[Federal Register Volume 66, Number 122 (Monday, June 25, 2001)]
[Notices]
[Pages 33722-33723]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-15848]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27420]


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

June 19, 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 July 13, 2001, to the Secretary, Securities and Exchange 
Commission, Washington, D.C. 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 July 13, 2001, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Cinergy Services, Inc., et al. (70-9879)

    Cinergy Services, Inc. (``Services''), a wholly owned service 
company subsidiary of Cinergy Corporation (``Cinergy''), a registered 
public utility holding company; The Cincinnati Gas & Electric Company 
(``CG&E''), an electric and gas utility subsidiary company of Cinergy; 
CG&E's utility subsidiaries, The Union Light, Heat and Power Company 
(``ULH&P''), and electric and gas utility company, Lawrenceburg Gas 
Company (``Lawrenceburg''), a gas utility company, and Miami Power 
Corporation (``Miami''), an electric utility company; CG&E's nonutility 
subsidiaries, KO Transmission Company (``KO''), and Tri-State 
Improvement Company (``Tri-State''), all located at 130 East Fourth 
Street, Cincinnati, Ohio 45202; and PSI Energy, Inc. (``PSA''), 1000 
East Main Street, Plainfield, Indiana 46168, an electric utility 
subsidiary company of Cinergy (``Applicants''), have filed an 
application-declaration under sections 6(a), 7, 9(a) and 10 of the Act 
and rule 54 under the Act.
    By order dated May 30, 1997 (HCAR No. 26723) (``1997 Order''), the 
Commission authorized Applicants, through December 31, 2002, to 
undertake a short-term debt financing program. Among other things, 
Applicants were authorized to continue to operate a system money pool 
(``Money Pool'') to provide short-term cash and working capital 
requirements for associate companies, other than Cinergy.\1\ The 1997 
Order authorized the utility subsidiaries, ULH&P, Lawrenceburg, Miami 
and PSI (``Utility Subsidiaries''),\2\ to make loans to and incur 
borrowings from each other under the terms of the Money Pool. The 1997 
Order also authorized Cinergy, CG&E, Services, KO and Tri-State to make 
loans to ULH&P, Lawrenceburg, Miami and PSI through the Money Pool. 
Additionally, ULH&P, Lawrenceburg, Miami and PSI were authorized to 
incur short-term bank borrowings from third

[[Page 33723]]

parties and PSI was also authorized to issue and sell commercial 
paper.\3\
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    \1\ By Commission order dated August 25, 1995 (HCAR No. 26362) 
(``Money Pool Order''), Cinergy was authorized to organize and 
operate the Money Pool. The Applicants do not propose to change any 
of the terms and conditions governing its operation from those 
approved in the Money Pool Order.
    \2\ While CG&E is a utility subsidiary and will be treated like 
the other utilities for all purposes under the Money Pool, it is 
exempt from the filing requirements of sections 6(a) and 7 under the 
Act, under rule 52(a), as discussed below.
    \3\ It is stated that the short-term borrowing authority 
requested in the application-declaration for ULH&P, Lawrenceburg, 
Miami and PSI (``Nonexempt Subsidiaries'') is not subject to state 
jurisdiction. Therefore, the filing exemption provided by rule 52(a) 
under the Act is not available to these companies. However, the 
Public Utilities Commission of Ohio does have authority over short-
term borrowings by CG&E, which, therefore, may issue short-term debt 
under the exemption provided by rule 52(a).
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    Under the 1997 Order, the maximum allowable outstanding principal 
amount of short-term borrowing from all available sources was $50 
million for ULH&P; $3 million for Lawrenceburg; $100,000 for Miami; and 
$400 million for PSI. Applicants state that these debt limitations 
established under the 1997 Order are no longer appropriate in light of 
current capital requirements. Therefore, Applicants propose to 
supersede the 1997 Order by replacing the short-term debt finance 
program and extending the authorization period through June 30, 2006.
    Specifically, the Nonexempt Subsidiaries propose to make loans to 
and incur borrowings from each other the Money Pool; Services, CG&E, KO 
and Tri-State and KO proposes to make loans to the Nonexempt 
Subsidiaries; the Nonexempt Subsidiaries propose to incur short-term 
borrowings from banks or other financial institutions; and PSI proposes 
to issue and sell commercial paper. As proposed, the maximum allowable 
outstanding principal amount of short-term borrowings from all 
available sources will not exceed $65 million for ULH&P; $5.5 million 
for Lawrenceburg; $100,000 for Miami; and $600 million for PSI.
    The Nonexempt Subsidiaries propose to borrow short-term funds from 
banks and other financial institutions through formal or informal 
credit facilities. Bank borrowings would be evidenced by promissory 
notes, each of which would be issued on or before June 30, 2006 and 
would mature no later than one year from the date of issuance, except 
in the case of borrowings by ULH&P, which would mature no later than 
two years from the date of issuance. The notes will bear interest at a 
rate no higher than the greater of: (1) 400 basis points over the 
comparable London interbank offered rate or (2) a rate that is 
consistent with similar securities of comparable credit quality and 
maturities issued by other companies. The Nonexempt Subsidiaries may be 
required to pay fees to the lender not to exceed 100 basis points per 
annum on the total commitment; and, except for borrowings on 
uncommitted credit lines, may be prepayable in whole or in part, with 
or without a premium.
    PSI proposes to issue and sell commercial paper at market rates 
(either on an interest bearing or discount basis) with varying 
maturities not to exceed 270 days. The commercial paper will be in the 
form of book-entry unsecured promissory notes with varying 
denominations of not less than $25,000 each. In commercial paper sales 
effected on a discount basis, the purchasing dealer may re-offer the 
commercial paper at a rate less that the rate to PSI. The discount rate 
to dealers will not exceed the maximum discount rate per annum 
prevailing at the date of issuance for commercial paper of comparable 
quality and the same maturity. The purchasing dealer will re-offer the 
commercial paper in such a manner as not to constitute a public 
offering within the meaning of the Securities Act of 1933.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-15848 Filed 6-22-01; 8:45 am]
BILLING CODE 8010-01-M