[Federal Register Volume 70, Number 164 (Thursday, August 25, 2005)]
[Notices]
[Pages 49955-49956]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4649]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-28017]


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

August 19, 2005.
    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 September 13, 2005, to the Secretary, Securities and 
Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303, 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 September 13, 2005, the 
application(s) and/or declaration(s), as filed or as amended, may be 
granted and/or permitted to become effective.

CNG Holdings, Inc. (70-10288)

    CNG Holdings, Inc. (``Holdings''), an exempt holding company, 7810 
Shaffer Parkway, Suite 120, Littleton, CO 80127, has filed with this 
Commission an application/declaration under Sections 3(a)(1), 9(a)(2) 
and 10 of the Act (``Application'').
    Holdings seeks authority to acquire the common stock of Missouri 
Gas Utility, Inc. (``MGU''). In addition, Holdings seeks an order 
granting it an exemption under Section 3(a)(1) of the Act.
    Holdings is a Colorado corporation, currently claiming exemption 
from registration under the Act by Rule 2. Holdings' direct wholly 
owned subsidiary, Colorado Natural Gas, Inc. (``CNG''), a Colorado 
Corporation, is a gas public utility serving approximately 6,300 retail 
customers in Colorado. CNG is regulated by the Colorado Public 
Utilities Commission. As of December 31, 2004, CNG had 1,950,432 feet 
of gas main lines and 2,779,770 feet of service lines, located in the 
Colorado counties of Park, Jefferson, Clear Creek, Teller, Gilpin and 
Pueblo. CNG sells no gas (or electricity) outside Colorado.
    As of and for the year ended December 31, 2004, Holdings' 
consolidated gross operating revenues, net income and net assets were 
approximately $5,204,464, $596,678 and $42,062,036, respectively. For 
the same period, CNG's gross operating revenues, net operating 
revenues, net income and net assets were approximately $4,390,757, 
$2,185,894, $558,403 and $39,437,935, respectively.
    Holdings also is engaged in certain non-utility businesses. Its 
wholly owned subsidiary, Colorado's Best Heating and Appliances, LLC, 
is a Colorado limited liability company engaged in the conversion of 
propane appliances to use natural gas fuel. Wolf Creek Energy, LLC, a 
Colorado limited liability company and a wholly owned direct subsidiary 
of Holdings, is engaged in the brokerage and sale of commodity gas to 
an industrial customer in Colorado. Wolf Creek Energy does not own 
facilities for the distribution of gas for sale.
    MGU is a Colorado corporation which owns and operates a natural gas 
distribution system (the ``utility assets'') serving approximately 740 
customers in the cities of Gallatin and Hamilton, Missouri, and 
surrounding communities. As of December 31, 2004, MGU had 554,400 feet 
of gas main lines and 111,000 feet of service lines, located in the 
Missouri counties of Caldwell, Davies and Harrison. For the nine months 
ended December 31, 2004, MGU had no gross operating revenues, and only 
$362 of interest income. MGU's net assets as of December 31, 2004 were 
$2,320,878. MGU does not conduct any nonutility businesses and the 
company has no subsidiaries.
    MGU is subject to the regulation of the Public Service Commission 
of the State of Missouri (``MPSC'') with regard to rates, quality of 
service, affiliate transactions and other matters. The MPSC authorized 
MGU to acquire the

[[Page 49956]]

utility assets by order dated December 14, 2004.
    Holdings seeks authority to acquire all of the issued and 
outstanding common stock of MGU. The transaction is structured as a 
stock-for-stock exchange at a ratio of 25:1 in which the current 
shareholders of MGU would exchange the 57,590 outstanding common shares 
of MGU for 2,303 common shares of Holdings. As of December 31, 2004, 
Holdings had 1,424,663 shares of common stock issued and outstanding. 
The acquisition of MGU would increase the number of Holdings shares 
outstanding to 1,426,966 shares.
    The municipalities of Gallatin and Hamilton, Missouri had initially 
operated the gas utility assets now owned by MGU. The municipalities 
financed the construction of the assets through a lease transaction. 
When the municipalities defaulted on their lease obligations, the 
trustee, acting on behalf of the lenders, sought to sell the assets. 
Pursuant to a sale authorized by the Missouri Public Service Commission 
in December 2004, MGU acquired the gas distribution system in Gallatin 
and Hamilton for an aggregate consideration of $1.9 million, plus 
counsel and bank fees of approximately $46,000. MGU financed the 
acquisition with bank financing in the amount of $2 million, backed by 
a guarantee from Holdings. CNG did not provide any financing for MGU's 
acquisition of the assets, nor did it guarantee the loan.
    Upon consummation of the acquisition, MGU would be a wholly-owned 
direct subsidiary of Holdings. Holdings requests that the Commission 
issue an order authorizing the acquisition and exempting Holdings, 
under Section 3(a)(1), from all provisions of the Act, except Section 
9(a)(2). In support of its request for an order of exemption, Holdings 
asserts that (i) MGU is not a material public utility subsidiary, (ii) 
after the acquisition, Holdings and CNG will both be organized in 
Colorado, and (iii) both Holdings and CNG also will be predominantly 
intrastate in character and carry on their business substantially in 
Colorado. In support of its request for approval of the acquisition, 
Holdings submits that the combined utility operations will be a single 
integrated public utility system, operating in a single area or region.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland
Deputy Secretary.
[FR Doc. E5-4649 Filed 8-24-05; 8:45 am]
BILLING CODE 8010-01-P