[Federal Register Volume 62, Number 65 (Friday, April 4, 1997)]
[Notices]
[Pages 16206-16208]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8654]


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SECURITES AND EXCHANGE COMMISSION
[Release No. 35-26698]


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

March 28, 1997.
    Notice is hereby given that the following filing(s) has/have been 
made with the Commission pursuant to provisions of the Act and rules 
promulgated thereunder. All interested persons are referred to the 
application(s) and/or declaration(s) for complete statements of the 
proposed transaction(s) summarized below. The application(s) and/or 
declaration(s) and any amendments thereto is/are available for public 
inspection through the Commission's Office of Public Reference.
    Interested persons wishing to comment or request a hearing on the 
application(s) and/or declaration(s) should submit their views in 
writing by April 21, 1997, to the Secretary, Securities and Exchange 
Commission, Washington, D.C. 20549, and serve a copy on the relevant 
applicant(s) and/or declarant(s) at the address(es) specified below. 
Proof of service (by affidavit or, in case of an attorney at law, by 
certificate) should be filed with the request. Any request for hearing 
shall identify specifically the issues of fact or law that are 
disputed. A person who so requests will be notified of any hearing, if 
ordered, and will receive a copy of any notice or order issued in the 
matter. After said date, the application(s) and/or declaration(s), as 
filed or as amended, may be granted and or permitted to become 
effective.

American Electric Power Company, et al. (70-8779)

    American Electric Power Company, Inc., 1 Riverside Plaza, Columbus, 
Ohio 43215, and its subsidiaries, American Electric Power Service 
Corporation, 1 Riverside Plaza, Columbus, Ohio 43215, Appalachian Power 
Company, 40 Franklin Road, Roanoke, Virginia 24022, Columbus Southern 
Power Company, 215 North Front Street, Columbus, Ohio 43215, Indiana 
Michigan Power Company, One Summit Square, Fort Wayne, Indiana 46801, 
Kentucky Power Company, 1701 Central Avenue, Ashland, Kentucky 41101, 
Kingsport Power Company, 422 Broad Street, Kingsport, Tennessee 37660, 
Ohio Power Company, 339 Cleveland Avenue, S.W., Canton, Ohio 44702, and 
Wheeling Power Company, 51-16th Street, Wheeling, West Virginia 26003, 
have filed a post-effective amendment under sections 6, 7 and 12(b) of 
the Act, and rule 45 under the Act, in connection with their previously 
filed application-declaration under sections 6(a), 7, 9(a), 10, 12(b) 
and 13(b) of the Act and rules 45, 90 and 91 under the Act.
    By orders dated September 13, 1996 (HCAR No. 26572) (``Initial 
Order'') and September 27, 1996 (HCAR No. 26583), AEP was authorized to 
form one or more direct or indirect nonutility subsidiaries (``New 
Subsidiaries'') to broker and market electric power, natural and 
manufactured gas, emission allowances, coal, oil, refined petroleum 
products and natural gas liquids (``Energy Commodities''). The Initial 
Order also authorized AEP to guarantee through December 31, 2000 up to 
$50 million of debt and up to $200 million of other obligations of the 
New Subsidiaries (``Guarantee Authority''). The Initial Order stated 
that obligations of the New Subsidiaries (other than debt) might take 
the form of bid bonds or other direct or indirect guarantees of 
contractual or other obligations.
    With the adoption of rule 58,\1\ the acquisition of securities of 
or other interests in Energy-Related Companies (as defined in the 
rule), including the marketing and brokering of Energy Commodities, 
subject to certain limitations, is exempt from the requirement of prior 
Commission approval under the Act. AEP states that any of the New 
Subsidiaries may convert to an Energy-Related Company so that such New 
Subsidiary could not only broker and market Energy Commodities, but 
also could offer all the other energy-related services permitted by the 
rule.
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    \1\ HCAR No. 26667 (February 14, 1997), 62 F.R. 7900 (February 
20, 1997). The rule became effective on March 24, 1997.
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    AEP requests that the Guarantee Authority be expanded so that AEP 
could guarantee the debt and other obligations of the New Subsidiaries 
for all Energy-Related Company activities.

New Century Energies, Inc. (70-9005)

    New Century Energies, Inc. (``NCE''), 1225 Seventeenth Street, 
Denver, Colorado 80202, a Delaware corporation not currently subject to 
the Act, has filed an application-declaration under sections 6(a), 7, 
9(a), 10, and 12(c) of the Act and rules 42 and 54 thereunder.\2\
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    \2\ NCE has previously filed an application-declaration under 
section 9(a)(2) of the Act to acquire all of the outstanding voting 
securities of Public Service Company of Colorado (``PSC''), 
Southwestern Public Service Company (``SPS'') and Cheyenne Light, 
Fuel and Power Company (``CLFP''), each a public utility company. 
Following the consummation of the transactions described in that 
application-declaration, NCE will register as a holding company 
under the Act.
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    NCE proposes to implement a shareholder rights plan and to enter 
into a Rights Agreement (``Agreement'') with an agent to be named. The 
Board of Directors of NCE (``Board'') proposes to declare a dividend 
distribution of one right (``Right'') for each outstanding share of 
common stock, $1.00 par value, of NCE (``Common Stock'') to 
shareholders of record at the close of business on a record date yet to 
be established (``Record Date''). Each Right would entitle the 
registered holder to purchase from NCE one one-hundredth of a share of 
Series A Junior Participating Preferred Stock (``Preferred Stock'') at 
a price to be determined by the Board, subject to adjustment 
(``Purchase Price'').
    Until the earliest to occur of (i) ten days following the date 
(``Shares Acquisition Date'') of the public announcement that a person 
or group of persons (``Acquiring Person'') has acquired, or obtained 
the right to acquire, beneficial ownership of Common Stock or other 
voting securities (``Voting Stock'') that have 10% or more of the 
voting power of the outstanding shares of Voting Stock or (ii) ten days 
(or such later date as may be determined by action of the Board prior 
to the time any person or group of persons becomes the Acquiring 
Person) following the commencement or announcement of an intention to 
make a tender offer or exchange offer, the consummation of which would 
result in such person acquiring, or obtaining the right to acquire, 
beneficial ownership of Voting Stock having 10% or more of the voting 
power of the outstanding shares of Voting Stock (the earlier of such 
dates being called the ``Distribution Date''), the Rights will be 
evidenced, with respect to any of the Common Stock certificates 
outstanding as of the Record Date, by such Common Stock certificates. 
Until the Distribution Date (or earlier redemption or expiration of the 
Rights), the Rights will be

[[Page 16207]]

transferable only with the Common Stock, and new Common Stock 
certificates issued after the Record Date will contain a notation 
incorporating the Agreement by reference. As soon as practicable 
following the Distribution Date, separate certificates evidencing the 
Rights (``Rights Certificates'') will be mailed to holders of record of 
Common Stock as of the close of business on the Distribution Date and 
such separate Right Certificates alone will evidence the Rights.
    The Rights are not exercisable until the Distribution Date. The 
Rights will expire at the close of business on the tenth anniversary of 
the Record Date, unless earlier redeemed or exchanged by NCE as 
described below.
    In the event that a person becomes an Acquiring Person, each holder 
of a Right will have the right to receive, upon exercise, Common Stock 
(or, in certain circumstances, cash, property or other securities of 
NCE) having a value equal to two times the exercise price of the Right 
then in effect. However, all Rights that are, or under certain 
circumstances were, beneficially owned by any Acquiring Person will be 
null and void.
    In the event that, at any time following the Shares Acquisition 
Date, (i) NCE is acquired in a merger or other business combination 
transaction, or (ii) 50% or more of NCE's assets or earning power are 
sold or transferred, each holder of a Right (except Rights which 
previously have been voided as set forth above) shall thereafter have 
the right to receive, upon exercise, common stock of the acquiring 
company having a value equal to two times the exercise price of the 
Right.
    The Purchase Price payable, and the number of shares of Preferred 
Stock (or Common Stock or other securities, as the case may be) 
issuable, upon exercise of the Rights are subject to adjustment from 
time to time to prevent dilution (i) in the event of a stock dividend 
on, or a subdivision, combination or reclassification of, the Preferred 
Stock, (ii) upon the grant to holders of the Preferred Stock of certain 
rights or warrants to subscribe for or purchase shares of the Preferred 
Stock or convertible securities at less than the then current market 
price of the Preferred Stock or (iii) upon the distribution to holders 
of the Preferred Stock of evidences of indebtedness or assets 
(excluding regular periodic cash dividends or dividends payable in 
Preferred Stock) or of subscription rights or warrants (other than 
those referred to above).
    With certain exceptions, no adjustment in the Purchase Price will 
be required until the earlier of (i) three years from the date of the 
event giving rise to such adjustment or (ii) the time at which 
cumulative adjustments require an adjustment of at least 1% in such 
Purchase Price. No fractional shares of Preferred Stock will be issued 
and, in lieu thereof, an adjustment in cash will be made based on the 
market price of the Preferred Stock on the last trading date prior to 
the date of exercise.
    NCE may redeem the Rights in whole, but not in part, at a price of 
$0.001 per Right (``Redemption Price''), payable in cash or stock at 
any time prior to 5:00 p.m. on the tenth day following the Shares 
Acquisition Date, subject to extension for up to an additional 20 days 
by the Board, with the concurrence of a majority of Independent 
Directors (as hereinafter defined). Under certain circumstances set 
forth in the Agreement, the decision to redeem shall require the 
concurrence of a majority of the Independent Directors. An 
``Independent Director'' means any member of the Board who either (a) 
was a member on the date of the Agreement, or (b) is subsequently 
elected to the Board (x) if such election was conducted in accordance 
with Article V(B)(1) of NCE's Restated Certificate of Incorporation, 
(y) if such person was nominated pursuant to the method described in 
Article V(E) of NCE's Restated Certificate of Incorporation, or (z) if 
such person is recommended or approved by a majority of the Independent 
Directors. The term Independent Director shall not include an Acquiring 
Person or any representative thereof.
    Immediately upon the action of the Board electing to redeem the 
Rights, NCE shall make announcement thereof and the only right of the 
holders of Rights will be to receive the Redemption Price.
    At any time after a person becomes an Acquiring Person, the Board 
(with the concurrence of a majority of the Independent Directors) may 
exchange the Rights (other than Rights owned by an Acquiring Person, 
which become void), in whole or in part, at an exchange ratio of one 
share of Common Stock (or a fraction of a share of Preferred Stock 
having the same market value as one share of Common Stock) per Right, 
subject to adjustment.
    Any of the provisions of the Agreement may be amended by the Board 
without the consent of the holders of the Rights prior to the 
Distribution Date. Thereafter, the Agreement may be amended by the 
Board (in certain circumstances, with the concurrence of the 
Independent Directors) in order to cure any ambiguity, defect or 
inconsistency, or to make changes which do not adversely affect the 
interests of holders of Rights (excluding the interest of any Acquiring 
Person); provided, however, that no supplement or amendment may be made 
on or after the Distribution Date which changes those provisions 
relating to the principal economic terms of the Rights.
    The Preferred Stock will rank junior to all other series of NCE's 
preferred stock with respect to payment of dividends and as to 
distribution of assets in liquidation. Each share of Preferred Stock 
will have a quarterly dividend rate per share equal to the greater of 
$1.00 or 100 times the per share amount of any dividend (other than a 
dividend payable in shares of Common Stock or a subdivision of the 
Common Stock) declared from time to time on the Common Stock, subject 
to certain adjustments. The Preferred Stock will not be redeemable. In 
the event of liquidation, the holders of the Preferred Stock will be 
entitled to receive a preferred liquidation payment per share of an 
amount equal to 100 times the Purchase Price (plus accrued and unpaid 
dividends) or, if greater, an amount equal to 100 times the payment to 
be made per share of Common Stock, subject to certain adjustments. 
Generally, each share of Preferred Stock will vote together with the 
Common Stock and any other series of cumulative preferred stock 
entitled to vote in such manner and will be entitled to 100 votes, 
subject to certain adjustments. In the event of any merger, 
consolidation, combination or other transaction in which shares of 
Common Stock are exchanged for or changed into other stock or 
securities, cash and/or other property, each share of Preferred Stock 
will be entitled to receive 100 times the aggregate amount of stock, 
securities, cash and/or other property, into which or for which each 
share of Common Stock is changed or exchanged, subject to certain 
adjustments. The foregoing dividend, voting and liquidation rights of 
the Preferred Stock are protected against dilution in the event that 
additional shares of Common Stock are issued pursuant to a stock split 
or stock dividend or distribution. Because of the nature of the 
Preferred Stock's dividend, voting, liquidation and other rights, the 
value of the one one-hundredth of a share of Preferred Stock 
purchasable with each Right is intended to approximate the value of one 
share of Common Stock.

Cinergy Corp., et al. (70-9011)

    Cinergy Corp. (``Cinergy''), a registered holding company, and 
Cinergy Investments, Inc.

[[Page 16208]]

(``Investments''), its wholly-owned non-utility subsidiary 
(collectively ``Applicants''), both located at 139 East Fourth Street, 
Cincinnati, Ohio 45202, have filed an application-declaration under 
sections 6(a), 7, 12(b), 32 and 33 of the Act and rules 45, 53, and 54 
thereunder.
    Applicants are currently authorized, under the terms of orders and 
supplemental orders issued under File Nos. 70-8477 [HCAR Nos. 26159 
(November 18, 1994) and 26477 (February 23, 1996)], 70-8521 [HCAR Nos. 
26215 (January 11, 1995) and 26488 (March 12, 1996)], and 70-8589 [HCAR 
Nos. 26376 (September 21, 1995) and 26486 (March 8, 1996)] 
(collectively, the ``Prior Orders''), among other things, to use the 
proceeds of the issuance of short term debt and common stock to invest, 
directly or indirectly through one or more special purpose subsidiaries 
or project parents, in exempt wholesale generators (``EWGs'') and 
foreign utility companies (``FUCOs''), and to issue guarantees of the 
obligations of such entities, provided that the total of the net 
proceeds used for such investments and guarantees outstanding at any 
one time shall not, when added to Cinergy's ``aggregate investment'' 
(as defined in rule 53(a) under the Act) in all EWGs and FUCOs, exceed 
50% of Cinergy's ``consolidated retained earnings'' (as defined in rule 
53(a)). This investment limitation is consistent with the investment 
limitation contained in rule 53(a)(1).
    Applicants request the Commission to modify this limitation, and 
exempt them from the requirements of rule 53(a)(1), to permit Cinergy 
to use the net proceeds of common stock sales and borrowings to 
acquire, directly or indirectly, the securities of, or other interests 
in, EWGs and FUCOs, and to issue guarantees of the obligations of such 
entities (all as authorized by and in accordance with the terms of the 
Prior Orders) in an aggregate amount that, when added to Cinergy's 
direct and indirect ``aggregate investment,'' as defined, in all EWGs 
and FUCOs, would not at any time exceed 100% of Cinergy's 
``consolidated retained earnings,'' as defined (``100% 
authority'').<SUP>3 The current amount of Cinergy's ``aggregate 
investment,'' as defined, in EWGS and FUCOs (approximately $495 million 
as of January 31, 1997) represents approximately 50% of its 
``consolidated retained earnings,'' as defined (approximately $990 
million as of December 31, 1996). Increasing this limitation as 
Applicants propose would allow financing of additional investments in 
EWGs and FUCOs of approximately $495 million based on Cinergy's 
consolidated retained earnings as of December 31, 1996.
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    \3\ Applicants request that the 100% authority sought herein in 
connection with the Prior Orders be extended to apply as well to the 
use of proceeds from the issuance and sale of debt securities by 
Cinergy pursuant to the authority sought in the pending application 
in file no. 70-8993 and to another application Cinergy expects to 
file shortly seeking authority to issue and sell additional 
securities, including common stock and short-term notes, the 
proceeds of which would be used to invest in, among other things, 
EWGs and FUCOs.
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    Applicants state that Cinergy is committed to making additional 
investments in EWGs and FUCOs, primarily because (1) current 
projections indicate that for at least the next eight years Cinergy 
will not need to make any new equity investment in any of its utility 
subsidiaries; (2) acquisitions of EWGs and FUCOs give Cinergy the 
opportunity to continue to grow through reinvestment of retained 
earnings in an industry sector that Cinergy has decades of experience 
in, while at the same time diversifying overall asset risk; and (3) 
Cinergy has purposely invested in utility systems in foreign countries 
where deregulation of and competition in retail and wholesale 
electricity markets is more fully developed than in the United States 
in order to gain experience with deregulated markets that will enhance 
Cinergy's ability to make its core domestic utility operations more 
competitive and efficient in the future as the United States moves 
toward deregulation and increased competition. Applicants also describe 
comprehensive procedures that Cinergy has established to identify and 
address risks involved in EWG and FUCO investments.
    Cinergy states that the use of financing proceeds and guarantees to 
make investments in EWGs and FUCOs to the proposed increased level will 
not have a substantial adverse impact on the financial integrity of the 
Cinergy system or an adverse impact on any utility subsidiary of 
Cinergy or its customers or on the ability of the affected state 
commissions to protect such customers. Applicants also state that 
Cinergy will not seek recovery through higher rates to its utility 
subsidiaries' customers in order to compensate Cinergy for any possible 
losses that it may sustain on investments in EWGs and FUCOs or for any 
inadequate returns on such investments. In addition, Cinergy will not 
cause or permit its utility subsidiaries to mortgage, pledge or 
otherwise encumber or use as collateral any of their properties or 
assets in connection with any direct or indirect acquisition by Cinergy 
of any interest in any EWG or FUCO.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-8654 Filed 4-3-97; 8:45 am]
BILLING CODE 8010-01-M