[Federal Register Volume 60, Number 67 (Friday, April 7, 1995)]
[Notices]
[Pages 17840-17844]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8542]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26264]


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

March 31, 1995.
    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 24, 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 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.

Indiana Michigan Power Company (70-6458)

    Indiana Michigan Power Company (``I&M''), One Summit Square, P.O. 
Box 60, Fort Wayne, Indiana 46801, an electric utility subsidiary of 
American [[Page 17841]] Electric Power Company, Inc. (``AEP''), a 
registered holding company, has filed a post-effective amendment to its 
application-declaration under Sections 9(a), 10 and 12(d) of the Act 
and Rule 44(b) thereunder.
    By order dated June 11, 1980 (HCAR No. 21618), I&M was authorized 
to dispose of and acquire certain pollution control systems 
(``Project'') at its Rockport Generating Station (``Plant''), under 
construction near the City of Rockport in Spencer County, Indiana 
(``City'') to comply with Indiana environmental control standards. 
I&M's disposition and acquisition was undertaken under an Agreement of 
Sale with the City, dated June 1, 1980, and in connection with the 
issuance by the City of pollution control revenue bonds in the amount 
of $40 million to finance the project (HCAR No. 21642, June 25, 1980). 
This represented a portion of I&M's then estimated cost of $150 million 
for its 50% obligation for the Project shared with AEP Generating 
Company.
    By order dated December 4, 1984 (HCAR No. 23514), the Commission 
authorized I&M to enter another Agreement of Sale with the City 
providing for the disposition and acquisition of the Project in 
connection with the issuance by the City of $110 million principal 
amount of pollution control bonds (``Series 1984A Bonds'') to finance 
the Project (HCAR No. 23528, December 12, 1984). By order dated August 
2, 1985 (HCAR No. 23781), the Commission authorized I&M to enter into a 
First Amendment to Agreement of Sale with the City providing for the 
issuance and sale of three additional series of pollution control bonds 
(``Series 1985 Bonds''), each in the principal amount of $50 million 
with a maturity of August 1, 2014. The second series of the Series 1985 
Bonds consists of adjustable rate bonds bearing interest at a rate 
which is adjusted every five years based upon an index and payable 
semiannually (``Adjustable Rate Bonds'').
    I&M now proposes to cause the City to issue and sell a series of 
refunding bonds (``Refunding Bonds'') in the aggregate principal amount 
of $50 million with an interest rate adjustment, as determined by I&M. 
The proceeds of Refunding Bonds will be used to redeem the Adjustable 
Rate Bonds. I&M could convert the interest rate on the Refunding Bonds 
between the various modes from changing daily to fixed for a term up to 
maturity. The Refunding Bonds will be issued under and secured by the 
Indenture and a sixth supplemental indenture and will mature at a date 
or dates not more than forty years from the date of issuance.
    In connection with the issuance of the Refunding Bonds, I&M may 
enter into one or more interest rate hedging arrangements, including an 
interest rate swap, cap, collar, or similar agreement (collectively 
``Hedging Facility'') with a bank or other financial institution 
(``Counterparty''). The Hedging Facility will be an interest rate 
conversion agreement designed to allow I&M to actively manage and limit 
its exposure to variable interest rates or to lower its overall 
borrowing cost on any fixed rate Refunding Bond. The Hedging Facility 
will set forth the specific terms upon which I&M will agree to pay the 
Counterparty payments and/or fees for limiting its exposure to interest 
rates or lowering its fixed rate borrowing cost, and the other terms 
and conditions of any rights or obligations thereunder. I&M may provide 
credit enhancement for the Refunding Bonds in the form of a letter of 
credit, surety bond or bond insurance and pay any related fees.
West Penn Power Company (70-6505)

    West Penn Power Company (``West Penn''), 800 Cabin Hill Drive, 
Greensburg, Pennsylvania 15601, an electric public-utility subsidiary 
company of Allegheny Power System, Inc., a registered holding company 
has filed a post-effective amendment to its declaration under Sections 
6(a) and 7 of the Act.
    By order dated May 3, 1985 (HCAR No. 23679), West Penn was 
authorized, among other things, to issue long-term promissory notes in 
connection with the issuance of pollution control revenue bonds series 
E (``Series E Bonds'') by the Washington County Development Authority 
(``County'') up to an aggregate principal amount of $18 million. The 
series E Bonds in the aggregate principal amount of $15.4 million were 
issued by the County, maturing April 1, 2014, along with West Penn's 
corresponding promissory note for $15.4 million. The proceeds of the 
Series E Bonds were applied by West Penn to the payment at maturity of 
the series D bonds and to the costs of issuance.
    Due to changes in interest rates, the County proposes to refund the 
Series E Bonds by issuing a new series of pollution control revenue 
bonds (``Series G Bonds''). The County proposes to issue $15.4 million 
aggregate principal amount of Series G Bonds maturing on the 
corresponding day in the year 2014 that they are issued in 1995. The 
proceeds from the sale of the Series G Bonds will be used to refund 
Series E Bonds. The Series G Bonds will be issued under a supplemental 
trust indenture with a corporate trustee (``Trustee''), approved by 
West Penn, and will be sold at such time, interest rate, maturity and 
price as approved by West Penn pursuant to market conditions.
    West Penn proposes to issue concurrently with the issuance of the 
Series G Bonds, its non-negotiable Pollution Control Note (``Note''), 
at any time on or before December 31, 1997, with terms and conditions 
corresponding to the Series G Bonds in respect to principal amount, 
interest rates and redemption provisions and having installments of 
principal corresponding to any mandatory sinking fund payments and 
stated maturities. Market conditions prevailing at the time of the 
offering may warrant the issuance of the Series G Bonds with floating 
interest rates during all or a portion of the stated life of the Series 
G Bonds. However, West Penn does not anticipate that to be the case. 
West Penn proposes that should it determine to use a floating interest 
rate, it will notify the Commission.
    The Note will be secured by a second lien on the equipment and 
facilities at West Penn's Mitchell Power Station in Washington County 
(``Facilities'') and certain other properties, pursuant to the Mortgage 
and Security Agreement delivered by West Penn to the Trustee creating a 
mortgage security interest in the Facilities and certain other 
property. Payment on the Note will be made to the Trustee under and 
indenture and applied by the Trustee to pay the maturing principal and 
redemption price of and interest and other costs on the Series G Bonds 
as they become due. West Penn proposes to pay any Trustees' fees or 
other expenses incurred by the County.

American Electric Power Company, Inc., et al. (70-7022)

    American Electric Power Company, Inc. (``AEP''), a registered 
holding company, and AEP Generating Company (``Generating''), an 
electric public-utility subsidiary of AEP, both of 1 Riverside Plaza, 
Columbus, Ohio 43215, have filed a post-effective amendment to their 
application-declaration filed under sections 9(a), 10, 12(b) and 12(d) 
of the Act and rules 44 and 45 thereunder.
    By order dated August 17, 1984 (HCAR No. 23399), Generating 
acquired a \1/2\ undivided interest in the Rockport Generating Station 
(``Plant'') with Indiana & Michigan Electric Company, now Indiana 
Michigan Power Company (``I&M''), also a subsidiary of AEP, including 
responsibility for 50% of the costs associated with acquiring certain 
[[Page 17842]] air and water pollution control devices (``Project'').
    By order dated October 4, 1984 (HCAR No. 23445) (``October 1984 
Order''), Generating was authorized to enter into an Agreement of Sale 
(``Agreement'') with the City of Rockport, Indiana (``City'') providing 
for the construction and installation of the Project by the City, and 
the issuance by the City of pollution control revenue bonds (``Series 
1984 A Bonds'') to finance Generating's share of the Project. The 
October 1984 Order authorized the issuance of the Series 1984 A Bonds 
in a principal amount of $150 million.
    The October 1984 Order contemplated that the proceeds of the sale 
of the Series 1984 A Bonds would be deposited by the City with Lincoln 
National Bank and Trust Company of Fort Wayne, as trustee under an 
Indenture of Trust (``Indenture'') dated as of October 1, 1984 between 
the City and Lincoln National Bank & Trust Company (now Norwest Bank 
Fort Wayne, N.A.), as trustee (``Trustee'') between the City and such 
Trustee, pursuant to which the Series 1984 A Bonds are to be issued and 
secured. The October 1984 Order also contemplated that such proceeds 
would be applied to payment of the cost of construction of the project. 
The Agreement also provided for the sale of the Project to Generating, 
the payment by Generating of the purchase price of the Project, and the 
assignment and pledge to the Trustee of the City's interest in, and of 
the monies receivable by the City under the Agreement.
    The Agreement also provided that each installment of the purchase 
price for the Project payable by Generating would be in such amount 
(together with other monies held by the Trustee under the Indenture for 
that purpose) as would enable the City to pay, when due and payable, 
(i) the interest of the Series 1984 A Bonds, any additional bonds and 
any refunding bonds, (ii) the principal amount of the Series 1984 A 
Bonds, any additional bonds and any refunding bonds payable at the time 
of their respective stated maturities and (iii) amounts, including any 
accrued interest, payable in connection with any mandatory redemption 
of the Series 1984 A Bonds, any additional Bonds or any refunding 
bonds. In addition, the October 1984 Order reserved jurisdiction ``with 
respect to the fees and commissions to be incurred by [Generating] and 
AEP in connection with this transaction, and the terms of sale under 
the Agreement.''
    By order dated September 6, 1985 (HCAR No. 23821) (``1985 Order''), 
Generating was authorized to enter into a First Amendment to Agreement 
of Sale (``1985 Agreement'') with the City providing for the issuance 
and sale of three additional series of pollution control bonds 
(collectively, ``Series 1985 Bonds''), each in the principal amount of 
$55 million with a maturity of September 1, 2014. One series of the 
Series 1985 Bonds was issued with a variable interest rate (``Variable 
Rate Bonds'') the rate of which was based upon an index and not to 
exceed 12% per annum, determined weekly and payable monthly. A second 
series of the Series 1985 Bonds was issued with the interest payable 
semi-annually at a rate which will be adjusted every five years based 
upon an index (``Adjustable Bonds''). A third series of the Series 1985 
Bonds was issued with the interest rate fixed at 9\3/8\% per annum, 
payable semi-annually (``Fixed Rate Bonds''), and these Fixed Rate 
Bonds were issued subject to optional redemption following an initial 
period not to exceed ten years. The proceeds of the Series 1985 Bonds 
were used to cover a portion of the cost of construction of the Project 
and to refund the outstanding short-term Series 1984 A Bonds in the 
principal amount of $150 million. The 1985 Order included no 
reservation of jurisdiction.
    AEP and Generating now propose that Generating enter into a Second 
Amendment to Agreement of Sale (``1995 Agreement'') with the City 
whereby the City will issue and sell one or more additional series of 
Pollution Control Revenue Refunding Bonds (``Refunding Bonds'') in the 
aggregate principal amount of up to $110 million with an interest rate 
adjustment (as determined by Generating). Generating could convert the 
interest rate on the Refunding Bonds between the various modes from 
changing daily to fixed for a term up to maturity. It is stated that 
the proceeds of such Refunding Bonds will be used to redeem the Fixed 
Rate Bonds and the Adjustable Bonds.
    In connection with the issuance of the Refunding Bonds, Generating 
proposes to enter into one ore more interest rate hedging arrangements 
(including an interest rate swap, cap, collar or similar agreement) 
(``Hedging Facility'') with a bank or other financial institution 
(``Counterparty''). The Hedging Facility will be an interest rate 
conversion agreement designed to allow Generating to actively manage 
and limit its exposure to variable interest rates or to lower its 
overall borrowing cost on any fixed rate Refunding Bond. The Hedging 
Facility will set forth the specific terms upon which Generating will 
agree to pay the Counterparty payments and fees for limiting its 
exposure to interest rates or lowering its fixed rate borrowing cost, 
and the other terms and conditions of any rights or obligations 
thereunder. The terms of each Hedging Facility would be negotiated by 
Generating with the respective Counterparty and would be the most 
favorable terms that can be negotiated by Generating.
    The Refunding Bonds will be issued pursuant to the Indenture 
between the City and the Trustee (now Norwest Bank Fort Wayne, N.A.), 
as supplemented by a Fifth Supplemental Indenture of Trust between the 
City and the Trustee (``Supplemental Indenture'') and the 1995 
Agreement. Pursuant to the Indenture and the Fifth Supplemental 
Indenture, the proceeds of the sale of the Refunding Bonds will be 
deposited with the Trustee and applied by the Trustee, together with 
other funds supplied by Generating, to the redemption of: (i) The Fixed 
Rate Bonds at a price of 102% of the principal amount thereof; and (ii) 
the Adjustable Bonds at a price equal to their principal amount.
    While Generating will not be a party to the underwriting 
arrangements for the Refunding Bonds, the 1995 Agreement provides that 
the Refunding Bonds shall have such terms as shall be specified by 
Generating. Generating understands that interest on the Refunding Bonds 
will be exempt from Federal income taxation under the provisions of 
section 103 of the Internal Revenue Code of 1986, as amended (except 
for interest on any Refunding Bond during a period in which it is held 
by a person who is a substantial user of the Project or a related 
person).
    It is expected that the Refunding Bonds will mature at a date or 
dates not more than 40 years from the date of their issuance. The 
Refunding Bonds may be subject to mandatory or optional redemption 
under circumstances and terms specified at the time of pricing or 
change in interest rate. In addition, the Refunding Bonds may not, if 
it is deemed advisable, be redeemable at the option of the city in 
whole or in part at ant time for a period to be determined at the time 
of pricing or change in interest rate of the Refunding Bonds. It is 
stated that no Refunding Bond may bear interest at an initial interest 
rate higher than 9%.
    It is stated that no series of Refunding Bonds will be issued at 
rates in excess of those generally obtained at the time of pricing for 
sales of substantially similar tax-exempt bonds (having the same 
maturity, issued by entities of comparable credit quality and having 
similar terms, conditions and features). [[Page 17843]] 
    In connection with an adjustment in the interest rate, the 
Refunding Bonds may be tendered, or may be deemed to be tendered, to 
the Trustee, by the owners thereof. Generating intends to remarket any 
Refunding Bonds so tendered through a remarketing agent, and may have a 
Liquidity Provider back up Generating's obligations. The Refunding 
Bonds will be subject to redemption at the direction of Generating 
under certain circumstances.
    AEP and Generating also propose that Generating provide some form 
of credit enhancement for the Refunding Bonds, a letter of credit, 
surety bond or bond insurance, and Generating may pay a fee in 
connection therewith. In addition, Generating may provide for a 
Liquidity Provider for interest payments, remarketing, redemption or 
maturity of the Refunding Bonds. Any letter of credit would not exceed 
$130 million.
    The type of credit enhancement may change while the Refunding Bonds 
are outstanding. Unreimbursed drawings under the letter of credit would 
bear interest at not more than 2% above the bank's prime rate. 
Generating may pay an annual or up-front fee for the credit enhancement 
which would not exceed 1.25% annually of the face amount.
    In addition, AEP and Generating propose that AEP guarantee payment 
of the principal of, premium, if any, and interest on the Refunding 
Bonds pursuant to a guaranty agreement (``Guaranty'') to be executed 
and delivered to the Trustee and the City. Under a Guaranty, AEP would 
unconditionally guarantee the obligations of Generating under the 1995 
Agreement.
    The Refunding Bonds could be payable from funds drawn under an 
irrevocable letter of credit, bond insurance policy, Standby Bond 
Purchase Agreement or other comparable obligation of a third party.
    Generating will not agree to the issuance of any Refunding Bond by 
the City if: (i) The stated maturity of any such Bond shall be more 
than 40 years; (ii) the discount from the initial public offering price 
of any such Bond shall exceed 5% of the principal amount thereof; or 
(iii) the initial public offering price shall be less than 95% of the 
principal amount thereof. Generating will not enter into the proposed 
refunding transaction unless the estimated present value savings 
derived from the net difference between interest payments on a new 
issue of comparable securities and on the securities to be refunded is, 
on a after tax basis, greater than the present value of all redemption 
and issuing costs, assuming an appropriate discount rate. The discount 
rate used shall be the estimated after-tax interest rate on the 
Refunding Bonds to be issued.
    AEP and Generating state that the transactions described above will 
be consummated no later than December 31, 1996.

EUA Energy Investment Corporation (70-8585)

    EUA Energy Investment Corporation (``EEIC''), P.O. Box 2333, 
Boston, Massachusetts, 02107, a wholly owned subsidiary of Eastern 
Utilities Associates (``EUA''), a registered holding company, has filed 
an application-declaration under sections 6(a), 7, 9(a), 10, 12 and 
13(b) of the Act and rules 43, 45, 87, 90 and 91 thereunder.
    EEIC proposes to incorporate a Massachusetts business corporation 
(``EEIC Subsidiary'') to be the general partner of a proposed joint 
venture limited partnership to be formed under Massachusetts law 
(``Home & Family''). EEIC Subsidiary, through Home & Family, intends to 
develop and commercialize, a home environmental audit and environmental 
remediation business including, but not limited to, home environmental 
testing of soil, air, water and substances found in or about the home 
and the remediation of home environmental problems (the ``Business 
Opportunity'').
    EEIC, together with Home & Family Limited Partnership, a 
Massachusetts limited partnership (``H&F LP''), is developing certain 
trademarks, packaging designs, marketing materials, copyrighted 
materials, business plans and other materials relating to the Business 
Opportunity (``Proprietary Materials''). EEIC owns all right, title and 
interest in and to the Proprietary Materials. EEIC proposes to 
contribute such Proprietary Materials to EEIC Subsidiary in exchange 
for capital stock in EEIC Subsidiary. No other person or entity will 
own stock in EEIC Subsidiary.
    Upon (i) EEIC's receipt of Commission authorization, and (ii) 
EEIC`s determination to proceed with the Business Opportunity following 
successful completion of a research, development and test marketing 
pilot program, H&F LP will contribute the name ``Home & Family,'' its 
intellectual property and other proprietary materials to Home & Family 
in exchange for a limited partner interest therein. EEIC, proposes to 
then transfer the Proprietary Materials, with an agreed upon value of 
$2,100,000, to Home & Family and to provide certain financing 
(described below) to Home & Family in exchange for a general partner 
interest therein.
    The initial authorized capitalization of EEIC Subsidiary shall be 
200,000 shares of common stock, $.01 par value per share, and EEIC will 
be issued a portion of such common stock in exchange for its 
contribution to EEIC Subsidiary of the Proprietary Materials. 
References to EEIC hereinafter shall mean EEIC or EEIC Subsidiary, 
where the context so allows.
    EEIC proposes to make additional capital contributions to Home & 
Family in an aggregate amount of up to $3,900,000 from time to time 
through December 31, 1997, in exchange for which EEIC's capital 
interest in Home & Family will increase correspondingly. In addition, 
from time to time through December 31, 1997, EEIC also proposes, at its 
discretion, to provide Home & Family with a working capital line of 
credit with a maximum availability of $3,000,000, at an annual interest 
rate equal to the base lending rate of The First National Bank of 
Boston, N.A., plus 2 percent, for a term of three years. All such loans 
and advances will be secured by all Home & Family assets, and will be 
used by Home & Family exclusively for its working capital needs.
    EEIC also proposes that any activities that it needs to perform 
under certain agreements relating to the proposed transaction would be 
accomplished by employees of EUA Service Corporation (``EUASC''). EUASC 
may provide management services including but not limited to financial, 
accounting, environmental, data processing and records management 
services, as appropriate, to Home & Family. All such services would be 
rendered at cost pursuant to the standard service contract entered into 
between EUASC and the other EUA system companies. No employees of the 
EUA system's retail electric utilities will be assigned to any 
activities involving Home & Family.

The East Ohio Gas Company (70-8601)

    The East Ohio Gas Company (``East Ohio''), 1717 East Ninth Street, 
Cleveland, Ohio 44101-0759, a gas public-utility subsidiary of 
Consolidated Natural Gas Company (``CNG''), 625 Liberty Avenue, 
Pittsburgh, Pennsylvania 15222-3199, a registered holding company, and 
CNG have filed a declaration under section 12(d) of the Act and rule 44 
thereunder.
    East Ohio and CNG propose that East Ohio sell certain utility 
assets (``Assets''), including 378 production wells, connecting lines, 
leases, access rights, contract rights and records associated with the 
wells, to Belden & Blake Corporation (``Belden & Blake'') for $6.5 
million. Belden & Blake is a [[Page 17844]] nonassociated oil and gas 
drilling and exploration company.
    East Ohio and CNG state that the sale of the Assets is part of East 
Ohio's contribution towards the current effort of the CNG system to cut 
costs and increase profits. East Ohio and CNG additionally state that, 
as utility assets, the Assets provide less than \1/2\ of 1% of East 
Ohio's total gas supply. Furthermore, by selling the Assets, East Ohio 
will save about $900,000 a year in maintenance costs.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-8542 Filed 4-6-95; 8:45 am]
BILLING CODE 8010-01-M