[Federal Register Volume 60, Number 38 (Monday, February 27, 1995)]
[Notices]
[Pages 10617-10620]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4650]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26233]


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

February 17, 1995.
    Notice is hereby given that the following filing(s) has/have been 
made with the Commission pursuant to [[Page 10618]] provisions of the 
Act and rules promulgated thereunder. All interested persons are 
referred to the application(s) and/or declaration(s) for complete 
statements of the proposed transaction(s) summarized below. The 
application(s) and/or declaration(s) and any amendments thereto is/are 
available for public inspection through the Commission's Office of 
Public Reference.
    Interested persons wishing to comment or request a hearing on the 
application(s) and/or declaration(s) should submit their views in 
writing by March 15, 1995, 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 issues 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.

Eastern Utilities Associates, et al. (70-8523)

    Eastern Utilities Associates (``EUA''), P.O. Box 2333, Boston, 
Massachusetts 02107, a registered holding company, and its wholly owned 
subsidiary, EUA Cogenex Corporation (``Cogenex''), P.O. Box 2333, 
Boston, Massachusetts 02107, have filed an application-declaration 
pursuant to Sections 6(a), 7, 9(a), 10, 12(b) and 12(f) of the Act and 
Rules 43(a) and 45(a) promulgated thereunder.
    Cogenex requests authority to acquire a non-associate company, 
Highland Energy Group, Inc. (``Highland Energy''), in a transaction 
structured as a statutory merger of Highland Energy with a subsidiary 
of EUA to be established for the acquisition. Highland Energy is a 
national energy services company that has extensive experience in the 
industry of energy efficiency. Highland Energy designs, executes, 
finances, monitors, maintains, and guarantees energy savings programs 
for public consumers, such as schools and hospitals, and for private 
energy consumers, such as office buildings and businesses, under multi-
year contracts.
    To effect the acquisition, EUA would establish a subsidiary 
(``Newco'') which would acquire the shares of Highland Energy in 
exchange for shares of EUA. The initial authorized capitalization of 
would be 200,000 shares of common stock, $.01 par value, of which 
10,000 would be issued to EUA for $100. Following the establishment of 
Newco and its acquisition of the shares of Highland Energy, Newco would 
change its name to EUA Highland Corporation (``EUA Highland'') and 
Cogenex would acquire all the shares of EUA Highland from EUA for $100.
    The consideration for the acquisition by Newco of Highland Energy 
will be in EUA common shares to be paid at the time Highland Energy 
shares are transferred to Cogenex (``Closing'') plus a contingent earn-
out amount, to be paid in EUA common shares at a later time. Any 
amounts representing fractional shares will be paid in cash. The 
payment made at the Closing will be worth an estimated $4.2 million 
(``Closing Amount''), measured by the average closing market price over 
a 5-day period before the Closing.
    The earn-out amount to be paid later in EUA common shares will 
range from zero to $3.8 million, measured by the average closing market 
price over a 5-day period before the date the earn-out amount is due. 
The amount owed at that time will be based on the earnings performance 
of EUA Highland over the three year period following the Closing. 
Notwithstanding the foregoing, EUA's obligation to pay the earn-out 
amount in EUA shares is limited to the number of shares used to pay the 
Closing Amount. Any excess of the earn-out amount over the value, 
measured as described in this paragraph, of the number of shares issued 
by EUA to pay the earn-out amount will be payable in cash. Assuming an 
EUA common share price of $22.00 per share, up to 363,636 common share 
of EUA could be issued in the acquisition.
    Additionally, Cogenex requests authority through December 31, 1997 
to make investments in EUA Highland in any combination of capital 
contributions or short-term loans not to exceed a combined aggregate 
amount of $10 million. The terms of such short-term borrowing will be 
the same terms as those for funds borrowed by Cogenex from EUA under 
its system lines of credit. Further, Cogenex requests authorization to 
guarantee performance obligations of EUA Highland in connection with 
ongoing operations, in amounts that in aggregate will not exceed $10 
million.
New England Electric System, et al. (70-8555)

    New England Electric System (``NEES''), a registered holding 
company, and its wholly owned nonutility subsidiary company, New 
England Electric Resources, Inc. (``NEERI''), both of 25 Research 
Drive, Westborough, Massachusetts 01582, have filed an application-
declaration under sections 6(a), 7, 9, 10 and 12(b) of the Act and rule 
45 thereunder.
    By Commission orders dated September 4, 1992 (HCAR No. 25621) and 
April 1, 1994 (HCAR No. 26017), NEERI was authorized to provide 
electrical related and consulting services to nonaffiliates and NEES 
was authorized to provide financing to NEERI. By Commission order May 
25, 1994 (HCAR No. 26057), NEERI was authorized to invest in a company 
formed to develop, manufacture and market a low harmonic distortion 
uninterruptible power supply and NEES was authorized to provide 
additional financing to NEERI.
    NEERI now proposes to engage in preliminary research and 
development activities (``Development Activities'') in connection with 
potential investments in exempt wholesale generators and foreign 
utility companies. NEES proposes to provide up to $10 million to NEERI 
from time-to-time through December 31, 1997, through capital 
contributions and/or non-interest bearing subordinated loans, for 
NEERI's Development Activities.

Central and South West Corporation, et al. (70-8557)

    Central and South West Corporation (``CSW''), a registered holding 
company, its service company subsidiary, Central and South West 
Services, Inc. (``Services''), both located at 1616 Woodall Rodgers 
Freeway, Dallas, Texas 75202, CSW's public-utility subsidiary 
companies, Central Power and Light Company (``CPL''), 539 North 
Carancahua Street, Corpus Christi, Texas 78401-2802, Public Service 
Company of Oklahoma (``PSO''), 212 East Sixth Street, Tulsa, Oklahoma 
74119-1212, Southwestern Electric Power Company (``SWEPCO''), 428 
Travis Street, Shreveport, Louisiana 71156-0001, West Texas Utilities 
Company (``WTU''), 301 Cypress Street, Abilene, Texas 79601-5820, and a 
nonutility subsidiary company, Transok, Inc. (``Transok''), 2 West 
Sixth Street, Tulsa, Oklahoma 74119 (collectively, ``Subsidiaries'') 
have filed an application-declaration under Sections 6(a), 7, 9(a), 10, 
12(b) and 12(f) of the Act and Rules 43, 45 and 54 thereunder.
    CSW and its Subsidiaries propose to continue, through March 31, 
1997, their short-term borrowing program, which includes the sale of 
commercial paper by CSW to commercial paper dealers and financial 
institutions and the sale of short-term notes to banks and their trust 
[[Page 10619]] departments by CSW and the Subsidiaries (``External 
Program'') and the CSW System money pool (``Money Pool''), as 
previously authorized by orders dated March 31, 1993, September 28, 
1993, March 18, 1994, June 15, 1994, and February 1, 1995 (HCAR Nos. 
25777, 25897, 26007, 26066 and 26226, respectively) (``Prior Orders''). 
The External Program would be coordinated through the use of the Money 
Pool, whereby CSW and its Subsidiaries would make loans to, and the 
Subsidiaries would borrow from, the Money Pool. Loans to the 
Subsidiaries through the Money Pool will be made pursuant to open-
account advances or loans evidenced by notes.
    The External Program and the Money Pool would make funds available 
to the Subsidiaries for the interim financing of their capital 
expenditure programs and their other working capital needs, and to CSW 
to loan and, when approved by the Commission, to make capital 
contributions to any of the Subsidiaries and in both instances to repay 
previous borrowings incurred for such purposes. Funds for the Money 
Pool would be available from surplus funds from the treasuries of CSW 
and the Subsidiaries, from proceeds from the sale of commercial paper 
by CSW and bank borrowings by CSW and its Subsidiaries. Funds to be 
loaned to the Subsidiaries are obtained in the following order of 
priority: (1) Available surplus funds of the Subsidiaries will be used 
to satisfy the borrowing needs of other Subsidiaries before any funds 
of CSW are used; (2) available surplus funds in CSW's treasury; and (3) 
external borrowings by CSW from the sale of commercial paper and/or 
bank borrowings. External borrowings by CSW would not be made unless 
there were no surplus funds in the treasuries of the Subsidiaries or 
CSW sufficient to meet borrowing needs. However, no loan will be made 
by CSW or any Subsidiary if the borrowing company could borrow more 
cheaply directly from banks or through the sale of its own commercial 
paper. When more than one Subsidiary is borrowing, each borrowing 
Subsidiary will borrow pro rata from each fund source 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 Money Pool.
    The interest rate applicable on any day to the then outstanding 
loans through the Money Pool will be the composite weighted average 
daily effective cost incurred by CSW for short-term borrowings from 
external sources. If there are no borrowings outstanding then the rate 
would be the certificate of deposit yield equivalent of the 30-day 
Federal Reserve ``AA'' Industrial Commercial Paper Composite Rate 
(``Composite''), or if no composite is established for that day then 
the applicable rate will be the Composite for the next preceding day 
for which the Composite is established.
    The aggregate principal amounts of short-term borrowing outstanding 
at any one time requested by CSW and its Subsidiaries are: (1) CSW--
$1.2 billion; (2) CP&L--$300 million; (3) PSO--$125 million; (4) 
SWEPCO--$150 million; (5) WTU--$65 million; (6) Services--$110 million; 
and (7) Transok--$200 million. These amounts reflect an increase in 
borrowing levels from those authorized in the Prior Orders for: (1) CSW 
of $250 million to accommodate additional investments in CSW 
International, Inc., CSW Energy, Inc., CSW Communications and new Money 
Pool and short-term borrowing requirements; (2) PSO of $25 million to 
provide interim financing for additional capital expenditures and other 
temporary working capital needs; and (3) WTU of $15 million to provide 
interim financing for additional capital expenditures and other 
temporary working capital needs. The aggregate principal amount of 
outstanding borrowings for CSW and its Subsidiaries together will not 
exceed $1.2 billion.
    To provide funds for the Money Pool, CSW proposes to issue and sell 
commercial paper (``Commercial Paper''). The Commercial Paper will 
mature in 270 days or less and will be issued from time-to-time through 
March 31, 1997 to commercial paper dealers (``Dealers'') and certain 
financial institutions.
    The Commercial Paper issued to Dealers will be in the form of 
either physical or book-entry unsecured promissory notes. Such notes 
will be issued and sold by CSW directly to Dealers at a rate not to 
exceed the rate per annum prevailing at the time of issuance for 
commercial paper of comparable quality and maturity sold by issuers 
thereof to Dealers. No commission or fee will be payable in connection 
with the issuance and sale of the Commercial Paper. The purchasing 
dealer, however, will reoffer the notes at a rate less than the rate to 
the issuer and, as principal, will reoffer such notes in such a manner 
as not to constitute a public offering under the Securities Act of 
1933.
    Sales of Commercial Paper directly to financial institutions will 
be undertaken only if the resulting cost of money is equal to or less 
than that available from Dealers or banks. Terms for directly placed 
notes would be similar to those of dealer placed notes.
    CSW and its Subsidiaries further propose to borrow money from 
banks, from time-to-time through March 31, 1997, to the extent that the 
surplus funds of CSW and the Subsidiaries are insufficient to meet the 
Subsidiaries' requests for short-term loans and subject to the 
limitations on aggregate principal amounts, above. Such borrowing will 
not be made unless it would produce a lower cost of money than the 
issue of CSW's Commercial Paper and, in any event, they will not bear a 
rate of interest higher than the effective cost of money for unsecured 
prime commercial bank loans prevailing on the date of borrowing. The 
borrowings will be evidenced by promissory notes maturing no later than 
March 31, 1997 and will be subject to prepayment by the borrower, or 
under certain circumstances with consent of the lending bank, in whole 
at any time or in part from time-to-time, without penalty.
    Compensation arrangements under lines of credit with banks 
maintained by CSW and its Subsidiaries are on a balance or fee basis. 
In general, fees range from \1/10\ to \1/5\ of 1% per annum on the 
average unused portion of the commitment and balance arrangements 
require average balances of 3% of the amount of the commitment. CSW 
also proposes, from time-to-time through March 31, 1997, to borrow 
funds managed by the trust departments of banks if such borrowings 
result in a cost of money equal to or less than that available from the 
sale of commercial paper or other bank borrowings.
    Neither CSW nor the Subsidiaries will use the proceeds from the 
proposed borrowings to finance the acquisition of an ``exempt wholesale 
generator'' or ``foreign utility company,'' as respectively defined in 
Sections 32 and 33 of the Act, without further Commission 
authorization.

The Southern Company, et al. (70-8567)

    The Southern Company (``Southern''), 64 Perimeter Center East, 
Atlanta, Georgia 30346, a registered holding company, and its wholly 
owned subsidiary company, Southern Nuclear Operating Company, Inc. 
(``Southern Nuclear''), 40 Inverness Center Parkway, Birmingham, 
Alabama 35204, have filed an application-declaration under Sections 
6(a), 7, 9(a), 10 and 12(b) of the Act and Rules 45 and 54 thereunder.
    Southern Nuclear proposes to borrow, from time to time through 
March 31, 1998, from Southern or other lenders up to an aggregate 
principal amount of $10 million at any time outstanding. 
[[Page 10620]] Borrowings from Southern will have maturities not to 
exceed ten years and will accrue interest at a rate equal to the 
average effective interest cost of Southern's outstanding obligations 
for borrowed money on the first day of each month, or if no obligations 
are outstanding at the time, at a rate equal to the weekly average of 
the thirty-day certificate of deposit rate (secondary market) as 
reported in the Federal Reserve statistical release H.15 (519) for the 
next to the last complete business week of the preceding calendar 
month. However, this rate will not exceed the prime rate in effect at a 
nationally recognized bank to be designated by Southern. Loans obtained 
from lenders other than Southern will have maturities not to exceed ten 
years and will accrue interest at a rate not to exceed the prime rate 
plus 2% for variable rate loans and the prime rate at the time of 
borrowing plus 3% for fixed rate loans. Such loans may be secured or 
unsecured and may be guaranteed by Southern.
    Southern proposes through March 31, 1998, to make up to $5 million 
in open account advances to Southern Nuclear from time to time, which, 
at the option of Southern, may be converted into capital contributions 
or additional shares of common stock of Southern Nuclear. To the extent 
any such advances are converted to equity, the borrowing authority 
sought herein shall be reduced by the amount of the advances so 
converted, so that the total capitalization of Southern Nuclear does 
not exceed $11.6 million (including its present common equity of $1.6 
million). The rate of return on Southern Nuclear's common equity 
capital will not exceed the average of the most recent rates of return 
allowed by the Alabama Public Service Commission and the Georgia Public 
Service Commission.
    Southern Nuclear states that the funds will be used by Southern 
Nuclear in connection with its working capital needs, including the 
purchase of equipment and office furniture, leasehold improvements and 
loans to employees for purposes such as residential energy programs, 
purchases of computers and employee transfer expenses.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-4650 Filed 2-24-95; 8:45 am]
BILLING CODE 8010-01-M