Federal Register / Vol. 62, No. 36 / Monday, February 24, 1997 / Notices 8279

.28%. Had this reimbursement policy

not been in place, the expense ratios for

the Index 500 Portfolio for the fiscal

years ended December 31, 1995, 1994,

and 1993, would have been .47%, .81%,

and .95%, respectively.

7. The Dreyfus Corporation

(‘‘Dreyfus’’), which manages the Dreyfus

Fund, receives a fee at the annual rate

of .245% of the Fund’s average daily net

assets. The expense ratios for the

Dreyfus Fund for the fiscal years ended

December 31, 1995, 1994, and 1993,

were .39%, .40%, and .40% of the

Fund’s average daily net assets. These

expense levels take into account

Dreyfus’s policy to voluntarily

reimburse the Fund in any year in

which the Fund’s expenses exceeded

.40% of the Fund’s average net assets.

Dreyfus has undertaken to maintain this

expense reimbursement policy absent

180 days notice to the Fund’s

shareholders of any change in the

policy.

8. The proposed substitution will be

effected by redeeming the shares of the

Dreyfus Fund held by the Dreyfus

Subaccounts, transferring the cash

values of Affected Contractholders from

the Dreyfus Subaccounts to the Index

500 Subaccounts, and then purchasing

shares of the Index 500 Portfolio. The

Dreyfus Subaccounts would then be

eliminated. All redemptions of shares of

the Dreyfus Fund and purchases of

shares of the Index 500 Portfolio will be

effected in compliance with Rule 22c-1

under the 1940 Act. The substitution

will be at net asset value of the

respective shares, without the

imposition of any transfer, sales, or

similar charge. There will be no change

in the amount of any Affected

Contractholder’s investment after the

substitution.

Applicants’ Legal Analysis

1. Section 26(b) of the 1940 Act

provides in pertinent part that ‘‘it shall

be unlawful for any depositor or trustee

of a registered unit investment trust

holding the security of a single issuer to

substitute another security for such

security unless the Commission shall

have approved such substitution.’’

Section 26(b) provides that the

Commission will approve a substitution

if it is consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the 1940 Act. The purpose of Section

26(b) is to protect the expectation of

investors in a unit investment trust that

the unit investment trust will

accumulate the shares of a particular

issuer and to prevent unscrutinized

substitutions which might, in effect,

force the contractholders, dissatisfied

with the substituted security, to redeem

their shares, thereby incurring either a

loss of the sales load deducted from

initial proceeds, an additional sales load

upon reinvestment of the redemption

proceeds, or both.

2. Applicants request that the

Commission issue an order pursuant to

Section 26(b) of the 1940 Act to permit

the Applicant Accounts to substitute

securities of the Index 500 Portfolio for

securities of the Dreyfus Fund.

3. Applicants submit that the

proposed substitution meets the

standard enunciated in Section 26(b),

and further that, if implemented, the

substitution would not raise any of the

concerns that Congress sought to

address when the 1940 Act was

amended to include the provision.

Applicants further submit that the

substitution will not result in the type

of costly forced redemption that Section

26(b) was intended to guard against and

is consistent with the protection of

investors and the purposes fairly

intended by the 1940 Act.

4. Applicants submit that the

investment objective, policies, and

operating expenses of the Index 500

Portfolio and the Dreyfus Fund are

substantially the same or comparable.

Applicants state that the Index 500

Portfolio is large enough to provide the

portfolio diversification necessary to

decrease investment risk and to provide

the economies of scale that may benefit

the Affected Contractholders, as well as

other Subject Contractholders.

5. Applicants represent that AVLIC

will bear the costs of the proposed

substitution, including legal,

accounting, and brokerage fees, and

Affected Contractholders will not incur

any fees or charges as a result of the

substitution. Applicants also represent

that the substitution will not impose

any tax liability on Affected

Contractholders or raise the level of fees

and charges currently paid by Affected

Contractholders. Applicants further

represent that the rights of affected

Contractholders and AVLIC’s

obligations under any of the Subject

Contracts will also not change.

6. Applicants represent that as soon as

reasonably practicable after the

requested order is issued, AVLIC will

send to the Affected Contractholders a

written notice (‘‘Notice’’) describing the

proposed substitution, including the

date on which the substitution will take

effect. The Notice will advise Affected

Contractholders that either before or

within thirty days from the date on

which the substitution occurs, they may

transfer all substituted assets to other

subaccounts. Applicants also represent

that any transfer of cash values in the

Dreyfus Subaccounts that occurs either

prior to, or within the thirty days, after

the substitution will not be treated as a

transfer that may be restricted because

of earlier transfers between subaccounts.

Applicants further represent that no

transfer charge is currently in effect, and

none will be imposed before the end of

the thirty-day period.

Conclusion

For the reasons summarized above,

Applicants assert that the requested

order approving the proposed

substitution is consistent with the

protection of investors and the policy

and provisions of the 1940 Act.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–4386 Filed 2–21–97; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–22515; International Series

Release No. 1053; File No. 812–10150]

Enron Corp., et al.; Notice of

Application

February 14, 1997.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Enron Corp. (‘‘Enron’’),

Enron Oregon Corp. (‘‘Enron Oregon’’),

Enron Oil & Gas Company (‘‘EOG’’),

Enron Global Power & Pipelines L.L.C.

(‘‘EPP’’), and Enron International Inc.

(‘‘EII’’).

RELEVANT ACT SECTIONS: Order requested

under section 6(c) of the Act for an

exemption from all provisions of the

Act.

SUMMARY OF APPLICATION: Applicants

request an order that would permit

applicants and certain of their

controlled companies to engage, directly

or through subsidiaries, in certain

foreign infrastructure projects without

being subject to the provisions of the

Act.

FILING DATE: The application was filed

on May 15, 1996, and amended on

October 22, 1996 and February 12, 1997.

Applicants have agreed to file an

amendment, the substance of which is

incorporated herein, during the notice

period.

HEARING OR NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the SEC orders a hearing.

Interested persons may request a

hearing by writing to the SEC’s
8280 Federal Register / Vol. 62, No. 36 / Monday, February 24, 1997 / Notices

1After the PGC Merger, Enron Corp. will be the

seventh largest seller of electricity in the United

States. Benjamin A. Holden, Enron Corp. has

Accord to Buy Portland General, Wall St. J., July 23,

1996, at A3.

Secretary and serving applicants with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

March 12, 1997 by proof of service on

applicants, in the form of an affidavit or,

for lawyers, a certificate of service.

Hearing requests should state the nature

of the writer’s interest, the reason for the

request, and the issues contested.

Persons who wish to be notified of a

hearing may request notification by

writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, N.W., Washington, D.C. 20549.

Applicants, 1400 Smith, Suite 5011,

Houston, Texas 77002.

FOR FURTHER INFORMATION CONTACT:

David W. Grim, Staff Attorney, at (202)

942–0571, or Elizabeth G. Osterman,

Assistant Director, at (202) 942–0564

(Division of Investment Management,

Office of Investment Company

Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee at the SEC’s

Public Reference Branch.

Applicants’ Representations

1. Enron, a Delaware corporation

organized in 1930, is an integrated

natural gas company with headquarters

in Houston, Texas. Essentially all of

Enron’s operations are conducted

through its subsidiaries and affiliates,

which are principally engaged in the

transportation and wholesale marketing

of natural gas to markets throughout the

United States and internationally

through approximately 44,000 miles of

natural gas pipelines; the exploration for

and production of natural gas and crude

oil in the United States and

internationally; the production,

purchase, transportation, and

worldwide marketing of natural gas

liquids and refined petroleum products;

the independent (i.e., non-utility)

development, promotion, construction,

and operation of natural gas-fired and

non-gas-fired power plants in the

United States and internationally; and

the non-price regulated purchasing and

marketing of long-term energy related

commitments.

2. Enron Oregon is an Oregon

corporation that was organized recently

for the purpose of effecting the merger

(the ‘‘PGC Merger’’) of Enron with

Portland General Corporation (‘‘PGC’’),

an electric utility company organized as

an Oregon corporation. Pursuant to the

merger agreement among Enron, PGC,

and Enron Oregon, subject to

satisfaction or waiver of the conditions

to the obligations of the parties to effect

the PGC Merger, (a) both Enron and PGC

will merge with and into Enron Oregon,

(b) Enron Oregon will succeed to all of

the assets and liabilities of both Enron

and PGC, and (c) Enron Oregon will

change its name to Enron Corp.1

3. EOG, a Delaware corporation, is

engaged in the exploration for, and the

development, production, and

marketing of, natural gas and crude oil

primarily in major producing basins in

the United States, as well as in Canada,

Trinidad, and India, and, to a lesser

extent, selected other international

areas. Enron currently owns

approximately 54% of the outstanding

common stock of EOG.

4. EPP is a Delaware limited liability

company formed by Enron to acquire,

own, and manage operating power

plants and natural gas pipelines around

the world. EPP’s assets consist of

interests in two power plants in the

Philippines, power plants in both

Guatemala and the Dominican Republic,

and natural gas pipeline systems in

Argentina and Colombia. EPP’s strategy

is to generate long-term growth in

dividends, cash flow, and earnings per

share through the selective acquisition

and efficient management of operating

power plants and natural gas pipelines

around the world. Enron owns

approximately 54% of the outstanding

common shares of EPP.

5. EII is a Delaware corporation that

is a wholly-owned subsidiary of Enron.

In December 1996, Enron announced

that it was reorganizing its business

units and that as part of the

reorganization Enron International

would be Enron’s business unit that

would develop and own integrated

energy projects, commercial power

generation, and pipeline activities

outside of North America and Europe.

This newly organized business unit will

pursue all or substantially all of Enron’s

foreign infrastructure projects outside of

North America and Europe, will offer

merchant, finance, and risk management

products to third parties in emerging

markets, and will be responsible for

Enron’s interest in EPP. As the

reorganization was announced only

recently, Enron must make a number of

decisions and take a number of actions

regarding transfers of subsidiaries or

properties to this new business unit and

other matters in order to complete the

organization of the Enron International

business unit. Based on preliminary

planning, when the organization is

completed, EII will be the parent

company of the corporate family of

companies that comprises Enron

International. It is possible, however,

that EII will be a wholly-owned

subsidiary of the parent company

within the Enron International business

unit. This could occur if, for example,

Enron decides that another form of

entity (such as a limited liability

company) or an entity incorporated in

another jurisdiction (such as a foreign

jurisdiction) should be the parent

company within the Enron International

business unit.

6. Enron, Enron Oregon, EOG, EPP,

and EII request relief to permit each

applicant and each entity now or in the

future controlled by, or under common

control with, any of them (Enron, Enron

Oregon, EOG, EPP, EII, and each

controlled entity, the ‘‘Covered

Entities’’) to engage, directly or through

subsidiaries, in certain foreign

infrastructure projects without being

subject to the provisions of the Act.

7. Enron is the largest interstate

natural gas pipeline company in the

United States, and its subsidiaries have

participated in the development or

ownership and management of gas

transmission pipelines, crude oil and

refined petroleum products pipelines,

natural gas liquids pipelines, oil and gas

gathering facilities, gas processing

facilities, and chemical manufacturing

facilities. Enron and its affiliates also

have developed and own and operate a

number of domestic facilities for the

generation of electricity and steam.

8. As a result of relatively recent

changes in the international political

and business climate, applicants and

their subsidiaries have begun to develop

and acquire and operate infrastructure

projects throughout the world. Foreign

infrastructure projects that applicants

have or may become involved in are

roads, bridges, communication facilities,

mass transit systems or facilities, rail

transportation facilities, airports, ports,

waterways, water supply facilities,

desalinization facilities, recycling or

waste water treatment facilities, solid

waste disposal facilities, oil, gas, or

other mineral exploration, development,

or production facilities, housing,

schools, hospitals, prisons, electricity

generation facilities, electricity

transmission or distribution facilities,

stream generation facilities, natural gas

transmission or distribution pipelines of

facilities, petroleum storage facilities,

petroleum liquids pipelines, natural gas

liquids separating, processing, or

distribution facilities, facilities for the

liquefication of natural gas or the

transportation, distribution, or

regasification of liquefied natural gas,

refineries, chemical or other
Federal Register / Vol. 62, No. 36 / Monday, February 24, 1997 / Notices 8281

manufacturing or processing facilities,

or any similar facilities or operations.

Applicants and their subsidiaries

currently are working on approximately

25 foreign infrastructure projects in

various stages of development,

involving estimated total capital

expenditures of approximately $20

billion. These include projects in Guam,

India, Indonesia, Israel, Italy, Jordan,

Mozambique, Puerto Rico, Qatar, and

Turkey. Although it is unlikely that all

of the projects ultimately will be

completed, the dollar amounts involved

are quite significant relative to the size

of Enron, EOG, and EPP, whose total

assets at year end 1995 were $13.2

billion, $2.1 billion and $188 million,

respectively.

9. There are numerous steps that must

be pursued by a developer/owner of a

foreign infrastructure project. Project

development involves, among other

things, engineering or architectural

design services, site selection,

governmental relations, construction

services, and the arrangement of

financing. The management of operating

projects involves responsibilities such

as employee and customer relations,

contract administration, continuing

compliance with environmental and

other legal requirements, community

and governmental relations, financial

and accounting issues, etc.

10. The physical assets comprising a

foreign infrastructure project are or will

be owned by an entity (a ‘‘Foreign

Infrastructure Project Company’’) in

which a Covered Entity has or will have

a direct or indirect beneficial interest. In

most cases, the Foreign Infrastructure

Project Company is or will be a special

purpose entity set up for the sole

purpose of owning and operating the

assets attributable to a single foreign

infrastructure project, although in some

cases, Foreign Infrastructure Project

Companies own or will own interests in

assets comprising multiple foreign

infrastructure projects.

11. In some cases, entities are

organized for the purpose of providing

development, construction, operational,

or maintenance services to one or more

Foreign Infrastructure Project

Companies (‘‘Foreign Infrastructure

Service Companies’’). Such entities are

distinguishable from Foreign

Infrastructure Project Companies in that

the former do not own assets directly,

but rather engage in the business of

providing services.

12. For purposes of the application,

applicants represent that Foreign

Infrastructure Project Companies and

Foreign Infrastructure Service

Companies are included within the term

‘‘Foreign Infrastructure Company,’’

which is any company (a) substantially

all of whose operations are conducted

outside of the United States; and (b)

whose business primarily relates to or

whose operations consist primarily of

the development, construction,

ownership, or operation of, or the

provision of management, operational,

or maintenance services relating to,

foreign infrastructure projects.

Applicants and other Covered Entities

own and will own their interests in a

Foreign Infrastructure Company through

direct or indirect interests in companies

known as ‘‘Foreign Infrastructure

Finance Companies.’’

13. For purposes of the application,

applicants represent that a ‘‘Foreign

Infrastructure Finance Company’’ is any

company (a) that is a majority-owned

subsidiary of a Covered Entity; (b) that

has not made, is not making, and does

not presently propose to make a public

offering of its securities; and (c) that is

primarily engaged in the business of

owning or holding 10% or more of the

economic or voting interests in Foreign

Infrastructure companies with respect to

which the Covered Entity, the Foreign

Infrastructure Finance Company, or a

majority-owned subsidiary of either of

them, provides ‘‘active developmental

assistance.’’

14. For purposes of the application,

applicants represent that ‘‘active

developmental assistance’’ means the

provision of material assistance in the

development, construction, or operation

of, or the provision of management,

operational or maintenance services

relating to, a foreign infrastructure

project. An entity will be deemed to

furnish such assistance if it is or has

been materially involved in providing

such assistance. Thus, if an entity was

materially involved in the development

of a Foreign Infrastructure Company,

such entity will be deemed to be

providing active developmental

assistance to such Foreign Infrastructure

Company even after the Foreign

Infrastructure Company has moved past

the development stage. In addition, the

expiration of a long-term contract

relating to the operation of a foreign

infrastructure project will not cause a

company to cease to qualify as a Foreign

Infrastructure Finance Company. The

requirement of material involvement

will not be satisfied, however, by

arrangements that are immaterial to the

overall development of an infrastructure

project or overall success of the Foreign

Infrastructure Company’s operations,

such as a short-term contract or a nonsubstantive contract (e.g., a consulting

arrangement that is sometimes entered

into as part of an executive employee’s

severance arrangement, pursuant to

which the ex-employee is paid but does

little in the way of actual consulting). A

contract that is renewable automatically

on a periodic basis unless canceled at

the option of one or more contracting

parties would not, by virtue of the

cancellation provisions, be deemed to

be a short-term or non-substantive

contract.

15. Because regulations in many

countries limit the percentage interest in

host country companies that can be

owned by foreign companies, the

Covered Entities have been and will

continue to be permitted to own only

minority interests in many Foreign

Infrastructure Companies. As a result, it

has become increasingly difficult for the

Covered Entities to structure their

interests so that they may operate

without technically falling within the

definition of ‘‘investment company’’

under the Act. The Covered Entities

believe they are not the type of entities

that should be regulated under the Act

and thus seek relief from all provisions

of the Act.

Applicants’ Legal Analysis

1. Section 3(a)(3) of the Act defines an

‘‘investment company’’ as including any

issuer that is engaged in the business of

investing, reinvesting, owning, holding,

or trading in securities, and owns

investment securities having a value

exceeding 40% of the value of such

issuer’s total assets (exclusive of

Government securities and cash items).

Section 3(a) defines ‘‘investment

securities’’ to include all securities

except, in pertinent part, securities

issued by majority-owned subsidiaries

of the owner which are not investment

companies. Section 2(a)(24) defines a

‘‘majority-owned subsidiary’’ of a

person as a company 50% or more of

the outstanding voting securities of

which are owned by such person, or by

a company which, within the meaning

of section 2(a)(24), is a majority-owned

subsidiary of such person.

2. Applicants represent that the

proposed ownership structure for

foreign infrastructure projects is the

result of legitimate and compelling tax,

limited liability, governance, and other

reasons. The proposed ownership

structure protects applicants against

liability to creditors of the Foreign

Infrastructure Companies. In addition,

some foreign governments remain

committed to retaining control over

infrastructure projects. Moreover, under

the laws of many host countries, there

are limitations on the percentage equity

interest in host country entities that can

be owned by companies such as the

Covered Entities that are organized in

jurisdictions other than the host
8282 Federal Register / Vol. 62, No. 36 / Monday, February 24, 1997 / Notices

2Health Communications Services, Inc. (pub.

avail. Apr. 26, 1985).

country. As a result, a company desiring

to participate in a foreign infrastructure

project will often have to choose

between becoming a minority project

participant with other companies or not

participating at all. Because sections

3(a) and 2(a)(24), taken together, impose

limits on the percentage of assets of the

Covered Entities that may be

attributable to securities representing

minority interests in other companies,

the Act may, in the absence of the

requested relief, prevent these entities

from participating in foreign

infrastructure projects on desirable

terms.

3. In certain cases, a Covered Entity

may rely on section 3(c)(1) or section

3(c)(9) of the Act or rule 3a–1

thereunder. These provisions, however,

are inadequate to permit these entities

to participate in foreign infrastructure

projects on desirable terms.

4. Section 3(c)(1) of the Act excepts

from the definition of investment

company private investment companies

(‘‘3(c)(1) Entities’’) that have 100 or

fewer shareholders. Under section

3(c)(1)(A), a company is counted as one

shareholder of a 3(c)(1) Entity unless

that company owns 10% or more of the

shares of the 3(c)(1) Entity and more

than 10% of that company’s assets are

shares of 3(c)(1) Entities. If a company

meets these tests, the beneficial

ownership of the 3(c)(1) Entity is

deemed to be that of the holders of such

company’s outstanding securities. As a

result of this provision, applicants are

forced by the Act to limit their

investments in 3(c)(1) Entities even

where compelling business reasons

favor making those investments and

where, applicants believe that, none of

the Act’s purposes would be served by

preventing them from making the

investments.

5. The National Securities Markets

Improvement Act of 1996 (the ‘‘1996

Act’’) amended section 3(c)(1)(A) of the

Act. When the relevant provisions of the

1996 Act become effective (on the

earlier of April 9, 1997 or the date on

which the related rulemaking is

completed), the amended section

3(c)(1)(A) will no longer apply to a

shareholder of a 3(c)(1) Entity that is an

operating company (i.e., a company that

is not an investment company or a

3(c)(1) Entity). Accordingly, the

exception provided by amended section

3(c)(1) may be available to Foreign

Infrastructure Finance Companies.

However, the 1996 Act also amends the

definition of ‘‘investment securities’’

under section 3(a) of the Act to provide

that securities of majority-owned 3(c)(1)

Entities are investment securities. The

amended section 3(a) will limit the

amount that the Covered Entities can

invest in majority-owned 3(c)(1)

Entities, such as Foreign Infrastructure

Finance Companies. As a result,

applicants cannot rely on the current or

amended version of section 3(c)(1) to

participate in foreign infrastructure

projects on desirable terms.

6. Section 3(c)(9) of the Act excepts

from the definition of investment

company any company substantially all

of whose business consists of owning or

holding oil, gas, or other mineral

royalties or leases. Although the section

3(c)(9) exception may be available to

EOG in a number of cases, it does not

cover Enron or EPP because of the

nature of their businesses. Many foreign

infrastructure projects do not involve oil

and gas exploration or production

properties. Moreover, some projects that

do involve such properties involve

additional assets not qualifying under

section 3(c)(9). As a result, the section

3(c)(9) exception is inadequate to permit

the Covered Entities from participating

in foreign infrastructure projects on

desirable terms.

7. Rule 3a–1 under the Act deems

certain issuers that meet the statutory

definition of investment company in

section 3(a)(3) of the Act not to be

investment companies, provided such

issuers meet certain criteria. An issuer

can qualify for this exemption only if no

more than 45% of its assets consist of,

and no more than 45% of its net income

is derived from, securities other than,

among others, securities of certain

companies controlled primarily by the

issuer. Although the exemption may be

relied upon by the Covered Entities

from time to time, a company relying on

the exemption as a result of a control

relationship must have a degree of

control greater than that of any other

person.2 Because a foreign government

often will primarily control a Foreign

Infrastructure Company, rule 3a–1 is

inadequate to permit the Covered

Entities to participate in foreign

infrastructure projects on desirable

terms.

8. Section 6(c) provides that the SEC

may exempt any person, security, or

transaction from any provision of the

Act or any rule or regulation thereunder,

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

request an order under section 6(c) to

permit the Covered Entities to engage,

directly or through subsidiaries, in

foreign infrastructure projects without

being subject to the provisions of the

Act.

9. Applicants believe that the

requested relief is necessary and

appropriate in the public interest.

Applicants state that in many foreign

infrastructure projects, foreign

regulations force applicants to structure

their interests in the project such that

they may technically fall within the

definition of investment company under

the Act. In addition, applicants state

that the fact that they conduct their

foreign infrastructure activities through

subsidiaries is not by any means an

attempt to circumvent the limitations

imposed in connection with the

exception in section 3(c)(1) of the Act.

Applicants assert that those limitations

were not aimed at situations, such as

those described herein, where an active

business is conducted through

subsidiaries that are set up for legitimate

and compelling tax, limited liability,

governance, and other reasons that

prevent companies actively conducting

such business from acquiring direct

ownership interests. Applicants argue

that section 3(c)(1) reflects a

congressional determination that no

significant public interest exists in

regulating 3(c)(1) Entities under the Act.

The beneficial ownership attribution

rules in section 3(c)(1)(A) are, in effect,

intended to prevent companies from

circumventing the requirements of the

Act by setting up one or more majorityowned subsidiaries that would be

regulated as investment companies but

for the fact that no single one of them

had more than 100 security holders.

Further, the amendments to the

beneficial ownership rules in section

3(c)(1)(A) reflect an intent by Congress

to simplify the application and limit the

scope of the rules rather than a change

in the underlying purpose of the

section. As a result, applicants assert

that the foreign infrastructure activities

described herein, which require active

developmental assistance, clearly are

not the type intended to be covered by

the current or amended section 3(c)(1).

10. Applicants believe that the relief

requested is consistent with the

protection of investors and the purposes

fairly intended by the policies and

provisions of the Act. Applicants state

that the Act was not intended to

regulate the kind of industrial activity in

which the Covered Entities engage.

Applicants historically have developed

as operating industrial companies rather

than investment pools, engaging

principally in the natural gas and other

energy-related business. In addition,

their proposed participation in foreign

infrastructure projects through the
Federal Register / Vol. 62, No. 36 / Monday, February 24, 1997 / Notices 8283

provision of active developmental

assistance to a Foreign Infrastructure

Company is consistent with the type of

activities typically associated with an

operating industrial company. Finally,

the Covered Entities do not hold

themselves out as being engaged in the

business of investing, reinvesting, or

trading in securities or otherwise as

investment pools of the type intended to

be regulated by the Act.

Applicants’ Conditions

Applicants agree that the order

granting the required relief shall be

subject to the following conditions:

1. No Covered Entity that proposes to

rely on the requested relief will hold

itself out as being engaged in the

business of investing, reinvesting, or

trading in securities.

2. The Covered Entities will rely on

the order granting the requested relief

only to the extent that the manner in

which they are involved in foreign

infrastructure projects does not differ

materially from that described in the

application.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–4442 Filed 2–21–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 35–26669]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

February 14, 1997.

Notice is hereby given that the

following filings(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

March 10, 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.

Ameren Corporation (70–8945)

Ameren Corporation (‘‘Ameren’’),

1901 Chouteau Avenue, St. Louis,

Missouri 63103, a Missouri corporation

not currently subject to the Act, has

filed an application-declaration under

sections 4, 5, 6(a), 7, 8, 9(a), 10, 11,

12(b), (d) and (e), and 13(b) and Rules

42, 43, 45, 62, 65, 82, 83, 87, 88, 90 and

91 thereunder.

Ameren proposes to acquire by

merger Union Electric Company (‘‘UE’’)

and Central Illinois Public Service

Company (‘‘CIPS’’), a wholly-owned

utility subsidiary of CIPSCO Inc.

(‘‘CIPSCO’’), and acquire indirectly 60%

of the outstanding common stock of

Electric Energy, Inc., (‘‘EEI’’). UE and

CIPS will become wholly-owned

subsidiaries of Ameren (‘‘Transaction’’),

and Ameren will register with the

Commission under section 4 of the Act.

Ameren also proposes to engage in

other Transaction-related activities,

including the retention of combination

gas and electric public utilities, the

retention of all of CIPSCO’s and UE’s

nonutility activities, formation of a

service Company and the transfer of

certain utility assets from UE to CIPS. UE is a combination gas and electric

public-utility company and an exempt

public-utility holding company,

pursuant to an order of the Commission

under section 3(a)(2) of the Act,

authorized to do business in Missouri

and Illinois. The principal business of

UE is to provide electric energy to

customers in a 24,500 square mile area

of Missouri and Illinois.

UE’s Missouri electric service area

includes the City of St. Louis and St.

Louis County, and all or portions of 65

other counties. Its Illinois service area

includes the cities of East St. Louis and

Alton. In addition to the retail electric

business, UE serves 18 wholesale

electric customers, all of which are

located in Missouri. Union Electric also

provides natural gas service to

customers in 23 Missouri counties and

two Illinois counties. UE also provides

steam service in Jefferson City,

Missouri.

UE provides retail electric service to

approximately 1.069 million customers

in Missouri and 63,000 in Illinois. UE

provides natural gas service to

approximately 102,000 customers in

Missouri and 18,000 customers in

Illinois. As of June 30, 1996, UE has

6,167 employees in its two-state

operations. UE owns 100 percent of

Union Electric Development

Corporation (‘‘UEDC’’) (formerly known

as Union Colliery), a nonutility

subsidiary, and 40 percent of EEI. UE

funds UEDC’s investments through

intercompany loans or advances. These

intercompany loans bear interest at a

market rate and are short-term in nature

or due on demand.

UEDC’s nonutility activities include

the owning of and/or investing in

energy-related and civic and community

development-related investments in

UE’s service territory. EEI, which owns

a coal-fired generating plant and

transmission lines, was formed in the

early 1950s to provide electric energy to

a uranium enrichment plant located

near Paducah, Kentucky, which is now

operated by the United States

Enrichment Corporation. The uranium

enrichment facility is its only end-user

customer. EEI’s common stock is held

by four utility companies: UE, 40%;

CIPS, 20%; and two unaffiliated,

utilities, Kentucky Utilities Company,

20%; and Illinois Power Company,

20%. EEI also sells electricity to its

sponsoring utilities for resale.

CIPSCO, incorporated under the laws

of the State of Illinois in 1986, is an

exempt public utility holding company

under section 3(a)(1) of the Act, and

owns all of the issued and outstanding

common stock of CIPS. CIPS, an Illinois

corporation organized in 1902, supplies

electricity and natural gas services in a

20,000 square mile region of central and

southern Illinois, rendering service to

approximately 319,000 retail electricity

customers in 557 communities and

distributing natural gas to

approximately 167,000 customers in 267

communities. CIPS’ utility service

territory has an estimated population of

820,000 (about seven percent of Illinois’

population) and contains about 35% of

the surface area of Illinois. In addition,

CIPS sells electricity in the wholesale

and interchange markets to such entities

as Soyland Electric Cooperative, Illinois

Municipal Electric Agency, Wabash

Valley Power Association, Inc., Mt.

Carmel Public Utility Company,

individual municipal electric systems

and other public- and investor-owned

electric systems. As noted above, CIPS

owns 20 percent of the capital stock of

EEI and is an exempt holding company

pursuant to section 3(a)(2) of the Act. As

of June 30, 1996, CIPS had

approximately 2,360 employees.

CIPSCO owns 100 percent of CIPSCO

Investment, the holding company for