[Federal Register Volume 60, Number 38 (Monday, February 27, 1995)]
[Notices]
[Pages 10617-10620]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4650]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26233]
Filings Under the Public Utility Holding Company Act of 1935, As
Amended (``Act'')
February 17, 1995.
Notice is hereby given that the following filing(s) has/have been
made with the Commission pursuant to [[Page 10618]] provisions of the
Act and rules promulgated thereunder. 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 amendments thereto is/are
available for public inspection through the Commission's Office 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 March 15, 1995, to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, 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 case of an attorney at law, by
certificate) should be filed with the request. Any request for hearing
shall identify specifically the issues of fact 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 issues in the
matter. After said date, the application(s) and/or declaration(s), as
filed or as amended, may be granted and/or permitted to become
effective.
Eastern Utilities Associates, et al. (70-8523)
Eastern Utilities Associates (``EUA''), P.O. Box 2333, Boston,
Massachusetts 02107, a registered holding company, and its wholly owned
subsidiary, EUA Cogenex Corporation (``Cogenex''), P.O. Box 2333,
Boston, Massachusetts 02107, have filed an application-declaration
pursuant to Sections 6(a), 7, 9(a), 10, 12(b) and 12(f) of the Act and
Rules 43(a) and 45(a) promulgated thereunder.
Cogenex requests authority to acquire a non-associate company,
Highland Energy Group, Inc. (``Highland Energy''), in a transaction
structured as a statutory merger of Highland Energy with a subsidiary
of EUA to be established for the acquisition. Highland Energy is a
national energy services company that has extensive experience in the
industry of energy efficiency. Highland Energy designs, executes,
finances, monitors, maintains, and guarantees energy savings programs
for public consumers, such as schools and hospitals, and for private
energy consumers, such as office buildings and businesses, under multi-
year contracts.
To effect the acquisition, EUA would establish a subsidiary
(``Newco'') which would acquire the shares of Highland Energy in
exchange for shares of EUA. The initial authorized capitalization of
would be 200,000 shares of common stock, $.01 par value, of which
10,000 would be issued to EUA for $100. Following the establishment of
Newco and its acquisition of the shares of Highland Energy, Newco would
change its name to EUA Highland Corporation (``EUA Highland'') and
Cogenex would acquire all the shares of EUA Highland from EUA for $100.
The consideration for the acquisition by Newco of Highland Energy
will be in EUA common shares to be paid at the time Highland Energy
shares are transferred to Cogenex (``Closing'') plus a contingent earn-
out amount, to be paid in EUA common shares at a later time. Any
amounts representing fractional shares will be paid in cash. The
payment made at the Closing will be worth an estimated $4.2 million
(``Closing Amount''), measured by the average closing market price over
a 5-day period before the Closing.
The earn-out amount to be paid later in EUA common shares will
range from zero to $3.8 million, measured by the average closing market
price over a 5-day period before the date the earn-out amount is due.
The amount owed at that time will be based on the earnings performance
of EUA Highland over the three year period following the Closing.
Notwithstanding the foregoing, EUA's obligation to pay the earn-out
amount in EUA shares is limited to the number of shares used to pay the
Closing Amount. Any excess of the earn-out amount over the value,
measured as described in this paragraph, of the number of shares issued
by EUA to pay the earn-out amount will be payable in cash. Assuming an
EUA common share price of $22.00 per share, up to 363,636 common share
of EUA could be issued in the acquisition.
Additionally, Cogenex requests authority through December 31, 1997
to make investments in EUA Highland in any combination of capital
contributions or short-term loans not to exceed a combined aggregate
amount of $10 million. The terms of such short-term borrowing will be
the same terms as those for funds borrowed by Cogenex from EUA under
its system lines of credit. Further, Cogenex requests authorization to
guarantee performance obligations of EUA Highland in connection with
ongoing operations, in amounts that in aggregate will not exceed $10
million.
New England Electric System, et al. (70-8555)
New England Electric System (``NEES''), a registered holding
company, and its wholly owned nonutility subsidiary company, New
England Electric Resources, Inc. (``NEERI''), both of 25 Research
Drive, Westborough, Massachusetts 01582, have filed an application-
declaration under sections 6(a), 7, 9, 10 and 12(b) of the Act and rule
45 thereunder.
By Commission orders dated September 4, 1992 (HCAR No. 25621) and
April 1, 1994 (HCAR No. 26017), NEERI was authorized to provide
electrical related and consulting services to nonaffiliates and NEES
was authorized to provide financing to NEERI. By Commission order May
25, 1994 (HCAR No. 26057), NEERI was authorized to invest in a company
formed to develop, manufacture and market a low harmonic distortion
uninterruptible power supply and NEES was authorized to provide
additional financing to NEERI.
NEERI now proposes to engage in preliminary research and
development activities (``Development Activities'') in connection with
potential investments in exempt wholesale generators and foreign
utility companies. NEES proposes to provide up to $10 million to NEERI
from time-to-time through December 31, 1997, through capital
contributions and/or non-interest bearing subordinated loans, for
NEERI's Development Activities.
Central and South West Corporation, et al. (70-8557)
Central and South West Corporation (``CSW''), a registered holding
company, its service company subsidiary, Central and South West
Services, Inc. (``Services''), both located at 1616 Woodall Rodgers
Freeway, Dallas, Texas 75202, CSW's public-utility subsidiary
companies, Central Power and Light Company (``CPL''), 539 North
Carancahua Street, Corpus Christi, Texas 78401-2802, Public Service
Company of Oklahoma (``PSO''), 212 East Sixth Street, Tulsa, Oklahoma
74119-1212, Southwestern Electric Power Company (``SWEPCO''), 428
Travis Street, Shreveport, Louisiana 71156-0001, West Texas Utilities
Company (``WTU''), 301 Cypress Street, Abilene, Texas 79601-5820, and a
nonutility subsidiary company, Transok, Inc. (``Transok''), 2 West
Sixth Street, Tulsa, Oklahoma 74119 (collectively, ``Subsidiaries'')
have filed an application-declaration under Sections 6(a), 7, 9(a), 10,
12(b) and 12(f) of the Act and Rules 43, 45 and 54 thereunder.
CSW and its Subsidiaries propose to continue, through March 31,
1997, their short-term borrowing program, which includes the sale of
commercial paper by CSW to commercial paper dealers and financial
institutions and the sale of short-term notes to banks and their trust
[[Page 10619]] departments by CSW and the Subsidiaries (``External
Program'') and the CSW System money pool (``Money Pool''), as
previously authorized by orders dated March 31, 1993, September 28,
1993, March 18, 1994, June 15, 1994, and February 1, 1995 (HCAR Nos.
25777, 25897, 26007, 26066 and 26226, respectively) (``Prior Orders'').
The External Program would be coordinated through the use of the Money
Pool, whereby CSW and its Subsidiaries would make loans to, and the
Subsidiaries would borrow from, the Money Pool. Loans to the
Subsidiaries through the Money Pool will be made pursuant to open-
account advances or loans evidenced by notes.
The External Program and the Money Pool would make funds available
to the Subsidiaries for the interim financing of their capital
expenditure programs and their other working capital needs, and to CSW
to loan and, when approved by the Commission, to make capital
contributions to any of the Subsidiaries and in both instances to repay
previous borrowings incurred for such purposes. Funds for the Money
Pool would be available from surplus funds from the treasuries of CSW
and the Subsidiaries, from proceeds from the sale of commercial paper
by CSW and bank borrowings by CSW and its Subsidiaries. Funds to be
loaned to the Subsidiaries are obtained in the following order of
priority: (1) Available surplus funds of the Subsidiaries will be used
to satisfy the borrowing needs of other Subsidiaries before any funds
of CSW are used; (2) available surplus funds in CSW's treasury; and (3)
external borrowings by CSW from the sale of commercial paper and/or
bank borrowings. External borrowings by CSW would not be made unless
there were no surplus funds in the treasuries of the Subsidiaries or
CSW sufficient to meet borrowing needs. However, no loan will be made
by CSW or any Subsidiary if the borrowing company could borrow more
cheaply directly from banks or through the sale of its own commercial
paper. When more than one Subsidiary is borrowing, each borrowing
Subsidiary will borrow pro rata from each fund source in the same
proportion that the amount of funds provided by that fund source bears
to the total amount of short-term funds available to the Money Pool.
The interest rate applicable on any day to the then outstanding
loans through the Money Pool will be the composite weighted average
daily effective cost incurred by CSW for short-term borrowings from
external sources. If there are no borrowings outstanding then the rate
would be the certificate of deposit yield equivalent of the 30-day
Federal Reserve ``AA'' Industrial Commercial Paper Composite Rate
(``Composite''), or if no composite is established for that day then
the applicable rate will be the Composite for the next preceding day
for which the Composite is established.
The aggregate principal amounts of short-term borrowing outstanding
at any one time requested by CSW and its Subsidiaries are: (1) CSW--
$1.2 billion; (2) CP&L--$300 million; (3) PSO--$125 million; (4)
SWEPCO--$150 million; (5) WTU--$65 million; (6) Services--$110 million;
and (7) Transok--$200 million. These amounts reflect an increase in
borrowing levels from those authorized in the Prior Orders for: (1) CSW
of $250 million to accommodate additional investments in CSW
International, Inc., CSW Energy, Inc., CSW Communications and new Money
Pool and short-term borrowing requirements; (2) PSO of $25 million to
provide interim financing for additional capital expenditures and other
temporary working capital needs; and (3) WTU of $15 million to provide
interim financing for additional capital expenditures and other
temporary working capital needs. The aggregate principal amount of
outstanding borrowings for CSW and its Subsidiaries together will not
exceed $1.2 billion.
To provide funds for the Money Pool, CSW proposes to issue and sell
commercial paper (``Commercial Paper''). The Commercial Paper will
mature in 270 days or less and will be issued from time-to-time through
March 31, 1997 to commercial paper dealers (``Dealers'') and certain
financial institutions.
The Commercial Paper issued to Dealers will be in the form of
either physical or book-entry unsecured promissory notes. Such notes
will be issued and sold by CSW directly to Dealers at a rate not to
exceed the rate per annum prevailing at the time of issuance for
commercial paper of comparable quality and maturity sold by issuers
thereof to Dealers. No commission or fee will be payable in connection
with the issuance and sale of the Commercial Paper. The purchasing
dealer, however, will reoffer the notes at a rate less than the rate to
the issuer and, as principal, will reoffer such notes in such a manner
as not to constitute a public offering under the Securities Act of
1933.
Sales of Commercial Paper directly to financial institutions will
be undertaken only if the resulting cost of money is equal to or less
than that available from Dealers or banks. Terms for directly placed
notes would be similar to those of dealer placed notes.
CSW and its Subsidiaries further propose to borrow money from
banks, from time-to-time through March 31, 1997, to the extent that the
surplus funds of CSW and the Subsidiaries are insufficient to meet the
Subsidiaries' requests for short-term loans and subject to the
limitations on aggregate principal amounts, above. Such borrowing will
not be made unless it would produce a lower cost of money than the
issue of CSW's Commercial Paper and, in any event, they will not bear a
rate of interest higher than the effective cost of money for unsecured
prime commercial bank loans prevailing on the date of borrowing. The
borrowings will be evidenced by promissory notes maturing no later than
March 31, 1997 and will be subject to prepayment by the borrower, or
under certain circumstances with consent of the lending bank, in whole
at any time or in part from time-to-time, without penalty.
Compensation arrangements under lines of credit with banks
maintained by CSW and its Subsidiaries are on a balance or fee basis.
In general, fees range from \1/10\ to \1/5\ of 1% per annum on the
average unused portion of the commitment and balance arrangements
require average balances of 3% of the amount of the commitment. CSW
also proposes, from time-to-time through March 31, 1997, to borrow
funds managed by the trust departments of banks if such borrowings
result in a cost of money equal to or less than that available from the
sale of commercial paper or other bank borrowings.
Neither CSW nor the Subsidiaries will use the proceeds from the
proposed borrowings to finance the acquisition of an ``exempt wholesale
generator'' or ``foreign utility company,'' as respectively defined in
Sections 32 and 33 of the Act, without further Commission
authorization.
The Southern Company, et al. (70-8567)
The Southern Company (``Southern''), 64 Perimeter Center East,
Atlanta, Georgia 30346, a registered holding company, and its wholly
owned subsidiary company, Southern Nuclear Operating Company, Inc.
(``Southern Nuclear''), 40 Inverness Center Parkway, Birmingham,
Alabama 35204, have filed an application-declaration under Sections
6(a), 7, 9(a), 10 and 12(b) of the Act and Rules 45 and 54 thereunder.
Southern Nuclear proposes to borrow, from time to time through
March 31, 1998, from Southern or other lenders up to an aggregate
principal amount of $10 million at any time outstanding.
[[Page 10620]] Borrowings from Southern will have maturities not to
exceed ten years and will accrue interest at a rate equal to the
average effective interest cost of Southern's outstanding obligations
for borrowed money on the first day of each month, or if no obligations
are outstanding at the time, at a rate equal to the weekly average of
the thirty-day certificate of deposit rate (secondary market) as
reported in the Federal Reserve statistical release H.15 (519) for the
next to the last complete business week of the preceding calendar
month. However, this rate will not exceed the prime rate in effect at a
nationally recognized bank to be designated by Southern. Loans obtained
from lenders other than Southern will have maturities not to exceed ten
years and will accrue interest at a rate not to exceed the prime rate
plus 2% for variable rate loans and the prime rate at the time of
borrowing plus 3% for fixed rate loans. Such loans may be secured or
unsecured and may be guaranteed by Southern.
Southern proposes through March 31, 1998, to make up to $5 million
in open account advances to Southern Nuclear from time to time, which,
at the option of Southern, may be converted into capital contributions
or additional shares of common stock of Southern Nuclear. To the extent
any such advances are converted to equity, the borrowing authority
sought herein shall be reduced by the amount of the advances so
converted, so that the total capitalization of Southern Nuclear does
not exceed $11.6 million (including its present common equity of $1.6
million). The rate of return on Southern Nuclear's common equity
capital will not exceed the average of the most recent rates of return
allowed by the Alabama Public Service Commission and the Georgia Public
Service Commission.
Southern Nuclear states that the funds will be used by Southern
Nuclear in connection with its working capital needs, including the
purchase of equipment and office furniture, leasehold improvements and
loans to employees for purposes such as residential energy programs,
purchases of computers and employee transfer expenses.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-4650 Filed 2-24-95; 8:45 am]
BILLING CODE 8010-01-M