[Federal Register Volume 69, Number 229 (Tuesday, November 30, 2004)]
[Notices]
[Pages 69641-69644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3380]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27916]


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

November 23, 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 December 17, 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 December 17, 2004, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

[[Page 69642]]

Northeast Utilities et al. (70-9541)

    Northeast Utilities (``NU''), a public utility holding company 
registered under the Public Utility Holding Company Act of 1935, as 
amended (``Act''), the Connecticut Light and Power Company (``CL&P''), 
Public Service Company of New Hampshire (``PSNH'') and Western 
Massachusetts Electric Company (``WMECO''), each an electric utility 
subsidiary of NU, North Atlantic Energy Corporation (``NAEC''), 
formerly a public utility company under the Act, NU Enterprises, Inc. 
(``NUEI''), a sub-holding company over certain of NU's non-utility 
subsidiaries, Northeast Generation Company (``NGC''), Northeast 
Generation Services Company (``NGS''), Select Energy, Inc. (``SE''), 
HEC Inc., now known as Select Energy Services, Inc. (``SESI''), Select 
Energy Portland Pipeline, Inc. (``SEPPI''), Reeds Ferry Supply Co., 
Inc. (``Reeds''), Select Energy Contracting, Inc. (``SECI'') and HEC 
Energy Consulting Canada Inc. (``HEC Energy''), each a direct or 
indirect non-utility subsidiary of NU, and E.S. Boulos Company 
(``Boulos'') and Woods Electrical Contracting, Inc. (``Woods''), 
wholly-owned subsidiaries of NGS, Yankee Energy Service Company 
(``YESCO'') and Yankee Energy Financial Services Company (``Yankee 
Financial''), subsidiaries of Yankee Energy System, Inc., Select Energy 
New York, Inc. (``SENY''), a subsidiary of SE, (``Applicants''), have 
filed with the Commission a post-effective application/declaration 
(``Application'') under sections 6(a), 7, 9(a), 10 and 12(c) of the Act 
and rules 26(c)(3), 42, 43, 44, 46(a) and 54 under the Act.
    On March 7, 2000, the Commission issued an order (HCAR No. 27147) 
(``Prior Order'') granting Applicants' previously-submitted 
application/declaration (``Original Application'') and authorizing (a) 
the payment of dividends to, and/or the repurchase of stock from, NU 
out of capital or unearned surplus by each of CL&P, PSNH, WMECO and 
NAEC, from certain restructuring proceeds, though, as a result of the 
issuance of Rate Reduction Bonds (as described herein) each of CL&P, 
WMECO and PSNH (``Utilities''), and NU, on a consolidated basis, would 
fall below the Commission's common equity-to-total capitalization 
threshold of 30% (the ``30% Threshold''), (b) the payment of dividends 
to, and/or the repurchase of stock from, NU out of capital or unearned 
surplus by NUEI, the payment of dividends, and/or the repurchase of 
stock out of capital or unearned surplus by each of NGC, NGS, SE, SESI, 
SEPPI, Reeds, SECI and HEC Energy, in each case from their respective 
parent company, (c) the payment of dividends and/or the repurchase of 
stock out of capital or unearned surplus by CL&P from certain 
restructuring proceeds in accordance with the provisions of CL&P's 
dividend covenant under its First Mortgage Indenture and Deed of Trust 
dated May 1, 1921 to the Bankers Trust Company as trustee all through 
December 31, 2004 (the ``Initial Authorization Period''), and (d) the 
issuance of additional shares by NU to the extent necessary to fulfill 
its obligations under one or more forward stock purchase contracts 
through June 30, 2001.
    Applicants now seek a modification and extension through December 
31, 2007 (``Authorization Period''), of the authorization for the 
payment of dividends to, and/or the repurchase of stock from, NU out of 
capital or unearned surplus by NUEI, the payment of dividends to, and/
or the repurchase of stock from their respective parent company, out of 
capital or unearned surplus by each of NGC, NGS, SE, SESI and SECI, 
subject to the limitations set forth herein; (b) authorization for E.S. 
Boulos Company (``Boulos'') and Woods Electrical Contracting, Inc. 
(``Woods''), wholly-owned subsidiaries of NGS, Yankee Energy Service 
Company (``YESCO'') and Yankee Energy Financial Services Company 
(``Yankee Financial''), subsidiaries of Yankee Energy System, Inc., 
Select Energy New York, Inc. (``SENY''), a subsidiary of SE, and any 
other direct or indirect to-be-formed non-utility subsidiary of NU, to 
pay dividends to, and/or repurchase stock from their respective parent 
company out of capital or unearned surplus, (NUEI, NGC, NGS, SE, SENY, 
SESI, Reeds, SECI, Boulos, Woods, YESCO, Yankee Financial and any 
direct or indirect non-utility subsidiary of NU are collectively 
referred to as the ``Non-Utility Subsidiaries''),\1\ and (c) an 
extension through the Authorization Period of the authorization granted 
in the Prior Order for CL&P and PSNH to remain below the 30% Threshold, 
as a result of the impact of the Rate Reduction Bonds. The Utilities 
are not seeking an extension of any other authorizations granted in the 
Prior Order.
---------------------------------------------------------------------------

    \1\ In the Prior Order, NAEC was listed as a utility; as a 
result of the sale of its utility assets, NAEC is no longer a 
utility for purposes of the Act. NAEC, along with SEPPI and HEC 
Energy, which are now inactive, do not seek an extension of the 
authorizations previously granted and are not applicants to the 
Application.
---------------------------------------------------------------------------

    In the Prior Order, the Commission noted that restructuring 
legislation in each state in which the utility subsidiaries of NU were 
located allowed for the issuance of Rate Reduction Bonds by each 
Utility to finance a portion of its cost incurred in the sale of its 
regulatory assets and/or renegotiation of its obligations under 
purchase power contracts. Rate Reduction Bonds are securities issued by 
a subsidiary of the Utility and are non-recourse to the Utility or the 
NU system. Because of the mandated divestiture of generating assets and 
issuance of Rate Reduction Bonds, the Utilities experienced a 
significant decrease in the amount of tangible assets that each owned 
and received a significant influx of cash.
    The Original Application noted that as a result of increased debt 
from the issuance of the Rate Reduction Bonds, NU and the Utilities 
would fall below the Commission's benchmark 30% common equity-to-total 
capitalization ratio (``Common Equity Ratio''). After giving effect to 
various restructuring transactions, including the then-contemplated 
issuance of the Rate Reduction Bonds, CL&P's pro forma Common Equity 
Ratio, as reported in Exhibit K filed with the Original Application was 
projected to be 19.1%, WMECO's pro forma Common Equity Ratio was 
projected to be 16.6%, PSNH's pro forma Common Equity Ratio was 
projected to be 14.2%, and NU's pro forma Common Equity Ratio was 
projected to be 29.1%. In the Original Application, the Applicants 
stated that they expected NU's Common Equity Ratio to be above 30% by 
December 31, 2001 but that the Utilities expect that their Common 
Equity Ratios would remain below 30% throughout the duration of the 
Initial Authorization Period and thereafter. The Commission, in the 
Prior Order, noted that after the end of the Initial Authorization 
Period, further Commission authority would be required if the Common 
Equity Ratios of any of the Utilities would be below 30%. CL&P and PSNH 
seek authorization through the Authorization Period for their 
respective Common Equity Ratios to remain below the 30% Threshold when 
the impact of Rate Reduction Bonds is considered.
    Applicants seek a modification and extension, through the 
Authorization Period, of the authorization contained in the Prior Order 
for the payment of dividends to, and/or the repurchase of stock from, 
the respective parent company of each such Non-Utility Subsidiary, in 
each case out of capital or unearned surplus, subject to the new 
limitations set forth in the Application to extend that authorization 
to Boulos, Woods, SENY, YESCO and Yankee Financial and to add the 
limitations on

[[Page 69643]]

the payment of dividends as set forth below. There may be situations in 
which one or more of the Non-Utility Subsidiaries would have 
unrestricted cash available for distribution in excess of current and 
retained earnings resulting from a disposition of assets, a 
restructuring or other accounting charge that eliminated retained 
earnings or its normal operations (excluding debt financing). 
Consistent with these considerations, Applicants seek authorization for 
the payment of dividends to, and/or the repurchase of stock from, the 
respective parent company of each such Non-Utility Subsidiary, in each 
case out of capital or unearned surplus provided, however, that, 
without further approval of the Commission, no Non-Utility Subsidiary 
will declare or pay any dividend out of capital or unearned surplus if 
it derives any material part of its revenues from the sale of goods, 
services or electricity to an associate Utility (``Non-exempt 
Subsidiary''). In addition, no Non-Utility Subsidiary will declare or 
pay any dividend out of capital or unearned surplus unless it: (a) Has 
received excess cash as a result of the sale of its assets; (b) has 
engaged in a restructuring or reorganization; and/or (c) is returning 
capital to an associate company. NU further requests that the 
Commission reserve jurisdiction over the payment of dividends out of 
capital or unearned surplus by any Non-exempt Subsidiary.

Northeast Utilities (70-10256)

    Northeast Utilities (``NU''), a public utility holding company 
registered under the Public Utility Holding Company Act of 1935, as 
amended (``Act'') has filed with the Commission a declaration under 
sections 6(a) and 7 of the Act and rule 54 under the Act.
    NU requests authority to issue up to 275,000 Northeast Utilities 
Common Shares, $5.00 par value (``Common Shares'') from the date of the 
order granting the authorization requested through December 31, 2014, 
inclusive. This figure is based on a projected need of not more than 
25,000 Common Shares per year from 2005 through 2014, plus the 25,000 
shares currently needed to satisfy deferred shares obligations. NU 
expects to modify its trustee compensation program from time to time in 
the future as necessary or desirable to take into account trends in 
director compensation, regulatory and tax changes and business needs.

E.ON AG, et al. (70-10260)

    E.ON AG (``E.ON''), E.ON US Holding GmbH (``E.ON Holding''), E.ON 
US Investments Corp. (``EUSIC''), and LG&E Energy LLC (``LG&E Energy'' 
and collectively with E.ON, E.ON Holding and EUSIC, the ``E.ON Holding 
Companies''), registered holding companies under the Act, Louisville 
Gas and Electric Company, a public utility subsidiary of LG&E Energy 
(``LG&E'' and together with the E.ON Holding Companies, the ``E.ON 
Applicants''), and American Electric Power Company, Inc. (``AEP'', 
together with the E.ON Applicants, the ``Applicants''), a registered 
holding company not affiliated with E.ON, have filed an application-
declaration (``Application'') with the Commission under sections 8, 
9(a), 10, 11(b) and 12(d) of the Act and rules 44 and 54 under the Act.
    Applicants seek authorization for the proposed acquisition by LG&E 
from AEP of 730 shares of common stock, $100 par value (``Shares'') of 
Ohio Valley Electric Corporation (``OVEC''), an Ohio corporation and an 
electric utility company under the Act (the ``Transaction'').
    E.ON, an entity incorporated under the laws of the Federal Republic 
of Germany, registered as a holding company under the Act on July 1, 
2002, as a result of E.ON's acquisition of Powergen Limited, formerly 
known as Powergen plc (``Powergen''). The Commission approved the 
acquisition of Powergen in Holding Company Act Release No. 27539 (June 
14, 2002) (the ``Acquisition Order''). E.ON owns LG&E Energy, which in 
turn owns two public utility companies, LG&E and Kentucky Utilities 
Company (``KU'' and together with LG&E, the ``E.ON Utility 
Subsidiaries''). E.ON's interest in LG&E Energy is held indirectly 
through E.ON Holding and EUSIC, as intermediate holding companies.
    AEP, a New York corporation registered as a holding company under 
the Act, owns, directly, and indirectly through AEP Utilities, Inc. 
(formerly Central and South West Corporation), a Delaware corporation 
and registered holding company under the Act, numerous utility and non-
utility subsidiaries, including the following public utility 
subsidiaries: AEP Generating Company, AEP Texas Central Company 
(formerly Central Power and Light Company), AEP Texas North Company 
(formerly West Texas Utilities Company), Appalachian Power Company, 
Columbus Southern Power Company, Indiana Michigan Power Company, 
Kentucky Power Company, Kingsport Power Company, Ohio Power Company, 
Public Service Company of Oklahoma, Southwestern Electric Power 
Company, and Wheeling Power Company (collectively, ``the AEP Utility 
Subsidiaries'').
    OVEC and its wholly-owned subsidiary, Indiana-Kentucky Electric 
Corporation (``IKEC''), own two generating stations located in Ohio and 
Indiana with a combined electric production capability of approximately 
2,256 megawatts. OVEC and IKEC are both electric utility companies 
within the meaning of the Act. OVEC is currently owned by AEP (39.9%), 
Columbus Southern Power Company, a subsidiary of AEP (4.3%), LG&E 
(4.9%), KU (2.5%), Allegheny Energy, Inc. (12.5%), The Cincinnati Gas & 
Electric Company, a subsidiary of Cinergy Corp. (9.0%), The Dayton 
Power and Light Company, a subsidiary of DPL Inc. (4.9%), Ohio Edison 
Company, a subsidiary of FirstEnergy Corp. (16.5%), Southern Indiana 
Gas and Electric Company, a subsidiary of Vectren Corporation (1.5%), 
and the Toledo Edison Company, also a subsidiary of FirstEnergy Corp. 
(4.0%).
    On April 8, 2004, LG&E and AEP entered into a stock purchase 
agreement (``Agreement''), under which the parties agreed, subject to 
certain conditions, including approval of the transaction by the 
Commission, that AEP would AEP to sell, assign and transfer to LG&E, 
and for LG&E to purchase from AEP, the Shares upon closing of the 
Transaction (the ``Closing''). LG&E agreed to pay $104,286 (``Purchase 
Price'') for the Shares upon the Closing, which is subject to customary 
conditions for a transaction of this size and magnitude, all as set 
forth in the Agreement. LG&E will finance the Transaction with cash on 
hand.
    On April 30, 2004, irrespective of the consummation of the proposed 
Transaction and not conditioned upon its approval, OVEC and its 
shareholders, including AEP (and/or its affiliates), LG&E and KU, 
entered into an Amended and Restated Inter-Company Power Agreement (the 
``Amended Power Agreement''), to be effective beginning March 2006, 
upon the expiration of the Power Agreement. In negotiation of the 
Amended Power Agreement, disputes arose between AEP and LG&E over a 
number of issues, including their respective ongoing rights to purchase 
power from OVEC. In order to avoid litigation, and the cost, delay and 
uncertainty relating thereto, AEP and LG&E settled these disputes. As 
part of the settlement, AEP agreed to sell, and LG&E agreed to 
purchase, the Shares, representing 0.73% of the outstanding common 
stock of OVEC, at the same price per share paid by AEP in 1990. Upon 
the effectiveness of the Amended Power Agreement, AEP (and/or its 
affiliates) and LG&E will receive allocations of marginal cost-based

[[Page 69644]]

power from OVEC in an amount proportional to their respective ownership 
interests in OVEC after giving effect to the Transaction.

    For the Commission by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
 [FR Doc. E4-3380 Filed 11-29-04; 8:45 am]
BILLING CODE 8010-01-P