[Federal Register Volume 65, Number 188 (Wednesday, September 27, 2000)]
[Notices]
[Pages 58117-58135]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-24732]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27231; International Series Release No. 1232]


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

September 20, 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 amendments(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 October 13, 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 October 13, 2000, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

PowerGen PLC, et al. (70-9671)

    PowerGen plc (``PowerGen''), a public limited company organized 
under the laws of England and Wales, its wholly owned nonutility 
holding company subsidiaries, PowerGen US Holdings Limited (``US 
Holdings''), PowerGen US Investments Limited, Ergon US Investments 
Limited, PowerGen Luxembourg sarl, PowerGen Luxembourg Holdings sarl, 
PowerGen Luxembourg Investments sarl, PowerGen US Partnership and 
PowerGen U.S. Investments Corporation (these subsidiaries, 
``Intermediate Companies''), each located at 53 New Broad Street, 
London EC2M 1SL, United Kingdom; \1\ LG&E Energy Corp. (``LG&E 
Energy''), a public-utility holding company exempt from registration by 
order under section 3(a)(1) of the Act,\2\ located at 220 West Main 
Street, Louisville, Kentucky 40232; LG&E Energy's wholly owned public-
utility company subsidiaries Louisville Gas and Electric Company 
(``LG&E''), located at 220 West Main Street, Louisville, Kentucky 
40232, and Kentucky Utilities Company (``KU'', located at One Quality 
Street, Lexington, Kentucky 40507, and LG&E Energy's nonutilty 
subsidiaries LG&E Capital Corp., LG&E Energy Marketing Inc. and LG&E 
Energy Power Inc., each located at 220 West Main Street, Lexington, 
Kentucky 40232 (collectively, ``Applicants''), have filed a joint 
application-declaration (``Application'') under sections 2(a)(7), 
2(a)(8), 3(a)(1), 3(a)(2), 4, 5, 6(a), 7, 9(a), 10, 11(b), 12(b), 
12(c), 13(b), 14, 15 and 33 of the Act, and rules 42, 43, 45, 46, 52, 
53, 54, 80-91, 93 and 94 in connection with the proposed acquisition of 
LG&E Energy by PowerGen (``Merger'') and related transactions. 
Following the Merger, PowerGen and each of the Intermediate Companies 
will register under section 5 of the Act.
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    \1\ The Intermediate Companies have been or will be formed prior 
to consummation of the proposed merger described in the filing.
    \2\ See LG&E Energy Corp., Holding Co. Act Release No. 26886 
(Apr. 30, 1998).
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Summary of Proposals

    PowerGen proposes to acquire all of the issued and outstanding 
common stock of LG&E Energy \3\ (``LG&E Energy Common Stock''). Through 
the acquisition, PowerGen would indirectly acquire LG&E; KU; a 20% 
interest in Electric Energy, Inc. (``EEI'' and together with LG&E and 
KU, ``LG&E Energy Utility Subsidiaries''),\4\ an electric utility 
company; and a 4.9% interest held by LG&E and a 2.9% interest held by 
KU in Ohio Valley Electric Company (``OEC''), an electric utility 
company; and LG&E Energy's direct and indirect nonutility subsidiaries 
(``LG&E Energy Nonutility Subsidiaries,'' and together

[[Page 58118]]

with the LG&E Energy Utility Subsidiaries, the ``LG&E Energy 
Subsidiaries''). PowerGen seeks to retain LG&E Energy and KU as public-
utility holding company subsidiaries exempt from registration under 
sections 3(a)(1) and 3(a)(2), respectively. PowerGen seeks authority to 
engage in acquisition-related financing transactions; to retain the gas 
utility system of LG&E; and to retain PowerGen's existing utility and 
non utility activities, businesses and investments and the LG&E Energy 
Nonutility Subsidiaries. Applicants request that the Commission 
disregard: (1) For purposes of calculating the percentage limitation of 
rule 58, nonutility investments made by LG&E Energy prior to the 
effective date of rule 58; and (2) for purposes of applying section 
11(b)(2) of the Act, the existence in the corporate structure of the 
Intermediate Companies and KU. Applicants further request authority: 
(1) To execute a system tax allocation agreement, (2) to establish a 
service company subsidiary and (3) to adopt utility and non utility 
service company agreements.
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    \3\ LG&E Energy will merge with a Kentucky corporation to be 
formed as a direct, wholly owned subsidiary of PowerGen US 
Investments Corp. (``Merger Sub''), with LG&E Energy as the 
surviving entity.
    \4\ LG&E Energy's direct and indirect nonutility subsidiaries 
are described in Appendix A to this notice.y
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    In addition, Applicants request authorization to engage in a series 
of financial transactions. Following the Merger, Applicants propose to 
maintain in place the existing financing arrangements of LG&E and its 
subsidiaries and to engage in a variety of transactions, including, 
among other things: (1) External financings by PowerGen, US Holdings, 
LG&E and KU, (2) intrasystem financings by the Intermediate Companies, 
LG&E and the LG&E Energy Subsidiaries (together with LG&E Energy, 
``LG&E Energy Group''), (3) guarantees by PowerGen, US Holdings and 
members of the LG&E Energy Group securities and other obligations of 
their subsidiaries, (4) payment by members of the LG&E Energy Group of 
dividends out of unearned capital or surplus and (5) use of securities 
proceeds to invest in exempt wholesale generators and foreign utility 
companies.

Parties

PowerGen
    PowerGen, through its subsidiaries, is a leading U.K. gas and 
electric company with significant investments in utility operations 
outside the U.K. and the U.S. PowerGen conducts its business through 
two direct subsidiaries: PowerGen U.K. which conducts PowerGen's U.K. 
businesses, and U.S. Holdings.\5\ PowerGen U.K. serves as a holding 
company over PowerGen Energy (formerly East Midlands Electricity plc) 
and those PowerGen subsidiaries that will not be in the LG&E Energy 
chain of ownership following the Merger.
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    \5\ PowerGen has one other direct subsidiary, PowerGen Share 
Scheme Trustee Limited (``Share Trustee''). Share Trustee, a trust 
company, administers employee stock plans to benefit the employees 
of PowerGen.
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    PowerGen U.K.'s primary businesses are generation and distribution 
of electricity. It is also involved, either directly or through its 
subsidiaries or investment interests, in the transportation, marketing 
and delivery of natural gas, and the development and operation of 
combined heat and power plants (i.e., cogeneration) and renewable 
energy facilities (i.e., wind farms).
    PowerGen Energy, plc (``PowerGen Energy'') is the third largest 
regional electricity company in England and Wales. It distributes 
electricity to approximately 2.3 million residential and business 
customers in a service territory covering a 16,000 square kilometer 
area. PowerGen Energy operates a distribution network of over 67,000 
kilometers of overhead lines and underground cables together with 
utility connections and metering services.
    PowerGen U.K.'s other significant subsidiaries are: PowerGen CHP 
Limited and PowerGen CoGeneration Limited, subsidiaries that construct 
and operate power plants that provide electricity and heat or steam to 
industrial customers; PowerGen Energy Trading Limited, a subsidiary 
that trades electricity, gas and oil in seven energy trading markets in 
the U.K. and Europe; PowerGen Energy Solutions Limited, a subsidiary 
that provides tailored energy service products and advice to customers; 
PowerGen Renewables Holdings Limited, a 50% owned subsidiary that 
develops wind farms; PowerGen Gas Limited, a subsidiary that operates 
PowerGen U.K's natural gas pipelines in the U.K.; and PowerGen 
International Limited (``PowerGen International''), a power project 
developer involved in eleven projects in Europe, India and Asia.\6\
    Prior to consummation of the Merger, either PowerGen U.K. or 
PowerGen Group Holdings, a holding company to be organized, intends to 
file Form U-57, under rule 57, claiming status as a foreign utility 
company (``FUCO'') under section 33 of the Act.\7\ Applicants 
anticipate that the claimant will retain FUCO status following the 
Merger.
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    \6\ PowerGen's subsidiaries and activities are described in 
Appendix A to this notice.
    \7\ PowerGen Group Holdings, a new, unlimited liability holding 
company, will be established between PowerGen and PowerGen UK. This 
measure will permit PowerGen International to become a sister 
company, rather than a subsidiary, of PowerGen UK. At the same time, 
it will create a single FUCO, with ownership of all FUCO businesses 
except those in the LG&E Energy Group.
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    PowerGen's ordinary shares are listed on the London Stock Exchange 
(``LSE''). PowerGen has an American Depositary Share (``ADS'') program 
under which some of its shares trade in the United States as American 
Depositary Receipts (``ADRs'') on the New York Stock Exchange 
(``NYSE''). According to a report filed by PowerGen with the Commission 
on Form 20-F on March 29, 2000, in accordance with section 12(b) of the 
Securities Exchange Act of 1934, PowerGen had issued and outstanding as 
of January 2, 2000 649,726,502 ordinary shares, 50 pence par value per 
share, 49,998 shares of limited voting redeemable preference shares, 1 
pound sterling par value per share, and one ``golden share.'' \8\ As of 
PowerGen's fiscal year ended January 2, 2000, PowerGen had revenues, 
net income and total assets of $6.058 billion, $1.819 billion, and 
$10.740 billion, respectively.\9\
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    \8\ Applicants explain that the golden share, which is held by 
the U.K. government, effectively operates as governmental change-in-
control regulation.
    \9\ All figures are presented on a U.S. Generally Accepted 
Accounting Procedures (``U.S. GAAP'') basis. The figures for 
revenues and net income were translated into dollars using a rate of 
U.S. $1.6172 for one pound, and the figure for total assets was 
translated using a rate of U.S. $1.6117 for one pound. Consistent 
with U.S. GAAP, PowerGen's share of joint ventures and associates' 
businesses is included in net income and assets but is omitted from 
revenues.
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LG&E Energy
    LG&E engages in the generation, transmission, and distribution of 
electricity to approximately 366,000 customers in Louisville and 
adjacent areas in Kentucky. LG&E also purchases, distributes, and sells 
natural gas to approximately 295,000 customers within this service area 
and in limited additional areas. For the twelve months ended December 
31, 1999, LG&E had electric operating revenues of $790.7 million, gas 
operating revenues of $177.6 million, electric operating income of 
$189.9 million, and gas operating income of $7.9 million. LG&E is 
subject to regulation by the Federal Energy Regulatory Commission 
(``FERC'') and the Kentucky Public Service Commission (``Kentucky 
Commission'').
    KU is engaged in producing, transmitting, and selling electric 
energy to approximately 458,000 customers in over 600 communities and 
adjacent suburban and rural areas in 77 counties in central, 
southeastern and western Kentucky, and to approximately 29,000 
customers in five counties in southwestern Virginia. In Virginia, KU

[[Page 58119]]

operates under the name Old Dominion Power Company. KU also sells 
electric energy at wholesale for resale to twelve Kentucky 
municipalities and one Pennsylvania municipality. In addition, KU owns 
and operates a small amount of electric utility property in one county 
in Tennessee.\10\
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    \10\ KU is also a holding company by reason of its ownership 
interests in OVEC and EEI. KU is exempt from registration by order 
under section 3(a)(1) of the Act. See KU Energy Corp., Holding Co. 
Act Release No. 25409 (Nov. 13, 1991).
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    For the year ended December 31, 1999, KU had operating revenues of 
$937.3 million and operating income of $196.4 million. KU is subject to 
regulation by the FERC, the Kentucky Commission, the Virginia State 
Corporation Commission (``Virginia Commission ''), and the Tennessee 
Regulatory Authority (``Tennessee Commission'').
    In addition to its utility subsidiaries, LG&E Energy has three 
direct, nonutility subsidiaries. LG&E Energy Foundation, Inc., a 
charitable foundation exempt from taxation under section 501(c)(3) of 
the Internal Revenue Code, makes charitable contributions to qualified 
entitles.\11\ LG&E Energy Marketing Inc. (``LEM'') engages in energy 
marketing and trading.\12\ LG&E Capital Corp, is a holding company for 
nonutility investments. Through various subsidiaries and joint 
ventures, LG&E Capital Corp. is involved in numerous energy-related 
businesses. These nonutility subsidiaries include: LG&E Credit Corp., 
which offers consumer lending programs and services in Louisville; LG&E 
International Inc., a management and holding company for international 
energy project investments and operations, each of which qualifies for 
FUCO status; LG&E Power, Inc., which develops, operates, maintains and 
owns interests in domestic power facilities, each of which qualifies as 
an exempt wholesale generator under section 32 of the Act or qualifying 
facility under the Public Utilities Regulatory Policy Act of 1978; WKE 
CORP., a company whose subsidiaries operate the Big Rivers Electric 
Corporation's generation facilities; and CRC-Evans International, Inc., 
which provides equipment and services used in the construction and 
rehabilitation of gas and oil piplines.\13\
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    \11\ As of December 31, 1999, the market value of the assets of 
LG&E Energy Foundation was $19.9 million.
    \12\ LEM has discontinued its merchant trading and sales 
business, but maintains the technical systems and personnel 
necessary to make power marketing sales from assets owned or 
controlled by its affiliates.
    \13\ LG&E Energy Subsidiaries are described in Appendix A of 
this notice.
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    As of February 29, 2000, there were 129,677,030 shares of LG&E 
Energy Common Stock outstanding. As of December 31, 1999, on a 
consolidated basis, LG&E Energy's assets, operating revenues, and net 
income were $5,133.8 million, $2,707.3 million, and $62.1 million, 
respectively.

Proposed Merger and Resulting Structure

    In accordance with an Agreement and Plan of Merger dated February 
27, 2000, among LG&E Energy, PowerGen, PowerGen US Investments Corp., a 
Delaware corporation to be formed as an indirect, wholly owned 
subsidiary of PowerGen, and Merger Sub (``Merger Agreement''), LG&E 
Energy will merge into Merger Sub, with LG&E Energy as the surviving 
entity. LG&E Energy will be an indirect, wholly owned subsidiary of 
PowerGen.
    As consideration for each share of LG&E Energy Common Stock 
outstanding at the time of the Merger, LG&E Energy shareholders will 
receive $24.85 per share in cash, without interest.\14\ LG&E Energy 
shareholders will not obtain any stock consideration from PowerGen in 
the Merger. Applicants estimate that total cash payable to LG&E Energy 
shareholders (``Cash Consideration''), based on the number of shares of 
LG&E Energy Common Stock outstanding on February 27, 2000, will be 
approximately $3.23 billion.\15\
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    \14\ Under Kentucky law, dissenting shareholders are entitled to 
seek the judicially determined value of their common stock in lieu 
of the $24.85 provided in the Merger Agreement.
    \15\ Applicants state that the Merger is expected to have no 
effect on the outstanding public debt of the LG&E Energy Group.
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    PowerGen intends to establish the Intermediate Companies as 
intermediate holding companies in the corporate structure between 
PowerGen and LG&E Energy.\16\ Applicants state that the Intermediate 
Companies will exist primarily to create an economically efficient 
structure for the Merger and the ongoing operations of PowerGen and the 
LG&E Energy Subsidiaries. Applicants request that the Commission 
disregard the Intermediate Companies, LG&E Energy and KU solely for 
purposes of section 11(b)(2) of the Act.
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    \16\ Applicants state that there will be no third party holders 
of voting equity securities in the Intermediate Companies.
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Financing of the Merger

    As noted previously, the Cash Consideration for the Merger will be 
approximately $3.23 billion. PowerGen intends to finance the Merger by 
borrowings under a fully committed bank facility (``Credit 
Facility'').\17\ PowerGen and U.S. Holdings established the Credit 
Facility on February 27, 2000. It was originally underwritten by five 
internationally recognized banks and subsequently syndicated among a 
larger group. It provides for up to $4.0 billion in borrowings by 
PowerGen, US Holdings and other Intermediate Companies that are 
subsidiaries of US Holdings as approved in writing by the banks, and 
guaranteed by PowerGen or US Holdings.\18\ The Credit Facility has a 
final maturity of five years from the date of signing. To the extent 
necessary, Applicants request authorization for borrowings under the 
Credit Facility.
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    \17\ Applicants state that the Credit Facility was established 
both to fund the Merger and, if necessary, to provide funding and 
accommodate working capital needs of the Intermediate Companies and 
the LG&E Energy Group.
    \18\ Applicants state that, although the Credit Facility permits 
other borrowers, Applicants intend that US Holdings will be the only 
borrower, with a guarantee provided by PowerGen.
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Retention of LG&E's Gas System

    Applicants seek to retain the gas integrated public-utility system 
of LG&E in addition to the electric integrated public-utility system of 
LG&E Energy. Applicants have submitted a study of the gas utility 
operations that analyze the lost economies that these operations would 
suffer upon divestiture. Applicants represent that substantial lost 
economies would result from divestiture.

Approval of Tax Allocation Agreement

    Applicants request approval of an agreement for the allocation of 
consolidated tax among PowerGen US Partnership, PowerGen US Investments 
Corp. and the LG&E Energy Group following the Merger (``Tax Allocation 
Agreement''). Approval is necessary because the Tax Allocation 
Agreement will provide for the retention by the PowerGen entities 
within the consolidated group of certain payments for tax losses, 
rather than the allocation of the losses to subsidiary companies 
without payment, as would otherwise be required by rule 45(c)(5) under 
the Act.

Subsidiary Service Company and Affiliated Transactions

    Applicants propose to form a subsidiary service company of LG&E 
Energy, to be named LG&E Energy Services, Inc. (``LG&E Services''), to 
provide goods and services to members of the LG&E Energy Group, and to 
a lesser extent, to PowerGen and its other subsidiaries. Applicants 
request that LG&E Services be authorized under

[[Page 58120]]

section 13(b) and rule 88 to provide goods and services to associate 
companies, and to charge for goods and services to LG&E Energy 
Subsidiaries under two separate service agreements, one for the LG&E 
Energy Utility Subsidiaries and one for the LG&E Energy Nonutility 
Subsidiaries. In addition, Applicants propose that members of the 
PowerGen System provide goods and services to the LG&E Energy Group. 
Presently, it is anticipated that the majority of trans-Atlantic goods 
and services will be provided by the PowerGen system, principally, 
PowerGen UK (or PowerGen Group Holdings, if applicable). Charges for 
services provided to public-utility associate companies will comply 
with the at-cost requirements of section 13.
    In addition, Applicants request that the Commission grant an 
exemption under section 13(b) from the at-cost requirement of section 
13 and rules 90 and 91 for any nonutility subsidiary of Powergen to 
provide services to: (1) Associate FUCOs and exempt wholesale 
generators (``EWGs'') that derive no part of their income, directly or 
indirectly, from the generation, transmission or distribution of 
electric energy for sale or the distribution of natural gas at retail 
in the United States; and (2) services provided to an associate EWG, 
qualifying facility (``QF''), or independent power project (``IPP'') 
provided that the purchaser of the electricity sold by the entity is 
not an associate company of LG&E Energy. No services will be provided 
at market-based rates to a QF, IPP or EWG that sells electricity to an 
LG&E Energy Utility Subsidiary.
    Certain LG&E Energy Group companies have in place arrangements for 
the provision of facilities, personnel and services to other LG&E 
Energy Group companies, as described below. All such arrangements for 
the provision of goods, services and construction are provided at cost 
as determined in accordance with rules 90 and 91. Certain of the goods, 
services and construction to be provided by the providing company to 
the other LG&E Energy Group companies are provided through contracts 
with third parties. Where practicable, the contracting LG&E Energy 
Group companies will enter into assignments to LG&E Service of any such 
existing contracts. In addition, the Applicants expect that upon the 
expiration or renegotiation of the original contract for such goods, 
services and construction, LG&E Services will enter into new contracts 
with such third parties, in compliance with the requirements of rules 
87, 90 and 91. The Applicants seek the necessary approval for the 
continued performance of these arrangements through December 31, 2001 
in order to allow an orderly transition of such contracts and 
arrangements.

Description of Financing Proposals

    Applicants request authority through February 28, 2004 
(``Authorization Period'') to engage in a variety of financing 
transactions subsequent to the Merger including: (1) External 
financings and guarantees by PowerGen, US Holdings, LG&E Energy and the 
LG&E Energy Subsidiaries, (2) intrasystem financings by the 
Intermediate Companies, other special purpose PowerGen subsidiaries, 
LG&E Energy and the LG&E Energy Subsidiaries, (3) increases in the 
number of shares authorized by the Intermediate Companies with respect 
to any capital security, without further Commission authorization, (4) 
currency and interest rate hedging instruments, (5) acquisition, 
redemption or retirement of securities issued by the Intermediate 
Companies and members of the LG&E Energy Group, (6) the formation of 
financing entities and the issuance by those entities of securities 
authorized to be issued and sold under the authority requested in the 
Application, (7) acquisition of intermediate subsidiaries for the 
purpose of investing in EWGs, FUCO, rule 58 subsidiaries (``Rule 58 
Subsidiaries''), exempt telecommunications companies (``ETCs'') and 
other non-exempt, nonutility subsidiaries, (8) reorganization and 
restructuring of the Intermediate Companies and the LG&E Energy 
Nonutility Subsidiaries, (9) investment of up to 100% of the PowerGen 
system's consolidated retained earnings post-Merger in EWGs and FUCOs, 
(10) financial reporting as described in the Application, (11) 
maintenance of the existing financial arrangements of the LG&E Energy 
Group and (12) the payment by the PowerGen, the Intermediate Companies 
and members of the LG&E Energy Group of dividends out of capital or 
unearned surplus. In addition, Applicants request an exemption for 
certain reporting requirements.
    The proceeds from the sale of securities in external financing 
transactions by US Holdings and the LG&E Energy Group will be used for 
the general corporate purposes of the LG&E Energy Subsidiaries. The 
proceeds from the sale of the capital stock and short-term debt by 
PowerGen will be used by the PowerGen system, subject to any applicable 
limits on such uses.
    The Applicants represent that no proceeds of financing by PowerGen 
will be used to acquire a new subsidiary, other than a special purpose 
financing entity as described below, unless such acquisition is 
consummated in accordance with an order of the Commission or an 
available exemption under the Act.

PowerGen and US Holdings External Financing

    Applicants propose that PowerGen and US Holdings be granted 
authority to issue equity and debt securities in amounts that, except 
as noted below, would not aggregate more than $6 billion outstanding at 
any time during the Authorization Period (``Aggregate Limitation''). 
Debt incurred to finance the Merger, including any borrowings under the 
Credit Facility, would be included in the Aggregate Limitation. These 
securities could include, but would not necessarily be limited to, 
ordinary shares, preferred shares, options, warrants, long- and short-
term debt (including commercial paper), convertible securities, 
subordinated debt, bank borrowings and securities with call or put 
options. In addition to the Aggregate Limitation, aggregate outstanding 
amounts of securities issued by PowerGen would be subject to the limits 
for each type of security described below:

------------------------------------------------------------------------
                          Security                            $ billions
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Ordinary Shares, including options and warrants............          4.0
Preferred stock............................................          1.0
Short-term debt financing..................................          4.0
Long-term debt financing...................................          6.0
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Ordinary Shares

    PowerGen's common equity consists of ordinary shares, with a par 
value of 50 pence each, that are listed on the LSE. PowerGen currently 
has ADSs in the United States which trade as ADRs on the NYSE and are 
registered under the Securities Act of 1933, as amended.
    Ordinary share financings by PowerGen covered by this Application 
may occur in any one of the following ways: (1) Through a pro rata 
rights offering directly to existing shareholders; (2) through 
underwriters or dealers under underwriting agreements of a type 
standard in the United Kingdom, the United States, or other places of 
sale; (3) through agents; (4) directly in private placements or other 
non-public offerings to a number of purchasers or a single purchaser; 
(5) directly to employees (or to trusts established for their benefit) 
and other shareholders through PowerGen's

[[Page 58121]]

employee benefit plans; (6) through the issuance of bonus shares (i.e., 
stock splits or stock dividends) to existing shareholders; or (7) 
through the issuance of options or warrants to acquire ordinary shares.
    PowerGen seeks authority to use its ordinary shares (or associated 
ADSs or ADRs) as consideration for acquisitions that are otherwise 
authorized under the Act. Among other things, transactions may involve 
the exchange of PowerGen equity securities for securities of the 
company being acquired in order to provide the seller with certain tax 
advantages. The PowerGen ordinary shares to be exchanged may, among 
other things, be purchased on the open market or may be original issue. 
For purposes of the $6.0 billion external financing limit, PowerGen 
ordinary shares used as consideration in an acquisition would be valued 
at market value based upon the last closing price of the ordinary 
shares on the LSE prior to the execution of the transaction agreement.
    In addition to other general corporate purposes, the ordinary 
shares will be used to fund employee benefit plans. PowerGen currently 
has and Applicants propose that it maintain three employee benefit 
plans under which its employees may acquire ordinary shares of PowerGen 
as part of their compensation: (1) The PowerGen ShareSave Scheme, (2) 
the PowerGen Executive Share Option Scheme and (3) the PowerGen 
Restricted Share Plan. The PowerGen ShareSave Scheme is available to 
all eligible employees of PowerGen. It provides for the issuance of 
share options that are normally exercisable on completion of a three or 
five year ``save-as-you-earn'' contract. The exercise price of options 
granted may be at a discount of no more than 20% of the market price at 
the date of the grant. The PowerGen Executive Share Option Scheme is 
available to executive directors and other senior executives and 
managers selected by the Remuneration Committee of the Board of 
Directors. Options are generally exercisable between the third and 
tenth anniversaries of the date of the grant, and are granted at the 
market price of PowerGen's shares at the time of the grant or higher 
where options have previously been exercised at a higher rate. The 
PowerGen Restricted Share Plan involves two types of awards: (1) Medium 
Term Bonus Awards and (2) Annual Bonus Enhancement Awards. The Medium 
Term Bonus Awards are available to executive directors and senior 
managers selected by the Remuneration Committee. Shares of equivalent 
value to the annual bonus received by the participant are placed into 
trust. Subject to certain performance conditions being met, shares vest 
into the ownership of the participant after three and four years, and 
may be called for a year after that. The annual bonus Enhancement 
Awards are available to executive directors and managers who may elect 
to forgo some or all of their cash Annual Bonus. Shares of equivalent 
value to the bonus forgone are placed into trust, and if held in trust 
for a period of three years, are enhanced by PowerGen on the basis of 
one extra share for every four shares so held.
    In addition, PowerGen may adopt one or more other plans which will 
provide for the issuance and/or sale of PowerGen ordinary shares, share 
options and share awards to a group which has not yet been determined 
but may include directors, officers and employees of the companies in 
the PowerGen System. PowerGen also has agreed to give holders of LG&E 
Energy stock options the right to convert those options into options 
for PowerGen ADSs. PowerGen may issue its ordinary shares under the 
requested authority described in this notice in order to satisfy its 
obligations under these plans. Ordinary shares for use under share 
plans may be newly issued shares or shares purchased in the open 
market. PowerGen or the Share Trustee may make open-market purchases of 
ordinary shares in accordance with the terms of or in connection with 
the operation of the plans.
    Securities issued by PowerGen under all of the plans will be 
included within the $6.0 billion external financing limit and will be 
valued, if ordinary shares, at market value based on the closing price 
on the LSE on the day before the issuance of the shares. Options issued 
by PowerGen under the plans will be valued at zero until exercised.
    Any ordinary shares issued by US Holdings will be issued solely to 
PowerGen absent additional authority from the Commission. However, 
Applicants propose that US Holdings issue non-voting preferred stock 
from time to time during the Authorization Period. Any preferred stock 
would have dividend rates or methods of determining the same, 
redemption provisions, conversion or put terms and other terms and 
conditions as US Holdings may determine at the time of issuance. All 
issuances of preferred stock will be at rates or prices, and under 
conditions negotiated under, based upon, or otherwise determined by 
competitive market conditions.

PowerGen and US Holdings Short-Term Debt

    Applicants request that PowerGen and US Holdings may engage in 
short-term financing as each may deem appropriate in light of its needs 
and market conditions at the time of issuance. Financing could include, 
without limitation, commercial paper sold in established U.S. or 
European commercial paper markets, lines of credit with banks or other 
financial institutions and debt securities issued under an indenture or 
a note program. All transactions will be at rates or prices, under 
conditions negotiated using, based upon or otherwise determined by 
competitive market conditions.

US Holdings Long-Term Debt

    Applicants propose that US Holdings issue long-term debt from time 
to time during the Authorization Period.\19\ Any long-term debt would 
have the designation, aggregate principal amount, interest rate(s) or 
method of determining the same, terms of payment of interest, 
redemption provisions, non-refunding provisions, sinking fund terms, 
put terms and other terms and conditions as are deemed appropriate at 
the time of issuance. In addition, the long-term debt may be 
convertible into preferred shares of US Holdings or exchangeable for 
ordinary shares of PowerGen authorized to be issued hereunder. The 
maturity of any long-term debt will not exceed 50 years.
---------------------------------------------------------------------------

    \19\ PowerGen does not itself anticipate issuing long-term debt 
during the Authorization Period.
---------------------------------------------------------------------------

    The long-term debt may be issued and sold under standard 
underwriting agreements or under negotiated bank facilities. In the 
case of public debt offerings, distribution may be effected through 
private negotiations with underwriters, dealers or agents, or through 
competitive bidding among underwriters. In addition, the long-term debt 
may be issued and sold through private placements or other non-public 
offerings to one or more persons. All transactions will be at rates or 
prices, under conditions negotiated using, based upon or otherwise 
determined by competitive market conditions.
    In addition to the specific securities listed above, PowerGen and 
US Holdings may issue other types of securities during the 
Authorization Period that are not exempt from prior Commission 
approval. Applicants request that the Commission reserve jurisdiction 
over the issuance of additional types of securities by PowerGen and US 
Holdings. Applicants also undertake to have a post-effective

[[Page 58122]]

amendment filed in this proceeding that will describe the general terms 
of each such security and request a supplemental order of the 
Commission authorizing the issuance thereof. Applicants further request 
that each supplemental order be issued by the Commission without 
further public notice.

Intermediate Company Financings

    The portion of an individual Intermediate Company's aggregate 
financing to be effected through the sale of equity securities to its 
immediate parent company during the Authorization Period cannot be 
determined at this time. It may happen that the proposed sale of 
capital securities may in some cases exceed the capital stock of a 
given Intermediate Company authorized at the date of the Merger, in 
which case the limit will be increased. In addition, an Intermediate 
Company may choose to use other forms of capital securities. Capital 
stock includes common stock, ordinary shares, preferred stock, other 
preferred securities, options and/or warrants convertible into common 
or preferred stock, rights, and similar securities. As needed to 
accommodate the sale of additional equity, Applicants request the 
authority to increase the amount or change the terms of any 
Intermediate Company's authorized capital securities, without 
additional Commission approval. The terms that may be changed include 
dividend rates, conversion rates and dates, and expiration dates. 
Applicants note that except for the financings of US Holdings described 
above, each of the Intermediate Companies will be wholly owned directly 
or indirectly by PowerGen and will not have third-party investors.
    Applicants also propose that Intermediate Companies and LG&E Energy 
be authorized to borrow from its parent company. These inter-company 
loans would be on terms and conditions not materially less favorable 
than those obtainable by US Holdings from third parties.
    Separately, US Holdings and its direct subsidiary, PowerGen US 
Investments Limited, will enter into parallel loans in order to effect 
a currency hedging transaction. Applicants believe that, although the 
transaction will be booked as loans, they do not constitute loans or 
extensions of credit within the meaning of section 12(a) of the Act and 
request approval of such transactions.

PowerGen Capital and Luxembourg Securities

    Applicants propose for PowerGen to establish two subsidiaries, 
PowerGen Capital and Luxembourg Securities, sarl, which will stand 
outside the chain of the Intermediate Companies, to serve as conduits 
through which dividend payments from LG&E Energy are repatriated to 
PowerGen.
    PowerGen Capital will be a sister company to US Holdings, and will 
not be in the chain of ownership between PowerGen and LG&E Energy. 
Applicants propose that PowerGen Capital issue non-voting ordinary 
shares to PowerGen Luxembourg sarl (``PowerGen Luxembourg''), an 
indirect subsidiary of US Holdings, and an Intermediate Company in the 
chain of ownership of LG&E Energy, and loan the proceeds from the sale 
to US Holdings.\20\ Applicants state that PowerGen Capital will serve 
as a conduit through which dividend payments from LG&E Energy are 
repatriated to PowerGen in the most economically efficient manner, and 
ask that the transactions not be deemed to constitute an ``upstream 
loan'' for purposes of section 12(a).
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    \20\ Applicants also seek authority for PowerGen Capital to 
issue non-voting ordinary shares to other Intermediate Companies and 
to loan the proceeds from any such issuance to US Holdings on 
commercially reasonable terms.
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    Luxembourg Securities also will not be an Intermediate Company, but 
will be wholly owned by an Intermediate Company. At the time of the 
Merger, Luxembourg Securities will own voting preference share capital 
of PowerGen Luxembourg Holdings sarl (``PowerGen Luxembourg 
Holdings''), an Intermediate Company.\21\ The ordinary shares of 
PowerGen Luxembourg Holdings will be owned by PowerGen Luxembourg, also 
an Intermediate Company. The only assets of Luxembourg Securities will 
be the preference shares of PowerGen Luxembourg Holdings and a 
participating loan note to be issued for tax purposes by PowerGen 
Luxembourg Holdings.\22\ The funds that PowerGen Luxembourg Holdings 
will be using to make payments on the participating loan note will 
originate as lawfully payable dividends from LG&E Energy and these 
funds will be dividended by Luxembourg Securities to its immediate 
parent and, ultimately, to PowerGen.
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    \21\ Luxembourg Securities will own less than 1% of the voting 
securities of PowerGen Luxembourg Holdings.
    \22\ The terms of the participating loan note provide for the 
payment in any year, from dividend payments received in such year, 
an amount that causes the rate of tax credit for UK double tax 
relief purposes to be equivalent to the current rate of UK 
corporation tax.
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    Neither PowerGen Capital nor Luxembourg Securities will issue 
securities to third parties, nor will it be engaged in any substantive 
business activity other than to effect the dividend repatriation.

LG&E Energy Group Financings

    Applicants seek Commission approval to retain the existing 
financing arrangements of members of the LG&E Energy Group, which, to 
this date, have been exempt from Commission authorization. These 
arrangements are more particularly described in Appendix B to this 
notice. Applicants request that the Commission authorize the existing 
financing arrangements through the Authorization Period.

LG&E Energy Financing

    Applicants propose that LG&E Energy obtain funds externally through 
sales of short-term debt securities, which include commercial paper and 
bank financings. The aggregate amount of short-term debt of LG&E Energy 
to be outstanding at any one time during the Authorization Period shall 
not exceed $400 million. This financing could include, without 
limitation, commercial paper sold in established U.S. or European 
commercial paper markets, lines of credit with banks or other financial 
institutions, and debt securities issued under an indenture or a note 
program. Applicants also request that the Commission reserve 
jurisdiction over the issuance by LG&E Energy of additional types of 
securities and the amount thereof.

LG&E Energy Utility Subsidiary Financing

    All securities of LG&E and KU, except for securities with 
maturities of two years or less, are approved by the Kentucky 
Commission. Accordingly, authority is requested for LG&E and KU to 
issue debt with maturities of two years or less to one or more 
associate or non-associate lenders, provided that the aggregate 
principal amount of such debt incurred by either at any one time during 
the Authorization Period not exceed $400 million outstanding. In 
addition, LG&E and KU may find it necessary or desirable to issue other 
types of securities during the Authorization Period that are not exempt 
from prior Commission approval. Applicants request that the Commission 
reserve jurisdiction over the issuance of such additional types of 
securities and the amount of these issuances.

[[Page 58123]]

LG&E Energy Nonutility Subsidiary Financings

    The LG&E Energy Nonutility Subsidiaries have financing arrangements 
in place, which arrangements Applicants propose to maintain in place 
following the Merger. To the extent such financing arrangements are not 
exempt under rule 52, Applicants request authorization for such 
arrangements. These arrangements are more particularly described in 
Exhibit C to this Notice. Applicants believe that, in almost all cases, 
financings entered into by the LG&E Energy Nonutility Subsidiaries will 
be exempt from prior Commission authorization pursuant to rule 52(b). 
Applicants request authority, to the extent necessary, to engage in 
these transactions and ask that the Commission reserve jurisdiction 
over the issuance of these securities.

Intra-System Financings

    The activities of LG&E Energy and the LG&E Energy Nonutility 
Subsidiaries are financed, in part, through inter-company loans. The 
sources of funds for the operations of LG&E Energy and the LG&E Energy 
Nonutility Subsidiaries include internally generated funds and proceeds 
of external financings. Outside of borrowings from the LG&E Money Pool 
(as defined below), there were outstanding as of December 31, 1999, 
inter-company loans among LG&E Energy and the LG&E Energy Nonutility 
Subsidiaries in a net principal amount of approximately $757 million, 
including upstream loans from LG&E Capital to LG&E Energy in the 
aggregate amount of approximately $230 million.
    The Applicants request authorization to maintain in place the 
existing intercompany loans.\23\ In addition, the Applicants request 
authorization for additional inter-company loans among LG&E Energy and 
the LG&E Energy Nonutility Subsidiaries in a net principal amount at 
any one time outstanding during the Authorization Period not to exceed 
$1.0 billion. The authorization for inter-system financing requested in 
this paragraph excludes (1) financing that is exempt pursuant to rules 
45(b) and 52, as applicable, and (2) amounts outstanding from time to 
time under the LG&E Money Pool and/or the Utility Money Pool and 
Nonutility Money Pool. These financings would generally be in the form 
of cash capital contributions, open account advances, intercompany 
loans, and/or capital stock purchases. The terms and conditions of 
intercompany loans available to any borrowing company will be 
materially no less favorable than the terms and conditions of loans 
available to such borrowing company from thirdparty lenders.
---------------------------------------------------------------------------

    \23\ If LG&E Energy is denied its request for continuing 
exemption under section 3(a)(1) of the Act, upstream loans to LG&E 
Energy would violate section 12(a) of the Act as of the moment LG&E 
Energy registers as a holding company. In such event, LG&E Energy 
requests that these borrowings and extensions of credit not be 
deemed illegal under the Act, pending their repayment over a 
reasonable period of time. Because of the amount of the borrowings, 
LG&E Energy requests that it be granted two years from the date of 
the order authorizing the proposals in this Application to repay 
these borrowings and eliminate the extensions of credit.
---------------------------------------------------------------------------

Money Pools

    LG&E Energy, LG&E and KU currently participate in a money pool 
(``LG&E Money Pool''). Through the LG&E Money Pool, LG&E and KU make 
unsecured short-term borrowings from the money pool and contribute 
surplus funds to the money pool. LG&E Energy contributes surplus funds 
to the LG&E Money Pool, but does not borrow from the LG&E Money Pool. 
At March 31, 2000, LG&E Energy and LG&E were contributors to the LG&E 
Money Pool and KU had borrowings from the LG&E Money Pool of 
approximately $17.2 million.
    Applicants request that the Commission authorize the continuation 
of the LG&E Money Pool for an interim period not to exceed two years to 
permit LG&E Energy to make a transition from the LG&E Money Pool to the 
Utility Money Pool and the Nonutility Money Pool as discussed below.
    Applicants propose that LG&E Energy, LG&E, KU and the LG&E Energy 
Nonutility Subsidiaries replace the LG&E Money Pool with the Utility 
Money Pool and Nonutility Money Pool and request authority to do so. 
Further, LG&E and KU, to the extent not exempted by rule 52, also 
request authorization to make unsecured short-term borrowings from the 
Utility Money Pool, to contribute surplus funds to the Utility Money 
Pool and to lend and extend credit to (and acquire promissory notes 
from) one another through the Utility Money Pool. Applicants request 
authorization for LG&E Energy to contribute surplus funds and to lend 
and extend credit to (1) LG&E and KU through the Utility Money Pool and 
(2) LG&E Energy Nonutility Subsidiaries through the Nonutility Money 
Pool. Under the proposed terms of the Utility Money Pool, short-term 
funds would be available from surplus funds in the treasuries of the 
LG&E Energy, KU and the LG&E (``Internal Funds''), surplus funds in the 
treasury of LG&E Energy, and proceeds from bank borrowings by Utility 
Money Pool participants or the sale of commercial paper by the Utility 
Money Pool participants for loan to the Utility Money Pool (``External 
Funds'').
    Utility Money Pool participants that borrow would borrow pro rata 
from each company that lends, in the proportion that the total amount 
loaned by each such lending company bears to the total amount then 
loaned through the Utility Money Pool.
    If only Internal Funds make up the funds available in the Utility 
Money Pool, the interest rate applicable and payable to or by the 
Utility Money Pool participants for all loans of such Internal Funds 
outstanding on any day will be the rates for high-grade unsecured 30-
day commercial paper sold through dealers by major corporations as 
quoted in the Wall Street Journal on the preceding business day. If 
only External Funds comprise the funds available in the Utility Money 
Pool, the interest rate applicable to loans of such External Funds 
would be equal to the lending company's cost for such External Funds, 
or, if more than one Utility Money Pool participant had made available 
External Funds on such day, the applicable interest rate would reflect 
a weighted average of the two rates.
    Funds not required by the Utility Money Pool to make loans (with 
the exception of funds required to satisfy the Utility Money Pool's 
liquidity requirements) would ordinarily be invested in one or more 
short-term investments, including: (1) Interest-bearing accounts with 
banks, (2) obligations issued or guaranteed by the U.S. government and/
or its agencies and instrumentalities, including obligations under 
repurchase agreements, (3) obligations issued or guaranteed by any 
state or political subdivision thereof, provided that such obligations 
are rated not less than ``A'' by a nationally recognized rating agency, 
(4) commercial paper rated not less than ``A-1'' or ``P-1'' or their 
equivalent by a nationally recognized rating agency, (5) money market 
funds, (6) bank certificates of deposit, (7) Eurodollar funds and (8) 
such other investments as are permitted by section 9(c) of the Act and 
rule 40. The interest income and investment income earned on loans and 
investments of surplus funds would be allocated among the participants 
in the Utility Money Pool in accordance with the proportion each 
participant's contribution of funds bears to the total amount of funds 
in the Utility Money Pool.
    Each Applicant receiving a loan through the Utility Money Pool 
would be required to repay the principal amount of such loan, together 
with all

[[Page 58124]]

interest accrued thereon, on demand. All loans made through the Utility 
Money Pool may be prepaid by the borrower without premium or penalty.
    The Nonutility Money Pool will be operated substantially on the 
same terms and conditions as the Utility Money Pool. All contributions 
to, and borrowings from, the Nonutility Money Pool are exempt under the 
terms of rule 52 under the Act, except contributions and extensions of 
credit by LG&E Energy, authorization for which applicants request 
authority. LG&E Services will administer the Utility and Nonutility 
Money Pools on an ``at cost'' basis and will maintain separate records 
for each money pool.

Guarantees

    Applicants request authority for PowerGen to guarantee obligations 
incurred by US Holdings under the Aggregate Limitations. In addition, 
Applicants request that PowerGen and US Holdings to enter into 
guarantees, obtain letters of credit, extend credit or otherwise 
provide credit support with respect to the obligations of the 
Intermediate Companies and members of the LG&E Energy Group as may be 
appropriate to enable such system companies to carry on their 
respective authorized or permitted businesses. Guarantees entered into 
pursuant to this authorization by PowerGen and US Holdings will be 
subject to a $2.5 billion limit, based upon the amount at risk 
outstanding at any one time, which amount is in addition to guarantees 
by PowerGen of securities issued by US Holdings under the Aggregate 
Limitation.

Existing Guarantees of the LG&E Energy Group

    Members of the LG&E Energy Group have in place certain guarantees 
and other credit support arrangements, more particularly described in 
Appendix D to this notice, which arrangements Applicants request that 
the Group maintain following the Merger (``Existing Guarantees''). In 
addition, Applicants request authorization for LG&E Energy to enter 
into guarantees, extend credit and obtain letters of credit expense 
agreements and otherwise to provide credit support for the obligations 
from time to time of the LG&E Energy Subsidiaries during the 
Authorization Period in an aggregate principal amount not to exceed 
$1.5 billion, based on the amount at risk, outstanding at any one time, 
exclusive of the Existing Guarantees.
    In addition, the Applicants request authorization for the LG&E 
Energy Nonutility Subsidiaries to enter into guarantees, extend credit, 
obtain letters of credit or otherwise provide credit support with 
respect to the obligations of the other LG&E Energy Nonutility 
Subsidiaries as may be appropriate to enable the LG&E Energy Nonutility 
Subsidiaries to carry on their businesses, in an aggregate principal 
amount not to exceed $1.5 billion outstanding at any one time, 
exclusive of the Existing Guarantees and any guarantees that may be 
exempt under rule 45(b).

Interest Rate and Currency Risk Management Devices

    Applicants request authority to enter into, perform, purchase and 
sell financial instruments intended to manage the volatility of 
interest rates and currency exchange rates, including but not limited 
to interest rate and currency swaps, caps, floors, collars and forward 
agreements or any other similar agreements. Activities of this nature 
could include (1) converting variable rate debt to fixed rate debt, (2) 
converting fixed rate debt to variable rate debt, (3) limiting the 
impact of changes in interest rates resulting from variable rate debt 
and (4) hedging currency exposures of foreign currency denominating 
debt. In addition, the Applicants may utilize instruments to manage 
interest rate and currency risks in future periods for planned 
issuances of debt securities. In no case will the notional amount of 
any hedging instruments exceed that of the underlying debt instrument.

Acquisition, Redemption or Retirement of Securities

    Applicants propose that each of PowerGen, the Intermediate 
Companies and each member of the LG&E Energy Group acquire, redeem, or 
retire its securities or those of its direct and indirect subsidiaries, 
which securities may be either outstanding presently or issued and sold 
in the future from time to time during the Authorization Period.

Financing Entities

    Applicants request authority for US Holdings and the LG&E Energy 
Subsidiaries to organize and acquire voting interest in or equity 
securities of new corporations, trusts, partnerships or other entities 
created for the purpose of facilitating financing through their 
issuance to third parties of trust preferred securities or other 
securities authorized by the Application. Applicants also request 
authority for these financing entities to issue the securities to third 
parties. Additionally, Applicants request authority with respect to (1) 
the issuance of debentures or other evidences of indebtedness by any of 
US Holdings and the LG&E Energy Subsidiaries to a financing entity in 
return for the proceeds of the financing and (2) the guarantee by 
PowerGen, US Holdings or the LG&E Energy Subsidiaries of the financing 
entity's obligations in connection with its issuance of securities. Any 
amounts issued by financing entities to third parties under these 
authorizations will count against the external financing limit for US 
Holdings or and of the LG&E Energy Subsidiaries, as applicable. 
However, the underlying intra-system mirror debt and guarantee will not 
count against any applicable intercompany financing limit or the 
separate guarantee limits for PowerGen and US Holdings, or for the LG&E 
Energy Group.

Receivables Factoring Program

    Applicants propose that each of LG&E and KU, prior to the closing 
of the Merger, implement a receivables factoring program, providing for 
the factoring of accounts receivable (``Receivables''), including 
outstanding consumer billings, through one or more existing or newly-
formed subsidiaries of LG&E and KU (``Receivables Sub''), to one or 
more unaffiliated third parties (``Purchasers''). Each Receivables Sub 
will purchase Receivables from the related associate company as the 
Receivables are generated at a discount based on, among other things, 
the collection history of the associate company.
    Each Receivables Sub will enter into purchase and sale agreements 
with one or more Purchasers under which Receivables Sub may sell (from 
time to time in its discretion and subject to the satisfaction of 
certain conditions precedent) fractional, undivided ownership interests 
expressed as a percentage (``Receivable Interests'') in (1) Receivables 
of its related associate company and (2) certain related assets, 
including any security or guarantee for the Receivables, all 
collections thereon and related record (``Related Assets''). The 
Purchasers of the Receivable Interests are expected to be special 
purpose corporations, which acquire receivables and other assets and 
issue commercial paper to finance these acquisitions and/or financial 
institutions, and their respective successors or assigns.
    Primarily because of the reserves that are included in the 
calculation of the Receivable Interests sold to the Purchasers, the 
purchase price paid by the Purchasers for the Receivable Interests will 
be lower than the purchase price paid by the Receivables

[[Page 58125]]

 Sub to the associate company for the Receivables and Related Assets. 
The funds available at the Receivables Sub at any time may not match 
the cost of the Receivables and Related Assets available for purchase 
from the associate company. In the event that the Receivables and 
Related Assets originated by an associate company exceeds the amount of 
cash that the applicable Receivables Sub has available, either the 
Receivables Sub will pay the purchase price of the Receivables in part 
in cash and in part through the use of an inter-company note, or the 
associate company will make an additional capital contribution to the 
Receivables Sub in the form of excess Receivables and Related Assets.
    Applicants state that, for financial reporting purposes, LG&E 
Energy will treat the transfer of Receivables Interest from associate 
companies to the Receivables Subs as sales under U.S. GAAP. Applicants 
request that the Commission authorize the retention of existing 
Receivables Subs, the creation of new subsidiaries for the purpose of 
acting as Receivables Subs and the payment of dividends or other 
distributions by the Receivables Subs to their own parent companies, to 
the extent the dividends or other distributions may be considered to be 
paid out of capital or unearned surplus. Applicants also request that 
the Commission authorize the inter-company notes issued by the 
Receivables Subs to its parent, as described above. These inter-company 
notes will not be counted against the intra-system financing limit 
requested.

Intermediate Subsidiaries

    Applicants propose that LG&E Energy and the LG&E Energy Nonutility 
Subsidiaries acquire the securities of one or more intermediate 
subsidiaries (``LG&E Energy Intermediate Subsidiaries''), which would 
be organized exclusively for the purpose of acquiring, holding and/or 
financing the acquisition of the securities of, or other interest in, 
one or more EWGs, FUCOs, Rule 58 Subsidiaries, ETCs or other nonexempt, 
nonutility subsidiaries, provided that the LG&E Energy Intermediate 
Subsidiaries may also engage in development activities and 
administrative activities relating to these subsidiaries. Investments 
in LG&E Energy Intermediate Subsidiaries may take the form of any 
combination of the following: (1) Purchases of capital shares, 
partnership interests, member interests in limited liability companies, 
trust certificates or other forms of equity interests, (2) capital 
contributions, (3) open account advances with or without interest, (4) 
loans and (5) guarantees issued, provided or arranged in respect of the 
securities or other obligations of any LG&E Energy Intermediate 
Subsidiaries.

Reorganization

    Applicants propose that the Intermediate Companies receive a 
general grant of authority to adjust the capital structure of the 
Intermediate Companies from time to time, in order to reflect tax and 
accounting changes after the Merger, without the need to apply for or 
receive prior Commission approval, on the condition that the 
reorganization will not result in (1) any Intermediate Company being 
organized under any jurisdiction other than a member state of the 
European Union with which the United States has a Double Taxation 
Treaty, or a state of the United States, (2) any Intermediate Companies 
not being wholly-owned, directly or indirectly, by PowerGen or, other 
than in respect of the debt and preferred stock of US Holdings, having 
third party investors, (3) the Intermediate Companies being engaged in 
any business or trade other than the business of owning, directly or 
indirectly, equity securities of LG&E Energy and the financing 
transactions described in the notice and (4) any of the Intermediate 
Companies being regulated by United Kingdom or other third country 
regulatory authorities having jurisdiction over electricity rates and 
service. Such restructurings may involve the creation of new, the 
elimination of existing or the consolidation of Intermediate Companies 
and/or the re-incorporation of an Intermediate Company in a different 
jurisdiction.
    In addition, Applicants request authority for LG&E Energy to 
reorganize and restructure the LG&E Energy Nonutility Subsidiaries from 
time to time, without the need to apply for or receive prior Commission 
approval, on the condition that the reorganization will not result in 
the entry by the LG&E Energy Nonutility Subsidiaries into new lines of 
business that have not previously been authorized by the Commission or 
that are not permissible on an exempt basis under the Act or Commission 
rule. These restructurings may involve the creation of new, or the 
elimination of existing, LG&E Energy Nonutility Subsidiaries, the 
consolidation of LG&E Energy Nonutility Subsidiaries, the spin-off of a 
portion of an existing business of an LG&E Energy Nonutility Subsidiary 
to another LG&E Nonutility Subsidiary, the reincorporation of an 
existing LG&E Energy Nonutility Subsidiary in a different state, the 
transfer of authority from one LG&E Energy Nonutility Subsidiary to 
another, the transfer or sale of one LG&E Energy Nonutility Subsidiary, 
or its assets, to LG&E Energy or another LG&E Energy Nonutility 
Subsidiary or other similar type arrangements.

EWG/FUCO Related Financings

    As a general matter, PowerGen intends to fund its FUCO activities 
at the level of its first-tier subsidiary, PowerGen UK (or PowerGen 
Group Holdings, as applicable), under which PowerGen subsidiaries, 
other than the Intermediate Companies and the LG&E Energy Group, will 
be segregated. However, under certain circumstances, it may be 
desirable from time to time for PowerGen to provide some additional 
investment capital or credit support for FUCO acquisitions or 
operations. At the end of the fiscal year 1999 (as adjusted for 
investments subsequently sold), the combined LG&E Energy Group and 
PowerGen ``aggregate investment'' in EWGs and FUCOs was approximately 
$1.270 billion. This investment represents 77% of PowerGen consolidated 
retained earnings at the end of fiscal year 1999, calculated in 
accordance with U.S. GAAP. Applicants seek authority to finance, after 
the Merger, additional EWG and FUCO investments and operations in an 
aggregate amount of up to 100% percent of the consolidated retained 
earnings of the entire PowerGen system at any one time outstanding 
during the Authorization Period. These financings may include the 
issuance or sale of securities for the purpose of financing the 
acquisition or operations of an EWG or FUCO or the guarantee of a 
security of an EWG or FUCO.

Payment of Dividends

    Applicants will use the purchase method of accounting for the 
Merger. Applicants state that, under applicable exemptions to these 
accounting rules, PowerGen is not required to ``push down'' the premium 
paid in the Merger to the LG&E Energy Group. However changes in 
circumstances or changes in accounting principles or the application 
thereof may result in such a pushdown or a similar non-cash charge to 
retained earnings. Accordingly, Applicants request authority for 
PowerGen, the Intermediate Companies and members of the LG&E Energy 
Group to pay dividends out of additional paid-in-capital up to the 
amount of LG&E Energy's consolidated retained earnings just prior to 
the Merger and out of earnings before the amortization of goodwill 
after the Merger. In addition,

[[Page 58126]]

Applicants request authorization for the LG&E Energy Nonutility 
Subsidiaries to pay dividends with respect to the securities of 
companies, from time to time through the Authorization Period, out of 
capital and unearned surplus capital (including revaluation reserve), 
to the extent permitted under applicable corporate law.

Requests for Exemption From Rule 26(a)(1)

    Applicants request an exemption from rule 26(a)(1) under the Act, 
regarding the maintenance of financial statements in conformance with 
Regulation S-X, for any subsidiary of PowerGen UK (or PowerGen Group 
Holdings as of its formation) organized outside the United States. Any 
FUCO acquired directly or indirectly by PowerGen subsequent to the 
issuance of an order in this Application will maintain its financial 
statements in accordance with U.S. GAAP or reconcile such statements to 
U.S. GAAP in the same manner as required by Form 20-F.

Appendix A--Nonutility Businesses

PowerGen

I. FUCOs and ETCs

    PowerGen owns, directly or indirectly, the following interests 
in foreign utility companies (``FUCOs'') and exempt 
telecommunications companies (``ETCs'') (all of the following 
subsidiaries or affiliates are 100% owned, except where noted): 
Telecentric Solutions Ltd (internet sales services; ETC); PowerGen 
UK plc (electric generation and holding and financing company over 
subsidiaries; FUCO); 33.3% interest in Phambile Nobane (Proprietary) 
Ltd (gas distribution project in South Africa; FUCO); PowerGen CHP 
Ltd (development and operation of cogeneration plant in UK and 
holding company and financing company for PowerGen Cogeneration Ltd 
and Biogeneration Ltd; FUCO and energy-related company); PowerGen 
Cogeneration Ltd (operates cogeneration plant in UK; FUCO or energy-
related company); 50% interest in Biogeneration Ltd (operates 
biomass plant in UK; FUCO or energy-related company); 50% interest 
in PowerGen Renewables Ltd (operates 9 windfarms in UK; FUCO or 
energy-related company); 25% interest in Yorkshire Windpower Ltd 
(operates 2 windfarms in UK; FUCO or energy-related company); 25% 
interest in TPG Wind Ltd (operates 1 windfarm in UK; FUCO or energy-
related company); Gen Net. Com Ltd (internet services provider; 
ETC); PowerGen Systems & Services (information technology services 
company; ETC); Garnedd Power Co Ltd (hydro electric plant in Wales; 
FUCO); PowerGen Retail Gas Ltd (gas retail in UK; FUCO); 99% 
interest in PT PowerGen Jawa Timur (operator of Paiton station in 
Indonesia; FUCO); 49.99% interest in Turbogas Produtora Energetica 
SA (owner of Tapada station in Portugal; FUCO); 75% interest in 
Portugen Energia SA (operator of Tapada station in Portugal; FUCO); 
Csepel Eromu Rt (owner of Csepel I plant in Hungary; FUCO); PowerGen 
Energia RT (operator of Csepel II project in Hungary; FUCO); Csepel 
Aramtermelo (owner of Csepel II station in Hungary, which is under 
construction; FUCO); 49.5% interest in Yallourn Energy PTY Ltd 
(owner of Yallourn station in Australia; FUCO); 74.1% interest in 
Gujarat PowerGen Energy Corporation (owner of Pagathan plant in 
India; FUCO); 20.5% interest in Kraftwerk Schkopau GbR (owner of 
Schkopau plant in Germany; FUCO); 22.5% interest in Kraftwerk 
Schkopau B'Gessellschaft GmbH (operator of Schkopau plant in 
Germany; FUCO); 49.9% interest in LG Energy Co Ltd (owner of Bugkok 
plant; FUCO); and 35% interest in PT Jawa Power (owner of Paiton 
station in Indonesia; FUCO); PowerGen Energy plc (electric 
distribution in UK and holding company for PowerGen Retail Gas Ltd, 
East Midlands Electricity Gen Ltd, Charnwood Insurance Co Ltd, 
Coppice Insurance Co Ltd, East Midlands Electricity Gen (IPG) Ltd, 
Phambile Nobane (Proprietary) Ltd, and 29 dormant companies; FUCO).

II. Intermediate Holding Companies and Financing Entities

    PowerGen owns, directly or indirectly, the following interests 
in intermediate holding companies holding, or financing entities 
financing, its nonutility business interests (all of the following 
subsidiaries or affiliates are 100% owned, except where noted): 
PowerGen (Kentucky) Ltd (representative office in UK for PowerGen's 
interest in LG&E Energy Corp.); PowerGen East Midlands Investments 
(holding and financing company for PowerGen Energy plc, an electric 
distribution company and holding company for other energy 
facilities); PowerGen (East Midlands) Holdings (financing company); 
East Midlands Electricity Gen (Non Fossil) Ltd (holding company for 
Biogas Generation Ltd, an energy-related company); PowerGen 
Directors Ltd (company administration); PowerGen Secretaries Ltd 
(company administration); PowerGen Investments Ltd (holding and 
finance company for PowerGen Renewables Holdings Ltd); 50% interest 
in PowerGen Renewables Holdings Ltd (holding and finance company for 
PowerGen Renewables Ltd); PowerGen Finance Ltd (finance company); 
Ergon Finance Ltd (finance company); PowerGen Energy Solutions 
(energy management company in UK and holding company for DelComm 
Ltd, a dormant company; also qualifies as energy-related company); 
Ergon Nominees Ltd (finance company); PowerGen Projects Consultancy 
Ltd (with Malaysian Branch) (project management; also qualifies as 
energy-related company); PowerGen International Limited (holding and 
financing company for PowerGen Overseas Holdings Limited, 
Visioncash, Ergon Overseas Holdings Ltd, Inputrapid Ltd, Ergon 
Energy Ltd, PowerGen Serang Ltd, and North Queensland Power Ltd); 
PowerGen Overseas Holdings Limited (holding and finance company for 
Ergon Generation (Malaysia) Sdn Rhd, a dormant holding company); 
Visioncash (finance company); Ergon Overseas Holdings Ltd (holds 84% 
of, and serves as finance company for, PowerGen Holdings BV, which 
is a holding and finance company); Inputrapid Ltd (holds 16% of, and 
serves as finance company for, PowerGen Holdings BV); PowerGen 
Holdings BV (holding and finance company for sixteen direct 
subsidiaries); PowerGen Nederland BV (finance company); 33% interest 
in MIBRAG BV (finance company for Mibrag lignite mine in Germany); 
33% interest in MIBRAG IB GmbH (finance company for Mibrag lignite 
mine in Germany); 33% interest in MIBRAG IV GmbH (finance company 
for Mibrag lignite mine in Germany); 33% interest in MIBRAG IVB GmbH 
(finance company for Mibrag lignite mine in Germany); PowerGen 
Australia Holdings BV (finance company for Yallourn Energy Pty 
Limited, a FUCO); PowerGen Australia BV (finance company for 
Yallourn Energy Pty Limited, a FUCO); PowerGen Aus PTY Ltd (finance 
company); 49.5% interest in Auspower PTY Ltd (finance company); 
49.5% interest in Mezzco PTY Ltd (financing partnership); PowerGen 
India Ltd (holds 46.3% of the Gujarat PowerGen Energy Corporation 
(``Gujarat''), a FUCO, with PowerGen BV Holdings holding 27.8%; also 
serves as financing company for Gujarat); 50% interest in Saale 
Energie GmbH (financing company for Schkopau plant); 40% interest in 
PT Power Jawa Barat (developer of Serang project, a prospective 
power station in Indonesia; also qualifies as an energy-related 
company); 35% interest in BLCP Power Limited (developer of Map Ta 
Phut project, a prospective power station in Thailand; also 
qualifies as an energy-related company); PowerGen (Malaysia) Sdn Bhd 
(regional headquarters of PowerGen in Malaysia; operation 
headquarter support service); Ergon Energy Ltd (holding and finance 
company for PT Jawa Power, a FUCO); 49.95% interest in LLPCo 
Holdings Ltd (holding and finance company for LLPCo PTY Ltd); 49.95% 
interest in LLPCo PTY Ltd (manages Yallourn Investments); 49.95% 
interest in Yallourn Investments, A Limited Partnership (LLP) 
(financing partnership for Yallourn station); and 49.95% interest in 
Meerco PTY Ltd (finance company for Yallourn Energy Pty Limited, a 
FUCO).

III. Energy-Related Companies

    The following is a list of the companies Applicants assert are 
energy-related companies, owned directly or indirectly by PowerGen 
(all of the following subsidiaries or affiliates are 100% owned, 
except where noted): EME Industrial Shipping Ltd (gas shipping in 
UK); 50% interest in Biogas Generation Ltd (waste combustion in UK); 
East Midlands Pipelines Ltd (installation and operation of gas 
pipelines); PowerGen Energy Trading Ltd (energy trading in Europe); 
50% interest in PowerGen Renewables Developments Ltd (develops 
windfarms in UK; holding company for Blyth Offshore Wind Ltd); 16.5% 
interest in Blyth Offshore Wind Ltd (developing an offshore 
windfarm); 50% interest in Fusers Ltd (develops windfarms in 
Ireland; holding company for Tursillagh Windfarm Ltd); 25% interest 
in Tursillagh Windfarm Ltd (develops windfarms in Ireland); 50% 
interest in Cottam Development Centre Ltd (turbine testing/operation 
in UK); PowerGen Gas Ltd (gas pipeline transportation and operation 
in

[[Page 58127]]

UK); 33% interest in MIBRAG mbH (owner of Mibrag lignite mine in 
Germany); 49% interest in Bina Power Supply Company Limited 
(developer of Bina project); and 49.5% interest in Saale Energie 
Services GmbH (consultancy services).

IV. Nonutility Companies Authorized by Order or Commission Precedent

    In addition to the above nonutility subsidiaries and affiliates, 
PowerGen also owns interests in the following nonutility entities, a 
description of which follows each entity's name in parentheses (all 
of the following subsidiaries or affiliates are 100% owned, except 
where noted): Ergon Pensions Trustee Ltd (pension scheme trustee); 
PowerGen Share Trustees Ltd (share scheme trustee); PowerGen Share 
Scheme Trustee Limited (Qualifying Employee Trust Company); 
Charnwood Insurance Co Ltd, Guernsey (captive insurance company); 
58.9% interest in Hams Hall Management Co Ltd (property management 
company); East Midlands Electricity Share Scheme Trustees Ltd (staff 
share scheme trustee); and Ergon Insurance Ltd (captive insurance 
company).

V. Inactive Companies

    PowerGen also, directly or indirectly, owns the following 
inactive companies (all of the following subsidiaries or affiliates 
are 100% owned, except where noted): Central England Networks Ltd; 
Drakmarn O&M Ltd; Electricity Ltd; Ergon Properties Ltd; First 
Energy (UK) Ltd; Kinesis Resources Ltd; Kinesis Resource Management 
Ltd; Kinetica Ltd; Lincoln Green Energy Ltd; PowerGas Ltd; PowerGen 
Leasing Ltd; PowerGen Technology Ltd; The Power Generation Company 
Ltd; Wavedriver Ltd; Coppice Insurance Co Ltd, Guernsey; East 
Midlands Electricity Gen (IPG) Ltd; Derek B Haigh Ltd; East Midlands 
Electricity Distribution Ltd; East Midlands Electricity Generation 
(Rugby) Ltd; East Midlands Electricity Supply Ltd; East Midlands 
Telecommunications Ltd; EMCO Ltd; EME Employment Co Ltd; EME 
Employment Co No. 2 Ltd; Furse Earthing and Lightning Project 
Systems Ltd; Furse Specialist Contracting Ltd; Homepower Retail 
(EME) Ltd; J Smith (Southern) Ltd; M MacDonald & Co Ltd; Padfield 
and Howes Ltd; Ransome Properties Ltd; SGB (Steeplejacks) Ltd; 
Statco 2 Ltd; Statco 3 Ltd; Statco 4 Ltd; Statco 5 Ltd; Statco 6 
Ltd; Statco 7 Ltd; The Peerless Engineering Co Ltd; The Santon 
Steeplejacks Co Ltd; 50% interest in Windy Hills Ltd; DelComm Ltd; 
PowerGen Brasil Limitada; Csepel Holdings BV; 40% interest in North 
Queensland Power Ltd; Powerconsult Ltd; Powercoal Ltd; Ergon Power 
Ltd; Ergon Generation (Malaysia) Sdn Bhd (to be used in possible 
Malaysia energy projects); and PowerGen Serang Ltd (will be holding 
company for Serang project, a prospective power station in 
Indonesia).

LG&Energy

I. EWGs, FUCOs, and QFs

    LG&E Energy owns, directly or indirectly, the following 
interests in exempt wholesale generators (``EWGs''), foreign utility 
companies (``FUCOs''), and qualifying facilities (``QFs'') (all of 
the following subsidiaries or affiliates are 100% owned, except 
where noted), which constitute the vast majority of LG&E Energy's 
nonutility businesses: LG&E Power Monroe LLC(lease and combustion 
turbine purchase in Monroe, Georgia; EWG); Western Kentucky Energy 
Corp. (leases the generating facilities owned by Big Rivers Electric 
Corporation, certified as an EWG, and sells the output of those 
facilities to LG&E Energy Marketing Inc. and, potentially, other 
affiliates and third-parties); 40% of Tenaska III Texas Partners 
(owns QF facility in Paris, Texas); 5% of Tenaska Washington 
Partners, L.P. (owns QF facility in Ferndale, Washington); 45% 
general partner interest and 5% indirect general partner interest in 
LG&E-Westmoreland Southampton (owns QF facility in Southampton, 
Virginia); 45% general partner interest and 5% indirect general 
partner interest in LG&E-Westmoreland Altavista (owns QF facility in 
Altavista, Virginia); 45% general partner interest and 5% indirect 
general partner interest in LG&E-Westmoreland Hopewell (owns QF 
facility in Hopewell, Virginia); 0.5% general partner interest and 
49.5% limited partner interest in Windpower Partners 1993, L.P. 
(owns QF facility, windmill farms, in Minnesota and California); 
0.33% direct and 0.113% indirect general partner interest and 24.67% 
direct and 8.22% indirect limited partnership interest in Windpower 
Partners 1994, L.P. (owns EWG facility, a windmill farm, in Salt 
Flat, Texas); 45.84% interest in K.W. Tarifa, S.A. (power generation 
facilities in Spain; FUCO); 45.9% interest in Distribuidora de Gas 
del Centro S.A. (natural gas distribution company in Argentina; 
FUCO); 14.4% interest in Distribuidora de Gas Cuyana S.A. (natural 
gas distribution company in Argentina; FUCO); and 19.6% interest in 
Gas Natural BAN S.A. (natural gas distribution company in Argentina; 
FUCO).

II. EWG, QF and FUCO Related Intermediate Holding Companies and 
Financing Entities

    LG&E Energy owns, directly or indirectly, the following 
interests in intermediate holding companies holding, or financing 
entities financing, its nonutility business interests (all of the 
following subsidiaries or affiliates are 100% owned, except where 
noted): LG&E Capital Corp. (primary holding company for LG&E 
Energy's nonutility business interests); LG&E International Inc. 
(management and holding company for international energy project 
investments and operations); WKE Corp. (holding company for EWGs 
that are parties to the lease and related transactions with Big 
Rivers Electric Corporation, other than LG&E Energy Marketing Inc.); 
LG&E Power Inc. (management and holding company for QFs and EWGs); 
KUCC Paris Corporation (holds 15% limited partnership interest in 
Tenaska III Partners, Ltd., which owns 40% of Tenaska III Texas 
Partners, a QF); KUCC Ferndale Corporation (holds limited 
partnership interests in QFs); LG&E Power Spain, Inc. (management 
and holding company for energy power projects in Spain); LG&E Power 
Argentina II Inc. (owner of 45.9% combined equity interest in 
Distribuidora de Gas del Centro S.A., a FUCO); LG&E Power Argentina 
III LLC (owner of 14.4% combined equity interest in Distribuidora de 
Gas Cuyana S.A., a FUCO); LG&E Centro S.A. (receives consulting 
revenues and pays management expenses related to Distribuidora de 
Gas del Centro S.A. (10% owned indirectly through LG&E Power 
Argentina II Inc.); holding company for FUCO); LG&E Power Finance 
Inc. (special purpose financing subsidiary formed to purchase and 
resell certain subordinated indebtedness collection rights as a part 
of a settlement of claims with K.W. Tarifa, S.A. (a FUCO and Spanish 
corporation owned 45.9% by LG&E Power Spain Inc.)); Inversora de Gas 
del Centro S.A. (owner of 51% equity interest in Distribuidora de 
Gas de Centro S.A., a FUCO (75% ownership)); LG&E Power Development 
Inc. (development of QFs and EWGs); American Power, Incorporated 
(owner of 99% interest in LG&E Power Monroe L.L.C., a QF); LG&E 
Power Gregory I, Inc. (formed to hold interests in Gregory Power 
Partners L.P., which will be a QF); LG&E Power Gregory II Inc. 
(formed to hold interests in Gregory Power Partners LLC, which will 
be an EWG); LG&E Power Gregory III Inc. (formed to hold interests in 
Gregory Power Partners LLC, which will be a QF); LG&E Power Gregory 
IV Inc. (formed to hold interests in Gregory Power Partners L.P., 
which will be a QF); KUCC Grimes GP Corporation (intermediate 
holding company formed in conjunction with EWG project in Grimes, 
Texas); KUCC Grimes LP Corporation (intermediate holding company 
formed in conjunction with EWG project in Grimes, Texas); LG&E Power 
11 Incorporated (indirect owner of interest in QF in Southampton, 
Virginia); LG&E Southampton Incorporated (indirect owner of interest 
in QF in Southampton, Virginia); LG&E Power 12 Incorporated 
(indirect owner of interest in QF in Altavista, Virginia); LG&E 
Altavista Incorporated (indirect owner of interest in QF in 
Altavista, Virginia); LG&E Power 13 Incorporated (indirect owner of 
interest in QF in Hopewell, Virginia); LG&E Hopewell Incorporated 
(indirect owner of interest in QF in Hopewell, Virginia); LG&E Power 
16 Incorporated (indirect owner of interest in QF in Roanoke Valley, 
North Carolina); LG&E Power Roanoke Incorporated (indirect owner of 
interest in QF in Roanoke Valley, North Carolina); LG&E Power 21 
Incorporated (indirect owner of interest in QF, windmills in 
California and Minnesota); LG&E Power 21 Wind Incorporated (indirect 
owner of interest in QF, windmills in California and Minnesota); 
LG&E Power 31 Incorporated (indirect owner of interest in QF in Salt 
Flat, Texas); 33.3% interest in LQC LP LLC (indirect owner of 
interest in QF in Salt Flat, Texas); 33.3% interest in LQ GP LLC 
(indirect owner of interest in QF in Salt Flat, Texas); LG&E Power 
31 Wind Incorporated (indirect owner of interest in QF in Salt Flat, 
Texas); 15% of Tenaska III Partners, Ltd. (owns 40% of Tenaska III 
Texas Partners, a QF, in Paris, Texas); 20% general partnership 
interest in LG&E Southampton L.P. (intermediate holding company for 
QF); 20% general partnership interst in LG&E Altavista L.P. 
(intermediate holding company for QF); 20% general partnership 
interest in LG&E Hopewell L.P. (intermediate holding company for 
QF); 50% general partnership interest in Westmoreland-LG&E Partners 
(owner of QF interestst in Roanoke Valley, North Carolina); 24.0% 
interest in Inversora

[[Page 58128]]

de Gas Cuyana S.A. (intermediate holding company for FUCO); 28% 
interest in Invergas S.A. (owns 51% interest in Gas Natural BAN 
S.A., a FUCO); and 28% interest in Gas Natural S.D.G. Argentina S.A. 
(owns 19% of Gas Natural BAN S.A., a FUCO).

III. Energy-Related Companies

    The following is a list of the energy-related companies owned, 
directly or indirectly, by LG&E Energy (all of the following 
subsidiaries or affiliates are 100% owned, except where noted) that 
Applicants assert are energy-related: LG&E Energy Marketing Inc. 
(power marketing); LG&E Home Services Inc. (appliance repair and 
warranty); LG&E Enertech Inc. (engineering, energy management and 
consulting services); LG&E Energy Services Inc. (formed to submit 
bid to provide electric service to Ft. Campbell project; FSF 
Minerals Inc. (owns Pittsburgh and Midway coal reserves near 
Henderson, Kentucky); LCC Inc. (formed to bid on a coal project); KU 
Solutions Corporation (energy marketing and services corporation); 
LG&E Power Engineers and Constructors Inc. (engineering and project 
management); LG&E Power Services Inc. (power facilities management 
and operation); LG&E Power Operations Inc. (intermediate holding 
company for QFs; power project ownership, management and 
development); LG&E Facilities Inc. (marketing, processing, storage 
and transmission of natural gas); LG&E Natural Gathering & 
Processing LLC and Llano Gathering Inc. (both natural gas 
transmission and processing); LG&E Natural Plains Marketing LLC and 
LG&E Crown Inc. (both marketing of natural gas); Hadson Gas 
Transmission LLC and Power Tex Parent Inc. (both natural gas 
transmission); LG&E Natural Plains Energy Services LLC and LG&E 
Minor Facilities Inc. (natural gas transmission); LG&E Natural 
Pipeline LLC and Llano Storage Inc. (both natural gas storage and 
transmission); LG&E Energy Natural Industrial Marketing Co. (natural 
gas marketing and transmission); LG&E Fuels Services Inc. (formed 
for alternative fuels investments); CRC-Evans Pipeline 
International, Inc. (primary operating company of CRC-Evans 
companies providing specialized equipment and services for pipeline 
construction); CRC-Key, Inc. (manufactures concrete weights for 
pipeline construction); CRC-Evans B.V. (international sales office); 
CRC-Evans Canada LTD. (company for Canada operations); PIH Holdings 
LTD. (holding company for operations in Europe and the Middle East); 
Pipeline Induction Head Ltd. (services for pipelines); GGSI Crown 
J.V.\24\ (owns gas gathering and processing assets); Power Tex 
J.V.\25\ (owns gas gathering and processing assets); 50% general 
partnership interest in Adobe Merchant 89 (owns gas gathering and 
processing assets); 50% interest in Gregory Power Partners LLC \26\ 
(owns and developing power project in Gregory, Texas; will be a QF); 
1% general partnership interest and 49% limited partnership interest 
in Gregory Power Partners L.P. (owns and developing power project in 
Gregory, Texas; will be a QF); 50% general partnership interest in 
Wheeler Gathering System (owns gas gathering and processing assets); 
11.5% general partnership interest in Hillsboro Gathering System 
(owns gas gathering and processing assets); and LG&E Industrial 
Sales Corporation (owner of natural gas transmission assets).
---------------------------------------------------------------------------

    \24\ 34.6% by Hadson Gas Transmission LLC (``HGTC''); 65.4% by 
LG&E Natural Plains Marketing LLC.
    \25\ 34.6% by HGTC; 65.4% by LG&E Natural Plains Energy Services 
LLC.
    \26\ 1% held by LG&E Power Gregory II, Inc. and 49% held by LG&E 
Power Gregory II, Inc.
---------------------------------------------------------------------------

IV. Other Nonutility Companies

    In addition to the above nonutility subsidiaries and affiliates, 
LG&E Energy also owns interests in the following nonutility 
entities, a description of which follows each entity's name in 
parentheses (all of the following subsidiaries or affiliates are 
100% owned, except where noted): LG&E Energy Foundation Inc. 
(charitable contributions); LG&E Credit Corp. (offers consumer 
lending programs for energy efficient products in the Louisville 
metropolitan area); CRC-Evans International, Inc. (formed for the 
acquisition of CRC Holdings Corp., which owns interests in energy-
related companies); WKE Station Two Inc. (operates the Station Two 
generating facility that is owned by the City of Henderson, Kentucky 
under an agreement with the city and Big Rivers Electric 
Corporation); 28% interest in ServiConfort Argentina S.A. (provides 
retail services to gas customers in Argentina).

V. Inactive Companies

    LG&E Energy also, directly or indirectly, owns the following 
inactive companies (all of the following subsidiaries or affiliates 
are 100% owned, except where noted): Lexington Utilities Company; 
LNGCL Inc. (indirectly held former interest in Natural Gas 
Clearinghouse); LNGCG Inc. (indirectly held former interest in 
Natural Gas Clearinghouse); KUCC Frederickson Corporation (owns 10% 
interest of Tenaska Washington Partners, II, L.P.); KUCC Portland 34 
Corporation (holds 21% interest in Portland 34, L.P. and serves as 
its general partner); KUCC Portland 34, L.P. (former lessor 
regarding combustion turbine); Portland 34 LTD Corporation (holds 
79% limited partnership interests in Portland 34, L.P.); KUCC 
Development Corporation (former development company); KUCC Grimes 
Corporation (intermediate holding company for developing EWG project 
in Grimes, TX); WKE Facilities Corp.; LCC LLC; FCD LLC; Excalibur 
Development LLC; LG&E Mendoza Services Inc. (originally formed to 
hold investment in foreign power facilities); LG&E Power Venezuela 
I, Inc. (originally formed to hold investment in foreign power 
facilities); LG&E Power Australia I Inc.; Ultrasystems Construction 
Co., Inc. (originally formed to construct power and related 
facilities); HD Energy Corporation; Hadson Financial Corporation 
(former management company); Ultrasystems Small Power, Incorporated; 
Hadson Fuels, Inc.; 70% interest in HD/WS Corporation (holding 
company for ash disposal activities); LG&E Power 5 Incorporated 
(former owners of investment in power facilities); LG&E Power 6 
Incorporated (former owner of investment in power facilities): LG&E 
Power 14 Incorporated (owner of investment in power facilities); 
LG&E Power 18 Incorporated (owner of investment in power 
facilities); LG&E Erie Partner Incorporated (owner of investment in 
power facilities); LG&E Power 22 Incorporated (owner of investment 
in power facilities); LG&E Power 29 Incorporated (indirect owner of 
interest in QF); LG&E Power 25 Incorporated (owner of investment in 
power facilities); LG&E Power 26 Incorporated (owner of investment 
in power facilities); LG&E Australia Pty Limited; LG&E Power 
Constructors Inc. (former constructor of QFs and EWGs); Ultraclean 
Incorporated; NuHPI, Inc.; Ultrafuels Incorporated; Ultrafuels 1 
Incorporated; Ultrapower Biomass Fuels Corporation; Hadson Power 
Live Oak Incorporated; Ultrasystems Small Power 1, Incorporated; 
Triple T Services, Inc.; 25.4% capital stock interest in Babcock & 
Wilcox; 10% interest in Tenaska Washington Partners, II, L.P. 
(interest in power general facilities; former facility in 
Frederickson, Washington); 17% general partnership interest in 
Babcock-Ultrapower West Enfield; 17% general partnership interest in 
Babcock-Ultrapower Jonesboro; 45% general partnership interest in 
LG&E Power 14-Buena Vista (owner of investment in power facilities); 
1% general partnership interest, 49% limited partnership interest, 
and a 0.5% general partnership interest in Erie Power Partners L.P. 
(former owner of power supply contract); 2% general partnership 
interest and 49% limited partnership interest in LG&E/Kelso Power 
Partners, L.P. (formed to develop and own power facilities); 50% 
general partnership interest in Maine Power Services; 50% general 
partnership interest in LG&E-Westmoreland Rensselaer (former owner 
of power generation facilities); LG&E Power Argentina I, Inc. 
(management and holding company of former natural gas projects in 
Argentina); LG&E Power Spain LLC (formed to facilitate possible 
merger with LG&E Power Spain Inc.); and LG&E Natural Canada Inc. 
(former natural gas marketer).

Appendix B--Existing Financing Arrangements of U.S. Utility 
Subsidiaries

LG&E
    Bond Financing:
At 12/31/99
First Mortgage Bonds--( x  000's)
    Series due July 1, 2000, 7.5%\*\--20,000
    Series due August 15, 2003, 6%--42,600
Pollution control series:
    P due June 15, 2015, 7.45%--25,000
    Q due November 1, 2020, 7.625%--83,335
    R due November 1, 2020, 6.55%--41,665
    S due September 1, 2017, variable--31,000
    T due September 1, 2017, variable--60,000
    U due August 15, 2013, variable--35,200
    V due August 15, 2019, 5.625%--102,000
    W due October 15, 2020, 5.45%--26,000
    X due April 15, 2023, 5.90%--40,000

Total first mortgage bonds--506,800

Pollution control bonds (unsecured):
    Jefferson County Series due September 1, 2026, variable--22,500
    Trimble County Series due September 1, 2026, variable--27,500

[[Page 58129]]

    Jefferson County Series due November 1, 2027, variable--35,000
    Trimble County Series due November 1, 2027, variable--35,000

Total unsecured pollution control bonds--120,000

Total LG&E bonds outstanding--626,800
\*\ Redeemed
Capital Stock:
    Common Stock, without par value--Authorized: 75,000,000 shares
    Outstanding: 21,294,233 shares
    Cumulative Preferred Stock:

------------------------------------------------------------------------
                                                               Current
                                                   Shares     redemption
                                                outstanding     price
------------------------------------------------------------------------
$25 par value, 1,720,000 shares authorized, 5%      860,287       $28.00
 series.......................................
Without par value, 6,750,000 shares
 authorized:
    Auction rate..............................      500,000       100.00
    5.875% series.............................      250,000       104.70
------------------------------------------------------------------------

Short-Term Financing:
    $200 million revolving credit line, expiring November 2001.
    Commercial paper program, up to $200 million authorized
KU
Bond Financing:
At 12/31/99
First Mortgage Bonds-- (x 000's)
    Series Q, due June 15, 2000, 5.95%--61,500
    Series Q, due June 15, 2003, 6.32%--62,000
    Series S, due January 15, 2006, 5.99%--36,000
    Series P, due May 15, 2007, 7.92%--53,000
    Series R, due June 1, 2025, 7.55%--50,000
    Series P, due May 15, 2027, 8.55--%33,000
Pollution Control Series:
    Series 7, due May 1, 2010, 7.375%--4,000
    Series 8, due September 15, 2016, 7.45%--96,000
    Series 1B, due February 1, 2018, 6.25%--20,930
    Series 2B, due February 1, 2018, 6.25%--2,400
    Series 3B, due February 1, 2018, 6.25%--7,200
    Series 4B, due February 1, 2018, 6.25%--7,400
    Series 7, due May 1, 2020, 7.60%--8,900
    Series 9, due December 1, 2023, 5.75%--50,000
    Series 10, due November 1, 2024, variable--54,000
Total KU bonds outstanding--546,330
Capital Stock:
    Common Stock, without par value--Authorized: 80,000,000 shares
Outstanding: 37,817,878 shares
Cumulative Preferred Stock:

------------------------------------------------------------------------
                                      Shares       Current  redemption
                                   outstanding            price
------------------------------------------------------------------------
Without par value, 5,300,000
 shares authorized:
    4.75% series, $100 stated          200,000  101.00.
     value.
    6.53% series, $100 stated          200,000  Not redeemable.
     value.
------------------------------------------------------------------------

Short-Term Financing:
    Commercial paper program, inactive.
    Uncommitted credit line with Centric Corporation (``Centric''), 
up to $60 million.

Appendix C--Existing Financing Arrangements of U.S. Non-Utility 
Subsidiaries

LG&E Capital Corp.
Long-Term Debt:
At 12/31/99--( x  000's)
    Medium term notes, due September 7, 2000, variable--50,000
    Medium term notes, due May 1, 2004, 6.205%--150,000
    Medium term notes, due January 15, 2008, 6.46%--150,000
    Medium term notes, due November 1, 2011, 5.75%--150,000
Total Capital Corp. bonds outstanding--500,000
Credit Facilities:
    $200 million revolving lines of credit, expiring September 2000.
    $500 million revolving line of credit, expiring September 2002.
    $20 million uncommitted letter of credit facility.
Commercial paper program, up to $600 million authorized.
CRC-Evans Pipeline International Inc.
At 12/31/99--( x  000's)
    Note payable, due May 2003, 6.75%--$281
Distribution de Gas del Centro
At 12/31/99--( x  000's)
    Argentine negotiable obligations, due August 2001, 10.5%--
$37,782

Appendix D--Guarantees

Obligations of LG&E Capital Supported by LG&E Energy under the 
Support Agreement

    1. Obligations of LG&E Capital on each of its credit facilities, 
in an aggregate principal amount of $720 million.
    2. Obligations of LG&E Capital in respect of its commercial 
paper program, in an authorized principal amount of $600 million.
    3. Obligations of LG&E Capital in respect of its medium-term 
notes outstanding, in an aggregate principal amount as of March 31, 
2000 of $500 million.
    4. Obligations of LG&E Capital in respect of a guarantee of 
lease obligations of LG&E Power Monroe, LLC. See ``Guarantees issued 
by LG&E Energy and the U.S. Non-Utility Subsidiaries'' below.
    5. Obligations of LG&E Capital under interest rate swap 
transactions in an aggregate notional amount of $50 million, entered 
into in connection with the hedging of interest rate risk on 
outstanding indebtedness of LG&E Capital Corp.
    6. Obligations of LG&E Capital under a guarantee of certain 
obligations of LG&E Energy Marketing Inc. under several Purchased 
Power Agreements relating to the purchase of 560 MW of power. No 
limit is stated.

Guarantees Issued by LG&E Energy and the U.S. Non-Utility 
Subsidiaries

    1. LG&E Power and LG&E Capital guarantee certain obligations of 
LG&E Energy Marketing. These guarantees are provided in lieu of 
letters of credit or other credit enhancements required by 
counterparties and are provided in order to minimize the cost of 
providing the commodity required under the contract. The guarantees 
typically have a stated maximum amount, but the actual exposure is 
typically only a small percentage of the aggregate maximums stated 
amount of the guarantee. The maximum stated amount on such 
guarantees as of March 31, 2000 was $461 million. In other cases, no 
maximum amount is stated. The aggregate exposure of LG&E Power and 
LG&E Capital under such guarantees as of March 31, 2000 was 
approximately $63 million.
    2. Guarantee by LG&E Capital of the lease obligations of LG&E 
Power Monroe, LLC under an operating lease relating to three 
combustion turbines and related facilities to be installed and 
constructed in Monroe, Georgia. The value of the assets under lease 
is expected to be approximately $175 million.
    3. Guarantee by LG&E Capital of the obligation of LG&E Power 
Inc. under a lease of office space in Irvine, CA in an aggregate 
amount of less than $5 million.
    4. Guarantees by LG&E Capital to provide equity contributions in 
respect of the Gregory Project. Each guarantee is unlimited on its

[[Page 58130]]

face, but the underlying agreements effectively limit the guaranteed 
obligations to $4.5 million.
    5. Guarantees by LG&E Capital of the obligations of HD/WS 
Corporation under a standby ash disposal agreement relating to 
certain power projects in Franklin, VA, Altavista, VA and Hopewell, 
VA. There is no stated cap on the potential liability under these 
guarantees.
    6. Guarantee by LG&E Energy of all obligations of certain of the 
U.S. Non-Utility Subsidiaries relating to the lease of the 
generating assets of Big Rivers Electric Corporation (``Big 
Rivers''). The transaction provides the U.S. Non-Utility 
Subsidiaries with access to approximately 1,700 megawatts of 
capacity and requires that power be supplied to Big Rivers at 
contractual prices. The leased assets are expected to be capable of 
meeting the requirements of Big Rivers throughout the term of the 
lease. In addition, the U.S. Non-Utility Subsidiaries are required 
to make annual lease payments of $31.5 million to Big Rivers through 
July 2023.
    7. LG&E Energy has guaranteed all obligations of LG&E Energy 
Marketing in its contract with Oglethorpe Power Corporation 
(``OPC''). Under this contract LG&E Energy Marketing is required to 
supply approximately one-half of the system-wide power needs of OPC 
at fixed prices and has access to one-half of OPC's generation 
capacity. LG&E Energy Marketing has assumed the risk of price 
increases for any power it is required to purchase off system and 
any load growth under this contract. LG&E Energy has discontinued 
its merchant energy trading operation which includes servicing of 
this contract has booked reserves to cover expected future losses 
from these activities. In July 1998, LG&E Energy recorded an after-
tax loss on disposal of discontinued operations of $225 million. In 
December 1999, LG&E Energy increased the size of this reserve by 
$175 million based on what it believes to be appropriate estimates 
of future energy prices and load growth. There is no guarantee that 
higher-than-anticipated future commodity prices or load demands or 
other factors could not result in additional losses.
    8. Guarantee by LG&E Capital of certain obligations, up to a 
maximum amount of $96 million, payable by LG&E Power Development 
Inc. with respect to a purchase contract for eight turbines.

Exelon Corporation, et al. (70-9693)

    Exelon Corporation (``Exelon''), Exelon Business Services Company 
(``Services''), Exelon Ventures Company (``Ventures''), Exelon 
Enterprises Company, LLC (``Enterprises''), Exelon Generation Company, 
LLC (``Genco''), and Exelon Energy Delivery Company (``Energy 
Delivery''), each located at 10 South Dearborn Street, Chicago, 
Illinois 60603 and each a subsidiary of PECO Energy Company (``PECO''), 
a combination gas and electric utility holding company claiming 
exemption from registration under section 3(a)(1) of the Act by rule 2 
under the Act; PECO and its utility subsidiaries, PECO Energy Power 
Company, Susquehanna Power Company and Susquehanna Electric Company, 
each located at 2301 Market Street, Philadelphia, Pennsylvania 19101; 
and Commonwealth Edison Company (``ComEd'' and collectively, 
``Applicants''), an electric utility subsidiary of Unicom Corporation 
(``Unicom''), an electric utility holding company exempt by order from 
registration under section 3(a)(1),\27\, each located at 10 South 
Dearborn Street, Chicago, Illinois 60603, have filed an application-
declaration under sections 6(a), 7, 9(a), 10, 12(b) and 12(c) of the 
Act and rules 43, 44, 45, 46, 53 and 54 under the Act.
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    \27\ Unicom Corporation, HCAR No. 26090 (July 22, 1994).
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    In a separate filing with this Commission, file no. 70-9645 
(``Merger Application''), Exelon has sought authority to exchange its 
common stock for the common stock of its parent, PECO, followed by a 
merger of Unicom with and into Exelon (``Merger''). Exelon will 
establish Energy Delivery as an intermediate holding company over PECO 
and ComEd, and will also establish Ventures as an intermediate holding 
company over Genco, to which generation assets of PECO and ComEd will 
be transferred, and over Exelon's nonutility subsidiaries.\28\ In 
addition, Exelon, Ventures, and Energy Delivery will each register as a 
holding company under the Act after the Merger.
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    \28\ Each of the entities that will be directly or indirectly 
owned subsidiaries of Exelon upon consummation of the Merger is 
referred to in this notice individually as a ``Subsidiary'' and 
collectively as ``Subsidiaries.'' ``Utility Subsidiaries'' includes 
ComEd, PECO, Genco, Commonwealth Edison Company of Indiana (which 
has no retail customers), PECO Energy Power Company, Susquehanna 
Power Company and Susquehanna Electric Company (the latter three are 
exclusively engaged in owning and operating an electric generation 
project, all of the power from which is sold at wholesale.) 
``Nonutility Subsidiaries'' includes all other subsidiaries of 
Exelon and also includes other direct or indirect subsidiaries that 
Exelon may form after the Merger in accordance with a Commission 
order or with an applicable rule or order; provided, however, that 
for purposes of the requests described below with respect to the 
nonutility money pool, the term ``Nonutility Subsidiaries'' includes 
only Services and Enterprises.
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    In the instant filing, Applicants seek authorization and approval 
with respect to ongoing financing activities through March 31, 2004, 
(``Authorization Period'' and other matters relating to the Merger.

I. Summary

    Applicants seek authority for Exelon and the Subsidiaries with 
respect to: (1) The issuance of common stock, guarantees, preferred 
debt and other securities for cash and in connection with various 
acquisitions, (2) the issuance of 21 million shares of common stock 
under dividend reinvestment and stock-based management incentive and 
employee benefit plans, (3) the maintenance of existing debt and 
guarantees, (4) the payment of dividends out of capital or unearned 
surplus, (5) hedging transactions, (6) the establishment of a utility 
money pool and a nonutility money pool, (7) the retention, 
establishment and use of special-purpose financing entities, (8) 
changes in the capital stock of certain Subsidiaries in order to engage 
in financing transactions with a parent company and (9) the use of 
proceeds of securities issuances to invest in exempt wholesale 
generators (``EWGs'') and foreign utility companies (``FUCOs'') in 
amounts that exceed 50% of Exelon's consolidated retained earnings.
    Applicants' effective cost of money on long-term debt borrowings 
under this authorization will not exceed the greater of (1) 350 basis 
points over the comparable term U.S. Treasury securities or (2) a gross 
spread over U.S. Treasuries that is consistent with similar securities 
of comparable credit quality and maturities issued by other companies. 
Applicants' effective cost of money on short-term debt borrowings under 
this authorization will not exceed the greater of (1) 350 basis points 
over the comparable term London Interbank Offered Rate (``LIBOR'') or 
(2) a gross spread over LIBOR that is consistent with similar 
securities of comparable credit quality and maturities issued by other 
companies. The dividend rate on any series of preferred securities will 
not exceed the greater of (1) 500 basis points over the yield to 
maturity of a U.S. Treasury security having a remaining term equal to 
the term of such series of preferred securities or (2) a rate that is 
consistent with similar securities of comparable credit quality and 
maturities issued by other companies. The maturity of indebtedness will 
not exceed fifty years. All preferred securities will be redeemed no 
later than fifty years after being issued.
    The proceeds from the sale of securities in external financing 
transactions will be used for general corporate purposes, including the 
financing, in part, of the capital expenditures and working capital 
requirements of the Exelon system, for the acquisition, retirement or 
redemption of securities previously issued by Exelon or the 
Subsidiaries, and for authorized investments in rule 58 companies, 
EWGs, FUCOs, exempt

[[Page 58131]]

telecommunications companies (``ETCs'') and for other lawful purposes.

II Exelon External Financing

A. Securities
    Exelon requests authorization to obtain funds externally through 
sales of common stock, preferred securities, long-term debt and short-
term debt securities. With respect to common stock, Exelon also 
requests authority to issue common stock, options, warrants or stock 
purchase rights to third parties in consideration for the acquisition 
by Exelon or a Nonutility Subsidiary of equity or debt securities of a 
company being acquired in accordance with an order of the Commission, 
under sections 32, 33 or 34 of the Act or rule 58 under the Act.\29\ 
The aggregate amount of financing requested will not exceed $8 billion 
(``Exelon Financing Limit''.\30\
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    \29\ Exelon common stock issued in consideration for the 
acquisition of a company under any of these circumstances will be 
valued, for purposes of determining compliance with the proposed 
aggregate financing limitation, at its market value as of the date 
of issuance (or, if appropriate, at the date of a binding contract 
providing for the issuance of common stock).
    \30\ Applicants state that Exelon will incur approximately $500 
million in debt to finance the Merger, which it proposes to exclude 
from the calculation of indebtedness for purposes of the Exelon 
Financing Limit.
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    Common stock financings may be effected in accordance with 
underwriting agreements of a type generally standard in the industry. 
Public distributions may be pursuant to private negotiation with 
underwriters, dealers or agents as discussed below or effected through 
competitive bidding among underwriters. In addition, sales may be made 
through private placements or other non-public offerings to one or more 
persons. All common stock sales will be at rates or prices and under 
conditions negotiated or based upon or otherwise determined by, 
competitive capital markets.\31\
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    \31\ Applicants note that a very small amount of ComEd common 
stock will not be held by Exelon. This stock has been and will be 
acquired on conversion of certain outstanding warrants or on 
conversion of ComEd convertible preferred stock. Unicom has extended 
a standing offer to these holders of ComEd common stock to exchange 
the stock for Unicom common stock. Exelon wishes to continue this 
program.
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    Preferred stock or other types of preferred securities may be 
issued in one or more series with such rights, preferences, and 
priorities as may be designated in the instrument creating each such 
series, as determined by Exelon's board of directors. Dividends or 
distributions on preferred securities will be made periodically and to 
the extent funds are legally available for such purpose, but may be 
made subject to terms which allow the issuer to defer dividend payments 
for specified periods. Preferred securities may be convertible or 
exchangeable into shares of Exelon common stock or indebtedness.
    Exelon's long-term debt securities will be comprised of bonds, 
notes, medium-term notes or debentures under one or more indentures or 
long-term indebtedness under agreements with banks or other 
institutional lenders. Maturity dates, interest rates, redemption and 
sinking fund provisions, tender or repurchase and conversion features, 
if any, with respect to Applicants' long-term securities, as well as 
any associated placement, underwriting or selling agent fees, 
commissions and discounts, if any, will be established by negotiation 
or competitive bidding.
    Exelon's short-term debt will replace pre-Merger letters or lines 
of credit or commercial paper and would provide financing for general 
corporate purposes working capital requirements and temporary financing 
of capital expenditures. Any short-term debt outstanding or credit 
facility of Unicom existing at the time of the Merger may be assumed by 
Exelon.\32\ Exelon's short-term debt may include commercial paper, 
which would be sold at the discount rate or the coupon rate per annum 
prevailing at the date of issuance of commercial paper of comparable 
quality and maturities sold to commercial paper dealers generally. In 
addition, Exelon may, without counting against the Exelon Financing 
Limit, maintain back up lines of credit in connection with a commercial 
paper program in an aggregate amount not to exceed the amount of 
authorized commercial paper.
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    \32\ These are described in Appendix A to the notice.
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B. Hedging Transactions
    Exelon requests authority to enter into, perform, purchase and sell 
financial instruments intended to reduce or manage the volatility of 
interest rates, including but not limited to interest rate swaps, caps, 
floors, collars and forward agreements, structured notes or 
transactions involving the purchase or sale of U.S. Treasury or Agency 
obligations or LIBOR based swap instruments for fixed periods and 
stated national amounts (``Hedge Instruments''). Exelon will not engage 
in speculative transactions unassociated with its financing needs and 
activities, and will only enter into agreements with counterparties 
having senior debt ratings, as published by a national rating agency, 
greater than or equal to ``BBB'' or an equivalent rating (``Approved 
Counterparties'').
    Exelon and its subsidiaries also request authorization to enter 
into interest rate hedging transactions with respect to anticipated 
debt offerings (``Anticipatory Hedges''). Anticipatory Hedges would 
only be entered into with Approved Counterparties, and would be 
utilized to fix and/or limit the interest rate risk associated with any 
new issuance through (1) a forward sale of exchange-traded Hedge 
Instruments, (2) the purchase of put options on Hedge Instruments 
(``Put Options Purchase''), (3) a Put Options Purchase in combination 
with the sale of call options, (4) transactions involving the purchase 
or sale, including short sales of Hedge Instruments, or (5) some 
combination of the above and/or other derivative or cash transactions, 
including, but not limited to, structured notes, caps and collars, 
appropriate for the Anticipatory Hedges. The same limitations on the 
creditworthiness of counterparties described immediately above would 
also apply to Anticipatory Hedges.

III. Subsidiary External Financing

A. All Utility Subsidiaries
    Rule 52 provides an exemption from the prior authorization 
requirements of the Act for most sales and issuances of securities by 
the Utility Subsidiaries.\33\ Applicants have also requested, however, 
authority for certain Utility Subsidiaries to engage in external 
financings beyond the scope of the rule 52 exemption.
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    \33\ In general, all securities issuances by ComEd must be 
approved by the Illinois Commerce Commission, other than 
indebtedness with a final maturity of less than one year, renewable 
for a period of not more than two years. Similarly, all securities 
issuances by PECO must be approved by the Pennsylvania Public 
Utility Commission, other than securities with a maturity of one 
year or less or having no fixed maturity but payable on demand. 
Issuances of securities by Genco are not subject to review by any 
state commission.
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    Applicants seek authority for ComEd, PECO and Genco to issue 
commercial paper and establish and borrow under credit lines in the 
aggregate amount of $2.7 billion outstanding at any one time during the 
Authorization Period (``Utility Financing Limit''). In addition, ComEd 
and PECO have existing financing arrangements in place which they 
propose to maintain.\34\ ComEd, PECO and Genco may also, without 
counting against this limit, maintain back up lines of credit in 
connection with a commercial paper program in an aggregate amount not 
to exceed the

[[Page 58132]]

amount of authorized commercial paper.
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    \34\ These arrangements are described in Exhibit A to the 
notice.
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    Additionally, to the extent not exempt under rule 52, the Utility 
Subsidiaries request authority to enter into and perform under Hedge 
Instruments and Anticipatory Hedges. These transactions will be entered 
into subject to the limitations and requirements applicable to Exelon's 
Hedge Instruments and Anticipatory Hedges.
B. Genco
    Applicants request authority for Genco to issue common stock, 
preferred stock or other types of preferred securities, as well as such 
long-term debt securities as bonds, notes, medium-term notes or 
debentures under one or more indentures, or under agreements with banks 
or other institutional lenders, and to sell commercial paper and 
establish credit lines. The maturity dates, interest rates, redemption 
and sinking fund provisions and conversion features, if any, with 
respect to the long-term securities of Genco, as well as any associated 
placement, underwriting or selling agent fees, commissions and 
discounts, if any will be established by negotiation or competitive 
bidding. In addition, Genco may, without counting against the limits 
set forth above, maintain back up lines of credit in connection with a 
commercial paper program in an aggregate amount not to exceed the 
amount of authorized commercial paper.
    The aggregate amount of common equity, preferred securities, long-
term debt and short-term debt financing to be obtained by Genco during 
the Authorization Period (excluding indebtedness issued during the 
Authorization period to refund then outstanding indebtedness) will not 
exceed $5.5 billion (``Genco Financing Limitation''). Any issuance of 
securities by Genco under the requested authority will count against 
the Exelon Financing Limit, except for borrowings from associates where 
the lender's own borrowings count against the Exelon Financing Limit.
    Applicants also request authority for Genco to assume approximately 
$369 million in pollution control loan obligations PECO issued in 
connection with facilities located at the generating stations to be 
transferred to Genco as part of the Merger. These assumptions of 
indebtedness will be in addition to the Genco Financing Limit.

IV. Intrasystem Transactions

A. Guaranties
    Applicants request authority for Exelon to enter into guaranties, 
obtain letters of credit, enter into support or expense agreements or 
otherwise provide credit support with respect to the obligations of the 
Subsidiaries as may be appropriate or necessary to enable the 
Subsidiaries to carry on in the ordinary course of their respective 
businesses, and to enter into guaranties of third parties' obligations 
in the ordinary course of Exelon's business (``Exelon 
Guaranties'').\35\ Applicants also request authority for Genco to enter 
into guarantees and other forms of credit support with respect to the 
obligations of its subsidiaries (``Genco Guaranties'') and for each 
Nonutility Subsidiary to provide guarantees and other forms of credit 
support to other Nonutility Subsidiaries (together with the Exelon 
Guaranties and the Genco Guaranties, ``Guaranties'').
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    \35\ For example, as one of the founding members of the Midwest 
System Operator (``MISO''), Unicom issued guaranties to creditors on 
behalf of MISO to assist MISO's start-up operations.
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    The aggregate amount of the Guaranties will not exceed $4.5 billion 
outstanding at any one time (not taking into account obligations exempt 
pursuant to rule 45) (``Guaranty Limit''). Included in this amount are 
existing guaranties and other credit support mechanisms entered into by 
Unicom \36\ which will be assumed by Exelon and those entered into by 
PECO \37\ in favor of their respective Subsidiaries.
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    \36\ Existing guaranties of Unicom are described in Exhibit A to 
this notice.
    \37\ Existing PECO guaranties are described in Exhibit A to this 
notice.
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    The issuance of any Guaranties will also be subject to the 
limitations of rule 53(a)(1) or rule 58(a)(1), as applicable. 
Applicants propose that each Subsidiary be charged a fee for each 
Guaranty provided on its behalf that is comparable to those obtainable 
by the beneficiary of the Guaranty from third parties.
B. Money Pools
    Applicants request authority for Exelon and the Utility 
Subsidiaries to establish a money pool (``Utility Money Pool''). In 
addition, Applicants request authority for the Utility Subsidiaries, to 
the extent not exempted by rule 52, to make unsecured short-term 
borrowings from the Utility Money Pool, to contribute surplus funds to 
the Utility Money Pool, and to lend and extend credit to (and acquire 
promissory notes from) one another through the Utility Money Pool. In 
addition to the Utility Subsidiaries, Applicants request authority for 
existing utility related financing entities, referred to below, to 
participate in the Utility Money Pool as a result of their financing 
relationship with ComEd and PECO.
    In addition, Exelon and the Nonutility Subsidiaries request 
authorization to establish a nonutility money pool (``Nonutility Money 
Pool''). The Nonutility Money Pool activities of all of the Nonutility 
Subsidiaries are exempt from the prior approval requirements of the Act 
under rule 52. Applicants request authorization of Exelon to contribute 
its surplus funds and to lend and extend credit to: (1) The Utility 
Subsidiaries through the Utility Money Pool and (2) the Nonutility 
Subsidiaries through the Nonutility Money Pool. The aggregate 
outstanding amount of borrowings that each of PECO, Genco and ComEd may 
incur under the Utility Money Pool will count against the Utility 
Financing Limit.
    Utility Money Pool participants that borrow would borrow pro rata 
from each company that lends, in the proportion that the total amount 
loaned by each such lending company bears to the total amount then 
loaned through the Utility Money Pool. On any day when more than one 
fund source (e.g., surplus treasury funds of Exelon and other Utility 
Money Pool participants (``Internal Funds'') and proceeds from external 
financing (``External Funds''), with different rates of interest, is 
used to fund loans through the Utility Money Pool, each borrower would 
borrow pro rata from each such fund source in the Utility Money Pool in 
the same proportion that the amount of funds provided by that fund 
source bears to the total amount of short-term funds available to the 
Utility Money Pool.
    If only Internal Funds make up the funds available in the Utility 
Money Pool, the interest rate applicable and payable to or by 
Subsidiaries for all loans of such Internal Funds will be the rates for 
high-grade unsecured 30-day commercial paper sold through dealers by 
major corporations as quoted in The Wall Street Journal.
    If only External Funds comprise the funds available in the Utility 
Money Pool, the interest rate applicable to loans of such External 
Funds would be equal to the lending company's cost for such External 
Funds (or, if more than one Utility Money Pool participant had made 
available External Funds on such day, the applicable interest rate 
would be a composite rate equal to the weighted average of the cost 
incurred by the respective Utility Money Pool participants for such 
External Funds).
    In cases where both Internal Funds and External Funds are 
concurrently borrowed through the Utility Money Pool, the rate 
applicable to all loans comprised of such ``blended'' funds

[[Page 58133]]

would be a composite rate equal to the weighted average of (1) the cost 
of all Internal Funds contributed by utility Money Pool participants 
(as determined pursuant to the second-preceding paragraph above) and 
(2) the cost of all such External Funds (as determined pursuant to the 
immediately preceding paragraph above). In circumstances where Internal 
Funds and External Funds are available for loans through the Utility 
Money Pool, loans may be made exclusively from Internal Funds or 
External Funds, rather than from a ``blend'' of such funds, to the 
extent it is expected that such loans would result in a lower of cost 
of borrowings.
    Funds not required by the Utility Money Pool to make loans (with 
the exception of funds required to satisfy the Utility Money Pool's 
liquidity requirements) would ordinarily be invested in one or more 
short-term investments including: (1) Interest-bearing accounts with 
banks; (2) obligations issued or guaranteed by the U.S. government and/
or its agencies and instrumentalities, including obligations under 
repurchase agreements; (3) obligations issued or guaranteed by any 
state or political subdivision, provided that such obligations are 
rated not less than ``A'' by a nationally recognized rating agency; (4) 
commercial paper rated not less than ``A-1'' or ``P-1'' or their 
equivalent by a nationally recognized rating agency; (5) money market 
funds; (6) bank certificates of deposit, (7) Eurodollar funds and (8) 
such other investments are permitted by Section 9(c) of the Act and 
rule 40 under the Act.
    Each Applicant receiving a loan through the Utility Money Pool 
would be required to repay the principal amount of such loan, together 
with all interest accrued thereon, on demand and in any event not later 
than one year after the date of such loan. All loans made through the 
Utility Money Pool may be prepaid by the borrower without premium or 
penalty.
    The Nonutility Money Pool will be operated on the same terms and 
conditions as the Utility Money Pool, except that Exelon funds made 
available to the Money Pools will be made available to the Utility 
Money Pool first and thereafter to the Nonutility Money Pool. Operation 
of the utility and Nonutility Money Pools, including record keeping and 
coordination of loans, will be handled by Exelon Service under the 
authority of the appropriate officers of the participating companies. 
Exelon Service will administer the Utility and Nonutility Money Pools 
on an ``at cost'' basis and will maintain separate records for each 
money pool.
C. Borrowings by Ventures and Exelon Energy Delivery
    Ventures and Exelon Energy Delivery request authority to issue debt 
or equity securities to Exelon for the purpose of facilitating Exelon's 
additional investments in Genco, PECO, ComEd, and Enterprises. Amounts 
borrowed by Ventures and Exelon Energy Delivery from Exelon for this 
purpose would not count against the aggregate financing limit proposed 
for Exelon.
D. Other Borrowings
    The Nonutility Subsidiaries may engage, from time to time, in other 
types of security financing with associates that are not exempt from 
prior Commission approval. In the limited circumstances where the 
Nonutility Subsidiary making the borrowing is not wholly owned by 
Exelon, directly or indirectly, authority is requested under the Act 
for Exelon or a Nonutility Subsidiary, as the case may be, to make such 
loans to such subsidiaries at interest rates and maturities designed to 
provide a return to the lending company of not less than its effective 
cost of capital. If such loans are made to a Nonutility Subsidiary, 
such company will not sell any services to any associate Nonutility 
Subsidiary unless such company falls within one of the categories of 
companies to which goods and services may be sold on a basis other than 
``at cost,'' as described in the Merger Application.

V. Other Transactions

A. Financing Subsidiaries
    Exelon and the Subsidiaries request authority to acquire, directly 
and indirectly, the equity securities of one or more corporation, 
trusts, partnerships or other entities (``Financing Subsidiaries'') 
created specifically for the purpose of facilitating the financing of 
the authorized and exempt activities of Exelon and the Subsidiaries 
through the issuance of long-term debt preferred securities or equity 
securities, to third parties and the transfer of the proceeds of such 
financings to Exelon or such Subsidiaries.\38\
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    \38\ One of the special purpose subsidiaries already in 
existence at PECO or Unicom, such as PECO-Energy Transition Trust 
(discussed below) or ComEd Transitional Funding Trust, may be used 
for these purposes as well.
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    The parent of a Financing Subsidiary may, if required, guarantee or 
enter into support or expense agreements in respect of the obligations 
of its Financing Subsidiaries. Any amounts issued by a Financing 
Subsidiary to third parties will be included in the proposed financing 
limit, if any, applicable to its immediate parent. However, any 
intrasystem borrowing by the parent of the proceeds of those issuances 
would not count against the proposed aggregate financing limitations, 
if any, applicable to the parent and a guaranty by the parent with 
respect to those issuances would not count against the Guaranty Limit.
    PECO currently has in place Financing Subsidiaries related to its 
securitization bonds. Under the terms of PECO's settlement of its 1998 
electric restructuring proceeding and the final order of the 
Pennsylvania Commission approving the settlement, issued on May 14, 
1998, PECO is permitted to recover $5.26 billion in stranded costs over 
a twelve year period that began on January 1, 1999. PECO's stranded 
costs are collected through a non-bypassable transition charge 
(``Transition Charge'') which must be paid by all of PECO's 
transmission and distribution customers, regardless of whether the 
customers continue to purchase their electric capacity or energy from 
PECO.
    The May 14, 1998 order authorized PECO to securitize up to $4 
billion of its recoverable costs through the issuance of transition 
bonds. On March 16, 2000, the Pennsylvania Commission issued a second 
order authorizing PECO to securitize an additional $1 billion. In order 
to accomplish the approved securitization transactions, PECO created an 
independent special purpose entity named PECO Energy Transition Trust 
(``PETT'') for the special purpose of purchasing from PECO certain 
property, including rights to the Transition Charge (``Transition 
Property''), issuing the transition bonds, pledging its interest in the 
Transition Property and other collateral to the bond trustee to secure 
the transition bonds, and performing activities that are necessary and 
suitable to accomplish these purposes.
    The transition bonds have been issued and, in accordance with the 
orders of the Pennsylvania Commission, PECO is utilizing the proceeds 
of the transition bonds to retire higher cost debt and buy back equity 
securities. The investment of the transition bonds is being 
accomplished through a series of intercompany loans, contributions and 
distributions involving nonutility subsidiaries of PECO. Interest 
payments and loan advances are being and will continue to be made on a 
quarterly basis among these nonutility subsidiaries exempt under rule 
52. The last of these quarterly transactions is presently expected to 
take place in May of 2010.

[[Page 58134]]

Applicants request authority for PECO to refinance and extend the 
maturity of these obligations to lower interest costs. No refinancing 
will extend the maturity of the transition bonds past March 1, 2011.
B. Changes in Capital Stock of Majority Owned Subsidiaries
    It may happen that the sale by a Subsidiary of capital securities 
(i.e, common stock or preferred stock) may in some cases exceed the 
then-authorized capital stock of such Subsidiary. In addition, the 
Subsidiary may choose to use capital stock with no par value. 
Accordingly, request is made for authority to change the terms of any 
50% or more owned Subsidiary's authorized capital stock capitalization 
or other equity interest by an amount deemed appropriate by Exelon or 
other intermediate parent company. This request for authorization is 
limited to Exelon's 50% or more owned Subsidiaries and will not affect 
the aggregate limits proposed in this application. A Subsidiary would 
be able to change the par value, or change between par value and no-par 
stock, without additional Commission approval.
C. Payment of Dividends
    1. Exelon and ComEd. As a result of the application of the purchase 
method of accounting to the merger, the current retained earnings of 
ComEd will be recharacterized as additional paid-in-capital. In 
addition, the Merger will give rise to a substantial level of goodwill. 
In accordance with the Commission's Staff Accounting Bulletin No. 54, 
Topic 5J (``Staff Accounting Bulletin''), the goodwill will be ``pushed 
down'' to Unicom's subsidiaries, principally ComEd and reflected as 
additional paid-in-capital on ComEd's financial statements. As of the 
end of 1999, ComEd had a retained earnings balance of approximately 
$433 million. However, the effect of these accounting practices will be 
to leave ComEd with no retained earnings, the traditional source of 
dividend payment. In addition, any dividend by ComEd of amounts now 
recharacterized as capital would be deemed a return of capital to 
Exelon and not a distribution of earnings. Accordingly, Applicants 
request authority for Exelon and ComEd to pay dividends out of capital 
up to the amount of $500 million.
    2. Nonutility Subsidiaries. The Nonutility Subsidiaries propose to 
pay dividends, from time to time through the Authorization Period, out 
of capital and unearned surplus (including revaluation reserve), to the 
extent permitted under state law.
D. EWGs and FUCOs
    At March 31, 2000, the pro forma consolidated amount of Exelon's 
aggregate investment in EWGs and FUCOs, as those terms are defined in 
rule 53, was $151.4 million.\39\ Applicants now request authority for 
Exelon to use up $5.5 billion of the proceeds of financings to acquire 
additional investments in EWGs and/or FUCOs. In addition, Exelon 
requests that the limit on the use of Genco employees imposed in rule 
53(a)(3) in connection with EWGs and FUCOs not apply.\40\
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    \39\ Applicants currently have no FUCO investments. The only 
existing EWG investment is PECO's investment in AmerGen, which was 
recorded at $51.4 million at March 31, 2000. AmerGen, which is 50% 
owned by PECO, is an EWG that owns the Clinton Power Station in 
Illinois and the Three Mile Island Unit 1 Nuclear Generating 
Facility in Pennsylvania. As noted above, PECO also has issued 
letter agreements to provide funding up to a total $100 million to 
be available to AmerGen in connection with the operation and 
maintenance of all the commercial nuclear power reactors acquired or 
to be acquired by AmerGen.
    \40\ One of the conditions to the use of the safe harbor 
provisions of rule 53 is the requirement in rule 53(a)(3) that no 
more than 2% of a registered holding company's utility subsidiaries 
employees render services to the company's EWGs or FUCOs.
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    Applicants note that pro forma consolidated retained earnings of 
Exelon as of March 31, 2000 were $14 million. Consequently, Exelon will 
not satisfy the safe harbor requirement of rule 53(a). Applicants state 
in this regard that Exelon's low level of retained earnings are due to 
extraordinary writeoffs related to industry restructuring and the 
expected recharacterization of ComEd's retained earnings as a result of 
the Merger.
E. Stock and Incentive Plans
    Applicants propose for Exelon, from time to time during the 
Authorization Period, to issue up to 21 million shares of Exelon common 
stock under the employee benefit and incentive plans described below 
and under a dividend reinvestment plan Exelon anticipates establishing 
after the Merger.
    Upon completion of the Merger, Exelon will assume all the 
obligations of Unicom under the Unicom Stock Plans, of PECO under the 
PECO Stock Plans, the outstanding employee stock options and stock 
appreciation rights granted under those plans and the agreements 
evidencing the grants of those options and rights. In addition, each 
employee or director benefit or compensation plan, program or 
arrangement using Unicom Common Stock or PECO Common Stock, other than 
the Unicom Stock Plans and the PECO Stock Plans, will provide for 
issuance or purchase in the open market only of Exelon Common Stock 
rather than Unicom Common Stock or PECO Common Stock, as the case may 
be, after the Merger. Further, Exelon anticipates that it will adopt 
the PECO Energy Company 1989 Long-Term Incentive Plan for purposes of 
making awards to employees of Exelon and its Subsidiaries following the 
Merger.

Appendix A--Existing Debt and Guaranties

Unicom Debt and Guaranties

    Unicorn is currently obligated under two notes to an associate 
having an outstanding aggregate principal amount of approximately 
$627 million as of March 31, 2000. Unicom also currently guaranties 
committed lines of bank credit available to a Nonutility Subsidiary 
for $400 million (from a group of 20 banks) which expire on December 
15, 2000. In addition, as of March 31, 2000, Unicom has authorized 
guaranties of $802 million including guarantees relating to 
obligations of Unicom Thermal Technologies, Unicom Energy, Inc., 
Unicom Energy Ohio, Unicom Enterprises and the Midwest Independent 
System Operator. Further, ComEd and Unicom Investment, Inc. entered 
into an intercompany agreement relating to the sale of certain 
fossil generating stations by ComEd under which Unicom Investment 
executed a 12 year promissory note to ComEd for $2.5 billion

Utility Subsidiary Debt and Guaranties

    As of March 31, 2000, ComEd has several issuances of debt 
outstanding, having various maturities up to 2023, including first 
mortgage bonds, sinking fund debentures, pollution control 
obligations, medium term notes, intercompany loans and purchase 
contract obligations, in amounts aggregating approximately $4.914 
billion. ComEd also has a commercial paper program in place with 
outstanding principal debt aggregating approximately $122 million. 
ComEd Transitional Funding Trust has issued several series of 
transition bonds, with various maturities up to 2008, with an 
aggregate outstanding principal amount of approximately $3.0 
billion. ComEd has various other subsidiaries which will also 
maintain existing financing arrangement in transactions Applicants 
state are exempt from Commission review under rule 52.
    As of March 31, 2000, PECO has several issuances of debt 
outstanding, having various maturities up to 2014, including first 
mortgage bonds, pollution control debt and other secured 
obligations, sinking fund debt, and medium term notes, in amounts 
aggregating approximately $1.766 billion. In addition, PETT has 
issued several series of transition bonds having various maturities 
up to 2009, in an aggregate outstanding principal amount of 
approximately $4.9 billion. Further, Susquehanna owes: Approximately 
$60,000 under an intercompany note issued to PECO.

[[Page 58135]]

    As of March 31, 2000, PECO has $110 million in outstanding 
guarantees or commitments, including a $100 million obligation in 
favor of AmerGen, an EWG, an $10 million in favor of its Exelon 
Infrastructure Services subsidiaries.

    For the Commission by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.

[FR Doc. 00-24732 Filed 9-26-00; 8:45 am]
BILLING CODE 8010-01-M