Skip to Content

Notice

Filings Under the Public Utility Holding Company Act of 1935, as Amended (“Act”)

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble April 21, 2000.

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 16, 2000, 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 16, 2000, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective.

Energy East Corp., et al. (70-9569)

Energy East Corp. (“Energy East”), P.O. Box 1196, Stamford, Connecticut 06904-1196, a New York corporation and a public utility holding company exempt from registration under section 3(a)(1) of the Act, by order of the Commission dated February 2, 2000,[1] CMP Group, Inc. (“CMP Group”), 83 Edison Dr., Augusta, Maine 04336, a Maine corporation and a public utility holding company exempt from registration under section 3(a)(1) of the Act, by order of the Commission dated February 12, 1999,[2] CTG Resources, Inc. (“CTG Resources”), 100 Columbus Boulevard, Hartford, Connecticut 06103, a Connecticut corporation and a public utility holding company exempt from registration under section 3(a)(1) by rule 2 under the Act, and Berkshire Energy Resources (“Berkshire Energy”), 115 Chesire Road, Pittsfield, Massachusetts 01201, a Massachusetts corporation, and a public utility holding company exempt from registration under section 3(a)(2) by rule 2 under the Act (collectively, “Applicants”), have filed with this Commission an application under sections 9(a)(2), 10 and 11 under the Act.

The Applicants seek authorization for Energy East to acquire all of the issued and outstanding common stock of CMP Group, CTG Resources and Berkshire Energy (“Merger”). Under the proposed transactions, CMP Group, CTG Resources and Berkshire Energy would become direct subsidiaries of Energy East and Energy East would register as a public utility holding company under section 5 of the Act.[3] The Applicants also seek authorization to operate as a combination electric and gas utility holding company. In addition, Energy East seeks authorization to retain its interests in its utility and nonutility activities, businesses and investments and to acquire and retain the interests of CMP Group, CTG Resources and Berkshire Energy's utility and nonutility activities, businesses and investments.

Description of the Merger [4]

On June 14, 1999, CMP Group, Energy East and EE Merger Corp. (a wholly owned subsidiary of Energy East) entered into the CMP Group Merger Agreement. The CMP Group Merger Agreement contemplates that EE Merger Corp., will merge with and into CMP Group with CMP Group being the surviving corporation and becoming a wholly owned subsidiary of Energy East (“CMP Group Merger”). Under the terms of the CMP Group Merger Agreement, each outstanding share of CMP Group's common stock, $5.00 par value per share, other than dissenting shares and any treasury shares or shares owned by CMP Group, Energy East or any of their subsidiaries, will be converted into the right to receive $29.50 in cash. Under the CMP Group Merger Agreement, approximately $957 million in cash will be paid to holders of shares of CMP Group common stock.

On June 29, 1999, CTG Resources entered into the CTG Resources Merger Agreement with Energy East and Oak Start Printed Page 25011Merger Co. (“Oak”), a Connecticut corporation and a wholly owned subsidiary of Energy East. CTG Resources will merge with and into Oak, with Oak being the surviving corporation (“CTG Resources Merger”). Oak will continue to conduct CTG Resource's business under the name “CTG Resources, Inc.” as a direct, wholly owned subsidiary of Energy East. Under the terms of the CTG Resources Merger Agreement, each outstanding share of CTG Resources common stock, other than dissenting shares, will be converted into the right to receive: (i) $41.00 in cash (“CTG Resources Cash Consideration”); (ii) a number of shares of Energy East common stock equal to the Exchange Ratio; or (iii) the right to receive a combination of cash and shares of Energy East common stock. The “Exchange Ratio” shall be equal to the CTG Resources Cash Consideration divided by either; (i) the Energy East share price if the Energy East share price is equal to or less than $30.13 and equal to or more than $23 .67; (ii) $30.13 if the energy East share price is greater than $30.13, in which case the Exchange Ratio will equal 1.3609; or (iii) $23.67 if the Energy East share price is less than $23.67, in which case the Exchange Ratio will equal 1.7320. The Energy East share price will equal the average of the closing prices of Energy East common stock as reported in the Wall Street Journal, for the 20 trading days immediately preceding the second trading day prior to the effective time of the CTG Resources Merger. The aggregate number of shares of CTG Resources' common stock that is convertible into cash is limited to 55% of the total number of shares of CTG Resources common stock issued and outstanding as of the effective time of the CTG Resources Merger.

On November 9, 1999, Berkshire Energy, Energy East and Mountain Merger LLC entered into the Berkshire energy Merger Agreement Mountain Merger LLC will merge with and into Berkshire Energy, with Berkshire Energy being the surviving company and becoming a wholly owned subsidiary of Energy East (“Berkshire Energy Merger”). Under the terms of the Berkshire Energy Merger Agreement, each outstanding Berkshire Energy common share, without par value, other than any treasury shares of shares owned by Berkshire Energy, Energy East or any of their subsidiaries, will be converted into the right to receive $38.00 in cash. Under the Berkshire Energy Merger Agreement, approximately $96 million in cash will be paid to holders of Berkshire Energy common shares.

As a result of the Merger, the post-merger Energy East System will have pro forma assets of approximately $7.275 billion for the twelve month period ended September 30, 1999 and combined operating revenues of approximately $3.9 billion, for the same period. If approved, the Energy East System will serve approximately 1,359,000 electric customers in two states and 579,800 gas customers in four states. Following completion of the Merger, Energy East will register with the Commission, as a holding company, under section 5 of the Act.

Parties to the Merger

Energy East and Its Subsidiaries

Energy East, through its subsidiaries, is an energy delivery, products and services company with operations in New York, Connecticut, Massachusetts, Maine, New Hampshire, Vermont and New Jersey. Energy East currently owns, directly or indirectly, three public utility companies: New York State Electric & Gas Corporation (“NYSEG”), CMP Natural Gas, L.L.C. (“Maine Gas Co.”) and The Southern Connecticut Gas Company (“Southern Connecticut Gas“).[5]

NYSEG's service territory is in the central, eastern and western parts of New York. NYSEG's service territory has an area approximately 19,900 square miles and a population of 2,400,000. The larger cities in which NYSEG serves both electricity and natural gas customers are Binghamton, Elmira, Auburn, Geneva, Ithaca and Lockport, New York. No customer accounts for 5% or more of either electric or natural gas revenues. During 1996 through 1998, approximately 84% of NYSEG's operating revenue was derived from electric service with the balance derived from natural gas service.

As of December 31, 1998, NYSEG's electric transmission system consisted of approximately 4,482 circuit miles of line. NYSEG's electric distribution system consisted of 33,858 pole-miles of overhead lines and 2,109 miles of underground lines.

For the twelve months ended September 30, 1999, Energy East's consolidated gross utility revenues consisted of electric revenues of approximately $1,725,112,000 (84%) and gas revenues of approximately $322,870,000 (16%). Energy East's utility operating income and utility net income available for common stock were $615,872,000 and $232,383,000, respectively. Consolidated assets of Energy East and its subsidiaries as of September 30, 1999, were approximately $4.0 billion, consisting of $2.1 billion in net utility plant and $1.9 billion in other utility and nonutility assets. For the twelve months ended September 30, 1999, consolidated operating revenues, operating income and net income for Energy East and its subsidiaries were approximately $2,348,310,000, $565,003,000, and $233,044,000 respectively. Connecticut Energy's operating revenues totaled approximately $228,296,000 for the twelve months ended September 30, 1999. Connecticut Energy's consolidated net income for the same period was $17 million.

NYSEG is engaged in the business of purchasing, transmitting and distributing electricity and purchasing, transporting and distributing natural gas. NYSEG also generates electricity from its 18% share of the Nine Mile Point Unit 2 Nuclear Plant (“NM2”) and from its hydroelectric stations. NYSEG has agreed to sell its share of NM2.[6] NYSEG serves 826,000 electric customers and 244,000 natural gas customers in upstate New York. NYSEG retains hydroelectric facilities with an aggregate capacity of 623 MW, nonutility generation (“NUG”) contracts and contracts under which the New York Power Authority sells power to NYSEG, as well as an 18% ownership interest in the NM2.

Maine Gas Co., a gas utility company, is in the process of constructing a local natural gas distribution system, on a nonexclusive basis, in certain areas of the state or Maine, including among others, the Bethel, Windham, Augusta, Waterville and Bangor metropolitan areas, and the coastal area, including Brunswick and Bath. Maine Gas Co. began to provide service to retail customers in May 1999.

On April 23, 1999, Energy East and Connecticut Energy Corporation (“Connecticut Energy”) entered into an Start Printed Page 25012agreement and plan of merger. On February 2, 2000 the Commission issued an order authorizing the merger.[7] On February 8, 2000 Energy East completed its merger with Connecticut Energy. Connecticut Energy, an exempt holding company, is primarily engaged in the retail distribution of natural gas through its principal wholly owned subsidiary, Southern Connecticut Gas.

Southern Connecticut Gas, a public utility company incorporated under the laws of Connecticut, is engaged in the retail distribution of natural gas for residential, commercial and industrial users and the transportation of natural gas for commercial and industrial users.[8] Southern Connecticut Gas serves approximately 158,000 customers in Connecticut, primarily in 22 towns along the southern Connecticut coast from Westport to Old Saybrook, which include the urban communities of Bridgeport in New Haven. Southern Connecticut Gas is the sole distributor of natural gas, other than bottled gas, in its service area.

Connecticut Energy has a number of direct and indirect nonutility subsidiaries including CNE Energy Services Group, In. (“CNE Energy”), CNE Development Development Corporation (“CNE Development”) and CNE Venture-Tech, Inc. (“CNE Venture-Terch”). All three of these nonutility subsidiaries are Connecticut corporation.

CNE Energy, a wholly owned subsidiary of Connecticut Energy, provides an array of energy products and services to commercial and industrial customers throughout New England, both on its own through participation as a member of various energy-related limited liability companies. CNE Energy's principle subsidiaries are Energy East Solutions, LLC; Total Peaking Services, LLC, a wholly owned subsidiary of CNE Energy, which operates a 1.2 billion cubic foot liquefied natural gas open access storage facility in Milford, Connecticut, a Conectiv/CND Peaking, LLC, a wholly owned subsidiary of CNE Energy, which provides a firm in-market supply source to assist marketers and local gas distribution companies in meeting the maximum demands of their customers by offering firm supplies for peak-shaving and emergency deliveries.

CNE Development, a wholly owned subsidiary of Connecticut Energy, is a 16.67% equity participant in East Coast Natural Gas Cooperative, LLC (“East Coast”). East Coast purchases and stores spot gas supplies, provides storage service utilization services and is involved in bundled sales.

CNE Venture-Tech, a wholly owned subsidiary of Connecticut Energy, invests in ventures that produce or market technology advanced energy-related products. CNE Venture-Tech owns a 7.8884% limited partnership interest in Nth Power Technologies Fund I, L.P., which invests in companies that develop, produce and market innovative energy-related products; and CIS Service Bureau, LLC, a service bureau which provides access to customer-billing software and other related services for local distribution and other utility-type companies (including Southern Connecticut Gas) and which is wholly owned by CNE Venture-Tech.

Energy East also has a number of direct and indirect nonutility subsidiaries including EE Enterprises, a Maine corporation, XENERGY Enterprises, Inc. (“XENERGY”), a Delaware corporation, and Energy East Management Corporation (“Energy East Management”), a Delaware corporation.

EE Enterprises owns natural gas and propane air distribution companies. It is a wholly owned subsidiary of Energy East. It is currently an exempt public utility holding company under the Act by order of the Commission dated February 12, 1999.[9] It indirectly holds public utility assets through its ownership of a 77% interest in Maine Gas Co., a gas utility company.

EE Enterprises' nonutility subsidiaries: New Hampshire Gas Corporation, a New Hampshire corporation, which is a wholly owned subsidiary of EE Enterprises and is an energy services company in New Hampshire specializing in propane air distribution systems; Southern Vermont Natural Gas Corporation, a Vermont corporation, which is a wholly owned subsidiary of EE Enterprises and is developing a combined natural gas supply and distribution project that includes a extension of a pipeline from New York to Vermont by Iroquois Gas Transmission System and the development of natural gas distribution systems in Vermont; and Seneca Lake Storage, Inc., a New York corporation, which is a wholly subsidiary of EE Enterprise and proposes to own and operate a gas storage facility in New York.

XENERGY is a wholly owned subsidiary of Energy East. It currently holds no public utility assets and is neither a public utility company nor a holding company under the Act. XENERGY invests in providers of energy and telecommunication services. XENERGY's principal subsidiaries are as follows:

XENERGY Inc., a Massachusetts corporation, is a wholly owned subsidiary of XENERGY and is an energy services, information systems and consulting company that specialties in energy management, conservation engineering and demand-side management.

Energy East Solutions, Inc., a Delaware corporation, and a wholly owned subsidiary of XENERGY, markets electricity and natural gas to end users and provides wholesale commodities to retail electric suppliers in the northeastern United States.

NYSEG Solutions, Inc., a New York corporation and a wholly owned subsidiary of Energy East Solutions, markets electricity and natural gas to end users and provides wholesale commodities to retail electric suppliers in the state of New York.

South Jersey Energy Solutions, LLC, a Delaware limited liability company, is a partially owned subsidiary of Energy East Solutions and was formed to market retail electricity and energy management services in the mid-Atlantic region of the United States.

Energy East Solutions, LLC, a Delaware limited liability company, is a partially owned subsidiary of Energy East Solutions and CNE Energy Services Group, Inc. and sells natural gas, fuel oil and other services, and markets a full range of energy-related planning, financial, operational and maintenance services to commercial, industrial and municipal customers in New England.

Energy East Telecommunications, Inc., a Delaware corporation, is a wholly owned subsidiary of XENERGY Enterprises and was formed to provide telecommunication services, including the construction and operation of fiber optic networks.

Telergy East, LLC, a New York limited liability company, is a partially owned subsidiary of Energy East Telecommunications, Inc., and was formed to construct, own and operate a fiber optic network.

Cayuga Energy, Inc., a Delaware corporation, is a wholly owned subsidiary of XENERGY Enterprises and invests in co-generation facilities.

Carthage Energy, LLC, a New York limited liability company, is a wholly owned subsidiary of Cayuga and owns a co-generation facility in upstate New York. It is an exempt wholesale generator (“EWG”), as defined in section 32 of the Act.

South Glens Falls Energy, LLC, a New York limited liability company, is a Start Printed Page 25013partially owned subsidy of Cayuga Energy, Inc. and owns a co-generation facility in upstate New York. It is an exempt EWG, as defined in Section 32 of the Act.

XENERGY Inc.'s subsidiaries are as follows:

XENERGY Canada, Inc., incorporated in Quebec, Canada, is a wholly owned subsidiary of XENERGY, Inc. and provides software services related to a utility client management system.

XENERGY International, a Delaware corporation, is a wholly owned subsidiary of XENERGY, Inc. and is an energy services, information systems and consulting company that specializes in energy management, conservation engineering and demand-side management in the United Kingdom and Spain.

KENETECH Energy Management, Inc. (“KENETECH”), a Massachusetts corporation, is a wholly owned subsidiary of XENERGY, Inc. and is an energy services company specializing in energy management.

KENETECH Energy Management International, Inc. (“KENETECH International”), a Delaware corporation, is a wholly owned subsidiary of KENETECH and is an energy services company specializing in energy management.

KENETECH Energy Management Limited, a limited company formed in Ontario, Canada, is a wholly owned subsidiary of KENETECH International and is an energy services company specializing in energy management.

KEM 1991, Inc. (“KEM 1991”), a Delaware corporation, is a wholly owned subsidiary of KENETECH and is an energy services company specializing in energy management.

KEM partners 1991, L.P., a Delaware limited partnership, is an energy services company specializing in energy management. All of its interests are owned by KENETECH and KEM 1991.

Other current direct nonutility subsidiaries of Energy East are: Energy East Management Corporation, a Delaware corporation that invests the proceeds of the 1999 sale of Energy East's coal-fired generation assets;[10] Oak, formed solely for the purpose of consummating the proposed merger with CTG Resources and which, upon consummation of such merger, will change its name to, and operate under, the name of “CTG Resources, Inc.”; and EE Merger Corp., a Maine corporation, formed solely for the purpose of consummating the proposed merger with CMP Group.

CMP Group and Its Subsidiaries

CMP Group is a holding company by virtue of owning, directly or indirectly, the voting securities of Central Main Power, Maine Electric Power Company, Inc. (“MEPCo”), NORVARCO and Maine Gas Co., all public utility companies as defined in the Act.

CMP Group's principal utility subsidiary, Central Maine Power, is primarily engaged in transmitting and distributing electricity generated by others to retail customers in Maine.[11] Central Maine Power is the largest electric utility in Maine and serves approximately 538,000 customers in its 11,000 square-mile service area in southern and central Maine. Central Maine Power had approximately $972 million in consolidated electric operating revenues in the twelve month period ended September 30, 1999.

As of December 31, 1999, Central Maine Power's delivery system consisted of 2,288 miles of overhead transmission lines, 19,754 pole-miles of distribution lines and 155 miles of network underground and submarine cable.

For the twelve months ended September 30, 1999, CMP Group's operating revenue on a consolidated basis was approximately $1,006,000,000 of which approximately $972,000,000 was derived from electric operations, and $33,715,000 from other operations. Consolidated assets of CMP Group and its subsidiaries at September 30, 1999 were approximately $807,596,000 in net electric utility property, plant and equipment, and approximately $1,338,584,000 in other corporate assets.

Central Maine Power currently has two utility subsidiaries, each of which is organized and operates exclusively in Maine: MEPCo and NORVARCO. MEPCo owns and operates a 345kV transmission interconnection between the Maine-New Brunswick, Canada international border at Orient, Maine. Central Maine Power owns a 78.3% voting interest in MEPCo, with the remaining interests owned by two other Maine utilities. NORVARCO holds a 50% general partnership interest in Chester SVC Partnership, a general partnership which owns a static var compensator in Chester, Maine, adjacent to MEPCo's transmission interconnection.

Central Maine Power owns a 38% voting interest in Maine Yankee Atomic Power Company, which owns the Maine Yankee nuclear electric generating plant in Wiscasset, Maine.[12]

CMP group's nonutility subsidiaries are as follows.[13]

CNEX (formerly called CMP International Consultants), provides consulting, planning, training, project management, and information and research services to foreign and domestic utilities and government agencies in various aspects of utility operations and utility support services.

MaineConn Services (“MaineCom”), develops fiber-optic data service for bulk carriers and provides other telecommunications services, including point to point connections, private networking, consulting, private and voice and data transport, carrier services, and long-haul transport. MaineCom holds direct or indirect voting interests in various entities that are in the business of developing a fiber-optics network in the northeast. It is subject to regulation by the MPUC, with respect to making available a fiber optics cable for public use in Maine.

Northeast Optic Network (“NEON”) develops, constructs, owns and operates a fiber optic telecommunications system in New York and New England. New England Business Trust, a wholly owned subsidiary of MaineCom owns 37.9% of NEON's common stock.

TeleSmart provides, for utility companies, collections and related accounts receivable management services and has a division which collects charged-off accounts. TeleSmart is currently in the process of being dissolved. Applicants anticipate this Start Printed Page 25014process will be completed by May 1, 2000.

Central Securities Corporation owns and leases office and service facilities in Central Maine Power's service territory for the conduct of Central Maine Power's business. Central Maine Power owns all of the outstanding common stock of Central Securities Corporation.

Cumberland Securities Corporation owns and leases office and service facilities in Central Maine Power's service territory for the conduct of Central Maine Power's business. Central Maine Power owns all of the outstanding common stock of Cumberland Securities Corporation.

The Union Water-Power Company (“Union Water”), a wholly owned subsidiary of CMP Group, provides utility construction and support services (On Target division), energy efficiency performance contracting and energy use and management services (Combined Energies division), and utility-related real estate development services, (UnionLand Services). Union Water's Maine HomeCrafters division, which was in the business of brokering and financing pre-fabricated housing has been sold.

CTG Resources and Its Subsidiaries

CTG Resources is an exempt public utility holding company that owns all of the common stock of Connecticut Natural Gas Corporation (“CNGC”), a public utility that operates as a regulated local natural gas distribution company. CNGC distributes gas to approximately 146,000 customers in 22 Connecticut communities, principally in the Hartford-New Britain area and Greenwich. CNGC's gas distribution business is subject to regulation by the Connecticut Department of Public Utility Control as to franchises, rates, standards of service, issuance of securities, safety practices and certain other matters.

For the twelve months ended September 30, 1999, CTG Resources' operating revenues on a consolidated basis were approximately $286,749,000, of which approximately $262,060,000 were derived from gas operations and $24,689,000 were from other operations. Consolidated assets of CTG Resources and its subsidiaries at September 30, 1999 were approximately $297,957,000 in gas utility property, plant and equipment, and approximately $168,304,000 in other corporate assets.

CTG Resources' nonutility subsidiaries include:

CNG Realty Corp., owns the Operating and Administrative Center located on a seven-acre site in downtown Hartford, Connecticut. The Energy Network, Inc. (“TEN”) which, through its wholly owned subsidiary, The Hartford Steam Company, provides district heating and cooling services to a number of large buildings in Hartford, Connecticut.

TEN Transmission Company, a wholly owned subsidiary of TEN, owns a 4.87% interest in Iroquois Gas Transmission System Limited Partnership, which operates a natural gas pipeline transporting Canadian natural gas into New York, Massachusetts and Connecticut.

Downtown Cogeneration Associates Limited Partnership, TEN's partially owned subsidiary, owns and operates a cogeneration facility in Hartford, Connecticut.

ENI Gas Services, Inc., and TEN Services, Inc., both wholly owned subsidiaries of TEN, together own 100% of KBC Energy Services, a partnership. TEN's other unregulated operating divisions offer energy equipment rentals, property rentals and financing services and own a 3,000 square foot building in Hartford, Connecticut.

Berkshire Energy and Its Subsidiaries

Berkshire Energy owns The Berkshire Gas Company (“Berkshire Gas”), a public utility company as defined by the Act. Berkshire Gas operates as a natural gas public utility distribution company. Berkshire Gas sells and distributes natural gas to approximately 34,000 retail customers in 19 communities in western Massachusetts. Berkshire Gas operates a natural gas distribution system comprising 694 miles of natural gas distribution mains. Berkshire Gas is subject to regulation by the Massachusetts Department of Telecommunications and Energy. Berkshire Gas is a “natural gas company” [14] with respect to certain sales for resale of natural gas. Berkshire Gas has secured a “blanket certificate” for these transactions from the FERC.

For the twelve months ended September 30, 1999, Berkshire Energy's operating revenues on a consolidated basis were approximately $49,283,000, of which approximately $45,453,000 were derived from natural gas operation. Consolidated assets of Berkshire Energy and its subsidiaries as of September 30, 1999 were approximately $77,457,000 in natural gas utility property, plant and equipment, and approximately $31,453,000 in other corporate assets.

The nonutility subsidiaries of Berkshire Energy are Berkshire Propane, Inc. (“Berkshire Propane”) and Berkshire Service Solutions, Inc. (formerly Berkshire Energy Marketing, Inc.) (“Service Solutions”). Berkshire Propane is a retail propane company providing service to more than 6,000 customers in 100 communities across a 5,000 square mile area in western Massachusetts, eastern New York, and southern Vermont. Service Solutions provides one-stop natural gas services to commercial and industrial customers. Service Solutions entered into a strategic alliance with Energy East Solutions, LLC.

The Applicants contend that the combination of NYSEG's electric system and CMP Group's electric operations will result in a single, integrated electric utility system (the “new Energy East Electric System”). The Applicants further contend that the combination of Energy East's current gas system (NYSEG's gas operations, Connecticut Energy and Maine Gas Co.) with the gas operations of CMP Group, CTG Resources and Berkshire will result in a single, integrated gas utility system (the “new Energy East Gas System”). The companies request the Commission authorize the mergers and find that the new Energy East Electric System is the primary integrated public utility system and the new Energy East Gas System is a permissible additional system.

Start Signature

For the Commission by the Division of Investment Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

1.  Holding Co. Act Release No. 27128.

Back to Citation

2.  Holding Co. Act Release No. 26977.

Back to Citation

3.  The Applicants have also filed in S.E.C. file no. 70-9609 an application-declaration related to the financing of the proposed Energy East registered holding company system.

Back to Citation

4.  The Merger will be accounted for as an acquisition of CMP Group, CTG Resources and Berkshire Energy by Energy East under the purchase method of accounting in accordance with generally accepted accounting principles.

Back to Citation

5.  NYSEG and Southern Connecticut Gas are wholly owned subsidiaries of Energy East. Maine Gas Co. is a joint venture between New England Gas Development Corporation, a wholly owned subsidiary of CMP Group, and Energy East Enterprises, (“EE Enterprises”), a wholly owned subsidiary of Energy East.

Back to Citation

6.  NYSEG has contracted to sell its 18% interest in NM2 to AmerGen Energy Corporation (“AmerGen”). Approval of that sale is pending before the New York Public Service Commission (“NYPSC”). In December 1999, Rochester Gas & Electric Corporation (“RG&E”), an NM2 cotenant, exercised its right of first refusal in connection with the sale of plant. The NYPSC began settlement negotiations in January 2000, seeking modifications to the proposed terms of the sale, whether to AmerGen or RG&E. An application for authorization to transfer associated jurisdictional facilities filed under section 203 of the Federal Power Act is also pending before the Federal Energy Regulatory Commission (“FERC”).

Back to Citation

7.  Holding Co. Act Release No. 27128.

Back to Citation

8.  Southern Connecticut Gas is a “gas utility company” as defined in section 2(a)(4) of the Act.

Back to Citation

9.  Holding Co. Act Release No. 26976.

Back to Citation

10.  Energy East Management Corporation's investments are passive.

Back to Citation

11.  Central Maine Power has sold its hydroelectric, fossil and biomass generating assets. Central Maine Power has sold its entitlements to purchase capacity and energy under the NUG contracts, as well as its entitlements to energy from its 2.5% interest in the Millstone 3 nuclear plant, and from its 4% interest in the Vermont Yankee nuclear plant, and its entitlement in a firm energy contract with Hydro Quebec. Further, Central Maine Power entered into an agreement to sell its ownership interest in Vermont Yankee, and it has reached an agreement with Northeast Utilities, the majority owner of Millstone 3, whereby Northeast Utilities will include Central Maine Power's interest in its planned auction of Millstone 3. The sales of generating capacity and entitlements to purchase capacity and energy under NUG contracts, nuclear interest and the Hydro Quebec contract were conducted under the requirements of Maine's recently enacted electric utility restructuring legislation and Maine Public Utilities Commission (“MPUC”) Rules and Regulations.

Back to Citation

12.  Maine Yankee's plant was permanently shut down on August 6, 1997. Central Maine Power also holds a 9.5% voting interest in Yankee Atomic Electric Company, which permanently shut down its plant located in Rowe, Massachusetts, and 6% voting interest in Connecticut Yankee Atomic Power Company, which permanently shut down its plant in Haddam, Connecticut.

Back to Citation

13.  All companies involved in telecommunications are either exempt telecommunication companies (“ETC”), under section 34 of the Act or Applicants expect to seek ETC status with respect to such companies.

Back to Citation

14.  See section 2(a)(6) of the Natural Gas Act, 15 U.S.C. 717(a)(6).

Back to Citation

[FR Doc. 00-10566 Filed 4-27-00; 8:45 am]

BILLING CODE 8010-01-M