[Federal Register Volume 61, Number 107 (Monday, June 3, 1996)]
[Notices]
[Pages 27940-27942]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13803]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-26521]


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

May 24, 1996.
    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 June 17, 1996, to the Secretary, Securities and Exchange 
Commission, Washington, DC 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.

GPU Generation Corporation, et al. (70-8289)

    GPU Generation Corporation, 1001 Broad Street, Johnstown, 
Pennsylvania 15907 (``GENCO''), a non-utility subsidiary of General 
Public Utilities Corporation (``GPU''), a registered holding company, 
and GPU's electric utility subsidiary companies, Jersey Central Power & 
Light Company, 300 Madison Avenue, Morristown, New Jersey 07962 
(``JCP&L''), Metropolitan Edison Company, P.O. Box 16001, Reading, 
Pennsylvania 19640 (``Met-Ed''), and Pennsylvania Electric Company, 
P.O. Box 16001, Reading, Pennsylvania 19640 (``Penelec''); (together 
with JCP&L and Met-Ed, ``Operating Companies''), have filed a post-
effective amendment to their application under sections 9(a) and 10 of 
the Act.
    By order dated December 15, 1993 (HCAR No. 25948) (``Order''), the 
Commission, among other things, authorized the Operating Companies to 
enter into, from time-to-time, operation and maintenance agreements 
(``O&M Agreements'') with nonutility generation facilities (``NUGs''): 
(1) with which an Operating Company has entered into a power purchase 
agreement; or (2) which are otherwise located within the service 
territory of one of the Operating Companies or that of an adjacent 
utility. The NUGs are ``qualifying facilities'' under the Public 
Utility Regulatory Policies Act of 1978 and the regulations thereunder 
of the Federal Energy Regulatory Commission or, more recently, ``exempt 
wholesale generators'', as defined in section 32 of the Act.
    The fees and other terms and conditions of each O&M Agreement were 
to be as negotiated between the Operating Company and the NUG facility 
owner, and were expected to be market-based. In the Order, the 
Commission reserved jurisdiction pending completion of the record over 
the performance by the Operating Companies of the operation and 
maintenance services (``O&M Services'') to be performed under the O&M 
Agreements for NUGs located: (1) In New Jersey; or (2) within the 
service territories of the Operating Companies or adjacent service 
territories, but with which an Operating Company does not have a power 
purchase agreement.\1\
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    \1\ Since GENCO is not subject to the jurisdiction of the New 
Jersey Board of Public Utilities or the Pennsylvania Public 
Utilities Commission, the reservation of jurisdiction contained in 
the Order need not be carried forward with respect to any aspects of 
the proposed transactions insofar as GENCO is concerned.

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[[Page 27941]]

    Subsequently, by order dated January 26, 1996 (HCAR No. 26463), the 
Commission, among other things, authorized GPU to organize and acquire 
all of the capital stock of GENCO. GENCO has been organized to operate, 
maintain and rehabilitate the non-nuclear generation facilities owned 
and/or operated by the Operating Companies pursuant to service 
contracts and/or an operating agreement. GENCO will also design, 
construct, start up and test any new non-nuclear generation facilities 
that the Operating Companies may require in the future, and will be 
responsible for budgeting, accounting, and other data collection, and 
for customary generation support activities, such as procurement of 
materials, supplies, outside services, fuel and fuel supplies as 
requested.
    Inasmuch as the operating and maintenance functions for the 
nonnuclear generation facilities of the GPU System have now been 
consolidated in GENCO, the O&M Services to be performed under the O&M 
Agreements contemplated in the Order must now be performed by or 
through GENCO. Various management and other non-bargaining unit 
employees formerly employed by the Operating Companies who are now 
employees of GENCO have expertise regarding the performance of 
particular O&M Services contemplated by the Order, such as pre-start-up 
service, operation staff development and long-term operation, 
maintenance and administration.
    The O&M Services to be provided to NUGs will consist of one or more 
of the following: (1) pre-start-up service; (2) operation staff 
development; and (3) long-term operation, maintenance and 
administration. GENCO expects that O&M Services for NUGs would be 
undertaken by available personnel and would involve the use of only a 
limited amount of such resources. Thus, there will be no diversion of 
GENCO personnel or resources that will adversely affect any Operating 
Subsidiary' domestic customers or GPU's shareholders.
    GENCO will not enter into an O&M Agreement for a NUG facility at 
market based prices where such facility has a power purchase agreement 
with an Operating Company providing for adjustment in the rate to be 
paid for energy or capacity sold thereunder based directly upon the 
cost of O&M Services. GENCO will separately account for all revenues 
received and expenses incurred; including allocable overheads, in 
providing O&M Services.
    All applicable conditions set forth in rule 53(a) are, and, 
assuming the consummation of the transactions proposed hereby, will be, 
satisfied and none of the conditions set forth in rule 53(b) exist or 
will exist as a result of the transactions proposed hereby.

Public Service Company of Oklahoma (70-8341)

    Public Service Company of Oklahoma (``PSCO''), 212 East 6th Street, 
Tulsa, Oklahoma, 74119-1212, an electric public-utility subsidiary of 
Central and South West Corporation, a registered holding company, has 
filed a post-effective amendment to an application previously filed 
under sections 9(a) and 10 of the Act and rule 54 thereunder.
    PSCO requests authorization to increase its investment in Excel 
Technologies, Ltd. (``Excel'') to $2,718,764,91, from $2.35 million, 
and to consummate certain related purchases and exchanges of securities 
issued by Excel. Excel is engaged in research, development, and 
installation of energy-control technology.
    By order dated March 31, 1994 (HCAR No. 26016) (``994 Order''), 
PSCO was authorized to invest up to $2.0 million, through capital stock 
purchases, in Excel pursuant to an October 14, 1993 Debenture, Common 
Stock and Preferred Stock Purchase Agreement (``Purchase Agreement'') 
among Excel, PSCO, and ML Oklahoma Venture Partners, L.P. 
(``Partnership''), an unaffiliated Oklahoma limited partnership.\2\ The 
1994 Order reserved jurisdiction over an additional investment by PSCO 
of $500,000 through capital stock purchases.
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    \2\ Under the Purchase Agreement, PSCO acquired from Excel 3,882 
shares of Series A Preferred Stock, 61.336 shares of Series B 
Preferred Stock, and 4,334 shares of Class A Common Stock. Under a 
Certificate of Designations, Voting Powers and Rights of Series A 
and Series B Convertible Participating Preferred Stock of Excel, the 
Series A Preferred Stock is convertible into Class A Common Stock 
and the Series B Preferred Stock is convertible into Class B Common 
Stock. However, upon conversion of the Series A Preferred Stock into 
Class A Common Stock, PSCO would own 4.99% of the outstanding shares 
of Class A Common Stock, which are the only voting securities of 
Excel. Therefore, Excel will not be a subsidiary company under 
section 2(a)(8)(A) of the Act nor an affiliate under section 
2(a)(11)(A) of the Act. Under an April 9, 1993 Consulting and 
Research and Development Agreement (``Consulting Agreement''), Excel 
was to provide PSCO with product research and development expertise, 
and sales experience and is to otherwise consult on demand-side 
management issues. In return, PSCO was to pay Excel up to $1.35 
million.
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    By order dated March 17, 1995 (HCAR No. 26252) (``1995 Order''), 
PSCO was authorized to invest $350,000 in Excel pursuant to a December 
8, 1994 Debenture and Warrant Purchase Agreement (``Investment 
Agreement'') among Excel, the Partnership, the John and Donnie Brock 
Foundation (``Brock Foundation''), Spavinaw Partners, L.P., and PSCO. 
Under the Investment Agreement, PSCO received $350,000 in principal 
amount of 9% Subordinated Debentures with a one-year maturity (``New 
Debentures'') and a warrant (``New Warrant'') to purchase 5,706 shares 
of Class B Common Stock. The 1995 Order reserved jurisdiction over the 
acquisition by PSCO of $150,000 in Excel capital stock pending 
completion of the record.
    PSCO now requests Commission authorization for the transactions 
described below.
    Pursuant to a December 20, 1995 Stock Purchase and Exchange 
Agreement (``Exchange Agreement'') among Excel, PSCO, the Partnership, 
the Brock Foundation and NorthStar Energy Group, a Texas general 
partnership, the New Debentures held by PSCO, plus accrued interest 
thereon of $21,316.77, will be converted into 1,971 shares of Series E 
Preferred Stock.
    The Exchange Agreement also provides for the exchange of the shares 
of Series A and B Preferred Stock currently owned by PSCO for shares of 
Series E Preferred Stock. The Series E Preferred Stock shall have 
rights, powers, qualifications, restrictions and preferences almost 
identical to those of the Series A and B Preferred Stock.
    In addition, the Exchange Agreement provides that PSCO shall invest 
an additional $346,587.08 in Excel in exchange for 590 shares of Series 
C Preferred Stock, 1,749 shares of Series E Preferred Stock and 648 
shares of Class B Common Stock (``New Shares''). PSCO shall acquire the 
New Shares through cancellation of $346,587.08 owed by Excel to PSCO 
pursuant to the Consulting Agreement.
    PSCO requests that the Commission release jurisdiction over the 
remaining $150,000 investment by PSCO in Excel and that the Commission 
authorize PSCO to invest an additional $218,764.91 in Excel.
    PSCO also requests authorization for (i) the conversion of the 
$21,316.77 of accrued interest on the New Debentures held by PSCO into 
shares of Series E Preferred Stock, (ii) the exchange of the shares of 
Series A and B Preferred Stock currently owed by PSCO for shares of 
Series E Preferred Stock and (iii) the acquisition of the New Shares.
    After consummation of all these transactions, PSCO will hold 590 
shares of Series C Preferred Stock, 14,208 shares of Series E Preferred 
Stock, 4 shares of Class A Common Stock, 648 shares of Class B Common 
Stock and a warrant to purchase 5 additional shares of Class B Common 
Stock. Its aggregate

[[Page 27942]]

investment in Excel shall equal $2,718,764.91.

Columbia Gas System, Inc., et al. (70-8849)

    Columbia Gas System, Inc. (``Columbia''), 20 Montchanin Road, 
Wilmington, Delaware 19807, a registered holding company, and three of 
its wholly-owned non-utility subsidiaries, Columbia Energy Services 
Corporation (``CES''), 121 Hill Pointe Drive, Suite 100, Canonsburg, 
Pennsylvania 15317, Columbia Natural Resources, Inc. (``CNR''), 900 
Pennsylvania Avenue, Charleston, West Virginia 25362, and Columbia Coal 
Gasification Corporation (``CGC''), 900 Pennsylvania Avenue, 
Charleston, West Virginia 25362, have filed an application-declaration 
under sections 6(a), 7, 9(a), 10, and 12(f) of the Act and rules 43 and 
45 thereunder.
    Applicants request authorization to reorganize their existing 
corporate structure by (1) reincorporating CES in Delaware via a merger 
into a newly-formed successor corporation for the sole purpose of 
converting CES from a Kentucky to a Delaware corporation and (2) 
merging CGC with and into CNR with CNR being the surviving corporation.
    The reincorporation of CES in Delaware would be accomplished under 
a plan of reorganization and merger pursuant to which CES, a Kentucky 
corporation, will be merged into CES (DE), a newly-formed Delaware 
corporation which will, by virtue of the merger, become a wholly-owned 
subsidiary of Columbia.\3\ CES (DE) will succeed to all of the rights 
and assets of CES and assume all of its liabilities and obligations. 
The officers and directors of CES will become the officers and 
directors of CES (DE). The merger will qualify as a tax-free 
reorganization under Sections 368(a)(1) (A) and (F) of the Internal 
Revenue Code of 1986, as amended. No additional capital financing will 
occur as a result of the transaction. Applicants state that the merger 
and reincorporation of CES in Delaware will afford CES the benefits of 
Delaware's favorable business corporation laws, allow it to conduct its 
affairs in a more flexible and efficient manner and produce significant 
property tax savings.\4\
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    \3\ All of the assets and liabilities of CES will be transferred 
to CES (DE) in exchange for common stock of CES (DE) which will 
simultaneously be transferred to Columbia in exchange for all 
outstanding shares of CES, leaving CES (DE) the surviving company.
    \4\ Applicants note that Delaware has followed a policy of 
encouraging incorporation in that state and, in furtherance of that 
policy, has adopted comprehensive, modern and flexible corporation 
laws that are periodically updated and revised to meet changing 
business needs. They also note that a majority of Columbia's 
subsidiaries are already incorporated in Delaware. In addition, 
Delaware, unlike Kentucky, does not impose a tax on intangible 
property. The Columbia Energy Market Center, a division of CES that 
licenses and sublicenses commodity trading software used to operate 
an electronic bulletin board for the trading of natural gas, is 
subject to the tax on intangible property, the impact of which is 
expected to become increasingly significant as revenues generated by 
the bulletin board grow.
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    Columbia owns all 1,939,000 outstanding shares of common stock of 
CGC, a Delaware corporation.\5\ Columbia would accomplish the merger of 
CGC with and into CNR , a Texas corporation, by transferring all 
1,939,000 shares of CGC common stock, $25 par value per share, to CNR 
in exchange for approximately 343,000 shares of newly issued CNR common 
stock, $25 par value per share. The actual number of shares of CNR 
stock will depend on the net book value of CGC on the effective date. 
Based upon the $8.581 million net book value of CGC as of February 29, 
1996, 343,245 CNR shares would be issued to Columbia in exchange for 
the 1,939,000 shares of CGC transferred to CNR. The proposed 
transaction will qualify as a tax-free reorganization under Section 
368(a)(1)(A) of the Internal Revenue code of 1986, as amended. No 
additional capital financing will occur as a result of the transaction.
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    \5\ CGC has no other class of equity stock outstanding.
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    This exchange will make CNR the parent corporation of CGC and the 
temporary owner of 100% of CGC's outstanding shares. Promptly, 
thereafter, CGC will be merged with and into CNR pursuant to Article 
5.16 of the Texas Business Corporation Act. Article 5.16 provides that, 
upon the merger, CNR will succeed to all of the rights and assets of 
CGC and will assume all of its liabilities and obligations.
    Applicants expect the merger of CGC and CNR to produce significant 
benefits and efficiencies, including (1) simplified and less costly 
internal and external accounting operations; (2) reduced and less 
costly regulatory and compliance requirements; (3) reduced general and 
administrative costs, and (4) the realization of certain state tax 
benefits associated with being a single company.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-13803 Filed 5-31-96; 8:45 am]
BILLING CODE 8010-01-M