[Federal Register Volume 69, Number 103 (Thursday, May 27, 2004)]
[Notices]
[Pages 30342-30344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-12028]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27847]


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

May 21, 2004.
    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

[[Page 30343]]

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 June 15, 2004, 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 June 15, 2004, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Connecticut Light and Power Company, et al. (70-9905)

    The Connecticut Light and Power Company (``CL&P''), a wholly owned 
electric utility subsidiary of Northeast Utilities, a public utility 
holding company, and CL&P Receivables Corporation (``CRC''), a wholly-
owned special purpose subsidiary of CL&P, both located at 107 Selden 
Street, Berlin, Connecticut 06037-5457, have filed a declaration under 
section 12(c) and rules 46 and 54 of the Act.
    By orders dated September 29, 1997 and October 15, 2001 (Holding 
Co. Act Release Nos. 26761 and 27453) (``Orders''), the Commission 
authorized CL&P to organize CRC to engage in an accounts receivable 
purchase and sale program through July 8, 2004, and to, among other 
things, permit CRC to pay CL&P dividends out of capital from time-to-
time to achieve the optimum balance of capital to achieve economic 
efficiency (``Program''). CL&P and CRC now propose to extend the 
Program through July 3, 2007, under the same terms and conditions.
    The Program consists of two agreements. Under the first agreement, 
between CL&P and CRC (``Company Agreement''), CL&P sells or transfers 
as equity contributions from time-to-time all eligible categories of 
its billed and unbilled accounts received (``Receivables'') and related 
assets (``Related Assets'') to CRC. The purchase price paid by CRC for 
any Receivables and Related Assets takes into account historical loss 
statistics on CL&P's receivables pool and the purchaser's 
(``Purchaser'') cost of funds. Under the second agreement (``CRC 
Agreement''), CRC sells fractional undivided interests (``Receivable 
Interests'') in the Receivables to the Purchaser from time-to-time.
    The availability of Receivables and Related Assets varies from 
time-to-time in accordance with electric energy use by CL&P's 
customers. As a result of this and certain other factors, the funds CRC 
has available to make a purchase at any time may not match the cost of 
Receivables and Related Assets available. The Program includes certain 
mechanisms to accommodate this mismatch. When the amount of Receivables 
and Related Assets originated by CL&P exceeds the amount of cash CRC 
has available, either CRC will make the purchase and owe the balance of 
the purchase price to CL&P on a deferred basis (the unpaid portion will 
accrue interest or the purchase price will involve a discount to 
reflect the deferral), or CL&P will make a capital contribution to CRC 
in the form of the Receivables and Related Assets for which CRC lacks 
purchase price funds at that time. Conversely, if CRC develops a 
substantial cash balance (due to collections of previously transferred 
Receivables exceeding the balance of newly created Receivables 
available for purchase), CRC will likely dividend the excess cash to 
CL&P. These dividends may represent a return of previous capital 
contributions by CL&P to CRC. Through these mechanisms, CRC does not 
itself retain substantial cash balances at any time and substantially 
all cash realized from the collection of the Receivables (net of the 
costs of the program and any reductions in the outstanding balance of 
Receivable Interests) is made available to CL&P.
    CL&P and CRC will continue to be obligated to reimburse the 
Purchaser and its agent (``Agent'') for various costs and expenses 
associated with the Company Agreement and the CRC Agreement upon 
extension of the Program. CRC will also continue to be required to pay 
to the Agent certain fees for services in connection with these 
agreements.
    CL&P is working with the parties to the agreements to extend the 
Program through July 3, 2007. CRC may, following written notice to the 
Agent, terminate in whole or reduce in part the unused portion of its 
purchase limit in accordance with the terms and conditions of the CRC 
Agreement. The CRC Agreement allows the Purchaser to assign all of its 
rights and obligations under the CRC Agreement (including its 
Receivable Interests and the obligations to fund Receivable Interests) 
to other persons. However, any assignment will not change the nature of 
the obligations of CL&P or CRC under the Company Agreement and the CRC 
Agreement.

Allegheny Energy Inc. (70-10178)

    Allegheny Energy Inc. (``Allegheny''), a registered holding 
company, 10435 Downsville Pike, Hagerstown, Maryland 21740, has filed 
an application-declaration (``Application'') under sections 6(a)2 and 7 
of the Act and rule 54 under the Act.
    Allegheny proposes to eliminate a stockholder protection rights 
plan (``Plan'') previously authorized by the Commission by order dated 
July 23, 1999 (Holding Co. Act Release No. 27052) (``Plan Order''). 
Under the Plan, the Allegheny Board of Directors (``Board'') declared a 
dividend of one right (``Right'') for each outstanding share of 
Allegheny common stock, par value $1.25 per share (``Common Stock''), 
payable to all stockholders of record on May 16, 2000. Allegheny now 
proposes to eliminate these Rights and terminate the Plan.
    Allegheny initially adopted the Plan in order to discourage abusive 
takeover tactics and to ensure that each shareholder is treated fairly 
in any transaction involving an acquisition of control over Allegheny. 
The Plan was implemented according to a rights agreement (``Rights 
Agreement'') between Allegheny and ChaseMellon Shareholder Services, 
Inc. (``Rights Agent''). In particular, the Rights Agreement was 
designed to create the possibility that Allegheny's stockholders, by 
exercising their Rights, would be able to increase substantially the 
cost of acquiring more than 15% of Allegheny's outstanding Common 
Stock.
    Shareholder proposals were submitted at Allegheny's annual meetings 
in May of 2001 and 2002, seeking to make the adoption or maintenance of 
a ``poison pill'' subject to shareholder approval. Each year, the 
proposal received the affirmative vote of more than 50 percent of the 
votes cast; therefore, the Nominating and Corporate Governance 
Committee of the Board reconsidered the appropriateness of the Plan 
and, in July 2003, recommended to the Board that the Rights and the 
Plan be terminated. The Board approved that recommendation.

I. Description of Rights Being Eliminated

A. Exercise Price
    The Rights created under the Rights Agreement entitle the holders 
to purchase one share of Common Stock at

[[Page 30344]]

a pre-determined exercise price (``Exercise Price''), subject to 
adjustment. The Rights, currently held by owners of Allegheny's Common 
Stock, are not exercisable and cannot be traded without the outstanding 
shares of Common Stock until the occurrence of a triggering event, 
which is described below. At that time, the Rights would become 
exercisable and certificates (``Rights Certificates'') representing the 
Rights would be distributed and would be traded independently of 
outstanding shares. However, the Rights would not entitle the holder to 
make a discounted purchase of shares of Allegheny's Common Stock or of 
the common stock of the person acquiring Allegheny until the occurrence 
of a Flip-in or Flip-over event, which are described below.
B. Triggering Events
    The Rights Agreement provides that the Rights will not become 
exercisable (i.e., Common Stock could not be purchased at the Exercise 
Price) until the earlier of (i) the first date, or a later date as the 
Board may from time to time fix, of public announcement by Allegheny 
that any person or group (``Acquiring Person'') acquires beneficial 
ownership of 15% or more of Allegheny's outstanding Common Stock 
(``Flip-in Date'') and (ii) 10 days (unless extended by the Board) 
after any person or group commences a tender or exchange offer which 
would, upon its consummation, result in that person or group becoming 
an Acquiring Person (``Flip-over Trigger'').
C. Flip-In
    Upon the occurrence of a Flip-in Date, the holders of the Rights, 
other than an Acquiring Person and certain transferees, whose Rights 
will become void, would immediately have the right to receive, for each 
Right exercised, Common Stock having a market value equal to two times 
the Exercise Price then in effect. At its option, the Board may, at any 
time after the Flip-In Date but before the acquirer acquires more than 
50% of Common Stock, elect to exchange all Rights which have not become 
null for Common Stock at a ratio of one share for each Right.
D. Flip-Over
    On or after the Flip-in Date, and prior to (i) Allegheny being 
acquired by another person or entity not controlled by Allegheny 
(``Acquirer'') in a merger or other business combination transaction in 
which the Common Stock is exchanged for securities or other property 
and the Acquirer receives different treatment than all other holders of 
Common Stock, or (ii) 50% or more of Allegheny's consolidated assets or 
earnings power being sold or transferred to an Acquirer, Allegheny is 
obligated under the Plan to enter into a supplemental agreement with 
the Acquirer for the benefit of the holders of the Rights providing 
that each holder of a Right (except Rights which previously were to be 
voided as set forth above) would be entitled to receive, for each Right 
exercised, common stock of the Acquirer having a market value equal to 
two times the Exercise Price then in effect.
E. Redemption of Rights
    The Rights could be redeemed, as a whole, at the discretion of the 
Board, at a Redemption Price of $.01 per Right, subject to adjustment. 
The Redemption Price shall be paid, at Allegheny's option, in cash, 
shares of Common Stock or other equivalent Allegheny securities, at any 
time prior to the close of business on the date that any person became 
an Acquiring Person. The Rights expire at the close of business 10 
years from the date of the Rights Agreement, unless earlier redeemed or 
exchanged by Allegheny as described below.
F. Exchange of Shares for Rights
    At any time after a Flip-in Date and prior to the time that any 
person (other than Allegheny and certain related entities), together 
with its affiliates and associates, become the beneficial owner of 50% 
or more of the outstanding shares of Common Stock, the Board could 
direct the exchange of shares of Common Stock for all of the Rights 
(other than Rights which have become void) at the exchange ratio of one 
share of Common Stock per Right, subject to adjustment.
G. Adjustment To Exercise Price
    The Exercise Price payable and the number of shares of Common Stock 
(or other securities, as the case may be) issuable upon exercise of the 
Rights were subject to adjustment from time to time to prevent dilution 
(i) in the event of a stock dividend on, or a subdivision or 
combination of, the Common Stock, or (ii) upon the distribution to 
holders of the Common Stock of securities or assets (excluding regular 
periodic cash dividends) whether by dividend, reclassification, 
recapitalization or otherwise.
H. Termination of the Plan and the Rights Agreement
    The Plan provides that Allegheny may amend the Plan without the 
approval of any holders of Rights prior to the Flip-In Date. Since 
Allegheny no longer intends that the Rights be exercisable under the 
Plan or the Rights Agreement, Allegheny proposes to terminate the 
Rights by notice to the Rights Agent as provided in Amendment 1 to the 
Plan. Upon the termination of the Rights, the Plan and the Rights 
Agreement will be terminated. To the extent required under the Act, 
Allegheny requests authorization to terminate the Rights, the Plan, and 
the Rights Agreement.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-12028 Filed 5-26-04; 8:45 am]
BILLING CODE 8010-01-P