23746 Federal Register / Vol. 66, No. 90 / Wednesday, May 9, 2001 / Notices

1Applicants state that the acquisition of GEM was

exempt from section 9(a) of the Act because GEM

is an energy-related company under rule 58 of the

Act.

1Based on the number of issued and outstanding

Common Shares on December 31, 2000 this

restriction will permit 719,181 Common Shares to

be issued to fund purchases by Plan participants in

2001 and 7,191,818 Common Shares over the ten

year life of the Plan. The issuance each year is

subject to appropriate adjustment in the event of

recapitalizations, mergers, splits or similar

corporate transactions.

Company, LLC (‘‘AE Supply’’), R.R. 12,

P.O. Box 1000, Roseytown Road,

Greensburg, Pennsylvania 15601, a

utility subsidiary of Allegheny,

(collectively, ‘‘Applicants’’) have filed a

declaration under sections 6(a), 7, and

12(d) of the Act and rules 44 and 54

under the Act.

In accordance with an Asset

Contribution and Purchase Agreement

dated January 8, 2001 (‘‘Agreement’’),

AE Supply and Allegheny Energy

Global Markets, LLC, AE Supply’s

newly formed rule 58 company,

acquired Global Energy Markets

(‘‘GEM’’), the energy commodity

marketing and trading unit of Merrill

Lynch & Co., Inc. (‘‘Merrill Lynch’’), on

March 16, 2001 (‘‘Closing Date’’).1 The

purchase price for GEM was $490

million, paid on the Closing Date, and

2% of the membership interests in AE

Supply (‘‘Membership Interests’’). The

sale of the Membership Interests is

contingent upon the approval of the

Commission. The Agreement further

provides that if the Commission does

not approve the sale of the Membership

Interests, Allegheny, AE Supply, and

Allegheny Energy Global Markets, LLC,

are obligated to make an additional cash

payment to Merrill Lynch. Accordingly,

Applicants request authorization to sell

the Membership Interests to Merrill

Lynch.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary

[FR Doc. 01–11594 Filed 5–8–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 35–27392]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

May 3, 2001.

Notice is hereby given that the

following filing(s) has/have been made

with the Commission pursuant to

provisions of the Act and rules

promulgated under the Act. All

interested persons are referred to the

application(s) and/or declaration(s) for

complete statements of the proposed

transaction(s) summarized below. The

application(s) and/or declaration(s) and

any amendment(s) is/are available for

public inspection through the

Commission’s Branch of Public

Reference.

Interested persons wishing to

comment or request a hearing on the

application(s) and/or declaration(s)

should submit their views in writing by

May 28, 2001, to the Secretary,

Securities and Exchange Commission,

Washington, DC 20549–0609, and serve

a copy on the relevant applicant(s) and/

or declarant(s) at the address(es)

specified below. Proof of service (by

affidavit or, in the case of an attorney at

law, by certificate) should be filed with

the request. Any request for hearing

should identify specifically the issues of

facts or law that are disputed. A person

who so requests will be notified of any

hearing, if ordered, and will receive a

copy of any notice or order issued in the

matter. After May 28, 2001, the

application(s) and/or declaration(s), as

filed or as amended, may be granted

and/or permitted to become effective.

Northeast Utilities, et al. (70–9883)

Notice of Proposal To Issue Securities;

Order Authorizing Solicitation of

Proxies

Northeast Utilities (‘‘NU’’), 174 Brush

Hill Avenue, West Springfield,

Massachusetts 01090–0010, a registered

holding company, has filed a

declaration under sections 6(a), 7, and

12(e) of the Act and Rules 54, 62, and

65 under the Act.

NU seeks the Commission’s approval

for: (1) The solicitation of proxies from

NU’s common shareholders seeking

adoption of the Northeast Utilities

Employee Share Purchase Plan (‘‘Plan’’),

which contemplates the issuance of

NU’s common shares, $5.00 par value

(‘‘Common Shares’’) and (2) the

issuance each year, during the ten year

term of the Plan, of NU Common Shares

(either authorized, but previously

unissued shares or reacquired shares)

not to exceed one-half percent (0.5%) of

the number of shares outstanding as of

the end of the preceding year 1 and

derivatives of such shares.

On April 9, 2001, NU’s Board of

Trustees (‘‘Board’’) adopted an

Employee Share Purchase Plan (‘‘Plan’’).

This Plan replaces an earlier Employee

Share Purchase Plan adopted in 1 998

by order of the Commission dated April

29, 1998 (HCAR No. 26865) (‘‘Prior 1998

Plan’’), which NU discontinued in

December of 2000 in anticipation of the

merger with Consolidated Edison, Inc.

The Prior 1998 Plan allowed officers to

participate, but only as optional

participants, which in effect required

that the officers purchase the share at

100% rather than 85% of the market

value as of a designated date determined

by the Plan’s committee. Under the

current Plan officers may participate

under the same terms as other eligible

participants. NU proposes to submit the

Plan to its shareholders for approval at

NU’s Annual Meeting of Shareholders to

be held on June 28, 2001. If approved

by NU’s shareholders, the Plan will be

effective as of August 1, 2001. The Plan

will terminate ten years from its

effective date, unless terminated earlier

by the Board.

The Plan will be administered by the

Compensation Committee of NU’s Board

of Trustees or by a delegate

(‘‘Committee’’). The Plan is intended to

be an employee stock purchase plan

under Section 423 of the Internal

Revenue Code of 1986, as amended.

Through programs established by the

Committee from time to time eligible

employees may purchase newly issued

Common Shares through payroll

deduction. The purchase price will be

determined by the Committee and will

be between 85 percent and 100 percent

of the lower of closing market value on

the first and last days of the purchase

period. Shares purchased under the

Employee Share Purchase Plan may not

be transferred for six months following

the purchase date.

Additionally, NU requests authority

to solicit proxies approving the Plan

from the holders of NU Common Shares,

for use at the Annual Meeting of

Shareholders to be held June 28, 2001.

It is anticipated that solicitation

materials will be mailed to shareholders

commencing on or about May 11, 2001.

NU proposes to mail the notice of

meeting, statement relating to the Plan,

proxy statement and proxy to its

shareholders for the annual meeting,

and has filed its proxy solicitation

material relating to the Plan. NU

requests that an order authorizing the

solicitation of proxies be issued as soon

as practicable under rule 62(d). It

appears to the Commission that NU’s

declaration as it pertains to the

proposed solicitation of proxies should

be permitted to become effective

immediately under rule 62(d).

Rule 54 states that the Commission

will not consider the effect of the

capitalization or earnings of any

subsidiary which is an exempt

wholesale generator (‘‘EWG’’) or foreign

utility company (‘‘FUCO’’) upon the

Federal Register / Vol. 66, No. 90 / Wednesday, May 9, 2001 / Notices 23747

registered holding company system if

rule 53(a), (b), and (c) are met. NU

states, for purposes of rule 54, that it

meets all of the conditions of rule 53

under the Act, except for rule 53(a)(1).

By order dated March 7, 2000 (HCAR

No. 27148)(‘‘EWG Investment Order’’),

the Commission determined that NU’s

financing of its investment in Northeast

Generation Company (‘‘NGC’’), NU’s

only current EWG or FUCO investment,

in an amount not to exceed 83% of its

‘‘average consolidated retained

earnings,’’ would not have the adverse

effects set forth in rule 53(c) based on

the representations NU set forth at that

time. As of December 31, 2000, NU’s

‘‘aggregate investment,’’ as defined in

rule 53(a)(1) (‘‘Aggregate Investment’’),

in EWGs and FUCOs was approximately

$469.5 million, or about 76.1% of NU’s

consolidated retained earnings (‘‘CRE’’).

For the four quarters ending December

31, 2000, NU’s CRE was $617.3 million.

The proposed transactions are subject

to rule 54. Under rule 54, because NU

does not meet rule 53(a)(1), the

Commission must consider the effect of

the capitalization and earnings of EWGs

and FUCOs. Applicants state the

proposed transactions, considered in

conjunction with the effect of the

capitalization and earnings of NU’s

EWGs and FUCOs, would not have a

material adverse effect on the financial

integrity of the NU system, or an

adverse impact on NU’s public-utility

subsidiaries, their customers, or the

ability of state commissions to protect

such public-utility customers. NU’s

consolidated capitalization ratio and its

retained earnings, both have improved

since the date of the EWG Investment

Order. NU’s consolidated capitalization

consists of 36.1% common equity and

63.9% debt (including long- and shortterm debt, preferred stock, capital leases

and guarantees). NU’s consolidated

retained earnings have decreased from

$581.8 million as of the December 31,

1999 to 495.9 million as of December

31, 2000. NU’s interest in NGC has

made a positive contribution to earnings

in that time by contributing $26.4

million to NU’s retained earnings with

revenues of $108.5 million and net

income of $26.4 million. The

capitalization and earnings attributable

to NU’s investments in EWGs and

FUCOs has not had an adverse impact

on NU’s financial integrity.

Fees, commissions, and expenses to

be incurred in connection with the

solicitation of proxies are estimated not

to exceed $70,000. NU states that no

state or federal commission, other than

this Commission, has jurisdiction over

the proposed transactions.

It Is Ordered, under rule 62 under the

Act, that the declaration to the extent

that it relates to the proposed

solicitation of proxies is permitted to

become effective immediately, subject to

the terms and conditions contained in

rule 24 under the Act.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–11639 Filed 5–8–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 35–27394]

Filings Under the Public Utility Holding

Company Act of 1935, as amended

(‘‘Act’’

May 4, 2001.

Notice is hereby given that the

following filing(s) has/have been made

with the Commission pursuant to

provisions of the Act and rules

promulgated under the Act. All

interested persons are referred to the

application(s) and/or declaration(s) for

complete statements of the proposed

transaction(s) summarized below. The

application(s) and/or declaration(s) and

any amendment(s) is/are available for

public inspection through the

Commission’s Branch of Public

Reference.

Interested persons wishing to

comment or request a hearing on the

application(s) and/or declaration(s)

should submit their views in writing by

May 24, 2001, to the Secretary,

Securities and Exchange Commission,

Washington, DC 20549–0609, and serve

a copy on the relevant applicant(s) and/

or declarant(s) at the address(es)

specified below. Proof of service (by

affidavit or, in the case of an attorney at

law, by certificate) should be filed with

the request. Any request for hearing

should identify specifically the issues of

facts or law that are disputed. A person

who so requests will be notified of any

hearing, if ordered, and will receive a

copy of any notice or order issued in the

matter. After May 24, 2001, the

application(s) and/or declaration(s), as

filed or as amended, may be granted

and/or permitted to become effective.

Northeast Utilities (70–9853

Northeast Utilities (‘‘NU’’), 174 Brush

Hill Road, West Springfield,

Massachusetts 01089, a registered

holding company, has filed a

declaration under sections 6(a), 7, and

12(b) and rules 45 and 54 under the Act.

By prior Commission orders dated

November 9, 1988, December 20, 1990,

December 3, 1992, and December 29,

1994 (HCAR Nos. 24742, 25219, 25692,

and 26208, respectively) (collectively,

‘‘Prior Orders’’), Holyoke Water Power

Company (‘‘HWP’’), a utility subsidiary

of NU, was authorized, among other

things, to issue and sell notes, in an

aggregate outstanding amount not

exceeding $38.3 million, in connection

with the issuance and sale of pollution

control revenue bonds (‘‘Bonds’’) and to

enter into a series of related

reimbursement agreements

(‘‘Reimbursement Agreements’’) with

various banking institutions (‘‘Banks’’)

in exchange for the issuance of

irrevocable letters of credit (‘‘LOCs’’). In

addition, in connection with each of the

Reimbursement Agreements, NU

entered into equity support agreements

on behalf of HWP. These agreements

were in the nature of contractual

undertakings on the part of NU to

maintain specified ownership levels in

HWP and to cause HWP to maintain a

minimum common equity to

capitalization ratio.

In accordance with provisions in each

of the Reimbursement Agreements,

HWP agreed, among other things, that,

so long as the LOCs were outstanding,

HWP would not allow the ratio of its

common equity to total capitalization to

fall below 30%. As of December 31,

2000, HWP recognized a reduction in

the carrying value of certain of its assets.

Accordingly, its common equity ratio

failed to meet certain consolidated

common equity maintenance covenants

contained in each of the Reimbursement

Agreements. The Banks have consented

to the decline in HWP’s common equity

ratio provided that NU provide further

assurances that HWP will meet its

obligations under the Reimbursement

Agreements.

Consequently, NU now proposes,

through June 30, 2004 (‘‘Authorization

Period’’) to issue guarantees and other

forms of credit support (collectively,

‘‘Guarantees’’), in an aggregate amount

not to exceed $45 million, in order to

guarantee HWP’s obligations under the

Reimbursement Agreements. NU states

that the Guarantees may take the form

of NU agreeing to undertake

reimbursement obligations or to assume

liabilities or other obligations with

respect to the LOCs. NU also states that

the Guarantees will be without recourse

to any other operating company in the

NU system.