[Federal Register Volume 67, Number 135 (Monday, July 15, 2002)]
[Notices]
[Pages 46549-46550]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-17612]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27549]


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

July 8, 2002.
    Notice is hereby given that the following filings 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 
applications/declarations for complete statements of the proposed 
transactions summarized below. The applications/declarations are 
available for public inspection through the Commission's Branch of 
Public Reference.
    Interested persons wishing to comment or request a hearing on the 
applications/declarations should submit their views in writing by 
August 2, 2002, to the Secretary, Securities and Exchange Commission, 
Washington, D.C. 20549-0609, and serve a copy on the relevant 
applicant/declarant at the address 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 
August 2, 2002, the applications/declarations, as filed or as amended, 
may be granted and/or permitted to become effective.

American Electric Power Company, Inc. (70-9353)

    American Electric Power Company, Inc. (``AEP''), a registered 
public utility holding company, AEP Energy Services, Inc. (``AEPES'') 
and AEP Resources, Inc. (``Resources''), both wholly owned nonutility 
subsidiaries of AEP (collectively, ``Applicants''), all located at 1 
Riverside Plaza, Columbus, Ohio 43215, have filed a post-effective 
amendment under sections 6(a), 7, 9(a), 10 and 12 of the Act and rules 
45, 46, and 54 under the Act to their previously filed application-
declaration (``Application'').
    By orders dated November 2, 1998 (HCAR No. 26933), December 22, 
1999 (HCAR No. 27120), and August 13, 2001 (HCAR No. 27432) in this 
file (collectively, the ``Previous Orders'') the Commission authorized, 
among other things, Applicants to acquire from time to time through 
December 31, 2003 (``Previous Authorization Period''), nonutility 
energy-related assets or the equity securities of companies 
substantially all of whose physical properties consist of nonutility 
energy-related assets (collectively, ``Energy Related Assets'')\1\ in 
the United States that would be incidental to, and would assist 
Applicants and their subsidiaries in connection with, energy marketing, 
brokering, and trading ventures.\2\ Applicants were authorized to 
invest up to $2.0 billion (``Previous Investment Limitation'') during 
the Previous Authorization Period in Energy Related Assets.
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    \1\ Energy Related Assets include natural gas production, 
gathering, processing, storage and transportation facilities and 
equipment, liquid oil reserves and storgae facilities, and 
associated facilities.
    \2\ By orders dated September 13, 1996 (HCAR No. 26572), 
September 27, 1996 (HCAR No. 26583), May 2, 1997 (HCAR No. 26713), 
November 30, 1998 (HCAR No. 26947), April 7, 1999 (HCAR No. 26998), 
and August 19, 1999 (HCAR No. 27062) in File No. 70-8779, AEP was 
authorized to form direct or indirect nonutility subsidiaries to 
broker and market electric power, natural and manufactured gas, 
emissions allowances, coal, oil, refined petroleum products, and 
natural gas liquids in the United States and Canada (``Commodities 
Business'').
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    Under the Previous Orders, AEP, Resources, AEPES and any existing 
or new, direct or indirect subsidiaries of either company were 
authorized to issue securities to finance the purchase of Energy 
Related Assets in an aggregate amount not to exceed the Previous 
Investment Limitation, the securities to consist of any combination of 
(i) shares of common stock of AEP; (ii) borrowings by AEP from banks or 
other financial institutions under credit lines or otherwise; (iii) 
guarantees of indebtedness issued by Resources, AEPES or any existing 
or new, direct or indirect, subsidiary of Resources or AEPES; or (iv) 
guarantees of securities issued by any special purpose finance 
subsidiary (``SPF'').
    In turn, under the Previous Orders, Resources, AEPES, any existing 
or new, direct or indirect subsidiary of Resources, AEPES, and any SPF 
were authorized to issue debt, equity or preferred securities of any 
type, including guarantees as appropriate, from time to time during the 
Previous Authorization Period to finance acquisitions of Energy Related 
Assets.
    Under this authority, AEP has, among other things, acquired 
midstream gas assets, including intrastate pipeline systems in 
Louisiana and Texas, natural gas processing plants, and storage 
facilities.
    Applicants now seek authorization to acquire, in one or more 
transactions from time to time through June 30, 2004 (``New 
Authorization Period''), Energy Related Assets in Canada as well as the 
United States. These Energy Related Assets would be incidental to and 
would assist Applicants and their subsidiaries in connection with the 
Commodities Business in the United States and Canada. Applicants 
further seek authorization to increase the Investment Limitation by an 
additional $2.0 billion, which, together with existing authority, will 
increase the aggregate amount that could be invested in Energy Related 
Assets to $4.0 billion (``New Investment Limitation'').
    Consistent with the Previous Orders, Applicants propose to acquire 
Energy Related Assets for cash or in exchange for common stock of AEP 
or other securities of Applicants or may include the assumption of debt 
of the seller, or any combination of the foregoing. Consistent with the 
Previous Orders, under no circumstances will the Applicants acquire, 
directly or indirectly, any assets or properties the ownership or 
operation of which would cause the companies to be considered an 
``electric utility company'' or ``gas utility company'' as defined in 
section 2 of the Act.
    Accordingly, to provide the maximum flexibility, AEP requests 
authorization to issue securities in the manner described in an 
aggregate amount, when added to all other outstanding securities issued 
to purchase Energy Related Assets in File No. 70-9353, would not exceed 
the New Investment Limitation. Applicants were authorized in the 
Previous Orders to organize direct or indirect SPFs to finance these 
acquisitions, which authority Applicants request continue throughout 
the New Authorization Period.
    Applicants also request that, to the extent not exempt under rule 
52 and/or rule 45(b), the financing authority continue through the 
Authorization Period in an amount, when added to all other outstanding 
securities issued to purchase Energy Related Assets in File No. 70-
9353, would not exceed the New Investment Limitation.
    In addition, AEP, Resources, AEPES, and any new, direct or indirect 
subsidiaries of Resources or AEPES request authorization to guarantee 
financial commitments, other than indebtedness, of any entity owning or 
operating Energy Related Assets in an aggregate amount not to exceed 
the New Investment Limitation.\3\
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    \3\ The aggregate principal amount of these guarantees, 
exclusive of any guarantees or other forms of credit support that 
are exempt under rules 45(b) and 52(b), will not exceed the New 
Investment limitation.
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    In addition, AEP requests authorization to allow companies formed 
to own Energy Related Assets

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(``Energy Related Asset Subsidiaries'') to declare and pay dividends to 
their parent companies from time to time out of capital and unearned 
surplus to the extent permitted by applicable law.

Allegheny Energy, Inc. (70-8893)

    Allegheny Energy, Inc. (``Allegheny''), 10435 Downsville Pike, 
Hagerstown, Maryland 21740, a registered public utility holding 
company; its direct wholly owned public utility company subsidiaries 
Monongahela Power Company (``Monongahela Power''), 1310 Fairmont 
Avenue, Fairmont, West Virginia 26554, and Allegheny Energy Supply 
Company, LLC (``Supply''), 10435 Downsville Pike, Hagerstown, Maryland 
21740; and its indirect wholly owned public utility company subsidiary 
Allegheny Generating Company (``AGC''), 10435 Downsville Pike, 
Hagerstown, Maryland 21740, have filed a post-effective amendment to a 
declaration (``Declaration'') under section 12(c) of the Act and rules 
46 and 54 under the Act.
    AGC is a single asset company that owns a 40% undivided interest in 
a 2100-megawatt hydroelectric station located in Bath County, 
Virginia.\4\ By order dated September 19, 1996 (HCAR No. 26579), the 
Commission authorized AGC to pay dividends from capital surplus through 
December 31, 2001. AGC continues to have declining capital needs and 
its retained earnings are insufficient to pay common stock dividends. 
As a result, AGC requests authorization to continue to pay dividends 
from capital surplus through December 31, 2005.
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    \4\ AGC is jointly owned by Monongahela Power (27%) and Supply 
(73%).
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    AGC's current earnings are determined in accordance with a Federal 
Energy Regulatory Commission (``FERC'') approved cost of service 
formula. Under that formula, available cash flow from operations is 
applied first to the minimal capital expenditure requirements for AGC's 
existing single asset, and next to the pay down of debt and to the 
payment of dividends in a proportion that maintains debt at about 60% 
and equity at about 40% of total capitalization.
    AGC's current and proposed dividend payment policy remains 
unchanged since AGC's operations commenced in 1985. Prior to 1985, AGC 
paid no dividends but accrued retained earnings as a result of 
recording allowance for funds used during construction in accordance 
with the FERC uniform system of accounts. From 1985 to 1996, AGC paid 
dividends from current earnings and accrued retained earnings.

Dominion Resources, Inc. (70-10037)

    Dominion Resources, Inc. (``Dominion''), a registered holding 
company, 120 Tredegar Street, Richmond, Virginia 23219, and Dominion 
Oklahoma Texas Exploration & Production, Inc. (``DOTEPI''), a 
nonutility subsidiary company of Dominion, Four Greenspoint Plaza, 
16945 Northchase Drive, Suite 1750, Houston, Texas 77060, have filed a 
declaration under section 12(c) and rules 46, 53, and 54 under the Act.
    On November 2, 2001, Consolidated Natural Gas Company (``CNG''), a 
wholly owned registered holding company subsidiary of Dominion, 
acquired in a merger transaction Louis Dreyfus Natural Gas Corp. 
(``LD''), a company engaged in natural gas exploration and production 
in the United States. Under the merger agreement, LD was merged with 
and into DOTEPI, a newly formed subsidiary of Dominion.\5\ All of 
DOTEPI's shares were contributed by Dominion to CNG immediately 
following the merger. The acquisition was financed in part through the 
issuance of long-term debt and trust-preferred securities by CNG.
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    \5\ The common stock of DOTEPI was acquired by CNG under rule 
58.
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    The acquisition was accounted for by the purchase method of 
accounting. As a result, the retained earnings of LD were 
recharacterized as paid-in-capital on DOTEPI's books. DOTEPI now 
requests authorization to pay dividends to CNG out of its capital 
surplus to compensate for the accounting treatment. The amount of 
dividends will be limited to the amount of LD's retained earnings 
immediately prior to the merger.\6\ Dominion states that the payment of 
dividends to CNG will allow CNG to service the acquisition debt 
incurred in connection with the merger.
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    \6\ The amount of LD's retained earnings as of October 31, 2001 
was $302.7 million.
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    Dominion also requests authorization for any nonutility company in 
the Dominion system to declare and pay dividends out of capital surplus 
to its immediate parent companies, subject to applicable corporate law 
and any applicable financing agreement that restricts distributions to 
shareholders. Dominion states that the payment of dividends will 
benefit the system by enabling the parent companies to reduce or 
refinance borrowings and to fund operations of the system companies.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-17612 Filed 7-12-02; 8:45 am]
BILLING CODE 8010-01-P