[Federal Register Volume 69, Number 112 (Thursday, June 10, 2004)]
[Notices]
[Pages 32634-32635]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-13167]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27855]


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

June 4, 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 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 29, 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 29, 2004, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

NU Enterprises, Inc., et al. (70-9637)

    NU Enterprises, Inc. (``NUEI''), a nonutility holding company 
subsidiary of Northeast Utilities (``NU''), a registered holding 
company, and the following subsidiaries of NUEI and NU, Woods Network 
Services, Inc., Northeast Generation Company, Northeast Generation 
Services Company, E. S. Boulos Company, Woods Electrical Company, Inc.; 
Select Energy, Inc., Mode 1 Communications, Inc., R.M. Services, Inc., 
Yankee Financial Services, Inc. and Yankee Energy Services Company, all 
of 107 Selden Street, Berlin, Connecticut 06037; Select Energy Services 
Inc. and Select Energy Contracting Inc., 24 Prime Parkway, Natick, 
Massachusetts 01760; Select Energy New York, Inc., 507 Plum Street, 
Syracuse, New York 13204; and Reeds Ferry Supply Co. Inc., 605 Front 
Street, Manchester, New Hampshire 03102, and any to-be-formed direct or 
indirect nonutility subsidiary of NUEI (collectively, ``Competitive 
Companies'' or ``Applicants'') have filed an application-declaration 
(``Application'') under section 13(b) of the Act and rules 54, 86, 87, 
90 and 91 under the Act.
    The Competitive Companies are all nonutility companies under the 
Act that provide various services to customers who are not affiliated 
with NU. In addition, some of the Competitive Companies, in the 
ordinary course of their business, may also provide services to 
affiliated companies (both utility affiliates and nonutility 
affiliates). The Competitive Companies seek authority to provide 
certain services in the ordinary course of their business 
(collectively, ``Services'') to each other, in certain circumstances 
described below, at any price they deem appropriate, including but not 
limited to cost or fair market prices. The Competitive Companies 
request an exemption under section 13(b) from the ``at cost 
requirement'' of rules 90 and 91 to the extent that a price other than 
``cost'' is charged.\1\ Any Services provided by the Competitive 
Companies to NU's regulated public utility subsidiaries will continue 
to be provided at ``cost'' consistent with rules 90 and 91. The 
Competitive Companies will not provide Services at other than cost to 
any other Competitive Company that, in turn, provides the same 
Services, directly or indirectly, to any other associate company that 
is not a Competitive Company, except according to the requirements of 
the Commission's rules and regulations under section 13(b) or an 
exemption from that section granted by the Commission.
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    \1\ By order dated March 7, 2000 (Holding Co. Act Release No. 
27148) jurisdiction was reserved by the Commission over the 
authority for Northeast Generation Services Company to provide 
certain services to Northeast Generation Company at other than at-
cost. The request in that filing is replaced by this request.
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    The Competitive Companies request authorization to provide Services 
to each other at other than cost in any case where the Competitive 
Company receiving the Services is:

    (i) A foreign utility company (``FUCO'') or an exempt wholesale 
generator (``EWG'') that derives no part of its income, directly or 
indirectly, from the generation, transmission, or distribution of 
electric energy for sale within the United States;
    (ii) An EWG which sells electricity at market-based rates, which 
have been approved by the Federal Energy Regulatory Commission 
(``FERC''), provided that the purchaser of the electricity is not an 
associate utility company;
    (iii) A ``qualifying facility'' (``QF'') within the meaning of 
the Public Utility Regulatory Policies Act of 1978, as amended 
(``PURPA''), that sells electricity exclusively (a) at rates 
negotiated at arms'-length to one or more industrial or commercial 
customers purchasing the electricity for their own use and not for 
resale, and/or (b) to an electric utility company (other than an 
affiliate utility company) at the purchaser's ``avoided cost'' as 
determined in accordance with the regulations under PURPA;
    (iv) A domestic EWG or QF that sells electricity at rates based 
upon its cost of service, as approved by FERC or any state public 
utility commission having jurisdiction, provided that the purchaser 
of the electricity is not an associate utility company; or
    (v) A direct or indirect subsidiary of NU formed under rule 58 
of the Act or any other nonutility company that (a) is partially 
owned by NU, provided that the ultimate recipient of the Services is 
not an associate utility company, or (b) is engaged solely in the 
business of developing, owning, operating and/or providing Services 
to Competitive Companies described in clauses (i) through (iv) 
immediately above, or (c) does not derive, directly or indirectly, 
any material part of its income from sources within the United 
States and is not a public-utility company operating within the 
United States.

Allegheny Energy, Inc. (70-10230)

    Allegheny Energy, Inc. (``Allegheny''), a registered holding 
company, 800 Cabin Hill Drive, Greensburg, Pennsylvania 15601, has 
filed a declaration under sections 6(a) and 7 of the Act and rule 54 
under the Act.
    Allegheny requests authority to issue shares of common stock, $1.25 
par value (``Common Stock''), according to a Stock Unit Plan 
(``Plan''). Allegheny proposes to issue up to 4,500,000 shares of 
Common Stock to settle stock units (``Units'') issued to certain 
employees. Specifically, upon vesting of each Unit, participants in the 
Plan (``Participants'') will receive one share of Allegheny Common 
Stock for each Unit, as well as dividends paid by Allegheny during the 
period the Unit was held.
    The Plan became effective upon its approval by Allegheny's Board of 
Directors on May 14, 2004.\2\ At that

[[Page 32635]]

time, 3,414,048 Units that had previously been granted to certain of 
Allegheny's executive officers under employment agreements 
(``Outstanding Units'') were made subject to the Plan, as consented to 
by each of the relevant executive officers. Subject to adjustment as 
provided under the Plan, the total number of Units authorized under the 
Plan is 4,500,000, inclusive of the Outstanding Units.\3\ If any award 
under the Plan is forfeited or otherwise terminated, or is cancelled 
prior to the vesting of any Units, then the Units covered by the award 
will again be available under the Plan.
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    \2\ The Plan will remain in effect until terminated by the Board 
or until Units are no longer available for grants of awards under 
the Plan, whichever occurs first. Unless otherwise expressly 
provided, any award granted prior to termination shall survive the 
termination.
    \3\ The number of Units authorized under the Plan may be 
adjusted to reflect a distribution, recapitalization, split, or 
other similar transaction.
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    Allegheny maintains that implementation of the Plan is necessary to 
attract and retain employees who are essential for Allegheny's growth 
and profitability. The Plan will be administered by Allegheny's Board 
of Directors, which will determine the individuals to whom Units shall 
be granted, the conditions under which Units may become vested and/or 
forfeited, and other terms and conditions as the Board may establish. 
Each Participant in the Plan will enter into an agreement (``Stock Unit 
Agreement'') providing that, upon vesting, each Participant shall be 
entitled to one share of Allegheny Common Stock and shall be subject to 
the terms and conditions of the Plan. A Stock Unit Agreement may grant 
a Participant rights with respect to dividends paid by Allegheny during 
the period a Unit was held, as well as a right to defer payments with 
respect to vested Units.
    The Outstanding Units, as originally issued, entitled holders to 
the market value of a share of Allegheny Common Stock payable, at 
Allegheny's option, in cash or Common Stock at each vesting date. 
Because the Outstanding Units originally provided for payment in either 
cash or Common Stock and because Allegheny does not have authority to 
settle the Outstanding Units through the issuance of Common Stock, 
Allegheny has been required to use the variable method of accounting 
for the Units. As a result, Allegheny is recording an accrued expense 
liability for the cash amount payable to Participants at the vesting 
dates of issued Units, and compensation expense increases or decreases 
as the market value of stock increases or decreases.
    The Plan provides that all Units, including the Outstanding Units, 
will be settled only through the issuance of Common Stock. Once 
Allegheny receives Commission authorization to issue Common Stock, the 
fixed method of accounting will replace the variable method of 
accounting for all Units, including the Outstanding Units that have 
become subject to the Plan. Under the fixed method of accounting, total 
compensation expense to be recorded over the vesting period of an award 
is equal to the market price of Allegheny stock on the date of the 
award multiplied by the number of Units awarded. Under this method of 
accounting, total compensation expense for each award is calculated and 
fixed at the grant date (or the date of the Commission's authorization 
for Outstanding Units). This fixed total compensation expense will be 
recorded over the vesting period on a straight-line basis, and will not 
vary regardless of subsequent increases or decreases in the market 
price of Allegheny stock.
    Allegheny maintains that the requested authority will benefit the 
company by reducing the volatility associated with accounting for the 
Units, will permit Allegheny to conserve cash in its administration of 
the Plan, redeeming Units through the issuance of stock, rather than 
cash payments, and will result in increased Common Stock capitalization 
in the amount of compensation expense that would otherwise be paid to 
participants in cash.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-13167 Filed 6-9-04; 8:45 am]
BILLING CODE 8010-01-U