53034 Federal Register / Vol. 62, No. 197 / Friday, October 10, 1997 / Notices

terms upon consummation of the

Transaction.

3. Rule 15a–4 provides, in pertinent

part, that if an investment advisory

contract with an investment company is

terminated by an assignment in which

the adviser does not directly or

indirectly receive a benefit, the adviser

may continue to serve for 120 days

under a written contract that has not

been approved by the company’s

shareholders, provided that: (a) The new

contract is approved by that company’s

board of directors (including a majority

of the non-interested directors); (b) the

compensation to be paid under the new

contract does not exceed the

compensation that would have been

paid under the contract most recently

approved by the company’s

shareholders; and (c) neither the adviser

nor any controlling person of the

adviser ‘‘directly or indirectly receives

money or other benefit’’ in connection

with the assignment. Applicants state

that because of the benefits to Signet,

the Adviser’s parent, arising from the

Transaction, applicants may not rely on

rule 15a–4.

4. Section 6(c) provides that the SEC

may exempt any person, security, or

transaction from any provision of the

Act, if and to the extent that such

exemption is necessary or appropriate

in the public interest and consistent

with the protection of investors and the

purposes fairly intended by the policy

and provisions of the Act. Applicants

believe that the requested relief meets

this standard.

5. Applicants note that the terms and

timing of the Transaction were

determined by First Union and Signet

and arose primarily out of business

considerations beyond the scope of the

Act and unrelated to the Funds and the

Adviser, including the time needed to

obtain federal and state banking

approvals for the Transaction.

Applicants submit that it is in the best

interests of shareholders to avoid any

interruption in services to the Funds

and to allow sufficient time for the

consideration and return of proxies and

to hold a shareholder meeting.

6. Applicants submit that the scope

and quality of services provided to the

Funds during the Interim Period will

not be diminished. During the Interim

Period, the Adviser would operate

under the New Agreements, which

would be substantively the same as the

Existing Agreements, except for their

effective dates. Applicants submit that

they are not aware of any material

changes in the personnel who will

provide investment management

services during the Interim Period.

Accordingly, the Funds should receive,

during the Interim Period, the same

advisory services, provided in the same

manner, at the same fee levels, and by

substantially the same personnel as they

received before the Transaction.

7. Applicants contend that the best

interests of shareholders of the Funds

would be served if the Adviser receives

fees for its services during the Interim

Period. Applicants state that the fees are

a substantial part of the Adviser’s total

revenues and, thus, are essential to

maintaining its ability to provide

services to the Funds. In addition, the

fees to be paid during the Interim Period

will be unchanged from the fees paid

under the Existing Agreements, which

have been approved by the shareholders

of each respective Fund.

Applicants’ Conditions

Applicants agree as conditions to the

issuance of the exemptive order

requested by the application that:

1. The New Agreements will have

substantially the same terms and

conditions as the Existing Agreements,

except for their effective dates.

2. Fees earned by the Adviser in

respect of the New Agreements during

the Interim Period will be maintained in

an interest-bearing escrow account, and

amounts in the account (including

interest earned on such paid fees) will

be paid (a) to the Adviser in accordance

with the new Agreements, after the

requisite approvals are obtained, or (b)

to the respective Fund, in the absence

of such approval with respect to such

Fund.

3. The Fund will hold meetings of

shareholders to vote on approval of the

new Agreements on or before the 120th

day following the termination of the

Existing Agreements (but in no event

later than April 30, 1998).

4. Either First Union or the Adviser

will bear the costs of preparing and

filing the application, and costs relating

to the solicitation of the shareholder

approval of the Funds necessitated by

the Transaction.

5. The Adviser will take all

appropriate steps so that the scope and

quality of advisory and other services

provided to the Funds during the

Interim Period will be at least

equivalent, in the judgment of the

Boards, including a majority of the

Independent Trustees, to the scope and

quality of services previously provided.

If personnel providing material services

during the Interim Period change

materially, the Adviser will apprise and

consult with the Boards to assure that

the Boards, including a majority of the

Independent Trustees of the Funds, are

satisfied that the services provided will

not be diminished in scope or quality.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–26900 Filed 10–9–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 35–26763]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

October 3, 1997.

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 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

October 27, 1997, 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 issued 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.

Columbia Gas System, Inc. (70–8925)

The Columbia Gas System, Inc.

(‘‘Columbia’’), a registered holding

company, its service company

subsidiary, Columbia Gas System

Service Corporation, its liquified natural

gas subsidiary, Columbia LNG

Corporation, its trading subsidiary,

Columbia Atlantic Trading Corporation,

all located at 12355 Sunrise Valley

Drive, Suite 300, Reston, Virginia

20191–3458; Columbia’s five

distribution subsidiaries, Columbia Gas

of Ohio, Inc., Columbia Gas of
Federal Register / Vol. 62, No. 197 / Friday, October 10, 1997 / Notices 53035

1Support Conectiv will be incorporated before

the consummation of the Mergers to serve as the

service company for the Conectiv system.

2 Delmarva Industries, Inc. and Delmarva Energy

Company participate in oil and gas exploration and

development opportunities.

Delmarva Services Company owns and finances

an office building that it leases to Delmarva and/

or its affiliates. Delmarva Services Company also

owns approximately 2.9% of the common stock of

Chesapeake Utilities Corporation, a publicly-traded

gas utility company with gas utility operations in

Delaware, Maryland and Florida.

Conectiv Services, Inc. acquires and operates

service businesses primarily involving heating,

ventilation and air conditioning sales, installation

and servicing, and other energy-related activities.

Conectiv Communications, Inc. provides a fullrange of retail and wholesale telecommunications

services.

Delmarva Capital Investments, Inc. is a holding

company for a variety of unregulated investments.

ECNG is a limited liability company in which

Delmarva holds a 1⁄7th interest, is engaged in gas

related activities.

Pennsylvania, Inc., Columbia Gas of

Kentucky, Inc., Columbia Gas of

Maryland, Inc., Commonwealth Gas

Services, Inc., all located at 200 Civic

Center Drive, Columbus, Ohio 43215;

Columbia’s two transmission

subsidiaries, Columbia Gas

Transmission Corporation and

Columbia Gulf Transmission Company,

located at 1700 MacCorkle Avenue, S.E.,

Charleston, West Virginia 25314;

Columbia’s exploration and production

subsidiary, Columbia Natural Resources,

Inc., 900 Pennsylvania Avenue,

Charleston, West Virginia 25302;

Columbia’s propane distribution

subsidiaries, Commonwealth Propane,

Inc. and Columbia Propane Corporation,

both located at 9200 Arboretum

Parkway, Suite 140, Richmond, Virginia

23236; Columbia’s energy services and

marketing subsidiaries, Columbia

Energy Services Corporation (‘‘Columbia

Energy’’), Columbia Service Partners,

Inc. and Columbia Energy Marketing

Corporation, all located at 121 Hill

Pointe Drive, Suite 100, Canonsburg,

Pennsylvania 15317; Columbia’s

network services subsidiary, Columbia

Network Services Corporation (‘‘CNS’’)

and CNS’ subsidiary, CNS Microwave,

Inc., both located at 1600 Dublin Road,

Columbus, Ohio 43215–1082; and

Columbia’s other subsidiaries, Tristar

Ventures Corporation, Tristar Capital

Corporation, Tristar Pedrick Limited

Corporation, Tristar Pedrick General

Corporation, Tristar Binghamton

Limited Corporation, Tristar

Binghamton General Corporation,

Tristar Vineland Limited Corporation,

Tristar Vineland General Corporation,

Tristar Rumford Limited Corporation,

Tristar Georgetown Limited

Corporation, Tristar Georgetown

General Corporation, Tristar Fuel Cells

Corporation, TVC Nine Corporation,

TVC Ten Corporation and Tristar

System, Inc., all located at 205 Van

Buren, Herndon, Virginia 22070, have

filed a post-effective amendment to their

joint application-declaration under

sections 6(a), 7, 9(a), 10 and 12(b) of the

Act and rules 45 and 53.

By order dated December 23, 1996

(HCAR No. 26634) (‘‘Order’’), the

Commission authorized the Applicants

to establish their internal and external

financing program, through December

31, 2001. In particular, the Order

authorized Columbia, its existing

nonutility subsidiaries and any

nonutility subsidiaries established

before December 31, 2001, to enter into

guarantee arrangements, obtain letters of

credit, and otherwise provide credit

support for their respective subsidiaries

in amounts of up to $500 million

(‘‘Guaranties’’). Columbia and its

existing and future nonutility

subsidiaries now propose to increase the

amount of Guaranties to $2 billion.

Columbia wants to increase its

investments in non-rate regulated

businesses, particularly gas marketing

operations, and will use the Guaranties

to support these activities. Columbia

notes that, in May 1997, Columbia

Energy entered into an agreement to

purchase and market the offshore

natural gas production for the KerrMcGee Corporation (‘‘Kerr-McGee’’) of

approximately 250 Mmcf per day.

Columbia Energy will mange all of KerrMcGee’s United States natural gas

marketing activities including

scheduling, nominating, balancing

pipeline transportation and providing

financial risk management services.

Also, Columbia Energy purchased

Pennunion Energy Services L.L.C.

(‘‘Pennunion’’), an energy marketing

subsidiary of the Pennzoil Company.

The Pennunion acquisition will add

sales of 2. Bcf per day.

Conectiv, Inc. (70–9069)

Conectiv, Inc. (‘‘Conectiv’’), 800 King

Street, Wilmington, Delaware 19899, a

Delaware corporation not currently

subject to the Act, has filed an

application-declaration under sections

6(a), 7, 8, 9(a), 10, 11, and rules 80

through 91, 93 and 94 under the Act. Conectiv proposes to acquire, by

means of the Mergers described below

(‘‘Mergers’’), all of the issued and

outstanding common stock of Delmarva

Power & Light Company (‘‘Delmarva’’)

and Atlantic Energy, Inc. (‘‘Atlantic’’).

Conectiv makes four other requests.

Following the Mergers, Conectiv will

register under section 5 of the Act. First, Conectiv requests that Support

Conectiv (‘‘Support Conectiv’’) be

designated as a subsidiary service

company under rule 88 of the Act.1

Second, Conectiv requests approval of

the terms of the service agreement

among companies in the Conectiv

system and Support Conectiv. Third,

Conectiv seeks Commission approval for

it to acquire the gas properties of

Delmarva and to continue to operate

Delmarva as a combination utility.

Fourth, Conectiv seeks Commission

approval for it to acquire the nonutility

activities, businesses and investments of

Delmarva and Atlantic.

Delmarva is a public utility company

which provides electric service in

Delaware, Maryland and Virginia and

gas service in Delaware. As of December

31, 1996, Delmarva provided electric

utility service to approximately 442,000

customers in an area encompassing

about 6,000 square miles in Delaware

(253,000 customers), Maryland (169,000

customers) and Virginia (20,000

customers), and gas utility service to

approximately 100,000 customers in an

area consisting of about 275 square

miles in northern Delaware.

For the year ended December 31,

1996, Delmarva’s operating revenues on

a consolidated basis were approximately

$1,160 million, of which approximately

$981 million were derived from electric

operations, $114 million from gas

operations and $65 million from other

operations. Consolidated assets of

Delmarva and its subsidiaries at

December 31, 1996 were approximately

$2,979 million, consisting of

approximately $2,536 million in

identifiable electric utility property,

plant and equipment; approximately

$219 million in identifiable gas utility

property, plant and equipment; and

approximately $224 million in other

corporate assets. As of December 31, 1996 Delmarva

owned gas property consisting of a

liquefied natural gas plant located in

Wilmington, Delaware with a

storagecapacity of 3.045 million gallons

and a maximum daily sendout capacity

of 49,898 Mcf per day. This facility is

used primarily as a peak-shaving facility

for Delmarva’s gas customers. Delmarva

also owns four natural gas city gate

stations at various locations in its gas

service territory. These stations have a

total contract sendout capacity of

125,000 Mcf per day. Delmarva has 111

miles of transmission mains (including

11 miles of joint-use gas pipelines that

are used 10% for gas distribution and

90% for electricity production), 1,539

miles of distribution mains and 1,091

miles of service lines. The Delmarva gas

facilities are located exclusively in New

Castle County, Delaware. Delmarva has seven direct nonutility

subsidiaries: Delmarva Industries, Inc.,

Delmarva Energy Company, Delmarva

Services Company, Conectiv Services,

Inc., Conectiv Communications, Inc.,

Delmarva Capital Investments,Inc. and

East Coast Natural Gas Cooperative,

L.L.C. (‘‘ECNG’’).2
53036 Federal Register / Vol. 62, No. 197 / Friday, October 10, 1997 / Notices

3AEII brokers used utility equipment to

developing countries, and provides utility

consulting services related to the design of substations and other utility infrastructure. AEE is a

holding company for Atlantic’s non-regulated

subsidiaries.

4 DS Sub has been incorporated as a direct

transitory subsidiary of Conectiv established to

effectuate the Delmarva Merger. The authorized

capital stock of DS Sub consists of 1000 shares of

common stock, $0.01 par value, all of which is held

by Conectiv. DS Sub has not had, and prior to the

closing of the Mergers will not have, any operations

other than the activities contemplated by the

Merger Agreement necessary to accomplish the

combination of DS Sub and Delmarva.

5The proposed use of two classes of common

stock addresses the difference in Delmarva’s and

Atlantic’s evaluations of the growth prospects of,

and uncertainties associated with deregulation of,

the regulated electric utility business of Atlantic.

The Conectiv Class A Common Stock has been

created to track the performance of the currently

regulated electric utility businesses of ACE. This

stock will be issued only to the holders of the

Atlantic Common Stock, thereby giving the current

holders of Atlantic Common Stock a

proportionately greater opportunity to share in the

growth prospects of, and a proportionately greater

exposure to the uncertainties associated with

deregulation of, the regulated electric utility

business of Atlantic. The proposed Conectiv Class

A Common Stock will have full voting rights with

the Conectiv Common Stock.

6Conectiv states that the retail services may

specifically include: (1) service lines repair/

extended warranties; (2) surge protection; (3)

appliance merchandising/repair/extended

warranties; (4) utility bill insurance; and (5)

incidental and reasonably necessary products and

services related to the choice, purchase or

consumption of any of these products and services.

On December 31, 1996, Delmarva’s

nonutility subsidiaries and investments

constituted approximately 4 percent of

the consolidated assets of Delmarva and

its subsidiaries.

Delmarva also has a nonutility

subsidiary trust, Delmarva Power

Financing I (‘‘DPF I’’), which was

formed in 1996 in connection with the

issuance by Delmarva of Cumulative

Quarterly Income Preferred Securities.

Atlantic is a public utility holding

company that claims an exemption from

regulation by the Commission under

section 3(a)(1) from all provisions of the

Act except section 9(a)(2).

The principal subsidiary of Atlantic is

Atlantic City Electric Company

(‘‘ACE’’). ACE is itself a holding

company which claims exemption from

regulation by the Commission under

section 3(a)(1) from all provisions of the

Act except section 9(a)(2). ACE is

engaged in the generation, transmission,

distribution and sale of electric energy.

ACE serves a population of

approximately 476,000 customers in a

2,700 square-mile area of Southern New

Jersey.

ACE currently has one utility

subsidiary, Deepwater Operating

Company (‘‘Deepwater’’). Deepwater

operates generating facilities in New

Jersey for ACE. Deepwater owns no

physical assets. Prior to the closing of

the Mergers, the employees of

Deepwater will become employees of

ACE. ACE also has a nonutility

subsidiary trust, Atlantic Capital I

(‘‘ACI’’), which was formed in 1996 in

connection with the issuance by ACE of

Cumulative Quarterly Income Preferred

Securities.

On a consolidated basis, Atlantic’s

operating revenues for the calendar year

ended December 31, 1996 were

approximately $980 million, and its

total assets as of December 31, 1996

were approximately $2,671 million.

Atlantic has two direct nonutility

subsidiaries, Atlantic Energy

International, Inc. (‘‘AEII’’) and AEE.3

At December 31, 1996, Atlantic’s

nonutility subsidiaries and investments

constituted approximately 8.2 percent of

the consolidated book value of the

assets of Atlantic and its subsidiaries.

Conectiv has no operations other than

those contemplated by the Merger

Agreement to accomplish the Mergers.

At present, Conectiv’s common stock,

consisting of 1,000 issued and

outstanding shares, is owned by

Delmarva and Atlantic, each of which

owns 500 shares.

The merger agreement, dated as of

August 9, 1996, as amended and

restated as of December 26, 1996

(‘‘Merger Agreement’’), provides for

Atlantic to be merged with and into

Conectiv. Also under the Merger

Agreement, DS Sub, Inc., a direct

subsidiary of Conectiv (‘‘DS Sub’’), will

be merged with and into Delmarva.4

Conectiv will be a public utility

holding company and will have two

direct utility subsidiaries, Delmarva and

ACE, whose only nonutility subsidiaries

will be the two trusts: DPF I and ACI.

Delmarva’s and Atlantic’s other direct

subsidiaries will also become direct

subsidiaries of Conectiv. Support

Conectiv will be incorporated as a

service company for the Conectiv

system.

Conectiv proposes to convert each

issued and outstanding share of

Delmarva common stock into the right

to receive one share of Conectiv

common stock (‘‘Conectiv Common

Stock’’). Each issued and outstanding

share of Atlantic common stock shall be

converted into the right to receive 0.75

shares of Conectiv Common Stock and

0.125 shares of Class A common stock

of Conectiv (‘‘Conectiv Class A Common

Stock’’).5

The Mergers will have no effect on the

shares of preferred stock of Delmarva

issued and outstanding at the time of

the consummation of the Mergers, each

series of which and each share of which

will remain unchanged. Atlantic has no

shares of preferred stock outstanding.

Conectiv proposes that the

Commission authorize Support Conectiv

as the system service company. Support

Conectiv will provide the Conectiv

system companies with a variety of

administrative, management,

engineering, construction,

environmental and support services,

either directly or through agreements

with associate or nonassociate

companies, as needed.

Support Conectiv will enter into a

service agreement with most, if not all,

companies in the Conectiv system.

Support Conectiv’s authorized capital

stock will consist of up to 3,000 shares

of common stock, $1 par value per

share. Conectiv will hold all issued and

outstanding shares of Support Conectiv

common stock.

Support Conectiv and its associate

companies’ cost and allocation methods

will conform with the ‘‘at costs’’

requirements of section 13 and rules

under the Act.

Conectiv also requests authority to

provide, directly, or through one or

more of its subsidiaries, retail services

to residential, commercial and

industrial customers. Retail services

include energy analysis, project

management, design and construction,

energy efficient equipment installation

and maintenance, facilities management

services, environmental services and

compliance, fuel procurement, and

other similar kinds of managerial and

technical services.6

Conectiv further requests authority,

after consummation of the Mergers for a

period of 24 months from the effective

date of the Mergers, to transfer certain

assets such as real property used for

administrative purposes and

information technology equipment and

software from Delmarva or ACE at cost

to Support Conectiv.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–26905 Filed 10–9–97; 8:45 am]

BILLING CODE 8010–01–M