[Federal Register Volume 65, Number 83 (Friday, April 28, 2000)]
[Notices]
[Pages 25010-25014]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-10566]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27171]


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

April 21, 2000.
    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 May 16, 2000, 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 May 16, 2000, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Energy East Corp., et al. (70-9569)

    Energy East Corp. (``Energy East''), P.O. Box 1196, Stamford, 
Connecticut 06904-1196, a New York corporation and a public utility 
holding company exempt from registration under section 3(a)(1) of the 
Act, by order of the Commission dated February 2, 2000,\1\ CMP Group, 
Inc. (``CMP Group''), 83 Edison Dr., Augusta, Maine 04336, a Maine 
corporation and a public utility holding company exempt from 
registration under section 3(a)(1) of the Act, by order of the 
Commission dated February 12, 1999,\2\ CTG Resources, Inc. (``CTG 
Resources''), 100 Columbus Boulevard, Hartford, Connecticut 06103, a 
Connecticut corporation and a public utility holding company exempt 
from registration under section 3(a)(1) by rule 2 under the Act, and 
Berkshire Energy Resources (``Berkshire Energy''), 115 Chesire Road, 
Pittsfield, Massachusetts 01201, a Massachusetts corporation, and a 
public utility holding company exempt from registration under section 
3(a)(2) by rule 2 under the Act (collectively, ``Applicants''), have 
filed with this Commission an application under sections 9(a)(2), 10 
and 11 under the Act.
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    \1\ Holding Co. Act Release No. 27128.
    \2\ Holding Co. Act Release No. 26977.
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    The Applicants seek authorization for Energy East to acquire all of 
the issued and outstanding common stock of CMP Group, CTG Resources and 
Berkshire Energy (``Merger''). Under the proposed transactions, CMP 
Group, CTG Resources and Berkshire Energy would become direct 
subsidiaries of Energy East and Energy East would register as a public 
utility holding company under section 5 of the Act.\3\ The Applicants 
also seek authorization to operate as a combination electric and gas 
utility holding company. In addition, Energy East seeks authorization 
to retain its interests in its utility and nonutility activities, 
businesses and investments and to acquire and retain the interests of 
CMP Group, CTG Resources and Berkshire Energy's utility and nonutility 
activities, businesses and investments.
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    \3\ The Applicants have also filed in S.E.C. file no. 70-9609 an 
application-declaration related to the financing of the proposed 
Energy East registered holding company system.
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Description of the Merger \4\
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    \4\ The Merger will be accounted for as an acquisition of CMP 
Group, CTG Resources and Berkshire Energy by Energy East under the 
purchase method of accounting in accordance with generally accepted 
accounting principles.
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    On June 14, 1999, CMP Group, Energy East and EE Merger Corp. (a 
wholly owned subsidiary of Energy East) entered into the CMP Group 
Merger Agreement. The CMP Group Merger Agreement contemplates that EE 
Merger Corp., will merge with and into CMP Group with CMP Group being 
the surviving corporation and becoming a wholly owned subsidiary of 
Energy East (``CMP Group Merger''). Under the terms of the CMP Group 
Merger Agreement, each outstanding share of CMP Group's common stock, 
$5.00 par value per share, other than dissenting shares and any 
treasury shares or shares owned by CMP Group, Energy East or any of 
their subsidiaries, will be converted into the right to receive $29.50 
in cash. Under the CMP Group Merger Agreement, approximately $957 
million in cash will be paid to holders of shares of CMP Group common 
stock.
    On June 29, 1999, CTG Resources entered into the CTG Resources 
Merger Agreement with Energy East and Oak

[[Page 25011]]

Merger Co. (``Oak''), a Connecticut corporation and a wholly owned 
subsidiary of Energy East. CTG Resources will merge with and into Oak, 
with Oak being the surviving corporation (``CTG Resources Merger''). 
Oak will continue to conduct CTG Resource's business under the name 
``CTG Resources, Inc.'' as a direct, wholly owned subsidiary of Energy 
East. Under the terms of the CTG Resources Merger Agreement, each 
outstanding share of CTG Resources common stock, other than dissenting 
shares, will be converted into the right to receive: (i) $41.00 in cash 
(``CTG Resources Cash Consideration''); (ii) a number of shares of 
Energy East common stock equal to the Exchange Ratio; or (iii) the 
right to receive a combination of cash and shares of Energy East common 
stock. The ``Exchange Ratio'' shall be equal to the CTG Resources Cash 
Consideration divided by either; (i) the Energy East share price if the 
Energy East share price is equal to or less than $30.13 and equal to or 
more than $23 .67; (ii) $30.13 if the energy East share price is 
greater than $30.13, in which case the Exchange Ratio will equal 
1.3609; or (iii) $23.67 if the Energy East share price is less than 
$23.67, in which case the Exchange Ratio will equal 1.7320. The Energy 
East share price will equal the average of the closing prices of Energy 
East common stock as reported in the Wall Street Journal, for the 20 
trading days immediately preceding the second trading day prior to the 
effective time of the CTG Resources Merger. The aggregate number of 
shares of CTG Resources' common stock that is convertible into cash is 
limited to 55% of the total number of shares of CTG Resources common 
stock issued and outstanding as of the effective time of the CTG 
Resources Merger.
    On November 9, 1999, Berkshire Energy, Energy East and Mountain 
Merger LLC entered into the Berkshire energy Merger Agreement Mountain 
Merger LLC will merge with and into Berkshire Energy, with Berkshire 
Energy being the surviving company and becoming a wholly owned 
subsidiary of Energy East (``Berkshire Energy Merger''). Under the 
terms of the Berkshire Energy Merger Agreement, each outstanding 
Berkshire Energy common share, without par value, other than any 
treasury shares of shares owned by Berkshire Energy, Energy East or any 
of their subsidiaries, will be converted into the right to receive 
$38.00 in cash. Under the Berkshire Energy Merger Agreement, 
approximately $96 million in cash will be paid to holders of Berkshire 
Energy common shares.
    As a result of the Merger, the post-merger Energy East System will 
have pro forma assets of approximately $7.275 billion for the twelve 
month period ended September 30, 1999 and combined operating revenues 
of approximately $3.9 billion, for the same period. If approved, the 
Energy East System will serve approximately 1,359,000 electric 
customers in two states and 579,800 gas customers in four states. 
Following completion of the Merger, Energy East will register with the 
Commission, as a holding company, under section 5 of the Act.

Parties to the Merger

Energy East and Its Subsidiaries
    Energy East, through its subsidiaries, is an energy delivery, 
products and services company with operations in New York, Connecticut, 
Massachusetts, Maine, New Hampshire, Vermont and New Jersey. Energy 
East currently owns, directly or indirectly, three public utility 
companies: New York State Electric & Gas Corporation (``NYSEG''), CMP 
Natural Gas, L.L.C. (``Maine Gas Co.'') and The Southern Connecticut 
Gas Company (``Southern Connecticut Gas``).\5\
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    \5\ NYSEG and Southern Connecticut Gas are wholly owned 
subsidiaries of Energy East. Maine Gas Co. is a joint venture 
between New England Gas Development Corporation, a wholly owned 
subsidiary of CMP Group, and Energy East Enterprises, (``EE 
Enterprises''), a wholly owned subsidiary of Energy East.
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    NYSEG's service territory is in the central, eastern and western 
parts of New York. NYSEG's service territory has an area approximately 
19,900 square miles and a population of 2,400,000. The larger cities in 
which NYSEG serves both electricity and natural gas customers are 
Binghamton, Elmira, Auburn, Geneva, Ithaca and Lockport, New York. No 
customer accounts for 5% or more of either electric or natural gas 
revenues. During 1996 through 1998, approximately 84% of NYSEG's 
operating revenue was derived from electric service with the balance 
derived from natural gas service.
    As of December 31, 1998, NYSEG's electric transmission system 
consisted of approximately 4,482 circuit miles of line. NYSEG's 
electric distribution system consisted of 33,858 pole-miles of overhead 
lines and 2,109 miles of underground lines.
    For the twelve months ended September 30, 1999, Energy East's 
consolidated gross utility revenues consisted of electric revenues of 
approximately $1,725,112,000 (84%) and gas revenues of approximately 
$322,870,000 (16%). Energy East's utility operating income and utility 
net income available for common stock were $615,872,000 and 
$232,383,000, respectively. Consolidated assets of Energy East and its 
subsidiaries as of September 30, 1999, were approximately $4.0 billion, 
consisting of $2.1 billion in net utility plant and $1.9 billion in 
other utility and nonutility assets. For the twelve months ended 
September 30, 1999, consolidated operating revenues, operating income 
and net income for Energy East and its subsidiaries were approximately 
$2,348,310,000, $565,003,000, and $233,044,000 respectively. 
Connecticut Energy's operating revenues totaled approximately 
$228,296,000 for the twelve months ended September 30, 1999. 
Connecticut Energy's consolidated net income for the same period was 
$17 million.
    NYSEG is engaged in the business of purchasing, transmitting and 
distributing electricity and purchasing, transporting and distributing 
natural gas. NYSEG also generates electricity from its 18% share of the 
Nine Mile Point Unit 2 Nuclear Plant (``NM2'') and from its 
hydroelectric stations. NYSEG has agreed to sell its share of NM2.\6\ 
NYSEG serves 826,000 electric customers and 244,000 natural gas 
customers in upstate New York. NYSEG retains hydroelectric facilities 
with an aggregate capacity of 623 MW, nonutility generation (``NUG'') 
contracts and contracts under which the New York Power Authority sells 
power to NYSEG, as well as an 18% ownership interest in the NM2.
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    \6\ NYSEG has contracted to sell its 18% interest in NM2 to 
AmerGen Energy Corporation (``AmerGen''). Approval of that sale is 
pending before the New York Public Service Commission (``NYPSC''). 
In December 1999, Rochester Gas & Electric Corporation (``RG&E''), 
an NM2 cotenant, exercised its right of first refusal in connection 
with the sale of plant. The NYPSC began settlement negotiations in 
January 2000, seeking modifications to the proposed terms of the 
sale, whether to AmerGen or RG&E. An application for authorization 
to transfer associated jurisdictional facilities filed under section 
203 of the Federal Power Act is also pending before the Federal 
Energy Regulatory Commission (``FERC'').
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    Maine Gas Co., a gas utility company, is in the process of 
constructing a local natural gas distribution system, on a nonexclusive 
basis, in certain areas of the state or Maine, including among others, 
the Bethel, Windham, Augusta, Waterville and Bangor metropolitan areas, 
and the coastal area, including Brunswick and Bath. Maine Gas Co. began 
to provide service to retail customers in May 1999.
    On April 23, 1999, Energy East and Connecticut Energy Corporation 
(``Connecticut Energy'') entered into an

[[Page 25012]]

agreement and plan of merger. On February 2, 2000 the Commission issued 
an order authorizing the merger.\7\ On February 8, 2000 Energy East 
completed its merger with Connecticut Energy. Connecticut Energy, an 
exempt holding company, is primarily engaged in the retail distribution 
of natural gas through its principal wholly owned subsidiary, Southern 
Connecticut Gas.
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    \7\ Holding Co. Act Release No. 27128.
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    Southern Connecticut Gas, a public utility company incorporated 
under the laws of Connecticut, is engaged in the retail distribution of 
natural gas for residential, commercial and industrial users and the 
transportation of natural gas for commercial and industrial users.\8\ 
Southern Connecticut Gas serves approximately 158,000 customers in 
Connecticut, primarily in 22 towns along the southern Connecticut coast 
from Westport to Old Saybrook, which include the urban communities of 
Bridgeport in New Haven. Southern Connecticut Gas is the sole 
distributor of natural gas, other than bottled gas, in its service 
area.
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    \8\ Southern Connecticut Gas is a ``gas utility company'' as 
defined in section 2(a)(4) of the Act.
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    Connecticut Energy has a number of direct and indirect nonutility 
subsidiaries including CNE Energy Services Group, In. (``CNE Energy''), 
CNE Development Development Corporation (``CNE Development'') and CNE 
Venture-Tech, Inc. (``CNE Venture-Terch''). All three of these 
nonutility subsidiaries are Connecticut corporation.
    CNE Energy, a wholly owned subsidiary of Connecticut Energy, 
provides an array of energy products and services to commercial and 
industrial customers throughout New England, both on its own through 
participation as a member of various energy-related limited liability 
companies. CNE Energy's principle subsidiaries are Energy East 
Solutions, LLC; Total Peaking Services, LLC, a wholly owned subsidiary 
of CNE Energy, which operates a 1.2 billion cubic foot liquefied 
natural gas open access storage facility in Milford, Connecticut, a 
Conectiv/CND Peaking, LLC, a wholly owned subsidiary of CNE Energy, 
which provides a firm in-market supply source to assist marketers and 
local gas distribution companies in meeting the maximum demands of 
their customers by offering firm supplies for peak-shaving and 
emergency deliveries.
    CNE Development, a wholly owned subsidiary of Connecticut Energy, 
is a 16.67% equity participant in East Coast Natural Gas Cooperative, 
LLC (``East Coast''). East Coast purchases and stores spot gas 
supplies, provides storage service utilization services and is involved 
in bundled sales.
    CNE Venture-Tech, a wholly owned subsidiary of Connecticut Energy, 
invests in ventures that produce or market technology advanced energy-
related products. CNE Venture-Tech owns a 7.8884% limited partnership 
interest in Nth Power Technologies Fund I, L.P., which invests in 
companies that develop, produce and market innovative energy-related 
products; and CIS Service Bureau, LLC, a service bureau which provides 
access to customer-billing software and other related services for 
local distribution and other utility-type companies (including Southern 
Connecticut Gas) and which is wholly owned by CNE Venture-Tech.
    Energy East also has a number of direct and indirect nonutility 
subsidiaries including EE Enterprises, a Maine corporation, XENERGY 
Enterprises, Inc. (``XENERGY''), a Delaware corporation, and Energy 
East Management Corporation (``Energy East Management''), a Delaware 
corporation.
    EE Enterprises owns natural gas and propane air distribution 
companies. It is a wholly owned subsidiary of Energy East. It is 
currently an exempt public utility holding company under the Act by 
order of the Commission dated February 12, 1999.\9\ It indirectly holds 
public utility assets through its ownership of a 77% interest in Maine 
Gas Co., a gas utility company.
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    \9\ Holding Co. Act Release No. 26976.
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    EE Enterprises' nonutility subsidiaries: New Hampshire Gas 
Corporation, a New Hampshire corporation, which is a wholly owned 
subsidiary of EE Enterprises and is an energy services company in New 
Hampshire specializing in propane air distribution systems; Southern 
Vermont Natural Gas Corporation, a Vermont corporation, which is a 
wholly owned subsidiary of EE Enterprises and is developing a combined 
natural gas supply and distribution project that includes a extension 
of a pipeline from New York to Vermont by Iroquois Gas Transmission 
System and the development of natural gas distribution systems in 
Vermont; and Seneca Lake Storage, Inc., a New York corporation, which 
is a wholly subsidiary of EE Enterprise and proposes to own and operate 
a gas storage facility in New York.
    XENERGY is a wholly owned subsidiary of Energy East. It currently 
holds no public utility assets and is neither a public utility company 
nor a holding company under the Act. XENERGY invests in providers of 
energy and telecommunication services. XENERGY's principal subsidiaries 
are as follows:
    XENERGY Inc., a Massachusetts corporation, is a wholly owned 
subsidiary of XENERGY and is an energy services, information systems 
and consulting company that specialties in energy management, 
conservation engineering and demand-side management.
    Energy East Solutions, Inc., a Delaware corporation, and a wholly 
owned subsidiary of XENERGY, markets electricity and natural gas to end 
users and provides wholesale commodities to retail electric suppliers 
in the northeastern United States.
    NYSEG Solutions, Inc., a New York corporation and a wholly owned 
subsidiary of Energy East Solutions, markets electricity and natural 
gas to end users and provides wholesale commodities to retail electric 
suppliers in the state of New York.
    South Jersey Energy Solutions, LLC, a Delaware limited liability 
company, is a partially owned subsidiary of Energy East Solutions and 
was formed to market retail electricity and energy management services 
in the mid-Atlantic region of the United States.
    Energy East Solutions, LLC, a Delaware limited liability company, 
is a partially owned subsidiary of Energy East Solutions and CNE Energy 
Services Group, Inc. and sells natural gas, fuel oil and other 
services, and markets a full range of energy-related planning, 
financial, operational and maintenance services to commercial, 
industrial and municipal customers in New England.
    Energy East Telecommunications, Inc., a Delaware corporation, is a 
wholly owned subsidiary of XENERGY Enterprises and was formed to 
provide telecommunication services, including the construction and 
operation of fiber optic networks.
    Telergy East, LLC, a New York limited liability company, is a 
partially owned subsidiary of Energy East Telecommunications, Inc., and 
was formed to construct, own and operate a fiber optic network.
    Cayuga Energy, Inc., a Delaware corporation, is a wholly owned 
subsidiary of XENERGY Enterprises and invests in co-generation 
facilities.
    Carthage Energy, LLC, a New York limited liability company, is a 
wholly owned subsidiary of Cayuga and owns a co-generation facility in 
upstate New York. It is an exempt wholesale generator (``EWG''), as 
defined in section 32 of the Act.
    South Glens Falls Energy, LLC, a New York limited liability 
company, is a

[[Page 25013]]

partially owned subsidy of Cayuga Energy, Inc. and owns a co-generation 
facility in upstate New York. It is an exempt EWG, as defined in 
Section 32 of the Act.
    XENERGY Inc.'s subsidiaries are as follows:
    XENERGY Canada, Inc., incorporated in Quebec, Canada, is a wholly 
owned subsidiary of XENERGY, Inc. and provides software services 
related to a utility client management system.
    XENERGY International, a Delaware corporation, is a wholly owned 
subsidiary of XENERGY, Inc. and is an energy services, information 
systems and consulting company that specializes in energy management, 
conservation engineering and demand-side management in the United 
Kingdom and Spain.
    KENETECH Energy Management, Inc. (``KENETECH''), a Massachusetts 
corporation, is a wholly owned subsidiary of XENERGY, Inc. and is an 
energy services company specializing in energy management.
    KENETECH Energy Management International, Inc. (``KENETECH 
International''), a Delaware corporation, is a wholly owned subsidiary 
of KENETECH and is an energy services company specializing in energy 
management.
    KENETECH Energy Management Limited, a limited company formed in 
Ontario, Canada, is a wholly owned subsidiary of KENETECH International 
and is an energy services company specializing in energy management.
    KEM 1991, Inc. (``KEM 1991''), a Delaware corporation, is a wholly 
owned subsidiary of KENETECH and is an energy services company 
specializing in energy management.
    KEM partners 1991, L.P., a Delaware limited partnership, is an 
energy services company specializing in energy management. All of its 
interests are owned by KENETECH and KEM 1991.
    Other current direct nonutility subsidiaries of Energy East are: 
Energy East Management Corporation, a Delaware corporation that invests 
the proceeds of the 1999 sale of Energy East's coal-fired generation 
assets;\10\ Oak, formed solely for the purpose of consummating the 
proposed merger with CTG Resources and which, upon consummation of such 
merger, will change its name to, and operate under, the name of ``CTG 
Resources, Inc.''; and EE Merger Corp., a Maine corporation, formed 
solely for the purpose of consummating the proposed merger with CMP 
Group.
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    \10\ Energy East Management Corporation's investments are 
passive.
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CMP Group and Its Subsidiaries
    CMP Group is a holding company by virtue of owning, directly or 
indirectly, the voting securities of Central Main Power, Maine Electric 
Power Company, Inc. (``MEPCo''), NORVARCO and Maine Gas Co., all public 
utility companies as defined in the Act.
    CMP Group's principal utility subsidiary, Central Maine Power, is 
primarily engaged in transmitting and distributing electricity 
generated by others to retail customers in Maine.\11\ Central Maine 
Power is the largest electric utility in Maine and serves approximately 
538,000 customers in its 11,000 square-mile service area in southern 
and central Maine. Central Maine Power had approximately $972 million 
in consolidated electric operating revenues in the twelve month period 
ended September 30, 1999.
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    \11\ Central Maine Power has sold its hydroelectric, fossil and 
biomass generating assets. Central Maine Power has sold its 
entitlements to purchase capacity and energy under the NUG 
contracts, as well as its entitlements to energy from its 2.5% 
interest in the Millstone 3 nuclear plant, and from its 4% interest 
in the Vermont Yankee nuclear plant, and its entitlement in a firm 
energy contract with Hydro Quebec. Further, Central Maine Power 
entered into an agreement to sell its ownership interest in Vermont 
Yankee, and it has reached an agreement with Northeast Utilities, 
the majority owner of Millstone 3, whereby Northeast Utilities will 
include Central Maine Power's interest in its planned auction of 
Millstone 3. The sales of generating capacity and entitlements to 
purchase capacity and energy under NUG contracts, nuclear interest 
and the Hydro Quebec contract were conducted under the requirements 
of Maine's recently enacted electric utility restructuring 
legislation and Maine Public Utilities Commission (``MPUC'') Rules 
and Regulations.
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    As of December 31, 1999, Central Maine Power's delivery system 
consisted of 2,288 miles of overhead transmission lines, 19,754 pole-
miles of distribution lines and 155 miles of network underground and 
submarine cable.
    For the twelve months ended September 30, 1999, CMP Group's 
operating revenue on a consolidated basis was approximately 
$1,006,000,000 of which approximately $972,000,000 was derived from 
electric operations, and $33,715,000 from other operations. 
Consolidated assets of CMP Group and its subsidiaries at September 30, 
1999 were approximately $807,596,000 in net electric utility property, 
plant and equipment, and approximately $1,338,584,000 in other 
corporate assets.
    Central Maine Power currently has two utility subsidiaries, each of 
which is organized and operates exclusively in Maine: MEPCo and 
NORVARCO. MEPCo owns and operates a 345kV transmission interconnection 
between the Maine-New Brunswick, Canada international border at Orient, 
Maine. Central Maine Power owns a 78.3% voting interest in MEPCo, with 
the remaining interests owned by two other Maine utilities. NORVARCO 
holds a 50% general partnership interest in Chester SVC Partnership, a 
general partnership which owns a static var compensator in Chester, 
Maine, adjacent to MEPCo's transmission interconnection.
    Central Maine Power owns a 38% voting interest in Maine Yankee 
Atomic Power Company, which owns the Maine Yankee nuclear electric 
generating plant in Wiscasset, Maine.\12\
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    \12\ Maine Yankee's plant was permanently shut down on August 6, 
1997. Central Maine Power also holds a 9.5% voting interest in 
Yankee Atomic Electric Company, which permanently shut down its 
plant located in Rowe, Massachusetts, and 6% voting interest in 
Connecticut Yankee Atomic Power Company, which permanently shut down 
its plant in Haddam, Connecticut.
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    CMP group's nonutility subsidiaries are as follows.\13\
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    \13\ All companies involved in telecommunications are either 
exempt telecommunication companies (``ETC''), under section 34 of 
the Act or Applicants expect to seek ETC status with respect to such 
companies.
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    CNEX (formerly called CMP International Consultants), provides 
consulting, planning, training, project management, and information and 
research services to foreign and domestic utilities and government 
agencies in various aspects of utility operations and utility support 
services.
    MaineConn Services (``MaineCom''), develops fiber-optic data 
service for bulk carriers and provides other telecommunications 
services, including point to point connections, private networking, 
consulting, private and voice and data transport, carrier services, and 
long-haul transport. MaineCom holds direct or indirect voting interests 
in various entities that are in the business of developing a fiber-
optics network in the northeast. It is subject to regulation by the 
MPUC, with respect to making available a fiber optics cable for public 
use in Maine.
    Northeast Optic Network (``NEON'') develops, constructs, owns and 
operates a fiber optic telecommunications system in New York and New 
England. New England Business Trust, a wholly owned subsidiary of 
MaineCom owns 37.9% of NEON's common stock.
    TeleSmart provides, for utility companies, collections and related 
accounts receivable management services and has a division which 
collects charged-off accounts. TeleSmart is currently in the process of 
being dissolved. Applicants anticipate this

[[Page 25014]]

process will be completed by May 1, 2000.
    Central Securities Corporation owns and leases office and service 
facilities in Central Maine Power's service territory for the conduct 
of Central Maine Power's business. Central Maine Power owns all of the 
outstanding common stock of Central Securities Corporation.
    Cumberland Securities Corporation owns and leases office and 
service facilities in Central Maine Power's service territory for the 
conduct of Central Maine Power's business. Central Maine Power owns all 
of the outstanding common stock of Cumberland Securities Corporation.
    The Union Water-Power Company (``Union Water''), a wholly owned 
subsidiary of CMP Group, provides utility construction and support 
services (On Target division), energy efficiency performance 
contracting and energy use and management services (Combined Energies 
division), and utility-related real estate development services, 
(UnionLand Services). Union Water's Maine HomeCrafters division, which 
was in the business of brokering and financing pre-fabricated housing 
has been sold.
CTG Resources and Its Subsidiaries
    CTG Resources is an exempt public utility holding company that owns 
all of the common stock of Connecticut Natural Gas Corporation 
(``CNGC''), a public utility that operates as a regulated local natural 
gas distribution company. CNGC distributes gas to approximately 146,000 
customers in 22 Connecticut communities, principally in the Hartford-
New Britain area and Greenwich. CNGC's gas distribution business is 
subject to regulation by the Connecticut Department of Public Utility 
Control as to franchises, rates, standards of service, issuance of 
securities, safety practices and certain other matters.
    For the twelve months ended September 30, 1999, CTG Resources' 
operating revenues on a consolidated basis were approximately 
$286,749,000, of which approximately $262,060,000 were derived from gas 
operations and $24,689,000 were from other operations. Consolidated 
assets of CTG Resources and its subsidiaries at September 30, 1999 were 
approximately $297,957,000 in gas utility property, plant and 
equipment, and approximately $168,304,000 in other corporate assets.
    CTG Resources' nonutility subsidiaries include:
    CNG Realty Corp., owns the Operating and Administrative Center 
located on a seven-acre site in downtown Hartford, Connecticut. The 
Energy Network, Inc. (``TEN'') which, through its wholly owned 
subsidiary, The Hartford Steam Company, provides district heating and 
cooling services to a number of large buildings in Hartford, 
Connecticut.
    TEN Transmission Company, a wholly owned subsidiary of TEN, owns a 
4.87% interest in Iroquois Gas Transmission System Limited Partnership, 
which operates a natural gas pipeline transporting Canadian natural gas 
into New York, Massachusetts and Connecticut.
    Downtown Cogeneration Associates Limited Partnership, TEN's 
partially owned subsidiary, owns and operates a cogeneration facility 
in Hartford, Connecticut.
    ENI Gas Services, Inc., and TEN Services, Inc., both wholly owned 
subsidiaries of TEN, together own 100% of KBC Energy Services, a 
partnership. TEN's other unregulated operating divisions offer energy 
equipment rentals, property rentals and financing services and own a 
3,000 square foot building in Hartford, Connecticut.
Berkshire Energy and Its Subsidiaries
    Berkshire Energy owns The Berkshire Gas Company (``Berkshire 
Gas''), a public utility company as defined by the Act. Berkshire Gas 
operates as a natural gas public utility distribution company. 
Berkshire Gas sells and distributes natural gas to approximately 34,000 
retail customers in 19 communities in western Massachusetts. Berkshire 
Gas operates a natural gas distribution system comprising 694 miles of 
natural gas distribution mains. Berkshire Gas is subject to regulation 
by the Massachusetts Department of Telecommunications and Energy. 
Berkshire Gas is a ``natural gas company'' \14\ with respect to certain 
sales for resale of natural gas. Berkshire Gas has secured a ``blanket 
certificate'' for these transactions from the FERC.
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    \14\ See section 2(a)(6) of the Natural Gas Act, 15 U.S.C. 
717(a)(6).
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    For the twelve months ended September 30, 1999, Berkshire Energy's 
operating revenues on a consolidated basis were approximately 
$49,283,000, of which approximately $45,453,000 were derived from 
natural gas operation. Consolidated assets of Berkshire Energy and its 
subsidiaries as of September 30, 1999 were approximately $77,457,000 in 
natural gas utility property, plant and equipment, and approximately 
$31,453,000 in other corporate assets.
    The nonutility subsidiaries of Berkshire Energy are Berkshire 
Propane, Inc. (``Berkshire Propane'') and Berkshire Service Solutions, 
Inc. (formerly Berkshire Energy Marketing, Inc.) (``Service 
Solutions''). Berkshire Propane is a retail propane company providing 
service to more than 6,000 customers in 100 communities across a 5,000 
square mile area in western Massachusetts, eastern New York, and 
southern Vermont. Service Solutions provides one-stop natural gas 
services to commercial and industrial customers. Service Solutions 
entered into a strategic alliance with Energy East Solutions, LLC.
    The Applicants contend that the combination of NYSEG's electric 
system and CMP Group's electric operations will result in a single, 
integrated electric utility system (the ``new Energy East Electric 
System''). The Applicants further contend that the combination of 
Energy East's current gas system (NYSEG's gas operations, Connecticut 
Energy and Maine Gas Co.) with the gas operations of CMP Group, CTG 
Resources and Berkshire will result in a single, integrated gas utility 
system (the ``new Energy East Gas System''). The companies request the 
Commission authorize the mergers and find that the new Energy East 
Electric System is the primary integrated public utility system and the 
new Energy East Gas System is a permissible additional system.

    For the Commission by the Division of Investment Management, 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-10566 Filed 4-27-00; 8:45 am]
BILLING CODE 8010-01-M