant's switchyards and certain transmission assets, and 
office property located in Brattleboro, Vermont.
    After the Closing, Vermont Yankee will continue its existence as a 
corporation. Its operations will be limited to its obligations under 
the PSA. The PSA contemplates that Vermont Yankee will purchase, from 
ENVY, 100% of the output of the Plant, based on the Plant's current 
configuration and capacity during the Plant's remaining licensed 
life\4\ under a power purchase agreement (``PPA'') between Vermont 
Yankee and ENVY. Vermont Yankee will resell that output at wholesale to 
the Sponsoring Utilities under certain amendatory agreements 
(``Amendatory Agreements'') with each of the Sponsoring Utilities that 
modify existing power contracts and additional power contracts 
(collectively, ``Power Contracts'') to reflect the proposed 
transaction. The Power Contracts also require the Sponsoring Utilities 
to pay Vermont Yankee's remaining unamortized net plant investment and 
Vermont Yankee's ongoing costs after Closing.\5\
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    \4\ The Plant's remaining licensed life ends March 21, 2012.
    \5\ It is important for Vermont Yankee to remain in existence 
because the Power Contracts between Vermont Yankee and the 
Sponsoring Utilities are within the jurisdiction of the FERC and 
have been accepted by the FERC. Under the present Power Contracts, 
the Sponsoring Utilities may include Power Contract payments in the 
calculation of rates to their customers. If Vermont Yankee ceased to 
exist, and the Sponsoring Utilities were to enter into Power 
Contracts directly with ENVY, their ability to include those Power 
Contract payments in their rate calculations would be uncertain and 
a method to cover other ongoing Vermont Yankee costs, including 
unamortized net plant investment, and residual obligations under the 
PSA would be necessary.
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    In addition, the PSA contains a Security Agreement between Vermont 
Yankee and ENVY under which Vermont Yankee pledges its rights to the 
payments from the Sponsoring Utilities under the Power Contracts to 
ENVY, if Vermont Yankee defaults on power payments. Applicants state 
that the Security Agreement amounts to a pass-through to ENVY of 
Vermont Yankee's right to payment obligations that the Sponsoring 
Utilities will have under the Power Contracts. The Security Agreement 
provides that if Vermont Yankee fails to pay ENVY for power provided, 
ENVY has the right to receive the payments under the Power Contracts 
that the Sponsoring Utilities would otherwise pay to Vermont Yankee.
    In preparation for the Closing it will be necessary for Vermont 
Yankee to redeem its outstanding first mortgage bonds and to repay the 
outstanding indebtedness under its current secured credit agreement. 
The cash required to satisfy these obligations will come from the cash 
proceeds to be paid by ENVY at the Closing.

Northeast Utilities, et al. (70-10033)

    Northeast Utilities (``Northeast''), a registered holding company, 
107 Selden Street, Berlin, CT 06037; Northeast's wholly owned direct 
public utility subsidiaries, The Connecticut Light and Power Company 
(``CP&L''), 107 Selden Street, Berlin, CT 06037, Western Massachusetts 
Electric Company (``WME''), 174 Brush Hill Avenue, West Springfield, MA 
01090, and Public Service Company of New Hampshire (``PSC''), 1000 Elm 
Street, Manchester, NH 03101; and Vermont Yankee Nuclear Power 
Corporation (``Vermont Yankee''), an indirect electric public utility 
subsidiary of Northeast 185 Old Ferry Road, Brattleboro, VT 05703 
(together, ``Applicants''), have filed a declaration under sections 
6(a), 7, and 12(d) of the Act and rules 44, 53, and 54 under the Act.
    Vermont Yankee is a single purpose electric utility which operates 
a 540 MW nuclear powered electric generating plant (``Plant'') located 
in Vernon, Vermont. CP&L, WME, and PSC own an aggregate of 16.99% of 
the outstanding common stock of Vermont Yankee.\6\ Vermont Yankee's 
output is currently shared by the eight utility companies which own 
Vermont Yankee (``Sponsoring Utilities'').\7\ The Sponsoring Utilities 
and Vermont Yankee currently operate under cost-of-service power 
contracts approved by the Federal Energy Regulatory Commission 
(``FERC'') and additional power contracts.
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    \6\ New England Power Company, a subsidiary of each of National 
Grid USA and National Grid Group plc (``National Grid''), both 
registered holding companies, also owns 23.89% of the outstanding 
common stock of Vermont Yankee. Central Maine Power Company, an 
indirect electric utility subsidiary of Energy East Corporation 
(``Energy East''), a registered holding company, also owns 4.25% of 
the outstanding common stock of Vermont Yankee. National Grid and 
Energy East have filed applications, S.E.C. File Nos. 70-10025 and 
70-10070, respectively, regarding the sale of Vermont Yankee's 
assets and the Commission is issuing a notice of those filings 
simultaneously with the issuance of this notice.
    \7\ The eight Sponsoring Utilities are: Central Vermont Public 
Service Corporation, New England Power Company, Green Mountain Power 
Corporation, CP&L, Central Maine Power Company, PSC, WME, and 
Cambridge Electric Light Company.
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    On August 15, 2001, Vermont Yankee entered into a purchase and sale 
agreement (``PSA'') with Entergy Nuclear Vermont Yankee, L.L.C. 
(``ENVY''), a subsidiary of Entergy, a registered holding company doing 
business in Texas, among other states. The PSA states that Vermont 
Yankee proposes to sell to ENVY substantially all of its assets, 
including the Plant. The PSA contemplates that ENVY will pay a purchase 
price of $180 million, subject to closing adjustments, and will assume 
Vermont Yankee's obligation for operating and decommissioning the Plant 
in exchange for the transfer at the closing of the sale (``Closing'') 
of:
    1. Substantially all of the assets comprising the Plant,

[[Page 44651]]

    2. The funds in Vermont Yankee's decommissioning trust 
(``Decommissioning Trust''), which had a fair market value of 
approximately $299.6 million as of September 30, 2001,\8\
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    \8\ Although the PSA provides that Vermont Yankee may be 
required to fund fully or ``top-off'' the Decommissioning Trust, 
Applicants state that any ``top-off'' payment is contingent on 
several factors. First, if the value of the assets of the 
Decommissioning Trust at Closing meets or exceeds the Nuclear 
Regulatory Commission required minimum, no ``top-off'' payment will 
be required. Second, any ``top-off'' payment will be capped at $5.4 
million, which represents the difference between the amount that 
would have been collected by Vermont Yankee before the recent 
settlement in a FERC proceeding relating to secondary purchaser 
issues ($16.8 million) and the amount that would be collected under 
that settlement ($11.4 million). Based on an analysis of all 
relevant factors at the time of execution of the PSA, Vermont Yankee 
does not anticipate that it will have to make a ``top-off'' payment 
at the Closing, although this expectation could change based on a 
change in circumstances.
---------------------------------------------------------------------------

    3. Vermont Yankee's rights with respect to the funds held by the 
State of Vermont in connection with the Texas Low-Level Radioactive 
Waste Disposal Compact,
    4. Certain human and site assets related to the Plant,
    5. The Plant's switchyards and certain transmission assets, and 
office property located in Brattleboro, Vermont.
    After the Closing, Vermont Yankee will continue its existence as a 
corporation. Its operations will be limited to its obligations under 
the PSA. The PSA contemplates that Vermont Yankee will purchase, from 
ENVY, 100% of the output of the Plant, based on the Plant's current 
configuration and capacity during the Plant's remaining licensed 
life\9\ under a power purchase agreement (``PPA'') between Vermont 
Yankee and ENVY. Vermont Yankee will resell that output at wholesale to 
the Sponsoring Utilities under certain amendatory agreements 
(``Amendatory Agreements'') with each of the Sponsoring Utilities that 
modify existing power contracts and additional power contracts 
(collectively, ``Power Contracts'') to reflect the proposed 
transaction. The Power Contracts also require the Sponsoring Utilities 
to pay Vermont Yankee's remaining unamortized net plant investment and 
Vermont Yankee's ongoing costs after Closing.\10\
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    \9\ The Plant's remaining licensed life ends March 21, 2012.
    \10\ It is important for Vermont Yankee to remain in existence 
because the Power Contracts between Vermont Yankee and the 
Sponsoring Utilities are within the jurisdiction of the FERC and 
have been accepted by the FERC. Under the present Power Contracts, 
the Sponsoring Utilities may include Power Contract payments in the 
calculation of rates to their customers. If Vermont Yankee ceased to 
exist, and the Sponsoring Utilities were to enter into Power 
Contracts directly with ENVY, their ability to include those Power 
Contract payments in their rate calculations would be uncertain and 
a method to cover other ongoing Vermont Yankee costs, including 
unamortized net plant investment, and residual obligations under the 
PSA would be necessary.
---------------------------------------------------------------------------

    In addition, the PSA contains a Security Agreement between Vermont 
Yankee and ENVY under which Vermont Yankee pledges its rights to the 
payments from the Sponsoring Utilities under the Power Contracts to 
ENVY, if Vermont Yankee defaults on power payments. Applicants state 
that the Security Agreement amounts to a pass-through to ENVY of 
Vermont Yankee's right to payment obligations that the Sponsoring 
Utilities will have under the Power Contracts. The Security Agreement 
provides that if Vermont Yankee fails to pay ENVY for power provided, 
ENVY has the right to receive the payments under the Power Contracts 
that the Sponsoring Utilities would otherwise pay to Vermont Yankee.
    In preparation for the Closing it will be necessary for Vermont 
Yankee to redeem its outstanding first mortgage bonds and to repay the 
outstanding indebtedness under its current secured credit agreement. 
The cash required to satisfy these obligations will come from the cash 
proceeds to be paid by ENVY at the Closing.

Energy East Corporation, et al. (70-10070)

    Energy East Corporation (``Energy East''), a registered holding 
company, CMP Group, Inc. (``CMP''), an exempt holding company 
subsidiary of Energy East,\11\ both located in Albany, NY 12212-2904, 
Central Maine Power Company (``Central Maine''), a wholly owned 
electric utility subsidiary company of CMP, 83 Edison Drive, Augusta, 
ME 04336, and Vermont Yankee Nuclear Power Corporation (``Vermont 
Yankee''), an indirect electric public utility subsidiary of Energy 
East, 185 Old Ferry Road, Brattleboro, VT 05703 (together, 
``Applicants''), have filed a declaration under sections 6(a), 7, and 
12(d) of the Act and rules 44, 53, and 54 under the Act.
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    \11\ See Holding Co. Act Release No. 27224 (Aug. 31, 2000), 
approving CMP's exemption from registration under the Act.
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    Vermont Yankee is a single purpose electric utility which operates 
a 540 MW nuclear powered electric generating plant (``Plant'') located 
in Vernon, Vermont. Central Maine owns 4.25% of the outstanding common 
stock of Vermont Yankee.\12\ Vermont Yankee's output is currently 
shared by the eight utility companies which own Vermont Yankee 
(``Sponsoring Utilities'').\13\ The Sponsoring Utilities and Vermont 
Yankee currently operate under cost-of-service power contracts approved 
by the Federal Energy Regulatory Commission (``FERC'') and additional 
power contracts.
---------------------------------------------------------------------------

    \12\ New England Power Company, a subsidiary of each of National 
Grid USA and National Grid Group plc (``National Grid''), both 
registered holding companies, also owns 23.89% of the outstanding 
common stock of Vermont Yankee. Connecticut Power & Light Company 
(``CP&L''), Western Massachusetts Electric Company (``WME''), and 
Public Service Company of New Hampshire (``PSC''), all public 
utility subsidiaries of Northeast Utilities (``Northeast''), a 
registered holding company, own an aggregate of 16.99% of the 
outstanding common stock of Vermont Yankee. National Grid and 
Northeast have filed applications, S.E.C. File Nos. 70-10025 and 70-
10033, respectively, regarding the sale of Vermont Yankee's assets 
and the Commission is issuing a notice of those filings 
simultaneously with the issuance of this notice.
    \13\ The eight Sponsoring Utilities are: Central Vermont Public 
Service Corporation, New England Power Company, Green Mountain Power 
Corporation, CP&L, Central Maine Power Company, PSC, WME, and 
Cambridge Electric Light Company.
---------------------------------------------------------------------------

    On August 15, 2001,Vermont Yankee entered into a purchase and sale 
agreement (``PSA'') with Entergy Nuclear Vermont Yankee, L.L.C. 
(``ENVY''), a subsidiary of Entergy, a registered holding company doing 
business in Texas, among other states. The PSA states that Vermont 
Yankee proposes to sell to ENVY substantially all of its assets, 
including the Plant. The PSA contemplates that ENVY will pay a purchase 
price of $180 million, subject to closing adjustments, and will assume 
Vermont Yankee's obligation for operating and decommissioning the Plant 
in exchange for the transfer at the closing of the sale (``Closing'') 
of:
    1. Substantially all of the assets comprising the Plant,
    2. The funds in Vermont Yankee's decommissioning trust 
(``Decommissioning Trust''), which had a fair market value of 
approximately $299.6 million as of September 30, 2001,\14\
---------------------------------------------------------------------------

    \14\ Although the PSA provides that Vermont Yankee may be 
required to fund fully or ``top-off'' the Decommissioning Trust, 
Applicants state that any ``top-off'' payment is contingent on 
several factors. First, if the value of the assets of the 
Decommissioning Trust at Closing meets or exceeds the Nuclear 
Regulatory Commission required minimum, no ``top-off'' payment will 
be required. Second, any ``top-off'' payment will be capped at $5.4 
million, which represents the difference between the amount that 
would have been collected by Vermont Yankee before the recent 
settlement in a FERC proceeding relating to secondary purchaser 
issues ($16.8 million) and the amount that would be collected under 
that settlement ($11.4 million). Based on an analysis of all 
relevant factors at the time of execution of the PSA, Vermont Yankee 
does not anticipate that it will have to make a ``top-off'' payment 
at the Closing, although this expectation could change based on a 
change in circumstances.
---------------------------------------------------------------------------

    3. Vermont Yankee's rights with respect to the funds held by the 
State of Vermont in connection with the Texas

[[Page 44652]]

Low-Level Radioactive Waste Disposal Compact,
    4. Certain human and site assets related to the Plant,
    5. The Plant's switchyards and certain transmission assets, and 
office property located in Brattleboro, Vermont.
    After the Closing, Vermont Yankee will continue its existence as a 
corporation. Its operations will be limited to its obligations under 
the PSA. The PSA contemplates that Vermont Yankee will purchase, from 
ENVY, 100% of the output of the Plant, based on the Plant's current 
configuration and capacity during the Plant's remaining licensed 
life\15\ under a power purchase agreement (``PPA'') between Vermont 
Yankee and ENVY. Vermont Yankee will resell that output at wholesale to 
the Sponsoring Utilities under certain amendatory agreements 
(``Amendatory Agreements'') with each of the Sponsoring Utilities that 
modify existing power contracts and additional power contracts 
(collectively, ``Power Contracts'') to reflect the proposed 
transaction. The Power Contracts also require the Sponsoring Utilities 
to pay Vermont Yankee's remaining unamortized net plant investment and 
Vermont Yankee's ongoing costs after Closing.\16\
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    \15\ The Plant's remaining licensed life ends March 21, 2012.
    \16\ It is important for Vermont Yankee to remain in existence 
because the Power Contracts between Vermont Yankee and the 
Sponsoring Utilities are within the jurisdiction of the FERC and 
have been accepted by the FERC. Under the present Power Contracts, 
the Sponsoring Utilities may include Power Contract payments in the 
calculation of rates to their customers. If Vermont Yankee ceased to 
exist, and the Sponsoring Utilities were to enter into Power 
Contracts directly with ENVY, their ability to include those Power 
Contract payments in their rate calculations would be uncertain and 
a method to cover other ongoing Vermont Yankee costs, including 
unamortized net plant investment, and residual obligations under the 
PSA would be necessary.
---------------------------------------------------------------------------

    In addition, the PSA contains a Security Agreement between Vermont 
Yankee and ENVY under which Vermont Yankee pledges its rights to the 
payments from the Sponsoring Utilities under the Power Contracts to 
ENVY, if Vermont Yankee defaults on power payments. Applicants state 
that the Security Agreement amounts to a pass-through to ENVY of 
Vermont Yankee's right to payment obligations that the Sponsoring 
Utilities will have under the Power Contracts. The Security Agreement 
provides that if Vermont Yankee fails to pay ENVY for power provided, 
ENVY has the right to receive the payments under the Power Contracts 
that the Sponsoring Utilities would otherwise pay to Vermont Yankee.
    In preparation for the Closing it will be necessary for Vermont 
Yankee to redeem its outstanding first mortgage bonds and to repay the 
outstanding indebtedness under its current secured credit agreement. 
The cash required to satisfy these obligations will come from the cash 
proceeds to be paid by ENVY at the Closing.

    For the Commission by the Division of Investment Management, 
pursuant to delegated authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 02-16832 Filed 7-2-02; 8:45 am]
BILLING CODE 8010-01-P