[Federal Register Volume 70, Number 171 (Tuesday, September 6, 2005)]
[Notices]
[Pages 53031-53033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4839]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-28021]


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

August 30, 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 26, 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 26, 2005, the 
application(s) and/or declaration(s), as filed or as amended, may be 
granted and/or permitted to become effective.

FirstEnergy Corp., et al. (70-10307)

    FirstEnergy Corp., (``FirstEnergy''), a registered holding company; 
its public utility subsidiaries: Ohio Edison Company, an Ohio 
corporation (``Ohio Edison''); The Cleveland Electric Illuminating 
Company, an Ohio corporation (``Cleveland Electric''); The Toledo 
Edison Company, an Ohio corporation (``Toledo Edison''); and 
Pennsylvania Power Company, a Pennsylvania corporation and wholly owned 
subsidiary of Ohio Edison, (``Penn Power''), collectively, ``Utility 
Subsidiaries;'' all of 76 South Main Street, Akron, Ohio 44308, have 
filed an application-declaration, as amended (``Application'') under 
sections 9(a), 10 and 12(b) of the Act and rule 45 under the Act. 
FirstEnergy and the Utility Subsidiaries are referred to as 
``Applicants.'' FirstEnergy directly owns all of the outstanding common 
stock of Ohio Edison, Cleveland Electric, Toledo Edison, and indirectly 
through Ohio Edison owns all of the outstanding common stock of Penn 
Power''.\1\
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    \1\ FirstEnergy's other public utility subsidiaries are Jersey 
Central Power & Light Company, Pennsylvania Electric Company, 
Metropolitan Edison Company, York Haven Power Company, The Waverly 
Electric Power & Light Company and American Transmission Systems, 
Incorporated. These companies are not applicants in this proceeding.
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    Ohio Edison was organized under the laws of the State of Ohio in 
1930 and owns property and does business as an electric public utility 
in that state. Ohio Edison also has ownership interests in certain 
generating facilities located in the Commonwealth of Pennsylvania. Ohio 
Edison engages in the generation, distribution and sale of electric 
energy to communities in a 7,500 square mile area of central and 
northeastern Ohio having a population of approximately 2.8 million.
    Ohio Edison owns all of Penn Power's outstanding common stock. Penn 
Power was organized under the laws of the Commonwealth of Pennsylvania 
in 1930 and owns property and does business as an electric public 
utility in that state. Penn Power is also authorized to do business and 
owns property in the State of Ohio. Penn Power furnishes electric 
service to communities in a 1,500 square mile area of western 
Pennsylvania having a population of approximately 300,000.
    Cleveland Electric was organized under the laws of the State of 
Ohio in 1892 and does business as an electric public utility in that 
state. Cleveland Electric engages in the generation, distribution and 
sale of electric energy in an area of approximately 1,700 square miles 
in northeastern Ohio having a population of approximately 1.9 million. 
It also has ownership interests in certain generating facilities 
located in Pennsylvania.
    Toledo Edison was organized under the laws of the State of Ohio in 
1901 and does business as an electric public utility in that state. 
Toledo Edison engages in the generation, distribution and sale of 
electric energy in an area of approximately 2,500 square miles in 
northwestern Ohio having a population of approximately 800,000. It also 
has interests in certain generating facilities located in Pennsylvania.

Requested Authorization

    Applicants request authorization for certain transactions that are 
related to the sale of their respective interests in certain fossil-
fuel and hydroelectric generating facilities owned by the Utility 
Subsidiaries to FirstEnergy Generation Corp. (``FE GenCo''), which is a 
direct wholly-owned subsidiary of FirstEnergy Solutions Corp. (``FE 
Solutions'') and an indirect subsidiary of FirstEnergy. FE GenCo is an 
``exempt wholesale generator'' (``EWG'') under Section 32 of the Act. 
These asset transfers are in furtherance of FirstEnergy's Ohio and 
Pennsylvania corporate separation plans, which were described in 
FirstEnergy's Application/

[[Page 53032]]

Declaration for authorization to merge with GPU, Inc. (``GPU''). See 
HCAR No. 27459 (October 29, 2001). Specifically, the Utility 
Subsidiaries request authority to acquire the secured promissory notes 
from FE GenCo, as described below.
    The Utility Subsidiaries own, individually or together as tenants 
in common, interests in the following fossil-fuel and hydroelectric 
generating plants: \2\
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    \2\ The Utility Subsidiaries do not propose to transfer their 
remaining percentage ownership interests in certain fossil-fuel 
units that are not now being leased by FE GenCo.

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               Plant                        Location             MW                Ownership  (percent)
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Ashtabula 5........................  Ashtabula, OH........          244  Cleveland Electric 100.
Bay Shore 1-4......................  Toledo, OH...........          631  Toledo Edison 100.
Bay Shore Peaking..................  .....................           17
R.E. Burger 3-5....................  Shadyside, OH........          406  Ohio Edison 100.
R.E. Burger Peaking................  Shadyside, OH........            7  Ohio Edison 85.6.
                                                                         Penn Power 14.4.
Eastlake 1-5.......................  Eastlake, OH.........        1,233  Cleveland Electric 100.
Eastlake Peaking...................  .....................           29
Lakeshore 18.......................  Cleveland, OH........          245  Cleveland Electric 100.
Lakeshore Peaking..................  .....................            4
Bruce Mansfield 1..................  Shippingport, PA.....          780  Ohio Edison 60.
                                                                         Penn Power 33.5.
Bruce Mansfield 2..................  Shippingport, PA.....          780  Ohio Edison 43.06.
                                                                         Penn Power 9.36.
                                                                         Cleveland Electric 1.68.
Bruce Mansfield 3..................  Shippingport, PA.....          800  Ohio Edison 49.34.
                                                                         Penn Power 6.28.
W.H. Sammis 1-6....................  Stratton, OH.........        1,620  Ohio Edison 100.
W.H. Sammis 7......................  Stratton, OH.........          600  Ohio Edison 48.
                                                                         Penn Power 20.8.
                                                                         Cleveland Electric 31.2.
W.H. Sammis Peaking................  Stratton, OH.........           13  Ohio Edison 85.6.
                                                                         Penn Power 14.4.
Edgewater Peaking..................  Lorain, OH...........           48  Ohio Edison 86.
                                                                         Penn Power 14.0.
Richland Peaking 1-3...............  Defiance, OH.........           42  Toledo Edison 100.
Seneca.............................  Warren, PA...........          435  Cleveland Electric 100.
West Lorain Peaking Unit 1.........  Lorain, OH...........          120  Ohio Edison 100.
Mad River Peaking..................  Springfield, OH......           60  Ohio Edison 85.6.
                                                                         Penn Power 14.4.
Stryker Peaking....................  Springfield, OH......           18  Toledo Edison 100.
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    Currently, the Utility Subsidiaries lease all of the fossil and 
hydroelectric generating plants listed in the table above to FE GenCo, 
which, as indicated, has previously been certified by the Federal 
Energy Regulatory Commission (``FERC'') as an EWG.\3\ FE GenCo leases 
and operates these plants pursuant to the terms of a Master Facility 
Lease (``Master Lease''), dated as of January 1, 2001 (incorporated by 
reference as Exhibit B-1 to the Application). Applicants state that the 
Master Lease, which became effective on January 1, 2001, and has a term 
of twenty years, was intended as the first step in the eventual 
transfer of ownership of the leased plants to FE GenCo. Pursuant to 
Section 12 of the Master Lease, FE GenCo has an option to purchase the 
leased generating plants for the purchase price per unit listed in 
Exhibits A through D to the Master Lease. Section 12 of the Master 
Lease further provides that, upon exercise of the purchase option, FE 
GenCo may pay the purchase price either in cash or by executing a 
promissory note, secured by a lien on the transferred assets.
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    \3\ FE GenCo was approved by the FERC as an EWG on April 6, 
2001. FirstEnergy Generation Corp., 95 FERC ] 62,018 (2001).
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    Each of the Utility Subsidiaries and FE GenCo has entered into a 
Fossil Purchase and Sale Agreement (``Fossil PSA''), filed with this 
Application as Exhibits B-2 through B-5. Under the Fossil PSAs, FE 
GenCo has agreed to purchase each Utility Subsidiary's fossil units 
(and, in the case of Cleveland Electric, one hydroelectric generating 
facility), and to assume certain liabilities relating to the purchased 
units, for an amount equal to the aggregate purchase price for all 
units owned by the selling Utility Subsidiary, as set forth in Exhibits 
A through D of the Master Lease, as follows: Ohio Edison--$980 million; 
Penn Power--$125 million; Cleveland Electric--$408 million; and Toledo 
Edison--$88 million. As consideration for the purchased units, FE GenCo 
would deliver to the selling Utility Subsidiary its secured promissory 
note (``FE GenCo Note''), filed with the Application as Exhibits B-10 
through B-13. Each FE GenCo Note would be secured by a lien on the 
units purchased, bear interest at a rate per annum based on the average 
weighted cost of long-term debt of the Utility Subsidiary to which the 
FE GenCo Note is issued, and mature twenty years after the date of 
issuance. FE GenCo may prepay the FE GenCo Note at any time, in whole 
or in part, without penalty.
    The calculation of the average weighted cost of long-term debt of 
each of the Utility Subsidiaries as of March 31, 2005 is shown in 
Exhibit I to the Application. The actual interest rate on the FE GenCo 
Notes would be calculated in the same manner as of the end of the 
quarter next preceding the closing date.
    Under each Fossil PSA, FE GenCo has also agreed that, upon request 
of the selling Utility Subsidiary, it would assume the selling Utility 
Subsidiary's liabilities and obligations with respect

[[Page 53033]]

to certain outstanding pollution control revenue bonds (``PCRBs'') that 
were issued to finance pollution control equipment related to the 
purchased plants.\4\ If PCRB obligations are assumed by FE GenCo at or 
prior to closing, then the principal amount of the assumed obligations 
would reduce the principal amount of the applicable FE GenCo Note 
delivered by FE GenCo at closing. If FE GenCo assumes PCRB obligations 
after closing, the principal amount assumed would represent a payment 
of principal on the applicable FE GenCo Note delivered at closing.
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    \4\ Currently, the Utility Subsidiaries have outstanding 
obligations in respect of PCRBs in approximately the following 
principal amounts: Ohio Edison--$471 million; Penn Power--$63 
million; Cleveland Electric--$362 million; and Toledo Edison--$69 
million.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. E5-4839 Filed 9-2-05; 8:45 am]
BILLING CODE 8010-01-P